This is an article about personal finance.
Sorry about that. You probably didn’t come here to be told you could save money on your car insurance. And you don’t need to be reminded that you could easily afford a house somewhere you don’t want to live if only you scrimped on flat whites and avocados. At Men’s Health, we pride ourselves on not being your father-in-law.
But something has been stirring on the personal finance dark web – something subversive and perhaps a little cultish. “I see earning money like a game that I want to beat,” the anonymous Saving Ninja puts it on his or her blog of the same name. “It’s fun. Being a completionist is in my nature. I need to get that high score.” The Saving Ninja is part of Fire, a movement built around the twin aims of achieving “financial independence” and “retiring early”, ideally in your thirties or forties.
Success requires an obsession with your balance sheet, as well as an iron discipline with regards to Pret baguettes. It also demands an anti-consumerist spirit and the level of commitment you’d need for any training regime. Indeed, for many of Fire’s adherents, the discipline required to put away 40%, or even 80%, of each pay cheque benefits from training of a more literal sort.
“If you want the mentality to do this, first you need to improve the clarity of your thinking,” says Barney Whiter, 48, who blogs about his personal finance at theescapeartist.me. “If you’re a cubicle rat, leading a sedentary lifestyle, it’s a natural reaction to comfort-spend on holidays and takeaways, and so on. People get run down.” Weight training helped him to end this downward spiral. “It changes your mindset… Get yourself out of doors, exercise.” Whiter retired from accountancy at 43, having saved half of his salary over two decades. Five years later, he spends his time lifting weights, blogging and hanging out with his kids, while “watching all the wage slaves trundling towards the station like zombies every morning, to work in jobs they don’t like”.
Self-preservation Society
The Fire movement is American in origin, dating back at least to the 1990s. It is particularly popular in the accelerated economies of Silicon Valley – the land of libertarianism and spreadsheets – but it isn’t restricted to highly paid tech bros. If you’re earning £10,000 per month at Facebook, say, you have many more options than someone living precariously in the gig economy. But since the financial crisis of 2008, ordinary people have begun to question the logic of our consumerist, credit-dependent society.
A whole ecosystem of blogs and podcasts has sprung up. Reddit forums (such as r/financialindependence and r/fireuk) abound with income calculators and advice. The Canadian-born blogger Peter Adeney, aka Mr Money Mustache, welcomes millions of visitors to his site each month. He retired in his mid-thirties after saving about 50% of his salary while working in “standard tech cubicle jobs” and growing tired of hearing his middleclass compadres complain about how expensive everything was over high-price microbrews, or in financed Subaru SUVS.
“The whole country seemed to be displaying the same odd behaviour: living ridiculously expensive lifestyles while thinking they were completely normal,
and then being baffled when they had no money left over,” he notes. Imagine a more philosophical version of our own Money Saving Expert, Martin Lewis. “The whole reason for doing any of this,” Adeney wrote recently, “is to lead the happiest, most satisfying life you can possibly lead.”
This spirit of individualism speaks to a deep part of the American psyche. The 19th-century philosopher Ralph Waldo Emerson described society as a “jointstock company” that fed its members at the expense of their “liberty and culture”. But what if this joint-stock company were going out of business? In that case, Fire isn’t simply a matter of securing a life of leisure in your forties. It’s an act of subversion – and of self-preservation.
“This is also a response to the decline of jobs for life,” says Whiter. “It’s insanity to work in an economy where something like 10% of people get made redundant each year. Companies are continually restructuring. Automation is coming. AI is coming. The idea that you can leverage yourself to the hilt is crazy.” As more than one British Fire adherent points out, it’s far easier to achieve financial independence in the UK than in the US. The groceries are cheaper here, and there’s arguably less social pressure to spend. We don’t need to worry – as Americans do – about health insurance. And we have access to numerous benefits that Americans don’t get to enjoy. Parental leave is one. ISAS are another. Then there’s matched betting, a legal, online gambling hustle that some British Fire-heads claim earns them as much as £5,000 per month. We have the tools. It’s just a case of exploiting them.
