Some arguments "against" FIRE (Financial Independence, Retire Early)
Why CoastFIRE (or even just having "somewhat healthy finances") might be better
Before we start, let me reference 3 other articles I made on personal finance so far:
Now let’s get straight into this new article!
Chasing FIRE risks putting your life “on hold”, and that’s not good.
Your personality is yours to explore. But you need to nurture it:
Your taste
Your passions
Your motives
Your location preferences
And more.
There’s benefits in learning how to spend in parallel to learning how to earn.
You’ll discover if you like “fancy things” or not, or which ones of them you like and which not.
Maybe you’ll take time out from work and discover that you really like renovating houses in southern Italy, or driving boats in Greece, or teaching scuba diving in Thailand.
What if any of these endeavours would already pay for your living costs You’d be basically FIREd without being FIREd.
I’m not saying you shouldn’t chase a financial buffer. But how big should that be?
I find that most people chasing and having a shot at reaching FIRE are often the types who end up earning some money anyway after FIRE.
So what is this about?
Reducing financial risks as much as possible?
What about the risk of not living your best life?
If you hate your job, it's much better to strive to find a better one that you can enjoy, rather than slave and die away to "free yourself from work" in a decade or two.
Work is part of life.
FIRE people mask themselves behind a "I don't engage in materialism" and literally end up with their entire lives revolving around money.
At some point in 2022, I asked myself:
“What would my life after FIRE look like?”
Most of my friends in Zurich at the time were working in big tech, on a track to FIRE thanks to their high-pay job.
I was too.
“What will I do after FIRE?” – I asked myself.
“I would only do things I enjoy.”
“I should also make sure that my net worth is generating enough income.”
“OK let me learn about how to best invest capital to generate cash flow.”
“mmm ok ETFs, S&P500, real estate…”
“lemme look into real estate.”
I told my friend:
“It seems to me that reaching FIRE basically means becoming an investor?”
After all, you’d become someone who manages capital (yours) for a living.
So I thought:
“Since I’m already on a track to FIRE with my income, I might as well start studying for the next job.”
That’s when I realised that you can actually retire earlier, if you better learn how to do the investor job.
Some paths yield more cash than others, with similar or even less risk.
Real estate, if well done, is such a path.
So I dived deep into it:
explored locations to invest in
learnt about rental yields
appreciation
capital gains
short-term vs long-term rental
flipping
renovations
Ended up purchasing an apartment in Lisbon suburbs, renting it to Erasmus students through mid-term room rentals.
Then I thought:
“The line between investing and entrepreneurship is actually quite thin.”
Purely passive doesn’t exist.
(if you think it does, you’re at the very least underestimating the value of risk-proofing your investments)
Purely active is basically entrepreneurship.
All the middle grounds are somewhat-active forms of investment / hustling.
I realised:
“OK, so, it’s very important to be good at this new job, if you want to do well and with low risks.”
I was seeing it in my real estate adventure:
to make that vehicle work, I would have had to become a pro in that game.
Then I thought:
“I feel like there are better avenues for me than real estate.”
In parallel, my content on tech careers in Europe started to pick up, and it ended up creating a new job that I very much enjoy.
So I decided to sell the flat in Portugal and focus on building a different form of capital, with a different form of cash-flow. Something I enjoy building more and that feels more fulfilling.
I think people putting FIRE on a pedestal could benefit from deep-diving a bit more into their strategy, and thinking about what it is that they want to do eventually.
Maybe there are ways to lean into it earlier and better.
Just my 2 cents.
Finally, I think FIRE (Financial Independence, Retire Early) can also be toxic.
Some devs try to:
Land high-paying roles
Minimise their expenses
Climb the ladder and get higher pay
Save, invest, save, invest, save, invest
Until they finally reach a “magic number”
(usually below $5M, often below $2M), and then…
THEN
…they can finally start thinking about what they want to do in life.
I’m not so much into judging other people’s lives.
And I get that a front-loaded “sacrifice phase” of life, to buy more freedom later on, can make sense.
Especially if you:
a) End up in a position where you can accumulate very fast
→ e.g. a quant finance $300k+ role straight out of uni and a quick path to $500k+ and FIRE in ~5 years
b) You mostly like the job and life that will lead you to FIRE
But… I think one should also consider that:
1. FIRE calculations lie on shaky grounds
8% market return
Safe 4% withdrawal rate
Inflation under control
Linear history
2. Resilience > Extreme risk avoidance
Life is inherently risky, and things will always be thrown at you.
True power lies in being able to confront challenges as they’re thrown at you.
Not in letting fear rule your life.
3. Not contributing to society in any way sucks
If you are someone that can reach FIRE in <10–15 years, you can probably find ways to work on rewarding stuff that pays the bills.
What do you plan to do after FIRE anyway?
After all, income is the way our contribution to society is measured in today’s world.
Sure, there are many rewarding things you can do that don’t make money:
relationships, health, hobbies, etc.
But I find that most people want to apply their “genius” to things they can be proud of.
Having someone pay you to do something you like doing — and taking pride in doing it well — is a big part of a healthy reward system.
4. Having a safety net > FIRE
Not having money sucks and severely limits freedom.
It definitely impacted my decisions in life until I reached a decent buffer.
So I’m not advocating against saving.
A big part of my work on Euro Top Tech is literally helping people find jobs that allow them to save good money.
But as you stack more cash, you can also allow yourself to explore and find fulfilling ways to live.
5. FIRE delays gratification and learning
If you delay exploration while chasing a FIRE number, you’re also delaying growth.
And to accumulate FIRE-worthy numbers as a dev, we’re often talking about decade(s).
That’s a lot of time.
6. You only live once
And you don’t have all that much time on this earth.
Up to you whether you want to spend your prime years stacking cash slowly with a low-risk profile or actually living, experimenting, and building something meaningful along the way.
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