I personally always find it worthwhile hearing opposite points of view and like to be challenged so I can more often than not come to a more nuanced accurate view of things. I have therefore spent the past few days researching the many criticisms of the FIRE movement that different people have put across in various articles across the Internet.
I wanted to pick some of the common themes that come up and then paraphrase parts of those views followed by sharing what I personally think of them. I have found a kernel of truth in these particular criticisms and I have chosen these precisely for that reason. I’d love to then hear what you also think in the comments as always.
1 -It requires deprivation
I would say by far the most common negative theme is that in setting out on a journey towards FIRE, you will be deprived in different ways. There is essentially going to be deprivation of happiness in the here and now.
Living life on fast forward, waiting for the FIRE date
You work a job you really dislike. The thing that keeps you going is this future in which things will be so much better. You will no longer need to work for the man. You will be free, free to live your life to the full. Checking your spreadsheet and using a FIRE calculator provides so much joy. You have a countdown clock and cannot wait for the time to come, 3 years, 7 years, 18 years.
The problem is though that Life is for living now, you need to stop sacrificing your life now and rushing towards a future utopia that will not be the perfect dream you imagine, life doesn’t work that way. Live your best life now! You could be dead tomorrow.
My own thoughts
I think the brunt of this argument is that you will not be living your life now to the full if you pursue FIRE as a goal. You will be in essence wanting to fast forward life to this point of trigger pulling and that will be at the expense of now as you will be more focussed on the future than the present.
I think there is some truth to this but that applies to almost any pursuit or goal and isn’t just about FIRE. It’s all about the balance of wanting to enjoy life now whilst still wanting to improve things and having things to look forward too. If we truly did live like it was or very likely could be our last day on planet Earth, we wouldn’t go to work and would probably spend the day quite down to be fair.
If we were always 100% content with what we had, there would be little progress in the world. It’s good to both want and work towards something new or different whilst still wanting and enjoying what you have already. It’s the great challenge of life. I have been very conscious of this over the last year or two and have really tried to pull back a lot of focus to how I can get more joy out of life right now.
I do therefore certainly agree that people can be obsessed with this imagined idyllic future after FIRE which could then distract from the here and now a little but having joy looking forward to FIRE and reminding yourself of why you are doing this can also bring joy to the here and now. It’s worth remembering after all that moving closer towards FIRE and even simply having it as an option can bring so many benefits to the here and now, especially the closer you get. Becoming debt free, having some emergency cash buffer, lower expenses, having a few months of money in reserve to a few years really does help the here and now after all.
Extreme Frugality and life restrictions
Enjoy drinking that coffee with friends? Enjoy the intense physical workout at your local gym? what about taking your other half for a few drinks and a meal at the local pub? All of this will likely need to stop to help achieve that 50 to 70% savings rate. You shouldn’t own any nice cars or expensive objects. You will need to live on beans and rice, buy only second hand clothes, better yet if you can make your own clothing then that would be good. If you enjoy regular holidays abroad then all of this will have to stop too.
You will need to penny pinch and downscale in almost every area to make this dream a reality. You will likely feel guilt at every opportunity or thought of spending money, this is no way to live!
My own thoughts
This is probably the most common attack on the FIRE movement I have seen. You will be depriving yourself right now by not enjoying life to the full. This is because you are withholding all the cash you invest from providing you a whole multitude of things right here and now. This might include such things as holidays abroad all the way to that new kitchen or Mazda MX5.
I completely get this argument and have even wrote a separate blog post on the subject itself. From my own experience, I think I was in the early days slightly depriving myself and have since loosened up a little and do not feel so guilty when spending money on things I completely value and get joy out of. The key point here for me though is the value of that new kitchen or holiday abroad is so personal and subjective.
There can be many cheaper ways to have fun and enjoy life but I wouldn’t want to say person x is absolutely wrong because he enjoys driving a nice car for example. It would be better to look at what you spend money on and find out if it really does make you happy.
I do not feel like I am depriving myself for example by not wearing jewellery or designer clothes or by not staying in 5 star hotels abroad but I would if I couldn’t buy a PlayStation 5 on launch or a new iPad when mine starts to die because I get so much value out of those things. I enjoy eating out at restaurants occasionally and having takeaways whereas other people might get no real joy from those things and prefer to stay in and cook a family meal and play 2nd hand board games. The key for me is are you feeling deprived, are you feeling like you want to go out more with friends but don’t because you’re worried about spending a few extra quid, if you don’t then I wouldn’t worry about this criticism but it’s certainly got validity.
