I quit my miserable day job the day after turning 32 years old.
And I never turned back.
That was more than five years ago. Life has been wonderful.
I gave up millions of dollars in exchange for time and freedom. Absolutely zero regrets.
Financial independence and retiring early (FIRE) was the ultimate goal for me. I realized in my late 20s, after losing my job during the Great Recession, that I could not stand to live a life that wasn’t free. I needed to live on my terms.
And so I set out toward buying my freedom. I took on that mission with an almost inhuman level of consistency, focus, and determination. I went from below broke to financially independent and retired in just six years.
It’s worked out tremendously well. FIRE is a dream come true. And it can be a dream come true for almost anyone out there, as I lay out in 5 Steps To Retire In 5 Years.
I was able to start covering my personal essential expenses in life with my personal passive income at 33 years old. Mission accomplished.
That, for me, is the definition of FIRE.
As long as I can make sure rent is paid, food is in my belly, and the basic bills are covered (without having/needing a job), I’m good to go. The rest tends to work itself out.
Now, I’ve always looked at financial independence as the beginning, not the end. Achieving financial independence should be just one chapter in an otherwise fantastic book of your life.
Financial independence is simply a financial platform that allows you to build a customized and enjoyable lifestyle.
My FIRE lifestyle these days is all about waking up when I want, consuming/creating content, exercising, eating delicious food, and spending time around people I love.
I try to go to bed each day smarter than I woke up, make the world a slightly better place, and have a great time along the way.
It’s the perfect lifestyle for me. It’s the same lifestyle I’d choose to live even if I had millions of dollars.
This customized lifestyle is possible because of financial independence. I put a financial platform in place that allows me to live my best life.
Likewise, if you want to live the FIRE lifestyle of your dreams, you need to put your own financial platform in place.
But it’s impossible to put this platform in place if you don’t know what it is.
You can’t arrive at a destination if you don’t know where you’re going.
Define Your FIRE Number
If you want to achieve FIRE, the first thing you must do is actually define FIRE and your FIRE number.
If you don’t know what it is you’re trying to achieve, you can’t possibly achieve it.
Maybe your version of FIRE is just being able to cover the basics in life so that you can quit your job, dabble with hobbies, and spend more time with family.
Or maybe FIRE is $100,000/year in passive income because you like yachting around Ibiza.
Whatever.
The important thing is that you actually define what FIRE is for you.
What kind of lifestyle do you want? How much will it cost? When do you want to achieve it?
I’ve always been a big fan of SMART goals.
If a goal isn’t specific, measurable, achievable, realistic, and time-bound, it’s unlikely you’ll achieve it.
As such, you need to put up a number and a time frame to shoot for. You absolutely must define FIRE for yourself and the number that is required for you to be FIRE.
For example, you need to say, “I’m going to earn $1,500/month in passive income by the time I’m 40. I think that’ll be enough to cover my basic living expenses at that time. That’s FIRE for me, which allows me to quit my job and do stuff I enjoy.”
That’s a specific, measurable, and time-bound goal example.
Whether or not it’s achievable and realistic will depend on a host of individual factors.
Your FIRE vision and number can certainly change a bit as time marches on and you learn a bit more about what you want/need.
But without putting up this number in the first place, you’re driving in the dark. You can’t possibly reach FIRE if you don’t know what or where FIRE is.
I think, just as well, it’s very important that you define your “enough” in life. If you don’t know what enough is, you’ll be forever cursed to chase more.
Vicki Robin defined enough like this:
Enough is not the minimum amount for survival; it is the exact amount that gives you fulfillment without excess. There is nothing in your life that is more valuable than your time.
I couldn’t agree more.
For me, my FIRE goal was the same as my enough. When I hit FIRE, I stopped focusing on money. I had enough.
But it’s impossible to ever have enough if you don’t know what enough is.
Define your enough. Aim for and achieve it. Then live life on your terms.
My FIRE Number And Definition Of FIRE
I shared my definition of FIRE above, but I’ll repeat it.
My definition of FIRE is being able to cover personal essential expenses with passive income.
That’s it, folks. It’s not complicated for me.
