Misconceptions around FIRE

So you are convinced of why you should care about FI. But how do you go about it?

A common misconception about FI is that it's something that's only possible for NRIs, software engineers or other rich people. That is patently false.

The single biggest factor that determines whether you can be FI or not is not your income. It is your sustainable savings rate

For example if your savings rate is 20% and you expect a 4% average rate of return on investments after inflation, it will take you about 47 years to reach retirement corpus. But at 30% savings rate it drops to 36 years. At 40% it is 28 years and at 50% it is a little over 21.5 years. At 75% it is just 9.5 years. Of course the numbers will change slightly depending on some of the options set there, but the trend remains exactly the same.

Going one step further, if your retirement expenses are substantially lower than your current expenses, your time to FIRE is even shorter (not all FIRE calculators allow for this scenario, most assume current expenses = retirement expenses). Living in a High Cost of Living (HCOL) city (say Tier-1) to maximise earnings and then moving to a Low Cost of Living (LCOL) city (say Tier-3) after FIRE is called geographical arbitrage and this is a popular method to reduce one’s time to FIRE. NRIs and others who will move back to their home town etc. to retire should use their planned retirement expenses for their FIRE plan.