Move Over FIRE, Welcome DIRE: Delay, Inherit, Retire, Expire

The DIRE Movement: Delay, Inherit, Retire, Expire

Instead of embracing the FIRE movement for those seeking financial independence, it may be better to embrace the DIRE movement after such a massive bull run since 2009. For the millions of unemployed Americans thanks to the pandemic, the DIRE movement is real.

When I first started writing about achieving  financial independence early in 2009, I never thought the FIRE movement would reach such a huge level of interest a decade later. After all, only misfits decide to aggressively forgo material pleasures, save 50% or more of their incomes, and retire from well-paying jobs in their 30s and 40s.

Back in 2009, the “lifestyle design” movement was all the rage because people were getting blown out of their jobs left and right. Some people went back to graduate school to save face. Others decided to start lifestyle businesses after getting laid off. I figured there was a good chance my head would also roll, which is one reason why I started Financial Samurai that summer.

Thanks to a raging bull market that ensued, life turned out fine and the FIRE movement picked up steam. In 2022, we are at peak FIRE, as some folks try and retire early with less than $1 million to live a spartan life with no kids, no expectations for health setbacks, and no sense of duty to take care of their parents or other loved ones.

Unfortunately, when you're at the peak, there's usually nowhere to go but down.

Growing Angst Against Financial Independence

You know we're at peak FIRE because not a day goes by where there isn't a new story about someone leaving a job early and how they did it. Less than 5% of my posts are about early retirement since once you achieve FIRE, you don't incessantly talk about FIRE. However, my FIRE posts are some of the most searched online.

As an investor, we know that by the time the news is in print, it's often too late to invest. Rather, it's likely a more opportune time to sell. Just think about Uber and Lyft finally filing to IPO in 2019. After all the easy money has been made as private companies, they cashed out to retail investors who are now down more than 30% if they invested on IPO day.

My job as an investor and as a personal finance writer is to do my best to forecast the future. Writing about what may happen is infinitely more interesting (and risky) than writing about the past. Forecasting the future challenges your mind and could make you a rich hero or a broke fool with egg on your face.

But as with everything in life, no risk, no reward. Today, my crystal ball is saying the FIRE movement is in for a rude awakening.

On the one hand, there is growing disdain against the FIRE movement from the majority of Americans who will never reach financial independence. With the median household income going nowhere over the past 10 years, it's been hard for middle-class Americans to get ahead. Further, the average American has a pitiful amount saved in their retirement accounts.

When you've been spinning your wheels for so long, all this brouhaha about people retiring early to live fabulous lives while posting fake Instagram pictures about their amazing travels starts to get mighty annoying after a while. There are people who constantly brag about how much money they've made each month and how their net worth has gone up without working.

Annoyance turns into rage and a new movement is born.

On the other side are FIRE practitioners who are finding out that not all is sunshine and rainbows once they've quit a stable job with wonderful benefits.

The DIRE Movement Is Created

Thanks to another downturn in 2022, it's an inevitability that some FIRE followers will be forced to go back to work and earn their retirements the old-fashioned way. Some might even say FIRE during a recession stands for Foolish Idealist Returns to Employer.

However, as long as we keep the FIRE acronym alive, we give hope to its original meaning. But when all is lost, false hope only gets people into further trouble. Therefore, let's eliminate FIRE entirely from our vocabulary so that we can finally make a change!

Let me introduce the newest retirement movement to the world: DIRE. It stands for Delay, Inherit, Retire, Expire.

As a realist who sees the future, it is all but a certainty the DIRE movement will supplant the FIRE movement as the retirement path of choice. This is what DIRE in DIRE movement stands for.

D Is For Delay

For most people, delaying retirement due to the rapid rise in costs for housing, healthcare, and education is the only way to survive.

Given the median household income has stayed stagnant at around $61,000 for the past decade while the median house price in America has risen from $177,000 to $222,000 during the same period (26% increase), housing has become less affordable. In some cities, real estate prices have appreciated so quickly that most residents have no hope of ever owning.

Real median household income in America chart
Median household income has gone nowhere in awhile

Healthcare costs are out of control, especially if you plan to carry the entire monthly premium burden yourself. The average total healthcare cost is now almost $20,000 a year, subsidized mostly by the employer.

Once you're out of a job, the entire $20,000 cost falls upon you unless you have a low enough income to qualify for subsidies. For my family of three four, I pay $1,760 $2,380 a month, or $21,120 $28,560 a year for a platinum plan in 2020. None of us are overweight or have any serious chronic illnesses either.

Granted, many FIRE folk try to take advantage of subsidized healthcare because their incomes are under 400% of the Federal Poverty Limit once they retire. But seriously, who wants to live near poverty-level incomes in retirement when you can find a more pleasant job and live a better life?

Education costs, specifically college tuition has grown unbearable with annual tuition increases averaging 5% – 7%, regardless of a recession or not. That's a doubling of tuition every 10 – 15 years. Good luck retiring early if you've got to pay $50,000 – $100,000 a year for four or five years for even just a single child.

For parents with kids, retiring early will be all but a pipe dream. There will always be at least one parent working full-time to earn a steady income and have subsidized health care. The non-working parent can shout they are FIRE as loud as they want, but nobody will buy it.

Being a stay at home dad or mom is nothing to be ashamed about. It's a damn hard full-time job! Yet for the man especially, he can't seem to accept his new reality of living off his wife's income.

But I have to admit, having kids is the best thing in the world. I would never trade kids for early retirement now that I know what I know.

I Is For Inherit

With no hope of retiring early, many Americans are counting on an inheritance as their retirement strategy. With 25 as the median age when parents had kids in 1970 and the median life expectancy currently hovering around 80, the average American will likely have to wait until around 55 to inherit anything.

Today, the average age when women start to have children is 28. The delay is due to the desire for more women to rightly pursue their careers and a couple's need for more money. Therefore, future generations will likely have to wait even longer to inherit anything, especially as we're all living longer and longer.

Not all is bad news on the inheritance front, however. With the average net worth in America rising to almost $700,000, parents are doing more than ever before to help their adult children thrive in adulthood. After all, Baby Boomers have benefitted the most from the longest bull market in history.

Every single one of my immediate neighbors in San Francisco has parents who either bought them their house or are letting them live in one of their multiple properties rent free. When I first moved into my house in 2014, I met my neighbor's son who at the time was a 24-year-old senior at UC Davis. When he graduated in 2015, he returned home and still hasn't left! Curse him and his noisy motorcycle.

Inheritance Is Not A Retirement Strategy

Can you imagine relying on an inheritance as a retirement strategy? You might never be able to start a family, create your own sense of independence, and make your great contribution to society. Clearly, one side effect of DIRE is a surge in depression.

R is for Retire

Age of retirement in America

Forget about retiring in your 30s, 40s, 50s, or even 60s. With DIRE, we're talking nowadays about the majority retiring in our 70s or older, baby! We're living longer. This means we've got to work longer to support ourselves. Once upon a time, people would retire at age 65 and die within five years. We are returning to the phenomena of that bygone era.

The earliest one can collect Social Security will rise from 62 to at least 65 if the government wants to make the program whole. After all, the government runs a massive budget deficit each year. With little-to-no social safety, achieving a comfortable retirement life will all depend on you. Thankfully, there are now free financial tools to help manage your finances.

With the trend towards retiring in our 70s or older, retirement life won't be as fun. It'll be much harder to play leisurely sports like golf or tennis when your back is always in pain. There'll be no way to ever climb the stairs of Santorini when your knees don't have cartilage. Donkey ride it is!

The only thing left you can do in this new world of retirement is watch tons of TV and surf the internet. At least with the popularity of food delivery apps, you will no longer have to go out of the house to eat a nice rubber chicken dinner. Staying glued to a lounge chair is what the new retirement reality will be like. Hence, the ideal retirement age to minimize regret and maximize happiness is closer to your mid-40s.

E is for Expire

Here is where the DIRE movement will be at its saddest. After a long life of working because you had to, not because you wanted to, reluctant DIRE followers will look back on their lives with regret. They will curse the day they ever heard about FIRE because otherwise they would never have taken the leap of faith at the top of the market and fallen splat on their faces.

Instead of being the hare, they would have won the race as the tortoise – steadily saving and investing their income during their highest income earning years with much less stress and worry.

They wouldn't have had to embarrassingly gone back to work with their tails between their legs and watched old colleagues now become their bosses.

They wouldn't have needed to go through multiple mental breakdowns and countless nights of self-doubt because they couldn't replace their day job income with freelance income or entrepreneurial income to take care of their families.

Contrast reluctant DIRE followers with DIRE enthusiasts. DIRE enthusiasts see the FIRE movement is in trouble and decide to stay the course.

The DIRE Enthusiast Is Different

Instead of retiring in their 30s or 40s, the DIRE enthusiast decided to maximize their highest income earning years and retire with multi-millions in their 50s. Given everyone is living longer, retiring in your 50s is like retiring in your 40s of yesteryear.

Of course, they also don't just stay miserable at their jobs. DIRE enthusiasts proactively search for better opportunities in order to keep on working.

