How COVID 'galvanised the importance' of early retirement


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The financial independence movement is inspiring new followers - as young as 28 - who want to quit their day job and do their own thing.

The pandemic has prompted people like 30-year-old Michelle Ives to realise how fragile her financial security is.

"Anything can happen that has the potential to shake the normalcy of our lives. It has reminded me of what matters - it's not sitting at a desk for eight hours a day," says Michelle.

michelle ives thatgirlonfire early retirement fire money magazine financial independence mrmoneymustache
Michelle Ives writes about her path to financial independence at

She is drastically overhauling her family's finances, so they have more control over their lives. She wants to have the freedom to make choices about her life and work.

Michelle was already plugged into the growing personal finance movement that offers an abundance of information about saving and investing online. It is FIRE, an acronym for financial independence, retire early. As well, there is a more laid-back version, FI, or financial independence.

"If anything, the pandemic has just encouraged us to reach our goal more aggressively," says Michelle.

Michelle and her husband are saving 70% of their income and hope to retire in a few years. They have been FIRE followers for seven years. While she loves running her own copywriting business, she wants to take back her life while she is in her 30s and healthy, and to get out and enjoy it.

"In some ways, COVID-19 has actually galvanised the importance of FIRE for many because we've now had a glimpse of what a better work-life balance feels like."

Unhappy in their job

People have increasingly realised that they don't want to be stuck in a soul-crushing job, with long commutes, well into their 60s. They didn't want the anxiety that comes with working flat out, explains Serina Bird, who was connected to a work chat group and emails with alerts pinging from early morning until late at night.

So much so that two in five Australian workers (43%) are unhappy with their work and are planning to actively search for a new job in 2022, according to a survey by Elmo Software. Workers are prioritising more flexibility, working remotely more often, access to extra annual leave as well as increased wages and promotion.

A third of workers say they plan to quit their current job as soon as they secure a new role, with 19% intending to quit before lining up another job.

"The 'great resignation' is a thing and most employers don't get it," says Serina, who retired at 47 from a desirable public sector position.

There are newcomers switching onto the FIRE and FI philosophies to get rid of debt, rigorously save, invest sensibly and enjoy a modest, agreeable life. Those people on the FIRE journey retire in their prime.

"The pandemic has reinforced for many the value of the basic building blocks of FIRE, such as having a cash cushion in uncertain times," says Jason, who has accumulated $2.7 million and will retire early next year.

Follow the FIRE formula

FIRE is based on the philosophy of Peter Adeney, aka Mr Money Mustache, who kicked off the movement in 2011 (see

It is about building up enough investments so you can live off the returns for the rest of your life. Once you hit the point where the income exceeds your living expenses, you no longer need to work because you are financially independent.

Adeney came up with what he calls a "shockingly simple" formula. You take your annual expenditure and multiply it by 25. This calculation is based on "the 4% rule", where retirees withdraw no more than 4% of their total savings each year.

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Pete Adeney, known as Mr Money Mustache, the father of the FIRE movement. Photo: Supplied.

He says if you can save 50% of your take-home pay from the age of 20, you can retire at 37. If you can save 75%, you can retire in seven years.

Adeney's "mustachianism" lifestyle is about 50% cheaper than that of most of his peers and the surplus is invested in simple exchange traded funds and a rental house or two. He has inspired not only our six case studies but has resonated with millions of followers.

The philosophy of FIREs isn't about getting rich quick, but about taking a slow path. Forget about market timing - trying to find the best time to get in and out of the market - because, as Adeney says, it generally sucks.

The FIRE movement is evolving in a time of interesting financial changes. While the focus is still on saving and taking frugal steps, it is also about the choices that open up as you edge towards financial independence.

You can fire up any part of your life with a FI strategy. It can mean you live overseas and travel 52 weeks a year. You can volunteer to help others. Or, in Tasha's case, you can have a baby on your own.

You can connect with all sorts of FIRE communities for support and feedback from real people.

Flexibility is key when it comes to early retirement

Financial independence increasingly is for people who don't want to retire young or sacrifice too many of life's indulgences, but want flexibility in their lives.

"Early retirement conjures up hazy images of long golf games and pastel leisurewear," says Jason. "For seekers of early retirement, this vision doesn't connect with them very often - they are usually highly motivated and goal-oriented people with no desire to sit around on the couch for 30 to 50 years following early retirement."

"Many actively seek alternative passion projects, or to simply approach work from a strong negotiating position. This has led many to observe - myself included - that it's the financial independence we seek first and foremost, with the retire early part being optional or even irrelevant."

