In times of unprecedented economic, political and social instability, a growing group of individuals is exploring an alternative path towards freedom and autonomy. “Financial Independence, Retire Early” (FIRE) is a movement of people who aggressively save and invest to retire earlier and reclaim control over their lives.
While the term was coined in the 1992 book Your Money or Your Life, the FIRE movement has experienced a recent resurgence in popularity, particularly among younger working professionals. To gain further insights, we interviewed three individuals who have successfully traversed the path to financial freedom, whether through unexpected fortune, intuitive decision-making or intentional planning.
We discovered that there is no recipe, nor a universally applicable magic formula to achieve this goal. Contrary to popular belief, early retirement does not follow a clichéd routine of lounging by the pool and teeing off at the golf course. Instead, financially independent individuals often continue to seek purpose and meaning in the “work” they take on.
As part of ongoing research on the post-financial freedom journey of successful entrepreneurs, Bala Vissa, a Professor of Entrepreneurship and Family Enterprise at INSEAD and I (Winnie Jiang), found that many of these individuals encounter emotional ambivalence in their daily lives. While they experience a sense of joy and freedom, they also grapple with feelings of emptiness and anxiety, due to the seemingly limitless possibilities that lie ahead. Consequently, they often struggle when asked, “What do you do now?” and are in a constant search for labels to define their identity and purpose.
Essentially, attaining financial freedom doesn’t automatically translate to a fulfilled life. Our three subjects reached financial independence through different paths, and they all realised that the key wasn’t to cease “working”. Instead, they chose to engage in activities that appealed to them, while maintaining control over the quantity and quality of their work.
Permjot: An accidental path to retirement
Permjot’s journey towards financial independence was unplanned. While working at EY as a sales and marketing director in London, Permjot began to recognise that his success and achievements were influenced by external factors and circumstances beyond his control.
Through a combination of serendipity and a strong desire to foster meaningful connections, Permjot found himself invited to join a successful asset management fund led by prominent figures. Their first fund performed well, but it was the second fund that thrived, unexpectedly benefiting from opportunities arising from Brexit. As Permjot observed the steady stream of passive income generated, he realised he had the opportunity to allocate his time in new and different ways.
While speaking at a conference in Nova Scotia in Canada, Permjot sensed the need for talent and leadership development in the region. Supported by the revenues from his fund and rental income from his London house, Permjot had the freedom to say “yes” to opportunities to share his experience and expertise and set up a new life in Nova Scotia.
Permjot often engages in pro bono work, including leadership advisory roles and mentoring. He says developing others fills him with joy and that he has “only done a day or two of what feels like ‘real work’ in the last five or six years”. He underlines the importance of gradually pivoting and engaging with work that aligns with one’s age and experience. In his 40s, he supported start-ups, but now, in his 50s, he primarily concentrates on strategy and leadership development. He enjoys revising and renewing his work, driven by the belief that it is important to adapt to changing conditions and explore new avenues.
Financial independence has provided Permjot with a safety net and the freedom to explore new opportunities. As an accidental retiree, Permjot believes he still has much to contribute, teach and share with others.
Rachel: From corporate grind to simple luxury
Rachel found her path to financial freedom by relying on intuition rather than a well-defined strategy from the outset. She initially studied as a beautician and began working with a surgeon, offering therapeutic treatments after surgery. Rachel also set up a pub with her boyfriend at the time and found herself running two substantial businesses at the age of 20.
Life took Rachel to Spain, where she worked as a beautician at a spa. Her capabilities and dedication led to a swift promotion, and she soon assumed operational management responsibilities. This motivated her to earn a bachelor’s and master’s degree, which opened the door to a corporate role at Tata Steel in the UK. She rose fast and took on more senior roles, all the time knowing deep down that she did not appreciate working for someone else.
After nine years, she felt like she was living another person’s life and couldn’t hack it anymore. “Burning out was the best thing that happened to me,” she said. “I was just following the crowd up the ladder and doing what I was supposed to do and not what I really wanted to do.” Instead, she sought out ways to make money online, starting by tutoring languages, then doing translation and eventually coaching and consulting.
Her life is now simple, freeing and fulfilling. She reduced her expenses and continues doing work that she loves at a pace that suits her. Today, she coaches likeminded individuals to find their own version of freedom away from the corporate grind. She inspires others through weekly YouTube videos and has online courses, books and freelance projects that bring money in.
She travels constantly by house and pet sitting all over the world. While she makes more money now than she did working in her corporate job, she spends and consumes much less. She says she enjoys a “luxurious” life by keeping her expenses under €1,000 per month and prioritising experiences over material possessions. She cherishes her newfound freedom and independence, reflecting on how her previous corporate life would have never allowed her the flexibility to spend as much time with her family or pursue her passions.
Abel: A strategic journey to financial independence
Abel studied in the Netherlands and went on to become a chartered accountant in the United Kingdom. After landing a finance role at a shipping company, Abel and his wife, who also worked in finance, began to strategically live on one salary and put the other aside. As their revenues grew, the results of the savings essentially generated a “third” salary.
Abel’s father passed away at 58 without getting to sail the boat he dreamed of buying when he retired. As a result, Abel and his wife became even more intentional about their priorities regarding time and money. They were extremely careful to avoid “lifestyle creep” as they watched their friends buy cars and bigger houses. They stuck to their plan, paying attention to the end goal.
In his mid-30s, Abel entered the Global Executive MBA programme at INSEAD as a CFO, with his eyes firmly fixed on the aim of becoming a CEO. However, Abel realised that a CEO position wouldn’t align with the freedom he sought. When offered it, he negotiated for the role to be interim, and took on side hustles including consulting, non-executive roles in boards, teaching and more. After a few years, Abel fully transitioned out of his day job to become a location-independent portfolio careerist.
Abel and his wife approach their life just like a business, holding strategy retreats and quarterly closings, evaluating both financial and lifestyle outcomes. They carefully assess luxury purchases, despite having a budget of €90,000 a year. Abel’s wife is now fully retired and lives full time on boats. While Abel still finds it hard to say no to offers of work that interest and motivate him, he plans to be spending all the time he wants sailing within the next three years.
Steps towards financial freedom
Permjot, Rachel and Abel all deliberately chose to keep doing work that invigorated them once they were financially independent. Their narratives demonstrate that accumulating millions is not a prerequisite for achieving financial independence; rather, lifestyle choices allowed them to define their own path to freedom.
Building on their wisdom, here are some tips to keep in mind on the journey to financial freedom and early retirement.
Start early, if possible. Saving even 10 percent of your salary from your 20s onwards is a massive advantage. Compound interest is your ally.
Break your plans down into milestones that are easily understood and motivating: For example, first aim to get out of debt and move on to simple savings before more complex investments.
Clearly determine your non-negotiable elements such as health, relationships, family or adventure.
Wealth is built by having a high savings rate, not primarily investment returns.
Do an honest audit of your current lifestyle. You might be surprised by how much or indeed how little you spend.
Set goals and review them regularly, just like any other enterprise.
Ensure that the criteria for goals and reviews contains not only numbers and financials but also more intangible measures like happiness.
Remember that there is no simple “one size fits all” for financial independence.
The quest for financial independence is not a fixed end point. Rather, it is an ever-evolving journey that involves acknowledging the dynamic nature of one’s identity, financial situation and place in society. This holistic approach, encompassing personal values, goals and ongoing growth, is key to ensuring a fulfilling and empowered life.