The F.I.R.E. Movement has been gathering speed and is becoming a popular concept amount all age groups.
Whether you're a massive FIRE fan or never heard of the concept, the basic premise is that you can save your way to retiring much earlier than you otherwise would be able to so you can retire in your 50s, 40s, 30s or even 20s.
The concept sounds pretty nice for the first 10 seconds after you first hear about it, but when you stop to think about it, there's some massive issues with the concept.
In this video I go through the BIG problem that I have with FIRE as a concept and the movement behind it.
Link I mentioned in the video about how saving money will not make you rich: https://youtu.be/Fp5L9eXFyW4
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DISCLAIMER: I am not a financial advisor and this is not a financial advice channel. All information is provided strictly for educational purposes. It does not take into account anybody's specific circumstances or situation. If you are making investment or other financial management decisions and require advice, please consult a suitably qualified licensed professional.
Whether you're a massive FIRE fan or never heard of the concept, the basic premise is that you can save your way to retiring much earlier than you otherwise would be able to so you can retire in your 50s, 40s, 30s or even 20s.
The concept sounds pretty nice for the first 10 seconds after you first hear about it, but when you stop to think about it, there's some massive issues with the concept.
In this video I go through the BIG problem that I have with FIRE as a concept and the movement behind it.
Link I mentioned in the video about how saving money will not make you rich: https://youtu.be/Fp5L9eXFyW4
CAMERA GEAR I USE
○ My camera - https://bit.ly/sasha-camera
○ Main lens - https://bit.ly/sasha-lens
○ Microphone - https://bit.ly/sasha-mic
○ Tripod - https://bit.ly/sasha-tripod
○ Memory card - https://bit.ly/sasha-card
○ Ring light - https://bit.ly/sasha-light
Full list of gear here: https://kit.co/sashayanshin/sasha-video-gear
DISCLAIMER: Some of these links may be affiliate links. If you purchase a product or service using one of these links, I will receive a small commission from the seller. There will be no additional charge for you.
DISCLAIMER: I am not a financial advisor and this is not a financial advice channel. All information is provided strictly for educational purposes. It does not take into account anybody's specific circumstances or situation. If you are making investment or other financial management decisions and require advice, please consult a suitably qualified licensed professional.
What's up you guys sasha here now? How much do you know about the fire movement? Maybe you know a lot about it? Maybe you are part of it. Maybe you know nothing about it whatsoever. It doesn't really matter because what i'm gon na do in this video is, i will tell you what fire movement is as briefly as i possibly can, and then i will tell you what i think the big problem with it is in fact there's more than one, But stick around because i'm gon na go into the details later on. First, let's just explain what the fire movement is.
The acronym fire stands for financial independence retire early and it sounds like a really great idea. When you first hear it, it says you need to gain enough financial dependence for you to be able to quit the rat race for you to be able to not have to go to work so that you can live off the money that you've earned. For the rest of your life essentially retire when you are able to not when the government says you're allowed to when you're in your 60s or 70s, the objective is reasonably straightforward: it says that you need to go and save up as much money as possible as Quickly as possible, so that, then, that money can be used in order to fund the lifestyle that you want to have once you've gone past, the retirement point. This movement has become surprisingly popular with younger people.
One youtuber after another professes its virtues and tells you that they're going to retire in their 40s in their 30s in some cases in their 20s, and this creates a lot of pressure on some people who feel like they need to be part of the same game. They need to make sure that they do what these other people are doing. They need to retire when they're 35. They don't need to wait till 65, because why should you go and work your entire life when you can go and do this fire thing instead? Now, let's dive a little bit into the detail, and i'm going to begin talking about some of the things that i'm not so certain with when it comes to the fire movement concept.
Now, first, a lot of people who talk about it, talk about it from a position of massive negativity. It talks about everyone hating their jobs. It must be the case that if you have a job, you hate it, you don't want to do it. You don't want to go there, you want to quit as soon as possible so that you don't have to go and do that job any longer.
