What the ‘finance bros’ and FIRE crowd get wrong about building wealth to retire early

I’ve never been a fan of the miserable version of wealth-building: work yourself into the ground, spend nothing, live on noodles and baked beans, and save every cent. Then there are ‘finance bros’ telling us to retire at 40 and never work again. It sounds appealing on the surface, but I know from talking to many retirees how quickly the novelty of going on cruises and mowing the lawn wears off.

Instead, we need to understand the real reasons why people want to build wealth. Ask anyone who wants to improve their finances a few good ‘why’ questions and it will quickly become clear that what they want isn’t to retire and be idle. They want to stress less about money and bills, look after their family, send their kids to a good school, spend more time with their children while they’re young, take care of their health, and see the world.

All this can be wrapped up in one word: choice.

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It’s entirely possible to live a good life, enjoy your time while you can, and build wealth at the same time. What it takes is a solid plan which you implement consistently, and I’m going to give you the recipe for it here.

It is refreshingly simple: earn a bit more than you do now, save a bit more than you do now, and invest the surplus in quality assets, without chasing shiny investments that promise to double your money by Friday. That’s it!

Earn a bit more

There is a limit to how much you can trim your expenses, but far less of a limit on how much you can earn. That doesn’t mean you need to work overtime, start a business, or work three jobs. Sometimes there are simple solutions that let you earn more without spending more time to earn it.

I was working with a client where we couldn’t find more surplus income for him to invest. He had been with the same employer for about five years, so I asked him: do you know if you’re well paid for your job? He wasn’t sure. We jumped on Seek, and it quickly became clear that he was being paid about $25,000 below the market value for his role. So, he asked for a raise, got it, and now we’re investing that surplus. In 10 or 15 years, it could grow into a significant portfolio he can then start drawing on, potentially letting him drop work to three days a week.

There are plenty of other ways to earn a bit more. Think about a side hustle that doesn’t consume too much of your time: pet sitting, renting your shed out, hiring out equipment you rarely use, and so on.