Retire By 30
Overall Thoughts
Frank breaks down the F.I.R.E. concept deeply and also keeps it high-level for the reader to implement in their own day to day. This book encapsulates the full journey of not only strategies to pivot into, but also different areas and methods to consider. He discusses common pitfalls and overall makes it F.I.R.E. an easily digestible concept for someone new to the space. Overall, a book that is filled with tons of knowledge extracted to produce a high quality masterpiece.
“As you embark on this path, remember that your pursuit is not merely about freedom from financial burdens but a continual exploration of self, a balance between pleasure and purpose and an opportunity to craft a life that resonates with your truest self.”
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Quotes
Introduction
“Waking up to the jarring sound of an alarm clock, being thrust into peak hour traffic and then spending the bulk of my day in an office setting that often felt more like a competitive arena than a collaborative workspace, began to weigh heavily on me.”
“For me, [F.I.R.E] presented an enticing prospect: Imagine a life in which work is a choice, not a necessity, a life in which the allocation of your time is dictated not by a rigid work schedule, but by your passions and personal interests.”
“The second cornerstone of early retirement revolves around frugality. It’s not necessarily about how much you earn, but how much of that income you can successfully retain. This doesn’t mean leading an austere lifestyle devoid of joy. Rather’s it about making informed financial decisions, wisely prioritizing your spending and finding happiness in life’s simpler pleasures.”
“The principles of F.I.R.E. are not just about retiring early; they are about reclaiming your time, your health, your relationships, and ultimately, your life.”
Chapter 1: My F.I.R.E. Journey
“However, my goal was quite different: To accumulate wealth at an accelerated pace to exercise my own agency in selecting the pursuits that mattered to me. I’ve always found it grating to be told what to do, and though I didn’t know it at the time, F.I.R.E. was what I was working toward.”
“Fidelity undertook a study on their most lucrative traders and the results were quite insightful: The traders with the highest profits were those who had forgotten about their accounts.”
“Our startup’s failure was a harsh setback, but the most agonizing aspect of the experience was the unraveliing of my friendships with my co-founders. The pressure and disappointment accompanying our venture’s collapse strained our relationships over time, we slowly drifted apart.”
Once you mix business and friendship together, the relationship evolves.
“This predicament served as a distinct reminder of the brutal truths of corporate politics and the lengths some individuals would go to place business needs above their employees’ personal circumstances and well-being.”
“Throughout our professional lives, my wife and I had always been financially conscientious and disciplined. We regularly saved more than half of our income, living significantly below our means.”
Chapter 2: WHAT is F.I.R.E.?
“More than just an economic strategy, F.I.R.E. reimagines how we relate to money and shapes our life choices in alignment with personal values and aspirations.”
“Embracing F.I.R.E. doesn’t necessarily mean early retirement for everyone. For some, especially those in lower income brackets, financial independence might translate into greater financial security, flexibility in work choices or the freedom to pursue passions without immediate economic pressure.”
“LeanF.I.R.E. is a lifestyle choice, a philosophy that prioritizes living with less to achieve freedom sooner.”
“BaristaF.I.R.E. represents a middle path that seeks to blend the desire for early retirement with a more balanced and gradual approach. This strategy involves leaving a stressful, full-time job but continuing with part-time work or pursuing a passion project that might not pay as well.”
“FatF.I.R.E., on the other end of the spectrum, is geared toward individuals who have grown accustomed to a certain standard of living and wish to maintain or even enhance it during retirement.”
Understanding the different subcategories provides a clearer approach.
“Suppose you aspire to spend $100,000 every year during retirement. In accordance with the 4% rule, you’d need an investment portfolio worth $2,500,000 to sustain such spending indefinitely.”
“Therefore it’s essential to adjust your withdrawal amount according to inflation. For instance, if inflation is at 2%, you would withdraw $100,000 x 1.02, which equals $102,000 for that year’s expenses. Conversely, during periods of deflation, you would withdraw less. For example, 2% deflation would result in a withdrawal of $100,000 x 0.98 = $98,000.”
Easy to understand breakdown to showcase how withdrawals fluctuate.
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Chapter 3: PITFALLS TO AVOID
“Despite the changing times and evolving tactics, the fundamental structure of these get-rich-quick schemes remains the same: They promise fast and easy money but lead to financial ruin. We live in an era in which the promise of instant riches is marketed to us from every direction.”
“A report by the Federal Trade Commission (FTC) on MLM, a popular format for get-rich-quick schemes, found that a staggering 99% of MLM participants lose money. Yes, you read that right. Ninety-nine out of 100 people who enter such schemes end up losing money rather than making it.”
