Don’t die in the FIRE.
Oh the FIRE movement. You are probably here because you have heard about this amazing movement that will allow you to achieve “Financial Independence, Retire Early”.
It’s likely you’ve been drug into the depths of Reddit searching for the silver bullet that will lead to riches in your 30s.
Maybe you’ve stockpiled 300 pounds of Top Ramen in preparation for this “living below your means” adventure you are about to embark on.
Unfortunately, the huge proponents of the FIRE movement don’t understand some very important financial fundamentals of life and personal finance… and it seems they might also be failing to take into account quite a few key points that I’d like to discuss in this article.
If you want to understand more fully why the FIRE movement itself is really just a giant death trap, keep reading.
What Is The FIRE Movement?
Okay so the first few paragraphs didn’t provide much background on the FIRE movement and what it’s all about.
Most of the proponents of this movement have decided that in their early ages (usually early 20 somethings) they want to achieve Financial Independence any way they possibly can.
These same people go through extraordinary measures to make sure they have a couple million dollars saved by their early 30s. For some, the timeline may be a bit different, but the FIRE movement is definitely most popular among the “gig generation”.
Those who set out to achieve financial independence decide early on to make sure they have a stable income. They then attack all of their debt using popular methods like the snowball or avalanche method.
After debt is destroyed, they save every last penny available and likely quit that stable income.
Many FIRE proponents live well below their means. While there is nothing wrong with living well below your means, many take this too far. You often hear stories of living uncomfortably in shack sized apartments with essentially no furniture.
Quite often you hear about FIRE proponents who ignore their friends, they don’t enjoy others company because they don’t invite anyone over to entertain. They also don’t go out for drinks and enjoy themselves because they are so focused on “Retiring Early” (the second half of FI-RE).
The idea behind the FIRE Movement is that you become financially independent early in life, save for ten to fifteen years and live well below your means.
At the end of this stint, you simply quit your job, and since you know and understand how to live well below your means you will then be free to travel the world on the couple million you have saved up.
All of these are great ideas to start with. I agree that achieving full financial independence early in life is imperative to long term success and generational wealth.
However, there are a few fatal flaws that the FIRE movement fails to address.
These topics do get brought up once in a while, but are quickly shot down by FIRE forward nay sayers. I’m not one of those folks, so I’m here to feed you the truth about FIRE.
The first major flaw of the FIRE movement is that most who embark on a journey like this fail to realize that if you are married, one of either you or your partner have almost a 50% chance of living until you are 95 years old.
That seems pretty old to me. If you are deciding to retire as early as maybe 35, you need to sustain yourself for potentially 60 whole years.
Most in the FIRE community pride themselves on their savings of a million or so dollars. Many of these members are also very savvy investors and I am not here to insult anyone’s intelligence.
However, we are forgetting about some key points that fail to be addressed quite often.
Inflation is real.
Nobody knows what is going to happen with the overall US and Global Economy.
For you to potentially be putting your entire life in the hands of the Federal Government and rely on their decisions to curb inflation you are living dangerously and you are NOT FINANCIALLY INDEPENDENT.
I would like to reiterate that a core idea of the FIRE movement is to get rid of your W-2 and stop working for Corporate America (or Germany, or Australia, or wherever you are in the world).
The Federal Government hikes, maintains, and lowers rates based on the state of the economy. Inflation can increase and decrease in concurrence with these decisions.
In fact, hyper inflation has cause the currency of multiple countries to be completely obsolete (ref. Zimbabwe Trillion Dollar Bill).
Many economies have completely collapsed taking millions with them.
This includes the largest chunks of the largest 401k(s) out there.
So what happens if the economy takes a huge hit tomorrow, inflation rises rapidly (it’s risen by as much as 14% in some historical years), and your money is worth 85% of what it was the day before?
Your 6-7% S&P 500 gains have been absolutely devastated and you have lost an entire two years of income.
Many might say “oh I’ll just go back to work…” but that leads me to my next point.
To be clear, I’m not talking about social relevance. Your Instagram following is pretty irrelevant (although this can be a great business opportunity if used properly).
One common issue with stay at home mothers trying to re-enter the work force is that their skills now have lagged technology for years.
Many women who stay at home with their children through the early ages have large employment gaps on their resumes and tend to not have the most up to date skills that apply to modern jobs.
I am not being political here, I am just stating facts and hoping to offer you an analogy that is relatable.
Imagine you do the same…
You finally reach the pinnacle of what is Financial Independence, or so you thought. You have a couple million dollars stashed away and absolutely no debt.
That is fantastic and congratulations!
Now, let’s get real and fast forward five years.
You live below your means which is awesome and a great skill to have developed yet maybe some unexpected expenses came up, or you traveled too much too quickly.
You have a five year employment gap, you haven’t worked and you haven’t gained any skills because you’ve been sipping Mai Tai’s on the beach with your fellow FIRE movement buddy Paul who teaches surf lessons in Maui.
All of these things sound great until you realize that your funds will no longer last until you are 95. You immediately set out to find a new form of income, but noone will hire you because of your employment gap and lack of skills.
You take a job at your buddy Paul’s surf school for $15 an hour (because minimum wage will probably be that by then).
Sure, you might be able to sustain that for a while, but…
What if you want to have kids?
What if you want to fly off the island to go visit friends?
What if you feel unfulfilled in life? Are you changing the world?
Are you contributing to the advancement of society?
