Even cavemen wanted to be financially independent.
… And retire early (obviously). The idea is nothing new. In the last few years, the desire to be financially independent has been lit on fire by the FIRE movement (Financially Independent Retire Early).
They’re a bunch of weirdos that live the worst quality of life imaginable.
Where FIRE started
Your Money Or Your Life is the book credited with starting the movement in 1992. The mantra was choose to live instead of work yourself to death.
Some popular quotes I like from the book:
- “Endless desire is one of the pitfalls of human nature, and one of the first things you need to cure if you want to get ahead more quickly.”
- “Financial Independence has nothing to do with rich. It is the experience of having enough — and then some.”
- “Waste lies not in the number of possessions but in the failure to enjoy them.”
That’s where the fun ends kids.
The author died young so it wasn’t until the 2000s when FIRE came back again to haunt us. A blog started in 2007 called Early Retirement Extreme by Jacob Lund Fisker is the first one that became popular.
Then in 2012 Mr Money Moustache roared onto the scene peddling the same BS. The FIRE movement also found a home on Reddit.
“FIRE” sounds like caveman living
While scrolling through these blogs I inhaled the lifestyle they were peddling to see what I could learn.
See if this sounds good.
Eat lentil soup or tuna salad every day of your life. Instead of using air conditioning in the hot summer, just learn how to sit in a puddle of your own sweat.
Don’t live in a house or apartment as that’s for spoilt people. Live in a car or old boat. Make your soap from scratch instead of buy it. Get your furniture donated to you by your co-workers so you don’t have to buy it. Take that Ikea! Get rid of your hobbies as they’re too expensive.
Pick hobbies like walking — even if you hate them — because they’re free. Keep a spreadsheet of your income and finances and check it twice a day.
I knew my net worth down to the cent (by the minute too) — Jacob Lund Fisker
Does this sound like the good life to you?
It sounds like a f*cking nightmare. I’d rather die than live like this. Seriously it’s the 2020s for god sake.
FIRE Movement equals scarcity mindset
Watching every dollar is a pain in the ass.
There are better things to do with your time. I blame the FIRE movement on pessimism. When you live like an optimist you believe the future is going to get better and your earning capacity will improve.
You live a life of self-education where you grow your skills and get paid more along the way.
How you think has more to do with your finances than anything else. Think like a caveman and you’ll live like a caveman — literally.
The cliche money advice every FIRE cult member lives by
If you’ve seen the FIRE movement before, you’ll know they practically want to hump every index fund owner in history. They love this finance product.
“Buy index funds” they say.
I recently asked a high-profile money blogger about index funds as research for this article. Here’s how the conversation went:
Me: “Index funds (S&P 500) are supposed to produce a roughly 9% annual return. But inflation is 8.2%. So I make .08% before tax?”
Money blogger: “Over the past 100 years inflation has been historically 2% so this isn’t normal.”
So let me rip this BS index fund religion to pieces. Most people talk about the returns before tax. I pay 50% tax so I can’t just forget about them. Soz money bros. Second, inflation isn’t 2% and never has been.
Inflation is calculated by the government and they have a vested interest in lying about the figure (I’ve written about it in-depth here).
The central banks and government creates money out of thin air to pay for things like wars and bat viruses. When they do this they devalue currencies like the US dollar.
So when the official number right now is 8.2% it’s more like double that. All of a sudden these 9% returns don’t look so high anymore. In fact the people who don’t do the math sound as if they’re high on angel dust.
(By the way, I’m not saying never buy index funds. I’m just saying don’t fall for the BS as they’re not the holy grail they’re made out to be — otherwise we’d all be Lambo millionaires.)
Index funds are the pillar of the FIRE movement. Without them there is no passive income to fund their caveman lifestyle.
One good thing about this dumb FIRE movement
Okay let’s not be entirely negative.
Every dumb movement has at least one valuable lesson or tool. The FIRE movement teaches people to calculate everything they buy in hours instead of dollars. I love this.
A $10,000 car doesn’t sound that costly. But when you have to work 333 hours to get one it sounds bloody expensive.
This psychological trick stops you buying dumb stuff.
The solution to the FIRE movement that doesn’t light your fun on fire
So what’s the answer then?
Make more money. Read that again.
That’s right — don’t make your lifestyle worse than an ant with several missing legs. Learn how to make more money. This never used to be as easy. But now, thanks to the internet, making money online is possible.
You don’t need a degree or a permission slip. There’s zero barrier to entry. You just turn on your computer and enter a question into google. There’s infinite ways to make money online and you’ll never run out of people with money because there are billions to choose from.
You can waste your time making your own soap and begging work colleagues for handouts that destroy your reputation, or you can google side hustles and invest your time there.
Choice is yours.
Life is too short to live with a scarcity mindset. Make more money instead.
This article is for informational purposes only, it should not be considered financial, tax or legal advice. Consult a financial professional before making any major financial decisions.