Like what Cherroy shared, FI (Financial Independence) is the core component, RE.. hm.. things may change when U reach FI or reaching FI.

During my days, no such acronym, FIRE. Just focused on FI thus have options - option to continue working current job/Co., to change to another Co., to change entirely to another field that is more in-line with one's "purpose", no more "cold sweat middle-of-night awakening" due to monetary worries, etc.

Thus, if RE means freedom of options, FIRE has been around for ages, though known as a different thing .

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Sharing:
1. Financial independence/freedom (FF)
a. Personally, I was supposed to be FF in my 40s (now late 40s) but life happens - divorce, complicated birth, children, etc. Now, pushing it back to 50s to ensure children's education option.

b. I know the numbers needed - looks scary at first but do-able as we keep our focus, live below means (also good for planet, less destruction/wastage) & keep on growing investment assets.

c. I save 100% of my investment returns + at least 20% of my net income (excluding EPF/CPF), + IF there's bonus, >=50% is saved for investments & remaining is gifted & used for "feel good".

2. Man-at-work Vs Man-avoiding-work
Maybe i'm lucky, i enjoy what i do +i get paid well enough to be able to save & invest. Not many enjoy what they do, thus they just focus on "getting out" - which should not be the case. If U do not like the Co., then move. If U do not like your field, then learn other fields while working - suffer the 80% to get to the 20% of cheese/dream.

3. Ignore the noise
Be CRYSTAL CLEAR on what U want, ignore others - it's your life. When you're crystal, U literally just smile at "others' good intention/advice" - they aren't U, they can say/feel/opine whatever.

Just like Ramjade, loads of friends/colleagues/relatives will say things like:
a. What - U eating that again? Every day, how can U tahan?
b. Why U buy local car lar - U can afford ****
c. Eh, buy together lar holiday home - together gether cheaper, worth it la..
etc.
BTW, most of these folks.. they are the ones complaining not enough $ lar, blame employer for not paying earlier during Raya/CNY/Christmas la, blame Gov for too much tax lar, this lar, that lar

Also, most of these folks are either overweight or not able to do body-weight excercises - telling me to eat better

Apologies for the wall of text - just sharing my FIDO (Financial Independence, Doing Options) for U to convert to better FIRE.

good lord, i nearly choked on my drink when i read these

This post has been edited by wongmunkeong: Jul 4 2018, 03:59 PM

80/20 rule bro, thus 80% "like that"
Anyhow, life has taught me - it's good that the majority are "like that", else making a living or growing our portfolios will be ultra competitive

This post has been edited by wongmunkeong: Jul 17 2018, 08:29 AM

Agreed.
Lots of folks can't even hit the basic level of financial freedom (ie. BASIC living, not lifeSTYLE) BUT one shot want to hit level 2 or 3 liao.
Step by step is the best - achieve "level basic" first, then think about adding gravy if wanted. If i looked at the gravy only, instead of hitting the basic living first, i'd have totally given up before trying

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To share simple maths on "how much is enough" (my own PoV la, for those who's unsure or totally no idea how much they need):
1. Life style expenses wanted in future value of $ = current value of $ * (1+4%)^years
eg. 60K pa *(1+4% inflation per year) ^20 years time
= $131,467.39 pa needed in future value of $

2. Minimum investments/savings needed to generate (1.) pa = $131,467.39 / 4% returns = $3,286,684.71
Note - eg uses FD only. If U are an asset allocator & investor, 6%pa on total is very doable, thus need way less seeding / investment assets.

3. To be safe, assuming we spend only half of (2.) + invest the other half to keep ahead of inflation = $6,573,369.43
This is the safest place to be - high probability to be able to leave something behind +have safety buffers.

NOTEs:
a. the above, even (2.) is assuming we do not eat into the seed capital / investment assets, just skimming 4%pa off the top, thus (2.) works as if one doesn't plan to leave $ behind. To be even safer (i'm a worrier, so...)

b. (3.) would be a "safer place" + U may want to run Monte Carlo simulations on your projections (at least 1000 iterations) if your assets are allocated in highly fluctuating investment assets, eg. in stocks, businesses even properties (look at rentals for residentials & offices nowadays due to the overhangs)

Just sharing PoVs ya - no absolute right/wrong in personal financial planning. It is PERSONAL after all.

This post has been edited by wongmunkeong: Aug 7 2018, 11:15 AM

IMHO, even at USD$1M net worth, may not be enough due to:
1. extreme "gravy wanted" / lifeSTYLE
2. net worth includes non-$ making items like home, cars, super bikes, yatchts (?!!), etc.
3. ever inflating lifeSTYLE due to more income, instead of tapering off once certain comfort levels have been reached

momma says - one mountain got one mountain higher
thus, best to compare with oneself, ie. yesterday's self and try to better that.
maybe different mommas teach different things kua , ie. some teach children to keep up with the Joneses

This post has been edited by wongmunkeong: Aug 7 2018, 01:57 PM

reminds me of 'The quality of the Question greatly affects the quality of the Answer"

eg.
when we dunno how much we need /for goals/whys
AND how much we have,
thus can plan & explore how to "get there",
HOW la to "have enough" leh? "Enough" also no idea what number or why

Thus, the Q of "how much is enough".. maybe better Qs are "what do i want to achieve, why, by when" to make things clear/prioritize,
then the "how tos" can be filled in - with many many options/choices.