I’ll give you some real-life perspective on this.
My personal essential expenses these days average about $1,100/month.
That’s including my rent, the food I eat, electricity, transportation, toiletries, my mobile phone, etc.
Meanwhile, my passive income averages right about $1,500/month. This includes dividend income from my FIRE Fund, as well as royalties from my best-selling books.
That’s a very favorable spread between passive income and personal essential expenses.
Now, I have some luxuries in my life. I have a gym membership. I drink a lot of fancy coffee. I’ll travel occasionally. I also cover some expenses for my significant other here in Thailand.
These are all voluntary and complementary additions to an everyday life that is already very enjoyable. Most additions are covered by passive income anyway, because of the spread. Beyond that, active income kicks in.
Way too many people endlessly obsess over the early retirement math. That early retirement math is mostly moot.
I might have some luxuries and additional expenses that I choose to have in my life, but I don’t need to make sure passive income covers all of this. It’s unnecessary to make sure every dime I ever spend is covered by passive income.
That’s because I’m not 90 years old and incapacitated. I’m still in my 30s. I like to take on passion projects. And these projects sometimes generate income.
I’ve received plenty emails from potential coaching clients who feel like they need to have 200% or 300% of expenses covered with passive income. I think that’s total overkill.
Maybe these people suffer from OMYS. I don’t know. But waiting until you have some ridiculous margin of safety for FIRE sounds a lot like waiting for Godot to me. It’s almost like they’re subconsciously making it too difficult to reach, so that they don’t have to overcome their own fears and actually pull the trigger.
The truth about FIRE is, it’s vital to have the three P’s – passions, productivity, and progress – in your life. No matter how rich or poor you are, you need a meaningful life that allows you to productively progress forward with your passions.
I have yet, in all of these years of meeting people from all over the world, to meet anyone who quit their job at a young age only to then never again earn another dollar of active income. That’s not realistic. You’re going to want to stay active and have hobbies you enjoy. And you’re gonna make a few bucks with some of these hobbies. It’s just the nature of things.
My original FIRE goal was to generate $15,000/year in passive income by the time I turned 40.
That was my FIRE number. I was targeting spending $15,000/year on essential expenses.
You’ll notice that I repeated this number many times in the numerous interviews I’ve done (like this one with USA Today).
But I started to lower that target ever so slightly over time as I grew weary of my job and simultaneously became more creative with keeping essential expenses down.
I found my personal essential expenses running about $1,000/month at 33 years old, which was covered by passive income. I hit my “crossover point” and reached FIRE.
Admittedly, though, I was only FIRE insofar that I was able to maintain a very low base of spending.
Moving abroad and taking advantage of geographic arbitrage has made living off of passive income much easier, as I’m now able to essentially live like a millionaire on 1/3 the money. I haven’t stressed about money in years.
Of course, I’m now way over $15,000/year in passive income. So I still met my original goal anyhow. But much of that, particularly over the last few years, is due more to the compounding dividend snowball than any of my own effort.
Your Definition Of FIRE Is Your Own
So that’s my definition of FIRE and what kind of passive income I need to be FIRE.
But it’s up to you to come up with your own definition and make your version of FIRE a reality.
Please keep in mind, your FIRE number doesn’t have anything to do with anyone else. It’s only about YOUR personal situation.
It’s your goal, your lifestyle, and your needs.
Don’t worry about what anyone else is doing. What your neighbor or co-worker is doing doesn’t have anything to do with you.
These competitive comparisons that people make only serve to cause more harm than good. People only compare upward, which is why Theodore Roosevelt was correct when he stated:
Comparison is the thief of joy.
I mean, there are millionaires out there who are miserable because they know some other millionaire has more than them. These people might have money, but they don’t have enough. Because they never defined enough. And so they’re cursed to chase more. It’s honestly sad.
Speaking of comparisons, one thing that has concerned and puzzled me over the years is how many comments, tweets, and emails I’ve gotten from people who are trying to “catch up to me”, as if this is some kind of competition.
Look, I’ve always wanted to inspire you to make your dreams come true. But your dreams are your own. And the amount of money you need for those dreams is up to you.
