There are two key problems to solve on the journey to attaining Financial Independence and Retiring Early (FIRE): 1) ensuring you have enough money for the rest of your life and 2) figuring out what to do after retiring. While the latter is critical for a fulfilling retirement, it is also highly personal. However, the path to achieving the former is quite common to most people.
One’s attitude towards money, not their skills, is the largest determinant of their financial success. This post shares some of the resources I found inspiring and useful to calibrate mine. Many of the behaviours encouraged by these apply even if you do not intend to FIRE, but want to maintain a stable financial position throughout your life.
No discussion of FIRE is possible, without mentioning Mr. Money Mustache (MMM). This blog planted the idea of FIRE in me. The fact that Peter Adeney achieved FIRE at 30, as a regular tech employee, without getting lucky with ESOPs or working for a “Big Tech”/FAANG company, made FIRE appear achievable to me.
The most important takeaway from this blog is the fact that a high savings rate is far more important to achieving FIRE, than a high income. Increasing your saving rate has the double benefit of both helping you accumulate the retirement corpus faster and reducing the corpus required to retire.
These are few posts from MMM I found inspiring. There are many more nuggets of wisdom in there, especially in the older posts.
I disagree with MMM’s reliance on the 4% rule. While he has written his rationale for it, I am not convinced that it will work if one intends to truly retire early, without creating new sources of income after retirement. This is where the next resource comes in.
While MMM is an eternal optimist, Dr. M. Pattabiraman of Freefincal brings a much needed dose of realism and analytical rigour to personal finance. In my opinion, this website is the most valuable resource on DIY personal finance for Indians.
Freefincal does an excellent job highlighting potential risks and provides ways to mitigate them. His insistence on credit risk helped me avoid the Franklin debt fund fiasco in 2020. In addition to general money wisdom and data-backed analysis of financial products in India, Freefincal also provides information about changes relevant to personal finance. Their ready reckoner for the changes in capital gains taxation, introduced by the Budget of 2024, is the most detailed I have seen.
These are few posts I found useful on Freefincal.
There are other useful resources too, on Freefincal.
The Psychology of Money: This book explains and cautions against behavioural pitfalls in money management. I believe anyone getting started with money management must start with this.
The Millionaire Next Door: If one wants to achieve something, they must learn from those who have achieved it. This book is a great way to calibrate one’s outlook towards money, using the traits of millionaires in the US as examples.
The Little Book of Common Sense Investing: This book convinced me that investing in low cost market capitalization weighted index funds is the right long-term choice. There is a definite bias given the author is also the founder of Vanguard, but I think the book makes a clear case despite that.
You Can Be Rich Too: With Goal Based Investing: This book provides valuable tactical knowledge for managing personal finances in the Indian context. It is co-authored by Dr. Pattu of Freefincal.
All opinions are my own. Copyright 2005 Chandra Sekar S.