Early retirement: "We stop working before 40"

He and his wife Laura, two middle-clbad Americans in the state of Virginia, have also spent their lives working and earning a living until they decide to change their approach.

Like other members of the FIRE movement (financial independence, early retirement, which also means "shots"), they chose very early to see the expenditure of their salaries.

"I'm no longer forced to work from 9:00 am to 5:00 pm, I do not have any employer to rely on to have a paycheck," Brad Barrett proudly told the BBC.

The couple now has the time they want to devote to what they really love, the time they want, and have enough money to live a good life with their two daughters.

"We stopped working in our thirties," he says.

Stop the leaks

Brad and Laura were both accountants and were in paid employment until the arrival of their daughters, which led them to think about how to get and spend money effectively. money.

"Most people watch what they earn, while members of the financial independence community care about what we spend," said Brad Barrett.

As the FIRE movement favors, a person can achieve financial independence after 35, 40 or even 50 years by identifying and eliminating unnecessary leaks.

At home, the Barretts claim to have saved $ 3,000 a month by limiting their spending in the United States. They seem as basic as not having a car to afford or not to go out to eat at home all the time.

Laura Barrett says that a home-cooked dinner costs about 2 USD or 3 USD per person.

"If we save $ 3,000 a month, we get $ 36,000 a year, and if you do it for 10 or 15 years and you invest that money, it goes up and becomes huge," says Brad Barrett.

Work for pleasure

The couple explains that it is not that they have completely stopped working, but that they have saved enough money to only need one part of it. from what they had previously earned.

They can work on what they like to do, regardless of the fact that they do not receive a salary of $ 70,000 a year – a middle-clbad salary in the United States – and that they do not receive only $ 20,000.

"I have a job for the season, two months a year, I do rush hour tax returns, so I'm still a little on the job market," she says.

In the case of her husband, she has undertaken several personal activities that she now manages.

"I have the time and space to work on it and make it grow significantly," said Brad Barrett, who promotes his strategies for financial independence through his efforts. a podcast entitled Choose FI.

And their strategy has also allowed them to devote enough time to their daughters.

"As a mother, my financial independence has allowed me to stay here (at home) with my children.At the summer holidays, I am with them every day," says Laura Barret.

Doubts about the fire

The concept of the FIRE movement has become a very popular topic in Internet groups in recent years.

According to FIRE strategies, a person between the ages of 20 and 40 should save enough to retire at age 50 (or earlier).

Some 500,000 people participate in financial independence groups within the Reddit social network.

However, experts in personal economics have also raised doubts about the possibility that spending restraint and austere life will result in early retirement.

They point out that FIRE enthusiasts greatly underestimate the need for savings.

The basic rule for many, including the Barretts, is to save 25 times the annual expenditure they will need for their retirement: for example, a person who spends $ 30,000 per year during his retirement needs to have from a $ 750,000 sack.

But this rule has its flaws, especially when it is applied to young people.

This would usually work for those retiring at age 60, who will probably not need money for more than 30 years.

But if someone retires at age 40 or 45 and lives another 40 years, it will take much more than the expected 25 years.

BBC.