I’m transparent because I want to show possibilities and what the journey to and through FIRE looks like for one guy, but using me as some kind of proxy for yourself is a big mistake.
My FIRE number, and my lifestyle, almost certainly has absolutely nothing to do with you.
Unless you’re exactly me, I don’t see how my passive income or lifestyle objectives are relevant to what you should be doing.
I’ll give you a few examples of what I mean.
Some people have/want kids. Most of you readers live in the States. A lot of people own cars.
None of that applies to me.
I quit trying for FIRE more than three years ago, after I attained enough. The day I saw that passive income was covering my essential expenses in life was the day I laid off the gas pedal and stopped focusing so much on money. I was never interested in endlessly accumulating assets. Dying as the richest guy in the cemetery isn’t appealing to me.
Anyone trying to “catch up to me” is chasing a ghost. Saving money and buying stocks ceased to be a major priority in my life a long time ago. I knew that the power of dividend growth investing and compounding would mean I’d inevitably have way more wealth and passive income than I could ever conceivably need, even if I totally stopped investing.
Moreover, moving abroad basically tripled my local purchasing power. My $1,500/month in passive income is roughly equivalent to $4,500/month in any desirable US city. So that’s the number you’re actually shooting for if you find yourself unable to stop comparing things. But unless you’re Jason Fieber (are we twinsies?), these numbers are irrelevant to you.
I want my journey and ideas to be of value to you. If there’s anything I want to be remembered for, it’s inspiring people. But only in the sense that I inspire you to be free and live life on your terms.
Most people don’t have the same terms as me, so my numbers should only be looked at as a gauge for what’s possible based on the terms I share with you. You’ll have to adjust your numbers for your terms.
Conclusion
If you want to achieve FIRE, you must first know exactly what FIRE is and what kind of money it’ll take to achieve it.
Define it. Write down a number and a time frame. Make it a SMART goal.
Know your enough. Attain it. Then move beyond money and live life on your terms.
But make sure this is your enough. What someone else on some forum board thinks is enough has nothing to do with you.
FIRE as both a number and a lifestyle is highly subjective and individualized. The only thing that matters is that you’re content with the money you have the life you live. Having more for the sake of more, and/or living a life you don’t really like, isn’t gonna cut it.
I’m extremely happy with what I’ve got, what I’m doing, and where I am.
However, I could see how others might want more. I understand that some people want to have a big family. I also get that others want to live in the (more expensive) United States. Some might be just fine with a lot less, too. To each their own.
Don’t spend time worrying about what anyone else has got. That’s a total waste. Instead, pour your resources into attaining your defined enough and then living the life of your dreams!
What do you think? Have you defined FIRE? What is your FIRE number? What’s your enough?
Thanks for reading.
P.S. If you’re ready to achieve financial freedom as soon as possible, check out some awesome resources that I personally used on my way to becoming financially free at 33!
That’s what I try to tell my readers too. Everybody is on their on path. You can’t compare yourself to other people. Financial independence isn’t the beginning or the end for me. It’s just an inflection point. FI gave me the freedom to try new things, like retiring early.
My FIRE number used to be 30x annual expense, but it evolved to passive income covering expenses. 100% is good enough, but I’d like to see it for 3 years. Inflation makes it tough when you’re right at 100%. Maybe I need a little margin. 120%?
Joe,
We’re definitely on the same page in regard to the comparison stuff. 🙂
I’m not sure much more than 100% is necessary. I don’t even think you need to get to 100%. I’m sure you were gonna still blog and do everything you do, whether you were at 80% or 120% or whatever. Anyone who’s pulling the trigger in their 30s or 40s is going to go off and be productive. Just the nature of things.
Thanks for dropping by!
Best regards.
Great article Jason! Our fire number is 1.2m. That will provide a little over 40k in passive income which will be perfect for our family. The hard part for me is continuing this decade long savings marathon. To be clear, the saving part isn’t hard… it’s having a goal that’s still 5ish years out. Reading posts like this help to remind me that it this goal is achievable!