A DIRE enthusiast doesn't scoff at families who believe they need $5 million in an after-tax portfolio to retire early. DIRE enthusiasts understand that runaway inflation, globalization, and structurally lower investment returns in the future will wreak havoc on living the early retirement dream.

The DIRE movement believes the 4% Rule is outdated because interested rates started collapsing in 2019. It now takes a tremendous amount more capital to retire on a previous target retirement income. Following a safe withdrawal rate that was developed in the 1990s is foolish.

DIRE Movement believes in the 0.5% Rule

Therefore, instead of getting into a rage about why the world's round peg doesn't fit into their square hole, they simply adapt and work longer.

The DIRE Movement's Future

Unless you're willing to work more than 40 hours a week, build some side hustle income, generate some stable passive income, save aggressively, and continuously make shrewd investments for the long term, you have no chance of FIRE. And if you don't do all these things and still decide to retire early, you will likely be screwed and join the reluctant DIRE camp.

Yes, some of you will decide to live like paupers and either delay or not have kids to keep expenses to a minimum to hold onto your FIRE dreams. However, for the majority who want to live more conventional lifestyles, it's more important than ever to follow some key financial principles to increase your chances for financial independence.

If you are wise, you will embrace the realities of DIRE as it becomes more difficult to achieve financial independence. Giving priority to caring for your family and delaying a super early retirement is the responsible thing to do. Don't let FIRE FOMO foster irrational decision making.

Yes, if the economy gets really bad, there will be more face-saving by folks who say they are FIRE instead of admitting they got laid off and are drowning in a sea of despair.

Just recognize not all is what it seems as people put on brave faces. If your passive income cannot comfortably cover your best life's living expenses, you are not FIRE and only fooling yourself.

Thankfully, we're back to bull markets. Just know that bad times will eventually return once more. And when they do, it will be time for the DIRE movement to rise up!

Related posts on FIRE and DIRE:

The Negatives Of Early Retirement Nobody Likes Talking About

Why I Failed At Early Retirement: A Love Story

The Proper Safe Withdrawal Rate Makes FIRE Harder

FIRE Confessionals I: Surviving A Bear Market

FIRE Confessionals II: Flourishing In A Bull Market

Financial Independence Movement Thoughts Overall

As one of the pioneers of the modern-day FIRE movement since 2009, I'm proud to see what has developed. With so many different FIRE acronyms, like Coast FIRE and Lean FIRE, people are deciding to make labels conform to their current financial situation. It's nice to create labels to make you feel better about your progress. After all, FIRE is a long journey.

However, I encourage you to recognize the true definition of FIRE. Attaining FIRE is when your passive investment income streams can cover your desired living expenses. Once this financial attainment is achieved, there is no longer a reason to have to ever work for money.

FIRE is also a moving target. Thanks to inflation, the need to earn more to pay for more expensive goods increase. Further, if your family grows, you will likely need and want more money as well. For more great reading about achieving FIRE, pick up a copy of my book, Buy This, Not That: How to Spend Your Way To Wealth And Freedom.

150 thoughts on “Move Over FIRE, Welcome DIRE: Delay, Inherit, Retire, Expire”

  1. Froogal Stoodent

    I sense sarcasm and satire in this post. Good stuff!

    Nonetheless, there are some really good–and serious–points.

    It’s wise to consider bad-case scenarios; you just never know what’s around the corner. That’s why I’m continuing to learn economics and finance, even though I have a pretty good idea about asset allocation, savings rates, withdrawal rates, and so on.

    My retirement planning OVERestimates my spending, UNDERestimates returns [vs. long-range historical data], and UNDERestimates my current and future income. And even with all those extra-cautious assumptions, I’m still on pace to retire in about 15 years.

    Life has a way of throwing curveballs. That’s why I’m not planning to retire as soon as I can–there’s just too much that can go wrong. I sure hope those curveballs don’t come my way, but if they do, I’d better be prepared to hit them into left field…

  2. For F.I.R.E. wannabies, there is a simple calculation that would give them a pretty accurate idea of how they would fare if things go really bad supposing they want to fund their retirement being 100% invested in the stock market.

    You can run a simulation by “investing” 100% of your nest egg in the Nikkei 225 at it’s peak in 1989 and see the effect of one of the worst secular bear markets in history on your retirement. As that markets goes steadily down for about 12 years, don’t forget to take into account that dividends would also be slashed by 50% or more or even completely eliminated as well.

    If during the whole period (1990-2018), you are able to withdraw the
    $ 30,000 or so you need, year after year, without running out of money at some point, then you know that your plan will probably work in most market downturns…

    Doing that math is a very humbling experience, a dream-shattering reality check, but very necessary in my opinion to stress-test you retirement financial strategy.

    1. I used a 100% allocation to the S&P 500 (with dividends reinvested) on Dec. 31, 1929. The initial annual withdrawal was 3% of the original investment and used a 3% COLA for subsequent annual withdrawals. The money lasted about 27 years.

  3. I am 65. I retired at 63. There was no FIRE movement when I started saving in 1988/1989. I’ve been through the ’89 recession, the 99/00 recession, the Great Recession, the 2011 “flash” recession, and I am fine. Just work your plan. I had to wait a year longer than I intended to retire, but I did it. I created a 3-year cash cushion when I retired (12%), so I would never have to worry about a pullback in stocks. In December and January I got a lot of flack for that because some bloggers were suggesting a 100% stock portfolio, but right now I have no worries for the next three years. In addition, I am shifting money from bonds (18%) to stocks as the market goes down. All is going according to plan. People. Just work your plan and relax. It will work out.

  4. If one has been on the FIRE plan but is now being forced to reconsider due to a 20% market correction, it ought to be clear that this person had no business thinking they were remotely close to being ready to retire.

  5. “Once you’re out of a job, the entire $20,000 cost falls upon you unless you have a low enough income to qualify for subsidies. For my family of three, I pay $1,760 a month, or $21,120 a year for a platinum plan.”

    You will soon be in for a surprise. About 280% of the ACA age-related rate hikes occur after age 43. Rates from age 21 to age 43 are nearly constant – then the age-based curve starts upward on an exponential trajectory.

    We live in one of the cheapest ACA markets in the country. In our late 50s, a bare bones, literally catastrophic Silver plan with huge deductibles for a married couple is almost $20,000 per year. That does not cover dental or vision, like the typical employer plan with a far smaller deductible. Adding in our youngest daughter in grad school – who we have to cover – our ACA costs would be nearly $24,000 per year for 2018. (I say would be because we ended up using a legal exemption to drop out of the unaffordable ACA markets.)

    For dental, we pay about $1,200 per year for the two of us for what is effectively a dental discount/volume purchase program even though it is officially a dental insurance program and regulated as insurance. It caps each covered person to $1,000 total claims, and except for routine exams, it pays only 50% – and we pay the remainder. But one is stuck – if you don’t have “insurance”, your dentist will charge you twice as much as what they settle for with the “insurer” (based on actual experience).

    We pay cash for all vision care.

    Elsewhere, a married 64 year old couple earning pre-tax income of $65k/year is above the subsidy cut off, meaning they receive no financial assistance. In most markets, their ACA rates are around $28,000 to $36,000/year for a bare bones Silver plan. In Laramie WY (and most of WY) in 2018, their rates were $49,000/year. In Charlottesville VA for 2018, their rates were $57,000/year. (Quotes are from healthcare . gov web site for 2018). Their combined premiums + deductibles generally exceed their pre-tax income – and oh, they still need to cover minor stuff like food, housing, taxes….

    (These bizarre situations happen because the subsidy cut off level is determined solely by the regional poverty income level. There is no connection to actual ACA prices – the poverty income level and your premium have no connection. Thus, the cut off is about $65,000/yr in income regardless of your actual premium.)

    Am amazed you have a “platinum” plan. First, very few markets have platinum plans. Most have Bronze and Silver only; some have Gold. In sampling ACA premiums nationwide, I didn’t find any market with platinum plans except in Washington DC. I won’t go through the details here (unless someone wants it) but for most, a platinum plan would not be the best financial value.

    Anyway, your price quote suggests you are going to be in for a surprise on future ACA premiums as you get older. Unless the government fixes the ACA or does some other random thing to health care.

  6. DIRE is not the flip side of FIRE; it’s just regular life when people don’t save, particularly with an economy and culture dependent on spending. The basics of living under your means are not new so even missing fire but still having savings/investments is a good idea. As for Suze Orman’s recent statement of needing $5M to retire…where does the average American get that when they don’t even have $400 for an emergency? Pie in the sky either way.

  7. Thoughtful comments Sam. I don’t entirely agree with the conclusion, but expect we’re heading back towards more “lifestyle design” instead of everyone trudging on a death march into their 50s.

    I figure I’ll give up $4.5mil in earnings by leaving before my 37th birthday instead of working in corporate america until 50. Hobby entrepreneurship? Now I’m interested

  8. Probably not far off of what will actually happen in the next downturn. Unfortunately so many are bought into all you have to do is live a frugal life and save enough so you can live off 4% of your capital. I just saw yet another MMM article that espouses that once again, completely discounting all the risks associated with that. I kind of feel sorry for the rude awakening so many will feel. Thanks Sam for painting the picture of the other side of the FIRE coin.

