I Retired at 35 - Here's How I Used the FIRE Method to Do It

Katie dutifully followed the life plan, until she read a book that would shift the entire trajectory of her life for the better

WORDS BY
Katie Donegan
Published
January 19, 2024
More and more people are learning about the FIRE (Financial Independence, Retire Early) movement. So is it a lifestyle worth striving for?
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I'd always been taught that there's only one true way that you're supposed to live life. I call it the "standard plan". Maybe you've been sold on it too. Here's roughly how it goes…

  • Go to school
  • Go to university
  • Get a good job with a respectable company
  • Work hard and get promoted
  • Find a partner
  • Get married
  • Buy the biggest house you can afford
  • Get a pet
  • Have kids once you've proved you can keep the pet alive
  • Work hard
  • Keep your head down
  • Retire in your 60s
  • Play with the grandkids
  • Die 

I was completely bought into this life plan because I didn't know there were any other options. I was an excellent worker bee. I dutifully followed it.

Then I met my now husband Alan 18 years ago and my whole world changed. He was so different to anyone I'd ever met. He was into self-development and learning about how to live a happy, joyful, fulfilling life. He told me that it's possible to live any life I want, and opened my eyes to seeing that I don't have to follow the standard plan society set out for me.

Katie's story shows that it's possible to break away from the path society sets out in front of you (Photo: Martin Adams/Unsplash)

But diligent me, I was incredibly resistant to deviating from it and it caused a lot of friction in our relationship. I held Alan back because I wanted to keep us "safe" by following the plan and the rules that I held sacred. Surely it's wrong to do something different from what everyone else is doing? And so I carried on diligently.

 

The turning point

A few years later, Alan and I read a book together which introduced the idea that it's possible to retire early and that the amount of money you need isn't as much as you might think. I was gripped. In a “now what” phase having just qualified as an actuary, I had no crystal clear path to follow and to be completely honest, I completely freaked out.

Nobody's going to tell me what to do next in my career? I have to figure it out for myself? Is this really what life is going to be like now? This feeling would intensify every gloomy London morning as I’d wait for the train to shoe horn me into work. For the next 40 years, I thought, I’d need to live like this. Now that was a lifestyle I didn’t wish for myself.

This was the turning point and it was the first time I legitimately questioned the plan that I'd been following. But whilst I was empowered by the notion of buying my freedom, choice and power, a niggling feeling of guilt would continuously creep its way in. “Why should I be allowed to retire early?” I thought. “What will everyone think of me if I leave work altogether?”

 

Finding the FIRE movement

Speaking to a friend about the notion of retiring early, my friend Matt told us about the FIRE (Financial Independence Retire Early) movement. Explaining the fundamentals, he hooked me in from the get go. And the formula goes like this: You spend less than you earn, invest the difference in income producing assets, and once the income from those assets covers your living expenses, you don't have to work for money if you don't want to. “People in the community often reach this point decades before the traditional retirement age” he told me. That was the moment I started my own FIRE journey.

"We made the choice to buy our freedom and invest in assets first"

From that pivotal moment, I immersed myself in Mr Money Moustache, the biggest blogger in the FIRE community. I binge-read his whole back-catalogue, and before I knew it, I was spending all my spare time with this stranger, and that lingering guilt around ditching the plan slowly but surely dissipated. In my mind, he was talking directly to me, and soon my thoughts did a 180 from “why would you do this?” to something more empowering: "why would you not do this?!"

 

Full steam ahead  

I was all in and I was empowered. With the knowledge and confidence, I was ready to take action towards my vision. Alan and I would take long walks around our town, plotting and speeding up our journey towards financial independence. A few of my colleagues had become contractors and catapulted their earnings which planted the seed in my mind to follow suit. I was nervous – what if I don't get a contract? Will we be ok without my secure job and steady income?

At this juncture, we had built up a large buffer in savings. Even if it took me months to find work, I was confident we'd be ok. So with that, I took the plunge and trust me when I say it paid off.