DP,
Hey, that’s great. Putting a hard number on things like that gives you a clear target to shoot for. Doesn’t have to be an unwavering goal in your life, but not having anything to shoot for leaves you moving forward in the dark. And that’s where stuff like OMYS starts to set in, because you don’t know what else to do.
Best regards!
Hi Jason. Its been a while since I stopped by to catch up.
I never really thought much about what I really needed ( way back in 2004 ) I knew I had a home that was paid for and NO debt ! That was huge for me. I actually finally made a list of ongoing expenses and its ridiculously low I have not itemized food yet as it varies widly so I will run a 6 month avg.
Why would I do this so many years later ? I guess to understand the numbers and help take a look into the future.
Having a bit extra allows my wife and I to do some different things as well. We will be spending a few days at the cabins at Disney 🙂 I mentioned it to a few friends and they said “Those are expensive” my response ” well its free for us ” LOL I think you get it.
Enjoy 🙂 Life is shory and goes fast I just hit 58 years young LOL
Bob
Bob,
It’s incredibly helpful to have a good handle on all of your numbers. Then you know whether or not that Disney trip really is “free”. 🙂
Cheers!
Jason –
Couldn’t agree more. Define the number. Define the why for the number. Set a timeline. Then, the plan and path shall follow, it takes work – but the more you see, act and believe on it, the higher the chance you will make sure you get there.
Being a nerdy accountant, always about setting the number, setting that target, so that you know what you are trying to reach. Keep writing JF!
-Lanny
Lanny,
I’m definitely not someone who was ever into spreadsheets or anything like that, but I found it absolutely necessary to set a clear target to shoot for. I had an annual expense number, and then I could clearly see the passive income slowly climb against it. Once the latter exceeds the former, you’ve hit your “crossover point” and you’re home free. All gravy after that! 🙂
Best regards.
Hi Jason,
This is a great article and it could have been written for me.
I agree with calculating your number and sticking with it. With us, having a second kid had me re-calculate our number since I want to send the children to international school while living here. That is a hefty cost and fees grow 5-6% each year so more expensive than normal inflation elsewhere. As a result I’m going some part time jobbing to secure some additional income.
It’s great to have this flexibility from having a lot of the heavy lifting being done by the dividend income portfolio.
Life continues to be very good and I remain very optimistic.
Stay well up there in Chiang Mai. Congratulations on your 2-year anniversary with Oh. I’m up to 15 years with my significant other and the journey remains wonderful.
-Mike
Mike
Thanks a lot. It’s been a fantastic two years. I’m looking forward to more adventures together. With the ongoing tightening of visas here in the Kingdom, we definitely have to plan for some unique adventures next year just so that I can stay here. Congrats on your 15 years. It is really great when you can spend time with someone who adds a lot of value to your life.
Flexibility is wonderful. I’m right there with you. Sounds like you need to tap into some of that flexibility. That’s what it’s there for. 🙂
Best wishes.
Hi Jason, when you say “With the ongoing tightening of visas here in the Kingdom”, is Thailand limiting how many years you can renew your student visa? Student Visa is what I am planning to stay long term, if I choose to move to Thailand.
Thomas,
The ED visa is included in the clampdown. My program has been cut in half, and the administrator there told me it’s becoming difficult for them to get even one year for new students.
I have a post already written about this topic. Should be able to publish it before the end of the month. 🙂
Cheers.
Really nice article
That reminds me my plans, that looks like that:
Plan A) Reach by passive income enough money to survive in case of being jobless and no chance to find another.
Plan B) Reach an amount that allows me to live comfortable, no luxury, but not survival
Plan C) An amount that I can save money from it.
I have clear numbers from all the plans, obviously I am aiming for C, but it is good as well to know what can happen with other scenarios
Jorge,
Thanks for sharing!
Totally agree with what you’re saying. I wrote an article a while back about how freedom exists along a spectrum:
https://www.dividendmantra.com/2015/02/freedom-exists-on-a-spectrum/
You should have a target that you’re aiming for. All the same, though, it’s not like it’s a binary choice between 100% and 0%. All spots along the spectrum offer different advantages and disadvantages. And I’d argue being 50% there is almost as good as 100%. 🙂
Cheers.
