With strategies such as Fire and Golden Goose, there are also communities online to join for advice and solidarity – this helps when you’re stumped or want to keep your motivation up. Think of it as Weight Watchers for personal finance.
The younger you start these strategies and the more disciplined you are, the better the outcome. However, it’s never too late to change your financial ways.
Let’s start with Fire. The strategy involves sacrificing short-term luxuries for long-term financial freedom and retiring early. Some New Zealand adherents have retired in their 40s or 50s, although some get bored and go back to work, start more businesses or social enterprises. Fire is a more aggressive strategy than the Golden Goose and one that often appeals to younger people who don’t fancy working a lifetime like their parents did.
The general idea is that you save all out and invest that money for growth to retire young and early. Adherents typically have a dollar figure of the investments they need to retire. It may be $3 million or $4m. There are success stories. New Zealand Reddit user Acceptable_Ear_8849 ‘FIRED’ [retired] in December with $4m invested in exchange-traded funds and property.
Fire is full on. Followers manage to save as much as 50% or more of their income, thanks to extreme frugality. They recognise much of what other people consider “needs” are “wants”. Their discussions online about how to save every cent can be fascinating.
What they invest in is also important, with a bent towards business and low-fee, diversified growth investments such as index funds.
For some people, Fire is too full on and there are related strategies such as LeanFire, which focuses on minimalist living to support a smaller required retirement fund, and CoastFire, which involves accumulating sufficient savings so that, with compounding, it will coast towards the amount you need by traditional retirement age. You might need to keep working part-time or at a lower income level.
Not everyone has the self-discipline for Fire and some would say they’d rather Yolo (you only live once), which can undermine savings. For those people, the Golden Goose strategy can work, although it’s a lot less known. It’s named after the goose that lays golden eggs. It’s a slow, steady, wealth-building strategy with income and investments spread across various golden eggs.
The key to the Golden Goose – and many other strategies – is setting goals, creating a sustainable financial plan and making decisions that prioritise long-term wealth generation over short-term gains.
Like Fire, they build a portfolio of investments that brings in passive income – that’s income such as rent and dividends that keep coming in even when you’re sleeping or holidaying. But the Golden Goose is less rigid. A key tenet of the Golden Goose is nurturing and protecting your primary income sources to ensure long-term financial stability. This can be a stable job, a successful business or investments or, preferably, a combination. It emphasises the need to have multiple income streams. That could be a job and a side hustle, rental properties and other investments.
Golden Goose investors have insurance, emergency funds and strategies to mitigate financial risks. That’s a plan B for their job to start with.
And they reinvest in themselves to enhance skills, expand businesses or further grow and diversify their portfolios.
Apart from investing strategies, some people choose to follow certain investment authors. Perhaps the most popular in New Zealand is the Barefoot Investor (Scott Pape), whose practical, no-nonsense financial management approach has thousands of followers here, although it emerged from Australia. Its emphasis on budgeting, emergency funds and step-by-step saving plans has made it a go-to approach for those seeking practical financial management.
Finally, rather than pooh-poohing these strategies, think about how they could work.
