I recently read an article about a young lawyer who makes close to $400k a year, but sports threadbear suits and lives off ramen. He’s part of the hot new money movement – FIRE.
FIRE – Financial Independence, Retire Early – calls itself a ‘lifestyle movement’ that inspires people to ‘Reach financial independence and retire early.’
At the sacrifice of literally everything, young people around the world are forgoing social outings and lavish things in the name of retiring early. Typically, by age thirty.
Sounds like a hoot right? Starve yourself for a few years, pay off your house, quit your job, retire at by your mid-thirties, and… then what? Here’s how I imagine it:
You’ll spend a few weeks floating somewhere in the pacific on your forty feet FIRE yacht. Another day passes, only 16,425 to go. You’ll drift through empty ocean, wine in hand, stare at the exotic sunset and think:
Well this is boring, isn’t it?
You know what’s not-so-hot about the FIRE movement? The reality that 45-50 years of retirement is enough time to send anyone mad, let alone the financial sacrifices it would take to reach such an early retirement.
Singles need $45,255 a year to enjoy a ‘comfortable retirement’. By this estimate, you’ll need a smooth $905,100 to retire (assuming you retire at 65 and don’t kick the bucket for another 25 years). And if you follow the FIRE movement to retire at 35? A whopping $2.2 million.
So someone trying to be trendy and live by FIRE guidelines is given a whole 15 years (max) to save $2.2 million – just over $150,000 a year.
That would bearly be possible, even if you’re one of the 3.1% of Australians who earn upwards $3,000 a week. Which is even more unlikely considering the average graduate salary starts at $52,000.
Author of FIRE blog The Escape Artist, Barney Whiter, argues that sacrificing fun in the name of financial independence isn’t that bad, so long as people agree that ‘Spending doesn’t bring lasting happiness’.
He’s half right. Money doesn’t make people any happier beyond a certain point. But you know what makes people happy? Fun. Hate it or not, having fun costs money.
Your twenties are about having fun. Whether that be nights spent in with a bottle of red, or nights blurred by way too much tequila, one needs to sometimes spend money to have fun. FIRE ignores this basic fact.
I’m not saying one shouldn’t save for retirement. Just that there is a fine line between hoarding money like smule and not saving at all. Saving for retirment takes time and patience. FIRE takes too much patience and too little time.
Do you think retiring in your 30s is desirable, let alone achivable? Let me know below! If you want to know more about FIRE, check out these 9 blogs.
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