FINR, Not FIRE
I continue to be fascinated by the FIRE movement which of course stands for Financial Independence Retire Early. I love the financially independent aspect of the idea but I believe there is a mountain of regret waiting for the majority of people who actually retire before 40. Arguably there is a lot of regret for most people retiring before 50. I wrote about this last week and one reader who is 33 and retired with $500,000 accumulated commented that I don't get it. Maybe I don't get it but of course it would be worse for him if I do get it, if the things I am warning about related to very little Social Security, very little resilience to financial one-offs and some of the other concerns I have raised do come into play for these people.
As a repeat from past posts on this subject, I believe part of what we're seeing is an inability to look down the road to envision obstacles, financial and otherwise, that come up for everyone; veterinary bills, new tires, a broken arm that is costly in terms of your deductible, something in/on your home that needs fixing, a costly once in a lifetime experience that you'd regret forever if you passed up which one example for me would be the chance to be the third guy on one of the rigs below in the Dakar Rally. This is not very likely but there aren't that many degrees of separation between me and this crowd and I would jump at the chance.
The New York Times threw its hat into the discussion with an article profiling several people who retired at very young ages. A recurring theme for these folks seems to be a sense of burnout and in the case of the pharmacist from Tennessee, genuine dread. I believe the NYT article tries to explore the risks involved as well as the chances that these people will go back to work but there a couple of comments that I found to be depressing, depressing in terms of evidencing a sense of boredom from literally not working. A comment from one of the profiled FIRE people in describing his day said "...watched the ceiling fan spin around for a little bit” and another comment was about having watched 660 movies from the top 1000 as ranked by some website. If 660 is accurate, that's about 1300 hours. Read it and draw your own conclusion, maybe I have it wrong.
While I don't believe the majority of FIRE retirees are vegging out, that aspect of it, however common, will likely promote unsuccessful aging and while there is a qualitative component to this observation, in instances where it turns out to be correct life for them will be costlier medically which makes this even riskier.
Part of why this topic resonates with me is that I have been living a version of this (I think it is related) since I was 37, I would tweak FIRE to FINR; Financial Independence Not Retired, pronounced at finer. I have mentioned a jokey bit that my wife and I have where I will say I think I am going to retire. She will ask me what I plan to do with my time when I retire. "Oh," I say, "I'll probably get up, see what's going in the markets, place a trade if necessary, go the gym later on and then write a blog post." She replied "so you're just sick of getting paid for that then?" The joke being, I am lucky enough to be doing exactly what I want to do (FINR) and have no interest in retiring but realizing that when I am 85, there won't be too many people eager to hire someone that old.
The NYT talked about a type of "arbitrage" favorable to the FIRE community which involves moving to some place that is very inexpensive compared to a bigger city. Here's a Marketwatch piece that looks at just such a town in Colorado (go to slide number 6). In moving full time to Prescott in 2002 I think we did this. As I embarked on the current phase of my career as a self employed investment advisor, our monthly nut was around $1200 which is kind of difficult to replicate now due to what has happened to health insurance, we were paying less than $300/mo. We had a decent emergency fund to help with expenses if needed (we were lucky though with this) and had a little bit in IRAs but the idea of retiring was not a consideration on two levels; financially and for sense of purpose. The idea of being financially independent was very appealing; not having a boss, the early-ish days of the internet making it infinitely easier to work from anywhere and being able to manage my own time everyday with no commute sounded like absolute nirvana, all the more so if that idea could be built into a sustainable income.
One very common endeavor taken up in the FIRE community is blogging about FIRE. If you're reading this post then you might be aware I have been blogging since 2004. I've never had much luck monetizing the blog directly but it lead to a long stint at TheStreet.com that paid very well and then a little shorter stint at AdvisorShares which for the time spent was very lucrative. For now I am trying to make a run at blog monetization with The Maven and while that hasn't worked out yet I am optimistic that it will and if it doesn't, I believe something else can come along in this regard all as a secondary gig to my primary endeavor as an investment advisor.
I've made the comment before that starting this phase of my career in 2003 is when I arguably retired but really, more like it is when I became financially independent. It is crucial to understand that this was far more about having very low expenses than having money in the bank. In laying this all out, I took parts of what became FIRE and applied them to my circumstance and interests. This relates to what I regularly saying about investing which is to take bits of process from various sources to create your own process.
This new phase of my career also opened up a huge opportunity that I didn't realize at the time how big it would become related to my volunteer firefighting gig. I've been volunteering since 2003 and have been the chief of our department since 2012. I've often said of blogging and volunteering both, the more you put into it, the more you'll get out of it in terms of doing things you'd never otherwise do and meeting people you'd never otherwise meet. Encapsulating this idea, in the span of five months I participated in ringing the closing bell at the NYSE (came about by virtue of blogging) and met Doug Ducey the Governor of Arizona (came about by virtue of volunteering).
Any trip to the NYSE is a treat and while meeting a Governor may not be in anyone's top ten, it's still pretty cool.
Being able to derive purpose from work and volunteerism makes life enjoyable and interesting. Purpose doesn't have to come from work for people who can actually afford to retire at a very young age but I would hope for anyone that they find as much purpose in their lives as I do from my work and my volunteerism. In the context of monetizing a hobby to supplement income in retirement, I long ago figured out how to monetize the firefighting as an EMT or as part of one the Incident Management Teams that manage large wildfires out west. This is a door that I am pretty sure is open to me should I ever need it or should my interest in that endeavor ever increase. FINR.
The commenter I mentioned above with $500,000 at 33 is off to an outstanding start but the odds are very much against that amount of money sustaining for 60 or 70 years which is probably what he needs. It wouldn't be a given that $500,000 could last for 30 years. It probably could last for 30 years but one bear market coinciding with the bad luck something unexpected and very expensive could trigger some big (as in downsized) changes.
Part of my motivation behind some of the topics I write about, like in this post, is to encourage people think outside the constraints of the normal punching a clock career wishing away every week to the weekend, being over-indebted and carrying a lot of unnecessary stress.
Furthering this idea I am thrilled to announce that I have self published a book on Amazon called Random Roger’s Rules: Building Blocks For A Happier Life.
It is a list of 100 simple rules (like heuristics) that focuses on basic philosophy, diet and exercise, career, volunteerism, investing, personal finance and retirement that are geared to removing obstacles that get in the way of people's happiness.
Being sick briefly as a kid helped me figure some things out for myself a little earlier than I think I otherwise would have. When I write blog posts that are related, the response is typically very positive, friends/blog readers seem interested in this type of content from me. Often friends and colleagues come to me for advice.
The book is also a fundraiser for Walker Fire. Half of my net proceeds will be donated to the department to hopefully go toward buying a newer fire truck unless after one year the revenue from the book is less than $50,000 in which case it will go to the department's general operating fund.
This is the first time I've done something like this so the layout may be a little clunky but I think the content can help a lot of people.
I hope you'll consider buying the book and telling friends about it. Feel free to ask any questions publicly or by messaging me privately. Thank you!