FIRE is still viable, just at a different pace. It is guaranteed that people’s savings rates will fluctuate year to year, and that’s ok – stuff happens. It is analogous to committing to sailing around the world; the weather will constantly change, and that’s part of the course. If your strategy requires stable conditions, you will be in for a shock. A FIRE plan doesn’t avoid change; it accounts for it.
How each person is impacted by inflation depends on their circumstances, income and capacity to reign in expenses. Some will face higher costs but are at a life stage where their income increases.
What’s holding people in Australia back the most from reaching the endgame of FIRE?
Resources, particularly time. All good things take time, including FIRE. If you can add the other key ingredients, including long-term positive savings and investing well, it is just a matter of time. This doesn’t mean it is easy! It’s like planting an oak tree – if you are fortunate enough to have the resources of seeds, good soil, water, fertiliser and patience, it’s not a question of ‘if’ it will become an oak tree but ‘when’.
David’s top tips for growing wealth
The path to financial independence and growing wealth can be summarised in 16 carefully chosen words and four steps:
- Earn more than you spend
- Invest the rest well, over time
- Plan for property
- Cover your risks.