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Financial Independence; Retire Early

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Defense Wins Championships

June 5, 2016 by Guy on FIRE Leave a Comment

…and a high power offense can help get you across the goal line more quickly. The same holds true in the race to achieving FIRE (financial independence; retiring early). But what does this mean on your journey to crossing the FIRE finish line?

Defense wins financial independence

Defense

A strong defense is paramount to financial independence. I am not talking about having the best linebacker on your fantasy football team or signing Josh Norman during the off season.

Every month, money comes in (income) and money goes out (expenses). Controlling the outflows of cash is the defensive battle towards achieving financial freedom. Preventing unnecessary dollars from escaping is the epitome of a strong DEFENSE.

How do you play strong defense? This is achieved by budgeting, cutting out or reducing unnecessary expenses, living below your means, frugality and avoiding life-style inflation. Preventing money from flowing out allows an individual to accumulate cash which can then be invested. Over time, an individual can accumulate enough to live off of passive income generated by their investments; thus achieving financial independence.

A weak defense full of holes allows money to flow out very easily. This is prevalent in the United States since the country is built on consumerism and a “keeping up with the Jones” mentality. Most Americans have a weak defense, which causes them to burn through their cash, or worse, take on debt because they live and spend beyond their means.

Offense

Income is the offensive part of the game that can come in many forms. Salaries, interest, dividends, part-time jobs, hobbies and rental income are just a few of the many ways to generate income/offense. Increasing offensive production allows an individual to save more assuming they do not give in to the pressures of life-style inflation.

Some individuals are fortunate enough to earn a high income from their day job. However, for those of us not blessed with a six-figure salary, there are still ways to improve the offense. Individuals can earn a ‘side hustle’ by working part-time, renting out an extra room in a house, producing income through a hobby, blogging, dog-walking or cutting grass.

Now that you have the basic idea of offense and defense, how does your team stack up? Do you need to improve your defense and clog up holes that are allowing money to flow out? Are you ok with your current rate of savings/accumulating? And your offense, do you need to generate more income, or are you at a comfortable level to where you can save a large portion of what you take home?

Filed Under: Blog Posts

Guy on FIRE!

June 4, 2016 by Guy on FIRE 6 Comments

Welcome to Guy on FIRE (Financial Independence; Early Retirement), this site will share the journey of an average millennial (hate that term) guy on his quest to leave Corporate America at an age many deem impossible.

Sitting at a desk all day did not sit well with this guy. One day, he came to the realization there was more to life than wasting away in an office all day and being really, really ridiculously good looking (kidding!).

Through frugal budgeting, thoughtful planning and pragmatic investing anything is possible. Guy on FIRE plans to retire in his late 20s or early 30s to pursue his passions in life; biking, fishing, hiking, traveling, cooking and enjoying the simple things in life.

Filed Under: Blog Posts

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About Guy on FIRE

Guy on FIRE, is an average 20-something guy living in Washington, D.C. His friends call him Drew.

Drew went from being in debt to building a net worth over $500,000 in four years. He is obsessed with the app Personal Capital, real estate, and the outdoors.

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The Best of Guy on FIRE

  • 8 ways to crush if after graduation, in your 20s & beyond
  • 6 steps to saving a 6-figure net worth
  • Negative Net Worth to over $500,000 in 4 years
  • Overcoming the Power of Limiting Beliefs
  • Offensively Building Wealth
  • What is House Hacking?

Monthly Dividend Income

$760 / $1,500

50.65% of the way to my goal of $1,500 average monthly dividend income

 

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