Why I’m not a fan of FIRE, the ‘Financial Independence, Retire Early’ movement

Mouthy blogger Nick Daws looks at the FIRE movement and why, from the perspective of someone who has already experienced many of life’s ups and downs, he’s no advocate of the ‘financial independence, retire early’ method.

As a Mouthy Money reader there’s a good chance you’ll be familiar with the FIRE concept already. But just in case you’re not, it stands for ‘Financial Independence, Retire Early’.

The term was first coined in the US but soon crossed the pond to Britain and Europe. FIRE involves working hard to make (and save) as much money as you can, until you have enough capital to give up your day job and retire early.

At first glance it sounds appealing, but as you’ll gather from the title I’m not a fan. In this article I will explain some of the reasons I advise caution when contemplating a FIRE strategy, starting with the one I regard as most compelling.

1. Life doesn’t always go to plan

When you’re in your twenties or even thirties, it’s tempting to believe you can plan your whole life year by year, decade by decade.

As a FIRE aficionado, you might intend to put your nose to the grindstone for 20 to 30 years and retire in middle age, leaving you free to do whatever you want for the rest of your life.

That’s great in theory, but one thing my 66 years have taught me is that life may have other plans. Sadly, none of us knows when the Reaper will come calling.

I’ve had friends and relatives who have passed away at all ages, from their twenties to their sixties. Around one in five men don’t live long enough to collect their state pension, which is a sobering statistic.

Even if that doesn’t happen, other life events can throw a big spoke in your FIRE wheel. These include accidents, serious illness, disability, separation and divorce, losing your job (as happened to many people due to Covid), and so forth.

These are things you can’t plan for but they happen all too often. The danger then is that you may have ‘wasted’ the good years that came before.

Let me tell you about my partner, Jayne. She became seriously ill soon after her 50th birthday and passed away four years later. That was clearly tragic, but one small scrap of comfort is that in her early forties she decided to go part-time in her teaching career, to have more time for other interests.

We also decided that, as we both enjoyed travel, we would fit in as many trips as we could, even though money was often tight. We had some wonderful holidays that would never have happened if we’d both been working all hours and saving frantically for a future that in her case would never happen.

2. Are you willing to write off the best years of your life?

If you’re assiduously pursuing FIRE, you will be working your socks off during the day and scrimping and saving in your leisure time. Is this really how you want to spend what are arguably the best years of your life?

An example here is my old schoolfriend Phil*. Phil was the brightest guy in my class (and probably the whole school). He aced all his exams and went to Oxford, where he got a first-class honours degree in agriculture and forestry. Everyone predicted a stellar career for him.

Except that was never Phil’s plan. He was into FIRE before the term was even invented. He told me he was going to retire at forty. So he took a job he didn’t enjoy but paid well.

He saved every penny he could, even running an ancient Austin A40, for which he didn’t have to pay road tax. He even taught himself mechanics and welding, so he didn’t have to waste money on garage fees.

Phil used to visit me and Jayne when we were younger. We admired his intellect and his single-minded determination, but did wonder about the price he was paying. He never (to my knowledge) had a relationship, and never went to concerts, the theatre or anything like that.

We took him to a Chinese restaurant once, and he told us he had never been in one before (by this point he must have been in his late thirties). It certainly wasn’t a lifestyle either of us envied or would have chosen for ourselves.

3. What will you do when you achieve your goal of ‘financial independence, retire early’?

My friend Phil duly achieved his ambition. He was good at investing (naturally) and accumulated enough money to retire at his target age of forty. He then began devoting himself to volunteer conservation work.

So far so good, but he became more and more of a recluse. He became physically ill and (I’m pretty sure) mentally as well. He broke off all connection with us and other friends.

Last time I heard, he was living alone in the New Forest. I hope he is happy but am not convinced this is really a blueprint for how anyone should live their life.

If you have a clear vision of what you want to do when you’ve achieved FIRE, that will undoubtedly help. If you don’t, though, that should set off an alarm that you need to think very carefully before proceeding.

Even if you do have a plan – as Phil did – your post-FIRE life may not turn out to be as fulfilling or enjoyable as you hoped. How will you feel then about all the privations in the years leading up to it?

4. What about work-life balance?

You may disagree, but it does seem to me that FIRE and work-life balance are two concepts that are almost by definition at odds with each other.

For most people, their aim is to achieve a good work-life balance from day to day, with time for work, family, leisure, holidays, hobbies, and so on.

For FIRE enthusiasts, however, the balance is more over the course of a lifetime, with work dominating the earlier years and ‘life’ the remainder.

Aside from the risks mentioned above in assuming you can plan your whole life this way, that doesn’t seem like a recipe for good physical or mental health to me.

Final thoughts on ‘financial independence, retire early’

So those are some reasons I’m very dubious about pursuing a FIRE strategy.

Of course, I’m not saying you shouldn’t save for the future or indeed make sensible economies. But from my perspective as a 66-year-old, I strongly believe in striking a balance between making the most of your life today and planning prudently for tomorrow.

We only get one life, and sacrificing (say) twenty-five years of it for a very uncertain future is a huge gamble. In my view it’s a journey you should think very carefully about before embarking on.

Better, in my opinion, to seek work that brings you satisfaction and fulfilment rather than merely being a means to an end.

Make the most of everything life has to offer while you still can, since – as I well know – none of us can ever be sure what the future will hold.

Or as the old song by Guy Lombardo has it: ‘Enjoy yourself, it’s later than you think!’

Nick Daws writes for Pounds and Sense, a UK personal finance blog aimed especially (though not exclusively) at over-fifties.

*name changed

Photo by Dino Reichmuth on Unsplash