Top 5 Ways to Derail Financial Independence & Early Retirement

Does the concept of financial independence appeal to you? Would you like to have the option to retire early? Great! Me too!

One of my goals is to help give you the knowledge and motivation to help make FI a reality. I’ve talked about why you might want to retire early and how to go about it. I would be remiss if I didn’t talk about how not to do it.

Presenting, the Top 5 Ways to derail your FIRE plans.

1. Live Beyond Your Means

This one is obvious. The only way to accumulate the money required to call yourself financially independent is to not spend it all. The higher your savings rate, and the lower your expenses, the sooner you will be FI. If your spending grows along with your income, you might save the same amount, but you’re actually delaying FI further by having higher expenses, therefore requiring a bigger nest egg. A smaller money requirement is just as important as the ability to acquire it, perhaps more so.

If you want to stay on track for FI or RE, aim for relative frugality when it comes to the big ticket items (house, cars, schools, etc…).


You can’t afford the Oprah suite, but you can take the tour.


2. Trust the Wrong Person to Handle Your Money.

Who is going to have your best interests in mind better than you? Nobody. You may not know that much about personal finance, but the truth is, you don’t need to know a whole lot. You’re smart enough to have become a high earning professional, you’re smart enough to have found this obscure website. By golly, you’re smart enough to learn how to make simple investment decisions.

If you choose to outsource that task due to a lack of time or interest, do yourself a favor and make sure the costs are detailed, transparent, and low. If your money is with the friendly neighborhood storefront (see #4 in this Top 5), your total fees could average 2% to 3% per year. What’s 3% of millions? Millions.


$100,000 a year invested and compounded monthly at 7% grows to $10.2 million over a 30-year career.

$100,000 a year invested and compounded monthly at 4% grows to $5.8 million over a 30-year period, a difference of $4.4 million. Factor in unnecessarily stunted growth over an additional 30-years in retirement and the 3% difference between the 2 approaches could approach or exceed 8 figures.

Now, are you sure you don’t have time to figure out this personal finance stuff?

3. Start Late.

One of my classmates in medical school was a grandfather when he started. Sorry, Gramps, you missed the early retirement train entirely. I suppose it’s hard to be derailed from a train you never boarded.

My medical school offered all students the option to defer for a year prior to starting year one. A single year isn’t going to make or break it for you, but I declined, keeping my eyes on the prize. The sooner you start, the sooner you can finish.

Some who defer one year defer indefinitely, and never realize their dream of becoming a doctor.

Robert Smith, lead singer of The Cure, running back for the Ohio State Buckeyes and Minnesota Vikings, was reportedly heading to medical school after his playing career was done. You can still see him behind the booth on ESPN. Nathaniel Motte of the one-hit wonder duo called 3Oh3! deferred med school at UC Denver for 4 years before deciding to focus on music exclusively. I’ve never heard another song of theirs since Don’t Trust Me
made the Top 10 in 2009.

Oh, yeah… this is the part where you’re supposed to see some graph that compares investing $1000 a year from age 20 to 30 compared to saving $1000 a year from ages 30 to 50. Hopefully you’ve seen something like that before. Spoiler alert, the early saver comes out well ahead, despite putting in only half as much money. Compounding is mathematical magic.

4. Get Divorced.

There’s nothing like divorce to instantly transform you from “financially independent” to “half-way there”. I’ve explored the financial details previously. Interestingly, one reader commented that her divorce put her in a better spot financially. Parting ways with someone who likes to spend every paycheck can be a good way to actually start on a path to FI for the first time.

Your mileage may vary, but most often, a divorce will derail you from your FI track. Once again, if you never boarded that train in the first place, there are no rails to be derailed from. Once life has stabilized, you can board the train at the next station!


All aboard! p.s. Thank you, Tony.

5. Commit a Felony.

I’ve filled out many credentialing applications and applied for many state licenses. Every single one of them wants to know if I’ve ever committed a felony. I haven’t, or at least, I’ve never been charged ;). Unfortunately, I know other doctors who have, and I’ve seen a couple careers end in abruptly and spectacularly tragic fashion. I don’t think every felony is an automatic career-ender, but I’ve seen it happen more than once.

You could argue that committing a felony doesn’t belong on this list. After all, these doctors were forced into very early retirements. On the other hand, they were likely nowhere near financial independence, and will be relying on other people or second careers to have a prayer of getting there.

Care to add the list? Give me your #6’s in the comment section below.


  • Anonymous

    6. Become addicted to drugs or alcohol ( which sometimes results in felony charges but not always).

  • Joe

    Yikes, your list is tough to beat. You got all the big ones. Here is one that is somewhat related to divorce.
    6. Marrying someone that does not have the same values and goals than you. Financial independence is much easier to achieve if you work as a team. It’s probably impossible if one person isn’t helping. Money is one of the most common reason people get a divorce.