It says that you need to set a goal, and that goal needs to be the point at which you're going to be able to retire, and that goal is going to be based on something called the fire number. The fire number is basically the amount of money that you need to have saved up in order for you to be able to retire and never have to work again now to keep it really simple, and i'm not going to go into a huge amount of detail Here that number is basically something like 25 times the amount that you want to be able to draw from that amount of money every single year. So if you want to earn 40 000 a year, you will need about a million dollars saved up before you can hit that retirement point. The reason that applies is because, typically speaking, you can draw about four percent from your retirement fund every single year without the size of that retirement fund, going down on average over time, if you're having your investments in stocks and shares, then on average you're, probably expecting Somewhere in the six to seven percent return over time on that stocks and shares portfolio, if you then account for a two percent inflation say on average over the same period, then drawing four percent roughly keeps that million dollars in check and it doesn't go up or Down and you can continue drawing the same 40 000 every single year year after year. Of course, one million dollars is a huge amount of money for most people. It will take many many years and in some cases decades, even if you follow every single rule of the book in order to save it, to get to the place where you actually have it sitting in a bank account or in an investment portfolio. Sure compound interest plays a role, but i'm going to show you how it's not quite as much of a role as you might think when you're first thinking about it. So let's cover the fire plan.
First, you're going to spend the next 15 to 20 years living as cheaply as possible. You will cut out all non-essential costs, you will sell your car and you will buy another one which will cost you as little money as possible, maybe 500, and that car will not have aircon. It will not have any niceties. It's just a vehicle to get you from point a to point b.
You will live in the smallest, cheapest apartment in a very cheap location. To make sure you can set the money aside. Instead of paying to live somewhere, you will have no holidays. You will have no nights out.
You will buy the cheapest food from the cheapest grocery store that you can find, and every single penny that you save is going to go towards building that fire number. But here is an issue with that. Even if you assume a 7 average investment per year on the investments that you're making, while you're saving your money and even if you're, putting aside 25 000 per year every single year, because you managed to save so much and not spend anything. It's still going to take you 20 years to get to that 1 million, so that then, at the end of that, you can live on 40 000 a year for the rest of your life.
People will work every single hour of the day. They will drive for uber they'll, do part-time jobs, they'll work weekends? They will not be able to overpay their mortgage and pay down more quickly because they are putting every single penny that they have towards building their fire number. So in many cases you probably will never actually go and get a mortgage in the first place, so you'll never actually own. A home you'll continue renting, because that is the cheapest way and that ensures that the most amount of your disposable income can go towards your savings. Now, let's get to the problem that i have with it, and actually i don't have just one problem. I have three the first one is really really simple, and it is this: if you go down this route, if you're 20, 25, 30 35 - and you decide that you want to go down this route and pursue this strategy, you're, basically saying to yourself that you're going To waste the best part of your life, doing absolutely nothing fun, investing in nothing that will make you happy not spending any money in any way. That is not the cheapest possible way in order to be able to retire and enjoy a slightly less stressful life or a slightly more free life when you're in your 50s and 60s, and that seems to me like a trade-off that just isn't the right way of Thinking about it, yes, being frugal is great, i personally advocated as well yes, financial minimalism is amazing and can be extremely fruitful for people sorting their finances and thinking about them in the right way. But what about your friends? What about your family? What about enjoying life? What about the memories that you can build by traveling a little by just doing some things that sometimes will cost a little bit more money? I'm not saying you should go and splurge all the time, but i'm saying being so completely cheap that you spend absolutely nothing.
So that you can go and achieve this number, it's probably going to seriously impact the quality of life you're going to have for this entire period when you're old, when you're on your deathbed and you're thinking back on your life, are you going to be pleased that That is the choice that you've made, that you've decided to not live your life so that you can go and save every single penny. I don't think everyone would. Is it worth going through 20 years of having an incredibly miserable life in many ways because of the choices that you're making so that, then you can have a potentially maybe slightly happier life at some point in the distant future. Now, problem number two that i have with it is the retire early part of this mnemonic.
It is the last two letters i generally have a massive problem with it, and that is what is it that you want to do now? A lot of youtube videos. A lot of people out there will say hey. It is amazing, you can go and retire in your 30s and you will never have to do a day of work in your life again and i'm sitting there. Thinking.
If i go on a 10 day or a 2 week holiday, i am eager to get back into working. I get bored now. I know that different people have different ways of going about things, but i'm pretty certain that if the average person goes and sits on their backside for three or four decades in a row, they're probably going to get incredibly bored, they might not realize it, but they're Definitely going to be bored doing, nothing is actually pretty bad for your health. It is bad for your mental health. It is bad for your cognitive abilities. It is bad for the way that you think about stuff, and this is the point where people say well sure, but you can go and do some kind of work in your spare time. You can go and enjoy your passions, but why not change the rhetoric? And instead of talking about retirement, talk about focusing on things that you find more fulfilling focus on things that you find more interesting focus on things that are closer to your passions? Maybe those things are not going to earn you as much money. Maybe those things are not going to take you to the same career progression heights as some other avenues would.
