It’s Better to Fail at FIRE Than Succeed At Normality

Failing at fire is better than succeeding at normality

The Financial Independence “movement” is a relatively new concept. It’s exploded in popularity in recent years, particularly since the Great Recession in 2008-2009. With a bull run as long and intense as we’ve had, it’s not surprising.

The internet, too, has helped make stories like this popular. It seems that every week you can tune into a major news outlet and see a story about someone who retired early. They offer up tips and just general life advice to others looking to achieve the same thing.

What’s interesting to me is that without fail, these articles will always elicit negative reactions from people. Trolls abound in the online world, and the FIRE community is no exception.

Why FIRE Is Stupid – According To Trolls

The comments always are around a few themes. If it’s not impossible to save enough money, it’s stupid to do so. Leaving work will universally leave people bored and unfulfilled in life. Those who do are selfish and dumb.

Obviously these are undeniable truths.

Ask anyone who has achieved financial independence and left their day jobs to pursue their passions and they will tell you they are miserable. Why, oh why, would anyone wish to follow this path?

These are the main reasons I see come up over and over as to why pursuing FIRE is a stupid idea:

It’s impossible to save enough.

I will say this – it’s a lot easier to save money if your income is high relative to your expenses. For many people, though, this isn’t the case. With the median household income just shy of $60k and a typical retirement ‘budget’ of $40k, it’s a pretty big stretch to save up the money to support that life indefinitely.

But it’s not impossible. The folks who pursue FIRE – or secure their retirement in any way – are hard workers. We put in a lot of time and hard work, make sure we live below our means, and save diligently.

It’s not impossible, but it’s certainly not normal, either.

Your expenses will always go way up

This one’s interesting to me. There’s this assumption that expenses go up in retirement. After all, there’s way more stuff you have time to do!

But I think what people forget is that people who pursue FIRE also probably make a budget. I’m sure most of us know roughly what our regular expenses are, and have some contingencies for unknowns. Health care is a big one, and honestly it’s so chaotic and unpredictable in the long-term that the best we can do is work with the information we have now.

I also think some expenses will go down. My long commute eats a bunch of gas – an expense I’d no longer have. For some, leaving work means not having to buy clothes specifically for work each year. Maybe it means eating at restaurants less and cooking at home more.

There are tons of ways to actually make your expenses go down if you absolutely have to, particularly when you’ve got a lot of time to do it.

You will have kids and won’t be able to afford them

Where to even begin with this one…

There’s an assumption that everyone will have kids. That assumption is wrong.

And for those folks who do decide to have kids…well, pretty sure if they’re smart enough to plan for FIRE, they’re smart enough to plan for the added expense of kids.

Your investments will go down in value

Yes. And they’ll go up in value. That’s the joy of the markets.

Life without work at a normal job is meaningless

For some, sure. If you value your contributions at work to such a full extent that leaving them behind would strip al meaning from your life, then by all means, continue to work. FIRE (actually I prefer FIOR – Financial Independence; Optional Retirement) doesn’t mean quitting your job just because you’ve hit some magic number.

It means having the ability to do what you want, how you want, with money not being a force behind your decisions. If that means you still work because you love to, great.

But a lot of the people on the FIRE track derive meaning from their lives outside of their 9-5. Whether it’s volunteering, coaching, teaching, tutoring, writing…everyone has something to offer, and most can probably find ways to bring that to people without sitting in a cube all day.

People who FIRE are selfish idiots

See above. Many volunteer and give back to their communities, both with time and money. Far from selfish, and far from dumb.

It’s possible to save enough to retire early. Perhaps it’s not necessarily easy, but it’s definitely possible.

 

“Succeeding” at Normality

Let’s contrast a failed FIRE plan with a life of normality.

A typical person saves less than 5% of their income, and works for let’s say 45 years – retiring around 65-67. With a 5% savings rate and average inflation and returns, you literally cannot afford to retire at that age.

But people do, and then they rely on social security. The scary thing is how social security has been poised for the past few decades. As boomers get older and exit the workforce, the strain on social security will be felt. By 2035 – less than 20 years – it’ll only pay out about 75% of its current amounts.

In order to keep benefit levels the same by the time most millennials and Gen Z kids are hitting typical retirement age, there will need to be reforms. That means either higher taxes, lower payouts, older age requirements, or some combination of all of them.

