Members of the FIRE (financial independence/retire early) community might want to sit this one out. It’s going to get rough and I’m naming names!
The concept we now know as the FIRE community has been around for a long time under different names. Frugality and minimalism come to mind. Talking with grandpa they held many of these values 70 plus years ago without a fancy name to make it cool. Many of the personal habits of members of the FIRE community sound very familiar when reading the ancient Stoics: Marcus Aurelius, Seneca, Epictetus.
Then Pete (Mr. Money Mustache) showed up the game changed radically. Pete resonated with his “I retired at 30 and doing fine” message. It struck a chord. Some loved the idea and took to it like ducks to water. Others called BS and think Mustachians are ignoramuses.
As a part of this community I’ve had one serious gripe since the beginning. It’s easier to show what I mean.
Would You Like this Person?
What kind of person would you want to work for? Someone dedicated to doing good work and is a team player or someone saving and investing every dime so she can blow this place the first chance she gets?
Employers and those with a side gig, who would you rather have as a partner or employee? The dedicated individual or the guy itching to scream out the door?
What about friends? Or a mate!
That’s the unspoken problem of the FIRE community. They are terrible employees, friends, co-workers, mates and even business owners. As a group their goal is to amass barely enough to pay the bills with a frugal lifestyle and dump the rat race to dick around all day!
Before we start pointing fingers, let me share a story.
Before I stumbled upon the FIRE community I was frugal. The community attracted me due the similar philosophy.
With decades of experience in the accounting profession running my own practice I started to burn out. Like traditional employees I started to feel drained and wanted a different path.
Over the years I set up countdown clocks to mark the date and time I planned my exit. As each date approached I chickened out. The thought of selling my business made me nauseous. What I really loved would be gone so I stayed. I also convinced myself I could milk the business for a lot more cash than a mere sale.
What an idiot I was!
I stayed at the desk for a few more dollars when I wasn’t completely happy with what I was doing anymore.
My introduction to the FIRE community was Mr. Money Mustache. I drank it in like a desert rat.
I also concocted an idea to have my cake and eat it too.
The DIY tax program you see on this blog was something I always wanted to make viable. My goal was to meet Pete and strike a partnership with him.
Pete, the ever gracious man he is, said no. Buuuuut! He was willing to give my business a push, including the DIY tax program. All this activity also meant I needed to start a “real” blog in the demographic as there was a growing demand for my opinion. (Ah, yeah.)
I had no idea what a 5-10 million pageview blog could do to my tiny office in Phuket, Wisconsin. I planned on some added emails, expecting most of the action to hit the tax software and the blog. Well, two out of three ain’t bad!
Ill prepared, my business suffered under the strain. I lost clients as fast as I added them. I stood the real chance this would spiral completely out of control and grant me my dream of retirement whether I wanted it or not.
Every skill I possessed was no match for my epiphany. For the first time my little world was exposed to a much wider audience.
After serious soul-searching I realized I was doing exactly what I wanted to do. It was enough with the countdown clocks and retirement. I’m an accountant, dammit! And account I shall do.
The opening of this post I mentioned what kind of business you would like to patronize or the kind of employee you’d like to hire. When my left foot was pointed to the door it showed in my performance and attitude.
My original thought to milk the business for all it was worth came tumbling down when new clients poured in. New clients expressed concerns with hiring my firm if I was soon to quit. I had to lie and say I was going to stick around when my heart said otherwise.
Once the BS was scrubbed from my gray matter I had to get serious if I was to save my baby!
Once my attitude changed the results followed. Slowly I turned the corner. I wore out countless employees and killed myself working seven days a week during tax season. There were no other alternatives. I screwed up bad and if I wanted to salvage my practice I had to get serious PDQ.
Stepping Back from the Edge
I’m glad to announce the corner has turned! The client list is growing and we are getting work done in a timely manner for the first time in years. Business is good and getting better. It’s not the economy, it’s my attitude!
Employees are finally staying and enjoying their work. The workload is heavy but not drowning the entire team. Technology I refused to consider in the past has been implemented, saving hundreds of man (actually a lot of woman) hours.
Accuracy is up, stress is down. What looked like it would collapse a few years prior was starting to be fun again.
I blame it all on Pete because taking responsibility for my own actions is too much to ask. (That’s a joke, kind readers.) Pete made it look easy. (Michael Jordan makes a layup look easy but I didn’t think I could do that without effort or practice.) There was actual work involved.
Pete sold me on an idea. The people calling BS on Pete had a point, in my opinion. We can’t all do this! The economy would collapse! Chicken Little was never so proud.
Then I started thinking about what Pete really did.
Pete called it retirement, but it wasn’t a dead retirement! He had a rental property at the time. Played with a construction business for a while until he experienced partner problems. And eventually started his very successful blog.
