My Story (Part 1)

Key Points

  • Financial retirement is when you generate enough passive income to cover living expenses.
  • Through aggressive saving, you can financially retire sooner rather than later.
  • This is the foundation of a movement called FIRE, which breaks down to this: the more you save, the more quickly you can retire.

My name is Trishul Patel. I achieved financial independence before 40, and with my advisory business, I get up every day to help others do the same. To get where I am, I prioritized aggressive savings and identified the things that are truly important in my life. So throughout this series, I’ll dig into the steps I took along the way towards my own financial retirement.

My Background

Beyond finance and investing, I am an entrepreneur and problem solver at heart. Creativity has always been a part of me. At an early age, I began soldering analog circuits, building computers, and programming simple games.

Academically, I also have a few degrees from Cornell University. And I have been investing for almost two decades. Over my professional career, I’ve designed large-scale financial applications for tier-one banks. I likewise managed an exotic options book for a private firm based out of South-East Asia, generating over $750 million in revenue in three years. And I was a Portfolio Manager for a Hedge Fund, managing over $100 million in assets.

But these days, in addition to helping my clients meet their financial and investment goals, I also enjoy blogging, biking, and hiking with my wife and daughter.

My FIRE

Financial Independence and Retire Early (FIRE) is a philosophy that has been important to my lifestyle. And it is one that I espouse to others that share similar ideals. Typically, but not always, this means other high-performing professionals in search of financial freedom sooner rather than later.

Financial Independence, Retire Early (FIRE) is a movement dedicated to a program of extreme savings and investment that allows proponents to retire far earlier than traditional budgets and retirement plans would allow. —Investopedia

The goal of FIRE is to save as much as possible as quickly as possible. And then to use these savings to generate passive income, which can be used to cover living expenses on a go-forward basis. We’ll dive more in-depth in the next post of this series, but the high-level message is simple: the more you save, the quicker you can retire.

Granted, any philosophy can be taken too far. And when taken to the extreme, such a life-style decision can actually be a hindrance or require more sacrifice than its worth. Thus, it’s all about finding a healthy balance that works for the individual. And the balance we are talking about here can be boiled down to a simple trade-off: savings rate versus retirement age.

Mainly, save more = retire early; save less = retire later.

One Size Does Not Fit All

Unfortunately, savings rates are not what they used to be in the 1960s. The end result is that the status quo is to retire later. In fact, 74% of Americans plan to work past the retirement age.

Further, having kids is a hindrance to pursuing FIRE. The cost of raising just one child is upwards of $370k for higher-income families, without even factoring in college. And we all know that education, healthcare, and housing expenses continue to rise at rates higher than CPI. This makes having a large family, with multiple children ever more challenging.

It is perhaps for these reasons why woman are having fewer children (1.9 today, versus 3.7 in 1960), and why they are waiting longer to have children. In 1960, women ages 15 to 24 accounted for 40% of mothers with infants; by 2011, this figure dropped to 22%. But even with these demographic changes, individuals are saving less and retiring later.

Like any random variable, human preferences tend to fall within a bell-shaped distribution. And the statistics I mentioned above (lower savings, with later retirement) represent the average case for someone in the U.S. today. In my mind, FIRE is about understanding and living the alternative to saving little and retiring later (the status quo). And this will appeal to individuals that can thrive to the left of this distribution curve (higher savings, with earlier retirement).

The End of Work?

As I mentioned, the ideals of FIRE resonate with me and my personality. Yet, I realize that my personal situation is not the norm. I have had a solid education and a high income for the past (almost) twenty years. But over this time, my savings rate has been considerable (averaging over 40% gross). And as my income went up, my standard of living stayed relatively stable. And as of 2017, I “financially retired”. What I mean by “financially retired” is that I had enough passive income by this point that I no longer had to rely on a steady paycheck.

But there is a BIG difference between “not needing to work”, and “not working”. Even individuals that retire at the conventional age realize that retirement does not necessarily imply that they stop working completely. And this is different than sitting on the beach, updating my Instagram all day. Or traveling around South America in a campervan indefinitely.

Paradigm Shift

The critical distinction is that I no longer “need” a paycheck to support my lifestyle. I do, in fact, like working, as do most people I think. But with greater financial independence, I now have greater flexibility in determining how, when, and where I choose to work. I might even argue that this philosophy may ultimately lead to more significant wealth creation for me than the standard path of lower savings and later retirement. Indeed, I am far more entrepreneurial now than before when I was tied down to a 9 to 5. But of course, my success on this specific point remains to be seen.

Nevertheless, this shift allowed me the flexibility to take time off (I took a year off after my daughter was born). I spent the time with my wife and newborn daughter while writing a novel (currently in final editing). Call it a sabbatical, sure. But what gave me the confidence to do all of this is the understanding that I had a healthy financial cushion in place.

And now, I am busier than ever. However, how I focus my time is not purely financially driven. For example, I am devoting three weekdays to my advisory business, the other two to my daughter. Yes, I still could be earning a far higher salary at a hedge fund, as I have in the past. But spending this time with my daughter is, to me, priceless. My wife works full-time at a job she loves, but it’s more about the experience than the pay. So we both like working. However, if we need to take a few weeks, months, years off to pursue alternative non-financial life goals, this is now possible. Accordingly, I don’t think FIRE is about “trying to quit all jobs”. I think it has more to do with providing individuals greater flexibility and confidence to pursue goals and ambitions that are not exclusively financially motivated.

What Do You Value?

My friends and peers have faced similar life choices as compared to myself. And we were all blessed with excellent educations and high paying jobs. Some have followed the conventional approach of high-income millennials (low savings, multiple children, a big mortgage, new cars, fancy vacations, etc.). Others have opted for the alternative (high savings, fewer (or no children), modest (or no) mortgage, used cars, less travel, etc.).

I don’t think either option is necessarily better than the other. And I certainly don’t think either approach is “easier” than the other. Both paths have their own challenges and their own rewards. It has more to do with personal preference. And it is my goal to empower others that prefer the latter, unconventional lifestyle rather than the former.

The foundational principle of FIRE is simple:

The more you save, the quicker you will reach financial independence.

And for some people, obtaining “financial independence” even five to ten years earlier by increasing savings can be impactful to their lives. For more insight into how FIRE can work for you, check out Part 2 of this series.