FIRE: The Good, the Bad and the Ugly

fork in the road

Seems like lately there are A LOT of conversations around the FIRE (Financial Independence Retire Early) movement.  In a nutshell, is it a “good” thing or “bad”??

Hard to believe that any movement encouraging people to front load their lives and focus on 1) paying themselves first and 2) live debt free, could be anything but good.  But like everything in life… there are going to be nay-sayers and even haters.

Why I jumped on the FIRE bandwagon

Before we go too far down this conversation, let me share I why I joined the FIRE movement to give you some perspective of what my point of view is based on.  Basically, I hit a point in my life (40 years young) that I didn't want to live paycheck to paycheck anymore and I wanted to get rid of my massive ($255,000) of debt.  Enter the FIRE movement, where I:

1) learned to control my spending (this does not equal no fun),

2) learned to pay myself before paying any bills and

3) figure out how much I would need to be financially independent.

What is the problem with FIRE

The most vocal of FIRE haters is Suze Orman.  She makes no bones about it and is even quoted as saying, “I hate it! I hate it! I hate it!”.

She feels it gives people a false sense of security to work for “a few years” then live on their savings for the rest of their lives.  She also feels people are not thinking about “old age” and “potential health issues” and healthcare expenses.

I am sure there are people who fit that description.  Lets be honest who, when in their 20's, ever thought about health issues down the road?  I know I didn't.  In my 20's I thought I could do, well, everything.  I had no health issues in my 20's, so why would I give that topic any thought?

Suze also recommends having a minimum of $5MIL to cover any unforeseen health issues or expensive emergencies before “retiring”.  (Again with the one size fits all thinking … disappointing).

One Size Fits All Thinking 

$5 Million in savings before retiring.  Don't get me wrong, I think the world of Suze.  She made saving and investing hip well before the FIRE movement came to be.  Millions of people have benefited from her advice.  I don't always agree with her but I have a lot of respect for someone who dedicated much of their life to educating others on long term financial planning.

What I don't agree with is her one-size-fits all approach.  Each one of us should have $5MIL before retiring?  Granted I don't know what my medical expenses will be, but I do know that my cost of living is hovering around what $1MIL would generate at 4% withdrawal (about $4,000/month).  Knowing that, maybe I should consider another $1MIL so I am not a burden on my kids when I get to “old age”.  That brings me to $2MIL in savings.

But wait, I have rental property that generates $5k/month…  after mortgage, taxes, insurance and maintenance, I could still conservatively pull $2k/month in income.  So that means, I don't really need $1MIL to generate $4k/month but maybe more like $500k in investments to generate about $2k/month.

My point is, we are all different in our needs, lifestyles and what makes us happy.  We have different medical history.  Some of us are married, divorced, have kids, caring for our parents, etc… all of these things are part of the foundation from which we determine what our financial independence number is.

How can anyone give a blanket statement about needing $5MIL to retire.  What does that even mean?  Is that net worth?  Investments only? Pre and Post tax investments combined?  so many questions…

Incorporating the FIRE movement

The FIRE movement, first and foremost, is all about freedom and independence to work a job you love (or not), live where you want and basically have a life that fits your idea of joy and happiness.  The (Retire Early) part of FIRE doesn't necessarily mean, to stop working in your 30s...  yes a handful of people have, but its not the norm.  Retire Early from a stressful job and take a new job (or start your own business) that is more fun, has less (or no) stress is more the spirit of early retirement.

Lets be honest, the average person is not going to go traveling for years (yes some do) or hang out at home all day, every day (yes some people do).

Personally, I can't imagine not working.  I like to keep busy and love working on things that make other people's lives a little easier and better.  If I could find a job like that, I would gladly take a pay cut (email me at if you have such a job).

I can afford to switch to a lower paying job because I have been on my own FIRE journey for 10 years.  By my personal definition, I have achieved financial independence.  And, in fact, many people who have “achieved FIRE” (whatever that looks like for you), do find other employment that fills their soul.

I don't know what my future holds or what my health situation will be.  Going by my parents, I wont live to see my 90's.  But I do know this, I have today.  Everything I do is to make today a little better than yesterday was for me and my family.  If I did not adopt the beliefs of the FIRE movement, in my heart, I know, I would not be as far along as I am.

Plan for the future (401k, ROTH, HSA, etc…) but live for today (Index fund, real estate, emergency fund, etc…).  Enjoy the little things in life that happen every day.

In Summary

It seems to me that Suze and the FIRE people have more in common than they think.

1) Both teach people to pay themselves first.

2) Both teach people to invest in their 401k (at least to collect the match)

3) Both teach to live debt free.

Where Suze and the FIRE people part ways (maybe).

1) FIRE movement gets people to think about retiring early and not 40-50 years from now.  Front load your life in addition to funding traditional retirement, i.e. 401k.

2) FIRE movement encourages people to live on a faction of their paycheck for 10-20 years and invest the rest. Front load your life to invest in real estate or index fund.

3) FIRE Movement encourages people to build multiple streams of income (really, run your life like a corporation would).  I don't recall Suze ever suggesting such a thing – but if I am mistaken, please add a comment below.

4) FIRE Movement suggests that people look into the “gig” economy and pick up side hustles to further build their investments. (On the Suze Orman show, I have heard her suggest to people to take a 2nd and 3rd job – maybe not the same as a side hustle but it still goes to making more money now to be in a better position tomorrow).

5) FIRE Movement strongly encourages people to maintain a household budget and plan for large expenses years ahead.

Like all things, nothing is perfect.  In the end the best thing to do is what makes you happy, plan for the future and invest part of every paycheck.  Maybe early retirement is what you want, maybe it isn't, whatever you decide, its a personal decision.



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