FIRE -FIRE Independence Retire Early
Starting next week we will share a BOTS goal from a user of the BOTS app every week. A common goal is to become financially independent in order to be able to retire early. This principle is called FIRE: Financial Independence, Retire Early. What that is, we will explain to you today.
It's a hot topic: FIRE. Financial Independence, Retire Early. Or, in plain Dutch, become financially independent so you can retire early. An attractive idea. We've already given you four tips on how to build up your own pension.
Of course, you can start saving for your pension now. If you set aside a fixed amount each month, you will accumulate this money on your own and you will have a good appetite for thirst after the age of 67. Or maybe even after your 69th birthday. Safe and orderly.
You do realize that saving costs you money in the end. That has to do with inflation and the fact that your savings interest rate is 0%. In 2019, inflation was 2.6%, which means that your money is worth 2.6% less. If you still have 40 years ahead of you, your money will only be worth less.
2. Annuity policy
Another way to build up capital for your pension is to take out an annuity insurance. Every month you pay your premium to the insurer and they give an indication of the expected return. When you retire, they will pay you a monthly amount. Just like with your other pension payments. Safe and orderly, but also not very flexible.
3. Managed investments
There are a number of banks that offer a special pension product in combination with managed investment. In most cases, you deposit the same amount each month with which the bank will invest for you. Often you have a little say in the risk profile, but not in the exact shares, bonds and ETFs. The money you deposit is not freely withdrawable. Only after you have retired can you use this money again.
4. Automated investment
You can also automate your investments. You decide how much you deposit, what risk you take, in which markets you trade and when you want to withdraw your money.
Imagine you are going to invest for your pension with the BOTS app. You can start from €50,- boarding is easy. You check in the app which bots are successful, what risk you are willing to take and then you start. You can decide for yourself when and how much you want to put in and test the returns in the demo beforehand.
Bots are automatic trading strategies that trade for you based on algorithms, artificial intelligence and machine learning. Because they are bots, they never sleep and do not suffer from emotions when the stock market fluctuates. Convenient.
Previously, these automated trading strategies were only available to the richest 3% of the world's population. But now it's also available to you. With the BOTS app.
In this way you have full control over your pension plan. And then you can retire with peace of mind. And maybe even before you're 67.
Retiring early is a goal for many people. And in order to achieve that, financial independence is almost a requirement.
FIRE is actually a lifestyle. This lifestyle has been around for quite a long time, but is starting to gain ground. It is a style for the people with a long breath. Financially independent is not something you can do overnight. Except for jackpot winners.
In a nutshell, FIRE is about living below your means and using the difference between your income and expenses to invest. For a long time it was thought that you could only stop working sooner if you had millions in the bank, but by living more soberly, you can still meet your needs with much less money.
The FIRE principle is based on the growth of the world economy. Research shows that over the past 100 years, it has been growing at an average rate of 7% per year. Instead of investing in specific companies themselves, people who adhere to the FIRE principle invest in funds. They deposit a monthly amount and then don't look after it for a whole period of time. This also works compound interest in their favor. It's only when someone stops working that they sell. But only the amount needed to sing it out for a year.
How long this process takes for you, of course, depends on a number of things. Your income, your costs and when you would like to retire. You can of course influence all three:
- Try to live more frugally. The more of your income you earn, the more you can invest and the less you will need to support yourself for a year.
- Go earn more. Even if you earn more, the amount you can invest each month will increase and the time it takes to raise your capital will be shorter.
- Financially independent: You can always change this definition yourself. For one person it is really no longer necessary to have income (from paid employment) and for another it is for example free of housing costs so that less income is needed.
A combination of these three things will probably give you the fastest result.
FIRE is thus a common goal for the users of the BOTS app. But we are also curious about your other goals. Do you want to make a far journey? Buy a new car? We all want to know.
Do you want to share your BOTS goals too? Let us know via a message on one of our social media channels or send an e-mail to firstname.lastname@example.org mentioning BOTS Goals. We will contact you as soon as possible.
Investing is for everyone
Everyone should be able to invest. And now they can. With BOTS. Are you interested, but your question hasn't been answered yet? Take a look at the FAQ's on our site. Or contact us, we will gladly explain it to you in person.
Need any help with anything?
If you still have questions about the BOTS app, do not hesitate to contact our support department.
There is no such thing as risk-free investment. You can lose (part of) your deposit.