Page 18 - Kiplinger's Personal Finance - November 2018

F F F II RRR E

buy 30-year U.S. Treasuries that paid earning years—which will also lead to sidy when they purchase insurance on
from 8% to as much as 15%. That’s no a lower Social Security benefit later, the health care exchange. Some seek
longer an option for today’s FIREs, with says Roger Ma, a certified financial part-time work that comes with health
long-term Treasuries now yielding 3%. planner in New York City. benefits. Still others have medical pro-
This time around, too, there is social And health care is a major chal- cedures done in other countries for a
media to help spread the word. Instead lenge. Most workers get health insur- fraction of the cost in the U.S., Men-
of feeling as if they’re the only ones ance through an employer that typi- donsa says.
being frugal, those living the FIRE life cally picks up 70% of the cost. If Some FIRE followers join a Chris-
can now reach thousands of others in workers leave an employer, they need tian-based health care sharing minis-
the movement who will share advice to find coverage until they are eligible try that assesses a payment lower than
and offer support. For instance, the for Medicare at age 65. “In the mind of conventional premiums and goes to-
r/financial independence online com- early retirees, that is probably the big- ward paying members’ medical bills.
munity on Reddit now has 426,000 gest issue,” says Jonathan Mendonsa, The ministry’s arrangement is not in-
subscribers and is growing quickly. cofounder of ChooseFI. surance and generally doesn’t cover
ChooseFI, a website launched in Janu- For some, the answer is to keep in- preexisting conditions, Mendonsa
ary 2017, also helps connect those in come low enough to qualify for a sub- says. Members share religious beliefs
FIRE. ChooseFI has created Facebook and generally must attend church reg-
groups for people with specific inter- ularly, drink in moderation and ab-
ests, such as members of the military, KipTip stain from smoking and illegal drugs.
FIRE singles who want to meet other Building a FIRE Another major challenge for those
like-minded singles, and even people who achieve FIRE: what to do for the
who want to swap recipes. ChooseFI rest of their lives. Robin says she wor-
also helped set up groups in 150 cities To get on the road to Financial Inde- ries that some people in the FIRE
in more than 20 countries where pendence, Retire Early, proponents movement are too focused on the
people can meet up or trade tips with recommend these nine steps: number crunching. “They are so fo-
FIRE followers in their area, says 1. Determine why you want to achieve cused on the mechanics,” she says.
cofounder Brad Barrett. FIRE, and envision what you will do “They will wake up and realize there
Why have millennials flocked to once you get there. (This will keep you is something more to life.”
the movement? Robin says millennials motivated.) Finding the next act that gives your
with steep student loan debt and un- life purpose is a question facing all
certain job prospects have concluded 2. Calculate your net worth (total as- retirees—early and traditional, says
that they need to take control of their sets minus liabilities) to see where you J.D. Roth, founder of GetRichSlowly
stand.
own future. And the internet—along .org. Roth launched his site in 2006
with a laptop—gives workers today 3. Track every dollar spent so you know as he worked his way out of debt
more employment opportunities that where your money goes. and learned about personal finance.
don’t involve a 9-to-5 job, she says. He sold the blog three years later,
4. Slash expenses. To reach a savings
“It’s an anti-consumer movement to although he continued to write and
an extent,” says Bush, the Michigan rate of 50% or more, you’ll need to cut edit for it for a time and then traveled.
major expenses, including housing and
FIRE walker, adding that some mil- He repurchased the site last year.
transportation.
lennials are less inclined to be loyal to “In my case, after I achieved finan-
a company after seeing how their par- 5. Pay off high-cost debt, such as cial independence and retired, I
ents were pink-slipped by employers credit cards. drifted for a while,” says Roth, 49. “In
during the last recession. Bush’s fa- my talks, I joke that I sat around in my
6. Build an emergency fund so you
ther, for example, was in his peak underwear playing video games all
don’t resort to credit cards in a pinch.
earning years at age 57 when he was day. Even though I say that as a joke,
laid off by the company where he had 7. Take advantage of tax-friendly it’s true.” The main reason he bought
worked for more than 20 years. He accounts: 401(k)s, IRAs and a health his site back is to gain a sense of pur-
found other work, but “he never made savings account. pose and to bring some value to the
it back to where he was,” Bush says. 8. Use index funds to keep investing world, he says. “Financial indepen-
dence shouldn’t be your goal in and of
costs low.
TRADE-OFFS AND CHALLENGES itself,” says Roth. “You have to know
9. Find a side hustle to bring in extra
One of the big trade-offs of workers why you want to achieve it.”
abandoning careers early is that they income and boost savings.
will miss out on some of their peak CONTACT THE AUTHOR AT EAMBROSE@KIPLINGER.COM.

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