TLDR: What’s your investor spirit animal?

“FINANCIAL independence, retire early” – chances are you’ve come across this ambitious movement many young folks and financial influencers have talked about ad nauseum.

What is it, really? In short, it’s aggressively saving and investing, starting from as early as you possibly can, so you can stop work and live off your savings.

Can I be a Fire investor?

Sure – start by putting aside 50-75 per cent of your income every month. Invest it in something that suits your goals and risk appetite.

Sounds like a plan? Understand your investing behaviour and personality first.

Here’s how:

1) Know your biases – These could be influenced by race, religion, nationality, gender, where you are in life and what your priorities are. Cultural background or family experience can also influence your investment appetite.

2) Figure out your reason for choosing the Fire life – To leave a legacy for your children? To save for retirement? To be more confident in your decisions?

3) Decide if you are afraid of losing money – If you hate losses more than you love gains, you’ll probably be quite unhappy, and your unhappiness could lead you to poor investment decisions.

4) Know what you’re in for, and make sure you have the stomach to stay the course – You’ll have to make sacrifices in terms of your lifestyle habits, and perhaps even adjust your expectation of the life you are aiming to achieve, based on how much money you’re starting with.

And finally...

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What type of investor are you?

5) Recognise that you may not succeed – In fact, chances are slim that you will. Fire is an achievement obtained by few, especially if you are looking for a “good life” characterised by luxurious living and a comfortable passive income. What you manage to achieve depends very much on how much you start with, how much you’re earning, and what you’re working towards.

Want to learn more? Try out the quiz in this week’s Brunch to discover your investor personality and how it will help you in working towards your Fire dreams.