    With that said, there is another perspective on FIRE/DIRE through a downturn. You can always delay the RE part of FIRE until after a downturn. If you are facing a market down 20-50% and have the capital for FIRE at that point, you’re in a much safer spot. Sure the market could decline more (catch a falling knife). But you are way better off than if you are sitting at the top of a market and FIRE. The ideal spot to FIRE is at the bottom of a bear market as you said in a previous article.

    1. Yeah, it’s been a rough year for MMM and his cult followers. First his divorce and now the stock market really taking it on the chin. His followers don’t realize MMM makes millions off his site and can withstand the financial hit. He spends more than he says and is laughing all the way to the bank.

      A bull market has made people lazy and stupid. They can’t think for themselves.

    2. I’m not a follower of MMM, but does he really say 4% for the Fire movement? That’s almost malpractice. 4% MAY be ok for the normal retiree with a 30-35 year time frame, but almost impossible for the 50 to 60 year time frame some of these FIRE types need to plan for. Stepping down a 1/2% for each additional decade of expected life, and plan to 100 years of age, and you probably can make it. People need to recognize that they’ll have a 20-40% bear market every decade, and they need to keep the percentage low enough to be able to recover after each.

    3. You are ABSOLUTELY right on the timing. Never FIRE at the top of a bull market : that is financial suicide !

  9. I prefer FINER: Financial Independent No Early Retirement.

    At work I simply stay away from those mortgage slaves and only socialize with like-minded people who know I don’t need the pay check. It gets a bit lonely but beats sitting at home.

  10. I think how much the FIRE movement has jumped the shark depends on where you are. My circles are more NYC-based big corporate, or when entrepreneurs, the VC-funded kind, and FIRE isn’t as widespread an idea there. I actually think FIRE has much more room to emerge, and I think it’s still an important concept b/c jobs are so much more contingent now. You really should be aiming for FIRE just for the FI part and the ability to not rely on a job, whether or not you do the RE, Retire Early part or not.I say this as an HR consultant with 20+ years of recruiting and coaching experience, much of it with mid- to late-stage professionals (i.e., over 40). Someone who has reached FIRE, is close to FIRE, or is simply aware of that concept will have a stronger foundation from which to make good career choices in an increasingly uncertain job market.

  11. methuselah's mother

    Your best post ever, Sam – and the comments just keep getting better too, all so helpful. This is just intended as a word of encouragement to allay any apprehension about going back into the world of work. Anyone who has achieved what you have, has the imagination, resiliance and discipline to succeed at whatever you try.
    Here in benighted Brexit Britain the FIRE movement has only quite recently become an identifiable trend. I’ve walked that path alone most of the way.
    We don’t earn what you earn, but we do have effectively free health care, and it’s clear that this gives us a head start, as does being child-free (by choice). Having supported my spouse through seven long postgrad years there was a brief respite, then an involuntary geoarbitrage when he went to work 12,000 miles away, literally the other side of the world, in a place where trailing spouses were not permitted employment. It was a very hard decision to take b/c I was by then well established in a career I loved, but there was a lot of free global travel and when I’d had enough and London drew me home, three further careers (related enough to use transferrable skills) followed, the last being running my own micro enterprise. Terrifying financially but immensely fulfilling and again with plenty of paid-for travel and exploration. Currently on my fourth retirement, I’m certain keeping on learning is the one vital skill which will provide motivation, and you have plenty of that. – yours is the most inquiring and open mind among the US FIRE bloggers, IMHO.
    When working the long hours it’s hard not to envy those with the freedom to spend their time as they choose, but also to make them understand that travel and expensive outings are not often possible for the non-retired. Once retired, it’s equally hard to imagine where the time came from to be able to go to work. Stepping back from childcare 24/7 will likely be harder than getting involved in a new venture b/c you’re doing it in the reverse direction from most – pioneering as ever!
    All best wishes as and when, hope you can keep us updated with observations from the front when you have the chance.

  12. Sam – Great column! At age 68 I am five years into my retirement following a rewarding 30 year career in hospital and academic medicine development. I, too, find the millennial based FIRE movement to be unrealistic in its thinking and personally disappointing in their values. They look at early retirement through rose colored glasses failing to consider the realities life can bring – often with significant financial impact: divorce, major recessions, health issues, parents in need of financial help, and poor investment choices. Also, I have found that many are so insular in achieving and maintaining their FIRE status (where independence and often travel are priorities) that, while perhaps sympathetic regarding the burdens of the underserved and marginalized, they generally are not at all philanthropic. Of course, my observations come from my 68 years of living life where hindsight can tend to be more 20/20. Thanks, Sam!

  13. I’m no following how a desire to retire early can be on the decline. Unless I’m reading it wrong, the only people in trouble are those who retired early when they had BARELY enough money and depending on STOCK income. If you have conservatively underwritten cash flowing real estate, I’m not sure how this applies

  14. Sam

    Great post

    I totally agree FIRE became very popular because many people saw their investment multiplied in past 9 years
    I would add that who was able to save and invest (and got rich) had the right mentality of saving no matter what and this should spare them from the impacts of next recession (I.e they will Keep the expenses under control and they can count on good saving in case they will
    Lose their job)

    Conversely the spenders will be more vulnerable because in case of recession will finish their saving in few weeks, bankrupt, foreclose etc…a movie we already saw in 2008-2009

    I think now it’s good time to order your house:
    == Selling individual stocks
    == Selling mutual funds with expensive fees you bought before discovering low/no cost index funds
    == Investing proceedings in CD or T-bills (or Robinhood Saving account at 3% if it’s not a scam)
    == Find some side job(s) as plan B in case you lose your job


    Out of curiosity: your premium insurance plan what covers and how it works?
    Can you compare it with Canada or European Universal health care or it’s a ol’ school USA plan that drops you the moment you need some serious coverage ?


  15. SAM- Thanks, for this Post!! Being a mid 30’s FIRE fan I absolutely love DIRE from a PERSPECTIVE standpoint. A few reasons come to mind: Compound interest effect, FOMO of peak career success & earnings, etc. Specifically, I was delusional in my early 30’s based on my peer surroundings during my early/mid 20’s as I have several peers who were FIRE as multi millionaire’s (i.e. $3-5M+) prior to their late 20’s. I was never envious as I was worth maybe 1/4th (YES well above average) around the same age and utilized their success as my fuel.

    Shame on me, as I’ve had to recently recalibrate and realize that it was okay to be above average and not FIRE (worth $4M+) by mid 30’s in a non HCOL locale. With DIRE I can still compete with the thought that compound interest/time can catapult my worth and family wealth once in my late 40’s/early 50’s.

    Sam, you also touched on generational wealth “The BIG I” of DIRE!! I wish you’d expand more on its utility so that people can truly understand the topic. The more wealth I’ve obtained over the years, the more I’ve seen it handed to others (i.e. Adult Kids mortgages, etc.). I LOVE it because I think it’s remarkably Savvy, for example the high percentage (i.e. 30%+) of grandparents paying for grandkids (k-12) private school tuition at $25/30k+ a year by utilizing dividends, etc. Yes, it’s controversial for those with a poor upbringing and/or no generational wealth to view this imbalance (widening wealth gap)but better to be aware than not.

    This is why the internet (Free/Cheap Education) exists…Remove the secrecy of wealth and spread the knowledge to others in order for them to learn the game! Thanks SAM!!

  16. “None of us are overweight or have any serious chronic illnesses either.” Ha! because insurance companies can no longer base premiums on preexisting conditions.We are subsidizing the fat and lazy. Doing the right thing, the responsible thing, the adult thing no longer is rewarded financially or socially.

  17. siliconvalleyscrooge

    For Inheritance, all I get is a collection of urns and a desert tortoise that will outlive us all.

    But I wonder, do studies that say people don’t save enough for retirement take into account people’s expected pensions & defined benefits, as well as expected inheritances?

    For example, I know too many people in Silicon Valley that work for the government and spend nearly all their disposable income, because they believe the county and state will fully fund their pensions — so they might report very little savings to retirement studies, but yet may survive retirement ,assuming California’s $1 trillion pension shortfall does not indeed crush them like Napa grapes.

    1. California will eventually decrease pensions, as it has openly discussed. Countys and Cities will follow.

      To count on a pension not covered by Federal government insurance is a serious error. NO public pensions are covered by Federal Government insurance.

  18. FIRE seems like a reality for many during such a long bull market. We all know that bull markets are not infinite. The changes in the economy we are starting to feel including the stock market is a wake up call for many FIRE enthusiasts. I do think FIRE can be achieved but highly unlikely in 20s like I am seeing now (unless you are a pro athlete who is savvy with your finances). 30s is very difficult. 40s possible hinging on many factors including age of children. 50s realistic for many. The key to FIRE at any age is creating many stable sources of passive income that equate to at least your annual spending plus buffer. True passive income is not derived quickly based on my experience. You can either create it (via businesses) or via cash (buying income producing assets). When I read any FIRE enthusiasts story, I really focus on their passive income portfolio. Most seem to focus on net worth, which is great but to retire you must have cash flow – consistent, reliable, and most important, enough of it. Honestly, I feel most FIRE enthusiasts are simply people who are in jobs they don’t like so they dream of quitting them. Most of us who are FI continue to work because we enjoy what we do – reason we are FI.

