The FIRE Movement

Joe Millennial spends a bit too much time on Reddit and decides to try something called The FIRE Movement. FIRE stands for Financial Independence, Retire Early. He reads of people retiring at age 35 (or even 30!) and having scads of time to pursue their dreams, unshackled from the drudgery of their stultifying 9-to-5 jobs.

So here is how it goes.

Joe graduates from college and gets a job in the cube farm for $80,000 a year. He gets the cheapest apartment possible, rides a bike instead of driving, and eats ramen noodles. He does this for ten years, saving up to 70% of his income, and investing it in low-cost index funds. At the end of ten years, he has a million or so saved up, more if he is lucky. At that point, he retires to play the guitar or paint happy little trees, and gradually draws down his savings over time. If the stock market keeps going up as planned, he can stay retired for 50 more years, and get really good at guitar.

The is the fucking stupidest thing I have ever heard of in my life.

In no particular order:

1.     I am not a big fan of unstructured free time. If you’re like me, you probably know some Boomers who have retired poorly. They had visions of going to the beach, traveling, or visiting the grandkids, and instead they spend their days in the living room with the brown carpet with Fox News turned up to 11. Retirement is hard. If you don’t have a plan, you will descend into loneliness and despair, with Fox News as background noise. If you retire in your thirties, you will spend a lot of time playing the ding-a-ling banjo. After a few years of such self-abuse, you will write a book that nobody reads, play songs that nobody hears, or start a blog that nobody clicks on. You will accomplish nothing. You will live a life without accomplishment or purpose. But that’s not even the worst part.

2.     The worst part is that you will spend every waking moment hawking over the movements of the stock market. If the stock market goes up, you can stay retired. If the stock market goes down, and stays down, you will have to get a job, which will be impossible if you have a ten-year gap in your CV. If you’re financially trained, you know the periodicity of corrections and bear markets and great bear markets. Over the course of 50 years, there will be lots of ups and downs, and at least one occasion where the stock market goes down 50% or more. If that happens, you will be shitting your pants. You will be paralyzed with fear. Retiring at age 35 sounds interesting in principle, but it in practice, it would be hell. Imagine being completely idle and have nothing to do except worry about your small pile of money turning to dust.

3.     This is a fact: material things bring us happiness. It is good and right and a joyful thing to see a fancy new jacket in a store, try it on, look in the mirror, whip out your credit card, wear it out of the store, and show it off to all your friends. To deny yourself a lifetime of material possessions is insanity. You’re not Gandhi. The FIRE movement is not a savings and investment movement. It is an anti-consumption movement, and it has its roots in environmentalism. If you don’t buy something, it won’t end up in the landfill, and you will lead an entire life without any impact on the planet. These people are the cheapest of cheap fucks on the planet, because they believe that consumption is evil. They will agonize and obsess over a dollar. All their kids are going to end up in therapy.

4.     The FIRE people typically use very generous return assumptions on their investment portfolios. They generally think that the stock market returns 12% a year. I have seen the 15% number thrown around. The stock market does not return 12% or 15% a year. It returns a little over nine percent. So what these ding-dongs do is build a spreadsheet of their earnings and extrapolate it out 50 years, thinking that they are the first people on earth to discover compound interest. And sure, if you are compounding at 12%, the numbers look pretty good. But there is no rule that says that the stock market will return 12% a year. The conditions that led to prior returns might not be present for future returns. It’s a belief that these 12% returns are an immutable law of nature, like gravity. Really, it’s an article of faith. You’re betting your life and your life savings on the idea that U.S. stocks will be the most attractive destination for capital over the next 100 years. I am not so sure, certainly not sure enough to bet my life on it.

5.     The one thing that all the FIRE people have in common is that they hate work. Like, they really, really hate their jobs. I have a theory on this. Happy people like their jobs, unhappy people don’t. It doesn’t matter what job they have; unhappy people will be unhappy no matter what they are doing. They talk about the “soul-destroying” 40-hour work week. I don’t know about you, but I like the 80-hour work week even better. I have something in common with Mike Bloomberg—my favorite time of the week is Sunday night, because I am so excited about going back to work the following morning and do shit. The Sunday Scaries are for cherries. I’ll go further and say these people are lazy pieces of shit. Can you imagine employing one of these people, plotting and scheming to do as little work as possible, counting the days until retirement, shirking and malingering, creating negative value in the process? Imagine a person whose goal is to produce nothing, consume nothing, and merely exist, stealing everyone else’s oxygen in the process.

You know who is responsible for this ridiculousness? White people. More specifically, white guys in checkered shirts with ironic moustaches in Longmont, Colorado. One of the questions you have to ask about finance fads is: what if everyone did it? What if everyone retired at age 35 and played the ding-a-ling banjo? Well, GDP would go to zero and the stock market would crash. Investing only works if other people are working. So really, the FIRE people are the ultimate free-riders, piggybacking off the efforts of others, while contributing nothing but blog posts and Instagram reels about Van Life. The FIRE movement has no political overtones, but it’s worth pointing out that its adherents are predominantly liberal, because no self-respecting conservative would spend one second considering the possibility of dropping out of society and covering “Hey Soul Sister” on the ukulele. The FIRE people also have a poor understanding of how capitalism works—the stock market is a function of corporate profits which is a function of output, which requires everyone to chip in. The stock market is not magic beans, and it is not number go up. An elegant solution to the problem of not enough money is to make more money, which never occurred to these dingbats.

The one thing you consistently hear from the FIRE folks is that they are quitting their jobs to pursue their dreams. I don’t know about you, but I can only spend so many hours a day pursuing my dreams. Like, I can’t DJ all the time. I simply could not fill the hours. You know what I can do all the time? Work. Because my vocation is my avocation; I am a writer, and writing is work, but also fun. I spend twelve hours a day doing what I love. If you don’t like working in the cube farm, maybe find something you like better instead? Maybe you like making hematite rings and selling them on Etsy. Maybe you like cats and you start a cat café. Here is where things get interesting, though: there are a lot of people out there who think that if you are making money doing something, it can’t be fun. It is a business, or an artistic pursuit, but it can’t be both. It absolutely can be both.

My audience tends to be finance people, and most finance people think the FIRE movement is pretty dumb, so I am preaching to the converted. I don’t want to consume nothing and produce nothing—I want to produce a lot and consume a lot. That is pretty much what life is all about. Live hard and leave a smoking crater. Just because we have possessions, doesn’t mean our possessions own us. Stuff isn’t who we are—relationships are more important. But go out and buy a new Rolex and tell me that stuff doesn’t make you happy. The Rolex doesn’t make you happy—it was the virtues it took to make the money that you bought it with, which is something the FIRE people will never understand.

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