Early Retirement

Five steps to take in 2021 to start your FIRE journey

FIRE is a marathon, not a sprint. And like any marathon you need to prepare. You won’t know where you are exactly until you prepared. With a new year coming up now is the perfect time to set these first steps! Trust me all the calculators online and simulations online will not be able to tell you the same as your very own data.

1. Start to track your income

Probably most people will be able to give some indication of how much they make per month. But what about your holiday bonus or end of year bonus? What about your tax returns? What about side incomes? They are quite common in Belgium but most people don’t know how much this exactly is. So how much do you actually make in a year? How much is your income rising each year? Start writing this down every month, and do this for at least a full year.

2. Start to track your spending

White tracking income is for most people fairly easy as its just writing down wages and tax returns every month spending is a bit more challenging.

Now firstly you need to decide where you write this down. My personal favorite: google sheets. You have it online, on your phone and has all the basics you need to start.

To make it a bit easier to input data into google sheets you can use side tools. For example KBC has a very good tool that is already displaying your expenses in different categories. I use much of the same, or at least very similar, categories in my sheet. Check out what they are on my monthly savings rate reports. My categories might not be the same as yours by the way. You don’t want your categories to be to small or to large.

3. Research investment opportunities

Rushing into investing might be an expensive lesson. Do your research first. Check out FIRE bloggers who have been on this journey for years and learn from their winnings but more from their mistakes. For example when I started I thought peer to peer was a good way to reach FIRE but it turned out to be very risky.

98% of people going for FIRE will concentrate on the stock market and real estate. Stay away from alternative investments and go for the types that are proven to work.

4. Find out what really matters in life

FIRE is about what really matters to you in life and what makes you happy. For example when I started tracking my expenses I found out I was spending 500 EUR on restaurants per month. To be honest I eat out to be around people, I personally don’t mind that much if I eat a home cooked meal or a 3 star menu in a restaurant, its just fun being out.

So I budgeted myself at 100 EUR per month for restaurants, avoided high-cost restaurants and ordered more often simpler food if I did go out, like croque monsieur for example.

In order not to alienate myself from others I started focusing more on sports and found that this is actually a good way to be around people as well. One downside is that sports costs as well. But at least when you buy stuff its much longer lasting then a 1 hour meal.

Find a good balance between going for FIRE and living your life. your life on hold to save every penny. Knowing what makes you feel good and what can make you happy without spending needlessly is a good start. Make sure you make progress but also avoid putting your life on hold since even in a marathon you need to stop for some food and drinks from time to time to keep you going.

5. Decide on why you want to retire early

Lastly you need to know why you want to retire early. This will help you in your journey to make the right choices. In my case its not necessarily because I don’t like to work (although I do have some of those days) but its also to keep my options open, and because I don’t fully trust the Belgian government that they will have enough money in 30 years to let me retire safely.

2021 is coming and its the perfect time to start to plan! Remember this is your preparation, only when starting these 5 steps you will be able to take the next step to calculate when you can actually FIRE.


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