Growing into adulthood during college, I took a heavy interest in reading financial blogs. I suppose it was from a natural curiosity towards money. And I had the thought in my mind for quite a while now that I wanted to do something different. I just wasn’t sure what yet. I didn’t even want to go to college like all my peers.
Then I came across a term while browsing through these blogs.
The basic premise of FIRE is that a person in their 20’s, normally in a white collar career trajectory would find as many ways as possible to save as much as possible (ex. 50% of their income) so that their working career is shortened from decades to say 8-10 years.
That nest egg that would have been built would be allocated into income producing assets (stocks, real estate) that would provide a steady cash flow. The owner of such nest egg would then be free to do as they please as they would be free from work.
This was all really appealing to me, especially given the fact that I always wanted to travel the world, moving around the globe unattached.
The problem came during the first year of college where I found the living on your own with 0 social life, walking to work in a secondary US city not that great. Sure it was doable, but as the months rolled by, I came to a dawning realization.
The Problem With FIRE
Those folks that saw through with FIRE were normally in their mid to late 30’s so I thought to myself, 2 weeks PTO (paid time off) until I approached middle age. Translation: I would be sacrificing my youth for a dream far in the future.
I cannot confirm this firsthand, but early 20’s seeing the world vs 30’s is far different. Instead of being an idealistic youth with boundless curiosity witnessing firsthand the different cultures of the world, it would be an older man, likely jaded from years in the office and staying in resorts doing packaged tours (how many 30 something backpackers are there anyways).
So big picture, pursuing FIRE requires sacrifice but I’m not referring to material goods. For the most part, that can be postponed to a later period without too much consequence. What I am referring to is time and experiences that come along with it. There are different stages in a person’s life and each stage has certain things you can and cannot do.
Just as an adolescent attends secondary school and a top athlete is in his/her 20’s, many pursuits are tied to an age group. Of course a few individuals deviate, but let’s stick with the rule rather then the acception.
In other words, the problem with FIRE. This less then conventional path entails sacrificing a life stage along with many of the experiences thst go along with it.
If said experiences in the immediate post educational years, say trying different careers, seeing the world (unattached) is something you have no desire over. FIRE may be an option. Many firsthand accounts of people that pursued FIRE worked like a dog in their corporate positions (admirable) and saved aggressively (also admirable) to lead a middle class style life where they spend their newfound freedom with their children or traveling with family or pursuing a hobby. Absolutely nothing wrong with this.
Alternatives To FIRE
But if there are crazy ideas you want to pursue that would only feel right while you are young. Then odds are the rigors of FIRE will get in the way. Chances are, you don’t need a lifetime’s worth of savings to pursue a highly impractical idea. So digital nomadism or what I did might work for you.
Econ 101 first lesson is, there is no such thing as a free lunch. There is always a price to be paid. So the question becomes, are you willing to pay the price for FIRE?
Kingston S. Lim
October 14, 2020
Dar Es Salaam, Tanzania