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Financial advisors pour cold water on Indonesians' FIRE plans
While many Indonesians might aspire to achieving financial freedom and early retirement, achieving FIRE remains out of reach due to various factors including minimum wage earnings, familial obligations, poor financial management and societal pressures.
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Antique dealer John Rosenberg inspects a 14-15th century Javanese piggy bank which is for sale for 2,800 Australian dollars (US$1,400) at the Australian Antiques and Fine Arts Fair in Sydney on 23 May, 2001. (AFP/William West)
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chieving a personal goal of financial independence, retire early (FIRE) may be a distant dream for many Indonesians, according to financial planners who pointed to a large part of the population still grappling with hurdles including relatively low incomes and an inability to make long-term investments.
The FIRE movement represents people who are seeking to retire much earlier than conventionally, with some aiming to retire as early as in their 40s with a sufficient amount of money to sustain their daily lives.
Statistics Indonesia data released in August showed that Indonesians made an average monthly salary of just Rp 3.18 million (US$205.36), just a tad higher than the 2023 minimum wage of around Rp 2.9 million, according to Manpower Ministry data.
Dzulfikar Kharisma, a financial planner at Finansialku, told The Jakarta Post on Nov. 29 that minimum wage earners would likely spend most of their income to make ends meet from month to month, especially if they had a family to support. This would significantly limit their capacity to make long-term investments to grow their wealth, which was important to achieving FIRE.
Even if a household had a dual income, it would find it difficult to attain the goal if each of the working members earned just minimum wage, he said.
“Alternatively, you can [attain] financial freedom on a minimum wage salary if you come from rich family,” Dzulfikar said.
Read also: Quiet quitting: Gen Z and Millennials' silent rebellion?
