I was having a conversation with an old colleague back in the UK and they were exploring how they could get their money to work ‘just a little bit smarter’ for them. (his words, which I thought were great).

We used to work together and he was aware that I had been working on the idea of FIRE and he was looking to understand more. He had stumbled onto a website and was curious about FIRE and equally doubtful of the idea that there was any possibility of retiring so young. His target was to retire at sixty years old and that was good enough for him and a whole long way off. He said, “I have time on my side”.

I have to add, he is a few years younger than me, so a good early start and with his clarity of thought and the commitment and the focus for exploring more, was very welcoming. I often stay away from the direct conversation on money because I am never going to give stock market tips, saving account recommendations etc… as I am not a financial planner, I am however, a guy with a plan.

The conversation was insightful and refreshing for me as I reset some of my own reasoning.

The most interesting part of the conversation went like this;

Me: So what do you want to be saving for?

Him: I want to make money while I sleep and then in the future retire a few years early.

Me: Do you make any money while you sleep now, that’s an interesting concept to explore, what do you think about, when you are trying o work out how to make money while you sleep, what is the plan for that?

Him: Maybe a website selling things, I have a few ideas I am working on.

Me: Do you do that in your spare time now, because you are still working right?

Him: Yeah, I am still working. It takes a lot out of me as it can be exhausting, but I am prepared to work more in my spare time to do something in order to earn more.

Me: Thats cool, it can be a lot of work doing both, can I ask you how much your job pays you now?

Him: I am on just under twenty four grand a year, I get by on it well enough.

Me: What is that as an hourly rate?

Him: (after some quick calculations) About twelve forty an hour?

Me: Oh you don’t know that off the top of your head, how did you calculate it out?

He explained that he took his annual salary and divided it by the 52 weeks and then by the 37 hours a week he works and that was how he ended at that number.

Me: Cool, thats one way to do it, but does that fit with your idea of making money while you sleep?

Him: I don’t understand what you mean?

Me: Go and work the equation out again, this time use your take home pay after your taxes etc and use the full amount of hours available to you in a full day and week (remember you said you wanted to work and make money while you sleep) then see how that works out. When you get that figure, then that is your actual hourly rate.

Me: Hello, you still there?

after a small delay and some further calculations…

Him: Wow, that is crazy… that has left me feeling a bit crap to be honest.

Me: That’s cool, it’s a great starting point of realisation. I did the same and then I looked at every single thing I would buy with a whole new internal outlook. I looked at how much I was saving and what I was getting in return from things like the savings that I had in the bank, what interest percent I was getting etc, things I used to just ignore because I was lazy and I did not have a money mindset.

I started to put all of that information into my own equation and from that moment on I was off and running. I had discovered a reason for reading the personal financial books, the blog sites and joining some of the online groups. From there I wandered into the concept of FIRE and that has been a real focus for me. I have to say though, for me it is not about retiring but more about doing my own thing and in my own time at some point in the future.

Him: Where do I start with this, I want to get better and understand this more, what do I start with?

Me: Mate, you have already started!