Classic life models were never really our thing. We both have jobs that (mostly) we enjoy, but nine-to-five (or more) and climbing the career ladder never seemed desirable to us. When, as part of my deep dive into minimalism, I first heard about the American FIRE (Financial Independent, Retire Early) movement, it was the spark that got me interested in the topic of finances and financial freedom as well.
Being financially free and being able to work because you want to, not because you have to, sounded absolutely fantastic to me. For several years I carried this idea around with me without it ever really coming within reach. Living in one of the most expensive cities in Germany and our regular expenses (car, rent, groceries etc.) ate up a large chunk of our income again. On top of that, we regularly treated ourselves to extras we thought we needed (new furniture, electronics, clothes).
With the idea of living on a boat came a change in thinking. What’s the point of it all? Working 40 hours a week just for (even more) consumption? Do we actually need that? When our expenses dropped drastically, the idea suddenly no longer seemed so unrealistic. Our current everyday life allows us to reduce our working hours and still save money in order to build up financial reserves.
What does FIRE actually mean?
Financial Independence, Retire Early (FIRE) is a movement with its roots in the United States. The aim is to achieve a high savings rate from your income and invest it in high-yield assets in order to build up a large amount of wealth as quickly as possible, from which you can then live without having to continue in gainful employment.
This high savings rate is achievable either through a very high income and/or low expenses. That’s why the topic is linked to »frugal living«, a modest lifestyle without much consumption, for which the term frugalism has become established in German. It is not about a standard of living based on sacrifice, but rather a critical basic attitude towards unnecessary consumption. Because we – at least that’s how it feels to us – do not miss anything. With frugalism, the wealth needed for financial freedom moves away from “winning the lottery” territory into a range that is actually achievable.
Why boatlife makes FIRE more realistic
Our living expenses on board are low, without us feeling that we are living at subsistence level. Money guzzlers such as a car, consumer loans or a large flat or house have been eliminated. Being on the move and living close to nature also acts as a brake on consumption, because even if we wanted to, we could not buy that much – Amazon simply does not deliver to the anchorage.
Our numbers and learnings
Our largest expenses are rent, marina fees and groceries. And of course the maintenance and upgrades of our home on the water. As we only tackle upgrades step by step when we see a real need, the budget has stayed within limits so far. The investment in a solid (but therefore smaller) boat has paid off so far. Luckily, we have not yet had to do a time- and cost-intensive refit.
➡️ In our article we give insight into our ongoing costs.
A rough rule of thumb for how much wealth you need for “eternal retirement” is the 4% rule. If the annual capital requirement does not exceed 4% of your assets, they are sufficient without being used up (assuming, of course, they are invested with an average decent return and not sitting in a savings account). Put another way: annual cash requirement times 25. So if you need €2,000 a month, you need assets of €600,000.
Income & working on the move
Our main income comes from our remote jobs. Tommy is a software developer – partly self-employed, partly employed. He sometimes works on client projects and otherwise works daily for his employer. Since 2022 I have continued to work in my profession as a product manager.
➡️ How we work.
Our conclusion – freedom on our own terms
We see FIRE as a tool, not a dogma. And we actually do not want to completely retire. We love what we do. But if at some point it no longer fits together, the idea of financial independence gives us the security to continue doing what we love most: sailing and travelling. And if not forever, then at least for a very long time.
Because of course investments fluctuate and markets do not guarantee 100% reliable returns. And the next financial crisis is bound to come. Then you have to be able to endure the red numbers in your portfolio. If you cannot live with this tiny bit of uncertainty, FIRE is probably not for you.
And life on a boat is also not for people for whom a certain degree of security and stability in life is important. For us, the two go together very well. On the contrary: not needing a lot of money – and potentially having it – gives us the peace of mind we need. In our current life plan, money plays an important but not overly dominant role. That might look different with a huge mortgage on a house.