“No matter how high the income, extravagant and uncontrolled spending will lead to financial ruin.”
This goes back to the Psychology of Money book and how it’s about your habits.
“Compounding is the process by which interest is added to the principal (the original amount borrowed) and then additional interest is charged on this new, larger amount. This is why debts can grow rapidly and become unmanageable, especially with high-interest loans with an already-steep interest rate. For example, a $10,000 loan with an APR of 20% would grow to $12,000 after a year if the interest is compounded annually.”
Chapter 4: Step-By-Step Guide to F.I.R.E.
No quotes in this section. The step-by-step instructions provide a seamless, high-level overview for planning your F.I.R.E. route.
Chapter 5: How to Maximize Your Income
“It’s important to clarify that nurturing a positive money mindset doesn’t equate to an unhealthy obsession with wealth or transforming into a miserly figure. It’s more about maintaining an acute awareness of financial growth potential and possessing an upbeat, proactive attitude toward enhancing your financial health.”
“A growth mindset can turn ‘I can’t afford this’ into ‘How can I afford this?’ It can modify ‘I’ll never be able to earn more’ into ‘What strategies can I implement to increase my earnings?”
“To alter your financial trajectory, it’s imperative to acknowledge that every effort bears fruit. Each stride you make, each risk you undertake and each failure you learn from incrementally steers you closer to your financial objectives. Each setback lays the foundation for a rebound and each hurdle is a stepping stone propelling you toward substantial financial success.”
“Remember your beliefs can architect your financial reality. Make certain they’re constructing it to favor you”
Beliefs and actions will cascade into results.
“An integral part of this understanding is the introduction to the two primary modes of thinking: the Focused and Diffuse modes. Focused thinking refers to the concentrated, direct approach to problem solving in which your brain zeroes in on specific details. On the other hand, diffuse thinking is more about the relaxed, broad approach that allows the brain to make novel connections between disparate pieces of information.”
“Lifelong learning is not only a tool for personal and professional development; it’s a mindset that involves continuous curiosity, openness to new experiences and the pursuit of knowledge throughout life.”
“Here’s the catch: when you’re stretched thin across multiple gigs, you’re likely to struggle in delivering the level of commitment, time and energy that each job warrants.”
Less threads to focus on will produce finer quality growth.
“There is an increasing amount of evidence suggesting that concentrating on fewer tasks and executing them well can lead to enhanced productivity, improved performance and ultimately, increased income.”
“Agglomeration economy – a concentration of firms and people that, in turn, draws more individuals and companies, thus perpetuating a cycle that continues to increase wages.”
“Being surrounded by high achievers can propel you to perform your best, push your boundaries and aspire to excellence.”
The environment can either elevate or lower you.
“Strive to work for the most esteemed company you can, located in the most appealing city to you.”
“If negotiations aren’t going in your favor and you believe the offer isn’t reflecting your worth, you need to be prepared to walk away.”
“Focus on learning, earning or choosing to leave.”
“The light bulb moment came when I discovered the power of job hopping. It wasn’t a disregard for loyalty, as some might think, but a strategic move in the vast chessboard of my career. By shifting roles and companies, I was able to learn new skills, meet new people and broaden my professional horizons.”
“Remain in a role long enough to deliver substantial contributions and absorb meaningful lessons, but also recognize the right moment to advance forward.”
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Chapter 6: Living Below Your Means
“Frugal individuals recognize that every purchase carries a cost that extends beyond the monetary value reflected on the price tag. Purchases can also exact costs in terms of space, time and energy, and lead to potential clutter and waste.”
“Frugal individuals understand the concept of the ‘false economy,’ wherein the cheapest option might ultimately turn out to be more expensive in the long run.”
Say you bought something that broke within a few months over a higher quality version that lasts years. The investment upfront can lead to substantial changes in the long-term.
“Discerning between wants and needs enables us to resist the persuasive force of consumerism, which frequently pushes us toward desiring the latest gadgets or the trendiest fashion items.”
Be intentional and truthful with yourself about purchases.
“At its core, frugality is about personal and financial empowerment. It’s about taking the reins of your financial future, breaking away from the pattern of thoughtless consumption and aligning your expenditures with your values and aspirations.”
“The secret lies in concentrating on your own financial objectives and personal values, rather than striving to match or surpass what others possess.”
“Recognizing the allure of instant gratification can help us nurture patience and prioritize long-term financial objectives over immediate desires.”
“When you understand the worth of your time, you’re better equipped to evaluate the costs and benefits of various options.”
