≡ Menu

Debating FIRE: the elephant’s revenge (Round 3)

Debating FIRE: the elephant’s revenge (Round 3) post image

In round 2, The Accumulator presented his vision for a life of FIRE (Financial Independence Retire Early) prompting The Investor to get Hannibal on his ass by threatening TA with his elephant. Perhaps The Details Man can restore order…?

The Details Man:

Quoting @TA:

“I don’t know when the next bad boss will walk into my life. Or when I’ll be deemed surplus to requirements. Or too old. Or my face doesn’t fit anymore. Or I get a diagnosis I don’t want to hear and realise I never did spend enough time with Mrs Accumulator.”

I feel that’s a key point missing from our discussion so far. Many people don’t get to retire through choice. Retirement is forced upon them. They’re made redundant; become disabled; have to care for loved ones; take time out to raise children and find the ‘flexible work’ promises are empty; or there simply aren’t any jobs for an old coal miner.

We over-estimate how secure our jobs are. What’s more, we under-estimate how long we will live and how healthy we will be. It’s not in human nature to picture ourselves as being old and infirm.

In that sense, planning for early retirement is prudent– even if that’s only a few years before a ‘normal’ retirement age. It is a protection policy against an unfortunate, unpredictable future event. It is also a virtuous circle. The methods underpinning ‘sorting your finances’ help build good habits:

  • Planning for the future
  • Thinking long-term
  • Financial discipline
  • Learning to invest
  • Taking risk in exchange for reward

These will put you in good stead regardless of what happens.

Sidenote: Yes, I’ve read that David Foster Wallace speech. I’m a worrier and a grumpy man by nature. I know several people have questioned whether my work is purposeful. I feel it is – even if it might not seem it to external viewers. I’m good at it, for one thing, and we all enjoy doing things we’re good at. I also know how the rules work and, for better or worse, I’ve come to accept those.

After I quit, I explored the charity/third sector route. I found it wholly unfulfilling. I’m a devil’s advocate and, from my limited experience, they absolutely do not want challenge. There’s also a lot of coasters, inefficiencies and byzantine rules in these places: “We’ve always done it like this so we ain’t changing”. That’s something my friend and blogger Indeedably has also found.

Given I’m able to do interesting work, something I’m good at, on my terms and for handsome reward – it seems like a good deal to me!

The Investor gets personal

The Investor: I don’t feel I need to define new terms for ‘work’ and ‘retirement’ as you ask TA, because I have one that I feel does fine – financial independence.

It is financial independence that enables you to say ‘stuff it’ to a boss, or to a job you don’t like. It’s financial independence that enables you to shift to a different or lower-paying career if required. It’s financial independence that enables you to learn to be a piano tuner or study Tibetan for five years, if that’s what makes you happy.

It is not ‘early retirement’ – that is just one potential outcome of financial independence, and my argument is that it shouldn’t be seen as the prime one.

I’m not sure we even disagree about this, but we’re scuffling about in the arena butting heads, perhaps reluctant to give ground or perhaps caught up in the nets of definitions.

So at the risk of repeating myself, financial independence is a great and worthwhile goal, though not at all costs.

One cost, I’d say, is decades in a job you dislike if not hate. I’m not sure how personal to make this; I don’t want to get noses out of joint, but you’re now explicitly saying you’re okay with your job. But many times you’ve said, on this site, that getting out of that job is a goal because you don’t like it…

In any event, it’s the people who don’t like their jobs, and who pursue early retirement as an explicit goal, that I have in mind when I say get a different job. From reading the Internet and comments, that seems to comprise plenty if not most of the FIRE crowd.

You then talk about putting up with it for “a decade”. I think that’s generously short. If we assume someone earning £40,000 a year gross, saving £15,000 a year – already big numbers for most – then it’s going to take them over 20 years I’d estimate.

I think 20 years is realistic, if you really go for it, and presuming you don’t have (a) a huge salary, or (b) windfall assets from elsewhere (say an inheritance, or you buy before a house price boom and downsize). It matches my experience, too.