  19. Why not discuss how best to allocate the portfolio with the impending downturn at hand? Given the run over the last several years the feeling I have had is that the next opportunity for me is actually being well situatated for the next downturn and likely slow slow slow recovery. Wealth is all relative afterall? And there is so much credit/debt sloshing around out there that when this thing shakes out if you are well positioned, FIREd or not, you will be doing crazy well relativly.

    Alternativly, if we really are to be concerned with the downturn enough to run from FIRE to DIRE then we should also probably be looking at the largest elephant in the room – climate change. I do get a chuckle out of people talking about multigenerational wealth given where the globe is headed. Where do we account for global warming, or any other secular risks in our monte carlo or descriptive review of market performance? We don’t…

    In reality, if you are at a 3% draw or near to it, there is probably enough exogenic risk not being accounted for that you are way better off FIREing and taking your chances with the road ahead. If any of the big secular risks hit (environment, health, war, etc.) one is going to look back and wish to have gotten some ride off their efforts before the new world presents itself.

    If one wants to return to work for enjoyment or whatever clearly they should do that.

      1. Nothing earth shattering.

        35% cash (CDs and money market)
        17% bonds
        30% S&P
        10% Foreign
        8% alternatives

          1. I’m even more conservative with 25% cash, 29% bonds, 2% gold, 1% prop fund, 43% equities
            That is about 1.3mn out of 1.8mn net worth

            To be fair I have FS to thank so far given equity performance up to today. We are obviously facing a major slowdown in earnings and the only market I am looking at that I think presents compelling value is the FTSE 100 and FTSE All Share currently yielding 4.44% and 4.05% respectively due to the Brexit crisis. I don’t plan to buy back in until the Value Line Geometric index makes a significant and sustained 4% reversal

            Am I risking too much, ie sudden agreement with China and slowdown in Fed hikes that might push the market in the opposite direction?

    1. Great comment- totally agree. The biggest risks we face are likely to wipe out your employment prospects in addition to your wealth. If you can generate enough cash flow now using a 3% or less withdrawal rate from a diversified (multiple asset class) portfolio, go for it. I don’t really see the point in trying to time the market and adjust allocations based on whether valuations seem high or low– the majority of us won’t get that right anyway. The prospect of a cyclical downturn shouldn’t deter someone from FIRE- that’s just expected behavior. Like you said, might as well just enjoy it now (assuming reasonable known costs are covered).

  20. Wow, Sam. I read this last evening…processed it overnight…and must say you are onto something here. It’s shades of The Big Short with many of FIRE folk the equivalent of buying retirement on “stated income”. I have FIRE Koolaid stains on the sides of my mouth if not the carpet. This article was the exact level setting I needed. Thanks for writing this in the face of “popularity” with potential hurt feelings forthcoming. Very well done, Sir.

    1. Hi Jon – Glad you found value out of the post. I don’t think any feelings were hurt by rational people who are willing to look at both sides of the equation.

      The thing with FIRE is that if you make a wrong move, it is your life you’re screwing with. Choose the wrong TV, oh well. Buy another. Truncate your career too early or leave with too little before a financial downturn, then you might be screwed for 10 years.

      Prudence is underrated.

      1. Thanks for the reply, Sam. I think the 2nd part of the “1-2 punch” was hearing about MMM’s divorce for the first time. It’s very unfortunate with a kiddo involved…and let’s be honest…he’s a bit of the “Christopher Columbus” of the so called FIRE movement. “Camelot” is no longer what it once appeared to be. Sad and sobering stuff…

        1. Sam
          I echo most of the comments
          One question though: how doesn’t it marry up with your views on equity/bond/cash allocation?
          I am sitting on about 30% cash earning 3% in a high interest savings account, 30% bonds with avg maturity about 5-6 years, 40% equities through VGRO
          To be honest I’m only 32 with two kids and about $1.85mn including house. Wife might continue working to 50+ in a stable medical job.
          This article and a lot of what I’m seeing makes me want to be even less invested. What are your thoughts to going more high interest cash as fundamentals re assert themselves (which seems painfully obvious in 2019 and 2020)?

          1. Without knowing your goals and your current occupation and your expenses, I cannot say. But I can say for certainty that getting your wife to work over a couple more decades sounds like a great plan! Many husbands I know have successfully figured out how to make their spouses work longer so they can retire earlier.

            I personally would be happy with a 4% – 5% net worth return a year for the next five years.

            Related: Recommended Net Worth Allocation By Age And Experience

            1. I still want to retire at 40 and focus on writing as a side hustle (my true passion). Work as a management consultant and wife is a nurse combined income 200-225/year saving about 100/yr. nearly paid off mortgage. Costs are 106,000 per year to live very comfortably .
              I suspect the “dire” reality that is the subject of this article means I need to work longer. But what if I took the risk of going massively defensive for 1-2 years? Surely earning 3% for a year or two but then having the potential to return to 8-10% yearly returns in a bear market with a 60-70% equity weighting would be a risk worth taking?
              I think the yield curve will invert, and the sell off in US equities will take steam when corporate earnings decrease.

  21. Most of you reading this will never truly obtain FI or FIRE. I don’t want to argue the point, but let’s say you do meet FIRE in your own mind. Well, eventually there will be an unexpected worldwide event that rhymes with one of the many that history has recorded. Maybe even a new one and when it does, almost all of you will not transfer generational wealth. It is extremely rare the longer the timeline. Gold and diamonds were exchanged for loaves of bread and soup at end of WW2 or taken at gun point. So good luck with that. Enjoy your life and some of you should even consider welfare. When is the last time one of you received an inheritance from a great, great grandparent? How about you start investing $5 a month for your great, great, great, grandchildren and stop all this nonsense.

    1. Dire walk with me

      The tax plantations are designed so that any tall poppies are sure to be cut.

      After all were nothing but free range animals under the illusion of freedom but destined to be sheared at the end.

      Why does every generation have to buy a house over and over? Can’t these assets be passed along with more ease?

      1. Our society doesn’t do very much multi-generational living so passing houses down to the next generation isn’t all that common.

        Plus, only one descendent gets the property unless you have a large manor or farm or something. I knew one family that still held a decent amount of land which was the remainder of a large family plantation but the land seemed to me to be pretty sub-divided now. The mansion itself was sold off in the 30s because of the Great Depression.

        Around here it seems like most of the descendants sell off inherited farms to developers and split the proceeds. We then get a new sub-development and more traffic.

  22. I appreciate this post greatly. I’m all for people seeking financial independence, but I think people greatly underestimate how difficult it will be to remain retired for 30 or 40 years. There are so many things that have to break right for it to work well. I also appreciate how you brought up people who claim they’re FIRE but still have working spouses, or people who have an income from another source (usually a blog). I’ve always thought FIRE was a misleading acronym because most who claim to be FIRE aren’t retired in the way that most think of as retired. It will be interesting to see what happens in the next couple of years.

  23. Sam,

    Why retire at all? Warren Buffet is 88, Charlie Munger is 94, George Soros is 88, Carl Icahn is 82, the Koch brothers are 83 and 78! Michael Bloomberg is 76, and Donald Trump is 71. I’ll bet all of them also enjoy life.

    1. A rare accomplishment is to never peak. These guys have never peaked, that’s a significant reason why they keep working. That and they’re not mining coal.

      Close friend of mine grew up in a jungle with a dirt floor, she now makes six figures US$ in an emerging market, most of us can never compete with her. She’ll never be a billionaire, but she’ll never peak.

      If you aren’t climbing, you’re more likely to embrace the false religion of FIRE.

      1. BTW … “There’ll be no way to ever climb the stairs of Santorini when your knees don’t have cartilage” assumes that those that never peak also never travel. That’s ridiculous logic. Many 21st century white collar working professionals have plenty of PAID TIME OFF or flexible time to travel wherever they want.

  24. Nothing new under the sun. Life has always had winners and losers. DIRE will be common but some will still obtain FIRE.

    We have a massive trade imbalance with China. It gets worse every year that we delay the inevitable trade war. It’s an unpleasant but we need to stand up to them while we still can.

  25. You know, Sam, I like you. You show respect to your father and things were not always financially good for you. However, you are a typical millennial, trapped in your own world, except for your very, very unusual ability to earn money. You think it is OK for the United States to enable the rest of the world and don’t acknowledge the trading disadvantage we have with China, which negotiates as a company while we negotiate as a committee.

    Except for a very select few, FIRE is not even a dream, and I am confident that at some point in time you will have a change of heart. You will be able to recover, but the feckless who embraced this approach unprepared will be – I believe the technical term is — “screwed” with no hope of recovery.

    Ms. Orman has many things right — particularly when she notes that there are “highways into poverty but just paths out.” I can tell that many readers of this blog are not financial high achievers, and for those, in fact for all but less than a few percent of American families reaching DIRE will take a lot of work.

    1. Thanks for your wisdom Bob. I hyperlinked your view on Ms. Orman to my post that you might find interesting. It ended up doing very well on MarketWatch.

      Given your wisdom, what kind of things do you recommend we whipper snappers do to help get our finances right? Some background about yourself would be helpful.

