Tag: financial independence

Bougie Fire

Posted on by melanie

By now, most of you are familiar with the concept of FIRE and the various types: Lean FIRE, Barista FIRE, etc. (if you aren’t, you can read about it here). But I’ve decided that none of those definitions of FIRE really speak to me correctly. Therefore, I’m coining a new FIRE term: Bougie FIRE.

Bougie

Bougie is a term that comes from the French word bourgeois, which means upper middle class. According to Urban Dictionary, it means aspiring to be a higher class than you actually are. It’s also a lot of fun to say.

Bougie is typically used to mean that someone is too good for something, like “she refuses to shop at the thrift store, she’s so bougie”. I’m taking some liberties with that definition, but hey, it’s not like it’s from Webster’s Dictionary. It’s just slang.

Bougie Fire

Bougie Fire is being financially independent while having a nest egg big enough to enjoy bougie adventures. It means that you don’t have to work anymore, but you can live. You can spend that year learning to surf in Costa Rica. You can go on SCUBA adventures to the Red Sea. You can live your life to the fullest! But because you are just bougie and not rich, you have to sacrifice material things to get there.

Bougie Fire vs Fat Fire

I know lot of you financial independence pros are thinking “there’s already a term for this; it’s called Fat Fire”.  However, there are some key differences. First, it’s way more fun to say Bougie Fire than to say Fat Fire. But more importantly, Fat Fire is about being financially independent while living off 100K or more. It’s also about living well while pursuing financial independence. Generally, those who are reaching for Fat Fire have pretty high incomes and plan to maintain their standards of living. Physician on Fire wrote an awesome article on it if you are interested.

Viator 

Bougie Fire, on the other hand, isn’t about the amount of money you plan on spending yearly. Bougie Fire is all about the adventures.  If you spend a lot of time in a low cost of living country (like, Costa Rica for instance) you can do the Bougie Fire thing on the cheap. If your bougie adventures take you to Monaco or Switzerland, it’s going to be a lot more expensive. It’s also about sacrificing some of the finer things so that you can have the fancy adventures.  Some of the Fat Fire folks enjoy their expensive dinners out, nice cars, and large homes. There’s nothing wrong with that!  The Bougie Fire folks give up these things so that we can have adventures. It’s all about what you prioritize, and neither is better than the other.

How I came up with Bougie Fire

I first thought of the term Bougie Fire when writing my post about how crazy expensive it is to have adventures.  It was a tough pill for me to swallow, because I really want to be frugal. But my main reason for pursuing Fire is so that I can live life to its fullest, and part of that for me is to experience all the things. So I said screw it and went for it.

Then I realized how bougie I am when it comes to having adventures. I will eat tuna and ramen for a week so that I can afford my plane tickets to Europe. I haven’t had my hair cut in over a year, I don’t get my nails done, and I rarely buy makeup. But I’ll drop a grand on getting SCUBA certified like it’s nothing! So bougie.

What are your thoughts on my new Fire term? I’d love to hear from you!

 

Love this post? Share it!

Our Path to Fire

Posted on by melanie

Why Fire?

Jonathan and I are on a path to fire because we want to live life on our own terms. We don’t want to be tied to any job or employer. We don’t want the stress of needing a job. Being stressed out at work sucks!  We don’t want to deal with that anymore.

Our Path to Fire

If you recall from our article on the Fire Fundamentals (and you can read it here if you don’t!) I mentioned that there are four steps to getting on a path to fire. Step 1 is learning about Fire – I think I have that covered. Step 2 is deciding what you will be comfortable with. The third step is to make a plan for getting there, and the final step is to execute that plan.

What type of Fire will I be comfortable with?

I know we want to travel, so lean fire probably isn’t for us. But we also want to have a comfortable, secure traditional retirement (We absolutely don’t want to be in poverty when we are seniors!), so we need to at least get to Coast fire. We want to be financially independent as soon as possible, and we decided that we will probably need about 60K per year to be comfortable. We are also ok with working odds and ends types jobs, so I’d be totally comfortable with a barista fire type of lifestyle (financially independent, but taking an easy part time job to fill any holes that come up or for extra spending money).

