F.I.R.E Away But With A Plan!

Pravin Bhalerao Managing Partner, Pranitya Wealth Advisors

- Pravin Bhalerao

India Incs second-quarter earnings is underway and an interesting trend is panning out in mostly all sectors. Attrition rate has raced past 20 per cent which was quite unheard of in India thus far. A similar trend is playing out in the US with a record 4.3 million workers quitting their jobs in August 2021 (Source: CNBC).This could very well be the F.I.R.E movement taking off in the western world. F.I.R.E is abbreviated from Financially Independent, Retired Early. This new-age idea contradicts the age-old concept of retiring at the age of 60- 65. F.I.R.E consists of three broad steps. Extreme savings in the early stage, frugality (‘jugaad’ attitude) and creating a passive income source later.

You begin saving up to 70 per cent of your income at an early age and as you take on additional responsibilities, your expenditures may increase, but you would have earned equal or more returns on your past savings or investments if you start early. This continues until your savings reach 30 times your annual expenses adjusted for inflation and then you retire. Instead of following the income-expenditure = savings formula, follow income-savings = expenditure.

F.I.R.E Variants

• Lean F.I.R.E.: Trying to minimise expenses and maximising savings.