But why do you have to talk about retirement when you can talk about just doing things that you enjoy more, which don't come with the necessity to take 15 to 20 years of your life of doing absolutely nothing fun, not spending any money on anything problem? Number three is something kind of interesting, and that is the principles of the fire movement. Don't actually go hand in hand with the general way that you should think about building wealth. Nobody builds wealth, nobody becomes extremely rich by just saving money, it's impossible. I have a whole video that i'm gon na reference in the link below where i talk specifically about this concept, but the fire movement generally advocates that this is exactly what people do.
This is exactly why it will take you 15 to 20 years of going down this path of saving every single penny in order for the compound interest to take you towards that, one million mark - and this is exactly why people who go down this road will have To live on a salary of 20, 30 or 40 000 for the rest of their lives when they retire, they'll never be able to earn more than that because of the choices that they have made. Rich people don't become rich by exchanging time for money and exchanging a lot more of their time for money for a period of 15 to 20 years, rich people become rich because they build successful and high performing machines that make money on their behalf without them having To exchange time directly for making the money in the first place, they can spend their time improving, honing and making the machine better. At making money, that's called making a business. That's called making a passive income stream.
That is the way that people become rich. It isn't by working every single hour and saving as much of that money as possible. Now don't get me wrong, i'm generally a massive fan of being frugal of financial minimalism, of saving money and of being really smart with your finances. I am probably for the vast majority of the way that these people think i just think the literal interpretation and the way that this movement explains how you should structure your life is fundamentally not actually good for the majority of people. It is potentially going to send people down the wrong path. It's going to make them make decisions that are probably going to be disadvantageous to their mental health, to the way that they build relationships with people that they love. I generally think that not being able to spend any money on things like holidays, on enjoying yourself on things that are not necessarily the most frugal option ever is actually not healthy. It stops you from understanding the different avenues of life.
It stops you from understanding the way that you can lead life in different ways. It stops you from really actually living and there's living a life that is slightly more free and not having to go to work in 20 years time worth it. I would argue it isn't, i'm sure a lot of people are going to disagree with me. I'm sure this video is going to get a huge amount of dislikes make sure if you do like this video that you do go and hit that like button, because i will need some people to counteract all the dislikes.
This video is going to get if you're interested in the fire movement, and i completely miss the point and you want to educate me on it, make sure you go and leave a comment below and tell me exactly what i got wrong and exactly how you're approaching It if you're interested in topics about personal finance, about money, about managing money, about investments and all that kind of good stuff make sure you subscribe to this channel. That is exactly what i talk about on this channel three times a week on a monday wednesday and friday make sure you hit the bell. So you get notifications every single time. One of my videos comes out and i'll see you guys later.
You.
It's important to not deprive yourself during the wealth accumulation phase, and to retire towards something. Also, I don't see vacation as sitting on my backside, this is a time where I do things I don't have the time to do because of my work schedule. It is very rare that I come back from vacation thinking I'm so ready to go back to work. As much as I enjoy and love my job, I have other interests and passions and want to be freed from a schedule.
It really depends on your income level . if one is earning x per month , saving 50% per month will allow him to save for one year of living expense by working one year(spending x/2 per month). The problem is, it may be viable if x is very high because one can still get by x/2.
But if x is only enough for living from pay check to pay check then the whole model collapse.
Also , does one really want to live at x/2 even if they could ?
I think you have completely missed the point of FIRE. It boils down to spending money on the things that are important to you now, and saving the rest. If retiring earlier than standard is important, you may give up the mindless Amazon purchases but still go on vacation to create memories. It is about priorities.
The flip side of being frugal is indulging in too much consumerism. The more stuff you frivolously buy, the more you have to work and spend time away from your loved ones. I think most FIRE folks still believe in taking vacations and buying fun things if it fits their budget but the key is to prioritize investing to reach a goal and to be strict enough to stick to a realistic budget. Living paycheck to paycheck is super stressful and people don’t like it. They just do it bc they don’t know how they can possibly live differently. On a lower salary it may be difficult to make ends meet but the issue is when folks making $100k+ are struggling to make ends meet, you know there’s something wrong with what society has taught us.
You are overdoing it, no need to live al shitty life. To my opinion the main thing you have to do is think about what you plan to do and then ask yourself (be honest) in the head the question "Is working xx hours truely worth the the joy that I get from doing this or that?". Because that is actually what you are doing, you are spending the money what you worked for the month(s) before. FIRE is more a change of mindset, than a total denial of the joys in life.
Love always different point of views and I honestly think everyone should honestly but thats just my opinion.
Thank you
Actually, a problem I see with the FIRE movement is that it seems like most of the people hates their jobs, and a lot of youtubers are exploiting that weakness to "encourage" people to follow "their journey".
