Into the flames

At just 45, it’s a leap. Retirement. Wow. Who woulda thought?

But Nathan is there, after a twenty-year engineering career, mid-management. No CEO salary. Just a boy with his B&D portfolio.

“I wanted to send you a personal note since I have you to thank for providing your wisdom on Greaterfool all of these years,” he tells me, in a glorious MSU.  “I started reading in 2014 and tried to stay the course as best as I could, but I probably strayed too much (to your liking) off of the ETF path with single stocks (I’m working on getting back to majority ETFs, but will take some time to spread out the taxable cap gains).

“Don’t worry though, as I have paid my penance by reading all of the Greaterfool comments!!  What a cesspool at times, but it’s with that in my mind that I wanted you to share a little happiness with me today.  It’s my last day of work (at my almost 20-yr career).  Yeah – I know it’s relatively short compared to you.  I am joining the F.I.R.E. Brigade.”

For reference, this means “Financial Independence, Retire Early” and it’s a cult. The Internet is a swamp of financial advice on how people – mostly the young who actually don’t want to work at all, but would like to live in security and leisure – can chuck The Man and raise chickens. Or kids. Whatever. The goal is to knell in the Church of YOLO (You Only Live Once) and pursue a life teeming more with experiences than stuff.

Some FIRE advocates push an existence of frugality and denial to achieve this because they don’t trust financial markets. Others dive in options, derivatives, calls, puts, crypto, IPOs and meme stocks, looking for the big score that will free them from the tyranny of a cubicle, a monitored laptop and workplace responsibility.

“I am not sure what I’m going to do next,” Nate continues, “besides taking some time off.  However, I think FIRE will eventually change to the F.I.N.E. life (financially independent next). Do you have any advice for how I should approach my friends & family when they ask me what I’m going to do next or how I’m going to survive without a job?  I find this to be the trickiest question of all. Thank you again sir!  You changed my life.”

Sweet. However, FIRE ain’t for everyone. Like me. But I get the appeal.

It seems FIRE is a Millennial creation, inspired by a book (“Your Money or Your Life” by Vicki Robin & Joe Dominguez) published more than thirty years ago. Life instead of work, it preaches. Or only work enough to get the life you want. In any case work does not = life. It’s the enemy of it.

The original FIRE premise was that reducing expenditures, saving like a crazed beaver and learning to be happy with less was the fastest route to financial independence. A key theme: “Money is something you trade your life energy for. You sell your time for money. It doesn’t matter that Ned over there sells his time for a hundred dollars and you sell yours for twenty dollars an hour. Ned’s money is irrelevant to you. The only real asset you have is your time. The hours of your life.”

So disciples try to determine their FIRE Number – that dollar figure which will allow them to detach from structured employment and set sail on an indy journey. The blog has mentioned in the past a couple of kids (bank workers) who lived on air for years, shovelling every penny into accounts we managed. Their FIRE Number was $1,000,000. When achieved in their early thirties, they unhooked. Travelled the world. Tried a bunch of ventures. Things went sideways, amid bursts of joy. And a flood of experiences.

Is a million enough?

Expecting a long-term average return of 7% gives you under six grand a month, less tax. Tough to live on that if you’re renting an apartment in a major city, or even hoofing it through Europe and Asia without a vow of poverty. At some point you might need a partner, want kids, a stable roof or invest in a business. And the trouble with not having an employment income is running of our new funds to set aside for future needs. Plus eschewing a pension. And – if you need to rejoin the working world – a valid resume.

FIRE brings risks. You might not be able to function well without a work structure. You may miss colleagues, contacts and routine relationships. You may grow weary counting pennies, shopping for bargains and constantly worrying if your stash will run out. You might encounter a personal, medical or love emergency. Markets could take a dive when you can least weather that. And maybe the idea of having freedom and choice is far more attractive than waking up and wondering what they hell your life is about. In our society, for right or ill, our work is often our identity. Teacher. Coder. Soldier. Plumber. Doctor. Influencer. Blogger (scratch that).

In any case, Nathan, it’s not for everyone. You now face a myriad of decisions. In many ways, more difficult.

As for what to tell people?

Simple. Nothing. Live quietly among the masses.

About the picture: “I’ll start with the MSU, which is all true by the way!” writes Leonard. “I have been a faithful reader and occasional steerage section poster (Diversified in Mississauga).  I also had some delicious ice cream at your general store. I have followed your sage advice to stay diversified in the face of uncertainty with low cost ETF’s, and not letting panic set in to my decision making process.   My better half and I now are able to live the “Canadian Snowbird Dream”, spending several months each winter traveling in our RV with our 15 year old rescue cat “Willie”, in no small measure to this strategy. Willie is soaking up the sun in Tucson, Az. this past December. Thanks again for all you do.”

To be in touch or send a picture of your beast, emaol to ‘garth@garth.ca’.