If the FIRE Journey Makes You Miserable, You’re Doing it Wrong

⚠️ This brilliant article was written by Dave Gow of Strong Money Australia and has been shared with his permission. Please note: nothing in this article should be considered as financial advice. So do not act on what you read here. I (Owen) am simply a fan of Dave’s writing, so I wanted to share this with you. You can reach out to Dave via his website (see the links in his author bio below the article) or comment/make a FIRE topic in the Rask Core Community.

In recent times, I’ve noticed stories popping up with a similar theme.

That to achieve Financial Independence and Retire Early (FIRE) means extreme sacrifice that inevitably comes at a cost to your happiness today.

What’s the point of being miserable now, waiting so long for Financial Independence and then still missing out on the good life?

Let’s explore this topic.  Because if one thing is certain, it’s that we don’t want to create misery for anyone!  We all want to live a great life, get our freedom back and power ahead with a strong set of finances.  All empowering, joyful things.

But do we have to choose between happiness now and freedom later?  Is frugality simply a necessary evil that we endure to reach our end goal?

The argument against the FI path

Multiple stories have now surfaced of folks who ventured down the FI path, hoping to attain freedom in their lives, but later decided it wasn’t such a good idea.

Basically, they state that saving lots of money made them unhappy and so they decided the FIRE journey simply wasn’t worth it.  Many have quit the journey altogether or greatly pulled back and extended their timeframe out much longer.

Should we be worried that this lifestyle is going to affect us in negative ways?  Will we regret saving so much?  Or will we regret leaving traditional full-time work so early?

I can’t speak to all complaints because, as is typical of the internet, these are never-ending!  But let’s break down some whiny stories I’ve seen recently about the FIRE movement, along with other common complaints.  Some points here are taken from a media article which I won’t link as it doesn’t deserve recognition.

Now, forgive me as I channel my inner grumpy-old-man today!  He’s much closer to the surface than you might expect 😉 And like any good ribbing from an old bloke, I’m bound to repeat myself.

“The sacrifices you must make, such as turning down weddings or skipping date night, may end up eroding the happiness you experience now.”  

Wait, what?  Show me one blogger who said you MUST avoid these things!  Your friend’s wedding and spending quality time with your spouse?  FI computer says no, apparently.  What a load of shit!

The biggest principle of the FIRE philosophy is to axe spending on stuff that is NOT important and optimise the things that are.  If you chose to cut something genuinely important to you, there is no-one else to blame.

“FIRE follower X sacrificed weekly coffee dates and Friday pizza nights after marrying her husband to stick to their 70% savings rate.” She also let go of her aspirations of buying a home in the suburbs two months in advance of her wedding to save for that special day.”

Hmm, okay.  So she decided to save for her wedding instead of buying a house?  That seems reasonable.  After all, it would be ridiculous to expect to be able to pay for a (likely expensive) wedding and buy a house within the space of two months.  No clue what this has to do with the FI journey though.

Sacrificed weekly coffee date and pizza one night a week?  What would that cost?  $10 for two coffees, and $20 for a fancy pizza.  That’s $30 per week.

What would that do to their savings rate?  For a dual-income couple who is likely earning $150,000, their savings rate would drop from 70% to… 69%.  Do the math yourself here.

Oh no, Financial Independence is ruined!  Are these people serious?  1% difference.  This has roughly NO IMPACT on their retirement date.

So in this case, have the damn pizza and coffee and get on with it!  But no need to abandon ship.

“Another route for passive income championed by FIRE followers is buying real estate. But it’s not as simple as some suggest. One IT support professional bought a triplex to earn additional income.”

“She took a chance on an ex-convict who was recovering from an opioid addiction. But within a couple months, he quit his job and wasn’t paying rent.”

“Before she could confront him, he left the building with the house keys.  Her real estate setbacks and recent relocation have made her rethink her early retirement goals.”

Renting to an ex-con and recovering drug addict, and managing the property yourself.  What could go wrong?

But of course, this is all the FIRE movement’s fault.  With risky investing problems like this, how is anyone supposed to reach FI?

Well, how about investing in something that’s DIVERSIFIED and, you know, ACTUALLY PASSIVE!

An index fund or LIC, for example.  Where income is paid like clockwork, there are no bills, no vacancies, and where everyone else is working hard except you!

“I’d love to be FI.  But why live like you’ve got no money, just to retire early and continue living like that?  I want the good life!”

What people really mean by ‘the good life’, is essentially consumerism on steroids.  To live a shallow, material, celebrity-like lifestyle.

But that’s okay, because celebrities are known to be the most content people around, right?  No mental health issues, drug dependence, empty relationships and misguided values there at all!