Dave Gow, who retired at 28, says: "You can choose your own adventure. It's not a one-size recipe for early retirement."

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Dave Gow with partner Alison.

Some FIREs, like Matt, who runs the Aussie Firebug podcast, wants to "start a small business, spend time with my family and not have to commute to work".

Matt says he has always wanted to be able to scale back his work from five to three days a week when kids came along.

"Also, the free time to keep fit is a priority for me. I understand that when kids come on the scene things change and most people give up some of their 'me' time. I don't want to sacrifice my health and still want to be able to do all things I do now," he told the blogger Adventures with Poopsie.

Some people may not believe that retiring early in their 20s, 30s or 40s is really an option, but our case studies show that you don't need a windfall or a high-paying job or a lucrative tech start-up to retire early.

Serina, Leo, Michelle all show it is possible to save and retire early with a young family despite plenty of people telling them that financial independence wouldn't happen if you had kids and all the financial responsibilities that came with them.

Where to connect

Of our six case studies, Dave, Serina, Michelle, Jason and Tasha run blogs. 
• Dave Gow has and, with Pat Seyrak from, hosts fortnightly podcasts, FIRE & Chill. 
• Serina Bird:
• Michelle Ives:
• Jason runs and doesn't give his real name as he is apprehensive about talking to his work colleagues about his plans to retire early.
• Nataasha Torzsa:

Pandemic and war disrupt early retirement plans

The pandemic, and now the Russia-Ukraine war, have challenged short-term plans for some FIREs, especially those who enjoy travelling.

Jason, for example, says his plans to travel around Australia and overseas are now "up in the air". But it's also an opportunity to "keep my head down investing, until the outlook becomes a little clearer".

The economic fallout from the war may also hit saving and investing targets in the short term, but it's the long term that counts.

"The war in Ukraine is many things - most obviously an urgent and tragic humanitarian event as well as an opportunity for giving - but it is not a reason to change overall investment direction for someone seeking financial independence through a well-diversified portfolio," says Jason.

Markets, especially sharemarkets, tend to climb a wall of worry and expand even across periods that are objectively challenging.

"There are always sensible-sounding reasons to hold off investing, and await more certainty, but inaction just delays the powerful force of compounding returns getting underway over time. Putting in place simple automatic systems can help avoid the temptation to just wait and see that can end up costing investors dearly as markets recover and grow."

Jason says most major events reflected in newspaper headlines today will have little impact on returns over long-time investment frames of 10, 20, and 50 years.

Stay tuned over the next three weeks as Michelle, Serina, Dave, Leo, Tasha and Jason share their FIRE journeys. 

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Susan has been a finance journalist for more than 30 years, beginning at the Australian Financial Review before moving to the Sydney Morning Herald. She edited a superannuation magazine, Superfunds, for the Association of Superannuation Funds of Australia, and writes regularly on superannuation and managed funds. She's also author of the best-selling book Women and Money.
Bewareof finfluencers
April 14, 2022 1.26pm

The question is are these blogers licenced to provide finacial advice? Don't they know that even reporting their investments is now putting them breech of ASIC new licence reegulations. Let alone endorsing (influencing consumers) of their own particular investments whilst also recieving affiliate income, regardless of them posting these disclosures and claiming their advice is only general in nature.

Finfluencers need to be very aware of these new changes to the law in Australia, or face up to 5 years jail and $1,000,000 in fines.

Pete H
April 17, 2022 11.44pm

Why is it that Frugality is so associated with FIRE, as based on your case studies it seems that way. Is that the only way they can become Financially Independent and Retire Early? Where are the people in FIRE with $100k+ a year in passive income, living a great life and travelling heaps?

And what a load of BS the statement "save 50% of your take-home pay from the age of 20, you can retire at 37. If you can save 75%, you can retire in seven years" is. Just throw out some randowm figures to make you sound smart. I'm sure there are actually alot of assumptions and caveats with this, and it is really not attainable for most people. Take my son as a example, aged 23, graduated from Uni (so has HECS debt to repay), has a good job earning a reasonable wage, but he has moved back in with us so he can save for a house (or unit/apartment). We're fine with this, as we're happy to support our kids, and he is saving a lot, and well on the way to a substantial deposit. Let's assume by mid-30s he's debt free, so by mid-40s could retire. I don't think so. Unless the F in FIRE is really for Frugality. Or go back to the fact he is 23, if he continued saving and not purchase a house, at the age of 30 he could retire? But where to? He has no house? And for both scenarios that's not allowing for life's journey of getting married, having kids (and all of the associated expenditure with kids), travelling and whatever else life throws at you.