For those of us who have enthusiastically embraced Lifestyle Creep, the FIRE (Financial Independence Retire Early) movement is, ah, confronting. While ‘normal’ people adapt our lifestyles to our pay rises (and freak out at how little we used to spend, while struggling to make ends meet now), these keen beans are retirement planning with a vengeance. The concept is pretty simple:

Step one: Ruthlessly cut as many unnecessary expenses as possible

Step two: Calculate how much it costs you to live happily for a year within your new budget

Step three: Multiply that number by 25 - that’s the amount you need to retire

Step four: Put every possible cent towards investing, and add more income sources to put a rocket under your progress

Step five: Once you’ve hit your target, you can retire (even if you’re only 27!). As long as you don’t spend more than 3-4% of your total investments every year, your money should last indefinitely!

If the idea of retiring young doesn’t appeal, you are not alone. FIRE enthusiasts often don’t actually retire when they hit their target, their goal is something much more fundamental: Taking money out of the equation of their lives. Imagine being able to choose to work, having more time for your kids, hobbies and travel, and not even feeling one tiny prickle of fear when thinking about your financial future. Bliss.

We’re not going to dive deep into the fundamentals of the FIRE movement. Safe to say, it’s having a moment, so about 29% of the internet is currently articles, videos and forums dedicated to the topic. Go Google it.

Lighting the fire

The FIRE movement has become somewhat of a hot topic in the Hatch office, with a couple of us warily eyeing it up with skepticism we usually save for unbelievable investment returns.

But, we’re nothing if not game for a challenge, and after another year of having no idea where most of our hard earned money disappeared to, we’re going to give it a go.

In the hot seat

Introducing a new variation on the FIRE theme: Firing On Some Cylinders. Yes, we’re game for a challenge, but we also know ourselves. We’re not penny pinchers, and we firmly believe in living our best lives today. We’ve come up with our own FIRE-style goals and will update each other (and you) on our progress over 2020 #Accountability. Without further ado, here are our lab rats:

Nat Ferguson - 35.95 years old

Ok so this is scary. We spend a lot of time encouraging people to be more open about their finances, but doing this feels like that nightmare where you’re public speaking naked.

My current position is pretty good. Through a solid combo of hard work and privilege (but let’s be honest, the FIRE movement is a movement made up of life’s luckiest), I’m in a pretty strong financial situation. I already invest a decent portion of my income every month, and have had a lifetime of great financial habits… but in recent years, I’ve noticed my expenses ramping up. When I ticked off some big ticket financial achievements, I started to reward myself, and rewards became habit, then habits spiralled, and now you can find me at the day spa every month.

I want to achieve 3 things with this challenge:

1. Cut out expenses that don’t bring me joy. Apparently these make up 20% of general spending. What a waste.

2. Get a handle on how much I’d need to have invested to be able to cover my basic expenses FIRE-style (I love my job too much to retire, but would get massive relief from knowing that at a pinch, I could live forever more on the money I have invested).

3. Set myself a financial target to work towards.

Dylan Sweetensen - Almost 30 years old

Working in the finance sector can be a very confronting experience. It forces you to take a good look at your own financial health.

About two years ago I came across the idea of FIRE. It gave form to this abstract concept which had been floating around in my head ever since my first salary job. How much would I need to put away, and at what interest rate, would I need to live off the interest while maintaining a comfortable life? I started to save a chunk of my income and as my income and financial literacy increased, saving became investing. But as my income rose, my expenses steadily rose with it. When I came across the Financial Independence forums and blogs it became clear that it’s the outgoings that I need to look at if I have any hope of reducing my reliance on my salary. Having said that, I like to enjoy myself, and I don’t want to feel a stab of guilt every time I spend money on frivolous things.

My goal is to sustainably change my behaviours with money so I can be free of financial anxiety while still enjoying life’s little (and sometimes big) pleasures:

1. Get more visibility of where my money is going.

2. Identify the critical expenses I have (debt, insurance, etc).

3. Decide what leisure spending I can’t live without (like travel and craft beers).

Once I have a clear picture of my financial state for 2020, I can calculate my magic FIRE number, and create an investment strategy to help me get there.

Christine Jensen - 24 years young

I’m pretty new to the ‘being financially responsible’ thing, and until now have prioritised travel, life experiences and a few too many coffees over setting myself up for a solid financial future.

I don’t have investments or a huge cash cushion to fall back on, so I’m learning what it means to be financially empowered and set up great financial habits so I can start to invest in the share markets, my side hustle and/or property. In the past, I have been a victim of the good old lifestyle creep, but I’m starting to cut back on unnecessary purchases so I can get my spending in line with my values and goals. Being a financial newbie (and young-y?) I had no idea what FIRE was until Nat came to work excitedly telling us about it, so here goes...

My primary focus is to get started investing as soon as possible and in order to do this I need to:

1. Take a hard look at where my money is currently going, and identify where I am still making silly purchases on things I don't absolutely love.

2. Decide what I’m willing to compromise on (sorry peeps, I may not own 2 houses and have a massive investment portfolio, but I still love a good weekend getaway every now and again).

3. Put in place realistic saving & investing habits as well as a 1 year investing plan (key word: realistic).

Gather round the fire folks

Starting from Jan, we’ll be checking in monthly on our individual targets, challenges and lifestyle changes. We’ll share our successes and failures, and investment updates.

If you’re playing along at home, we’d love (read: are very desperate for) your tips, advice and stories!