How did I do it? By keeping our housing and transport costs extremely low by living in the same two bedroom flat and proudly driving our tiny three-door Skoda Citigo which we bought for cash. We were both earning good money, sure. But we made the choice to buy our freedom and invest in assets first before upgrading our lifestyle through a bigger house and fancier car. Those status symbols weren't, and still aren’t important to us. We were laser-focussed on buying our freedom. Because that’s what is important to us.

It was discipline and razor sharp focus that Katie adopted that made the vision of retiring early a reality

Retired at 35 and travelling the world

We got on the investing bandwagon, learnt about index investing and invested as much as we could, as quickly as we could. I’m proud of the discipline because the razor sharp focus paid off, all to reach financial independence at age 35 –more than three decades before the traditional retirement age. With the choice and freedom in our back pocket, Alan and I are living the nomadic travel life full-time – exploring new cultures, making new friends and eating all the food. Isn’t that what life’s about?

But we also recognise our own desire for purpose and pursuing our passions in order to live a life of expansion and growth. With that, we took it upon ourselves to pass our experiences down, by teaching and empowering people how to take control of their finances and build a life that excites, rather than deflates them. Because everybody deserves that, wherever you are and whatever you do.

Is it luck?

This is a question I’ve asked myself time and time again and the simple answer is this, no. The biggest myth? That being wealth relies on luck. That you're born into a rich family, you inherit the money or you hit the jackpot and win the lottery. But I’ve learnt first-hand that building wealth is a repeatable process that can be grabbed by the horns of anyone. Let me share the steps:

For Katie, it's not luck that creates wealth. It can be obtained by anyone with the right mindset to achieve it.

1. Create a gap between income and spending

There’s tons of fun and creative ways to do this. A lot of people focus on reducing spending but there's a natural floor to how little you can spend. There's plenty of ways to increase your income and if your reaction to this is"it's impossible for me to increase how much I earn", then I challenge you to examine if this is actually true or a story you're telling yourself that's keeping you trapped.

2. What to do with the gap

  • Build an emergency fund of $1,000 (or the equivalent in your currency)
  • Pay off expensive debt (credit card debt, store card debt etc)
  • Increase your emergency fund to three to six months living expenses
  • Invest in low cost globally diversified index funds

There might be lots of terms and concepts I've introduced here that are new to you - many of which are simplified here. Learning how to play the money game is like learning a new language. What do you do when you don't know a word in a foreign language?! You look it up and there are plenty of resources online that will help with that – Female Invest is a great place to start.

 

Play the long game

The important thing to remember, is that it’s a process. But boy does it become an exciting game to play! You won’t find £1,000 stashed under the sofa – if only it was that simple! The first step of building an emergency fund might take you several months or years to complete. Once you gain momentum and start celebrating those wins along the way, your finances will flourish and more and more choice becomes available. Because remember it’s not about making money, it’s about having choice and power in the day-to-day.

After years of discipline and frugality, Katie and husband Alan left their corporate jobs are now travelling around the world together.

The sobering truth 

I knew logically there wouldn't be rainbows and unicorns waiting for me when I hit financial independence but I was still surprised when it didn't happen. And now for the sobering truth: I was no happier the day my net worth hit a certain number then I was the previous day. My problems weren’t all solved when I achieved my goal.

I was still the same person I was the previous day with the same demons and unhelpful stories about myself and the world. My life is far from perfect because I retired at 35. But it’s the freedom and space to work on myself and deal with those problems in style – now that’s priceless.

Final thoughts

Let me be clear. I'm not judging the plan. The point I want to make is this: Be conscious, reflect on your path and choose your life as you want to live it. My story is proof that it’s not all set in stone. Any life you want is available to you, you just have to be in the driver’s seat of it – to choose it, set the intention and take action towards the goal.

The first step? Getting your finances in order. Because the minute you do that, you open up the space, time and resources to create the life aligned with your values. I'm so grateful to past Katie for the work she did on her finances. Do something today that Future You will thank you for.

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