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Frugalists: retiring at 40 – how do you do that? | message


The Frugalists’ principle of economy

Followers of the frugalist movement try to save so much at a young age that they can retire at 40 and are financially secure. In English-speaking countries, the movement is also known under the keyword “fire”. The abbreviation stands for “financial independence, retire early”, in German for “financial independence, early pension”.

The frugalism movement

Canadian Peter Adeney, blogging under the pseudonym Mister Money Mustache, is the best-known representative of the FIRE movement from the United States. Adeney writes about his life as an early retiree, it is about healthy, inexpensive food and free sports outside the front door. It provides investment tips, advice on cost-effective everyday organization and a life beyond common consumer behavior.

A lot of savings for early retirement

For frugalists, however, saving is not automatically associated with waiver. Florian Wagner, a follower of the Frugalist movement, explains on his blog “” what his everyday life and his savings methods look like. It is clear that he has no intention of lying on his lazy skin when he is 40 years old. Instead, most Frugalists only want a self-determined future in which they can realize their own projects, only work part-time or take on a job that is exciting but not so well paid. All in all, it’s about the freedom to choose, without economic constraint or sacrifice.

3 steps to early retirement

According to Wagner, it starts with three simple steps. First you should get an overview of the expenses. In addition to fixed costs, such as rent, you should list smaller everyday expenses. Writing down everything meticulously for two months could help determine its costs and identify potential savings. Wagner then recommends that you fundamentally question your own consumer behavior. If you come to the conclusion of buying something new, you should set a period of 30 days and only buy the item if you still find the investment sensible after this time. However, he makes it clear that this is not about not indulging yourself, but rather simply not wasting money. His third tip is to put the surplus at the end of each month instead of leaving it in the account.

Let money work for you

The Frugalists are concerned that the money works for them, that is, it creates added value somewhere in the world. The goal is to always get more money back than was originally invested, so that the wealth grows and the early pension comes closer. Because of their ignorance, many people shy away from investing. But to make profitable investments, you don’t have to be a banker or an economics student. The frugalists argue that the only thing that matters is acting deliberately. Two questions are essential: what do you want to achieve with your investment and what risk are you willing to take. Because for higher profit prospects you have to take a higher risk.

Next you have to choose a system class. Would you like to invest in stocks, real estate or bonds and find out which product is the right one for your project. Thereupon a depot has to be opened and the maintenance of the plants is due. Those who are familiar with the topic can work as a do-it-yourself investor. However, if you are unsure, you should definitely consult a consultant. A follower of the Frugalists would never contact a bank advisor, but would always engage a fee advisor. The latter works for no bank and is therefore not allowed to collect commissions for its recommendations. Instead, he works independently and for a fixed hourly wage. Ideally, frugalists can use this approach to live solely on the returns on their investments.

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Image sources: Daniela Staerk /

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