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00:00Whenever I meet someone from the FIRE community, or even when people message me after watching
00:03my videos, they often ask me the same thing.
00:05They say, I'm really passionate about FIRE.
00:07I want to achieve financial independence, but I don't know where to start, and I have
00:11no idea how to track my progress.
00:13So every time I hear that, I kind of feel a deep sense of familiarity, because truth
00:17be told, I was exactly in that same position about eight, nine years ago.
00:21Back then, I had stumbled upon the concept of financial freedom, and I was completely
00:24drawn to it.
00:25But the problem was that there wasn't a clear path.
00:28I kind of jumped from blog to blog, book to book, trying to understand what to do.
00:33There were a few forums, some Reddit groups, if I remember, but there was no structured
00:36step-by-step guide.
00:37There was no clear roadmap to follow.
00:40I had no clue whether I was doing things right.
00:42I don't know what comes first, what comes next.
00:45I didn't even know how far I was in the overall journey.
00:47And that's what actually made me pass and think, what if I could simplify this for others?
00:53What if I could take everything that I've learned over the past eight years and create
00:56a clear step-by-step process for anyone pursuing FIRE?
01:00And that's what I want to offer through this video, a simple roadmap, a roadmap that worked,
01:04a roadmap that helped me achieve FIRE in 2022.
01:07In this video, I'll walk you through the four major phases of a FIRE journey, the 10 stages
01:13across these four phases, and what to expect at each stage, what goals you should look for,
01:19and how your mindset should be across these stages.
01:22As a bonus, I've built a small free self-assessment tool that you could use,
01:26in which you input a few basic details, and the calculator will tell you exactly where you are
01:30in the FIRE journey, and which stages you are yet to complete, and what specific actions you need
01:34to do in order to complete that journey.
01:37Also, you can download the PDF version of the entire roadmap, and this entire presentation,
01:42for free as well.
01:43So whether you're just starting out, or you're already halfway through the FIRE journey,
01:46this video is for you. Let's begin.
01:51If you're new here, welcome. My name is Vivek, and I'm a financially independent Algo Freedom.
01:55This channel is all about building a community of like-minded people who are passionate about
01:58financial freedom, personal finance, and wealth creation. I share the tools, strategies,
02:01and methods that help me achieve my freedom, and my overall journey, and the experience.
02:05FIRE, the financial independence and retire early is often misunderstood. Most people think
02:10that this is just one definite state of accomplishment. It's almost like one fine day you get up
02:13from the bed, and you've arrived. Sadly, it's not the case. FIRE is actually a long journey.
02:19To achieve FIRE, you typically have to cross 10 milestones, and these 10 milestones can be grouped
02:23into four major phases.
02:26Phase 1 is solvency. This is where it all begins. From relying on others or borrowing to make your
02:31rents meet, one gradually moves into a state where he earns enough just to maintain his basic living.
02:36So you move to a point, at least you're no longer dependent on others. And this is also the phase
02:41where one gets that first taste of financial control, and it's a very powerful feeling.
02:46Phase 2 is stability. At the end of phase 1, you've become solvent, which is all good, which is an
02:51excellent achievement. But that's not going to be enough, right? But now is the time to build
02:55resilience, right? So in this phase, it's all about managing your risk and reducing your
02:59vulnerability. This is where one builds a buffer to give oneself some cushion. So your finances
03:04aren't fragile anymore. At least one unexpected bill won't ruin everything. You've closed all high
03:10interest debt. You're finally in control, not just of your income, but your obligations too.
