If you are really interested in knowing how to do this, please join me to learn about the fire movement, because the ultimate goal of this movement is "financial freedom and early retirement"!
Financial freedom Early ReFIREment Movement financial independence (R E Tire E Arly) originated in the United States. This abbreviation, which is exactly the same as the English spelling of "dismissal" and "dismissal", has an irresistible appeal to many fans.
Indeed, from the recognized goal of the Fire Movement, the slogan of "financial freedom, retirement at the age of 30" looks beautiful, which makes the Fire Movement gradually "fire" from the United States to the whole world.
In this field, I have to mention Mr. Qian Beard's blog often. As early as 20 1 1, Mr. Qian's blog website was launched and began to record and teach the principles of fire movement and various practical methods. Many core concepts, such as the 4% principle, were popularized by him. Later, through the improvement of more and more people, some recognized concepts, principles and operation methods were gradually formed.
In fact, the practice advocated by the fire movement is not a brand-new concept. As early as the18th century, the United States began to advocate this simple lifestyle: reducing expenses, cherishing time, and attaching importance to oneself rather than material wealth.
The real rise of the fire movement benefited from a best-selling book "Your Money or Your Life" published by 1992. The core concept of the 4% principle can also be traced back to 1998, a study by three professors at Trinity University in the United States. The results show that if a person can control the annual expenditure ratio below 4% of his total assets, his living conditions will not be greatly affected no matter how the market fluctuates or inflation (of course, regardless of hyperinflation). At this time, he can stop working and move forward. Therefore, the 4% principle is also called "Trinity Study".
The theory of fire movement has gradually become full and not complicated. Simply put, it is to accumulate original capital through savings, cover living expenses without moving the principal and only using income, and realize retirement without working.
The core of practice seems to be very simple. Calculate your living expenses first, then multiply the total annual expenditure by 25 to reach the savings target, and then achieve the savings target by increasing income and reducing expenditure. Then according to the principle of 4%, you can manage this asset with an annualized rate of return of 4%.
According to the consumption level of China's first tier cities, such as Beijing and Shanghai, the annual living expenditure is 654.38+200,000, and 25 times is 3 million. For some people, it is difficult to save enough net assets of RMB 3 million. The question is "when can I save enough?" ? For others, this is too easy. Their question is "Is financial freedom that simple?" ? Don't worry anyway. According to Mr. Qian's suggestion, let's first see if your situation belongs to one of the following:
1, retired or can retire, my financial situation is perfect.
2. Still working, paying social security in full, no long-term bills for mortgage, car loan and credit card.
3. Same as above, but with one or more long-term loans.
As mentioned above, the living expenses are tight, and social security cannot be paid in full.
5. Same as above, but there are some credit cards I want to pay.
I can't always pay off all my money. There is something wrong with my credit record. If I lose my job and income now, my financial situation will be very bad.
7. I have collapsed-I lost my house and property, I can't find a job, and the debt is beyond my repayment ability. Why is the world so cruel to me?
I didn't translate the above seven articles directly from the original text, but made appropriate adjustments according to China's national conditions.
In either case, you can follow the principle of fire and gradually improve your financial situation in order to achieve the goal of early retirement. In this way, the movement of fire at least looks beautiful! Yes!
So how does fire affect and improve the financial situation of believers? The following are some recommended implementation steps:
First, change your outlook on money.
Second, calculate how much it costs to retire early.
Third, increase savings by reducing expenses.
Fourth, increase income.
Fifth, actively invest.
Does it look simple? Is that really the case?
Yes, no, it is true that there are only five principles to achieve great strides, but each one has countless ways and paths to interpret and realize. I won't discuss these five items in detail today.
Finally, tell an inspiring fact! There is evidence that in recent years, from the United States to the world, the fire movement has helped dozens or even millions of people live a life of financial freedom and early retirement.
Let's make a popular introduction about the fire movement today, and we will continue the articles in the future, which should be a long and interesting process. I also plan to find some friends to build a community, discuss pragmatically and start implementing the fire road.
In any case, it is necessary for you to know more about the movement of fire. Whether you want to "retire early" or not, after all, the word "financial freedom" is beautiful to us ordinary people just by imagination!