FIRE stands for Financial Independence, Retire Early. It’s a lifestyle movement of people who commit to a program of extreme savings and investment so they can retire much sooner than they would on a traditional plan.
Embracing the FIRE movement includes saving as much as 75 percent of your income (some save even more, up to 90 percent); drastically reducing expenses (often to a spartan level); looking for ways to increase your income; and investing using a plan that considers your long-term goals and risk tolerance.
It’s not uncommon to see executives who are highly paid but stressed out and miserable in their work embracing the FIRE concept so they can quit their jobs and do something they truly enjoy. And in my opinion, that’s the primary thing that’s wrong with the FIRE movement.
I don’t think anyone is supposed to do something they despise so much that they want to quit and never do it again.
Let’s say you’re 35 and want to retire from your current job in five years. With a healthy lifestyle and today’s medical technology, you could easily live to your 90s or even 100. If you retire at 40, what are you going to do for the next 50 or 60 years?
The more important question is: Why aren’t you doing that now?
I’m not suggesting you walk away from your lucrative position tomorrow. But I also don’t want you to spend the next five years living on 10-25 percent of what you earn while you work 80 hours a week doing something you hate.
The mentality of the FIRE movement is rooted in scarcity and fear, not abundance. It’s about living in the future instead of being happy in the present.
In The Gap and the Gain, Dan Sullivan says that most people are unhappy because of what they measure themselves against. When we measure ourselves against an ideal that is a moving target always out of reach, we’re in “the gap.” When we measure ourselves against our previous selves and appreciate the progress we’ve made, we’re in “the gain.”
The FIRE movement puts you in the gap because you are intensely focused on the future at the expense of the present. If you choose instead to live in the gain, to celebrate how far you’ve come, to know that every day you are where you’re supposed to be, you’ll be happier, more confident, and more satisfied with your achievements. That, in turn, will lead you to even greater successes and a life richer in the ways that you desire.
If you’re good enough at what you do that you can earn enough in five years to live another 50 years without working, it’s likely that you can transfer those skills to another job or business doing something that you’re excited about and enjoy. And even if you’re doing something you don’t love because the money is great, you can at least change your mindset and live in the gain, appreciating each day knowing you aren’t going to be doing that forever.
“Don’t trade away your happiness now to earn money in hopes that if you make enough you’ll be able to buy it back later. You can’t.” (Unknown)
I’ve helped many highly compensated clients who have felt shackled by golden handcuffs find the key to unlocking those handcuffs without spending years working in a job that makes them miserable. If you’re part of the FIRE movement or if you’re just thinking it would be a good way to achieve your financial goals, let’s talk. You may have more choices than you realize.
Related: Why Haven’t You Retired?