Call me crazy, but I don’t want to rely on a system that’s failing. I’d prefer to take matters into my own hands.

And if I fail in trying to get there, so what. I’ll at least be better off than the folks with a piddly 5% savings rate.

Why It’s Better To Fail At FIRE

Nobody really likes to fail. Sure, it’s where you learn, but let’s be honest – if you could succeed at 100% of the things you try, wouldn’t you prefer that? I know I would.

Unfortunately that’s not reality. It also means some FIRE plans will fail. Some people will fall short of their savings goals.

The market will decline and people’s nest eggs will go down in value, perhaps at the worst time. Those who are ill-prepared may even need to go back to work. Backing out of early retirement would be humbling.

But it’s still better to fail at FIRE.

Let’s suppose your goal is $1,000,000 by age 40 so you can quit your job –  using the 4% rule, if you spend $40k or less you’d be fine. If you don’t make it to your goal, but you work diligently toward it and hit $800k, is it still a failure? Technically yes, but by any other comparison, no.

What if you pulled the trigger on early retirement and then need to go back to work in the future? Maybe a bad market downturn negatively impacted your portfolio, or you were caught off guard with something.

Going back to work isn’t the worst thing in the world. It’s exactly what you were doing before, anyway. And most people who FIRE probably are smart and creative enough to do something to get them by in the short-term.

Most probably don’t need to go back to a regular soul-sucking job. They could pursue something part-time to make ends meet until the market rebounds.

Those who pursue FIRE are pursuing something challenging. They’re recognizing the downfalls in typical retirement planning. They don’t want to live 45 years behind the walls of a cube.

We aren’t happy with the “American Dream” that was sold to us, so we’re doing something about it – and for some reason, getting flak for it.

We don’t have pensions anymore (generally speaking). Social security may be around, but not how it is today.

Why is taking things into your own hands and pushing yourself to succeed in something a little different such a bad thing? It makes no sense.

Thing is, even if you try to FIRE and fail, you’ll be in a much better spot.

I’d rather fail at FIRE than succeed at normality.

Question:

Why do you pursue FIRE (or at least financial independence)?

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25 Comments

  1. I plan to retire around 52-55, 3.5-6.5 years from now. I could do FIRE now, but choose to work a bit more to plan for the future. Medical costs, have flexiblity to move where we want to retire, and comfort level. I pursued FIRE, so if laid off, I could survive better. I want to choose when I leave, nobody else(well, except the wife)

    I am all for people FIRE in their 30’s or 40’s. It is your choice. Although, I would be hesitant to recommend someone do that. Thing is, most FIRE people have other sources of income and stay current with their specialties/jobs, so they could go back to work if necessary. Kudos to them.

    I base all this on the FIRE blogs. I don’t know of anybody around me who pursues FIRE in their 30’s or 40’s. Most are concerned with the here and now. I have printouts around the office on 401K and such, but it just collects dust.

    I would love to chat with people with similar mindset where I live, but it is like a ghost town for good financial thoughts. My wife and I are of similar mindset though.

    1. That’s roughly our timeline as well. A lot of that will depend on the market, a lot of that will depend on our earnings over the next decade or so. I think we could probably retire on a leanish budget by the time we’re in our late 40’s, particularly if our income grows over the next few years. But with health care being such an unknown, I wouldn’t be surprised if we chose to work until 55. It’d keep us busy anyway. I could see Kristin continuing to work and me go part-time consulting or something like that.

      And it’s a good call out that most FIRE people have some income coming in and aren’t just relying solely on their portfolios. Whether it’s rentals, a side business, or some sort of side hustle part-time thing, even a small amount of money can go a long way.

      It’s crazy to me how much people aren’t concerned with the future! Good thing you found a great online community and a spouse to help 🙂

  2. I’m pursuing financial independence but not necessarily early retirement. I want to get there because I saw what my dad was able to do with his savings at a young age and then create additional income streams for the future.

    He isn’t retired at 54, but probably could with the asset base he has built.

    Thanks for sharing Dave, this is a great article!

  3. Great article, thanks for sharing! I also pursue FI and hope to retire at age 55. Roughly 20 years from now. Everything earlier is a bonus.