“Leisure time is a crucial opportunity for rest and revitalization. After a demanding week of work, taking time to relax allows both body and mind to recover. This period of rest isn’t merely a luxury; it’s an essential requirement.”
Operate like an athlete. Run in sprints, rest in between. Act. Reflect. Repeat.
“It isn’t solely about monetary gain; it’s about achieving life satisfaction, facilitating personal growth and, ultimately, forging a path to financial independence.”
“Search for ‘credit card churning’ forums to maximize these rewards.”
“The celebration of milestones plays a pivotal role in maintaining motivation on your journey to financial independence. The expedition toward your financial goals, not just the end point, significantly contributes to your overall sense of accomplishment.”
“The power of keeping the end goal in mind cannot be overstated when it comes to frugal living. It imbues your journey with purpose, directs your decision-making process, fuels your motivation, and enables you to track your progress toward financial freedom. It transforms the journey from a mere attempt to save money into a fulfilling voyage toward a future marked by financial stability and freedom.”
Both the journey and destination are necessary to understand the barriers and direction of where you’re going.
Chapter 7: Invest the Difference
“If you want to invest in cryptocurrencies, use Coinbase. Bitcoin and Ethereum are the only two that you need to put money into, you can safely ignore everything else. The vast majority of currencies will go to zero and you should not gamble on any of them hoping to strike it rich unelss you have expertise and specific domain knowledge of the field.”
Overall, agree since there is more stability with Bitcoin and Ethereum (ETH). Altcoins are typically connect to ETH
“Dividends are a part of a company’s earnings that are shared with shareholders, generally as a means to redistribute surplus profits back to the investors.”
“The balanced 70% $VOO, 25% $BND, 5% cash portfolio strategy comes into play when individuals approach retirement or reach a stage in their lives at which preserving capital takes precedence over aggressive growth.”
Different strategies for each part of the journey. Setup checkpoints along the way to adjust accordingly.
“In the grand scheme of things, it’s not just about how much you save and invest, but when you start.”
Time in the market > timing the market
“Remember the essential part of investing isn’t necessarily the exact method you employ, but rather the act of investing itself. Consistently setting money aside for the future and allowing it to grow over time is a crucial aspect of financial planning, regardless of whether you choose DCA, lump sum investing or a blend of both.”
Saving > strategy. Both are important.
“Whether it’s starting a new habit of saving a certain amount each month or breaking an old habit of impulsive spending, understanding the habit loop can be a game changer in our journey toward financial independence.”
Chapter 8: Beyond the Horizon
“Flow is a state of effortless concentration so deep that we lose our sense of time, ourselves and our problems, and are completely and fully ‘in the moment.’”
“Retirement is not a cessation of achievement; instead, it offers an opportunity to redirect our energies toward new objectives and goals that can bring personal fulfillment.”
Money becomes less of a driver for making energy choices.
“One strategy is to adopt flexible spending. This refers to the practice of adjusting your annual expenses based on how the market is performing.”
“The strategy involves dividing retirement assets into three separate ‘buckets’ to cover different types of expenses. Bucket One is for short-term expenses and is filled with highliy liquid and safe assets, such as cash or money market funds… Bucket two is meant to fund your lifestyle in the medium term, during the next three to ten years…The three-bucket strategy helps you orgnaize your retirement savings based on when you’ll need access to them.”
“The distinct feature of Roth IRAs that benefits early retirees is the ability to withdraw contributions (but not earnings) at any time without penalties or taxes. This is because you’ve already paid taxes on the money you contributed.”
“To set up a Roth conversion ladder, you start by converting a portion of your traditional IRA to a Roth IRA. This converted amount is considered income and is therefore taxable in the year of conversion. The purpose of the ladder is to spread these conversions (and the associated tax liability) over several years, keeping your income in a lower tax bracket.”
“In the light of this, it would be wise to start claiming Social Security benefits at the earliest opportunity, age 62. While claiming early leads to smaller monthly payments, it does mean you;’ll be receiving these payments for longer.”
“One common strategy for reducing your taxable estate is gifting. The federal government allows an annual gift tax exclusion, which was $17,000 per recipient for 2023. This means you can give up to $17,000 to as many individuals as you want each year without impacting your estate tax exemption amount.”
Chapter 9: Reflections
“But here’s the thing: parenting, with all it’s challenges, was a commitment I wouldn't trade for anything. The labor of love it required was fulfilling in a way that no corporate achievement could ever match. And now I’m able to fully embrace the joy and privilege of being present in my children’s lives.”
“As you embark on this path, remember that your pursuit is not merely about freedom from financial burdens but a continual exploration of self, a balance between pleasure and purpose and an opportunity to craft a life that resonates with your truest self.”