Just a thought, no absolute right/wrong - just Wong

so.. focusing on that only = cant?
FYI - during my parents' time, no investment books, no forums to learn from, no computers & Internet, etc.
Ya, $ was "big" then but houses still costs several donkey years' wages.

my time - just had dial-up modem + BBS, luckily have investment books + security firms for stocks & mutual funds
heck 1990s was a challenging year to find good paying starter jobs. i started as a warehousing assistant, driving forklifts and even climbing several stories of racking..

nowadays, U young ones have access to the WORLD via online brokerages, online tools, info, etc.
heck, nowadays banks giving free $ in terms of 0% 6 to 15 months balance transfer or cash into account. dont have to believe me - check it out with HSBC, HLB, PB, Aeon Credit and MBB on/off.

not downplaying your challenges - just stating every generation have their challenges. so.. roll-over & play dead or learn & adapt?

This post has been edited by wongmunkeong: Aug 10 2018, 11:49 AM

like life, it HEAVILY depends..
1. on Gov Uni?
a. cheap lar compared to (2.)

2. on Private Uni/College?
a. If totally local, current cost is about MYR150K+/- for a UK/AU computer science degree
b. If 3+1 or 2+2 etc. - the cost of living overseas is the main pain
c. Ivy league? <faints>

3. on type of degree
a. Engineering & other stuff needing specialized tools?
b. Medical? get ready with at least $500K if without subsidy / scholarship
c. general stuff like biz, computing, accounting, etc.? "cheapest"

I'd suggest:
take the above $ cost, then calculate FUTURE COST = CURRENT COST *(1 +xx%) ^yy
xx% = education inflation expected, eg. 6%pa 8%pa
yy = number of years to uni, eg. kid now 3, thus around 15 years time
using above eg. in Excel, FUTURE COST = 150K * (1+6%)^15
in English, "^" is "power of"

the current costs can easily be found via googling the local campuses & their programmes

hope the above idea/guide helps


It's a great feeling having nailed down a goal / clarity, thus focus eh.

Just some data, just in case (my apologies for assuming if U already know) to help in your planning, since i'm living in MY for (like ever! ):
1. FD here - if yearly, U can get 4%pa +/- unless MY goes crazy up or down, i've seen 10%pa+ before but that was like in 1980s

2. Food is generally "cheap" comparatively - per pax, eating out MYR20-30, unless U are talking about fine dining which can be easily MYRXXX to MYRX,XXX per pax. If U are like me - likes food & eats anywhere but eats a lot, per pax range from MYR12 to MYR35 - from good wanton noodles to bahkutteh dry+wet (told U i eat like a pig )

3. Rentals? heavily dependant on area
Cost of home? also heavily dependant on area & landed or apartment-types.
eg. rentals for a landed house ranges from MYR1.5K to MYR2K currently VS purchasing a house MYR800K to MYR1.xM,
in Subang Jaya & Petaling Jaya (my normal haunts)

4. Inflation - officially around 4%pa+/-
Unofficially.. gawd.. it can be bad if one's lifeSTYLE is crazy or it can be nearly half that, ie. 2%+, if one is frugal (not into Starbucks and the likes of branded only lifeSTYLE)

5. Cost of maintenance - car, home, wiring, water-related, airconds, etc.
Still "cheap enough" to "outsource" for middle-income families in MY compared to developed nations.

6. Suggestion to look up MALAYSIA MY SECOND HOME if you're an Aussie planning to retire in MY - why not leverage on what is available

Just some thoughts ya, and my bad if U already know all the above (and more)

This post has been edited by wongmunkeong: Aug 12 2018, 10:30 AM

IMHO, in all budgeting & cash flow planning, it's a matter of probability or median lor
if assume highest or 0, then either stressed like kaka or no need to save
thus, personally, i'm using MYR200K+ as current cost then add inflation.
i've been doing this since 2012 and my extrapolation of costs then, is very near the $200K+ cost now. thus, ok lar - works for me as a clear focus

Yup yup.
Debt, like fire or water, if used properly can be a great boost for financial freedom. However, for some who can't control "unlimited wants", can kill easily.

