Implementing the FIRE Approach to Car Ownership

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Pexels: Melvin CJ

By Dan Parks

Special to Financial Independence Hub

Transportation is a necessary expense, but it’s also one of the highest ongoing costs for many households.

If you’re pursuing Financial Independence, Retire Early (FIRE), choosing the right car is only part of the equation. The way you buy, finance and own your car can also affect how much money you have available to invest.

Here are ways to apply FIRE principles to car ownership without sacrificing reliability or everyday convenience.

Start with the Total Cost of Ownership

A low monthly payment doesn’t necessarily mean you’ve found the right car for your FIRE plan. Instead of focusing on what fits your budget today, think about what the vehicle will cost over the entire time you expect to own it. You’ll want to look outside of the purchase price and estimate the expenses you’ll face throughout ownership.

According to AAA’s 2025 study, the average cost of owning a new vehicle driven 75,000 miles over five years is $11,577 per year, or about $965 each month. That estimate includes:

  • Financing
  • Depreciation
  • Fuel
  • Insurance
  • License, registration and taxes
  • Maintenance, repair and tires

Depending on your situation, you may also want to account for parking, tolls, accessories, home charging equipment for an Electric Vehicle or any upgrades you plan to make after purchase. Looking at the full cost of ownership gives you a stronger basis for comparing vehicles. A car with a higher purchase price may still cost less to own over time if it holds value well, uses less fuel and requires fewer repairs.

Buy a Car that serves your Purposes

Once you know what you can comfortably afford, choose a vehicle that fits your everyday life. Think about your commute, the number of passengers you usually carry, local weather and road conditions and any work or family responsibilities your car needs to handle. It’s also important to keep reliability in mind, since a well-built car can help you avoid unexpected repair costs and stay on the road for many years.

As your income grows, your vehicle budget may grow too. Before committing to a more expensive model, consider how it fits with your long-term FIRE goals. Many people in the movement use the Rule of 25, which estimates the amount needed for retirement based on annual spending and a 4% maximum portfolio withdrawal rate. Many also aim to withdraw only 3% to 4% of their savings each year, adjusted for inflation.

Every recurring expense influences that calculation, so choosing a reliable vehicle with reasonable ownership costs can help you stay on track and enjoy dependable transportation.

Treat Financing as a Financial Decision

How you pay for your car deserves the same careful thought as choosing the vehicle itself. If paying cash still leaves you with a healthy emergency fund and keeps your investment goals on track, you can avoid interest charges altogether. Financing can also fit your FIRE plan if it helps you manage your cash flow and supports your long-term financial priorities.

If you decide to apply for a loan, check your credit score and credit history. Lenders commonly group borrowers into FICO score tiers. Generally, a score of 670 or higher is considered good, and a better credit profile can help you qualify for a lower interest rate. That can reduce the total amount you repay over the life of the loan, giving you more money to invest. When comparing lenders, evaluate the interest rate, loan term and total repayment amount so you understand the full cost of borrowing.

Maximize the Value of every year you own the Car

A car becomes more valuable to your FIRE journey as it continues to serve you reliably. Extending its lifespan allows you to spread the purchase price and depreciation across more years. This helps you reduce your average transportation costs over time. For many people, keeping a well-maintained vehicle longer can free up money that would otherwise be used for another large purchase.

Reaching that point takes consistent care, though. You need to follow the manufacturer’s service schedule, replace worn parts before they fail and address small issues promptly to help your car stay dependable. A modern car from a brand with a good reputation for reliability may reach 200,000 miles or more when serviced according to the recommended intervals. You can also reduce ongoing costs by reviewing your insurance each year, comparing quotes and adjusting your coverage when your circumstances change.

Review Car Ownership like any other Investment Decision

Your car shouldn’t stay on autopilot after you buy it. Just as you review your portfolio from time to time, your vehicle deserves a regular financial check-in to make sure it still supports your FIRE goals. So, once a year, look outside routine expenses and assess the bigger picture. Analyze how much you’re spending on fuel, insurance, maintenance and repairs, then ask whether your current vehicle still matches your lifestyle.

A longer commute, a growing family or changes to your work could all influence what you need from a car. Plus, increasing repair bills or declining reliability may suggest it’s time to explore another option. Making these evaluations regularly helps you avoid costly decisions driven by habit or impulse. Regular reviews also help ensure your transportation costs continue supporting your long-term goals.

