I have been generally interested in the idea of passive income and investing for a very long time and I have been saving money since I can remember. But I haven’t really done much investing until 2018, when I stumbled upon Mr Money mustache and ideas of Financial Independence Retire Early (FIRE). I got hooked up on the idea and started my FIRE journey. The recipe for FIRE is simple, but it’s not necessarily easy! Save and invest well Cut your expenses - this will decrease how money you will need to maintain your lifestyle and help with the saving rate Amass enough of investments that working will become optional. A typical recommended amount is about 25 times your yearly spending. You can read more about the math behind it here . So why did I get hooked and committed to be on this difficult path of a miser? "Miser: a person who hoards wealth and spends as little money as possible." source Here are my main motivations: Strong need for financial security A desire for freedom
How you should invest depends on your situation in life. If you are young and don't need the money in the next 30 years you should be investing differently compared to if you are saving for a house down payment in 2 years or if you are planning to retire soon. The two most important factors to consider are the risk and the return. Another thing to consider is the liquidity of the investment, but let's assume in this post that we are only investing in liquid assets (ones that are easy to sell). Ideally, everyone would like the highest return with no risk. However, the risk free investments typically have very small yields and will give you poor returns. See an example of Irish bonds , the rates are terrible, but the risk is very small if the inflation is low. The rates on the savings accounts are similarly poor. There is one exception to that, which is paying off debt. Some people say "why should I pay off my debt, while I can make xx% in the stock market". Paying off