There is of course the fact that there will no doubt be a balance of judging the future benefits of FIRE and then as a result choosing to have less holidays or days out etc or less experiences and purchases in general but I feel comfortable with this as I feel I already sit at a table with a huge banquet in front of me of things to do and enjoy as it stands and adding an extra variety of food to the table will not bother me all that much if I still can’t finish what’s on the table to start with. As with the previous criticism it is also worth remembering the benefits in the here and now that pursuing FIRE brings, it can make how you relate to work completely change in there here and now.
You can feel so much more secure by having even small amounts of FU money, and it can get rid of so many of those money related worries that the majority of people can and do indeed have. It is not simply about benefits being delayed and only seen in the future.
2 – Early retirement is not so good
Another common theme of criticism is whether or not early retirement itself is really a good thing in the first place. You will be bored, you will lose a sense of self and identity. You won’t be able to relate to your friends in the same way as you could before. The early retirement life choice is just not really a wise choice in general, not for society at large or for you yourself.
What will you do? It won’t be as you imagine
I’m sorry to break it to you, but the early retirement utopia that you imagine is exactly that, a utopia. Sure it will be great for the first few months but the honeymoon period will wear off. How will you fill your time? Will you enjoy hanging out with normal retired aged people and people on benefits as everyone else will be at work during the day?
Get ready for lots of social changes as many people if they find out will likely be resentful and jealous. You won’t be able to relate to people anymore as you won’t be able to complain about what’s happening at the office or how you are dreading Monday again and craving the weekend. Many people who retire early have worse health, don’t live as long, feel like they are now on the long road downhill to the crypt. Life can feel very empty and isolating when you retire. A permanent holiday is just not something to aspire for.
My own thoughts
The Early retirement aspect of FIRE is certainly a point of concern for many critics of FIRE. Many people certainly agree Financial independence is a worthy endeavour but why would you want to retire in your 30s or 40s? When I originally started out on my FIRE journey, the RE element was something I really wanted. I had a bad job and wanted to get to my FIRE date as quick as possible. I have since completely changed my views on this. Some in the FIRE community do indeed have the RE part as core to their FIRE pursuit but I’d better explain my views on this before I tackle these specific criticisms.
I no longer care all too much for actually fully retiring early but rather it’s about being in the position to if I so wanted. The power to do this and security and comfort it brings is for me the holy grail of the pursuit now. I have no doubt I will be able to retire early but instead of in my 30s, I now aim for retiring probably in my late 40s or by 50 but even then I may well be working for myself or working part time or still working a regular type job if I really still enjoy what I do, I have no set plan on this other than simply having FI itself.
Now you understand my thoughts in general, let’s get back to this particular criticism itself – what will you do? It won’t be the utopia you imagine. I have seen countless stories of people that have retired and then it hasn’t truly been what they imagined and has indeed led to a little loss of identity. They get used to doing nothing, perhaps feel guilt for not working etc. I have however on the flip side seen people be incredibly happy with their new lifestyle of no work and never been more healthy.
What gives? I think it’s similar to having lots of money, we all hear stories of how people with money are still depressed and unhappy and can become drug addicts etc. Is this the fault of the money itself? If people can be happy with relatively low amounts of money then surely you can still be happy with money as well as it shouldn’t be just the absence of money that makes you happy.
If your current sense of self and social life is heavily linked to your work life then of course you could become miserable and depressed when you stop work. If you still have a bad relationship with your partner, then this could be magnified being with them all the time. If you have an expectation that when you retire there will be no more problems, no more negative thoughts, no more of life throwing you curve balls then you will no doubt be disappointed. If you however think early retirement gives you more options and less problems in other areas and you still fill your life with challenges and fun then of course it will make life better just as more money could do the same. It will not be a magic bullet but it will certainly be a great enabler.
As for playing bingo and not being able to relate to people, of course you can still relate to people, you are still human after all and have the same emotions and general feelings. There is of course also a little more to do than simply play bingo but I do get the point that some people may indeed feel a bit jealous and that during the days you might miss some existing social ties but this can open up new avenues as well.
It’s just wrong, you should contribute to society – work is not bad!
Retiring very early is incredibly selfish and not good for society at large. The thought of investing enough money to then never have to work or contribute again to society is just plain wrong. How is that fair to others who will need to work until they are 65 or 70 that you can just sit and play your Xbox all day and sleep in without a care in the world. All of everyone else’s efforts in continuing to work daily will enable you to carry on doing nothing. This is clearly not right. You shouldn’t be allowed to live off investments in perpetuity without providing any further contribution to society after your FIRE date especially if you are only 35 years old, that’s obscene!
Work as a concept is deeply demonised by the FIRE movement, if everyone works and contributes to society we will all be the better for it, it is part of the so called social contract. You should not tear that contract up and sit on your arse for 40 years…If you have a job you hate, instead of running away from it, find a new job or re-frame how you feel about your current one.