Let’s step back for a minute.  I propose that WE’RE ALREADY LIVING THE GOOD LIFE!  It’s just that nobody bothers to take a minute to see how ridiculous this all is.

We’re living at the richest time in human history.  In one of the most prosperous countries in the world.  With record levels of personal wealth, material luxury and the highest ever living standards!

Don’t believe me?  Okay.  How would you like to be living back in the early 1900s?  Or, how would you like to live in rural Africa?  Oh, doesn’t sound so good?  Well, there’s your answer.

Our perception of ‘the good life’ is completely skewed by the tiny fraction of the world around us, with no context for how other people live and those who’ve lived before us. 

Much of the world could subconsciously think of us (and rightly so) as extremely spoilt pieces of shit, if they knew we regarded living a simple life in Australia as anything less than ‘absolute heaven on Earth’.

Now, you might point out that people don’t think like that.  And that’s exactly the problem!

Despite being in the top fraction of luckiest/wealthiest people in the world, we still look at those just above us and think we’re somehow missing out.

This is a wildly inaccurate view of our true standard of living.  If we’re going to measure ourselves against others, it should be against all other 99.9% of human life.  Everywhere.  Alive and dead.

“FIRE is only possible by spending like NO money and saving nearly ALL of your pay”

Nope.  The numbers don’t show that at all.  Below are figures for how long it will take to reach FI, based on various savings rates, assuming 5% annual returns (after inflation) and then living off 4% per year.

These figures don’t include using superannuation, which could justify retiring even sooner if you make that part of your long term plan.

You’ve probably seen this before!  As you can see, FI is doable in a relatively short amount of time.  Starting at 25 and saving a fraction over half your pay, you’ll be done by 40!

If you want to spend more and do it in 20 years, then you can.  And you’ll STILL reach FI in your 40s!  The truth is, you can set this up for any age you want.

The FIRE movement isn’t about extreme sacrifice.  It’s about freedom and choices.  But mostly, it’s about turning down the dial on consumerism and building a life with more meaning.

The reason this works without extreme sacrifice, is because of the already fortunate, envy-inducing lives we have in modern-day Australia.  Oh, and the fact that full-time incomes are much higher than the actual cost of our needs.

Nobody wants to admit that, but it’s true.  When it clicks, people start scrambling for the big book of excuses, and furiously shuffle the pages, trying to find the best comeback they can.  While countless others sit back and think, “holy shit, we can do this if we try!”

Our own life of deprivation involves living in an unnecessarily big 4 bedroom house, which backs out onto a gigantic regional park, with a huge lake and abundant wildlife.  We eat tasty and nutritious food, get plenty of exercise, have a lovely (yet expensive!) dog and take numerous in-state and out-of-state trips.

We also enjoy excellent and mostly-free healthcare, visit friends, regularly indulge at cafes and restaurants and have these ridiculously convenient smartphones just like everyone else.  And of course, a reliable near-new vehicle which now sits idle most of the time.

Far from living in the sticks, our suburban town centre has an abundance of shops a 10 minute walk from our door.  And there’s a mini-city 10 minutes drive away.  The CBD is just a half-hour trip.

The annual cost of this satisfying lifestyle is around $45,000 (see a breakdown of our spending here).  That’s including rent!  We could always spend much more in every category.  But we could easily spend less if we needed or wanted to.

It’s no stretch to say there is even excess in our spending.  So you can see, even with a good life, there is typically a huge flow of extra income for many working households.  This cash can either be squandered (as is the norm), or put towards a higher purpose (like FI).

You might argue that you live in a more expensive city than me.  To that I’d say, so what?  We each get to choose where we live.   High house prices also don’t prevent financial independence.

By living in an big expensive city, it’s possible to save just as much, if not more, by taking advantage of high salaries and keeping expenses moderate, by going car-free and choosing sensible housing.  If not, then step off that glorified hamster-wheel and move!

Again, you’re not forced to give up anything.  You craft your own journey.  Create the healthiest most enjoyable lifestyle you can, while minimising waste, so you can save and invest to buy your freedom!

“But my spending makes me happy.  Without it I’ll be miserable”

What… all of it?  I highly doubt that.  If someone thinks their spending is what makes them happy, they probably haven’t got a clue what actually makes them happy.

What we get from spending is effectively the same as a sugar-high.  A rush that makes us feel good in the short-term, but ultimately, makes us dependant and sick in the long term.  Not only that, but it doesn’t satisfy us – we always want more.

The constant quest for more crap, for a better, fancier lifestyle is unproductive at best, and downright destructive at worst.

