Thinking of trying F.I.R.E.? Read this first šŸ‘‡

Finance Tips

The F.I.R.E. movement has gained steam over the past few years, helping young people achieve financial independence early in life and be relieved of the stress of having the same job for decades. Yet, this movement, while well-intentioned, shouldn’t be seen as a one-size-fits-all solution. In this article, we’ll explore everything you need to know to determine for yourself whether you should give the F.I.R.E. movement a go.

Why the new movement aimed at early retirement might not be for you
Why the new movement aimed at early retirement might not be for you

An overview of F.I.R.E.

The Financial Independence Retire Early (F.I.R.E.) movement aims to help young people achieve financial independence early in life to retire earlier than they would have, had they followed a less drastic financial plan. F.I.R.E. directs people to invest their money early, save every cent they can, and live a minimalist lifestyle by keeping expenses low. You can read a more detailed explanation in this blog post.

Follow this financial lifestyle directly, and the intended outcome is that by some time in your 30s to 40s, you will be able to retire and not have to worry about earning a full-time income from a (most likely boring) day job. This could free you to explore your passions and interests while living off your investment and savings income for the rest of your life.

Not so fast…

While F.I.R.E.’s goals and ambitions are great, and the idea does work for some, it’s not a foolproof plan. In fact, in many ways, F.I.R.E. perpetuates the idea that you are entirely in control of your own financial wellbeing, and not achieving financial independence is your fault.

Here are 3 reasons why the F.I.R.E. movement might not be suitable for you:

1.     You want to start a family

Starting a family is a valid reason to forgo the FIRE method.
Starting a family is a valid reason to forgo the FIRE method.

Saving 50% of your income is a great goal to have. But is it realistic if you are trying to start a family? Sure, as a single person or even married couple in a dual-income household, a high savings rate is undoubtedly attainable, but once you throw children into the mix, it becomes much more complex.

The simple act of having a baby will cost you thousands, and that’s only to bring the child into this world. Then you must factor in the cost of food, diapers, clothing, etc. Let’s not even dig into the exorbitant cost of education in some countries. Needless to say, having a family will make it even harder to save at the rate necessary to be a part of the F.I.R.E. movement.

2. You enjoy working

One of F.I.R.E’s core concepts is that retirement is the ultimate goal, and working is something that only those who aren’t financially independent must do. But if you love your job and career, this doesn’t apply to you at all. In fact, many people who enjoy their work continue to do it even into retirement age. Continuing to work into retirement is becoming more commonplace than ever before. Therefore, instead of the F.I.R.E. movement, it might be better to think about what kind of work excites and inspires you to the point that you will enjoy doing it on some level for most of your life.

As the saying goes: if you have a job you love, you never have to work a day in your life!

If you enjoy your work, why stop?
If you enjoy your work, why stop?

3. It could cost you your mental health

While early retirement is beautiful in theory, would you sacrifice your mental health and wellbeing for years just to get there? This is what many people who have tried the F.I.R.E. method have experienced. As one couple who attempted F.I.R.E found, it was a relief to dial it back and actually live their lives without worrying about every single expense. “Ditching the notion of retiring early felt like a relief because we now have the option to enjoy our lives along the way,” they recall.

Yes, financial independence is a great thing to strive for, but not at the cost of your mental health and wellbeing. So, think long and hard about whether you are prepared to make the necessary sacrifices to make F.I.R.E. a reality, or else you could be left unhappy and no closer to your financial goals.

Suitable for some, but not all

The F.I.R.E. movement is a financial plan that can be life-changing for some people. And while it may have immense benefits, it also isn’t right for everyone. Just because you have the opportunity to save all your money and retire early doesn’t mean you should jump on the F.I.R.E. bandwagon and put yourself under the stress of saving every penny. Additionally, with a growing family, it might not be realistic to live the type of lifestyle that F.I.R.E. requires. After all, you want to provide for your family to have a good life.

If you are exploring F.I.R.E. for yourself, first contemplate your life goals and what you really want. If F.I.R.E. is in alignment with your dreams and aspirations, then go for it. Otherwise, stick to a sound financial plan that is more realistic and easier to attain. It could be better for you in the end.