Retirement didn’t mean checking out of life for Pete! Sure, he spent more time with his family, the important stuff. He also became extremely efficient with his time.
He produced value for the economy and society in ways he never could have if he didn’t retire from the path he started on as a young adult!
Killing the Economy or Saving It
A frequent complaint against the FIRE community is that everyone can’t do it! Somehow spending less than you earn would destroy the fabric of the universe. The sun would dim; birds would fall from the sky. Hey, look! There goes Chicken Little again.
The oft repeated complaint is stupid at its best! When has saving and investing ever been bad for the economy? Ever?
The age you retire has nothing to do with how the broad economy will perform! And virtually all members of the FIRE community don’t bow out of life when they hit their magically arbitrary number they consider wealthy.
Pete had a property and business early on. Later his blog added millions to the national and worldwide economy with no end in sight. Now he opened his MMM HQ in his hometown as an education and social center of his community. Not bad for ol’ lazy bones taking the knee of early retirement at 30.
New Kid on the Block
There is a new kid on the block taking the FIRE community to another level. Gwen (Fiery Millennials) took the retirement knee at 27 with 200 grand in assets! What the hell is the matter with that kid!? (Gwen, if you’re reading this, don’t ditch me now. You know I’d never throw you under the bus.)
Gwen’s announcement caught the eye of MarketWatch (I’m jealous). Gwen started to feel my Mr. Money Mustache moment.
People thought Gwen was insane. And she is!
But when you think about it . . .
There is a certain accountant in the room who ditched traditional work in his early 20s after a whopping 14 months on the job to start his own practice. And I had less than $200k at the time! Yes, my $150k or so went further back then, but Gwen has something I didn’t at the time: real estate.
You see, Gwen accumulated a couple hundred K and recently purchased her second rental property. (I read on social media the deal didn’t close so she still has only one property to the best of my knowledge.) Investment property can produce enough free cash flow to live a frugal lifestyle with a very low net worth! Small amounts of investment property can leverage to a very comfortable income stream.
The new kid on the block was taking a path reasonably similar to your favorite accountant’s. By my late 20s I owned income property too.
Now comes the serious question. From the viewpoint of the world at large (according to the numerous negative comments on her MarketWatch article) she is nuts and it never will work. She will fail if some of the comments are to be believed. And she isn’t a contributing member of society anymore!
Okay. Let me ask this. When has providing shelter for families not been a benefit to society?
Ooooh! You didn’t think of it that way. Well, maybe you should.
If every business owner or investor waited until they were 100% financially secure and sound before taking a risk the economy would be screwed!
This concept of only traditional working environments producing value is flawed. Richard Branson runs a coterie of businesses technically under the Virgin brand. The work is done by thousands of employees. Branson’s job is to formulate ideas and to promote the businesses. He doesn’t book passengers on his airline, yet I bet we agree he adds serious value.
Steve jobs never wrote a line of code yet built from the ground up the largest company on the planet in the computer industry.
Imagine the same reasoning applied to Jobs or Branson and it becomes silly fast. Of course Jobs provided value before his early death. Of course Branson provides massive value around the world.
And so does Gwen, early retirement and all.
Retire and Travel
We can’t end this discussion without mentioning the folks who retire early and travel the world.
What a lazy good-for-nothing group of miscreants. To have the audacity to save and invest so you can cash in your chips before the clock strikes 40 and gallivant across the continents is the height of arrogance.
Travel isn’t in my blood so I can feel that way at times.
But when you start to think about it. . .
Traveling and sharing your adventures so others can enjoy their more limited adventures is actually providing value! Travel blogs are not new. Mark Twain wrote several travelogues. I think we can all agree Twain provided incredible amounts of value to society.
I admire those who can slow down more than I can. Elon Musk runs even faster than me.
It comes down to personality types. I speak out against travel because I don’t want to do it personally. But if you want to travel you should!
There is nothing wrong with following your bliss. The world is a better place for it. Imagine how boring this place would be with thousands of weaselly accountants running around and no one else.
Pete continues to expand his impact on his community. I still stamp out tax returns and advice at a rapid clip. J.D is back at the helm at Get Rich Slowly. Jim Collins is a force behind Chautauqua.
The economic miracle of the 1980s wasn’t the Reagan tax cuts; it was business creation. Small businesses were started at a rate of over 700,000 per year in the early 80s. Job growth and wage increases fueled that economy.
Today we struggle creating 400,000 businesses per year. The FIRE community is the only one I know of that encourages people to step out of their comfort zone, leave their job and start a side gig.
Side gigs are what we call business creation. Tomorrow’s business leaders are the people leaving their job today to think about a new path in life. Every business with rare exception started as a side gig. Apple started in the garage of Steve Jobs. A common story.
The FIRE community is not killing the economy or destroying society. Far from it.
They are the saviors. Our only hope.