Financial Independence Retire Early (FIRE) and Location Independent Working

My plans were similar to the now popular (within a small but committed group of people) Financial Independence Retire Early (FIRE) movement. I was more focused on lifestyle and increasing my financial independence (as apposed to striving for complete financial independence in order to retire very early).

My thoughts were more along the line of being able to avoid a full time job and possibly do some consulting, run my own business (with a lifestyle goal rather than a make millions goal) and have investments that supplement that income. I also wanted to be able to have that possible from wherever I chose to live. Often you are quite limited on where you can live (especially cheaply) if you require a high paying job.

I also understood by living more frugally I gave myself lifestyle options. Living frugally allows you to save money. But it also lets you experience what living on less is like and you know if that is what you want. It is for me. I would much rather have freedom from having to earn a bunch of money to allow me to spend lots of money.

John Hunter with lake and mountains in the background

John Hunter, Bear Hump trail, Glacier Waterton International Peace Park.

I think Financial Independence Retire Early (FIRE) concepts fit very well with a subset of digital nomads. Those focused on FIRE don’t have to be digital nomads (in fact a very small percentage is) and digital nomads don’t have to be concerned with FIRE (in fact, few are). But they are both, at the core, about putting your life first and not letting your life on the 9 to 5 job hamster wheel drive your major life decisions.

Combining FIRE and location independent work provides some valuable benefits. If you have some investments saved up that can be tapped as you travel that can meet some of your living costs, this aids on of the bigger challenges – how to earn money while you travel. And if you travel frugally you can reduce your costs (below what you speed where you used to live).

When I lived in South East Asia for 4 years, my costs were much lower than what they had been.

One of the ways FIRE and location independent working and living don’t mesh perfectly (for most people) is that normally you will earn less (often much less) than you could at “home.” This means it is hard to even save the amounts you normally should be saving for retirement, and saving a lot more (as FIRE would encourage) is unlikely.

Certainly if you are lucky/good enough to make a bunch of money with your location independent work and your expenses are lower than home then you can put even more toward savings to assist your FIRE goals.

For the right people, I think transitioning into location independent work and then living cheaply (nomadically or in one location) part way into the FIRE path can be a great option. It is basically what I have done. Your income will likely fall farther than your expenses drop and thus push back your time to full financial independence. But it does many good things.

John Hunter with school kids in Indonesia

John Hunter with school kids in Indonesia. I thoroughly enjoyed traveling around SE Asia made possible by working remotely.

Making the transition before you are truly financially independent lets you start the travel lifestyle earlier (and there are nice advantages to doing so when you are younger for many people). You also learn if this is an option you enjoy. If your FIRE plans rely on drastically reducing expenses by living in cheap areas, you should test that out long before you plan to retire.

In addition to learning if you like travel or living in a different culture you also learn if not working 40 hours a week in an office is right for you. While many people complain about it, there really are many people that want the community of working together in an office. You might as well figure out if retiring early (or working independently) is really something you want early on.

Most digital nomads start with very little savings. That is certainly fine. For me, it would be too nerve-wracking to worry about finances so much. For me having a reserve from my FIRE-like (even if I had never heard of FIRE before I left) savings

Related: Should I Sell or Keep My House When I Become a Nomad?My Early Experience as a Digital Nomad: Part One, TechnologyFIRE sub-reddit (this is a great resource for people interested in FIRE, it is also a good resource for digital nomads on personal finance even if they don’t want to focus on FIRE) – Phased RetirementSave What You Can, Increase Savings as You Can Do So

2 thoughts on “Financial Independence Retire Early (FIRE) and Location Independent Working

  1. Hi, I found a link to this blog post on the digital nomads sub-reddit. I have been pursuing FIRE for about the last 10 years, which was before I knew there were other people that had achieved this goal already. I have gotten to a point now at age 40 where I have a pretty reliable stream of income from stock based CEFs and ETFs of around $21k per year. I also have 15 years vested in a government pension for when I turn 60, along with social security and medicare.

    I brute forced my way there by living off around $28k per year on w-2 income of $60k for close to 10 years (investing around $32k per year). I believe I am on track to FIRE within 5 years, but I also started looking into ways that I could telecommute in the US and simply earn the remaining $7k I need from a part-time job.

    From there I have picked up on the digital nomad concept of telecommuting from a cheaper location. Which then led me to realizing that I could probably FIRE right now just by simply moving to a cheaper country…

    Right now I’m stuck in inertia, paralyzed by having options. Its been easy to simply grind away at living below my means and building up investments. Now comes the hard part of actually getting out my comfort zone.

  2. Pingback: USA Retirement Savings Contributions Tax Credit | Freelance Lifestyle, Finance and Entrepreneurship Blog

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