      And thanks for categorizing me as a Millennial! It feels great to get younger, and not older :)

      Related: Sweet Dreams Of Becoming A Millionaire Again


      Sam, Millennial

      1. First, I will say that giving constructive advice is a sure sign you like someone. And whipper-snapper — that’s not you. You are a little taken with yourself but a good person with sold values. No phony you.

        You castigate American “Alpha Males” but you don’t have the same reaction to the Chinese variety – the variety that is more powerful and subject to much, much less scrutiny. I do not think this is ethnic favoritism. I see this as an actual error in thinking, a learned and a systemic error — there is a kind of blind spot that likely generalizes to other areas of your thought process.

        It is worth thinking about.

        And think about all those folks caught in FIRE land vainly searching for the very narrow inaccessible path out.

  26. Wealthy Content

    I just want to confirm, there will be a camp DIRE right? We can host it here in South Africa.

  27. Speaking as someone in their mid-50’s, if I could retire now I’d be happy as a pig in muck.
    It’s still early retirement – you can’t get the Aged pension in Australia until your late 60’s.
    I like DIRE – enjoyed this post.

  28. I never want to retire, work is the only thing I find interesting. I’m in my early 50’s and just starting to hit my stride. I would like to start my own business tho, I’d be a great boss! Some type of subscription business where customers remain loyal as the future unfolds…. open to suggestions from there.

  29. There goes my plan to declare my husband retired-would be so much better for branding. Oh well, I guess we’ll stick with stay at home dad.

    I like to plan to reach FI away before I would retire. I would be so bored in a “do nothing” style retirement. Pretty much my entire adult life has been spent doing something else on top of full time employment-going to school full time, getting my MBA, running my site. My father was similar, and he eventually turned his side hustle into a full time business when he was laid off from corporate America in his mid 40’s.

  30. Adam and Jane

    “DIRE”, I didn’t know if you were kidding when you wrote this post since it was funny.

    In 1994 at age 30, I always wanted to retire at age 43. At 43, I failed to retire because I didn’t even know how much we spent each year and didn’t know the cost of medical. I always knew that the backup plan was to stay in our company for over 30 years until we reach 55 to get a 72K plus pension and money for retiree medical.

    In 2009 at age 45, I heard rumours of layoffs and had to build passive income from ground zero. I was banking on 5% CDs but they were paying less than 0.5%. My financial mentor suggested NY individual municipal bonds. Starting in 2010, we used almost our life’s savings to build a 3.5% to 5% bond portfolio.

    In 2014 at age 49, we became FI when our muni bonds generated 66K (46K for expenses and 20K for medical coverage).

    In 2015 at age 50, my financial mentor said we can retire at this age w/o waiting until we were 55 for our pensions to double to 72K. We would not get any money for company retiree medical if we left before 55. I told him that I wanted to work until 55 to get at least 8K for company medical since I estimated medical cost starting with 20K for 2 people and in 15 years with 8% yearly increases, medical coverage will be over 56K. He said 56K for medical insurance would be impossible since most people can’t afford it. He thought I was crazy for projecting medical that high. I rather be over prepared.

    In 2016, my wife was laid off with a 52K pension and 8K yearly for company retiree medical. Her medical was $11,064 in 2016. In 2017, it increased 13.51% to $12,558. In 2018, it increased 0.93% to $12,675. In 2019, it increased 8.34% to $13,733. It averaged about 8% per year. By the time my wife is 65, her medical coverage may be over 32K! This doesn’t include the $1,600 deductable! Let’s hope that medical doesn’t increase 8% yearly until we reach 55 since I can’t imagine paying 60K plus for us by age 65.

    In 2018, our bonds generated 89K tax free this year. Although we have passive incomes from munis, pensions and 401Ks which will cover 3x expenses, I am still working for another 9.5 months to reach age 55 so that I can increase my pension and get at least 8K yearly for retiree company medical.

    I am happy for the people that reached FIRE in their 30’s and 40’s. Our incomes were never that high so it took us a bit longer reach retirement by working 30 plus years in the same company. We don’t feel comfortable with lean fire and I am working until 55 to reach your definition of fat fire for financial security.

    Our pensions and retiree medical insurance are our golden handcuffs.


    1. 9.5 more months can’t come soon enough! Like reading the last several pages of the best book on earth. Don’t want something to happen beforehand!

      Working until you can get max pension and health is such a no brainer. ENJOY the remaining months. Take all your sick days allotted to you and all your non carry over vacation days!

  31. Great article Sam as always. Love how you are re-framing the whole “movement” so to speak or that there are more ways than one to get to the desired goal of “retiring”.

    Personally there are a ton of FIRE tenants that I adhere to, but TBH I enjoy my job and even if I could “retire early” I don’t know if I would because my current work situation is good.

    Anyways thanks for giving us all another way to look at things.

  32. After finding out about FIRE in Spring of 2018, my wife and I have decided to save a bunch more money in post-tax accounts. But we’re not planning to FIRE. We just plan to either work part-time in the future or, if we still enjoy it, just keep working full time.

    We don’t want to be in our mid-50s and then get laid off only to find age discrimination rear it’s ugly head. Since I was a kid I’ve watched too many people suffer this. We already were “prepared” but now we’re really getting prepared.

  33. Yes, I agree the future looks pretty sobering after a sudden surge in interest in FIRE. Rising health care premiums, an expensive stock and property market and so forth. It is going to be a grind to increase net worth for a while after quite a few years of enjoying big capital gains.

    I really think the “Easy Money” has been made for a while and reality is setting in. I wonder how some of the FIRE people who retired with small net worths will fare.

  34. Hahahahaha, good article Sam, but you are gonna piss off your fellow bloggers?? Thanks for being an advocate of DIRE, I couldn’t agree more.

    I’m a decamillionaire like you who is considering going back to the workforce after 11 years of FIRE. We are not going to be at risk anytime soon, but the coming few years don’t look good. Unlike other FIRE enthusiasts, I actually enjoyed working, just wanted to put more time into other aspects of life and now I am coming past that period.

  35. Ms. Conviviality

    I sometimes wonder if healthcare was strategically set up the way it is (to be super expensive) in the U.S. to keep workers from getting the crazy idea that they could retire early. I ran the numbers to determine how much I would need to be FI and the healthcare premiums are such a big chunk of the expenses.

    1. I’ve been FIREd for 11 years. The health care expenses are by far the biggest chunk. I spend about $30k a year for a family of 3 and we are mostly in good health.

  36. Sam, I loved this article and I couldn’t agree more. I’m in my late 40s with about 2 million in assets, but I’m going to stay in the workforce for another 5(ish) years or until silicon valley decides I’m too old or too expensive. I don’t have kids, so I don’t have to worry about legacy (except donations to my favorite charities). I love the idea of FIRE, but I think it’s often driven by a naive lack of life experience.

    BTW – you kinda glazed over that “going back to work full time” comment. I’d love to hear more about that.

    PS – this is one of the funniest PF articles I’ve ever read.

    1. Smart move Caren. The other thing to note is that once you are ready to leave, the last one year of work will feel like a semi-vacation. You couldn’t give two licks about your performance, so your stress level melts away as you see the end in sight.

      I made a promise to be a stay at home dad for two years. That time is coming up in the spring of 2019. I’m planning ahead and going to see what’s out there:

  37. We Want the FIRE

    Great article, Sam! In the 5 years or so I’ve been following you, I’ve wondered how long it would take for FIRE to become a fad. The more interesting part will be how long it sits in the spotlight!

    At 33, my original targets were 45 (early), 50 (goal), or 55 (late) or even 60+ (totally blew your plans). Its too hard to tell that far out. I think I’ve been DIRE from the start, I have a number in mind, not a date to hit. Just need to hit that number, which will honestly change before I hit any of those ages above.

  38. My family is poor. I grew up getting my good clothes in Sears, and my normal clothes in second hand stores until junior high, a few years after mom went back to work. Mom took off a few years to be a stay at home mom for about 10 years to raise my sister and I. Much of my family is quite poor. If you ever read Angela’s Ashes, then you will know the kind of poverty my parents grew up in. They were able to raise me in much better conditions.

    I joined the military to pay for college, and I am fortunate to have a good income.

    My wife and I are interested in this movement to have a backup plan. The 4% rule for us means that we can sustain a life with low paying jobs indefinitely. Its our safety net, the one that keeps us out of the poverty my parents experienced. I hope to retire in my mid 50s, so FIRE to me was more about earlier than 65 and a growing safety net before then. FIRE is about options. Its about giving you choices. Retiring in your 30s or 40s short of significant wealth ($5M+) seems risky, u less you work less. I call it my downshift. I want to work less than 50-60 hours a week with less stress in my 50s. That’s the goal. That’s early retirement. FIRE is good. Goals are good. Most of my family can not do that. The fact remains that the more you save, and the younger you start, the more options you have. That is the place to be, and my savings will make me feel confident that my son will always have a meal; something that was not true for my parents.

  39. Provocative piece which got me FIRED up!

    I think you make some valid points, but let’s not throw out baby with bath water.

    First of all, who says you are only in the FIRE movement if you “retire” in your 20s, 30s or 40s? I recently FIREd at 50, retiring at the same time as my dad who is 75. 50 is still young enough to raise eyebrows among most coworkers, friends, neighbors and family. At age 51, I consider myself very much apart of the FIRE community.

