FIRE FOMO: The Desire To Retire Early When You Really Can’t

FIRE stands for Financial Independence Retire Early. FIRE FOMO stands for Financial Independence Retire Early Fear Of Missing Out. What a mouth full!

Whenever there is something hot and trendy it's natural for more people to want to have or pursue that hot and trendy something. FIRE is extremely trendy right now because the stock market and real estate market are hot and there's been a proliferation of blogs and media coverage about the FIRE movement.

When I first started talking about FIRE in 2009 there weren't many of us. After all, 2009 was the worst of the Global Financial Crisis.

My goal by starting the FIRE conversation was to help make sense of the financial chaos and figure out a way to strategically quit my finance job sooner, rather than later. I had been working for 10 years in investment banking and really became disillusioned with work. I was burnt out and bored.

It wasn't after almost three years since writing about FIRE did I actually retire early in 2012 for good. Instead of quitting, I devised a financially sound strategy of negotiating a severance in order to have a nice financial runway to increase my chances of staying retired.

The strategy worked as my severance paid for 5-6 years worth of normal living expenses. During this time, I got my wife to negotiate a severance as well. We the traveled the world and grew Financial Samurai to keep us intellectually stimulated.

If you want to FIRE, you must negotiate a severance instead of quit your job with nothing.

FIRE FOMO Is Strong Nowadays

FIRE FOMO: The Desire To Retire Early When You Really Can't

What I've noticed starting in 2019 and beyond is that there is a proliferation of new FIRE blogs and FIRE enthusiasts who want to retire early, but have no business retiring early.

To be truly FIRE, you must have enough investment income to cover your desired life's living expenses.

Math doesn't lie. Only we do on our path to FIRE.

For example, quitting your job (already a no no versus negotiating a severance) at age 30 with only $500,000 is a terrible move. Why? Because $500,000 can only generate $20,000 a year in income IF you can get a 4% rate of return.

Currently, the 10-year bond yield is at 2%. Therefore, the most risk-free income you can get off $500,000 is actually only $10,000 gross.

Unless you want to live a life of poverty, retiring on $500,000 is not wise. There are plenty of other expenses that may occur as you get older. These expenses include children, health, and taking care of your parents.

FIRE FOMO causes people to quit their jobs prematurely without enough financial strength to comfortably support their lifestyles. FIRE FOMO is the typical millennial stereotype of wanting things without putting in the proper dues.

See: After-Tax Investment Amounts By Age To Comfortably Retire Early

Don't Be Overcome With FIRE FOMO

Unless you want to live a childless, spartan existence, without giving a damn about taking care of your aging parents, suffering from FIRE FOMO is very dangerous.

Please be smart with your early retirement strategy. At least amass enough capital to cover all your housing, food, and other basic living expenses without having to relocate or downsize your life.

It's disingenuous to say you are FIRE after quitting your job if you end up working like mad to actively make other income streams because you need the money. If this is the case, just say you changed careers.

Good luck on your FIRE journey!

Related posts on FIRE:

In Search Of FIRE: Financial Samurai Retirement Portfolio Update

The Fundamentals Of FIRE

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