Driving toward Financial Independence

Implementing the FIRE approach to car ownership begins before you receive the keys and continues throughout the vehicle’s life. Always look at the total ownership costs, choose a car that fits your needs, finance carefully and review your expenses regularly so that you can keep transportation costs aligned with your financial goals. Those intentional decisions can free up more money to invest and bring Financial Independence within closer reach.

Dan Parks is a senior writer at Modded.com. Based in Washington, D.C., Dan has a proven track record of distilling complex subjects into accessible narratives across various fields. His expertise in clear communication and meticulous research makes him a valuable contributor to discussions on personal finance and investment strategy, helping readers navigate intricate topics with ease. Dan is dedicated to providing readers with well-researched insights to foster financial literacy and independence.

Retired Money on The Wealthy Barber’s retirement at the end of this year

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My latest MoneySense Retired Money column looks at the imminent retirement of The Wealthy Barber himself: David Chilton. You can find the full column here:  The Wealthy Barber retires.

Chilton, who will reach the traditional retirement age of 65 late this October, announced in June on his popular YouTube podcast that  he’d be retiring at the end of 2026, a story soon picked up by the Globe & Mail.

My Retired Money column has focused on individual retirements now of Rob Carrick and blogger Mark Seed. Like Chilton, these people are younger than myself: I describe myself as only semi-retired, which is how I view Carrick and Seed. On his two-year-old The Wealthy Barber podcast, Chilton has now twice interviewed Carrick about his Retirement and also about his views on the high costs of housing.

As my MoneySense interview with him clarifies, Chilton views his transition as being closer to the traditional “Full Retirement” than the more gradual semi-retirement that Carrick and I are practicing. My view of Traditional Retirement is leaving a full-time salaried employee relationship and all that entails: commuting to a central place, bosses and meetings, taxes withheld at source, etc. Of course, Chilton has seldom if ever been an employee: he’s been a self-employed author and public speaker almost from the get-go. But as he reveals, his successful speaking career meant doing a lot of business travel and committing his time in advance: something he now wishes to reduce in order to have more personal freedom.

When and if he does pack it in in December, it will end an intense few years where he “aggressively” participated again in the Canadian personal finance content space that he helped pioneer in the first place.

Apart from public speaking, which he will cut back on in 2027, Chilton launched a successful biweekly podcast on YouTube that soon became weekly, promoted through video shorts on Facebook and TikTok. I can see how weekly podcasts could constitute almost a full-time job in itself so it should be no surprise that he will wind that up at the end of the year, despite the fact many around him would like to see it continue in some form.

Rewritten Canadian edition of The Wealthy Barber took longer to do than the original

The other big push he made was a massive two-year extensively rewritten 2025  Canadian edition of the book that made his career when he published it at age 27 in 1989. Chilton says it took him longer to revise (rewrite)  the new edition than to write the original! His focus is on Canadians 45 years old or younger, many of whom are struggling to get a toehold in the housing market (which includes my own daughter). Continue Reading…

The World didn’t break: Franklin Templeton Institute’s mid 2026 Investment Outlook

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Image courtesy Franklin Templeton Institute

By Stephen Dover, CFA, Franklin Templeton Institute

(Sponsor Blog)

Executive Summary

• Resilience is the key theme for 2026. Markets and economies have held up well despite geopolitical shocks, policy uncertainty and rising inflation. Global growth remains close to trend, supported by consumer spending, business investment, productivity gains and strong corporate profits.
• We expect investment opportunities to broaden across global equity markets, while corporate credit markets should remain stable. Strong earnings in the United States and emerging markets will support a wider set of opportunities across regions and sectors. • Tighter monetary policy should keep bond yields high and yield curves flat, creating opportunities to earn income. We favor US high-yield credit, select emerging market debt — especially in Latin America — and municipal bonds for US taxpayers.
• Long-term themes remain compelling. Artificial intelligence (AI) is driving demand for energy, infrastructure and broader economic change; rising investment in defense, national security and energy infrastructure create long-term potential return opportunities. Aging populations will require investment in labor-saving technologies, assisted living and health care innovation.
• In private markets and alternatives, secondaries, private credit, real estate and infrastructure offer attractive opportunities.
• Risk to the view. Geopolitical conflict, inflation and a stronger central bank response remain key risks for investors to watch in the second half of 2026.

Introduction

Global Investment Outlook: 2026 and Beyond was built around three cyclical themes — broadening, steepening, and weakening — and three longer-term forces shaping investor portfolios: intelligence, private markets and big government.

