Why the Term FIRE is Misleading
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As you probably know by now the acronym F.I.R.E stands for,
Financial Independence Retire Early
On the face of it this is great acronym because it really sums up what the movement is in neat little phrase you can use to remind yourself what you are trying to do. The first part of the acronym is pretty clear to most people I think. Financial independence basically means you want to have enough money coming in from investments or other sources of passive income that you do not need to work to make ends meet.
The second part of the acronym is less clear to most people since what they understand as retirement is not what they want to do or what they see financially independent people do. When most people consider the phrase retire early they think,
· Lounging on a beach
· Playing endless rounds of golf
· Constant traveling
· Other leisure related activities
But if you are only 45 years old when you retire do you really think that you are going to just play golf or sit on a beach all day.
What’s more likely is right after you “retire” you will take some time off to sit on a beach or play lots of golf but after a couple months of that you are probably just going to be bored of doing that. Humans beings are not wired to just sit around and do nothing and people that were able to work hard and retire much earlier than usual are even less likely to just sit around.
So get they get off their duff and they pursue what they enjoy doing. Well a funny thing happens when you get to do something you enjoy all the time. You tend to get really good at whatever it is you are doing. When you are good at something people take notice and if that something you are good at can be sold as a product or service pretty soon you have people asking you to do that very thing you enjoy doing for,
So now you are “retired” but every now and then you get asked for help with something and then you get payed for your time or what you produce.
Does that mean you are still retired?
A lot of people out there will start to cry foul right about now saying that no you are not retired because you are getting payed to do work. But that is very narrow way of looking at retirement. Why does retirement mean the absence of work? All retirement really is is that you don’t have to work to meet your living expenses. By that definition once you have reached financial independence you are retired. What being retired really means is that you are free to pursue what you want to do. That can mean sitting on beach or traveling but it can also mean starting a 2 acre urban farm (my dream by the way) where you spend all summer growing and selling delicious food. Just because I don’t need the money from my farm that doesn’t mean I don’t deserve to profit from my time and expertise.
So yes, you can be “retired” and still make money there is nothing wrong with that. But since there is so much hang up on the term Retire Early it might be time to ditch the retirement part of FIRE and call it something else.
To that end I give you
Financial Independence Freedom Early
Because that is all it really is you are pursuing financial independence so you can have the freedom to live your life that way to want to live it. FIRE is not about retiring it is about buying your freedom from the rat race of having to do something you don’t enjoy doing anymore. So if you get hung up the retire portion of the FIRE movement then just substitute the R for and F and you will get to the exact same place without the emotional angst.
I however will be sticking with the acronym of FIRE because I have no problem understanding what the retire early portion of it really means. Plus I really like how it sounds in my head when I am considering a potentially superfluous purchase. When I am considering buying something useless I just whisper,
To myself which reminds me what I really want from my life and to not waste it on something that wont bring real value to me.