    Second, the PRINCIPLES of financial independence (which are a paradigm shift from the social norm) are more important to me than debating over the ideal retirement age. Reaching FI will always be easier for some people than others and easier in some eras than others due to fluctuations in the economy, stock market, job market and housing market.

    However, arguably all Americans would do better to follow the principles of FI regardless of whether they retire early or at traditional retirement age:

    – Live frugally
    – Control life style inflation and ignore the Joneses
    – Maximize income and create a gap
    – Diversify incomes streams and build passive ones
    – Geoarbitrage when strategic to your plan
    – Invest for the long term and stay the course

    The FIRE community is demystifying investing and best personal finance practices and offering a different way to think about life planning. If we are lucky, that will be the movement’s lasting impact, even if your DIRE predictions come true.

    Who wants to live in a social system which enslaves us to corporations? To use a metaphor from The Matrix, I’d rather take the red pill and choose my destiny.

    1. Very well said. I think the DIRE movement helps bring the silliness out of the FIRE movement and allow people to still retire early i.e. 50s, but do so in a much more responsible and thorough way.

      When you start hearing about people proclaiming they retired in their 20s or even early 30s, it starts to get a little absurd. It’s like a race to see who can retire by 18 or something… i.e. emancipation from parents, I’m retired!

      1. I totally agree with you, Sam. There are so many people proclaiming themselves “retired”, but either has a spouse working full-time, has a blog that they’re monetizing, selling courses/”early retirement lifestyle” consulting, or podcasting. The whole FIRE movement with these people retiring in their 30s is pure ridiculousness. They claim they can live on $30K per year but has the full subsidy of the government on health care costs. So, not only are they not contributing to society, but they are also a burden on society.

        1. I do want to write something about getting subsidized healthcare as a super early retiree. Something seems wrong with that, I agree while having multi millions in net worth.

  40. I don’t think we’re anywhere close to “peak FIRE.”

    It only feels like we’ve reached peak FIRE because of online media and Twitter. In reality, FIRE is a tiny bubble with (at most) a few thousand serious adherents.

    No one in my peer group even knows what the term “FIRE” means. They’re not remotely aware of FIRE concepts like stealth wealth, building passive income streams, and saving aggressively.

    1. As a long time reader, you’re either not doing a good job sharing Financial Samurai with your peer group (why not since sharing is caring), or you’re hanging around the wrong people.

      Remember, you are the average of the closest 8 people around you.

  41. I think the FIRE movement took it a little too far. What do you do with your life by retiring in your 30s or 40s? Everyone needs some sort of mental stimulation and to have a feeling of some contribution to society. If you retire in your 30s and have 50+ years of just having fun and traveling, I would think it just gets old after awhile. This is no different from people we call the “trust fund kids.” What do they really do with their lives but pursue hedonistic pleasures? That’s the reason Bill Gates and Warren Buffet give most of their wealth to charity. They don’t want children who would just do nothing with their lives. I do agree that people need to save for the future, but saving 70% of your income just so you can retire in your 30s or 40s seem so shallow.

    1. Dire walk with me

      The FIRE movement should not have been a surprise to develop during this artificial extension of a Kondratieff Autumn. Now Winter will finally manifest in spite of CB intervention.

  42. To be honest- retiring in your 50s is STILL early compared with a normal working carreer. I think the important part is having FU money in the meanwhile just in case. An emergency fund on steroids, as it were.
    I suppose that FIRE practitioners are optimists- 1. optimistic they will reach their goals, and 2. optimistic that their goals are enough for their plan.
    (I’m pretty optimistic, too- but also a bit practical and know that I will definitely want to keep working, but the option of not having to or being able to work a lower paying less stressful job is my main goal).

    1. Indeed. Which is why I think FIRE followers will still find DIRE to be amazing. To be really financially secure (or even rich) and then retire in your 50s is awesome.

      I believe the balance of power will shift towards traditional retirement again as the market melts down, and settle with DIRE.

      1. ….if i currently have 10x more money than i’ll ever make on a job for the next 30 years, I think running out of money is the last thing i should be worried about. Even if a hyperinflationary even happened, or the event of a economic crisis, the markets have to comeback at some point. Even if they don’t, I still would have 50x more money than most people make in their lives. House paid off, cars paid off, a few rental properties, land thats paid off, and a few spare million (without touching my main portfolio), should be enough to ride through most economic crises and maintain my quality of life. If i have to worry, what about everyone else in the world???

  43. This article is genius. :) Thank you for writing this because it is so true. I agree with everything you said. And when I read “Some might even say FIRE during a recession stands for Foolish Idealist Returns to Employer,” I cracked up laughing. Your so funny and creative Sam!

  44. Interesting post. Everyone has a different approach, but mine has worked well for me. My focus was never “retirement.” It was “retirement” from someone else controlling my life. I don’t know what the acronym would be, but I firmly believe folks should save up enough money at a normal job to comfortably start a small business. It is risky for sure, but a lot less risky than trying to squeeze your lifestyle into a 4% draw from savings. Also, working is very rewarding when you enjoy what you do. The socializing alone is worth the cost of admission. I know not everyone has the entrepreneurial spirit, but it is so hard to make real money working a “job.” You need some kind of leverage to get ahead financially. Whether that be because you keep a dollar from each widget sold or a 40% contingency fee. When you trade hours for dollars it is very hard to get traction because you simply run out of hours.

    The underlying theory behind FIRE is very admirable. But, I think the news media, and some popular (yet lazy) bloggers have set people on the wrong path. I think folks should focus on the “I” in FI. Independence is the key to happiness and exactly what the FIRE community is really trying to accomplish anyway. I think when rational people focus on independence, they don’t conclude putting $500,000 in the bank and living like an animal from the interest is the answer. I “think” (and I could be very wrong) the rational answer is take $100,000 and open a cool small business that makes at least $50,000 a year while maintaining a $400,000 buffer. Stabilize that business and then grow it to $100,000 a year (hopefully while allowing the $400,000 a year to grow). Once your small business hits $100,000 a year you have the equivalent of $2,500,000 in the bank. But, you don’t have to wait until you’re 50 to “retire”-you can and should do it in your 30s. If you love what you do, and you pick something you’re good at, maybe you grow that small business to $200,000/year and beyond. All while not having a “job.”

    Maybe I am naive. That’s what I did though. It was scary as hell when I started at 30. By 33 I had worked out all the kinks. Fast forward several more years and now it just seems normal. Many in my circle of friends did something similar even though they all are from different walks of life. Accountants, lawyers, tech folks, etc. Some purely freelance their skills, but most opened up a business they could basically run from home (or a small shared office space). I now live in a nice high-rise building and I’m always shocked by the number of people gathering on the community floor in the morning with their laptops “going to work.” Personally, I just can’t imagine staying in a job past $500,000 in the bank. If you are the very rare 1% that loves their job then great. Sometimes you actually need a structure to do what you love (surgeon, movie producer, etc.). But, for the 99% of us working class folks, I think we would be infinitely happier running a coffee shop versus living in a cubical. I would rather be a plumber working for myself than a big firm lawyer. I’m confident I would be happier. Put a couple of plumbers underneath me at a small business within a few years and I might be making the same salary anyway. Factor in all the tax benefits of having a small business and I might be doing better financially. Start doing commercial plumbing with your team and you would crush the salary of a surgeon, law firm partner, etc. Richest people I know started out with small construction companies running a crew of five or less (including themselves).

    I sat down with a good friend of mine once who is an accountant. He started small, but now has about 5,000 clients and a staff of 10 or so. I thought he had an amazing viewpoint on exactly who makes the big bucks (and keeps it after tax). His clients are business owners, lawyers, doctors, google employees, … everyone. He told me by a wide margin that small business owners are his wealthiest and happiest clients. Lawyers, doctors, computer programmers, all do well, but most were living paycheck to paycheck and had accumulated next to nothing in investment accounts. He said his wealthiest client sells pipes to oil refineries. He doesn’t make the pipes. He just buys the pipes in bulk and stores them until a new oil rig needs the pipes. Just a middle man who saw an opportunity while installing the pipes himself.

    1. Good perspective! I do agree that making $1 with your own two hands trumps make $10 working at an employer. I’ve done 13 years working for someone else and almost 10 years now with FS, and it feels so rewarding to create something from nothing.

      It’s a blessing to create and to go back to your childhood dreams.

      Having a business and something to do is why I’ve turned down so many acquisition offers. It’s fun running FS and coming up with new things to write about.

      What is it you do?

      1. There is the personal satisfaction that comes from making $1 with your own two hands, but also, from a practical perspective, I believe it is actually safer often times because nobody else has complete control over your future. Nobody can walk into my local coffee shop and fire me! Of course, with a few million in the bank, you aren’t exactly stressing about getting fired from a job anymore either. But, for me anyway, it would still be very annoying to have to start taking money out of a savings account to live off of because my boss was having a bad day (or a big client decided I needed to go).

        I’m an attorney who works in a pretty specialized field.