How are we going to get there?

Sixty thousand dollars per year without working a full-time job seems pretty daunting. We need big gains and passive income! I got super lucky with real estate – and by getting lucky I mean I bought at a great time in a market that would only increase. My big gains could come from selling the house! But we also knew that meant we couldn’t stay in the crazy expensive metropolis of Los Angeles. We needed to find a new city in order to really capitalize on those real estate gains. 

Passive income is the real key though, so we needed to figure out a way to generate income without working. Blogging and Investment funds for the win!

Executing the plan

The first step to executing the plan was selling the house in a high COL area and moving to a low COL area. Done!  We packed up and moved from Los Angeles, CA to Savannah GA. Next, I used  my new found capital to set up diversified investments and open an account with Vanguard. Third, we dedicated ourselves to working like crazy for these next three years to shore up our investments and ensure that we are 100% ready to take that plunge into early retirement.

Related: Which Vanguard Total Market Fund should you chose?

We also set up additional income streams. We launched this blog, and have dedicated ourselves to updating content and marketing it whenever we can. I went back to my travel blog and updated the content, adding affiliate links and increasing the social media presence. Every little bit helps!  Every cent we can make via blogging gets us one step closer to freedom (full disclosure, we haven’t really made anything blogging yet. But Partners in Fire is super new, so we are hoping to generate some income off it in the coming months!)

I also have my 401K account for additional income when I reach retirement age, a pension, a Real Estate Investment Trust (REIT), and a few individual stock holdings. These different types of holdings should ensure that we are well diversified and should provide dividend income when we are ready to stop working.

Not Your Plan

We get that not everyone owns a home in a high COA area, and not all those who do will make huge gains by selling. That’s why my path may not be your path. Don’t worry, there are tons of other ways! Check out this small list of personal finance bloggers to see their paths to fire. You can take what you like from each and start your own journey!

Other Paths

 Downsize your 2080’s  Path to Independence involves downsizing the amount of time spent working. Some paths are simply about finding that work/life balance! Check out how they do it here!

Fifty Week Vacation is investing in both the stock market and real estate to create short, medium and long-term cash to achieve FIRE. Read about their investment journey here!

Saving Sherpa is perusing FIRE by putting experience over luxury, not having kids, and saving 70% of his income w/o side hustles. Read more about his $26k/yr Boston lifestyle here!

Military Dollar is going to achieve Fire by taking advantage of the programs offered to members of the armed services and creating multiple streams of retirement income. Follow her journey and learn some additional awesome finance tips for service members here!

Tread Lightly Retire Early is going to reach Fire by living an eco-friendly life and cutting spending to maximize their savings rate while minimizing their carbon footprint. Find out how they help the planet while gaining independence here!

What’s your Path to Fire?

As you can see, there are lots of different ways to get to financial freedom. There isn’t a one size fits all approach. And these blogs I listed are just a small sample of the paths different folks are taking, there are thousands more out there. Hopefully you will get some ideas from these and other blogs about what will work for you.

What does your path to Fire include? Do any of these bloggers resonate with you?  Is there a totally different path that I’m missing?  Let me know in the comments!

Love this post? Share it!

How Joining the military can start you on the Path to Financial Independence

Posted on by melanie

The Military and Financial Independence

The military isn’t for everyone (hell, it was barely for me!). But the military does offer a lot of benefits, and if you do decide to join, these benefits can be a great boon to your quest for financial independence.

Although I didn’t realize it at the time, joining the military was a huge step towards financial independence. There is absolutely no way I would be in the financial situation that I’m in if not for the benefits that I received from joining the military.

The best thing about this is that almost anyone can join the military and gain these benefits. I promise, I am not an Army recruiter!  But it is true that many people feel like they will never be able to achieve financial independence because they don’t have a STEM degree, or aren’t good at math, or college is affordable. There is a path, if you are physically able and meet the age requirements, and that path is the military.

