Why Early Retirement (FIRE) Didn't Work For Me
Issues I've had with FIRE (Financial Independence, Retire Early)
Introduction
It’s been a month since my last newsletter. I got swamped with a new contract I was working on, which has since ended (although I still have a couple of others). I thought I had retired in 2022 at the age of 46 after I sold WrestlingINC.com, but that changed this year.
Many of you may have heard of the FIRE (Financial Independence, Retire Early) movement, which has gained significant momentum in recent years. In this newsletter, I’ll discuss why FIRE hasn’t worked for me… yet
A quick reminder that this is not financial advice, just myself sharing my strategies, investments, stocks, index fund strategies, what I'm buying, and where I plan to take those investments. Everyone’s financial goals are different. No financial decisions should be made solely on this newsletter, which is for informational and entertainment purposes only and is not intended to be a substitute for advice from a professional financial advisor or qualified expert.
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FIRE Explained
For decades, I’ve always had a goal to retire by 50. I have no idea why, it was just a nice, round number. I hadn’t heard of the FIRE movement until a few years ago, and I realized I had unknowingly been practicing many of the FIRE concepts.
The FIRE (Financial Independence, Retire Early) movement is based on the idea of achieving financial independence through disciplined saving, investing, and minimizing expenses. People pursuing FIRE aim to accumulate enough wealth so that they can live off their investments and retire early—much earlier than the traditional retirement age. The essence of FIRE revolves around high savings rates, frugal living, and smart investing.
There are different types of FIRE types, but the most common are:
Lean FIRE: Living on minimal expenses and retiring with a lower annual budget, usually between $30,000 - $50,000 / year.
Fat FIRE: Saving aggressively to enjoy a more luxurious lifestyle in retirement with more than $100,000 / year in passive income.
Barista FIRE: Achieving partial financial independence, with the flexibility to work part-time to cover remaining expenses. It’s kinda like the halfway house of FIRE, where you’re partially independent but might have to pick up a side gig to keep it going.
Coast FIRE: Saving aggressively early on to cover expenses for a set period, then reducing work and relying on investments to fund retirement. This strategy offers flexibility and reduced stress compared to traditional FIRE.
How To Achieve FIRE
Determine Your FIRE Number
The “FIRE number” is how much you must save to live off your investments. A common rule of thumb is to save 25 times your annual expenses. For example, if you expect to spend $40,000 a year in retirement, your FIRE number is $1 million.Cutting Expenses
One of the pillars of FIRE is living below your means. This might mean downsizing, eliminating non-essential spending, and finding ways to enjoy life without high costs. Whether it's cooking at home, embracing DIY, turning your thermostat down to a brisk 60, or traveling frugally, minimizing spending allows for higher savings rates.Maximizing Income
It’s not just about saving; earning more is also key. This can come from career advancement, side hustles, investment income, wrestling sites, Etsy shops—you name it. The more you earn, the more you can save, accelerating your path to FIRE.Invest Wisely
Most FIRE advocates invest in low-cost index funds for their long-term growth potential and low fees (I recently revealed my two-fund ETF portfolio to get rich here). Others may diversify with real estate, dividend ETFs / stocks, or entrepreneurial ventures. The key is to find investment strategies that work for you and offer sustainable growth.
Why FIRE Didn’t Work For Me
I’m a big proponent of the main concepts of FIRE (cutting expenses, maximizing income, and investing wisely). However, there were some major downsides once I was able to retire.
A lot of people picture early retirement being sipping Mai-Tais on a beach miles away from nowhere. But with having a wife and kids, that wasn’t very realistic. Not only do I love spending time with them, but there are other responsibilities like being the kids’ personal Uber driver. I couldn’t just say, “Peace out, I’m heading to Tahiti for a few weeks!”
Another big thing was… there was not much to do. None of my friends who live around me are retired. It’s like having a sick day every day while all your friends are still at school. It might be fun for a day or two, but it gets boring quickly. I was up at 6 am, reading a bit, dropping the kids to school, hitting the gym, maybe catching some YouTube videos, and, bam—it was barely lunchtime. After lunch, I felt like the dog in the photo above. There was nothing I liked enough to do daily. I could have played golf more, but I like golfing with friends and they were all working. I’m not a winter sports guy, so the winters were extra boring. I was slowly becoming a professional Netflix binger.
I went through a year and a half trying to make it work, but finally threw in the towel this past January and started doing some consulting. I’m not working full-time, but close enough. Maybe once the kids are both in college, I’ll take the full plunge. But for now, FIRE is on hold.
Other Disadvantages Of FIRE
In addition to boredom, there are also some other potential downsides of FIRE:
Strict Lifestyle Constraints: Achieving FIRE often requires aggressive saving and significant lifestyle sacrifices, which can lead to burnout, social isolation, and reduced quality of life if not carefully balanced. If that’s your thing, more power to you. But for a guy like me who enjoys the occasional latte or trip to a restaurant without checking the coupon apps, it can be a struggle.
Market and Inflation Risks: FIRE depends on investment returns and low inflation to maintain wealth over decades, making it vulnerable to economic downturns, high inflation, and unpredictable medical costs which can quickly turn FIRE into FIZZLE.
Unexpected Life Events: Retiring early with a fixed budget might not account for unforeseen expenses like health issues, family support needs, market shifts, or a surprise wedding for one of the kids, which can create a financial strain or force a return to the workforce.
Conclusion
The FIRE movement does have some solid principles—saving money, investing, and avoiding unnecessary expenses. But unless you’ve got a lineup of hobbies or a nomadic itch, it might feel like a whole lot of “what now?” once you reach that magical number.
That's it for this week! As always, no financial decisions should be made solely on this newsletter, which is for informational and entertainment purposes only and is not intended to be a substitute for advice from a professional financial advisor or qualified expert. If you haven’t already, please subscribe to this newsletter below and never miss an update: