There’s a lot of buzz surrounding the FIRE (Financial Independence, Retire Early) movement lately. New personal finance blogs dedicated to the movement crop up every day, it seems. But, does it live up to the hype?
FIRE means that you work hard, save and invest early in life to retire before reaching old age. The typical blueprint for the FIRE movement says that you should work hard and live as cheaply as possible until your 40s or 50s, then retire at an earlier age than most people once you have enough money stored in your nest egg. Vicki Robin’s popular book “Your Money or Your Life” popularized this idea.
Click to read more about 30 ways to retire earlier.
Reaching financial independence and retiring early may sound like a great idea (and it is), but it can make for a stressful retirement planning experience. It’s a tall order for many people if they’re not willing to sacrifice and work for it. We might not all want to work 60 hours per week for two straight decades without taking more than one vacation per year. We might not all want to cut our budgets down to the barest necessities, especially when we know we can afford little luxuries like dining out.
The FIRE movement often demands that you live ultra frugally and embrace a workaholic mindset to make significant progress on your retirement savings goals. Sure, this might work for some, but for the vast majority of us, not so much. It’s pretty unreasonable to expect us to never to enjoy the fruits of our labor because we’re so focused on retiring early.
If you haven’t made up your mind about the FIRE movement yet, here are a couple of reasons why I think it’s overrated and what you can do instead.
Get Paid to Do What You Love
The main problem with the FIRE movement is that it implies you hate your current job and want to escape it as soon as possible by retiring early. But what if you were able to find a job you love so much that you dread the thought of retiring? Or, what about starting a home business and working for yourself instead of a micromanaging boss? The “financial independence” part of FIRE is undoubtedly an excellent goal for everyone to have, but you may not necessarily want or need to retire early if you find a job that you love.
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Further, many people say that they “retired early,” but that’s not truly the end of their working life. That’s why FIRE is a bit of a misnomer. A lot of people who retire early turn a passion project or hobby into a new career. Most of the bloggers who blog about the FIRE movement are now full-time professional bloggers, supplementing their retirement income with a new revenue source from blogging. Others find new income in the form of consulting work, a new product or even writing a book. Not acknowledging these new endeavors as work or a second career is disingenuous.
Truly, FIRE often means simply retiring from one career to start a second, more fulfilling one. So, instead of focusing so much on retiring early, shouldn’t we be more concerned with finding work we genuinely enjoy doing? As the famous adage goes, “Choose a job you love, and you will never work a day in your life.”
Discover Cost-Effective Hobbies
Another reason why people are so enamored with the FIRE movement is that they want to earn more money to fund their favorite hobbies and activities. Sure, when you live like a pauper for several years, putting nearly all of your extra income into retirement savings and investments, you’ll certainly have more money saved up by your 40s or 50s than someone who traveled, dined out and bought newer cars or clothes. But who do you think was happier during those early working years: the person who obsessively saved or the person who lived a little?
Financial independence shouldn’t come at the cost of your happiness as you work endlessly and never enjoy the fruits of your labor in fears of derailing your early retirement goals. Instead, you could seek out more cost-effective hobbies to trim your budget while still diverting quite a bit of money into your retirement funds. Better yet, you could monetize your hobbies to maximize your savings and self-fulfillment at the same time.
If you truly enjoy working overtime every week and saving as much money as possible, more power to you. However, if you would prefer to live in the moment, work average hours, enjoy hobbies, socialize on a regular basis and retire when you’re ready (instead of on a tight deadline), then the FIRE movement is probably not your best bet. Don’t feel pressured to work and save money to the extreme if doing so will hinder your happiness and well-being until the moment you finally retire.
Consider instead changing your mind about retirement from “I need to retire as quickly as possible, then I can enjoy life” to “I should enjoy life now as much as I plan to during my retirement years.”
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