#45. What The Public Gets Wrong About The FIRE Movement
Imagine that you have built up a reliable source of cash flow that does not require you to leave the bed in the morning. Whether you have invested enough in the stock market where you are living off dividends or you have purchased enough rental properties that pays for your lifestyle, the result is still roughly the same.
Even with this ideal scenario, the FIRE (financial independence / retire early) movement gets a bad rap. For those of you who are not familiar with this movement, FIRE is when a person makes lifestyle and financial choices in pursuit of being able to leave the workforce before typical retirement age.
From my experience, most people who are in the FIRE movement are seeking to retire from their 9 to 5 job in their 40s.
If you get to the end of this article and are curious about the FIRE movement, I would recommend that you immediately read The Simple Path to Wealth by JL Collins and then Quit Like A Millionaire by Kristy Shen. Both of these authors have amazing blogs as well that would be a great starting point too. Click here for Ms. Shen's blog and click here for Mr. Collin's blog.
With everything I have come across, people outside of the FIRE movement consistently get four things wrong.
One. FIRE requires extreme frugality.
A common response I get from people when I explain what FIRE means is, "well I like enjoying life now and going on vacations," or "do you just eat rice and beans?"
People think to be able to retire early means you can never buy that $5 coffee or ever go on vacation. People who think this way are wrong.
The FIRE mindset is more about optimization as opposed to going without. People in the FIRE movement are trying to enjoy life as much as they can in the moment while also optimizing every dollar the best way they know how.
The FIRE mindset strongly dislikes unconscious spending. People spend a lot of extra money unnecessarily without ever realizing it. FIRE is about cutting out any wasteful spending and making all spending choices conscious ones. Getting rid of wasteful spending increases happiness and saves you money at the same time.
As long as you know how much money you are investing for your future and how the rest of your money is being spent, you can live a very comfortable FIRE lifestyle pre-retirement and still enjoy your daily $5 coffee drink.
Two. People who retire at 40 years old are lazy.
This is another misconception about people in the FIRE movement. People confuse wanting to retire early with wanting to live a lazy life.
This could not be further from the truth. People who truly understand the FIRE mindset are generally trying to retire towards something, not away from work. They have spent years figuring out what in life makes them happy, and they are able to devote all of their time to that once retired from the 9 to 5.
When you retire towards something, you are much more likely to have a happy retirement. Some examples of this include starting your own business (such as my wife wanting to start a bridal shop), starting a YouTube channel, traveling for months at a time, or writing a book. The list is endless. As crazy as it sounds, my list even includes coaching high school football and writing this blog as my full-time jobs.
Having the freedom to pursue a passion knowing that if it fails you will be fine financially is what the FIRE movement is all about.
Three. You will get bored if you retire at 40.
This piggybacks off number two. Most people in the FIRE movement are retiring towards something, not away from ever having to work again.
Most people in the FIRE movement do not hate working at all. Most work on passion projects after their 9 to 5 job ends until they fall asleep at night. This means they are working 16 to 18 hour days.
This blog is one of my passion projects. I am not sure where it will go or whether people will keep reading it, but I am doing it for me as well. I enjoy the feeling of possibly helping just one person, however, I would be lying if I said I do not get something personally from writing down my thoughts.
If you do not understand what I mean, try journaling every night for a week straight and examine where you are at mentally. Writing things down is a powerful tool to help your mental health and keep you on track with your goals.
Four. People confuse their purpose with their job.
Okay, you caught me. This is not specifically what people get wrong about the FIRE movement, but more to do with why people have a tendency to dislike it.
If you ask the average person what they do for a living, they will say their job title. They will ignore their other very important roles they have, such as spouse, partner, parent, or friend.
Identifying yourself with your job is not a healthy thing to do. Even if you own your business, aligning your self worth and identity to your business is dangerous. If you had a major health issue, mentally or physically, where you were unable to work again, it will be very difficult trying to find your new identity.
People in the FIRE movement find their identity outside of work. Having a job is a crucial step in the wealth building process, but that job should not ever be your sole purpose in life.
Do I consider myself part of the FIRE movement?
Yes. And as I have laid out in this article, not because I want to never work again. I always see myself working in some form until I am physically unable to.
Mentally, I am not certain I am the type of person who can handle my job for the long-term. I am not diagnosing myself with vicarious trauma, but being around trauma on a daily basis and not being able to help at times takes its toll.
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