FIRE Your Old Financial Life and Retire Early. Here’s How…

A Chicago flight attendant has hit the news for turning her financial life around.

At 39, Bianca DiValerio was nearly broke after a divorce and the sale of several failing rental properties.

But now, she claims to be just a year away from full financial independence.

And how did she do this? By saving 75 percent of her pay and cutting expenses down to the bare minimum.

DiValerio, who earns $75,000 a year, is part of the growing FIRE movement (Financial Independence/Retire Early).

This movement is made up of extreme savers that aim to get to a point where they can live without working. They hope this will let them live their dreams sooner rather than later.

Let’s look at a few tips from FIRE followers.

Make a commitment

Those who manage to retire early don’t make the decision on a whim. And they’re not always rich, at least not in the conventional sense.

Rather, they’re people who know what they want and take steps to get there. It’s as simple as knowing what you want, making a plan for how to get there, and sticking to it.

Use compound interest

The earlier you start investing, the less you will need to invest. That’s the magic of compound interest.

Saving — and, crucially, investing — from a young age, will mean you are more likely to get a well-padded nest egg, regardless of whether you start off as poor or rich.

Compounding is the simple concept of earning interest on your interest. When it adds up over time, compound interest is practically printing your own money.

If you commit to putting away $500 per month at 25 years of age, invested in stocks and earning an 8% annual return, by 55 you’ll have only put in $180,000 of your own money.

However, compounding means that you’ll be sitting on a $680,000 nest egg.

Minimize housing costs

Housing tends to be the biggest cost for Americans, so choose it with care.

Try to keep your housing costs below 30% of your take home pay. That includes all the associated housing costs: mortgage, property tax, insurance and maintenance.

Develop multiple streams of income

This could be moonlighting from your day job as a freelancer, selling unwanted stuff, investing in property to rent out, or doing odd jobs for friends. Your imagination is the only limit.

It’s not just about working hard but about insulating yourself from the insecurity of having just one way to make money.

Live below your means

This is the key to saving more. Spending less.

To start off you might just make a list of all expenditures, then find cheaper alternatives.

Maybe try riding a bike instead of driving, cutting out cable TV, or reducing the number of times you eat out. A no-frills lifestyle can help you reach your goals faster.

Turn these five ideas into habits and then a lifestyle and you too will find that financial independence is an entirely possible dream.

Warren Buffett’s Favorite Indicator Suggests a Stock Crash Is Coming

Anyone in the realm of finance or the stock market knows Warren Buffett. He is the billionaire CEO of Berkshire Hathaway and has been one of the world’s best investors

Some Expected a Junk Bond Explosion. The Data Says Different.

It has been well documented that much corporate debt has been downgraded by the rating services over the course of this pandemic slowdown. However, the actual data shows it not

Iaccino: Some Quick Stock Ideas for an Unsettled Market

RealDaily's Bob Iaccino recently appeared on the Alpha Trader podcast (available here). Co-founder of PureXposure Growth Series and Chief Strategist at Path Trading Partners, Bob writes The Stock Think Tank

biden wins

What I’m Telling Investors to Do If Biden Wins the White House

The value of our Bulletproof Wealth Report model portfolio declined modestly over the past several trading days ending Sept. 27, while the Dow Jones Industrial Average fell by 822 points

Options: Meandering Market Tamed by Using a Straddle or a Strangle

When you hear talk of markets trending, people think of uptrends or downtrends. However, markets often get stuck in a trading range. This is the condition where there is no

Warning! Market ‘Death Cross’ Appears

A death cross! According to Investopedia: The death cross is a technical chart pattern indicating the potential for a major selloff. The death cross appears on a chart when a

5 Best Stocks to Buy If Trump Wins the Election

If President Donald Trump wins the election on November 3, 2020, you might want to consider adding these five equities positions to your portfolio: LMT, BAC, AMZN, XLE, TWTR. Why?

5 Best Stocks to Buy If Biden Wins the Election

If Vice President Joe Biden wins the election on November 3, 2020, you might want to consider adding these five equities positions to your portfolio: XLU, TSLA, XLV, MLM, and

TGIF — Ending the Week with a Whimper

Everything is proceeding as I have foreseen. In Monday's "The Week Ahead — 200,000 Deaths Weigh Heavily on the Market," we knew the 200,000th American death would put Covid back

Even If the Overall Market Continues Lower, This Staple Could Maintain Its Upward Trend

Since peaking in early September, the main indices have all three stumbled for the last few weeks with the S&P and Nasdaq falling over 10% from their highs already. Three

tesla stock

TSLA Too Volatile? Two Option Strategies for Tesla Stock

Tesla Inc. (TSLA) is one of the most popular stocks amongst investors. Led by CEO Elon Musk the electric vehicle manufacturer has disrupted the transportation industry, bringing hype to a

pot stock

Pot Stock ‘Blood in the Streets’ Buy Signal Is Here

The cannabis market has been a volatile space in recent years. A wave in legalization, particularly in Canada but also through parts of the United States, led to significant growth