Puff you looked at this through a narrow lens 🙁 .
You talk of wasting the best part of your early years, same thing can be said about holding a job till you are 60, heck the latter is now becoming scary because people don't have enough to retire these days. What is important is that you live your life how you want it . But if you can also ensure financial security along the way why not?
Talking about what to do with your time, here is the thing. If you have the choice to detach your work from money why not? It's harder for some to chase their passion when its tied to paying their bills, so telling people to figure out how to pursue their passion whiles thinking of paying the bills seems a lot harder.
About building wealth, bra not everyone wants to be a millionaire, most people are doing this to be free
Well, I think the point of FIRE went way over your head. The deal is to work towards not being tied to having to work. Today, if I want to "pause" work for a year, take a sabbatical, I'm just gonna starve, because I'm not rich like people who do this stuff. If I build financial independence I'll be able to work only when I want, on what I want.
There's also maaany ways to achieve this, there's only one rule -> build passive income stream(s) that provide for the lifestyle you want, as soon as you want. Period. You can grind on and save every penny and live in a box, but that's not smart. It would be better to work towards getting a better job, or starting a business (if you have the right idea), or learn how to invest smart. You can also set up your portfolio in a way that it will compound faster in the first ten years, then you rearrange it so it's more stable.
The point is to plan WAY ahead. And that's a great movement for young people to hop on.
I think you've allowed your bias against the movement to misrepresent FIRE. Yes, there are extremists but the majority of people trying to achieve FIRE do not spend their entire lives in misery as you portray. I certainly don't.
From your description:
"The concept sounds pretty nice for the first 10 seconds after you first hear about it, but when you stop to think about it, there's some massive issues with the concept."
The first massive issue is thinking you understand the FIRE movement after the first 10 seconds you hear about it and not actually reading and understanding the landscape from the sources available. The irony is a lot of what you cover in the back half of the video, focus on your passions and interesting things is literally the point of the movement as per the big name blogs, podcasts, and most actively retired FIRE proponents. Many actually talk about how they wish they hadn't rushed to get there in under 10 years.
Fire is not for the average joe. Need a large asset portfolio. 1 million dollars is nothing. Unless you inherited generational wealth or have created it, keep working.
First, being in debt and controlling expenses is a must and all will agree on that.
I agree with these comments, FIRE movement is good intention but mis-guided, to build wealth and financial independence focus should be on either entrepeneurship or investing in assets that are income earning such as property leveraged with mortgages (reference concept of 'good debt' versus bad debt). Also if target age is 30s or 40s presumably negates investing in pensions with 40% tax break for higher rate tax payers.
Using an excel to track your expenses and saving and using index funds is fine but will take decades to build and will never be wealthy and maybe at some point you could live a frugal life and sure not have to work some time but that is not the first goal. Also if you have a large family all these expectations will go out the window, cannot work on a target retirement age.
The FIRE movement is unambitious and distracts from focus of doing something that you are passionate about, is fulfilling and helps you express yourself and grow as a person (and if you do what you are passionate about, you will likely be successfull and build wealth that you would have choice to retire if you felt like it).
What is it I want to do? I want to sit on my arse all day and do nothing, I want to go on holiday whenever I want, I want to have experiences that I don't have to plan around 4 weeks holiday that I can only take at certain times of the year. I want to not have to worry about me or my partner being unable to work for whatever reason and thus us losing an income, how could you be bored on holiday and eager to get back to work? We are well on our way to FIRE and we have several holidays a year, no cutting back on anything we want and probably earn less than you do between us.
Very well said. You make good points about not sacrificing the best years of your life, and I highly agree with that, within reason. I have the kind of personality where working full time makes me miserable, and it's a struggle for me to hold a job for more than 6 months, let alone 40 years of my life. And that's why I'm saving as much as possible, but still leaving myself enough money to be able to go out maybe once a week and spend it on something I enjoy.
My main goal is to be able to save enough to reach the point where I can get by on part-time work, or maybe full time for around half of the year (probably self-employed, since it would be quite hard to find a job that will hire you if your work history involves solely quitting within 6 months haha).
I don't know where you read that FIRE has to mean you live an unhappy crappy cheapskate life for all your young life until you retire and then sit there doing nothing. there is no FIRE rules that dictate that is the case and really I think it is not at all representative of the movement.
This is not how the FIRE movement works for me. I know a few folk in it, and most just throw a % of income into Vanguard, maybe 25%, then live life normally on the rest. 75% of pay is still a good way to live, especially if you’re financially savvy.
