FIRE (Financial Independence, Retire Early)

The FIRE (Financial Independence, Retire Early) movement encompasses several strategies, each tailored to different financial goals, lifestyles, and timelines. 

Watch The Fifth Person: Which FIRE is Best For You?

Traditional FIRE (Missed the Boat)

• Goal: Save enough to fully retire early, living entirely off investment income or withdrawals.
• Approach: Aggressively save 50–70% of income, invest in assets (e.g., stocks, real estate), and aim for a nest egg 25–30x annual expenses (based on the 4% safe withdrawal rule).
• Lifestyle: Complete retirement from work, with no need for earned income.
• Example: Save $1.25 million to cover $50,000 annual expenses and retire at 40.
  
  

Lean FIRE (Possible but don't want to to sacrifice lifestyle)

• Goal: Achieve financial independence with a minimalist lifestyle, focusing on low expenses.
• Approach: Save enough to cover basic needs, often requiring a smaller nest egg than Traditional FIRE.
• Lifestyle: Frugal living, prioritizing essentials over luxuries, with little financial cushion.
• Example: Save $500,000 to support $20,000 annual expenses.
  
  

Fat FIRE (Impossible)

• Goal: Retire early with a comfortable or luxurious lifestyle, supported by a larger nest egg.
• Approach: Save significantly more than Traditional FIRE to fund higher expenses, travel, or hobbies.
• Lifestyle: Financial freedom with room for discretionary spending and flexibility.
• Example: Save $2.5 million for $100,000 annual expenses.
  
  

Barista FIRE (My Pursuit)

• Goal: Achieve partial financial independence, supplementing investment income with part-time work.
• Approach: Save enough to cover part of expenses, then work a low-stress job (e.g., barista) to bridge the gap.
• Lifestyle: Semi-retirement with a balance of leisure and light work, often with benefits like health insurance.
• Example: Save $500,000 to generate $20,000/year, then earn $20,000 from part-time work to cover $40,000 expenses.

Coast FIRE (Missed the Boat)

• Goal: Save enough early so investments grow to fund retirement later without further contributions.
• Approach: Reach a “Coast number” where compound growth over time meets retirement needs, then work only to cover current expenses.
• Lifestyle: Less savings pressure, with work continuing but not for retirement savings.
• Example: Invest $250,000 at 30, which grows to $1 million by 65, while working to cover living costs.
  
  

Geo-Arbitrage FIRE (Something to consider when older)

• Goal: Achieve FIRE by relocating to a lower-cost-of-living area or country to stretch savings further.
• Approach: Save for FIRE, then move to a place where expenses are significantly lower.
• Lifestyle: Maintains a comfortable lifestyle with less savings due to reduced costs.
• Example: Save $800,000 and move to a country where $32,000/year supports a high quality of life.
  
  

I am more inclined to Barista FIRE Lifestyle as it allows me to use the extra time from part-time work to pursue passions, hobbies, or side projects that bring fulfillment, whether it’s travel, volunteering, or learning new skills.

I can achieve partial financial independence by saving enough to cover a portion of expenses, then work a low-stress, part-time job to supplement income.

The goal is to enjoy a semi-retired lifestyle earlier balancing work and leisure while relying on investments for some financial support.

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Kakeibo: The Japanese Art of Saving Money

Kakeibo: The Japanese Art of Saving Money by Fumiko Chiba is a guide to a century-old Japanese budgeting method called Kakeibo, which means "household financial ledger." Introduced in 1904 by Hani Motoko, Japan’s first female journalist, it’s a pen-and-paper journaling system designed to promote mindful spending and saving without relying on apps or spreadsheets. Key Concepts of Kakeibo The Kakeibo method focuses on intentional financial planning and reflection to achieve savings goals and spend wisely. It emphasizes handwriting to foster mindfulness, encouraging users to slow down and consider their spending habits.

The process involves:

• Monthly Planning: At the start of each month, you calculate your income (after taxes), set a savings goal, and plan how to allocate remaining funds. You write down fixed expenses (e.g., rent, utilities) and determine how much to spend on variable expenses.
  
  
• Categorizing Expenses: Spending is divided into four categories (customisable, but typically):
  • Survival: Essentials like food, transport, and housing.
  • Optional: Non-essential wants, like dining out or entertainment.
  • Culture: Activities like books, museum visits, or concerts.
  • Extras: Unexpected costs, like repairs or gifts.
    
    
• Daily Tracking: Record each expense by hand, noting its category and cost, to stay aware of spending patterns.
  
  
• Weekly and Monthly Reflection: At the end of each week and month, tally expenses, compare them to your plan, and reflect on questions like:
  • How much money do you have?
  • How much do you want to save?
  • How much are you spending?
  • How can you improve next month? This reflection helps identify overspending and adjust habits.
    
    
• Mindful Spending: Before non-essential purchases, consider questions like: Can I live without this? Am I in the right emotional state to buy? How long will this purchase make me happy? This reduces impulsive spending.
  
  

Kakeibo aligns with Japanese principles of simplicity and mindfulness, similar to Marie Kondo’s decluttering method. It encourages users to "spend well to save well," focusing on intentional purchases that align with personal values, like saving for travel or big projects.

While I admire its minimalist approach, I’ve tried it, and frankly, it’s not for me. Here’s why I’ve ditched Kakeibo and adopted a more practical, modern budgeting strategy that aligns with my lifestyle.

