FIRE – Financial Independence, Retire Early is a Bad Idea
FIRE is popular among millennial’s – and older adults too.
Inspired by the classic book, “Your Money or Your Life,” by Vicki Robin and Joe Dominguez, FIRE is an acronym – Financial Independence, Retire Early. Thousands of diligent workers are striving to live with less to retire young. But, to what end?
I read the book when it first came out in 1992 and I like the living with less idea. It’s smart for the economy, the environment and a lot of other reasons. Living below your means, relieves money stress! In fact, I was raised with fiscally conservative parents and adopted that mindset.
It’s not hard for us to live beneath our means, because my family has engaged in this practice forever. We splurge on what matters, while cutting back in other areas.
Don’t get me wrong, reaching financial independence is great, as it relieves a big life stress, that of not having enough money.
But, what is the allure of early retirement?
I don’t get it.
We could have retired a long time ago. But, early retirement isn’t a goal. Even now, in the last third of my life, I don’t want to retire. I enjoy life, and working. But, I’m also fortunate that my husband and I have fulfilling work that makes a difference to us. I’m sympathetic to those who aren’t that lucky and working jobs that they dislike.
I think FIRE – financial independence, retire early is silly. What are you going to do with the next 55 years of your life if you retire at age 30 or 40? Work gives structure to life and provides fulfillment.
It’s important to create wealth for a satisfying life, but I don’t understand the goal of 55 years without working.
An alternative would be to find work that you enjoy.
The freedom to save and invest so that you can do work you enjoy – regardless of the pay, makes sense. But it seems selfish to retire early to indulge yourself.
Warren Buffett, Martha Stewart, Barbara Corcoran, John Bogle and other wealthy entrepreneurs working past their 70’s are inspiring. They’re contributing to society.
More Thoughts about FIRE – Financial Independence, Retire Early
“Finding the Good Life” by Mr. Tako Escapes
The good life. It’s a phrase that gets tossed around a lot. We all want to have a “good life”, but have you ever really thought about what it takes to live “the good life”?
Is “the good life” about traveling to sun soaked locations in private jets, eating lobster, and sipping drinks by the beach?
If your tastes tend toward the simpler, perhaps “the good life” is a simple homestead in Alaska… miles from the nearest town. On that homestead you might raise all your own food, powered only by solar panels. A completely low-impact “green” life…..
“Why I Don’t Want to be [More] Rich” by Ask Allea
I grew up a thousand miles from the Corporate Ladder.
Living in the same house since I was born, my hometown has a population of 118 people in rural Nebraska.
We shopped at garage sales, frequented second-hand stores, rarely ate out. We were a family of 7 (that’s so many). When we vacationed, we went to Kansas, Colorado or Missouri.
While some kids grew up going on vacations to the beach, getting new cars when they turned 16 or shopping at Gap, I was not that kid.
And I’m okay with that.
Vacations aren’t cheap. Feeding five kids isn’t easy. Pretty sure my mom heartily laughed in the face of the Joneses.
I grew up on clearance shoes and simple contentment……
“How to Become Financially Independent in 5 Years” by Anna Bahney at Money.CNN
Done with the job? Ready to do your own thing?
Those who are on track to be “financially independent and retiring early” — or “FIRE” — are.
You’d need to be fired up to sock away enough money to quit your job and retire in just five years. But it’s not impossible.
Some people, like Claudia and Garrett Pennington take extreme measures like saving 67% of their income and making big lifestyle choices. They almost never eat out, have no cable subscriptions and even dramatically downsized their home.
While that’s probably too much sacrifice for most people, see if you’re on track to make it to financial freedom in 10, 15 or 20 years.
This couple is on track to retire — before they turn 40
Being financially independent means that income from your investments alone is enough to cover all your expenses.
So how do you get there?…..
Money Articles for Those of Us Happy With Working (and Some of My Work)
“Stealth Wealth – Why the Best Wealth is Left Hidden” by Jim Wang of WalletHacks
When I read The Millionaire Next Door by William Stanley, I was amazed at how many millionaires lived in plain sight.
If you think about popular exposure to wealth – it’s pretty flashy. We’re trained, by television and social media, to think that millionaires live a life of excess. Big mansions, expensive cars, lots of jewelry, and partying non-stop. The reality is far more nuanced.
There are very wealthy folks who live lavishly. They get a lot of the publicity because it’s interesting.
There are far more wealthy folks who aren’t flashy at all. For every Kardashian, there are hundreds of wealthy people who live modest livesA billionaire lives here. $80+ billion net worth.
At the risk of holding up one extreme example to prove a point, I point to one of the richest men in the world – Mr. Warren Buffet. He is north of eighty billion dollars and lives in a modest house. His only vice is drinking full-calorie Coca-Cola.
We know about Warren Buffet’s wealth not because of his flashy lifestyle but because his company, Berkshire Hathaway, is a publicly traded company…..
“13 Quick and Helpful Reasons to Buy Term Life Insurance Online” by Simply Insurance
When it comes to buying term life insurance, I’m sure you’ll agree that it seems like a daunting task and you probably haven’t fit it into your budget or have been procrastinating about buying it.
Today I am going to explain why you should buy term life insurance online and how much more of a simple process it is.
This simple list will be a kick in the butt to your procrastination and show you how to apply for life insurance online today…..
“Retirement Planning Questions You Need to Ask” by David Waldrop of The Astute Investor
Retirement planning is a process, not an event. Asking yourself these questions will help you stay on track. Now that our taxes are done, it’s a great time to do some personal finance spring cleaning. Before we know it, we’ll be off on summer trips with our finances far in the back of our minds. Take this time to clean house!
Have you left any retirement funds behind?
Whether you recently changed jobs or have left your retirement funds at an old employer for years, it’s time to consider a rollover. Rolling over your 401(k) to your own Individual Retirement Account, will give you more control and likely allow for more investment choices. However, proceed with caution. If you anticipate needing to take withdrawals and you are between the ages of 55 and 59 1/2, it may be a mistake to rollover….
“Simplify Your Investing Life” by Barbara Friedberg of US News and World Report
Baby boomers average approximately 12 jobs in their lifetimes, according to the U.S. Bureau of Labor statistics. Tack on several bank and brokerage accounts to 401(k) money left behind at one or more of those dozen employers and older adults can easily rack up far more investment accounts than necessary.
Having too many investment accounts “makes efficient management almost impossible and also increases costs,” says Lawrence Solomon, director of investments and financial planning at OptiFour Integrated Wealth Management in McLean, Virginia.
Of course, it’s impractical, even impossible, to combine all your investment accounts into one. Tax-advantaged and taxable accounts, for example, will always need to remain separate as those dollars cannot be mingled. The same is true for individual retirement accounts that are funded with pre-tax or after-tax contributions…..
“The Major Problem With Dividend Investing” by Barbara Friedberg of InvestorPlace
A quick search for stocks with growing dividends returns over 1.5 million Google results. The popularity of dividend investing suggests that it is a perfect stock investment strategy. Buy a stock with a growing dividend or a high dividend fund and you’re assured future cash flow.
Then there’s the retirement wisdom that instructs you to spend interest and dividend income and leave capital gains income alone.
But, dividend investing isn’t all that it’s cracked up to be. There might be more “mental accounting” in a dividend investing approach than rational behavior…..
FIRE Wrap Up
So, whether your looking financial independence to retire early or just to be a good steward of your money. Live and spend with intent. You’ll enjoy your life and appreciate what you have.
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