BOSTON — Dreams of sipping pina Coladas on a tropical beach retired at an early age. Who hasn’t had thoughts like that while sitting in their cubicle?
A growing number of people are adopting a lifestyle they say can actually make it happen. It’s called the F.I.R.E Movement which stands for financial independence, retire early.
“Most people in the F.I.R.E Movement know their expenses to the T. They know their income. They really focus on maximizing the gap, creating a big gap between your income and your expenses and kind of utilizing that gap to live the life you want to live,” said Cody Berman, a 26-year-old from Spencer who is actively following this approach.
About five years ago, Berman was making $75,000 a year and saving more than 2/3rds of it.
He then quit his corporate job and started buying real estate and continued to save with a vengeance.
“Now fast forward,” said Berman. “This past year, I just announced on my podcast, that I made over $400,000 and we ended up spending combined, my fiancé Lauren and I, about $40,000. That’s like a 90% savings rate which is astronomical.”
That’s how the F.I.R.E movement works. “I saw that there were people who no longer had to work in their 20s, 30s, 40s and it was incredible, and I was all in,” said Berman.
He still works here and there, like developing his podcast on achieving financial freedom. “Just a bunch of different fun stuff that I do to create passive income streams,” Berman said.
He and Lauren live in a small condo and say they’re happy keeping material acquisitions to a minimum. “We figured out what we value which is experiences, travel, friends and we don’t spend a lot on housing or on our cars,” Berman said.
Stories about people retiring before 40 are easy to find on financial websites, but how hard is it to achieve?
Chuck Zodda, a managing partner at the Armstrong Advisory Group in Needham, believes only about 15%-25% of young people could adopt the lifestyle that F.I.R.E requires because financial habits are hard to change.
Still, Zodda says there is value to people adopting some of the steps that F.I.R.E calls for even if they’re unable to go all in.
“It’s all about figuring out what you can live on, building a strong budget, living within your means. I think those are actually really good for people in the 20s and 30s to focus on,” according to Zodda.
Zodda isn’t surprised young people today are looking for alternatives to working 9-5 for decades.
“I think one of the reasons you have people talking about this is because a lot of these people in their 20s and 30s, they’ve seen how corporate American has treated their parents in the last 20-30 years...I think there are different perceptions about how that long-term employment strategy works,” Zodda said.
Lauren Kowalchek, Cody’s fiancé, feels a sense of freedom living this lifestyle.
“I feel like we’re just stuck in a society where we have to work and work and work until we’re an older age, 65-70, and then by that time there’s not enough time to do the things we really want to do,” said Lauren Kowalchuk.
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