Moderate Income FIRE: Being Ordinary Might Not Be Bad

Financial Independence is a goal many set to achieve, but some are limited in achieving it due to their lower income. Well, worry not, because I have got just the advice for you.

While it does matter how much you earn, what matters more is how much you save. So, if you are earning less but still saving up a marginally higher amount of money, you will still be able to reach your goal of FIRE (Financial Independence, Retire Early). If you cannot save enough, then we will be giving you some advice later in this blog. The goal is to save as much as possible and live a minimalist and frugal life, the more you save up the earlier you can retire.

That is What it’s All About

That is the advice. The following are some tips that can help you save more money and some general tips to achieve FIRE with a lower income. So here are some tips to achieve your goal.

• Minimalism: Living a life of minimalism will help you succeed in your FIRE journey by lowering your needs. You would only try to save money on material things that might not be useful for you and are only bought for some time. Through this, you can focus on the things you require and spend the rest of the money you saved for your FIRE journey.
• Investing: Investing is a popular method to achieve FIRE. In fact, the method Coast FIRE is based on investing and through compound interest. It is also easy to get into after doing a little research. While it might not be for everyone, and it sure is risky as you might lose money instead of gaining, it can sure help propel your journey in the right direction.
• Reducing Travelling: Everyone loves traveling (Okay, maybe not everyone). However, traveling is a huge expense. Lowering these expenses can cause a significant rise in your savings. These expenses can be lowered by either getting cheaper flights and hotels or avoiding traveling at all, but where is the fun in the latter?
• Frugality: Frugality is a basic concept in FIRE. Whenever reading about FIRE, you will see this word being told time and time again. That is because living below your means is a great way to save money. By living a thrifty lifestyle, you can lower your expenses quite a bit and save so that you can focus on your retirement journey.
• Increase Income: This is an obvious point. While it may not be feasible for everyone, people who can achieve this should try it. You can increase your income through side hustles such as starting a small business, freelancing or even creating a blog on a topic you are interested in. There are countless ways to increase your income, but some would require more time than others, while others might require you to put money into them. Researching before getting into a method is always a great start.

These are some tips through which you might be able to reach early retirement quicker and more efficiently.

Saving Your Way Through Lower Income

Increasing your savings is the key to FIRE. If you increase your savings, you can reach your financial independence sum quicker. If you end up saving low, it might be harder to reach FIRE unless you have a very high income.

• Creating a Budget: A great way to save money is through creating a budget. Through creating a budget, you can list out all of your income and expenses, and use that to figure out what expenses need cutting down on. By doing this, you save up more money and know what things you are wasting your money on.
• Reduce Expenses: The lesser the expenses, the more money you can end up saving. While, not all expenses can be reduced such as some fixed expenses (rent, loan, etc.), there are various other expenses that can be reduced and rather easily. Such variable expenses could be reduced by lowering your subscriptions, buying products from a cheaper brand (be sure to check the quality), and taking time to upgrade things (such as your phone).
• Transportation: Transportation is a daily factor in the lives of the majority of the people. This is why it’s a great way to save money by lowering your transportation costs. You can lower these costs by opting for public transport, which is also more environmentally friendly than your car. While public transport might not available for everyone, you can carpool with people travelling from and to the same area, which can also help save you some money.
• Review and Change Strategies and Goals: Keeping track of your goals is essential to your FIRE journey. As you grow older, your goals might end up changing. While, it is recommended to keep a singular goal by some FIRE users as it helps you focus on that one goal, and design a framework around reaching it. However, it might not be possible to keep the same goal, as changing times require changing needs. This is why, reviewing and changing your strategies according to your new goals is important. Even if you do not change your goals, it is still recommended to review your strategies, as some factors might not be the same as when you made your strategy and might require some tweaking.

Conclusion

Reaching FIRE with a modest income might be tougher than you imagined, as you would have to sacrifice various different amenities and luxuries. Nevertheless, if your goal is to reach financial independence as early as you can, then following these methods can help you make that journey easier.

It is entirely possible to reach FIRE with a modest income, and a lot of people have already achieved it. There are various FIRE methods that are available for you to customize to your own liking and according to your own needs. Make sure to set a proper goal before starting. Your walk towards your goal might have some hot coal in between, but in the end, you will be able to relax in the water, so it might just be worth it.