Many full-blown consumers still haven’t figured out what matters and what doesn’t.  This results in using their limited free time to chase these short-term highs, to make the work-spend treadmill of life as palatable as it can be.

When instead, they can learn to short-circuit the system, by recognising the disconnect between our level of spending and a genuinely contented life.

If you’re new to FIRE, it’s totally okay to still be in this camp.  We’ve all been there!  But do some soul-searching on this topic and come back to it regularly.

My point is, what people actually need to live a happy life is dramatically less than what they think they need.  That’s what I and many others have found.  Maybe you will too.  Test it out for yourself.

“When the market crashes, all these early retirees will come crawling back to the workforce”

This one usually comes from disgruntled, middle-aged career-slaves, for whom investments are scary and the ultimate safety is a good job.

But what can early retirees do in that scenario?  Lots of things.  We can easily spend less for a start (remember many of us are unusually flexible).  Use the typical backup of cash or bonds to top up income until the market recovers.  We could also look at earning money through part-time work, freelancing etc.

It’s worth noting that the often-quoted 4% rule (or rule-of-thumb) has shown to be a relatively safe amount of your investments to spend, even through market crashes over time.  Given just a bit of flexibility on the income and spending side, I see no reason for future retirees to panic during a downturn.

Will some get scared and want to go back to work?  Sure, maybe.  But whatever happens, the FI community will fare much better than the rest of the population!

Why?  Because not only are we adaptable and good at managing money.  But we’re going into the downturn with a large pool of investments and relatively low spending.

Contrast that to the pampered high-spending household, who relies 100% on salary income to get by, and has little savings and zero investment income!

“But I want to give my kids the best education/a head start in life/help buy their first property etc.”

If you make room for this in your plan, you can.  Funnily enough, this is usually said by successful high-earning people who got to where they are WITHOUT expensive private education.  Bit ironic, don’t you think?

These people studied hard, paid their own way and are now affluent adults.  They learned to work hard for things, to manage money sensibly and now have a great source of pride in their progress.

So it makes perfect sense to help their kids get a head start in life, right?

Wrong!

By paying their child’s way and giving them ‘the best’, they are robbing them of learning these same valuable lifelong skills for themselves.  Not only that, but the huge sense of accomplishment their kids will feel by doing things on their own.

If everything is paid for them, and they pick up on regular subtle messages implying, “we’ll look after it,” how will they ever learn to manage their own money?

Why would they bother?  The answer is, they probably won’t.

I’m no parent, but the way I see it, the aim of being a parent should be not to give your children everything you can.  But to teach your children everything you can.

A pampered lifestyle is only going to grow a sense of entitlement and they’ll become more disconnected from the reality of their insanely lucky place in the world.

Give them your time, your knowledge, your guidance.  Focus on buying your freedom, and the result is, your kids get their parents back.  That’s the best possible gift you can give them.

After they’ve established themselves as a successful adult, then it’s fine to help.  But the irony is, if you’ve taught them well they won’t even need your help!

Revisiting the FIRE Philosophy

By now I hope you can see that most of the complaints about the FIRE journey are complete nonsense.  You’re not supposed to give up things that are extremely important to you.  How dumb would that be?

It just turns out that most important things in life don’t have much to do with money at all!  So it’s really about getting better at prioritising what’s worth spending on, and what’s not.  And if we value our freedom or care about how much of the planet we’re consuming, many things aren’t worth it.

That means we can get ruthless in areas that deliver no genuine benefit for our dollars.  Daily takeaway food/coffee.  SUVs with car loans attached.  Houses are too big for our needs (guilty).  Constant upgrades of everything.  The list goes on.

After you’ve learned what matters, here’s a shortcut:  Cut out the crap.  Optimise everything else.

For nearly all of us, there is a way to get the same level of happiness and life satisfaction (or more) that we currently have, for much less than we currently spend.

Remember, we’re changing our relationship with money.  So it won’t always be easy.  It’ll be a little uncomfortable, sometimes difficult.  But that’s how we grow as a person and what helps us develop better, healthier values.

Final thoughts

The FIRE journey is certainly not about deprivation or sacrifice.  Rather, it’s about conscious spending, priorities and simply getting our financial shit together.

If you feel deprived, miserable and are wishing the days away, you’re doing it wrong.  Maybe you need to revisit your values, or make room (in your life and your budget) for what’s important to you.

But we get to enjoy the best parts of life that everyone else does, in a more logical and less destructive fashion.  Health, nature, relationships, learning, hobbies, and finding meaningful work.

The biggest benefit of being rich that’s missing from this list, is not luxuries.  The only remaining benefit worth striving for, is freedom.

And fortunately, for those who adopt the FIRE philosophy, that freedom can be created surprising quickly.