Tag: early retirement

Book review: The 4-hour work week by Tim Ferriss (buy!)

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Please note that I am not paid to review books. 

I haven’t reviewed any book on the blog for some time.

I recently came across the 4-hour work week by Tim Ferriss. Although this book was initially released 12 years ago, it has been recently updated.

the title sounds like a scam

To be honest, this was my first thought. I guess the author wanted to be provocative…well done.

This book is anything but a scam. The premise of the book is that there are options beyond the traditional 9 to 5 job, and there are also options beyond the traditional F.I.R.E. movement.

This really resonated with me. I know I will never retire with $1 million in the next 2 or 3 years. To be honest, I don’t think I will retire with $1 million. Tim, however, introduces the concept of mini-retirements, which is something I recently experienced when I went to Malaysia for 4 months.

This concept definitely appeals and talks to me. I want to do more of these in the future.

the book is a lot about time-management

Whether you are pro at it, or not, you will find sound advice and new ideas. I personally found the section on “elimination” very helpful. There is also a whole section on “automation” which I liked. In the PF community, we tend to emphasize a lot on “doing everything ourselves” as a way to save money. Sometimes, outsourcing is definitely more efficient.

the book will get you thinking (outside the box)

I think it is definitely the goal of this book. It helped me come-up with a few ideas and options for myself.

The book has something for everyone.

but there is no magic formula

It is not a get-rich-quick scheme. In order to enjoy the life of the “rich and famous”, money still needs to be earned at some point…..

F.I.R.E. explained and debunked

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F.I.R.E. is a very popular acronym is the Personal Finance blogosphere. It stands for Financially Independent Retire Early. Over the years, this concept has become more and more appealing, and no wonder. With major changes in the workplace, such as stagnant wages, the disappearence of pension plans and a higher unemployment rate, a growing number of people aspires to quit the grind….myself included.

F.I.R.E. IS NOT A GET-RICH-QUICKLY SCHEME

Unfortunately, it will take some time before anyone is in a position of pulling the plug on their dreaded job, as a sufficient amount of money needs to be saved first.

Said amount will require thorough calculations first. Conventional wisdom says it should be 1 million or 25 times your yearly expenses. I say conventional wisdom needs to be challenged! I will save this for another post.

In order to save for the magic number, you need to make money, there is simply no way around this!

F.I.R.E. HAS AN ELEMENT OF PRIVILEGE IN IT

When you take a look at F.I.R.E. bloggers, most of them were making a decent income – well into the 6 figures, combined or not- before becoming financially independent (F.I.) . Some of them don’t have children or had them long after being F.I. Others chose not to buy properties or graduated with no student debt or had no debt at all.

The above definitely gives a head-start to anyone choosing F.I.R.E. It doesn’t mean you can’t achieve F.I.R.E. if the above-mentioned doesn’t apply to you. However, it may be more challenging and take longer.

The harsh truth is that F.I.R.E. will remain a dream for a lot of people.

F.I.R.E. HAS AN ELEMENT OF FRUGALITY IN IT

In order to achieve F.I.R.E., you not only need to earn money, but also to cut down on expenses.

By doing so, you may realize you need less than you initially thought to live on.

Being frugal can be borderline with being cheap at times.

Frugality is not for everyone either. That being said, not being frugal does not prevent anyone from reaching F.I.R.E. either. It will just take longer.

F.I.R.E. IS MORE ABOUT FINANCIAL INDEPENDENCE THAN EARLY RETIREMENT

A lot of people achieving Financial Independence actually do not retire or stop working. They choose to pursue different career paths instead, the most popular being becoming a writer and/or a blogger.

This is where the problem lies, in my not-so humble opinion. A lot of people blogs about retiring early and never working again, when they are actually still earning income instead of drawing from their savings!

The core concept is that F.I.R.E. gives you the ability to choose when and where to work as well as what to work on. Money is no longer part of the equation. This is what I personally find really attractive.

FINAL WORDS

I would love to reach Financial Independence sooner than later. That being said, I don’t know if it is a possibility right now, and it is OK. I fully acknowledge my economic reality and the limitations of the F.I.R.E. concept.

I would also caution anyone not to take at face-value anything read on the Internet from people claiming to be F.I.R.E. We never have the “full picture” of their situations. We don’t have access to their bank accounts, investment portfolio or tax returns. We can never be sure where their income comes from.