My thoughts on the FIRE movement
FIRE what?
Ever since I started BTM, I’ve been coming across the FIRE movement from various sources (e.g. articles, blogs, youtube, etc). This weekend I want to spend some time to share my thoughts on this.
What is the FIRE Movement?
In case you are like me who never came across the FIRE movement, it stands for “Financial Independence, Retire Early”.
This became a popular movement amongst millennials in the last decade for those who are obsessed with the retirement dream life of sunshine and rainbows.
The concept of this movement relies on extreme savings and investment that will allow the proponents to retire way earlier than what would be possible in the traditional way. This is achieved by saving above 70% of income at the expense of current quality of life and lifestyle. Early retirement age usually ranges from 30 – 50, which is a lot earlier than the traditional age of 65.
At retirement, the proponents will draw 3% – 4% yearly of their savings to sustain their lifestyle upon retirement.
There are a few variations of FIRE:
- Fat FIRE:ย Living off a traditional lifestyleย and saves more than the average retirement investor
- Lean FIRE:ย Minimalist living and extreme savings
- Barista FIRE:ย Quit traditional 9-to-5 job but still have part-time work to cover current expenses in order to reduce the burning of the “retirement fund” as it is insufficient to carry them through
- Coast FIRE:ย Similar to Barista FIRE,ย but have enough saved to fund their retirement and current living expenses
Now, let’s break that down.
Financial Independence
Financial independence is simply having sufficient passive income to sustain one’s living expenses for the rest of our lives.
A fantastic notion. I love this concept as anything extra that I get from my active income would be a bonus to supplement an increased lifestyle. I definitely encourage all to work towards achieving financial independence.
The best perk anyone could get from this is CHOICE. The choice to anything without the need to worry about money.
Retire Early
Early retirement may be attractive, but is it really?
Retiring early has a very huge criteria to make it meaningful – “What’s next?”. Too many have been so focused on the idea of retiring early from their jobs that they failed to see past the moment they actually took the step to retire.
I’ve had the opportunity to observe a few people who managed to “retire early”. A great deal of people who retired early have suffered a decline in their wellbeing (physical & mental) months into their retirement.
On the other hand, those who flourished and continue to live rich lives have migrated from their jobs to another work – be it another job, a business venture, coaching, etc. This looks more like a career change than retiring, no?
Yes, it feels fun to stay home for the entire week catching up on the series we’ve not had the time to watch or even just not doing anything after a period of hectic slogging. That’s what annual leaves are for!
Imagine retiring at the age of 40 and we have until 70 to live. That’s a whopping 30 years in between that we need to fill with activities. We can travel the world (need money), open a business (change of career & need money), volunteer in various places (if it’s what you like), watch all the Netflix/Disney+/HBO Max that we want.
What then?
I can do nothing for a month, but 1 year? 10 years? 30 years? I can’t bare the thought of the boredom that will ensue. How about you?
Rather than retiring early, find your Ikigai and live a life full of purpose – and happiness.
FIRE in its entirety
Now that we’ve looked at it separately, let’s tackle the last bit.
Transitioning from the traditional lifestyle to a FIRE lifestyle requires grit… A lot of it.
For most of us who have been living a certain lifestyle in the traditional sense, (As Mad Money Monster’s Lisa put it in her article), subscribing to FIRE movement requires cutting out a bunch of things from the day-to-day. And these are mostly things that we enjoy. Most of us live with tiny rewards in our lives. That cup of coffee, the once in a blue moon buffet, buying a bag that we’ve been eyeing for, etc. All of these add on to the happiness bar in a small but meaningful way.
Taking all of those out in the name of FIRE… you will have to decide if it is worth it.
As my wife once said to me, “If you’ve been thinking about that one thing for so long, and you can afford it without denting your finances, why not just reward yourself after a good day’s work? You’ll be happier!”
Keywords: “You’ll be happier”
Lingering Thoughts on FIRE
In the end, we’re all pursuing happiness, aren’t we?
Delayed gratification is one thing, but being extreme about it is unwarranted and may/will take a toll on the mental health. Also remember that other than Fat FIRE, the rest require a degree of minimalist lifestyle to live it out.
We’re also not built to “Retire Early”. The path to fulfilment (leading to happiness) is pouring our passion into our life. Seriously, if I hate my job, I change my job. Retiring early is not the fix to hating what we do.
As Steve Jobs once expressed this very eloquently:
Your work is going to fill a large part of your life, and the only way to be truly satisfied is to do what you believe is great work.
And the only way to do great work is to love what you do.
If you havenโt found it yet, keep looking. Donโt settle.
Steve Jobs
Disclosure: My monthly savings is 20% – 30% of my income. So yes, it is far from the FIRE requirement.