03:15Phase 3 is security. At the end of this phase, you're no longer just surviving. This is actually
03:19where FIRE really begins to start feeling real. And you can now cover your essential expenses with
03:24the passive income or your investment returns. You still have to work, work for other goals in
03:28life, but at least your core needs are all covered. This is also the point where you can downshift on
03:32your aggressive work life, travel, or even pivot careers. And finally, the phase 4 is the climax,
03:37which is the independence. This is what we all dream of, where your investment and your passive
03:41income can now cover the full lifecycle expenses and work becomes optional. At this stage, money is no
03:46longer a limitation in your life. It is a tool for impact. Now let's shift gears and dive into the
03:5210
03:52stages of FIRE. And I'll uncover it each one by one, right? So you may ask why 10 stages just
03:57sounds too complicated, right? Well, this is purely coming from my personal experience. And I'll be
04:01honest with you, the journey is not going to be easy. So for you to stay motivated and keep at
04:06it,
04:06smaller and more frequent milestones make things a lot easier for you to stay the course. It gives you
04:11that sense of accomplishments that will motivate you to push harder. Otherwise, people usually give up on
04:16it. Believe me, FIRE can have that effect on you. Stage 1 is financial dependence. This is where it
04:21all starts. This is where many of us begin, right? So you might be a student recently unemployed or
04:26simply caught in the cycle of spending everything that you earn, right? Someone living paycheck to
04:30paycheck, possibly with even a lot of debt and completely reliant on your next income to survive.
04:35Without your next paycheck or external support, you couldn't meet your basic needs.
04:39If this is you, don't worry. Acknowledging where you stand is the first step towards a positive
04:43change. The second stage marks your first victory, which is financial solvency. Here,
04:47what happens is you've reached a crucial milestone. Your income is consistently covering all your
04:51living expenses. You've stopped accumulating new debt. You can pay for your bills on time without
04:56borrowing really money from outside. This is your financial foundation, right? You may still have
05:01some debt, which is fine, but at least you've stopped basically digging the hole deeper, right?
05:04Many find this transition challenging, but immensely rewarding. And it is also where you take control of
05:09your spending and start building healthy money habits. Stage 3 is financial
05:13stability, and it's all about creating your first safety net. In this stage, you've established
05:18an emergency fund, typically covering three to six months of your essential expenses.
05:22This additional buffer protects you from whenever life throws a curveball at you, unexpected challenges
05:27like, say, sudden car repairs, your medical bills, or your home appliance broke down and it needs a
05:32replacement, or even something a bit more serious like a temporary job loss. So consider your emergency
05:37fund like you're a financial shock absorber, reducing stress and preventing you from sliding back into debt.
05:43Now comes a major milestone that many consider life-changing, becoming debt-free. So in stage
05:48four, which is debt freedom, you've systematically eliminated all your consumer debts, like things
05:52like credit card, personal loans, student loans, car payments, or in some cases, even home loan.
05:57So imagine the freedom of sending your money towards your future instead of paying your past.
06:01With the debt payments all taken care of, your cash flow increases dramatically, which basically opens up
06:07new possibilities for saving and investing. Personally, in my fire journey, when I became debt-free,
06:12it was almost like somebody, you know, someone just lifted a huge rock off my chest. It's kind of very
06:16difficult to explain, but it just felt wonderful. Stage five is coasting fire. With all the debts behind
06:22you, stage five is all about coasting your way to the fire. Typically, in this stage, it involves that
06:27you save up to 20 times your annual expenses. At this stage, you're not ready to stop working. However,
06:32you could choose to lighten up, you know, your load. Many people that I know at this stage choose
06:37to work differently. Perhaps, like, say, some sort of part-time work, freelancing, or even
06:41pursuing some passion projects. It's very important that you let your corpus grow and you do not touch
06:45it or withdraw any funds from it. On the contrary, you could choose to stop contributing to your corpus,
06:49although personally, I wouldn't suggest it. You know, you need to continue to contribute to your
06:53corpus. So while you'll likely continue to work, you've created a safety net that ensures that your
06:58survival needs will always be met, which is very, very important. This milestone dramatically reduces your
07:02financial anxiety, and that's wonderful. Stage six is financial security, and this is where your
07:08lifestyle begins to transform, and your passive income now covers all your basic necessities,
07:12plus some discretionary expenses, perhaps things like, you know, travel, lobbies, or even entertainment.
07:17The key aspect of the stage is that, you know, the work becomes more about fulfillment than really
07:21about survival, and at this stage, you're completely unstoppable because you've tasted, you know, freedom,
07:27and you don't need any external push to stay the course. And in case you've already reached the stage,
07:31give yourself a big pat on your back. From financial security, you move to the next stage,
07:35which is stage seven, financial flexibility. At this stage, your passive income meets or exceeds
07:39your current lifestyle expenses, offering the flexibility to make employment optional.
