FIRE is a goal to save and invest aggressively to retire early: StockEdge
In this latest episode of ‘Smart Money’, the focus is on an age=old concept that is picking up pace now, it’s called FIRE, which is "an active retirement where you will do things which you want, and you will not be restricted by a job where a particular job description is given to you. So you will create your own job description, and you will be your own boss, that is what retirement means in this case”.
In this latest episode of ‘Smart Money’, the focus is on an age-old concept that is picking up pace now called FIRE which stands for Financial Independence, Retire Early. This is a movement of people devoted to a programme of extreme savings and investment that aims to allow them to retire far earlier than traditional budgets and retirement plans would permit.
Speaking to CNBC-TV18, Vineet Patwari, Co-Founder & CEO of StockEdge, said in this scenario, retirement is not exactly retirement in the traditional sense, where one would to retire and do nothing.
He said, “It's an active retirement where you will do things which you want, and you will not be restricted by a job where a particular job description is given to you. So you will create your own job description, and you will be your own boss, that is what retirement means in this case.”
He added, “Earlier retirement used to be like 60 years where one used to invest in a pension fund and retire. Now people are saying Why 60? Why not do something, invest aggressively, save aggressively and retire at the age of 40-45? Why wait till 60? That is the FIRE movement.”
On how to calculate the amount you need to retire early Patwari mentioned there is something called the FIRE number; a simple rule of thumb — how much should you invest or how much should you save.
He said, “I will give you a simple number called FIRE number, which is 25 times of your annual expenditures — if you can save that much, so 25 times of your annual expenditure. If Rs 50,000 is your annual (expenditure), you multiply it by 25, the amount will be 25 into 50,000. So this is the amount which you need to save, and you need to reach there. Once you reach there, you can start thinking of retiring, because that amount will help you survive the rest of your retirement.”
For full interview, watch accompanying video
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First Published: Mar 17, 2023 4:41 PM IST
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