The FIRE Movement

What is the FIRE movement all about. It stands for “Financial Independence Retire Early” and it has a strong following called the fire community. Now I’m going to dive into what the FIRE movement isn’t by discussing Suze Orman’s interview with Paula Pant of the afford anything podcast

I just listened to Suze Orman’s interview on the afford anything podcast with Paula Pant and I am convinced that Suze does not know what the Fire Movement is all about. I have had nurses at work tell me how this new thing called the FIRE movement is so popular  right now and all the young people are into it and they just don’t know how people in the FIRE community are able to retire so young and how they are able to pay their bills. I have even been told by nurse supervisors of how the young nurses keep calling out of work at the last minute because they have no commitment and work ethics like the seasoned nurses do. They state that young nurses nowadays, and more specifically millenials, all just want to job hop and work a job for one year at a time and then leave to travel the world with a stock pile of cash that they have accumulated over the year by living on fumes.

It seems like everyone thinks the FIRE movement is actually the REFI movement, but it’s not. Suze Oreman is included in this group of individuals. She claims on the interview that members of the Fire community want to save up 1 million dollars by the time they are 30 years old and then never work a day in their life again. This is a major fallacy and this is why Financial Independence comes before Retire Early. The goal is to become financially independent so that you can retire early if you choose to.

This is why I love the Choose Financial Independence podcast and blog so much. It narrows the focus to the major aspect for the FIRE movement. The only way to become financially independent is to be in a position where you don’t have to work for money. That’s  the only way you will be able to pay your pills without a 9-5 and then choose to retire early if you want. The only way to be in a position where you don’t have to work for money is to have multiple streams of passive income.

I have people all the time that tell me they want to invest in the stock market and grow their wealth and get in on the bull run that this market is currently in, but when I ask if they are maxing out their retirement accounts like their 401K and IRAs and they tell me that they are too young to worry about retirement. But what they don’t realize is not only are these tax deferred retirement accounts a source of passive income, it also reduces your taxable income and allow you to put uncles sam’s money to work for you in your 401k to build your nest egg which will double every 10 years with compounding interest from dividends and capital gains from low cost index funds. Sure you can’t technically touch your 401K and IRA until you are age 59 and a 1/2, but if you start early you will have a passive stream of income that can last you from age 60 and on. This is one of the most  important passive streams of income to be taken advantage of. You can buy all the FANG (Facebook, Apple, Netflix and Google) stocks in your low cost index funds and ride the bull market in style.

Then there is the fallacy about retirement as it pertains to the FIRE movement. Most people in the FIRE community pursue other passions in retirement that most of the time produces income; and if your job was your major passion in life guess what. You can still work in retirement. It’s the point that you don’t have to work for money. It’s the point that you can work one day a month or one day every 6 months. It’s the point that you can do your job for free and volunteer your services at a nonprofit organization if your heart desires. It’s called freedom to do what you want to do when you want to do it. Now of course it would be wise to work enough to contribute to your IRA for extra cushion in your retirement accounts if you need to, but that’s $5000 a year. What’s that add up to like working 4-6 weeks a year. I call that retirement.

DISCLAIMER

I am not a licensed accountant or financial advisor or hold any type of professional financial certifications. This content is general information on investment strategy and does not constitute official or personalized investing advice. It is not a solicitation to buy or sell stocks or any security.  Invest at your own risk. The views of this blog are my opinion alone unless stated otherwise. Any type of historical financial success does not guarantee future returns.

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