How to Achieve FIRE with a 9-5 Job in 4 Steps


The Financial Independence, Retire Early (FIRE) movement is about empowering people to control their finances. You might be wondering if it's possible to achieve FIRE with a 9-5 job?

There are four steps that ordinary people with a 9-5 job can take to achieve FIRE.

  • Start with a savings goal

  • Create a budget that locks in your goals

  • Save more money by focusing on your big three expenses

  • Start a side hustle that provides scalable income.

In this post, I’ll explain each of these steps in detail.


1. Start with a savings goal

To achieve Financial Independence, the first thing you will need is a savings goal. How much money will you need to become financially independent?


Three factors will determine the answer to that.

  1. How much money you need to sustain your lifestyle.

  2. What other sources of income apart from your 9-5 job you may have.

  3. The withdrawal rate you are comfortable with on your investments.

If you need $50,000 per year to sustain your lifestyle, you will need to find a reliable and sustainable way to generate $50,000 per year to be ready to leave your 9-5 job.


The traditional way that many FIRE bloggers write about is piling up enough investments to cover that $50,000. The thinking goes that you can use a 4% withdrawal rate to live off your investments.


For example, to generate $50,000 per year from your investments, you would need to have $1.25 million, assuming you withdraw 4% of your portfolio per year to cover your living expenses.


It is important to understand the assumptions and limitations of the 4% rule. Since the 4% rule is based on a normal 30-year retirement, it is not reliable for early retirement. If you need to live off this money for more than 30-years, than a lower withdrawal rate like 3% or 2% will be more reliable.


To find out how much you need saved to live off your investments, simply divide your desired annual income by the withdrawal rate you choose.

  • To generate $50,000 per year with a 3% withdrawal rate would require $1.66 million ($50,000 ÷ 0.03.)

  • To generate $50,000 per year with a 2% withdrawal rate would require $2.5 million ($50,000 ÷ 0.02.)

Remember, you don’t need to cover 100% of your living expenses from investments. If you had a part-time or seasonal work that paid you $30,000 per year, you would only need to withdraw $20,000 per year from your investment portfolio.


To use as an example, for the remainder of this article, I will assume you will have $30,000 in non-investment income and plan on covering $20,000 per year from investments using a 2% withdrawal rate.


That means the goal is to save $1 million.


2. Create a budget that locks in your savings goal

Once you have a goal for how much you want to have saved, it’s time to build a plan around that goal.


The next step is to determine how much you will need to save each month to achieve your $1 million savings goal. To do this, you’ll need to know three things.

  1. In how many years you want to have $1 million saved

  2. How much money you currently have saved.

  3. The assumed rate of return on your investments.


For example, you want $1 million saved in 10-years, and you currently have $100,000 saved and assume your investments will return 6% per year.


Under those assumptions, you would need to save $4,967 per month for the next 10-years to save $1 million.


If you have an extra $5,000 per month that you can dedicate to savings, you are all set. Simply create a budget that allocates $4,967 to your investment accounts automate your savings, and your plan is in place.


Most people won’t even clear $4,967 per month on their paycheck, let alone having that much money left over after all of their living expenses are paid.


That means you are going to need to focus on pulling the two levers of Financial Independence

  1. Saving more of the money you have.

  2. Making more money.


3. Save more money by focusing on your big three expenses

Despite what a lot of financial bloggers will tell you, it’s probably not your daily latte that is keeping you from saving money.


If you want to save a lot of money, you will need to focus on your big three living expenses.

  1. Housing.

  2. Transportation.

  3. Food.

These three expenses account for nearly two-thirds of the average person budget. If you are serious about saving, start with the big expenses.


If you want to save money on housing, you have two options.

  1. Downsize.

  2. House-hack.

Housing is our number one expense in life, and most of us are not very efficient with our housing choices, which holds back our savings potential.


Every square foot in your home that you don’t use on a regular basis is costing you money. It’s increasing your rent or mortgage payment, utility costs, and property tax bill.


If you live in a four-bedroom house with one other person, consider the possibility of downsizing into a smaller, less costly living space.


Alternatively, you could engage in some type of house-hack to start generating some income from your house.

  • Renting your house on Airbnb when you are out of town.

  • Renting out a room in your house or your basement.

  • Buying a multi-family property and living in one unit while renting out the others.

Next up is your transpiration costs.


Again, this comes down to making efficient choices.

  • If you can get by without a car, sell it and buy a transit pass.

  • If you must have a car, ask yourself if you need to own a brand new car or if a used car will do.

  • Finally, if you live in a 2-car household, ask yourself if it would be possible to get by with a single car.

Finally, your third biggest expenses is food.

There are three simple changes you can make to cut down how much you spend on food.

  1. Eat out less.

  2. Make a meal plan based on what is on sale at the supermarket.

  3. Leverage digital coupons and grocery store apps.


If you can make efficient choices with your big three expenses, you’ll save a lot more of the money you already have.


4. Start a side hustle that provides you with scalable income

No matter how much you cut your monthly spending by, if you don’t make enough money, you won’t be able to save $4,967 per month.


That is why the second lever of financial independence is focusing on increasing your income.


If you have a 9-5 job, the easiest way to increase your income is to pick up a side hustle.


You generally have two options for side hustles.

  1. A second job that has predictable hours and pay like driving for Uber.

  2. A scalable side hustle, that is entirely on your schedule, has unlimited earning potential buy has $0 in guaranteed income.

I have been engaging in a scalable side hustle for the past two years, by writing. When I first started out, I made next to nothing from writing.


Today I earn between $3,000-$4,000 per month from my writing. Since this is in addition to my 9-5 job, every penny I earn from my side, hustle goes into my investment account.


A scalable side hustle has moved me to within spitting distance of Financial Independence in two ways.

  1. The additional income has increased by savings.

  2. The income from my side hustle has become reliable, meaning if I can earn $4,000 per month from my side hustle, that is $4,000 I don’t need to withdraw from my investments if I ever left or lost my 9-5 job.

If you can find a scalable side hustle you are excited about, not only can it help you increase your savings, it will reduce the amount you need to save because the money from your side hustle could help pay your expenses once you leave your 9-5 job.


That is why anyone pursuing FIRE with a 9-5 job should pick up a side hustle that excited them and provides scalable income. It makes the math easier and provides you with meaningful work.


It is possible to achieve FIRE working a 9-5

If you’re working a day job, even if you aren’t making a lot of money at the moment it is possible for you yo achieve FIRE.


The first step is to create a savings goal, this will be largely determined by how much money you want to withdraw from your investments once you leave your 9-5.


Next, you’ll need to do the math and figure out how much you will need to save each month to achieve that savings goal. Once you have figured that out, put it in your budget, and automate the savings.


If you don’t have enough money to meet your savings goal, you’ll need to focus on the two levers of Financial Independence, saving more money and making more money.


On the savings side, focus on your three biggest expenses; housing, transportation, and food.


On the income side, consider picking up a side hustle that has flexible hours and scalable income to complement your income from your 9-5 job. Make sure to save and invest all of the money you make from your side hustle.


It is not easy, but if you are focused and resilient, you can do it.


This article is for informational purposes only. It should not be considered Financial or Legal Advice. Not all information will be accurate. Consult a financial professional before making any major financial decisions


©2019 by Making of a Millionaire Inc.