There’s a secret about FIRE. MMM has hinted at it. Living AFI has gone to great lengths to avoid it, but already has plans of falling back in the trap. The early retirement police love to whine about it. So what is it? There’s no such thing as FIRE. There’s FI, and R- hopefully you are FI by the time you R- but RE, true RE, does not exist.
Wait… What? I just threw out a bunch of letters, so for the layperson, what I’m trying to say is “There’s no such thing as early retirement.” There’s no such thing as working hard to earn a pension and transitioning to a life of golf and Florida beaches… all by the age of 30. The retirement lifestyle that your grandad lives in his 70’s does not (and should not) exist for someone in their 20’s.
Yes, there is “Financial Independence” and there is “Retirement” in the classic sense; however, there is no version of “Early Retirement” which consists of merely starting a classic retirement 30 years early. So if FIRE doesn’t exist, is this terrible news for everyone working so hard to achieve the goal? Is everyone who spent the last 5-20 years of their life working toward FIRE S.O.L.? Should all of these people (myself included) start freaking out right about now? Is everything written about the 4% rule a lie?NO WAY! THIS IS GREAT NEWS!
Before I tell you what I mean exactly, saying, “There is no FIRE,” let me tell you why it’s great news. The science of happiness suggests the things you have when you have a good job: achievement, growth, challenge and success, supportive people around are the things which make people happy. This is great news because a lot of those happiness drivers become very difficult if you spend all your time on the couch (if you don’t believe me, you’ve never tried it for an entire weekend). So this is the “why”.
What I mean
FI, the feeling of FI, the control of being FI is way more important than actually retiring. Having the freedom to do whatever you want, and really doing those things is what brings happiness. Still need more convincing? Let’s look at the leaders of this movement, the FI bloggers.
All FI blogs touch on it in some way. Brave New Life, Get Rich Slowly, Early Retirement Extreme, Lacking Ambition, Go Curry Cracker, Financial Samurai, blah blah woof woof all cover similar facets with slightly different emphases. So what’s standing in the way?
Well, if you trust the simple math of the safe withdrawal rate, it’s the spend. People don’t believe it’s possible to live a great life on $20k per year. Because of that belief and the math of needing net worth many times annual spend, FI appears entirely out of reach. This is where MMM comes in. MMM’s goal is to show everyone it’s not only possible but socially acceptable/desirable to cut spending and live a luxurious life. He goes on amazing adventures and manages to live on very little.
People who have languished in their jobs for the last decade, frustrated and feeling stuck due to lack of money, read these stories and suddenly find they are much closer to FI than they ever dreamed. And Pete, the apparent king of the FIRE blog community, stays incredibly busy. The blog details many of his projects, so it should be obvious “retirement” does not quite mean what many people think it should. In fact, if there was any doubt left about “early retirement”, Pete himself admitted he would still probably be at his software job if he had not had his son.
Ok, so we agree, FI is freedom and achievable, and that early retirement is busy fun. So what does that mean for you? The FI milestone, while calculated on paper, is much more powerful as a psychological milestone. Once people reach the tipping point, and more importantly, once people convince themselves they’ve reached the tipping point, life can finally begin to move forward. No longer is the driver A paycheck, but it is instead YOUR paycheck. As the happiness science shows, you will still seek to achieve things, but you will seek them in your own way, to take control and achieve flow.
I actually got to experience the power of FI today myself. First some background: my career and industry choice has definitely taken me through ups and downs over the course of my 20’s. I switched companies about a year ago, staying in the same job. I’ve known, basically since that first paycheck hit my account, that I was pretty much FI. That knowledge was no consolation as I continued to wake up early and work the long hours demanded of my job. However, recently some things changed, and after a trip to Camp Mustache II, I found myself finally believing in my FI for the first time. My goal since returning to work has been to do whatever I need to do to not stress out and enjoy it. Sure, I intend to challenge myself, but I want to do it in ways that make me productive. I want to do more than just compete with others to see who can tolerate the hardest grind.
Armed with this knowledge, I wasted no time putting it into action. In the morning, I got in and saw my calendar open for lunch. There was a meeting 10-11:30, but since I was not presenting, I felt no qualms about skipping it. I went ahead and texted a friend who had just gotten a job nearby (after his own layoff) and we set plans for 11, the typical lunch hour in my office. At 9:45, my boss called and suggested it would be a good idea to go to the meeting as I would likely be presenting at something similar in the near future.
Agreeing with her argument, and flexible despite the short notice, I headed for the conference room. After grabbing a seat toward the back, I texted my friend to see if he was available to push lunch to a later time. He said he was, but it would be tight if my meeting ran long. Of course, the manager running the meeting (maybe as a show of dedication) likes to focus solely on problems with no regard for time commitment. This almost inevitably means her meetings run over… like double-duration over.
As I sat in the meeting, gaining more than sufficient flavor for what I would need when it was my own turn to present, I watched the clock tick toward 11:30. None of my young, ambitious counterparts showed the slightest sign of blinking. Finally, at 11:15, I started to write my friend a text, telling him I had to cancel. I typed it all out, thought about my promise to myself and sent a new text: “See you as promised. Leaving now.”
I quietly hopped up and headed for the door. As I stepped out, I turned to ease the door closed behind me. With my last glance into the room, I gave everyone my warmest, most genuine smile. I don’t know if anyone saw, but I do know that a short while later, I had the best turkey sandwich I’ve had in quite a long time.