To me if i was 80 and on my death bed after being retired for 40 years i would be laughing at everyone else who had those "night outs" in their 20's and 30's.
I can go on 2 holidays a year for £2000 for 2 people. I know people who spend that on flights alone per person.
Having an expensive car that costs more than a mortgage each month is not improving anyones quality of life.
You dont need excess money to have a good quality of life. Things that are free or cheap are often the best.
Answers at ur 3 problems: 1 – isnt it better to spend 10 years of ur life as a slave worker ans save a lot than spending all ur life as a slave consummer? 2 – spend ur time to do wharever u like, help,other ppl go back to,university and learn, isnt it far better than waking up early every morning and be under pressure and stress wiz thinking about money u need to get to live ur life and pay ur bills? 3- u dont need to,live like an homeless to succeed in ur fire goal! Just plan and optimize! Then u d become fire like many of us
You use such an Evangelical and dogmatic example of someones hypothetical FIRE strategy that this video is limited in its value. Surely you don’t misunderstand the FI element so badly?? It’s about giving people the freedom of options around how they want to live their life. I’m sure you found in your research that the majority of people are on some sort of middle ground. They still live their life, go on holiday and to social events. They might just choose not to have a new car on finance or be hyper materialistic in their consumption of ‘stuff’. This allows spare cash to be invested, giving greater financial flexibility as time goes on.
A part of me thinks this video has been created to generate comments… which I do realise I am now a part of ha
Interesting take! To me, the journey to FIRE helped me declutter my life and actually set me free from unnecessary things 🦢 ✨But depending on your living standard, you need to increase income for sure. I’ve had rental properties and they helped me reach FIRE. Now I enjoy spending my time based on my priorities and interests, which I couldn’t do much with my previous job. Financial freedom allows us to pursue interests without worrying too much about money. I think only boring people with boring minds get bored 😅
you weren't wrong about the massive dislikes! All you said is there is a trade off to saving for 15-20 years in your prime
The biggest problem to save money is around 30ths up 45ths after marriage and babies, becomes harder and harder to achieve.
How about this as a hidden consequence:
If EVERYONE is doing the EXACT same thing of investing in the stock market or real estate… What happens to the market place if there’s a mad rush to acquire these assets (hint: things get bubbly)? Also, what happens when everyone starts withdrawing/cashing out of holdings around the same time?
We’re in the most massive speculative market in human history. What happens to all those FIRE movers when the speculation comes to a crashing end?
I probably have enough money to retire at 55 in 18 months time but I would have less money to live on and the company also pays me the bulk of the money I invest luckily I love my job so am happy to soldier on nice to know you can retire though if you really wanted to😊
Everyone be careful not to be the richiest man in the grave yard. Leaving poor to die rich is a dumb ideia. When u don’t even know if ur getting there…
I'm doing FIRE right now. There are so many inaccuracies with content in this video… I can summarize with this: Video maker = 🤡
Money is just a way to let us DO what we feel to do. U say we would lose our 20 years by doing nothing, but we dont care to spend our money in clothes or cars or traveling or this and that. U feel to as ur brain is under marketing control. Think: are u happier with a big expensive car? Are u happier with expensive clothes u bought? Personnaly i m happy just to sit nearby a river and listen to warefall sound, i dont need then to wake up early on mornings and drive hours in jam to sit hours in an office in front of a computer. That is the best
Enjoy lief When you are young you Will be old years later and never got the benefits of it support your Channel 💪
amazing personality with great leadership qualities, @lisa_upfx i believe in her hands and success followed, initialy i deposited and in couple days i got my profits ,her credibility cant't be overloooked! feel free 2 cont@ ha 0' .n l',G @lisa_upfx
Kinder of Funny how you miss tur point of f.i.r.e. and then say About what you would Change…that is what f.i.r.e is all About in the first place..
F.I.R.E is About make stuff that you Like Even if you.make less or no money. And you can get a long way in 5 to 10 years .. .. dont need 20 years . .. and they do not only save … but Also invest
Thank you for your perspective on why you disagree on FIRE. I disagree and agree with some of the points you made, but I feel like you didn't had enough info about the different types of FIRE. Try (if you haven't already done so by now) searching different types of FIRE; I was surprised to see it and not heard more about it online. I guess when people talk up things like FIRE they miss or avoid details.
This sounds like the laziest and most nonsensical way to "retire early" that I've ever had the displeasure of hearing about. It breaks down to this: "Work low paying jobs as much as possible and then stop working completely in your 30s, then you'll have a very small yearly income that you have to live off of for the rest of your life, when that money is basically going to put you at the then-current poverty level."