The Tediousness of Manual Tracking Let’s be real—manually writing down every single expense is exhausting. I gave Kakeibo a fair shot, diligently jotting down my daily spending in a notebook years ago. But the process felt like a chore, especially when it came to doing the math by hand. Adding up every coffee, grocery run, or transport fare was time-consuming and prone to errors. In 1904, pen and paper were the only tools available, but today, we have better options. I’ve switched to using budgeting apps and Excel spreadsheets, which do the calculations for me instantly. These tools save time, reduce mistakes, and let me focus on analysing my spending rather than wrestling with numbers. Tracking What Matters Most: Food Kakeibo advocates for tracking every single expense daily, but I find that overwhelming. Instead, I focus on the one category that fluctuates the most: food. Food spending is my biggest budgeting challenge because it varies daily and can easily spiral out of control. By tracking my food expenses, I get a clear picture of how much I’ve spent and how much I have left in my budget. This helps me make conscious choices—like opting for a $2.50 Yakun coffee instead of a $7 Starbucks latte when funds are tight. Other expenses, like MRT fares, utilities, pet food, insurance, Netflix, and my part-time helper, are fixed costs. These are predictable and easy to manage monthly, so I don’t waste energy micromanaging them. Spending on Joy Without Guilt One of Kakeibo’s principles is cutting back to save money, but I don’t believe in slashing everything that brings happiness just to pad my savings account. As personal finance guru Ramit Sethi says, “Find ways to earn more money and not live miserably.” I wholeheartedly agree. Budgeting shouldn’t mean depriving yourself of joy—it’s about finding balance. For example, I’ve made compromises that save money without sacrificing my lifestyle. Instead of paying for an expensive personal trainer, I now go to a climbing gym with a friend, cutting my fitness costs by 50% while still having fun. Similarly, I swapped pricey mall manicures for more affordable options in my neighborhood or during trips to Batam or Johor Bahru. These small tweaks keep my budget in check while allowing me to enjoy the things I love. A Budget That Works for Me While Kakeibo’s mindful approach resonates with many, it’s too rigid and time-intensive for my taste. I prefer a streamlined system that leverages technology, focuses on variable expenses like food, and allows room for joy. Budgeting doesn’t have to be a grind—it’s about making intentional choices that align with your values and goals. By tracking what matters, embracing affordable alternatives, and prioritising happiness, I’ve found a way to manage my money without feeling like I’m stuck in 1904.

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PRINCE2 Foundation Certificate

A few weeks ago, I embarked on an unexpected but rewarding adventure: earning my PRINCE2 Foundation certificate. As someone who hadn’t studied formally since 2010, the thought of diving back into a structured learning environment was daunting, to say the least. 

I attended a 3-day intensive course with Bridging Minds for the PRINCE2 Foundation certification. Let me tell you, “intensive” is an understatement! The full-time course packed a ton of information into those three days. We covered theories, principles, and processes that form the backbone of PRINCE2 project management methodology. There was so much to memorize, and the concepts, while logical, were dense and interconnected.

Luckily it was company-sponsored, and because of my age, the course was surprisingly affordable at just S$577 (including the exam itself). The final test was a multiple-choice questionnaire (MCQ), but it was tricky! The answer options were so similar that I second-guessed myself constantly. I went into the exam on August 24th feeling far from confident, my heart pounding with the fear that I might not pass.

But guess what? I did it! When I found out I passed, a wave of relief and pride washed over me. Receiving my certificate was a moment of pure joy—a tangible reminder of what I’d accomplished. It’s hard to describe how rewarding it felt to overcome my doubts and prove to myself that I could still tackle something this challenging.

For now, I’m content with my Foundation certificate. I’ve decided not to pursue the PRINCE2 Practitioner certification—it feels like the Foundation level is enough for where I’m at in my career, and I’m happy with that choice. This journey wasn’t just about earning a certificate; it taught me something deeper. It reminded me that if I put my mind to it, I can work hard and achieve things I didn’t think were possible, even after years away from studying.

This experience has reignited a spark in me. It’s shown me that with determination and effort, I can take on new challenges and come out stronger. Here’s to celebrating small victories and the power of perseverance!

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Paying Off My HDB Loan: A Journey to Financial Freedom

November 2023 marked a monumental moment in my life—one I’ll never forget. After years of discipline, planning, and perseverance, I finally paid off my HDB loan! 

It’s hard to put into words the sense of relief and pride that comes with being mortgage-free, but I’m going to try. This milestone isn’t just about closing a chapter; it’s about opening the door to new possibilities, like retirement and true financial freedom.

To make this moment happen, I used a combination of ~S$20,000 from my CPF Ordinary Account and ~S$35,000 in cash. Watching that final payment clear and seeing the balance hit zero felt surreal. 

It was the culmination of years of budgeting, sacrificing small luxuries, and staying focused on the bigger picture. Every dollar saved, every extra payment made—it all added up to this.

Being free of a mortgage is more than just a financial win; it’s a mental and emotional weight lifted. No longer having that monthly HDB loan payment hanging over my head gives me a sense of control over my finances that I’ve never felt before. 

It’s liberating to know that my home is fully mine, and I can now redirect my resources toward the next big milestone: retirement.

Paying off the HDB loan has given me a clear runway to focus on building my retirement nest egg. Without the burden of a mortgage, I can channel more funds into investments, savings, or even exploring new passions that I’ve put on hold. 

It’s a step closer to financial freedom—a goal that once felt distant but now seems within reach. I’m excited to plan this next phase, whether it’s boosting my CPF savings, exploring investment opportunities, or simply enjoying a bit more peace of mind.

This journey has taught me that financial freedom isn’t just about having money—it’s about having choices. Paying off my HDB loan has given me the freedom to make decisions without the constant pressure of a mortgage. 

It’s a reminder that small, consistent steps can lead to massive milestones. For anyone out there still working toward paying off their loan, keep going—it’s worth it.

Here’s to celebrating this victory and looking forward to the next one. Financial freedom, I’m coming for you!

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