Financial independence in your 40s

Today’s Times has a piece on the so-called Fire (Financial Independence, Retire Early) movement that, having taken off in North American is growing in the UK, too.

Here’s the magic formula:

The basic mathematics of Fire are that you need a net worth of 25 times your annual spending, invested sensibly in the stock market in low-cost tracker funds or in buy-to-let property.

Financial independence, whether you  choose to continue working or not, must represent true sovereignty. It’s therefore a worthy goal for the sovereign professional.
“If you can save 50 per cent of your take-home pay, it will take 19 years to go from broke to never needing to work again. If you can save 75 per cent, it will take seven to eight years.”
The basic requirements are a long-term focus and an ability for deferred gratification.
It reminds me of a great book, Your Money or Your Life, by Vicki Robin and Joe Dominguez, which is well-worth a read.
Photo by Sonja Guina on Unsplash

Author: Andrew Munro

A writer, communicator and sovereign professional.

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