Since I started reading about early retirement one of the first thing I was thinking about was the right work attitudes. Most of the people work because of two reasons. They either have to work to make money to survive or they love what they are doing. Rarely both. Unfortunately I belonged to the first category, and was never lucky to love my job. I did not hate it – mostly, but I did not love it. I think most of us have same issue. Work for money and then in the free time we do what we like. Perfect solution would be to find the job which you would love. It is possible but extremely difficult. Even when you do find it then there are many issues. Salary too low, hours not suitable, stress, boss and other. So even though I believe finding perfect job is the great achievement for happy work life, it is very probable most of us will never find it or it still might not be satisfactory due to the issues mentioned above.

I found way which i believe is easier than finding perfect job. New movement calling itself FIRE – standing for financial independence, retire early offers solution to the problem of finding perfect job. Make yourself financially independent and then you do whatever you want and it doesn’t matter if it brings sufficient income or not. It sounds difficult and it might cost you 15 to 20 years of working life but it still gives you 20-25 years of financial freedom in your working age and solves standard retirement issue after 65 which you would have to solve anyway.

What is needed?

Reasonable salary. In Australia average should be sufficient as we have one of the highest average salaries in the world but of course higher is better. Most of the degrees or a good trade should give you that. So if needed do some qualification upgrade.

Now probably hardest point which actually is technically easiest one. Good savings skills. I don’t mean 10 or 15 percent of income. Focus should be on 50 to 70%. There are many complicated ways to get there but the easiest one I found is to avoid lifestyle inflation. Normally as your salary goes up, you think you can spend more. Of course you can but that will keep you fully employed until 70 and might send you even broke at any income level because as we know sh#t happens and savings are always handy. So if you are at the beginning of your career, keep living as a student, sharing house, having second hand furniture and no brand clothes, small used car, cheap holidays. This will allow 2 things. Save excess salary and not to get used to expensive lifestyle which might postpone retirement option indefinitely. And as your salary grows and you keep your expenses low your savings will skyrocket. If you went through solid lifestyle inflation already, do start thinking about your student time and priorities.

Once we have actual savings we can start investing. Though I am not qualified in finance I have economics and accounting background and I have done a bit of reading on this part and found couple of things. Everyone has to learn at least basics about investing. Its not bad to use financial planner but it is important to know what they are talking about. You are the only one who is ultimately responsible for your finance. Bit like with health. Keep investment simple. Property will do, but be careful with leverage, shares are fine but diversification will decrease your risk. I am using Vanguard index funds traded on Australian stock exchange which I find simple enough and you see market value of your investment anytime. They are highly liquid as well and can be bought and sold at anytime on the stock market. There are many listed index funds from many companies. One more thing i have learned from my many years of studying and working close to investments. Whoever is predicting any movements in financial markets is just taking a massive unreliable guess. Basically they should say they don’t know but they need to say something. Worst one are the commentators forecasting something but not even knowing that they don’t know. As they say basically there are 2 types of finance forecasters. The ones who don’t know or the ones who don’t know that they don’t know. With investing it is important to educate yourself, don’t chase the high returns and be happy with average returns of the selected markets. For example if I am investing on ASX, I am happy to match the average return of ASX. It could be a loss in certain year but based on history we should be able to achieve reasonable growth rate over medium period.

Following the points above should help in being in control of your finance and be able to make independent decision about your work life.