In today's bonus episode, Wendy and Curtis discuss the fourth tenet of the FIRE (Financial Independence Retire Early) Movement - which is to increase your savings rate.
In previous episodes we discussed the previous three tenets which are:
1. Rejecting Consumerism
2. Redefining Retirement
3. Tax Optimization
A good portion of the United States population has saved less than $200,000.00 towards their retirement.
Many will simply have Social Security as their only means of income upon retirement.
In a recent CNBC article, they state that many experts recommend people save seven times their annual income for retirement. This is stark contrast to the minimum suggested by the FIRE community, which is at least 25 times your living expenses.
To achieve that number, it is not unusual for members of the community to save upwards of 40%, 50% or even 75%.
If you are not able to save that much, does that mean you are excluded from the FIRE community? OF COURSE NOT. The point is to strive to increase your savings rate as much as you are able to.
One step we have taken to increase our savings rate is to allocate all raises and extra income earned to our retirement. This automatically increases your savings rate.
We hope this episode has been helpful to you. If you want to help create a solid money foundation and get your financial house in order, we invite you to participate in our FREE 7-step Money Foundations Course.