Giving up 20 of your very best years to a job you dislike or hate, to bring forward what I suspect will be an unsatisfying ‘early retirement’ for most, is a steep price to pay.

The alternative is to give up, say, 25 to 30 years in a job you mostly like, to achieve the same end. Or to stick to the 20-year plan, but allow for earning say £10,000 a year into normal retirement age, which is completely doable by anyone reading this blog who is capable of achieving FIRE.

We could go around in circles forever, so I’m going to bring in a new point, which is: we live in a society that is centred around earning money and being productive. I know I’m throwing you red meat to savage here, but it’s true.

Now he’s having a go at the monks

The Investor continues:

Stepping entirely outside of ‘normal’ means not just becoming financially independent but also becoming some kind of modern day monk, who not only shuns materialism but also the rhythm that currently makes the world go around.

Some can do it, sure. My observation is that most won’t, and I’m not surprised because it’s a big ask.

You might say that on top of saving 30 to 50% of net income (a vanishingly rare feat), the ideal FIRE-ee can then eschew work altogether. Perhaps that’s true, but I doubt most do.

I’m about as unusual/marginal a high-functioning Monevator-reader type as I know:

  • I long avoided all long-term commitments.
  • I rented with a friend into my 40s.
  • I did save huge swathes of my income.
  • For the last few years, before I bought my flat, people stopped asking me what I was doing because they assumed I’d lost the plot somewhere, seeing me still living my scruffy/cool/tawdry Bohemian investor lifestyle.
  • I didn’t use my excellent degree to get the six-figure salary that I could have earned within five years of university in the 1990s.
  • I’ve switched industries entirely twice and started from scratch.
  • I’ve never had a car and showed it off to the neighbours.
  • I don’t have kids nor respond to any societal or familial pressure to do so.

Bottom line: I’m comfortable being different. I think I could hack it.

Yet I can tell you – even as someone who day-to-day mostly shrugs that stuff off, and who has the wherewithal to reach FIRE – that turning your back on earning money and being economically productive – and rewarded – in 2019 is I believe a big ask.

It’s not that I couldn’t do it.

It’s that not doing it is easier, feels a better choice, leaves me with far more spending money, keeps me engaged with the world because money talks, gives me enough stress to make the non-stressful times sweet, allows me to buy stuff if I want to and to go on holiday, preserves my human capital… I could go on and on.

This is the crux of the debate, for me. If FIRE doesn’t actually mean not working again, then it means financial independence, and working as you see fit. If continuing to work/earn to some degree is accepted as part of the plan, then the plan has more optionality in both the accumulation and the post-FI phase.

Also, if one doesn’t build early retirement up as some kind of wondrous solution, then one won’t wonder what one did with the past 20 years, when one gets there.

Fisticuffs at dawn

I know you’re very thoughtful about all this. But if I may, five years ago you borderline dismissed such talk.

I agree the evolving discussion has helped bring these ‘what next’ issues to light. And, before you jump in a car and drive to challenge me to fisticuffs, I’m not meaning to be patronising. I was like that, too.

There are still explicit “let’s leave work and retire!” articles on Monevator I wrote from the very early days! I had a taste of it a decade or so ago (I wasn’t FI but I didn’t need to hurry back) and I started to notice the trends I’ve discussed, and I changed my view.

I remember one prominent early retirement blogger who hit his number while still working hard and then wrote a commendably candid post saying that previously hated work was now mostly de-stressed. He knew he could do what he wanted, management treated him differently, he had options.

Some readers said this was because RE was now in reach. But I noted at the time that this was really the power of financial independence – not the promise of RE, but the reality of FI today. Independence and choices.

This blogger proceeded to his dream RE and was metaphorically staring into space within six months. He’s done the community a huge service in continuing to write about this, because he’s the quintessential hard-driver who believed that he’d thought hard about post-work, and discovered that it wasn’t enough.

I don’t know – perhaps we all have to learn this for ourselves?

Blimey! Will The Accumulator challenge The Investor to fisticuffs? Will he blow money on petrol just to fight The Investor quicker? Find out in Round 4 – The Accumulator goes completely nuts! Comments are turned off until the final post.