My own thoughts
I do find some parts of these particular criticisms interesting. Is it fair to live off investments and potentially do nothing for 30 or 40 years? A usual response to this is, that of course I will be doing things, I will volunteer, I will provide value to society in other ways than just normal work. The other reply is that well yes it is selfish perhaps if I decide to just play my Xbox for years and put my feet up but I worked hard, invested so much money which was risky and have thus been rewarded. Why should I need to justify my self to others?
I too to be fair have thought it’s in an incredible scenario where money invested begets more money to the point where I don’t actually have to do anything anymore, this indeed does seem a bit strange and I have felt at times, is that really fair? Is that really right? Is it sustainable this whole growth model that seems to make it possible. I don’t feel guilty myself too much now as I will indeed still do things for others and I do feel a little bit that’s it’s a reward for the effort involved in the journey, but I do get it.
In the demonising work front, I agree that if you have a job you hate then it might be first worth seeing if you can change jobs or change how you relate to your work. It would be far better to work a job you don’t mind and actually dare I say it enjoy like I do than simply thinking the only option is to grit and bear it until you FIRE. With that said though, not all jobs will provide much joy and it’s not always easy to find one as a result. I luckily have gone from having a really bad job to having one I really enjoy so I have been fortunate to see it from both sides.
This in no way stops me from wanting to achieve Financial Independence though as it might only take a new manager, change of job specification or redundancy to change my feelings towards my work. Being able to comfortably look for new work without financial worry is another great benefit of FU money.
3 – It’s far too risky
In summary, this criticism focuses on there inherently being huge risk involved in order to do the RE part of the equation especially the earlier you do it. Your money could run out for so many different reasons.
The return on investment and the SWR is not guaranteed
One of the key aspects of FIRE being possible is the belief that investing often through index passive investments will continue in the long run to provide growth and allow for a safe withdrawal rate of 4%. This itself structurally underpins whether you can or cannot successfully FIRE and whether your money will run out which is no doubt the worse case scenario. The Safe withdrawal rate of 4% I am afraid to tell you all is not guaranteed, and nor is 3.5% or 3%.
No matter how confident fire calculators or rundown simulations may make you feel, all of this is on past information. 4% was all about US data and during a huge period of growth in general, this is not sustainable. Whose to say the stock market will even exist in 30 years time, things could change and pulling the trigger on FIRE could be similar to putting a bullet in your own foot or worse case your head.
My own thoughts
I think most of us will agree that this isn’t guaranteed but that we feel very confident that investing in the long run will work out in your favour and that a safe withdrawal rate whether it’s 2.5% or 4% will very very likely mean your money will not run out. It is this strong confidence and separate beliefs such as well we will all be screwed if there’s no world growth anyway so why worry?
I really relate to this and so this is very much a concern for me. I am more cautious than I was when I originally set out on the path to FIRE. I had my yearly withdrawal set at £12000 so that’s £1000 a month at 4% (£300,000 total stash). I class this now as Bare Bones FI where most my bills will likely be paid in perpetuity but by no means guaranteed. I like to lower the risk of pursuing this FIRE game by still owning my home mortgage free, having £10,000 cash and by still trying to build up a solid pension that can at least close to guarantee a form of a Bare Bones FI for when I reach normal retirement age irrespective of how my stash is touched.
For this reason as well, I don’t really look at a specific time for retirement, so when I reach a headline figure. It’s more of a psychological thing where I feel I will still use the 4% rule so I know when I am essentially FI at Bare Bones level and then perhaps Full Fat FI when I have £24,000 a year so £2000 a month (£600,000) stash. I would then feel I could stop working and still have room to lower my spending if there is a crash rather than rely on 4% or 3.5%, I won’t need to have my spending so close to the bone and just hope these safe withdrawal percentages work out for me.
Unexpected life events such as divorce, child and change of desires & wants
People who plan to FIRE on 4% or 3.5% etc. are just not looking at what could happen in their life. After all, your entire world can be shaken by a divorce and losing half your money. You might decide to have kids when originally that was not in your plans. You might need to fix your house when your insurance does not pay out due to a technicality.
You will be a different person in the next 20 years and might have new expensive hobbies that you could never have imagined. A health issue might cost you thousands and thousands. These people thinking they can live on £10,000 a year for the next 30 years are just delusional and life itself will show them that in the long run.