Your societal relevance can quickly collapse… you then are stuck living below your means with no money which sounds a lot like poverty to me (not Financial Independence).
Besides, wouldn’t you like to live a lucrative life that you are able to fully enjoy for the entirety of your remaining life?
Many FIRE proponents would argue that their lives are more than fulfilled. They have traveled the world, experienced more culture than they could have imagined.
They lived financially free for years and don’t have to worry about collecting a paycheck from Uncle Sam or big bad Corporate America man.
I can agree, traveling is very fulfilling, I too am a proponent of controlling your own income and your own destiny in this life. Once again… there are drawbacks.
If you don’t want children the FIRE movement may work.
If your partner is 100% in on the FIRE movement with you, it may work. However, what if you’re single and never end up finding a partner. What if you want kids but are never able to have them living your nomad lifestyle.
What if you lack stability and cannot supply a loving, warm home for those children?
Are you willing to riddle them with student loan debt add to the trillion dollars worth that already exists?
I personally cannot imagine living a life so selfish that I only focus on creating moments for myself in retirement and even for the first few years while I build financial independence.
It’s a struggle for me to understand how someone can be fulfilled in life without giving back to the world.
I aspire to be a great innovator, a great philanthropist, and a great father. Living for yourself and only your financial independence does not support the life fulfillment that I am searching for. Chances are, it won’t for you either.
The FIRE movement should instill fear in you. You should be on edge about starting to chase that dream and you should understand analytically what this means for you in both your younger life and old age.
Why sacrifice the end of your life, and ultimately die younger than anticipated, broke, and with no family just because you didn’t want to keep working late into life.
The Death Trap
It encourages young people with minimal life experience to live in poverty and sacrifice their early years so that they can enjoy what many have painted a picture as “the perfect life”.
The fact of the matter is, when you have a low income, health care is less available to you. You may not be able to afford medical bills later in life. This could result in death by pneumonia… how does that sound?
You will not be able to support children and offer them everything they need to achieve their own financial success.
This could result in an overall lack of education and you could contribute to the ultimate demise of humanity and onslaught of idiocracy (the movie may be reality if this continues).
You will have to sacrifice a tremendous amount of comfortability, time with friends and family, and ultimately many of those relationships that warm your heart just so that you can run around with mud on your face and a pack on your back for a few years.
There are great experiences to be had traveling the world. There are many cultures to experience, and it’s ideal to be able to experience these things while you are young.
At the end of the day though…
The Fire Movement Is Not For Everyone
Simply put, most FIRE proponents vastly underestimate the realistic amount of money you will need to retire comfortably and not have to eventually live in a tent under a bridge.
Even 5 million dollars would not allow me to maintain any sort of comfortable lifestyle, allow me to travel with friends, allow me to pursue the hobbies I enjoy, or even allow me to experience the things I wish to.
To be fair, maybe you are a very simple person… maybe you don’t enjoy nice things.
Maybe you don’t care to eat at a nicer restaurant once in a while.
Maybe you don’t care to have children and be able to afford their college.
Maybe you just want to live for you, travel the world, and die broke.
All of that is 100% fine.
I can imagine if you’re still reading… that’s not you. So…
The Alternative And SMART Solution
Sorry SMART is not a fancy acronym like FIRE. It just means intelligent. Many top economists have spoken out against the FIRE movement, and that is the last major red flag I need to start searching out alternatives or adaptations to the idea.
You’ll be happy to hear that there are alternatives to the FIRE movement, and that I am going to explain to you my exact thought process and how to achieve the same success and Financial Independence that I have today.
I have the freedom to travel, granted not whenever I feel like it, but that’s because I have not reached the threshold of Financial Freedom that I am looking for.
While young, my suggestion is to build multiple streams of income. I talk about all the different streams of income that generate me yearly cash flow quite frequently.
In fact, achieving generational wealth through online business is precisely the tag line of Incite Wealth.
True Financial Independence is being able to generate income without relying upon an external corporation or government to pay your bills and write that paycheck for you.
You become your own boss, you have limitless assets, and you will maintain this level of income even if you quit your day job at this very moment. That is the real Financial Independence.
This independence ultimately leads to freedom. As you build your nest egg, you want to make sure that it will sustain you at 95, and ultimately sustain the next 5 generations you leave behind.
Contribute to charity, give back to the world, and help others achieve their own success and you everything will come back to you tenfold.
Lastly, believe that you don’t have to be young as the FIRE movement would imply. You can be any age and start your very own business. Countless members of the 1.4 million member community I am part of are making money and have retired from the 9 to 5 workforce!
This can be you too.
I recently discussed some of my favorite business books here. In those books there is one common theme, work for yourself and make your money work for you.
At the end of the day, if you decide to “retire” you want do so knowing that your income is stable and not steadily depleting over time due to inflation, government interest rate hikes, or a collapsing global economy.
If you want to learn about some of the methods I employ to make money online, please click here and read my review of Wealthy Affiliate.
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I invest in Real Estate using a variety of methods, I have acquired many appreciating assets, I maintain a steady income from affiliate marketing, and I enjoy every minute of working hard and being able to travel whenever and wherever I please.
I don’t plan on ever quitting. In today’s society, you never need to quit when you can work from home and make a REAL income forever.
If you have experience with the FIRE movement, have a differing opinion, or are curious about my investments please feel free to comment below! I’d love to discuss all of the above topics and learn more about you and your goals and exactly how I can help you to achieve them.