Retirement: FIRE is still on fire
In the early days of the coronavirus pandemic, some called into question whether the Financial Independence, Retire Early movement would survive the recession and job losses that swept the country.
The idea behind FIRE is to save and invest enough money that at an early age, you can live on passive income, making work optional. Joblessness and steep declines in the stock market roughen the road to early retirement. But two years later, it’s evident that the transformation the pandemic sparked in Americans’ work and personal lives is fueling the movement.
As remote work becomes more commonplace, employees are increasingly able to “geoarbitrage” — live in a location with a lower cost of living while maintaining the same salary, allowing them to save more of their income. Plus, to reduce the spread of COVID-19, many people have stayed home more, spending less on dining out, entertainment and other pursuits.
Normally, undergoing such lifestyle changes comes with some social friction. Scott Rieckens, who documented his family’s entry into the movement in the 2019 film “Playing With FIRE,” knows from experience.
“People kind of looked at us weird because we were essentially shifting our identities in front of their eyes,” says Rieckens, 38. “The pandemic gave us all an excuse not to go out and to readjust those social settings.”
And as much as anything else, the pandemic has spurred individuals to evaluate what’s important to them, with some deciding that their job doesn’t make the cut.
“Layoffs and reorganizations may have given some people a taste of freedom,” says Pete Adeney, writer of the prominent FIRE blog Mr. Money Mustache. “I think part of the ‘Great Resignation’ we’ve been reading about in the news is people taking early retirements and choosing to stay home with their kids or start something new.”
In the past few years, FIRE has also drifted from the mind-set of extreme frugality that was once central to the movement.
“FIRE was almost competitive in nature when I first found it,” Rieckens says. Much of the conversation was around drastically cutting back on expenses and speeding toward the “FI date” at which you planned to achieve financial independence; Rieckens’ documentary occasionally flashes to his family’s savings rate and the number of years until they could retire.
Today, he and his wife, Taylor, aren’t focused on their FI date. They enjoy their work, and their young daughter is now in elementary school, freeing up more of their time.
Many FIRE devotees place heavier emphasis on the “FI” portion of the acronym. They strive for financial independence so that they can shape their lives around what makes them happy, regardless of whether a paycheck is involved.