How Your Investments Fire Your Financial Freedom Goals in 2023 (2024)

An important disclaimer: I am not a financial advisor and none of the below should be construed as financial advice. The below details tactics that have worked for me, but you should not expect to see similar success. Stock market investing is SUPER risky, only choose strategies that work for your personal goals and circ*mstances, and when you need it, seek advice from an accredited financial advisor.

Also, full disclosure: I am a proud affiliate, meaning if you click a link and make a purchase, I may earn a commission at no extra cost to you. My recommendations are based on deep experience with and knowledge of the products I mention and I recommend products only when they are genuinely helpful and useful, not because of the small commissions I may receive. Please don’t spend any money on products I recommend unless you genuinely believe they will help you achieve your goals.

Introduction

Do your priorities include achieving financial freedom goals?

Financial freedom via the FIRE movement (financial independence, retire early), is a growing trend. After all, why wouldn’t you want the freedom to choose what you do with your time?

When you achieve your financial freedom goals, you have the flexibility to choose how you live your life. You can live on YOUR terms. That kind of freedom can completely change your life for the better.

Maybe your career matters to you and you could never imagine retiring early. Even if that’s the case, wouldn’t it feel great to be able to choose whether or not you work?

One of the key components of the FIRE movement is investing. When you invest your money wisely, your money can grow over time and support you in retirement, early or not.

In this article, you’ll learn the various ways your investments can fire your financial freedom goals.

We’ll cover the following topics:

• What is FIRE?
• How to choose the right investment accounts to fire your financial freedom goals
• What types of investments should you consider for FIRE?
• How to develop an investment strategy

By the way, this article is part of a series of articles that are designed to help you fuel your financial freedom goals. For more on this topic, check out the following posts:

Part 1: 5 Simple Tips to Help You Start Investing in the Stock Market

Part 2: 4 Simple Steps for Getting Started: Investing in the Stock Market

What is FIRE?

FIRE, or Financial Independence, Retire Early, is a goal that many people in the FIRE movement aspire to achieve.

To achieve your financial freedom goals via FIRE, you need to save enough money so that you can live off of your investments without having to work. At least, that’s the fundamental theory. However, you may have your own interpretation of what it means to achieve FIRE.

There are a few different ways to achieve financial freedom goals like FIRE. One way is to save a very large percentage of your income, such as 50% or more. Another way is to invest your money in assets that have the potential to grow significantly over time, such as stocks or real estate.

Either strategy can help you achieve FIRE, though what’s most important is that you live below your means.

How to choose the right investment accounts to fire your financial freedom goals

There are a number of different investment accounts that you can use for FIRE. Some of the most popular options include the following:

401(k)

Many employers offer a 401(k) retirement savings plan. Contributions to a 401(k) are tax-deductible, and your money grows tax-deferred until you withdraw it in retirement.

IRA

An IRA is an individual retirement account that you can open on your own. Contributions to an IRA are also tax-deductible, and your money grows tax-deferred until you withdraw it in retirement.

HSA

A health savings account (HSA) is a tax-advantaged savings account that can be used to pay for qualified medical expenses. HSA contributions are tax-deductible, and your money grows tax-free.

Taxable brokerage account

A taxable brokerage account is an investment account that is not subject to any special tax benefits. Contributions to a taxable brokerage account are not tax-deductible, but your investment gains are taxed only when you sell your investments.

The best investment account for FIRE will depend on your individual circ*mstances. There’s a good chance that you’ll want to use a mix of these accounts, or others that are available to you but aren’t included on this list, such as a Roth IRA or 401(k).

If you have an employer that offers a 401(k), it’s usually a good idea to contribute at least up to the maximum company match. You can then contribute to an IRA or taxable brokerage account. However, you should choose the approach that works best for your specific needs.

Make sure you speak with an accredited financial advisor if you’re not sure how to proceed.

What types of investments should you consider for your financial freedom goals?

The types of investments that you should consider to support your financial freedom goals will depend on your risk tolerance and investment horizon.

If you’re young and don’t expect to draw from your investments in the near future, you can afford to take on more risk. In this case, you may want to invest in stocks, which have the potential to grow significantly over time.

If you’re older and/or have a shorter investment horizon, you may want to invest in less risky assets, such as bonds or CDs. These assets don’t have the same potential for growth as stocks, but they are also less likely to lose value.

Some of the most popular investment options include the following:

See Also

8 Best Places to Open a Health Savings Account (HSA)

Stocks

Stocks are shares of ownership in a company. When you buy stocks, you become a part owner in a company. Stocks have the potential to grow significantly over time, but they also carry more risk.

Bonds

Bonds are loans that you make to a company or government. When you buy a bond, you are essentially lending money to the borrower. Bonds are considered to be less risky than stocks, but they also have lower potential for growth.

CDs

CDs are certificates of deposit. When you buy a CD, it’s like depositing money into a savings account with a fixed interest rate. CDs are considered to be very safe investments, but they also have low potential for growth.

Real estate

Real estate is another popular investment option for FIRE. Investments in real estate can appreciate in value over time, and it can also generate income through rent payments. However, real estate can also be illiquid and expensive to manage.

How to develop an investment strategy to support your financial freedom goals

Once you have chosen the right investment accounts and investment types, you need to develop an investment strategy. Your investment strategy should be based on your risk tolerance, investment horizon, and financial goals.

A good investment strategy for FIRE will typically involve a mix of different asset classes. This will help reduce your risk and support your growth goals.

For more on this topic, check out the following posts (as mentioned earlier):

5 Simple Tips to Help You Start Investing in the Stock Market

4 Simple Steps for Getting Started: Investing in the Stock Market

Conclusion

Your investments can provide fire to your financial freedom goals, regardless of which investment strategy you choose to pursue.

Think carefully about your goals and do your research prior to investing and you’ll be well positioned for success.

Have any questions or want to learn more? Tell me about your goals for FIRE in the comments below!

Best of luck to you on your journey to financial freedom.

Think fueling your financial freedom goals will help you FIRE Your Life? Check out the posts page for more ways you can FIRE Your Career and achieve financial freedom.

FIRE Your Career: Achieve Financial Freedom Through Your Career & Spend MORE Time Doing What You Love.

Resources I frequently recommend (as related to this article):

Stock Market Simulator

The Bogleheads’ Guide to Investing (a great intro to investing book)

A Beginner’s Guide to the Stock Market (a more detailed investing book)

Tools I frequently recommend:

Strengths Finder (book to help you uncover your innate strengths, includes a free personality quiz)

ClickUp (my recommended goal-tracking and project-management tool)