Midway through 2026, we think that framework still provides a useful starting point, but the balance of risks has changed. Broadening remains firmly intact, supported by resilient economic growth, strong earnings and improving opportunities across regions and asset classes. But steepening of yield curves has given way to higher-for-longer yields, reflecting higher inflation and tighter monetary policies. Higher yields, however, also offer improved income opportunities in shorter-duration holdings, including US high yield and select emerging markets.

Meanwhile, the US dollar has firmed and is likely to remain rangebound rather than weak over the remainder of 2026. Most importantly, the world did not break. Despite war, tariffs, inflation, tighter policy and geopolitical fragmentation, the global economy and financial markets have held together better than many expected. This update therefore reframes the outlook around a single organizing idea: resilience: both the resilience already evident in economies and markets, and the resilience investors may need to build into portfolios for the remainder of the year.

A more Resilient Outlook (or Resilience in Markets and Portfolios)

The rest of this outlook is organized around one central idea: resilience. The phrase “the world didn’t break” is not meant to suggest that risks have disappeared or that the outlook is free of strain. Rather, it captures the defining surprise of 2026 so far: economies, markets, companies and investors have absorbed a series of shocks without a sustained breakdown in growth, earnings, credit or global trade.
The first sections explain why the global economy and financial markets have held up better than many expected, despite 18 months of geopolitical turbulence, tariffs, war, elections and rising inflation. They also show how resilience has been supported by solid economic growth and strong corporate profits growth across sectors and regions.
From there, we translate resilience into investment implications for equities, fixed income, private markets and alternatives. We also identify key long-term (thematic) opportunities. In all dimensions, we focus on where resilience is apparent and where it can create opportunities for investors in the second half of 2026.

This year, the global economy has demonstrated remarkable resilience in the face of numerous challenges, including geopolitical tensions, trade disputes, fiscal pressures, rising inflation and a sharp re-pricing of central bank policy responses.

Globally, wealth effects and favorable financial conditions have also supported consumption and capital expenditures.
Notably, trade has held up better than many feared following the introduction of high US tariffs in 2025. Global commerce has continued to expand, with important contributions from services.

China’s economy has also demonstrated notable resilience in 2026 despite ongoing challenges from a weak property sector, geopolitical tensions and trade frictions with the United States. The diversification of China’s growth drivers has been a key factor. Strong investment in advanced manufacturing, technology, renewable energy, electric vehicles, batteries and AI has helped offset weakness in real estate. These sectors have benefited from both government support as well as from strong domestic and international demand.

China’s exports have also remained more robust than many expected. Chinese firms have adapted to changing trade patterns by expanding into emerging markets, strengthening supply chains and increasing exports of higher-value-added products. As a result, China has maintained a significant role in global manufacturing and trade despite rising protectionist pressures. Continue Reading…

How I Handle High Stock Prices in my Portfolio

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By Michael J. Wiener

Special to Financial Independence Hub

The best way to respond to stock market news is usually to ignore it.  This is (almost) what I do.  The exception is that I make small adjustments when stock prices are very high.  David Chilton asked me about these adjustments when he interviewed me for his podcast.  Here I give a fuller answer to his question.

I hesitate to talk too much about this part of my portfolio plan, because it is a small step toward market timing, and investors get themselves into a lot of trouble with market timing.  I once described how I handle high stock prices to a friend, and he responded by selling all of his stocks.  The change in my own stock allocation percentage was barely noticeable, but he had gone to zero, mainly because I caused him to think about high stock valuations.  This was definitely not the outcome I wanted.

Most sensible people avoid market timing.  I used to be one of them.  But I realized that I was against market timing unless something really crazy happens that I never anticipated.  For example, if some future government were to threaten to nationalize large public corporations without compensation to owners, most investors would think hard about their stock ownership.

Most investors treat extremely high valuations as a problem to worry about if it ever happens. Some people who advocate sticking with an asset allocation through thick and thin would change their minds if world stock prices were to climb to the levels we saw with Japanese stocks in 1989.  In such a case I would sell some of my stocks.  I decided to figure out in advance how I’d respond to stocks becoming increasingly more expensive.

My portfolio rules are all coded into a spreadsheet.  A script runs each day to see whether my portfolio needs rebalancing.  Most of the time, I don’t need to pay any attention.  If the script thinks I need to make some rebalancing trades, it emails me.  If I could figure out how I would respond to high stock prices, I could automate that in the spreadsheet and script.  I’d have even less reason to pay any attention to markets.

