As outlined in the N.Y. Times last month by a number of their reporters, the “FIRE” movement, which stands for “Financial Independence, Retire Early,” has attracted a lot of followers.
In a nut shell, the millennial FIRE followers have cut living expenses to the bone and saved as much as they can to avoid their “high pressure jobs” so they can retire in their 30’s.
What a different world. In my world, work was a stimulating addiction, the pressure came from within. If you were successful in finding a career you enjoyed, it became a passion that helped you attain fulfillment. Apparently that is not the way of the FIRE people.
Before we dismiss the millennials’ new crusade, let’s explore more of what the N.Y. Times reported.
Why These Millennials Hate Work
Quitting the rat race isn’t a new concept. From the shakers of the 1700s to the back-to-the-land hippies of the 1960s and ‘70s, a strain of Americans has always embraced simple living. One of the bibles of the FIRE movement, “Your Money or Your Life,” which teaches readers to reduce their spending and value time over material gain, was published in 1992.
But Vicki Robin, who wrote that financial guide with Joe Dominguez, said the FIRE crowd is a different breed of dropout than those in the ‘90s. “Our aim was not just to have a whole bunch of people quit their jobs,” Ms. Robin said. “Our aim is to lower consumption to save the planet. We attracted longtime simple-living people, religious people, environmentalists.”
The FIRE adherents are, by contrast, “very numbers oriented, fascinated by the minutest of taxes and accounting,” Ms. Robin said.
They are also benefitting from a lengthy bull run in the stock market and, in some cases, the privilege of class, race, gender and background. It’s difficult to retire at 40 if you work a minimum-wage job, say, or have crushing student-loan debt, or did not have the same opportunities as others because you grew up poor in a crime-ridden neighborhood.
But if, as Ms. Robin said, FIRE adherents “don’t have the aspirational part” of earlier generations, why are they so determined to quit the work force? Many millennials haven’t been working longer than a decade, if that.
That accurately describes how Kristy Shen and Bryce Leung felt. The married couple became minor celebrities when they retired from their tech jobs in 2015 to travel the world full time. They were in their early 30s at the time.
Ms. Shen’s wake-up moment came when she watched a fellow I.T. colleague collapse at his desk after clocking 14-hour days and get hauled away in an ambulance. For several years before that, she and Mr. Leung, following the same path laid out by their parents, had tried to buy a house in the ever-escalating real estate market.
But, Ms. Shen said, “it didn’t matter how much you saved, it was a goal post that kept moving. And I was seeing people stressed out paying their mortgages.”
Though they had good educations and well-paying jobs in the booming tech sector, Ms. Shen and Mr. Leung faced the looming threats of outsourcing and artificial intelligence, and had no hope of a retirement pension, or even that their employers would exist in five years.
At the same time, their jobs were all-consuming, their work hours basically 24-7. Rather than chain themselves to a costly mortgage, and therefore to high-pressure jobs, the couple decided to pour their money into an investment portfolio and phase out.
“The rule books our parents have given us is advice that’s perfect for 1970, Ms. Shen said. “We have to throw out that rule book and write a new one.”
Mr. Leung spoke of the challenges his generation faces more bluntly. “We don’t have jobs that will take care of us,” he said. “We have to take care of ourselves.”
Go Where It’s Cheap
By ditching a big city, Ms. Shen and Mr. Leung exemplify another underlying reason for the popularity of FIRE: the high price of urban life, especially in places like New York and Southern California. There’s the insane housing prices, the high cost of child care, the temptations of so-called lifestyle creep.
“We were spending nearly $3,000 a month on rent, and that was considered a good deal,” said Scott Rieckens, 35, who along with his wife, Taylor, 33, and their infant daughter until recently lived in Coronado, Calif., a pricey beach town across the bay from San Diego. “We made something like $160,000 between the two of us, but we didn’t have a whole lot left over.”
After hearing a podcast interview with “the Frugal Guru,” Mr. Rieckens became fired up. He told his wife they should ditch their leased BMW and quit eating out several nights a week.
But even with those lifestyle cuts, the couple couldn’t increase their savings rate substantially unless they relocated to a cheaper community, a deleveraging tactic the FIRE crowd calls “arbitrage.”
The idea, The Frugal Guru said, is “to reap the high salary” of a place like Silicon Valley, “then take that nest egg out to any of the thousands of nice, affordable cities and towns we have in this country and begin a second stage of life on your own terms.”
Last year, the couple left Southern California in search of a community that would give them more financial freedom, a journey Mr. Rieckens, formerly a creative director for an ad agency, is chronicling in a documentary, “Playing With FIRE.”
They ended up in Bend, Oregon, where there’s no state sales tax and they could afford to buy a house. Gas for their used Honda CRV with 186,000 miles (they got rid of the BMW and downsized to one vehicle) is a dollar-per-gallon cheaper than in San Diego.
“The whole retire early thing is unimportant to me. It’s more about gaining control of your time,” Mr. Rieckens said. “If you dive into the definition of retirement, what you’re retiring from is mandatory labor. It’s not necessarily about pina coladas on the beach.”
When You Retire Before Your Parents
Mr. Jensen with his daughter, Daphne, and his wife, Mindy, are in Longmont, Colorado.
In retirement, Mr. Jensen and his wife and two daughters plan to live on roughly $40,000 a year generated from investments. Because his wife currently works, they have yet to draw on those accounts. But already, it’s a life rich on time but short on luxuries: Groceries are bought at Costco, car and home repairs are done by him.
“People always assume there’s an external circumstance: “Oh, you must have received an inheritance,” Mr. Jensen said. “We’ve just chosen to live far below our means. That itself is a radical idea.”
Equally radical is opting out of the work force in your 30s or early 40s, a time of life when men and women are normally leaning into their careers, or, less happily, enduring the daily grind to pay the bills until Social Security kicks in.
Jason Long, a pharmacist in rural Tennessee who retired last year at the ripe old age of 38, said his father had a hard time understanding why Mr. Long couldn’t continue to work and collect his $150,000 salary.
But Mr. Long said he was deeply unhappy in his job, where over his career he witnessed drug costs skyrocketing, sick people battling with health insurers and the over-prescription of opioids and the resulting addiction crisis. His customers, angry, confused, financially stretched, often lashed out at the person behind the counter.
“There were days when I had 12- or 14-hour shifts where I didn’t use the restroom, where I didn’t eat, because so much work was piled up on me,” Mr. Long said.
Like Mr. Jensen, he had been saving a sizable portion of his income over the past decade, and he and his wife had a paid-for-house and an investment portfolio worth a little more than $1 million. Why stick around?
A retirement that starts well before you go gray and lasts 40, 50 even 60 years is an anomaly in modern life. How do you fill all those days, months, decades?
Fearing boredom, Mr. Jensen at first took on way too much, and he found it strange to be at the local rec center exercising alongside senior citizens, or shopping at empty big-box stores on a Tuesday. He also beat his own mother to retirement, which made for awkward family get-togethers.
But one year in, he has settled into his life of leisure, enjoying time spent raising his daughters, making sure they never see him vegging in front of the TV. Mr. Jensen also practices an activity that for man FIRE achievers seems to be the new golf: writing a financial advice blog.
I certainly can’t say they’re wrong with the FIRE approach. I can say they maybe missing an opportunity to find a real passion in life and they have quit before they accepted a goal of finding a job, a career path and a calling that could bring a new diversion to their life.
To each their own.