Episode 3 – On Fire

This week we are discussing On Fire by Thomas Cromwell… his review of the FIRE movement – Financially Independent Retire Early

This week we are discussing “On Fire” by Thomas Cromwell.

Tom Cromwell professes to be a financial planner. His credentials are vague. In On Fire he reviews the FIRE movement (which stands for Financially Independent Retire Early).

The core objective under the movement is to release yourself from the shackles of debt and achieve Financial Freedom.

Sounds Great! I am sold. Where do I start?

Tom’s narrative suggests that entering into the world of FIRE is not for the fainthearted. The key requirements to achieve success:

  • Time
  • Discipline

The earlier you start saving with the utmost discipline in execution of your strategy the more likely you will reap wonderful returns at a younger age. He suggests you need a plan and you need to consistently stick to the plan and not be swayed by emotion or the volatility of the market.

Tom recommends having a budget and refers the reader to his budgeting tool at https://personalfinancewizard.com

The idea behind FIRE is to live frugally, save as much and invest as much as you can starting from as young as possible. It’s important to know your numbers – How much do you need to retire? What kind of lifestyle are you hoping to achieve? etc.

Diversification of investments is the key – though the book is heavily swayed towards stocks and buying shares. He notes the share market has on average over the past century returned 9 or 10 per cent consistently.

Index funds are safer because they reflect the overall market. If you want to invest in individual shares you need to do your research.

Overall I found the book insightful. I am definitely seduced by the idea of Financial Independence and Financial Freedom.

If you want to check it out you can find it here: https://www.youtube.com/watch?v=9nlstWseuwg

Next episode we are discussing Minimalism!! Can’t wait.

Disclaimer: This content is a personal opinion only and in no way constitutes financial advice and should not be relied on. You should always complete your own research and seek advice before investing or making important financial decisions for your situation.

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