Why I love the idea of getting semi FIRE’d!!

                              

Hello Y’all!

Just enjoying my last off day   before daily grinding starts in full swing from next week☹ This week I just worked in first two days and took days off with holiday on 1^st January. This feels like a comfortable mix of work and relax days to me. It  gives me a good taste of semi-retirement or semi-FIRE  plan I am contemplating for last couple of years.

Personally, I was never a big fan of full retirement except for poor health issue. Not sure I or folks in my circle would just enjoy sitting on couch and watching TV all day for 365 days..haha..that will be hell boring! Even people I see in Travel blogs/Vlogs, sailing around on boat or driving in Van, work on some income generation activities in some capacity. So at least for me, a combination of off day with low stress part time would be best combination.

For a full-blown FIRE, the typical require is to accumulate about 25 times of annual expenses. For example, if for a family of three the yearly expenses are about $35,000, then they need to stash away closer to $1 million. For a single person, yearly expense may run half of that, say $18,000, so needs to stash away about $500k.

Now let’s take a hypothetical scenario where a couple earns combined, $80,000 (yearly after tax) and contributes 20% towards investment account. For single person, would assume $40,000 yearly income.

If they investment in some index funds and say getting 7.5% (inflation adjusted) return, it would take almost 22 years to accumulate 25x times of annual expenses

For family of Three:

For Single:

For many of us in FIRE journey, 22 years of continuous working life might be a long path to take.

What I am thinking that how about I am open to work 15-20 hours a week to cover some portion of monthly expenses.

Here is a scenario I was thinking where I save half of the investment needed and withdraw a reasonable 4% out of it. According to 4% withdrawal rate, our principal amount still would be unchanged (hopefully!).

Here is some cost and required earning break-downs I am running considering living in a low cost area and tight monthly budgeting:

Following, the same investment assumption, it would take about 15 years to accumulate $500k for a couple and $250k for a single person. I guess 15 years not definitely short time but much shorter than 22 years!!

So, looking into the required amount to be earned, I believe for many of us that should not be more than 20-25 hrs/week worth of work. For me, maybe I can take a part time or freelancing engineering gig or take a hobby like blogging bit more seriously. Everyone has their own niche hobby or skill, which  can be transformed into a source of income. Or someone can negotiate with existing employer to work on part time basis.

I guess many folks on FIRE journey can reach the total investment amount much earlier as savings rate are usually higher than 20%. I know few fellow FIRE buddies saving around 50-60% of earnings which makes the wait time much shorter.

Hope all have a great start of 2020 FIRE journey. Let’s rev up all saving and investing engines😊

Disclaimer: This article shows my personal opinion and its for entertainment purpose only. This is no way professional financial advice. You may seek professional advice or conduct own research before investing.