    2. Have to totally agree with everything you said here. I used to think that I wanted to be a part of the whole FIRE movement. But it was really just the fact that I’ve been an entrepreneur my entire life but I was always working for someone else (which is a recipe for lack of fulfillment). Anyway I wound up leaving a pretty cushy and well paying job behind (as well as 200k in unvested stock) to purchase a small business and run that. It was BY FAR the best decision I’ve made in my entire life. I’m so much happier now that I get to control my own destiny. And I’m actually making more money now too but that is less important. What is really important is that I feel like I finally have the autonomy I’ve been craving my entire life. I think that a lot of people who are attracted to the FIRE movement would actually be totally fulfilled if they became self employed or started a business (or purchased one for that matter). Now that I’ve tasted business ownership, I don’t ever even want to retire. I always want to maintain some involvement in one or more businesses that I own. That being said, I do plan to go through different seasons in life where I have more or less involvement in the day to day operation of the business. But I don’t ever see myself just phoning it in and doing nothing all day. It’s way more fun to engage your mind and grow a business and to enrich your employees lives. Oddly enough, one of my favorite things about having a business is how GREAT it makes me feel to take really good care of my employees and give them a fantastic place to work.

    3. Interesting post. My brother’s accountant says something very similar about wealth accumulation — it’s often the folks you expect to have the most who actually have the least. My brother, who often looks very grungy and lacks a formal education, has more than even his accountant, who earns far more! Yes, his accountant has revealed this information to him, and states that it’s because he and his wife actually enjoy spending for lavish vacations and luxury items. But that’s their choice. They both earn substantial salaries.

      As for FIRE, DIRE, or any other acronym, I plan to continue working once I reach FI for several reasons: 1) I don’t want to jeopardize my financial stability, 2) I like my job and it’s rewarding, 3) I’d miss a lot of my colleagues, and 4) HEALTH CARE COSTS!!! I doubt I’ll work at my job until 65, but I’d gladly reduce my hours in a few years. I’ve already reduced them, but a further reduction to focus on things I enjoy as much or more (like my blog) or having more free time is becoming more and more valuable to me. For me, it’s less about retiring early and more about the freedom of choice.


      Superb perspective and the real meaning of FIRE. I have just saved up the money. Now I am planning to start a small business. Thanks for sharing this perspective. It made my day!

      Given the amount of ownership the companies of today demand from employees, one might as well work for himself/herself after building a certain buffer.

  45. I think you’re going to be fine if you decide to go back to work, Sam. It’ll be different, but you have a lot to offer employers, and it won’t be hard convincing folks in various industries of that worth. You may have been out of the work force for seven years, but you’ve shown nothing but hard work and drive to the world on here.

    Great article. Reflects a lot of things that have irked me with the recent FIRE explosion in the media. FS still remains one of the most level headed sites on personal financial independence.

    1. Thanks, but somehow, I probably won’t be able to get a job, or at least not the one that I think would be pretty meaningful. Part-time consulting is likely the most probably route.

      1. It was a shock to me at 56 I was not even considered for accounting jobs at any level (I had CA and many other qualifications). Being downsized from my job was a shock but I bought property so I had rental income, and took my company pension at 57. I took a job at half the pay for the security in one of my fields. When that shop closed down after 14 months, I got a very lucrative contract job for another year. Every penny of my severance package and and cash flow above basic expenses went into savings. After that, I had a few contracts here and there, and part-time jobs for the fun of it but I did not break into savings. Learning how to invest in the stock market and levered real estate appreciation pushed my net worth up fast so I had no worries.

  46. Steps To Early Retirement

    I worked in the Asset Management business and everyone has tons of letters after their names. When I started the MBA I thought I would work there another 10 to 15 years. That’s what you’re supposed to do or so we thought. I figure since I started the MBA I may as well finish it.

    We really didn’t decide to do this until a few months before we retired. It’s been a fun adventure ever since.

  47. I think we’ve reached peak FIRE too. I’m glad I got in early.
    Once the economy turns south, it’ll be much more difficult for people to FIRE. I suspect lots of young people are investing too much in stocks. A big downturn will discourage them quite a bit. Hopefully, they’re preparing for a downturn.
    Passive income and side hustle is the key to FIRE.

    1. Dire walk with me

      FIRE won’t be dead. There will be a monster bull in the Asset Class Which Must Not Be Named.

    2. Mr. Moneymustache recently posted about not worrying about a stock market crash while still being 100% invested in VTSAX because stocks will be on sale. I’m not sure how that math works if you reached FIRE and not working.

      1. DIRE Enthusiast

        Ouch! 100% allocation? With a collapsed stock market and his divorce, he’s having a rough year.

        But I’m sure he will probably continue to make millions preaching the frugal gospel, even if he may not be in private.

        1. There’s a lot of groupthink around VTSAX because that’s what JL Collins and MMM recommend. DIRE times might call for more diversification.

        2. All the research I have read says the 4% rule takes into account retiring at the top of markets right before a crash which is why it is very conservative. Its not as risky, historically, as you might think.

      2. MMM has heaps of money coming in from his blog etc. He isn’t really retired. Just self-employed.

    3. Young people are investing less than past generations. They saw the effects of dot com crash and financial crisis on their parents’ generation.

  48. Simple Money Man

    I’m probably the only person that doesn’t hate on Suze Orman. I’ve read her book and listened to a couple of her talks. The main thing I get is many people simply underestimate how much they’ll actually need for retirement. It’s better to be conservative and over-estimate… my estimation. :-)

  49. Can you generate the graph of median income farther back in time to the mid or early 1900s?

  50. Dire Walk With Me

    So it turns we’ve all been living in a QE dream the last ten years. None of it was real.

  51. Sam, are you headed back to work to weather the upcoming recession with a job and blog income (and your other streams) or some other reason? Not sure if I missed a blog post explaining the thought behind that.

    1. Yes. After two years of full-time fatherhood, I’ve decided to take a vacation by going back to work.

      Working 60+ hours a week is a walk in the park compared to being a full-time parent. My days often start by 5am and doesn’t finish until 10pm or later, with of course breaks and rest in between. After age 2, my boy will be sleeping better, be stronger and be more aware of his surrounds.

      We plan to send him to pre-school at 2.5 years old, which will buy me some work vacation time so I don’t feel so bad about abandoning him all day.

      So many of my male friends say fatherhood is easy because they don’t have to take care of their children M-F. I want to get a taste of what they’re drinking.

      See: Taking A Vacation From Parenthood By Going Back To Work

      1. Sam is a workaholic. Some people need to work. Being a SAHD can be difficult sometimes, but it’s way easier for me than working for corporate America.

        1. I think you are underestimating how good it is that your wife continues to work 7 years after you’ve retired. Not only that, it helps that she says she enjoys her job and is willing to work for many more years. With the luxury of a working wife and subsidized health care and retirement benefits, it’s much easier to relax and be a SAHD don’t you think?

          For me, I need to keep my eye on the ball a little more just to make sure my wife can continue being a SAHM until our son goes to kindergarten. It’s a different pressure, and almost 180 to your situation.

          I also found my job pretty exciting for 10 out of the 13 years. It was awesome to travel to Asia for work and discover emerging businesses and such. Conferences were fun too.

          Related Posts:

          How To Convince Your Wife To Work Longer So You Can Retire Earlier

          Common Financial Blindspots On The Road To Financial Independence

          1. DIRE Enthusiast

            I definitely agree it is easier to be a stay at home dad and be retired if I can make my wife work :-)

            The pressure to provide is pretty immense if your spouse does not work either

          2. You’re right. It is much easier to relax when I have that safety net.
            But your passive income + blog/hustle income is more than enough to cover your cost of living. You could relax if you want to.
            Happy holidays!

        2. Sorry Joe but after reading your comments I came to the conclusion you are lazy. Complain about being promoted to Sr engineer, never went to toast masters, never go to the gym. Come on man, what do you do all day. You’re lucky you have a wife that puts up with that.

          1. I’ve followed Joe’s story for a while now on RB40. He is definitely not lazy. He envisioned a better life for himself as compared to continuing in the corporate world, and he engineered a solution to achieve that vision. I’m sure his son’s life has been greatly enriched by having at least one stay at home parent.

          2. But Willie, isn’t the point of FIRE-ing is for you to spend your time as you see fit, even if it means just bumming on the couch or watching youtube?

            When I FIRE, I plan to spend at least one day a week just napping in the sun and watching clouds and butterflies go by! Why? Because I can!

            Besides after years of inhaling stale stinky skanky recirculated airconditioned office air, I deserve to be spoilt with fresh air! I deserve better than to be locked down in a cubicle all day! I deserve open spaces!

      2. Gotcha. Man healthcare kills you. I looked up the cost of self-employed healthcare just for me in NYC and it’s ~$160 for a $7,500 deductible until age 30, then it’s $500+ for someone in NYC … JUST for being older than 30!!

        8 hours of free time a day does sound like a large hole to fill. Hope you get that vacation-like job! Have you found anything that you like so far? Looking forward to a post where you break down that journey when you are done. Is there such a thing as a chill sales job where you’re not really pressured to get that many clients?

        1. Yes. Venture Capitalist. Invest other people’s money and get paid big if you make winning bets. If you make losing bets, you still get paid a handsome salary for the life of the fund. Not bad!

