commons.wikimedia.org/wiki/Fire#/media/File:Firetora.jpg; Public Domain.
No, alas, not that fire.
FIRE is an acronym you’ll see bandied about the Internet in financial circles. It generally stands for “Financially independent, retire(d) early.” The idea is that you can get out of the rat race, and do something else than work for someone or something you hate.
While the goal of not doing something you hate is laudable, there are a few reactions to being ‘financially independent’. For one – how do you get to financial independence? Sell drugs, legal or illegal? Bilk people by creating Ponzi schemes, or fictitious technologies? Invest in companies with questionable morals (the tech world is filled with this)? Work for such companies? In general, there’s the “spending less and prudently,” plus investing your money in things that provide real returns. How you get or increase that money does seem relevant.
The next point is about “independence” itself. While it is something many folks want, it isn’t the only thing to think about in this world, and financial independence can be quite dependent on things like a working financial sector, monetary system, courts, and rule of law. This isn’t to say we aren’t going to go Mad Max anytime soon, or that having passive streams of income is a particularly bad thing. Being too dependent on people, of course, isn’t great, but extensive financial independence may make you think that you are invulnerable, or make you think that you don’t have to care about interacting with others. And when a crash comes, that “independence” may fade quickly.
There’s an expression that you might have heard, “They’ve got ‘F*** You’ money.” The essence is that someone has enough money (financial independence) to not care about many situations. Nor is having financial independence all that there is in life; Jim Carrey, the actor, had a great quote, “I think everybody should get rich and famous and do everything they ever dreamed of so they can see that it’s not the answer.”
If there’s a middle ground between FIRE and destitution, perhaps it is to have “Thank you very much, have a nice day,” money – not so rich that you are above it all, and not so poor that you are miserable. Some place where you can weather the storms of life, but still remain grounded, and still realize that ‘independence’ is an illusion.
- What do you think about the FIRE philosophy? What would you give up to have it?
- Have you met folks who have achieved FIRE? If you’ve achieved it, what do you think?