My own thoughts
Following on from the last point about trust in the investing and safe withdrawal rates. If we assume that we can invest to the target stash amount and that the 4% rule actually does hold out. What about life essentially screwing things up with changes and unexpected events? I also think this is a valid concern and is exactly why I build safety margins into my figures. I still hold cash, don’t live close to the bone in a monthly withdrawal sense as I have a buffer included so that I can lower expenses or increase expenses should I need to and as a result gives me the ability to buy bigger one off purchases that will inevitably come up.
I also assume an inheritance will likely come that helps that bit more with any remaining concerns and fears I might have. Finally, at the same time I am working towards having a more Bare Bones pension for my essentials that I can pull on at least in normal age retirement should the worse case scenario occur with my portfolio.
I honestly don’t think I could pull £2,000 a month (4% SWR) from a £600,000 stash at 40 years old if I didn’t have the safety measures included. It would personally cause me great worry. My monthly withdrawal also includes £1k a year in expected unexpected outgoings.
4 – Its not achievable for the majority, it’s a pipe dream
Even if all of the previous criticisms can be addressed and answered, the very possibility and encouragement of this FIRE goal is just not a good thing as it’s simply not achievable for the vast majority. It’s like encouraging people to drop out of high school to pursue a football career to eventually become a premier league player, it’s just not going to happen for most people. It’s giving false hope as the movement claims everyone can do it with some effort.
50%+ savings rate…No one can save that much
How is it reasonable to expect people to save 50%+ of their salary when for the majority – 90% of their wages will go on accommodation, essential household and food bills. How can a single mother who barely has £10 left after all bills have gone out, then try and save upwards of half of her income. This is just not achievable.
Saving money is noble but the level and amount of savings required is just crazy. You need a huge salary to be able to get anywhere near that, you can only scrimp and be frugal so far, there are limits but these FIRE folk never seem to acknowledge that and make these people feel guilty when it’s not their fault.
My own thoughts
I think that being able to invest 50%+ of your salary is no doubt harder for many people especially those on lower incomes. It is however still possible to save more than people do in most cases. You also do not have to save 50% to aim for FIRE or some part of partial Financial Independence but it will of course take longer the lower the percentage. You will be able to get many benefits simply from having more of a cushion financially, full FIRE or 10% FIRE can still be a brilliant worthwhile goal.
It’s a privileged lucky minority who can pursue it
Very much in following on from the last point. You really are a lucky person to be able to pursue FIRE. There is great privilege in this and most FIRE peeps do not admit this, they feel they are all self made and it’s all down to their own ability and saving skills. Well I’m sorry to disappoint you but that’s not true. Sure you have had a part to play but you really do need a big salary to even have this goal as a slight possibility, you then need a fortunate path through life where events don’t completely derail these plans.
Your awesome high paying job came in part because of likely a good upbringing, good education and things just going your way in the great chaos that is life. It’s not as simple as well, just re-tool, work hard, get that promotion. That’s not easy to do when you haven’t had that head start and you have low grades, bad life experiences or other circumstances. If you are a single parent or disabled etc…in essence – a self made man is never completely self made but FI bloggers would have you think that they indeed are.
My own thoughts
I have written a separate post on gratitude for being onto the path towards FI. I can fully relate to the core message in this criticism in that being able to shoot for FIRE is very difficult for many and a lot easier for others. There are so many elements one of which also includes luck that enables the circumstances for you to be able to FIRE. I will be the first to acknowledge that.
It would however be wrong to then assume those less fortunate can’t move towards it, can’t improve their situations to make it more possible. There is room to re-tool and to improve your earnings, you can move from a position where it’s not possible to one where it is but this also no doubt will not be 100% self driven and I fully appreciate that but it will not happen with no action from you either, unless you win the lottery of course but then, I guess you did buy the ticket….
The other point here also is that even for people who clearly will find it very hard to get close to full FIRE. There are still many advantages found along the way from lowering your expenses, getting rid of debt and having some cash buffer available. These goals will almost universally be recommended and moving towards FIRE can certainly tick these boxes.
If I was to summarise my takeaway from this, I would do so as follows:
Move towards FIRE but whilst still enjoying the here and now just as much as you enjoy looking forward. Do it in such a way where you don’t feel too deprived along the journey. Don’t think there will be eternal bliss when you retire and don’t be content to stick a terrible job for years and years until you FIRE, there are better jobs out there.
Make sure you feel comfortable with whatever strategy you employ with regard to your investments, safe withdrawal rates and any extra buffers, or other safety measures. This will no doubt help you sleep better at night. It might also be cool if you have at least a small amount of gratitude or appreciation for being in a position to work towards FIRE, which is not completely of your own making. Good luck!
As always, I would absolutely love to hear your thoughts on this subject. Do you have any criticisms of your own or that you may have heard that you have taken on board or learned to agree with slightly?