      3. Actually, this is part of my thinking in not retiring for at least a couple or so years :) I find an almost 3 year old already a lot less work than a smaller child, but there’s another on the way….

  52. Hilarious, love it. The “Foolish Idealist Returns to Employer” acronym is even better than DIRE.

    But the stagnant median income meme is old, and a post on my blog using the real government data proves that median incomes have gone up faster than inflation in all states in America since 1984. Sure there have been times within that time frame where it has been stagnant or even gone down, but adjusted for inflation the median income is higher than it was in 1984.

    Now, where that gets negated as you clearly point out is in home prices and college costs, the two biggest out of control costs, esp the latter. But everyone doesn’t have a kid to send to college, so that doesn’t mean everyone is affected.

    Great post, funny stuff.

    1. I think the college worry is overblown. The outrageous costs Sam cites are for prestigious colleges that many upper middle class people think they must send their kids to or else they will end up failures in life. Most people go to college at their local state university which is much cheaper. Even private colleges won’t cost that much unless you are making $200k a year, in which case it isn’t such a scary expense anyway.

      1. Is College worth the cost and for years if you don’t go to a top 50 school or even top 25 school? Seriously, everything is free now on the Internet. For years and even $50,000 or $100,000 is a lot to spend.

      2. Even public school is going up in price at that same rate. The main driver is the “free” money being provided to the students in the form of student loans, which drives up the price via supply and demand. Students are too foolish to realize they’ll have to pay it back, and parents are just as clueless.

  53. DIRE enthusiast here. I’m not pursuing FIRE but do think about it upon occasion. In fact, FIRE is a great challenge. Shoot for the moon but land somewhere slightly lower. You still end up in a better place.

    We should contact Suze Orman to hear her thoughts on DIRE. She might be a fan, to say the least. Add another DIRE enthusiast to the list.

    Let’s see if you’re the trendsetter in predicting the rise of DIRE and demise of FIRE. It seems like an awfully safe bet.

  54. Awesome, now I’m trendy!

    My wife already convinced me to work 10 more years and honestly I have a cool job so eh.

    We probably have enough to retire now so we can relax on spending since we’re mostly just saving in 401K and not spending down retirement savings until later.

    Even cool jobs get annoying but when you have enough FU money in the bank the petty annoyances are a lot less stressful.

    I still don’t think you need $5M but it all depends on lifestyle. We should be pretty close to 5 unless it’s another lost decade.

  55. Very harsh reality but something that does have a lot of validity.

    Lot of people have or will retire at the earliest possible moment and have a lean FIRE which likely will be extinguished with the next market downturn.

    I’m shooting for an early 50s retirement because I want to pad my nest egg as much as possible while still retiring early enough to enjoy retirement longer. It’s a balancing act.

    I do hope we are wrong because between the two choices FIRE is the one that provides the most optimistic lifestyle in retirement.

    1. This always worries me when I browse /r/leanfire. I see a lot of my fellow twenty-somethings considering retiring on as little as $300k. Even in a bull market, I can’t imagine that.

  56. Not sure how much of this is satire and how much not…. But for most people it’s much more realistic to look at retiring in your 50s than in your 30s. Unless you have a very high paying job and are super frugal or strike it lucky at a tech company etc. When I was younger I saved up to 50% of my income at times, though I had a bit of a late start due to grad school. Then there were periods of unemployment – I could be picky about a job because I had money – and then stock market crashes etc (dotcom, GFC). Then I got married (very late), bought a house (at 50), and had a child. Now I’m 54, but based on my own savings and investment I could retire at a 4% withdrawal rate with our current spending.

    Now I just got an inheritance that increased my net worth by about 80% to USD 3 million roughly and now it’s a possibility. But at the moment my job is fairly easy going (in recent years it was a lot more work) and high paying so I am going to stick around for another year at least as I rearrange my finances etc and see if there is a big downturn in the economy and how well I navigate it.

    So, I have saved at a high rate till recently and from age 30 on had a middle to upper middle income job (except for a couple of years) but an inheritance is what actually looks like enabling early retirement if I want it.

    By the way, if people have children later then all else equal the children will get an inheritance earlier.

    1. I’m looking at how to preserve wealth for the future generations…$2-3M net worth and 50s as well. If we get to 5-10M by 80 that’s a substantial inheritance that could last a few generations if managed well.

      Or we could just blow our last dollar on our deathbeds but eh, that’s probably not us.

      If we last till 80 the kids inherit at 30-40. Assuming they aren’t slackers they should have thier own careers and families. I don’t want them to get $5M lump sum but maybe $50K a year and let the principal grow slowly so there’s some left for the grandkids if any.

      1. My goal is to pass on at least as much as I inherited (about USD 1.25 million) in real terms. I don’t see a reason to save money to provide your children with an inheritance but seems a good goal to give them the same opportunity at least that you had.

      2. Nigel, normal life expectancy is much older than 80. You need to plan to live to 100. Better to die with money leftover than broke. The nest egg will grow in retirement so that should be possible to live well without using principal and leave a nice legacy. I love your idea of funding the future generations. I don’t have my own kids, but am thinking nephews and nieces for my estate.

        1. I picked 80 not to be greedy…that gives the money 30 years to grow vs 40+ for 90 and beyond.

          If we suffer asset depletion then of course there’s no inheritance.

          If we are frugal and the markets don’t end up like Japan’s then 30 years should see a good increase in final net worth. Especially if we work till we’re 60 and continue to add to the 401K.

    2. Welcome to the DIRE movement Moom! Being able to survive until your 50s and boost your net worth by 80% is one of the core pieces of the DIRE movement.

      To clarify, did you have a child after 50 after you bought a house? Would love to hear more about that as we’re getting older too but are wondering whether our bodies can take having another child.

      Great point about getting an inheritance earlier if people have children later. Let’s see whether our longevity wins in the end or not.

      1. Sam, have another one the earlier the better! Your son will have a little baby brother or sister to play with in a couple of years. Hopefully they will have each others’ backs when they grow up.

        I had a kid in my 40s, she is almost 6 now, and I am keeping up with her just fine. I do work out quite a bit to stay in shape, doing some weights is important as you age.

        1. So personal, but I am in favour of another child, but 3 years apart in age. The older one can walk and talk and be helpful. Your wife’s body can recover properly. I have not found that age has made me less able physically, probably much better at 70 than I was at 40. You can’t keep everything up all the time. Now is the time for babies, and pulling back on other things. You can have it all but not all at the same time. Such a short time and the babies are gone so enjoy the kids now.

      2. I got married at 43, bought a house at 50, and had a child at 51. My wife is 10.5 years younger than me. Actually, she is pregnant, so if all goes well another child is on its way next year! We did need to use IVF. I think the advantage of being older is that I am much more relaxed and calmer with the mess, chaos, tantrums etc than I would have been when younger. My father was 48 when I was born. By contrast my brother got married at 25 and had 5 children!

      3. Hi Sam,
        I’m sort of in the same boat as moom. I’m close to 51. Just had my second daughter in October. First daughter is not yet 2. That’s what happens when you marry a youngin(she’s 39, so not that young). I’ve been in previous relationships where kids were involved, so it’s not my first rodeo with kids, but as you know, it’s different when they’re your own. At this age, I’m more emotionally and fiscally prepared than ever before and I look at this as a blessing, but of course there’s a counterpoint. Health and energy-I’ve made a concerted effort to do regular exercise and feel I’m in pretty good shape for my age, but having two makes time for exercise more and more difficult. I know there’s a good chance I won’t ever see my grandchildren due to my age. When my daughters are my age, I’ll be gone. Coming to terms with this, makes me want to spend as much time as possible with them and due to my time in the workforce at my age definitely provides some options.

      4. We had our first child when I was 36 and wife was 32. Due to infertility issues, 5 failed IUI attempts when we lived in Florida, then did IVF in Pennsylvania, which was mostly paid by my employer health insurance. First attempt failed, second worked: wife was 37, I was 41. We wanted another one as we are getting old so we waited the 6 months and implanted 2 more eggs (from the original batch) and had #3 right after I turned 43 and right before my wife turned 39. Needless to say, I’m not retiring anytime soon. I make a lot, but live in a high cost of living suburb of Philadelphia with good schools.

  57. I think all I will be doing is delaying until I expire. I can’t retire early and I won’t be getting any inheritance so I guess I am DE?

    1. Ah, you might not know about your inheritance until it actually happens. Everything has someone to give a beloved when they expire, even if it’s just a checking account or a picture of when y’all were young.

      You can also retire before you expire, especially if you know the expiration is near.


      1. And even with a will the estate lawyer’s find ways to suck you Dry. What remained of My Father’s estate was about $200. I received about $50. I’d rather have my Father than the money anyway.

    2. Matthew Todorovski

      Why is everyone giving up so easily? It took me fifteen years at three jobs, ten years of hard work learning to trade currencies, but I am now a multi-millionaire and I could retire tomorrow if I so choose.

      People are either impatient from short attention spans, or lazy and don’t want to put in the hard work.

      Where there’s a will, there’s a way.

      1. Carlos Vazquez

        Just curious, is that the only market you trade? I mean for income/living expense purposes?

Leave a Comment

Your email address will not be published. Required fields are marked *