CAPE

Investopedia

Before deciding how to respond to high stock prices, we need some way to define how high stocks are.  Robert Shiller’s Cyclically Adjusted Price-to-Earnings ratio (CAPE) does this job.  The CAPE is just the current price divided by the average inflation-adjusted earnings over the past decade.  The CAPE for U.S. stocks is widely-reported.  As I write this, the U.S. CAPE is at about 41.

I’m more concerned with the CAPE across all of my stocks across the world.  This blended CAPE is at about 34 as I write this.  If I was certain the CAPE wouldn’t go much higher than this, then I wouldn’t bother with any form of market timing.  But I want my spreadsheet to respond reasonably to extreme CAPE levels no matter how unlikely they are.

Future stock prices

Before considering any market timing, I wanted to decide how a high CAPE would affect future expected stock returns.  The answer is that it has a modest effect.  When the CAPE is high, future stock returns tend to be a little lower.  The effect is far too weak to justify jumping all the way in and out of stocks, though.

I came up with a simple rule.  When the CAPE is above 20, I assume that the CAPE will return to 20 by the time I reach age 100.  A simple calculation figures out how much stocks will underperform each year for them to drop from the current CAPE level to 20.  This is currently about 1.5% per year.  So, I take my usual expected annual stock return and reduce it by 1.5%.  My spreadsheet uses this reduced expected stock return to calculate my safe monthly retirement spending amount from my portfolio.

Interestingly, this approach tends to smooth out my monthly safe spending level.  In the short term, when stocks rise, it drives the CAPE up.  The higher stock prices push my safe spending level up, but the higher CAPE pushes my spending level down.

Variable Asset Allocation (VAA)

When the CAPE is not high, my bond allocation is equal to 5 years of my safe spending level.  At my current age, this works out to about 22% bonds and 78% stocks.  This feels like a reasonable allocation when the CAPE is below about 25 (I mistakenly said 30 in the podcast interview).  During the dot-com runup, the U.S. CAPE reached 45.  What if world stocks reach a CAPE of 50?  I decided I’d want my stock allocation to drop to about 50%.  What if the CAPE reaches 75?  I decided I’d want my stock allocation to drop to about 25%. Continue Reading…

How to Spot employers with a Modern Career Path conducive to Financial Independence (FIRE)

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Image courtesy Pexels: Tima Miroshnichenko

By Tessa Dodson

Special to Financial Independence Hub

Not every high-paying job accelerates your journey to Financial Independence (FI). The real difference lies in spotting a company with a modern, FI-friendly career path that combines strong compensation with flexibility, autonomy and genuine growth opportunities. These organizations pay well while creating conditions that allow you to build wealth faster and on your terms.

What a FIRE-Friendly Career Path really means

A Financial Independence, Retire Early (FIRE) career path demands more than raw earning power. In addition to high compensation, you need a strong work-life balance that leaves room for side income and a culture that values autonomy over micromanagement. A balanced lifestyle supports job satisfaction and engagement, keeping work sustainable and fulfilling.

The most FI-friendly companies offer predictable schedules, remote flexibility and trust-based management. These conditions allow you to maintain side projects, develop new skills and preserve the mental energy that strategic financial planning requires. Companies with healthy work hours allow daily recovery time that supports individual well-being and job performance.

Look for Cultures that prioritize Results and Flexibility

The clearest signal of a positive company culture is a focus on results and deliverables. Organisations that measure success by output rather than desk time create environments in which high performers work efficiently and reclaim hours for wealth-building activities.

Look for flexible scheduling policies, outcome-based performance metrics and leadership that respects boundaries. Presenteeism cultures do the opposite, rewarding visible activity over actual productivity and forcing you to trade time for appearance. The cost is measurable in hours you could allocate to wealth-building.

Decode a company’s commitment to Real Growth

How a company approaches development reveals whether it will support or stifle your trajectory. Surveys show that 60 to 70% of HR professionals express dissatisfaction with performance management systems. This signals a majority of rigid, outdated cultures that hinder both growth and flexibility.

Modern employers invest in career development programs that include mentorship, skill-building opportunities and clear advancement paths. These green flags indicate an organization that prioritizes meaningful employee development. During your research, examine whether the employer offers structured learning, cross-functional projects and visible promotion patterns that reward performance.

Seek Radical Transparency in Pay and Promotions

You can’t map a route without coordinates, and compensation transparency provides them. Companies that publish pay bands and promotion criteria let you project your earning potential with precision, which is critical when you’re calculating your FI timeline. Continue Reading…