Cheques and Balances
“My goal is to become financially independent within 10 years,” says Indy Hothi, 30, a strategy consultant who lives in west London. “That means having an investment pot of about £1m.” Hothi works in finance, which gives him a double advantage: he is financially numerate and relatively well paid. He currently earns about £4,000 per month, all of which he puts into savings. His wife is a teacher and earns £36,000 per year. Both live on that.
While most of his colleagues feel the need to base themselves within walking distance of a decent café, Hothi lives in a modest home near Heathrow airport. “It was the cheapest place we could find within commuting distance of my job,” he says. He also makes all of his own lunches and only reads the Economist – he believes that limiting his exposure to the media, and thus advertising, helps him avoid getting sucked into a consumerist mindset. “As a millennial, I can’t get rid of it entirely, but there are lots of tools to block this stuff,” he says. “Just because I searched for something online, it doesn’t mean I want to be targeted with ads.”
None of this makes him feel that he is missing out. “I’m fortunate that, as a consultant, I understand what businesses do to drive demand,” he explains. “Our lifestyles are all about replacing products, and those replacement life cycles are becoming shorter and shorter. I realised
“Jobs are no longer for life. AI and automation are coming. It’s a matter of survival”
early on that these products don’t buy you happiness. They really don’t.”
Behind the spreadsheets, he says, is “a philosophical problem. There are actions that anyone can take – going without coffee, say – but underlying it all is a question of value. It’s about fulfilment and understanding yourself.” For Hothi, as with many Fire advocates, the retirement part is misleading. He says his wife will probably continue to teach after reaching 40, but because she enjoys her job, rather than out of necessity. “My passion is for social enterprises in developing economies,” he says. “Financial independence will allow me to focus on that.”
I put all this to Adrian Lowcock, head of personal investing at Willis Owen, who specialises in a more “your father-in-law” school of financial advice. The working assumption of Fire-heads is that you’ll need a savings pot in the region of £1m. They reckon you can reasonably expect a 3-4% return on that (ideally spreading it around a mixture of ISAS, assets and shares), so it should provide around £40,000 per year in perpetuity.
Lowcock cautions that it’s not quite as simple as that. “You need to factor in inflation,” he says. “If inflation is 3%, say – currently, it’s around 2.1% – the buying power will halve in 23 years’ time. That means your £30,000 will buy £15,000 worth of goods. There is a negative compounding effect, as prices are always going up.” He stresses that financial planning is a marathon, not a sprint. It’s naive to think that you could work for 20 years and then sit back for the following 50. But he agrees that a reckoning is overdue when it comes to our collective reliance on credit. In a survey of 2,000 British workers by the RSA and Populus in January last year, 40% said their finances were permanently precarious, 32% had less than £500 in savings and almost 30% were concerned about their level of debt.
“It’s a huge concern to me how little savings people have,” he says. “Government policy stretching back years has made it much easier for people to access debt than to save.” And its limitations are becoming clear. “When I was growing up in the 1990s, the future seemed so rosy,” he recalls. “We spent a lot. It’s taken 10 years since the financial crisis for changes in attitude to seep in. I have an 18-year- old niece. She doesn’t go to the pub. She doesn’t drink. She’s very focused on her career. I don’t like categorising generations, but the outlook has never been rosy for millennials. They realise they have to look after themselves.”
System Failures
Jonathan Wilson, 28, is an engineer who works (remotely) for a manufacturing firm in Birmingham. He and his partner are hoping to achieve financial independence in their forties. They both entered the workforce in the aftermath of the financial crisis. “My first job was sold to me as a great opportunity, but my pay barely went up beyond the low £20,000s. It didn’t matter what I did; I wasn’t getting any raises.” His girlfriend, meanwhile, was earning a decent wage in online marketing but working in a “toxic environment” and getting home miserable each evening.
“I realised that without ‘Fuck you!’ money, I couldn’t just get up and walk out of a job,” says Wilson. He defines “Fuck you!” money as three to six months’ wages. “It’s what you need to be able to tell your boss that you’re not putting up with it any more. When I didn’t have those savings, I didn’t feel like I had any power.”