Full disclosure: I hated being in the military. It was fun during ROTC, but it got old once I got into the National Guard. There were too many rules and I’m too much of a free spirit. Also, as I got older, I realized that a lot of what we were doing probably wasn’t right. I don’t blame the Soldiers for that though, I blame the politicians who put the Soldiers into that position. But I digress.

Even though I didn’t necessarily enjoy my time in the military and I don’t necessarily agree with how the military is being used, I still think it’s a great opportunity for people without a lot of options to start working towards financial independence. If you join the guard, you make an extra few bucks every month (it’s the ultimate side hustle!).

 

 

how did the military help me?

Paying for College

 

First, the military paid for my college education. I went the ROTC route, so the military paid for my tuition. Unfortunately, I still had to take out student loans for housing, but I graduated with only 20K in student loan debt, while most of my peers had over 40K. That’s a huge difference. The year I graduated, they changed the rules so that the ROTC scholarship could cover either h

ousing or tuition, so if you can find a grant to cover tuition, you will be set!  But the military also amazing educational opportunities if you decide to go the enlisted route. Check out the GI Bill for more information.

 

VA Loans

The second huge helping hand my military service gave me was a VA loan. VA loans are amazing. They are backed by the Veterans Administration, and make it super super easy for Veterans to buy a house. There are two huge advantages to using a VA loan. The first is that you don’t need a down payment. There is no possible way I could have afforded a down payment on a home in Southern California, even at the bottom of the market.  Condos and town-homes were selling for above 200K, so to afford a traditional loan I’d have to come up with 40 thousand dollars!  That’s a tough thing to do for a twenty-something year old from a lower middle-class family.

Related: Getting Lucky with Real Estate!

The 2.5-5% down payment needed for a FHA loan is more reasonable, but even that’s between five and ten thousand dollars, and when you add in closing costs, that gets un-affordable as well. Also, after the crash of 2008, borrowers have to pay Primary Mortgage Insurance if they can’t come up with a down payment, which sometimes makes the mortgage itself un-affordable. Another big plus of the VA loan is that you don’t have to pay PMI, even if you don’t have a down payment! There is a funding fee which depends upon the value of the loan, but they can roll that into the mortgage so you don’t have to pay it up front.  The VA helped my buy my first home with only 10 grand up-front for closing costs. I wouldn’t have been able to do it without them.

 

 

 

Healthcare

   

 

 

 

 

 

Military service also offers an additional bonus that may help you gain financial freedom: healthcare. Obviously the VA doesn’t have the best healthcare, but its definitely better than having nothing. I don’t currently use the VA for healthcare and I actually don’t plan on using it anytime soon, but its nice to know that I have that option to fall back on.

Other benefits

These are the financial perks of military service that I have been able to capitalize on, but there are others as well, such as sign-on bonuses, retention bonuses, free job training, and Basic Allowance for Housing to name a few.

 

The military is also a great equalizer. It doesn’t care how smart you are, where you came from, how much money your family has. The military treats everyone the same, and offers everyone the same benefits. It just cares that you are physically capable of doing the job.

 

 

  

 

 

 

 

 

 

 

Lifestyle

Although I hated my time in the military, I’m glad I did it. It gave me a hand up out of the lower middle-class. It also benefited me in other, immeasurable ways. I wouldn’t be the confident leader that I am today without the experience that I gained in the military. 

I understand that the military isn’t for everyone. It is definitely a lifestyle adjustment, especially active duty and deployment. There are many physical, emotional, and political things to consider before deciding to join. But its a great option for people without any other options. It’s a great path out of poverty, and a great way to start on the road to financial freedom. 

 




Love this post? Share it!

Want a Partner in FIRE?

Subscribe to get exclusive content and immediate access to blog posts!  Let us hep you on your journey to financial freedom!

””

””

Join 19 other subscribers