If you have spent any amount of time combing the internet for personal finance blogs, you may have come across a blog or two that are pursuing the FIRE concept of achieving Financial Independence & Retiring Early (FIRE) or have already attained it. Depending on the age of the person, they might only be in their young 30s or mid-50s. It's a somewhat diverse group of people.
If you paid any attention to the title of this post, Why I'm Not (Directly) Pursuing FIRE, you are probably thinking who in their right mind wants to work the rest of their life when they don't have to. It's one reason I thought about not writing this post, because I don't want to have to work for the rest of my life because I cannot afford to retire.
What is FIRE?
Before proceeding much further, let's dust off the Money Buffalo dictionary to refresh on what the FI-RE mean in the F-I-R-E of FIRE.
Financial Independence- The ability to earn more passive income than your current expenses.
Example: If I was to quit my job tomorrow and my investments still earned $1,501 per month & my monthly expenses were $1,500, I would be financially independent.
Retire Early-Retire before the standard retirement age to claim your company retirement benefits (59 1/2 years old for 401ks & IRAs & age 65 or 67 for Social Security) because your passive income is significantly higher than your expenses and you have a sizable nest egg.
Why I'm Not Pursuing FIRE
There are several reasons why I'm not (directly) pursuing FIRE. As I will explain after this section, my wife & I are doing what we can to afford retirement when the time is right.
I already left my “good” job
I have shared in the past about my pair of golden handcuffs and how my wife & I decided it was best for our long-term vision to change careers. We took a 60% pay cut in the process as we built our presence in our community.
I was making good money for what I did, but I doubt it would have been enough to stop working in the next 10 years even with our 50% savings rate.
Admittedly, having gone from one side of the salary spectrum to taking an adult gap year and take a year-long “sabbatical,” I made a fortune relatively speaking.
But, after running into a former co-worker the other day at the store made any nostalgia disappear & made me remember why I wanted to leave it almost from my first day of work & only stuck around for the money in the first place.
We enjoy what we do
In a sense, we have already “mini-retired” as we have a fairly flexible schedule & enjoy what we do.
I do a combination of teaching & freelance writing. My wife teaches music & ballet, which is what she did before we moved away for a year (it's a long story but several changes at work made us decide to pursue Plan B of finding alternative employment, four of my fellow supervisors also made the same decision all within 6 months of each other).
We often say the year we were away was her sabbatical & I had mine the following year.
Now, we do like variety and have several irons in the fire when it comes to work. Basically my goal is to avoid corporate america as much as possible. Teaching is the best answer for us in this season in life.
We have a family
Children aren't necessarily expensive, but, your priorities change when you become a parent. I no longer want to work 14 hour days and get work calls when I sleep. I also know I'm home in the evenings now as well & don't have to work the graveyard shift.
I still pay attention to my finances, but, given how we went about our career transition, we didn't do it with FIRE in mind. As much as I hate to admit it, you could say we were in survival mode a few months.
There are families that have succeeded at FIRE even on teacher's salaries. This examples are our motivation that you can break the mold and retire early with children.
We have a mortgage (aka debt=low savings rate)
Several bloggers have written about how a mortgage is a “death loan.” Thankfully we just have a 15-year loan so I will be 45 at the latest when we pay it off.
Currently we are on track to repay it in 7 years.
Update (8/26/19): We became mortgage-free in April 2018! However, we now went back into debt to buy a rental property. Our monthly income covers the monthly mortgage payment.
It's hard to retire early if you have much debt. Most of our extra money is going towards extra loan payments, instead of being invested to earn passive income (the cornerstone to FI & RE).
We like flexibility. To us, being debt-free is more important than retirement at the moment. We still make monthly contributions of 10% of our income and I contributed for most of my 20s, so I should have some sweet compound interest in a few years.
What We Are Pursuing Instead
Notice how I put (directly) in parentheses in the title. If I was still making my old income and knew about FIRE sooner, we would have been more intentional. Instead, this is what we are doing now.
Pursuing Financial Independence
After reading Rich Dad Poor Dad by Robert Kiyosaki in high school, it has always been my goal to one day become financially independent by earning more passive income than my expenses and not rely on my active income like I do now.
The only problem is that I had student loans, a car loan, and currently a mortgage that have prevented me from investing as much as possible. At least with a mortgage, you get a house with equity out of the deal.
Learn to Live on Less
Thankfully, my wife & I aren't extravagant people. She often jokes I would have thrived in the Great Depression. But, there was a small element of lifestyle inflation with my old job like buying my dream car & going out to eat for one meal almost every day of the week (when I was single).
Taking a year off made use re-learn how to pinch pennies by only buying the essentials, borrowing books/DVDs from the library, and saving for purchases.
Now that we've boosted our income a little again after one year of full-time work, we have done some spending as we prepare to have baby #2 & scale our businesses, etc.
Investing More Consistently
When I was younger, I did trim my monthly investments down during the Great Recession and a few years afterward. Now, I wish I would have invested more. While I do have some concerns over the health of the stock markets and the historically low interest rates, it's still the best way for the average joe to accumulate wealth.
One way we're building passive income is with real estate investing. For instance, we bought a rental duplex in June 2019. I recommend using Roofstock to help you find rental properties in neighborhoods across America.
Try To Teach Our Children To Be Entrepreneurs
In high school, my two jobs were having a paper route & working at McDonald's. Nothing wrong with either one, but, neither job teaches much life skills beyond developing a good work ethic and setting goals.
We want our children to explore their talents & interests when they are young and have mom & dad to pay for their food and shelter. This can give them time to start their own business & hopefully get them a leg up in preparing for the future, instead of having to learn a new career each time I changed jobs and gradually work my way back up the ladder in each profession.
It's okay to pursue FIRE if you can. In fact, I encourage everybody to at least become debt-free & remain debt-free so they aren't beholden to their jobs for their entire life until they can no longer physically work.
For those of us that want to pursue it, but, are still waiting to be dealt the right cards. Make the most of what you have currently, as you might surprise yourself in a few years and realize you can retire early or at least scale back the hours you work each week.
Josh founded Money Buffalo in 2015 to help people get out of debt and make smart financial decisions. He is currently a full-time personal finance writer with work featured in Forbes Advisor, Fox Business, and Credible.