Ecosystem Jan 30, 2020

Victor Lora works on Strategy at Bankin'. He is also ambassador of the FIRE movement in France.

 

And if you want to meet Victor in person, come at our next talk on February, 6th: register on Meetup!

 

1. How did you discover the FIRE method and can you explain briefly what it is?

I discovered the FIRE method because what was offered to me did not meet my expectations. I was working in Investment Banking at La Défense (one of the business districts of Paris). It was after the financial crisis of 2008, salaries were not the same as before the crisis but long working hours were still required.

One morning, in the metro, I had an epiphany. I looked around and saw 40-50 years old’s who seemed tired or even depressed. I said to myself, there must be a solution to have another life and "be free".

At that point, I started looking online for a solution and mostly on American blogs, it was in 2011.

I read my first article about the FIRE method on Mr. Money Mustache’s blog.

F.I.R.E is an acronym for Financial Independence and Retire Early. It refers to the way of living of those who are retired before becoming 40. Members of the F.I.R.E movement aim to retire far earlier than they traditionally would (in their 30s, 40s, 50s) thanks to savings and investments (stock market, real estate, create a side business). For that, they should define the revenue they would like during their retirements.

In order to reach this goal, people are changing their lives with:
- Extreme savings
- Investments in stock market
- Investments in real estate
- Creation of a side business

2. In what ways has it changed your life?

The F.I.R.E method changed my life dramatically. I clarified my essential goals in life. I have a clear view of what I want, why I want it and the cost of it.

Progressively, I changed my needs and desires. More and more, I realized that consumerism will not make me happy.

The main things that changed in my life are the following:
- I spend less on clothing (I only own 50-60 items), and food (I mainly cook at home with a cost target per meal)
- I go out less with my friends (once a week)
- I make one real estate investment per year
- I invest my savings in the stock market
- I create side businesses

 

3. Is FIRE based on any particular philosophy?

The philosophy behind the frugal lifestyle is that consumerism will not make you happy. Once you've identified what's important to you, you can focus on it exclusively.

When you can break free from social and financial pressure and realize what your true goals (and desires) are, you can make more effective.

Your main objectives could be:
- Spending more time with your children
- Being able to work 2 days per week
- Dedicating time to a cause

 

4. What would you say to those who allege that the FIRE movement is only for the rich?

It is neither right nor wrong. It is a bit more complicated.

First, we need to specify the meaning of being rich. In France, the “Observatoire des Inegalités” defines it as twice the median revenue i.e. 3 120 € for a single person, 7 995 € for a couple with two children.

The main determinant is the amount needed to be FI (Financially Independent). Usually, people are targeting an amount not far from what they currently have. As such, people will have a goal proportional to their income.

In France, reaching 1 000 € per month of real estate investment is achievable for almost everyone with energy, perseverance, resilience, and project management skills. For someone with small revenues having a target of 3 000 € is possible but much harder than for someone with 3 120 €.

When you have small revenues, it will be more difficult for you to save large sums of money you to invest in the stock market, and to convince banks to lend you money. But that as well is achievable.
For example, I have a friend who is only making 1300 € per month as a part time worker and he is not far from being financially independent.

 

5. How do you imagine the scalability of the method and its expansion? Particularly in France and Europe

This method is a good answer to three problems that we are currently facing in France and Europe:
- The feeling of having a life void of meaning (jobs automatization)
- The retirement pension (pensions are decreasing)
- The need to become more responsible consumers (consume less and local, realizing our planet is finite)

In my understanding, more and more Europeans will apply the FIRE strategy to their lives.

6. What would you recommend as a starting point for those who might want to implement FIRE in their lives?

The first thing to do is to have a clear view of what is important to you in your life. The fastest way of doing it is to sit with a friend or your partner and write the 10 things that are the most important to you such as grabbing a coffee with a friend, having dinner with my parents, being involved in a meaningful project...

Once you know that, you can start defining your Financial Independence amount.

The idea is to plan your life in the future based on what is essential to you and calculate your needed income based on your spending. For example, if, you want to live in Lyon with your wife and two children, you will need 3 000 € per month in order to cover your expenses.

Once you have your FI (Financial Independence) amount it’s time to create a plan:
- How much do you need to save per month to invest in the stock market;
- How many real estate investments do you need to do;
- Can you launch a side and automated business.

The last thing is to change your life to reach your goals:
- Have a strong budget management to save 30-60% of your income
- Look and buy the right real estate investment
- Turn a passion into a side business

You can find more on how to bring the FIRE movement to your life on devenirfrugaliste.com.

 

And if you want to meet Victor in person, come at our next talk on February, 6th: register on Meetup.

 

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