    • Thank you, Joe! Your #6 is a good one. It’s best to marry for love, not money. But if the 2 of you can’t find common ground on money matters, expect to have a tougher time finding marital bliss (and financial independence).


    Not investing aggressively enough is also another sure way to derail your progress. I can’t tell you how many times my colleagues have told me how little they’ve got in their retirement accounts, and come to find out they had way too much in cash investments and short term bonds.

  • I really enjoyed this post! Just wanted to add, though – as a family law attorney on FIRE – that marriage is the absolute most important investment you’ll ever make, and a prenuptial agreement can go a very long way to help in the event of divorce 🙂

    My fiancee and I are pursuing FI together, and we have drafted a prenup to reflect that. We obviously hope that everything works out, that we achieve FI, that we live happily ever after and all that nonsense. But just in case this isn’t the reality, we have established a plan by which we can split up and not damage one another too much. We want to just go our separate ways, as in tact as possible, and know that neither of us is going to leave the other starving. It’s frankly tough to do, as every situation is different, but it’s worth the effort.

    • Not a bad idea if you can make it happen without killing the romance. I didn’t pursue it, but neither of us had any significant assets coming into the marriage, and it was agreed upon or at least assumed that I would be the breadwinner, and what I earned would be for our family. If it didn’t work out, I would expect to part with half.

      What reasons would you suggest creating a pre-nup if both parties are starting with a net worth of zero?


      • I’m glad you ask! And I apologize for the book/fear mongering, but this is really kind of a passion…

        About killing the romance: I think it’s important to think that a prenup is not a plan to divorce or an admission of a lack of love or faith in the relationship. Rather, a prenup is a way for each of you to admit to the other that you aren’t in it for financial gain only. And perhaps more importantly, it’s the start of an ongoing conversation about money, finances, and ultimately values (like FI!) that will do a lot to help make the marriage last.

        About a lack of assets: My fiancee and I actually have pretty much nothing right now. We’re doing well and rapidly accumulating wealth, but my student loans and our mortgage outweigh our assets somewhere to the tune of $300k. But accounting for future assets – and future support/alimony – is the key.

        At least in our state, anything that we accumulated before the marriage would be ours to keep by default. But increases in value on those assets, and assets accumulated during the marriage, would be up for grabs in equitable distribution – meaning we could end up splitting the vast majority of our assets 50/50 or spend money/stress/time on trying to convince a some other attorney to give one of us more than half because it’s just the fair thing to do.

        We could also run into problems with spousal support based on our FI goals. I’m an attorney, she’s a paralegal. Right now, my salary is only slightly higher than hers, but mine is rapidly increasing and hers will be relatively stagnant (pretty much COL adjustments).

        Say we both retire 10 years from today, and in 15 years we get a divorce. She could end up suing me for spousal support and dragging out the divorce for as much as two years, just because she decides she is angry with me and I deserve it. I wouldn’t expect her to do it if she’s capable of supporting herself, but people change in divorces. Plus she may have an attorney who strongly recommends it (I would!). (For background: Part of our state’s laws are that if a party won’t consent to the divorce and you don’t want to spend a bunch of money/time trying to litigate some reason for divorce, then the party who wants the divorce has to wait for a 2-year waiting period to elapse. During that time, either party could be entitled to collecting spousal support or what is called alimony pendente lite.)

        If she sues for support, the courts might hold me to an “earning capacity” based on my training and experience, even if I have “retired.” I’ve already seen cases of men and women who retired in their 50s and were ordered to pay support as though they were still earning six-figure salaries simply because “They could work if they wanted.” This is a really dangerous law for FIRE enthusiasts. It’s not going to happen in every case, but it also isn’t rare at all. And it could cost me tens of thousands of dollars in payments to her. Spousal support and APL are intended for the purpose of helping a spouse “maintain a standard of living,” particularly where maybe you have a spouse who is a high earner and another who doesn’t work or works for far less, with limited education/experience. Thing is, in our case, we live on about minimum wage expenses now, and if she collected support at the rate she would based on my earning capacity as an experienced attorney, she would actually be able to drastically increase her standard of living at the expense of my retirement. As in, I’d have to go back to work, potentially for decades, to make up for the cost of the divorce. She would continue to live an FI lifestyle, although perhaps much more extravagant than what we had planned! It’s not a pretty situation, for me.

        A good prenup can resolve these problems. It can resolve issues of support and alimony in a positive way while both parties to the marriage still want what is best for the other and aren’t simply trying to “stick it to my ex.” It can save both people a lot of time, money, and stress, and help them to move on in the event of a divorce. I honestly believe most marriages should begin with a prenup, and ESPECIALLY marriages between two people who are pursuing FI. It is way too dangerous to enter into an agreement risking division of assets (which sometimes have transaction costs, like selling a house or getting a Qualified Domestic Relations Order to divide retirement assets…both of which might happen even if your divorce is cordial and does not involve paying lawyers, which is a danger all it’s own), risking spousal support and alimony.

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