In Defense of FIRE

The financial independence retire early (FIRE) movement is often misunderstood and its followers dismissed as foolish frugal freaks with a lot to learn about life. The reality is more nuanced, of course, but it’s way easier to tear down a lifestyle you don’t identify with when you portray it as scrimping excessively to maybe one day live a simple existence on a paltry budget with no job.

I think we all know that such a caricature of a FIRE aficionado is laughable, but it’s the one that’s most often held up as a reason to reject the idea entirely, so I’d like to set the record straight.

I don’t know Buck personally, but we’ve shared a virtual stage with Passive Income MD’s Leverage and Growth Summit in the past, and he comes across as a humble, knowledgeable investor, which is why I was so taken aback by his words below. The featured podcast actually sounds like a great listen, but I have a hard time getting past the first few paragraphs of the written introduction, which are as follows:

There is nothing special about the investing patterns for these individuals. They typically invest in a very traditional way through ETFs. The hope is that the market will keep going up and allow for 3-4 percent withdrawal for life at some point.

Have you heard of the Financial Independence, Retire Early (FIRE) movement?

What’s particularly interesting to me in the physician community is that the FIRE people are rather militant. They mock other physicians with nice cars and homes. It’s so weird to me. Should you consider this kind of lifestyle? Well, personally I would not. It doesn’t sound like a lot of fun! And frankly, the militant FIRE people don’t sound like much fun either!

The strawman was sloppily set up and easily knocked down. Bravo. Let’s take a look at some of these misguided statements and set the record straight about “these people,” as he refers to people like me in the podcast.

No, no, and no. Allow me to rephrase. “The movement is defined by saving a significant portion of one’s income in order to retire early, living primarily on investment returns while one’s portfolio will likely increase in value most years.” That’s much closer to the truth

“The movement is defined by extreme frugality and extreme savings and investments in hopes of retiring early and living on small withdrawals of accumulated funds.”

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