Hi Jason,
yes, I can remember when I seriously started to begin getting FI, I defined a sum where I have to go to. I was not that experienced like you, when I was in the process to see all advantages before I reached the 100%. I was really strict, sometimes it was hard for me because after a while I got a bit impatient. Today I´m getting over 120% of all costs in Munich. I have more income than ever because I will do some projects with active income, which is not my main target. Today I would say: I was too strict with me and it is not necessary to hit the number to change everything.
But you are right with the spectrum you linked in an answer with the article on your former side. I knew reaching 20.000 EUROs that I was on the way, hitting 50.000 EUROs that there can´t happen too much financially serious to me and after 100.000 EURO that this was my first major milestone. And all of this is real when you reach these numbers. You are far away from FI, but I was proud to hit these numbers because this was the best safety net you can have.
On the other side I didn´t reduce anything and saved, made enough money to have the possibility to save and reinvested every dividend. I didn´t spend anything from this fund when I was saving. On the one side it was good, because when I reached FI it was clear that whatever happens, I can pay my bills. On the other side: I like IT anyway and when I shortened the projects when I reached let´s say 50% would have worked out as well. But I know it today and not when I was in the saving phase.
I will change some things next year and start some internet sites with different topics. So I will get away from the IT projects I´m doing today. I´m sure I will also earn a bit money with that, but this is really not important. I don´t think, I will earn as much as I do today. But when you are in a position that this is nothing what matters the decision is quite easy. Even if I don´t earn anything it doesn´t matter. For this 100%+ is ideal, no pressure. On the other side I plan to settle to Greece/Crete, which is from the COL much cheaper than Munich. Not important as well, but there is a lot of sea, nice mountains and a ton of good stuff to eat/drink. And a lot of nice islands nearby. Cheaper live and overall a lot of quality of live as well. I think, this is also doable with 70% of FI in Munich. Yes, the missing experience ….
Have a nice time in Chiang Mai
Oliver
Oliver,
I hear you. It’s tough to see the benefits of anything less than 100% when you’re deep in the slog of an everyday routine and job you don’t really like. You see that light at the end of the tunnel, and it’s all you can focus on. I was fortunate enough to kind of start to see things a bit differently, which led to quitting my job way earlier than 40. Of course, things could have worked out much worse. But I also knew my worst-case scenario was just going back to a job. At that point, there was nothing to fear.
Good luck with the upcoming move. Sounds very exciting. Munich looks like a beautiful city. A lot of German cities fascinate me. I sometimes think that if I were born in a different country with different QOL dynamics (like, say, Denmark), I might not have been so interested in FIRE in the first place. The major impetus for chasing FIRE, at least at the beginning, was my disdain for my job and equal feeling of being kind of left out in the cold (because the US safety net is terrible). Things might have been different if I were in a situation where I felt pretty comfortable and had a schedule that wasn’t too bad. But I’m glad it worked out the way it did. Now that I have financial freedom, it’d be tough to imagine a life without it.
Best regards.
Hi, Jason! Great read and insights.
I have very similar number (1200/month) and about 30 months to go:).
Can you please share how much did you earn from your passive income when you quit your job at 33? I recall reading that your portfolio was not much over 200k and actual income should have been lower than 15000/year.
Janis,
30 months will fly by! 🙂
I actually quit my job the day after my 32nd birthday. I wasn’t yet FI, but I also thought I’d be just fine anyway doing what I loved and making some money at it. The portfolio was somewhere around $150k back then. I hadn’t yet written my first book, so I think passive income was a bit less than $5,500 per year. I then achieved full FIRE about two years later, not too long before turning 34.
Best regards.
Really liked this one. Most people have the fear, and without facing the fear they will never be ready.
That applied to every aspect of life. You never feel ready, but you just have to do it and execute.
I was not ”ready” to start blogging, but I did it anyway. Now I’m reaching to the point where I get collaboration e-mails and it feels fantastic 🙂
– Financial Nordic
FN,
Right. And if you don’t define your “enough”, you’ll never feel ready to stop chasing more.
Best regards!