07:44So there are two key aspects to these stages. You know, number one is your passive income equals or
07:48surpasses your total monthly expenses, which is very, very important. Number two, ability to sustain
07:52current lifestyle without any active income, right? So you now work because you choose to,
07:57not because you must, right? I know a lot of people who, you know, achieve this stage,
08:01continue to work. They kind of not work for money anymore, but they really look to pick up work
08:05where they can make a lot more meaningful contributions. Financial independence is stage
08:11eight. You're now officially within the threshold of financial independence, and this is a really
08:15significant milestone. In this stage, your passive income well exceeds your current needs, allowing you
08:20to indulge in, you know, kind of lifestyle enhancements, like, you know, you can travel more
08:24luxuriously, you can move to one of the dream locations that you always wanted to, or you can
08:28indulge in hobbies without really have to, you know, having worry about cost, right? The global
08:33thumb rule for this stage is that you need to have at least 30 times your annual expenses saved up
08:38in your retirement corpus. Financial freedom is stage number nine. You've arrived and you've arrived
08:42in style. This is the stage that everyone dreams of, where your assets produce significantly more income
08:47than you could, you know, ever reasonably spend. Again, if you talk about thumb rules here,
08:52you need to have saved up in your retirement corpus over 50 times your annual expenses.
08:56Bear in mind, this corpus does not include your other long-term goals, like your kids' education,
09:01wedding, or any other lifestyle expenses. Those you would need to save up on top of the retirement
09:05corpus that I'm talking about. Personally, I crossed this stage in 2022, and I was literally on top of
09:10the world when I did it, especially after eight years of slogging it out. And finally, stage number 10,
09:16which is financial abundance. You know, if you have 100 times your annual expenses saved up in your
09:21retirement corpus, you basically get to have achieved this stage. This is a stage I also
09:26call as nirvana of wealth, because the final stage that transcends money entirely, right? It's all about
09:31aligning your wealth with a purpose. You've actually built generational wealth that will not only last
09:35your lifetime, but probably a couple of next generations as well. At this point in time, it's
09:39no longer about the money, but using money in ways that brings the greatest joy and impact.
09:43Personally, this is also the stage that I'm trying to work towards, and I'm hoping that I would reach
09:47very shortly. I spoke about a self-assessment tool that I built, which will tell you basically where
09:53you are within the journey. You can access that tool for free. All you need to do is just go
09:56to
09:56our community website, which is fabrader.in, and then you click on this access tools here, right?
10:01And then when you click on it, it basically opens up this, and then you can find the self-assessment
10:05tool right at the top, which is test yourself which stage of FHIR journey I'm currently in. So this is
10:09the one. So you put in some of your basic numbers here, and then when you try and say calculate
10:13my
10:14stage, this will tell you exactly what are the stages that you've already cleared, and what are
10:17the stages that you are yet to clear, along with what exact actions that you will have to take.
10:23Also, you can download the entire roadmap. This presentation take for free as well, the PDF version
10:27of it. I'll provide the link in the description. This contains the entire roadmap, and along with it,
10:32all the details that you need. In fact, you can take a printout of this particular roadmap, and then
10:37stick it on your desk, and then you can write your personalized plan as to when you plan to achieve
10:42these stages as well, which could be a great reminder for you.
10:48We have come to the end of the video, and I want to close with these words.
10:51As someone who has walked this path, I want you to know that I understand what it feels like
10:55to start this journey with more questions than answers, and I know exactly how overwhelming this
11:00can be. Looking back, I'm grateful that I did not give up, and that's why I created this roadmap and
11:05tool to make your journey a little easier than mine was. If you are someone along the way wondering
11:10if you're doing enough or heading in the right direction, I just want to say that you're not alone.
11:14I'm available for any questions that you may have. Please write to me, and you can always get in touch
11:18with me anytime, and if this video or tool has helped even a little bit, I'm truly happy to have
11:23been part of your journey. So keep going, and I'm rooting for you. Thank you. If you genuinely found
11:29this video useful, please consider subscribing and liking the video, and I will see you soon in another video,
11:33and until then, take care and happy trading.