At a time when everything seems to be getting more expensive and salaries don’t always follow this tendency, it’s easy to get the feeling that we need a lifetime to save enough money to retire. Many people believe that if they get lucky, they will be able to start working part time around the age of 65. Yet a new trend is emerging with today’s youth: they’re saving aggressively to retire as soon as possible. The
What is financial independence?
While we often associate the word “retirement” with old age, the expression “financial independence” is a sexier way to refer to the moment when we’re finally free to do what we want with our time. Why wait to be going grey (provided you still have hair left) to enjoy life? But to reach financial independence by the age of 40, you need a great deal of money discipline and, above all, to change your traditional view of retirement, since time is considered more precious than money.
How to do it
Followers of the F.I.R.E. movement rely on savings and expense reduction to be able to spend the rest of their lives without having to work. This is obvious in theory, but not always so simple in practice. When we talk about focusing on saving, ideally we should start maximizing revenue by finding the best-paying job possible to invest most of the money now and generate investment income later. And when we talk about
Why do it
We could ask ourselves what could motivate a person to deprive themselves in an extreme way today while working a potentially boring job with the only goal of reaching their financial freedom faster. According to Travis Shakespeare, producer of a documentary entitled
Let’s take the example of Jeremy and Winnie from
For a more practical calculation, think about accumulating 25 times your annual expenses. A couple with an annual budget of $35,000 should accumulate $875,000 before retiring. In Quebec, when it comes to investing, Montrealer Jean-Sébastien Pilotte, who retired in his thirties and founded the blog
Whether or not you want to begin your retirement journey early, keep in mind that retirement tools can serve many purposes. Because regardless of whether or not you’re looking into retiring in your 40s, we must all one day reach financial independence.