After he moved firms, he was able to lift his salary above £40,000, but the more significant development came when he earned the right to work remotely. Wilson reckons that, by eliminating workplace chatter, he can get through his daily to-do list in just a few hours. His girlfriend, meanwhile, took a pay cut to become selfemployed. Both have cut down their costs. “What I’ve found is that the more pushed you are for time, the more you spend. People who work lots of overtime tend to buy takeaways and taxis to compensate.”
He saves £1,100 each month from his take-home pay of £2,300. “My savings rate is 48%, so with a withdrawal rate of 4%, that gives me 20 years to retirement,” he explains. He puts £500 per month into a Vanguard account, £200 into a Help to Buy fund and channels the rest into his “Fuck you!” fund. He and his girlfriend buy most of their food in bulk from Asian supermarkets. “Don’t hit any of the middle aisles. You want vegetables and dried goods. We eat vegan most of the time.”
How does he feel when he sees his peers on a night out? “I prioritise my own health,” he says. “I compete in combat sports. I do yoga and a lot of training. I find that much more rejuvenating than drinking at parties. Living in a consumerist society, you’re constantly told you can buy happiness, but you can’t. What you can buy is freedom.”
When he describes where he grew up – the once-thriving industrial town of Maryport in Cumbria, now mostly boarded up – his priorities make far more sense. “There’s been a cycle for hundreds of years: a new industry comes in, people move to the big towns, but then it all runs out. My dad worked in the steel industry. At its peak, it employed about 6,000 people in a town of about 12,000. Eventually, that fell to 300, 400 people, then it was sold up. The town’s only recovering now. I never want to be in that situation: stuck with a house worth half of what I paid for it and no job prospects.”
He has seen the same process at work in manufacturing. “About 25% of jobs in my sector will be automated by 2030,” he says. “There are no long-term prospects. I know from speaking to people that there’s a lot of borrowing. They talk quite casually about their £10,000 credit card debt.”
He is now considering moving back in with his parents to save the £750 he pays on rent, and perhaps reduce childcare
costs in the future. “It’d be great to move back to Maryport and contribute a bit. It’s cheaper to live there, so we’re thinking we could even start a business. A large part of my previous role was teaching. I’d love to teach people advanced manufacturing, or engineering in schools.”
Money Talks
Callum (not his real name), a 33-year-old industrial analyst in central Scotland, also values financial independence above retiring early. He and his wife are saving half of their £55,000 joint income in the hope of going down to two or three days a week in future. He acknowledges he is lucky to live in a relatively cheap area, and to have been able to live rent-free at his parents’ house while he saved for a deposit on his house. But for him, Fire is a matter of necessity. He has a chronic respiratory condition. “I don’t know how long I can work without my disability wrecking my career,” he says. “The lower my spending is now, the less I have to reduce expenses in the event of severe illness. In the meantime, I will save more, too.”
The post-crash era has taught him self-reliance. “I hated relying on the government, as things can change at any moment,” he says. He turned to Fire after having the “creeping realisation that the government will fuck up the economy, then make the worst off pay for it.”
Callum is dismissive of the gamification of finance among some Fire enthusiasts. Many, he says, are high earners in denial about how easy this is to enact for ordinary people. Moreover, “It’s not worth increasing your savings rate by an extra 2% if it makes you miserable. We would save £4,000 a year if we didn’t take holidays, but life is what happens between now and retirement and I don’t want to spend it eating rice and beans in a studio flat, with the heating turned off in winter.”
While not everyone will be able to retire at 40, Fire’s principles can help pretty much anyone. “I have friends who make £40,000 a year, yet have as much money saved – zero – as others who are unemployed. That’s bonkers,” says Callum. Whiter echoes this point. “The extreme examples get the attention. Mr Money Mustache saved more than half of his income and retired at 30. Let’s be honest, most people won’t do that, but the idea is relevant. You don’t have to retire at 30, but why not at 55? It’s just about not being an idiot with your money, not being ripped off by consumerism. Everyone can get better with money. Money is power – power over your personal life. It can be used for good.”
“You’re told you can buy happiness, but you can’t. What you can buy is freedom”