    But for me FI does not equal ER. I want to have the choice to do what I want. I’m currently happy at my job and my professional development but as the saying goes nothing lasts forever so its better have options.

  4. Love it! I think its a big win if the FIRE pursuit results in more freedom in life. For me, that’s the goal much more than retiring early. Starting the FI journey early in life has opened doors that I would have never had if I’d ‘succeed at normality’.

  5. I like this framework! I am not sure I want to RE all that soon, but reaching financial independence is a goal of ours and one that we hope to meet someday. And if not, we’re a whole heck of a lot better off than if we didn’t try! 😉

    1. Glad you like it Mrs AR! I think retirement is a great goal but not the end-game. But FI…I don’t know why anybody WOULDN’T be on board with that! It’s a great goal to have.

  6. “Call me crazy, but I don’t want to rely on a system that’s failing. I’d prefer to take matters into my own hands.”

    Thank you, Dave. You’re a true personal responsibility warrior. I love it. That’s the philosophy Mrs. G and I follow as well. We’re FI but have a small New York State pension (20K a year). If that and our future Social Security benefits are cut by 25%, we won’t like it, of course, but it won’t materially affect our retirement. Once you hit FI, mailbox money like Social Security and pensions is gravy. Great post.

    1. Yep, gravy is right! I figure if nothing else we’ll be able to live it up even more when we’re 62+ (assuming we take benefits then) which would be awesome.

  7. I love reading troll comments because so often they make zero sense. It’s easy to lash out against something you don’t understand, especially when it’s so far out of the mainstream.

    We don’t always meet our savings goals each month, but ho-ly smokes am I glad we got into FIRE. If we hadn’t, we’d still be living paycheck to paycheck with no savings. It would be a freakin’ nightmare.

    1. Right?! The best part is that even though we’re spending less in some areas, it doesn’t detract from our quality of life. We were spending money that literally brought us no additional happiness. Would never have realized that if we hadn’t given it a whirl!

  8. I agree – Why not pursue FIRE? The worst case scenario is you save a bunch of money that will help you out later in life. It’s better to make sure you can retire comfortably someday than to only save 5% and have to worry about money when you can no longer work.

  9. I completely agree with all of this (unsurprisingly). The result of the normal 5% savings rate is downright scary. And I do like my job now and don’t want to quit, but FI is a hedge against the future – I can’t predict where I’ll want to be in 10 or 20 years, or even if I’ll be able to continue working regardless of my feelings on the matter. Life happens, and I want to be prepared to decide what life looks best for our family.

    1. Scary is right. I don’t think people realize how insufficient 5% is!

      And a very good note on being ABLE to work. We all assume we’ll live a long healthy life. Sadly not everyone will. I’d rather be prepared in case I can’t work when I’m 60 due to medical reasons or something else.

  10. “Leaving work will universally leave people bored and unfulfilled in life. ”

    This argument makes me laugh almost hysterically. Because all people who currently work ARE engaged and fulfilled in life? It’s positively unusual to find people who are happy with their work.

    In any case, whether we make it to an early retirement or not, I’m certainly not willing to give up the effort on the off chance that I might not enjoy being in charge of my own life 🙂

    If my job at the time we’re financially ready is still great and fulfilling and worthwhile, and my health is good enough, then obviously I can choose to stick with it.

    But overall I think that we’re going to opt for going to part time or no work as early as makes sense for us because my health has only been on a downward trajectory for the past 20 years. I haven’t got much faith in the medical establishment to reverse that trend when they don’t even have effective ways to treat the symptoms!

    Nevertheless, we remain open to more options, not fewer 🙂

    1. Hahah very good point Revanche! I don’t know many people whose work makes them full of life. Some folks, certainly, but I definitely would say that if you had more freedom to choose exactly what you did with money being no object, you’ve got a much higher chance of being fulfilled.

      Part time work is a great compromise if you can swing it!

  11. While I’m not sure about the “retire early” half of FIRE, I am pursuing FIRE so I can take care of my wife and future kid(s) better. If I do RE, then I will do it so I can spend more time with them.

    Also, people retiring earlier will help drive wages up, since that means there’s a smaller pool of people working. A smaller supply of workers means that each individual worker makes (on average) more.

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