Financial Independence and Early Retirement: A subverse dedicated to all aspects of achieving FIRE.
What is financial independence? It is a status in which your total monthly living expenses are fully covered through passively earned income (e.g. interest, gains, dividends, rent, etc.) from a mix of instruments such as 401(k), Traditional/Roth IRA, taxable investment accounts, pension, and/or rental properties thus making it optional for you to work for the primary purpose of actively-earning income. Achieving FI will allow you to retire early if you choose to do so.
How does one go about achieving FIRE? First and foremost, one must get their personal finances in order. The key to mastering your personal finance (PF) is to actively manage your spending. The best way to go about this is to outline a monthly budget to visually see how your money is being spent, saved, and invested. Other elements of establishing your PF include funding an emergency fund and investing in tax-advantaged accounts. Simply put, the less you spend and the more you save and invest, the faster you can achieve FIRE.