The 10 Mistakes We Avoided To Achieve FIRE

As you may already know, Amon and I retired before we hit 40, and we are currently living in Portugal with our two children. Over the years we’ve met a lot of people who have achieved FIRE, or who are working toward financial independence. One of the most important things we’ve learned from our journey, and other people's experiences, is that there are many mistakes that can stop people from achieving financial independence.

So today I want to share the top 10 mistakes that hold people back from early retirement, so you can avoid them on your own FIRE journey.

1. Ignoring The Gap Between Growing and Saving $$$

One of the main tenets of achieving financial independence is that you take any additional money that you make or save and invest it. But problems can arise when people focus too much on saving money, rather than making more of it. The idea is that you should be lowering your expenses and growing your income - the gap between those two things is all of the money that will help you reach financial independence.

No matter how much money you save, you will make it much harder to achieve FIRE if you are not finding ways to increase your income. Saving 70% of our income and making more money via our side hustles is one of the major reasons Amon and I reached retirement so quickly.

2. Spending Time With The Wrong People

Whether you like it or not, the people you surround yourself with while you strive for FIRE will dictate whether or not you achieve it. It’s harsh but true. Negative people in particular will be the bane of your journey, as they’ll try hard to shoot down your goals and ambitions.

And it’s not just negative people. Friends who always want to keep up with the Joneses and spend exorbitant amounts of cash on dinners, lavish holidays, and extravagant holidays will impact your journey too. Be aware of the people you surround yourself with, and try to spend more time with positive people who have more similar financial goals.

3. Depriving Yourself Of Joy

A lot of people who pursue FIRE try to save as much money as they can by depriving themselves of things that give them joy. This isn’t sustainable in the long-term, and will probably only lead to mistakes. Counting every penny and approaching financial independence as a chore or a painful thing will lead you off your path in the long run.

The key to reaching financial independence is by incorporating the things you enjoy. For example, Amon and I found affordable ways to travel so that we could still do what we loved while living on a budget. This is the only way to keep your journey sustainable.

4. Being Inconsistent

Being consistent with FIRE is like going to the gym. If you go too hard too early you’ll burn yourself out, only exercise infrequently, and fail to achieve your long-term goals. Pursuing financial independence only works if you put in consistent effort to reach those financial goals. That means automating your savings, budgeting, working on new ways to make money, and more.

5. Not Tracking Your Progress

Breaking your FIRE journey down into goals and milestones, and tracking your progress in the process, is essential. Without doing this, reaching early retirement will feel very daunting. Something that helped us immensely on our FIRE journey was setting small, bite-sized goals and celebrating when we achieved them. This helped to keep us motivated and stay on the path.

6. Not Being Financially Literate

This is a huge obstacle to reaching FIRE. Gaining financial literacy will be one of the best investments you ever make because you need financial literacy to achieve financial independence and you need that same literacy to maintain that independence.

It’s vital that you read more books on finance, watch more videos, listen to more podcasts, whatever gets you the education you need. You also need financial literacy to successfully invest in the stock market, which is a core component of FIRE.

7. Making Excuses Not To Say ‘Yes’

A lot of people will say no to ideas and shut them down before even hearing them out properly. This is not a good mentality to have when striving for financial independence. For example, when we made our video on creative side hustles we mentioned renting out your swimming pools. Several people insisted that it wouldn’t work due to the insurance liabilities and a host of other reasons, despite the fact that a little research would tell them that the platform offered a $1 million insurance liability for their pool hosts.

The mentality of saying no to an idea (especially when you haven’t researched it properly) will only hold you back and shut down many opportunities that could help you on your journey to FIRE. Saying yes, doing your research, and being open-minded will give you so much more in the long run.

8. Not Being On The Same Page

This is for spouses and partners who are working toward FIRE together - you have to be on the same page financially. You don’t have to have the exact same spending and saving habits, but you do have to align your values and find a middle ground that will allow you to work together.

The best way to achieve this is by talking it out as much as possible - because the last thing you should be doing is pursuing this lifestyle with someone who isn’t willing to work as hard as you are toward the same goals. Make sure you have this discussion with your spouse, lest you end up empty-handed or straining your relationship to its breaking point.

9. Setting Unrealistic Investment Goals

Too many people try to fast-track their journey to FIRE by making investments with a potential 1000% return. Unfortunately, achieving these extraordinary returns and reaching financial independence in a year or two just isn’t realistic. And when you set unrealistic goals, you’re more tempted to make riskier investments. And while it could work out for you, it could also derail your entire journey.

10. Not Having A FIRE Plan In Place

You need a FIRE plan that details how you’re going to get from A to Z. This includes calculating your FIRE number, figuring out what investments you are going to make, how you’re going to put them in investment accounts, how you’ll eventually withdraw them, and when you aim to reach financial independence and retire early. This is a comprehensive lifestyle plan that you absolutely need to achieve your financial goals.

Please, use these mistakes as a cautionary tale. Don’t let them derail your journey to financial independence. Use them as a lesson for what NOT to do, so you can reclaim your life by retiring early, just like we did.