Personally, i prefer to keep a D/E ratio of around 30%+/- - using the debts for assets or $ generating stuff.
eg.1 Balance Transfers 0% 6-12-15 months even though i can pay off total, then use the cash in hand for investments (REITs), flexi mortgage prepayments, money market, FDs, etc.

eg. 2 Hire Purchase of vehicle - 9 years loan, effective rate 5.3%pa. - also using the cash for investments (REITs) + some holding in flexi mortgage for opportunities, which cost me 1.3%pa (5.3%pa-4.6%pa)

eg. 3 Keeping my flexi mortgage until the end and extend/refinance if worthwhile , even when there's enough cash flow to pay off. For "leveraged lelong purchases" when extreme value presents themselves - think market fears during Presidentials, BrExit, Brazil index crashes, Shanghai index crashes

Bottom line - borrow money when available & cheap, coz when kaka happens & financial institutions turns off the flow, it's expensive / hard to get when U want or need it for investments, biz cash flow, etc.

Just personal thoughts/practices ya - no gospel truths, PERSONAL finance is personal after all

Unfortunately snowflakes (be they millennials, GenXYZ, etc.) think the world is clearly delineated black or white, with no inter-connectivity or causation-feedback good/destructive loop, which the stories/experiences shared by more experienced folks shows.

IMHO, FIRE is nothing more than a re-labelling of personal financial planning, which is a HUGE AREA and experiences shared by forumers usually shows what works consistently - eg. no gambling, risk management, earn like heck & save to invest, etc. Thus, I for one is thankful to GarySydney & U, Showtime, for sharing as i can pickup juicy real experiences & reflection of the experiences (eg. what good can be learned from the painful experiences). Thank U Sirs.

This post has been edited by wongmunkeong: Sep 22 2018, 10:00 AM

er.. just wondering why the focus on "others" and "average"? i thought we should focus on what we can affect?

Like focusing on our spending vs savings for FI/RE(FI/FU anyone? )
+the marathon or methodological investing the savings to grow it.

ie. why compare to others when comparing to our "last year's self / net worth" would be more useful as something we can affect / better.

just thinking out loud ya - no absolute right/wrong, just wong

Just to keep this interesting FIRE topic bumped:

https://www.marketwatch.com/story/how-to-da...w_theo_homepage

not just the article above but the remarks/feedbacks, one was gold.
from Ardak Kumerian:
Many are interested in FIRE, but fewer are capable of, or have the discipline for it.
What many really want: a spouse who can pay for your FIRE, while the spouse continues to work.

that was what torpedoed my personal fire at 36
life happens, thus for the younger ones pursuing FIRE, if i may boldly share - better to plan financially for FIREx3 (ie. 3 times your basic FIRE investment assets) to be prudent coz "life happens"

ex was that type la, ie. "what's yours is ours, what's mine is mine"
thus all my income = family expenses/spending, hers = into her own savings

so, U are like that ar? your wife pay & U fire? if so, great turnaround

that type would have activated my auto-defence system and be terminated before entry (even into my car). SHIELDS UP!

the type "what's yours is ours, what' mine is mine" is more insidious. It acts as a 50/50 partner tapi... suddenly evolves/mutates into a mutant virus/ransomware.. die lor.. activated liao, no escape except "cutting off infected limbs" (ie. pay with $, blood, sweat & tears)
IMHO - these are the most dangerous to the FI/RE or even simple accumulators type.

working with Property Company, fat bonuses attracting fat EPF (employee +employer) i reckon
AND / OR
Employer EPF contribution 19% - double happiness

personally, methinks it's just like excercising / investing.
some can go all out coz they are already conditioned - mentally, physically, habits
some IF go all out, will burn out and give up fast coz their body, psyche & habits do not even meet the baseline
heck, some may even literally die - heart attack or something XD

IMHO - like in all things to improve - know thyself & improve/move at your own speed lor

This post has been edited by wongmunkeong: Nov 12 2019, 02:25 PM

thank U for highlighting it
weird - it was working for a long time, i guess google locked down after awhile.
i've updated the links

Actionable:
1. Spend less and/or spend on high value items to U & cut mercilessly on the rest
2. Save to invest - keep learning while doing
3. Find ways to increase your income - keep learning while doing
Rinse and Repeat (1.) to (3.)
Simple but not easy

bro, from what i've been reading, U already gave up in your earlier post. please forgive me if i'm mistaken.

People that aims for FI or FI/RE have a NEED - not want, not nice to have - for FI or FI/RE.
Thus we just start by budgeting/saving while looking for ways to increase income
AND while doing, learn more, adding to our doing as we tweak & go along.

Yes, it's tough but do U think you're the only one with $5K+/- salary, married, with kids?
some started from somewhere worse/lower, some similar to your situation, some better situation.
me - i've yet to hit FI given that i want to fund my children's education 100% BUT if they ever get their scholarships - instant FI , though too old to be considered FI/RE
and yes, i started my journey in a position like yours and went worse, before getting better - heck, even saving 5% of my net income was a challenge those days.

U seem to be from Chinese descent based on your style of writing - have U heard of "facing cow, play piano" (literal translation, with no grammar correction)?
U need to find your reasons to NEED to achieve FI or FI/RE - else all the knowledge/how-to/"blowing sunshine up.." wont help U. It's like learning to ride a bicycle or swimming - U have to do and learn, and do.
FIND YOUR REASON(s) to NEED FI or FI/RE, else no point.