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The Surplus Method: Kickstarting your journey to better finances
Use this method as a starting point on your journey to flaming financial independence
How to light your FIRE
The FIRE method was born out of the bestselling book Your Money Your Life, written by Vicki Robin and Joe Dominguez in 1992. This extreme saving lifestyle can be simply described as:
Compare every expense to the time it takes at work to earn that expense
Alexandra Kerr of Investopedia breaks down the method of how to obtain and maintain FIRE:
Proponents of the extreme-saving lifestyle often begin by remaining for several years in the traditional workforce in order to save up to 70% of their yearly income. Once their savings reach approximately 30 times their yearly expenses, often roughly $1 million, they may quit their day jobs or completely retire from any form of employment altogether. To cover their living expenses after retiring at a young age, FIRE devotees make small withdrawals from their savings, typically around 3% to 4% yearly. Depending on the size of the savings and desired lifestyle, this requires extreme diligence to monitor expenses and continued maintenance and reallocation of their investments.
