How to FIRE in Singapore: An Essential Guide

How to FIRE Guide

“Eh did you know, Darryl from IT quit his job last week to travel the world sia”

“Oh wow, how did he do that? He no need money for his house meh? He’s only 45 leh how come can stop working liao?”

Well, how DID he do it? He probably achieved FIRE.

What is FIRE?

FIRE stands for Financial Independence Retire Early. Yes, Financial Independence is not just a buzzword used by internet gurus trying to make a quick buck. It is a method by which its users are able to retire earlier than traditional retirement plans through high savings rates coupled with smart investments.

To better understand the concept of FIRE, let us look at the 8 stages of Financial Independence.

Stage Significance
Stage 0: Financial Dependency
All of us start here, where our needs are cared for by your mother, father or guardian. Can’t expect a baby to pay the bills amirite?
Stage 1: Financial Solvency
At this point, your bills and expenses are covered for by yourself, usually through your work salary. You aren’t receiving handouts from others as well.
Stage 2: Financial Stability
Stage 3: Debt Freedom
Stage 4: Financial Security
Financial Security means that all your basic essentials are covered for by your assets. This would include utilities, bills, insurance and food.
Stage 5: Financial Independence
Now, this is where things get exciting. Financial Independence means that your entire current lifestyle can be supported by your investments. This is also the stage which most people refer to when they talk about FIRE.
Stage 6: Financial Freedom
Most people actually use this quite interchangeably with Financial Independence but I would say Financial Freedom gives you the freedom to upgrade your lifestyle.
Stage 7: Financial Abundance
This is when you have more money than you ever know what to do with. Well, if you reach this point, please let me in on your secrets hehe. But jokes aside, when reaching this point, the focus usually becomes how to best use the money to set up future generations for success and to protect their wealth rather than to continue growing it.

“Well then, that seems really complicated….where should you even start?”

The FIRE Number and the 4% rule

To even consider FIRE, we need to know how much we need. The number differs from person to person depending on how we live. This is where the 4% rule comes in to help us determine our very own FIRE Number.  According to the Trinity Study (4), a person with a portfolio of stocks and bonds may withdraw up to 4% of their assets annually without the portfolio being exhausted over a period of 30 or more years. 

In simple English, this means that for your investments to fund your retirement sustainably, you should only be withdrawing 4% of your investments every year. It is from this study where we now have the famous 4% withdrawal rule in retirement. This means that if we can achieve an investment portfolio, where 4% of its value is equal to our yearly expenses, we will be able to FIRE because our portfolio is able to support our yearly expenses!

Investment Portfolio  x  4% = Yearly Expenses
Hence, with a little simple math here, we can derive the required Investment Portfolio amount as:
Investment Portfolio = Yearly Expenses / 4%
Which would also be:

Investment Portfolio = Yearly Expenses x 25

For example, a married man with no children, Jerome, who spends $3,000 per month ($36,000 per year), would have a FIRE Number of $900,000. Pretty neat huh?

“Okay but, how do I get $900,000 even….”

The Three Core Pillars

Well, to get to your FIRE number, the journey is made up of what I like to call the three core pillars of FIRE. They are:
Easy infographic for the components leading to FIRE: Savings, Earnings, Investing


How fast you can achieve FIRE is determined a lot by your savings rate. Savings rate can be increased by cutting down on your expenses day to day (looking at that $6.60 cup of Starbucks) and on large purchases such as a car or a new TV when your current one works fine. Famous financial blogger Mr Money Moustache explains this using time required to FIRE as a function of savings rate.

Savings Rate Years Required to FIRE

* Years to FIRE is computed assuming 5% investment returns yearly and 4% withdrawal in retirement

Of course, this table is a tad oversimplified but the concept that our savings rate is inextricably linked to the time we’d take to FIRE is clear to see. This also means that if you really want to retire in 10 years, you’d need to get your savings rate to about 65%.

“Wah, 65% a lot leh…how to get 65% savings rate?”


Most people understand that a savings rate of 65% is pretty tough when you’re not earning much, many 20 year olds in Singapore earn about only about $3,000 ($2,400 take home) in their first few years working, meaning that saving 65% would be akin to spending only $450 after deducting CPF. Not too realistic right? 

This brings us to the second pillar, Earning. This refers to your income from your job. Many FIRE proponents choose to focus their time in increasing their inflow rather than nitpicking on small expenses like their daily coffee on the way to work because ultimately you can only cut down your expenses by so much. However, your income can be increased by much more and you can further increase this by creating secondary sources of income. You can increase your cash inflow by:

  • Asking for a raise: Definitely not easy to do, but say real, many companies won’t give you a raise if you don’t ask for it. Harsh, but it’s the reality. Check  out how to ask for a raise over on Seedly.
  • Finding a new job: Easier said than done, I know, but strategically switching jobs can definitely lead to higher pay.
  • Moving to a new industry: This is especially important if you’re in an industry with limited growth options and are already at or close to the peak.
  • Upskilling yourself for better prospects: Skills such as coding are increasingly desired in the workplace, almost bordering on a necessity in certain industries. Utilise government subsidies or SkillsFuture credits  to attend courses if you prefer structured courses or learn online for free through sites such as Codecademy or FreeCodeCamp.
  • Starting a side hustle: Online businesses, freelance services or even tutoring are viable side hustles to increase your inflow. Especially in Singapore, tuition is a huge market because we are so kiasu. Freelance services can also include photography businesses, commissioned artwork or copywriting services.

“Hmmm, okay, then the 5% return from the table just now? How can I get 5% returns? Banks keep cutting interest rates!”


The final pillar, investing. Investing allows you to grow your money over time instead of losing money to inflation. Investing allows you to grow your nest egg exponentially over time. The most common forms of investing are in stocks or in property. I’m sure many of us have heard our parents thinking of or even having bought our very own second properties as a form of passive income via rental. 

However, increasingly, Gen Z is looking to stocks to invest their money. After all, the stock market is more accessible than ever, taking just minutes to set up an account to start. A common fear (and misconception) that people have of the stock market is that it takes luck to succeed and being unlucky can result in losing all your capital, no different from our dear casino at Marina Bay Sands.

However, the truth couldn’t be further. Yes, you heard me right, there are ways to invest safely to get consistent returns over long periods of time. One such way would be passive investing or index investing.


Tl;dr, the steps to FIRE in Singapore are simple enough:
Earn More + Save More + Invest Hard = FIRE

However, that is not to say it is easy. Singapore is definitely not a cheap city to live and retire in. Plus, the discipline to pull through this journey over the next decade (and definitely to forsake some opportunities along the way) will require a strong will. 

I began my journey at the end of my first year in university. Admittedly, it was not an easy decision deciding to put such a large portion of my money into the stock market and to keep saving money, especially when everyone in uni seemed to spend money freely (Hai Di Lao, Nintendo Switches and the latest iPhones I’m looking at y’all). But over time, it definitely got a little easier. I build the habit of spending less, and investing regularly. While I’m still far from my goal to retire early, I’m well on my way and satisfied with the progress I’ve made.

At the end of the day, as the saying goes, “A journey of a thousand miles begins with a single step”. 

Start your journey today and your future self will thank you for it.

Photo by Tim Mossholder from Pexels

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