The Surprising Negatives Of Living The FIRE Lifestyle

Many people have negative views on young retirees who pursue FIRE (Financial Independence Retire Early). They’re spoiled. They’re lazy. They're entitled. Their parents helped them. They're leeches to society!

How can you blame people for hating on the FIRE lifestyle given only about 5% of Americans retire before the age of 55? For most Americans, they feel like they need to grind for the majority of their lifetime before being able to live it up.

We can call these people “haters.” However, these haters do have some valid points. As someone who began writing about FIRE in 2009 and has lived the FIRE lifestyle since 2012, let me share some thoughts.

Age of retirement in America

My FIRE Journey

I grew up in a middle-income household. I worked hard to earn good grades and pay for an in-state college. Usually, I was the first one in the office and the last to leave.

Sure, I got lucky by landing a high-paying investment banking job that made me work 60-70 hours a week on average for 13 years. Further, some of my investments provided a great return. That's what happens when you keep on taking risk.

But I live a frugal life and have always been diligent about staying on top of my finances. For a decade I used a simple Excel spreadsheet. Since 2012, I've been using Personal Capital, a free award-winning app to track all my finances and make sure my investments are properly allocated.

All of these things played a huge role in my early retirement at age 34. By the time I engineered my layoff I had amassed a net worth of about $3 million that generated roughly $80,000 in investment income per year.

If you want to be truly FIRE, you need to generate enough passive income to cover your desired living expenses.

Giving up big bucks during the prime of my career was tough. But I don’t regret my decision. Giving up a healthy six-figure paycheck for freedom is a good trade.

To be able to do what I want, when I want is priceless. As a stay at home dad now, seeing my son hit all his milestones has also been amazing. I won't ever get that time back with my son, and I'm so grateful.

But living the FIRE lifestyle is not all sunshine and samurai swords. There are some surprising negatives I did not anticipate. Let me go over them here in this post.

The Surprising Negatives Of The FIRE Lifestyle

1) You will feel lost for a bit

One of the most common questions people ask when they first meet each other is: “What do you do for a living?”

When you’ve spent at least a decade working in any job, you may find it incredibly jolting to no longer be identified as the marketing expert, the investment professional or the management consultant.

It was only after I left my job that I realized how obsessed I was with my profession. I often wondered: How is the business doing without me? I was there for 11 years. Were they really able to survive without my expertise?

But after months of no emails or phone calls begging for me to come back, I finally accepted the fact that I was no longer needed. That was an ego-swallowing moment that made me feel melancholy for a couple months.

2) You will doubt your decision to FIRE.

The Surprising Negatives Of Living The FIRE Lifestyle

When you retire young, you may find yourself questioning whether you made the right choice and regret all the money and status you forewent.

After all, you went to school for at least 13 years, and more like 17+ years if you attended college. Doctors who go to school and training for 4-7 years after college experience an even worse identity crisis.

When I left in 2012, I still had a $900,000 mortgage to pay and was worried that I made a grave mistake. But after some time, my retirement plans grew clearer.

I started writing more on Financial Samurai, the personal finance website I started in 2009. It was a cathartic way of dealing any stress and uncertainty.

Fortunately, after writing three times a week for the past 12 years, Financial Samurai has grown tremendously to the point where it makes enough to provide for a family of four in expensive San Francisco.

This surprise income stream is something I never expected. I reinvested 100% of the profits it made and generated a decent amount of passive income.

3) People may treat you like a loser.

Maybe it’s because retiring early is unconventional. Or maybe they’re secretly jealous you’re not grinding away at a day job. Whatever the reason, people won’t always give you the same amount of respect as they would to a working-class citizen.

If you're not working, some people will ultimately think you're a loser, or a leech. Many people are FIRE take advantage of government healthcare subsidies, despite being millionaires.

Eventually, I grew tired of explaining why I retired early or that I wasn’t a trust fund kid. To keep the discussion simple and regain a social identity, I’d simply say I was a writer and tennis coach.

4) You won't be much happier.

Many people think that once they achieve financial freedom or leave a job they hate, they’ll be permanently happier. But, as I mentioned earlier, my research has found that any significant amount of elevated happiness is only short-term.

One a scale of one to 10, my happiness level skyrocketed to a 10 after I was able to negotiate a pretty solid severance. It was enough to pay for five years worth of living expenses. The severance felt like I had won a massive lottery!

But not too long after that check hit my bank account, I reverted back to my normal post-retirement baseline of happiness. Despite the reversion to my normal level of happiness, every early retiree must still strive to negotiate a severance. If you quit, you get nothing. There is no downside to negotiate a severance.

See my book: How To Engineer Your Layoff: Make A Small Fortune By Saying Goodbye, to learn how to negotiate a severance. It's the only book of its kind and it has been refined since 2012 with more strategies and tips. There are 200 pages of action-oriented material for 2021 and beyond.

5) You will initially get very bored.

When you've suddenly got an extra 12 hours of free time a day, you won't know what to do with yourself unless you are an extremely diligent planner. Hours can go by where you end up doing nothing. If this trend persists, you might start getting depressed that you aren't doing anything productive with your life.

I felt listless and bored for fits at a time until I decided to regularly write from 6am – 8:30am. Then I allocated 4-6 hours of time a day with my boy followed by 1-3 hours of exercise. It was only after I established a regular schedule did I really start feeling good about my day-to-day FIRE lifestyle.

My wife joining my in early retirement after successfully negotiating a severance was really great too. Before our son was born we traveled to over 20 countries for 3 weeks at a time. It was a blast.

Then after our son was born, our lives had renewed meaning as both stay at home parents.

The FIRE Lifestyle Won't Fix Everything

If you’re unhappy before you retire early, it’s likely that you’ll still be unhappy after you retire. It’s better to figure out what’s at the very core of your issues and fix them first.

I've met several people who retired with lots of money and fame and ended up getting a divorce like Mr. MMM because they had issues. I know plenty of other people who retired early and decided to go back to work only after one or two years because they didn't know what to do with their lives.

Have a clear vision of what you actually plan to do when you retire. Otherwise, you’re just treating retirement as a crutch — and that rarely ever works out.

Since retiring in 2012, I finally found my groove by regularly doing things that I enjoy:

  1. Writing on Financial Samurai, an intellectually stimulating activity.
  2. Investing in real estate, my favorite asset class to building wealth and creating passive income to allow us to live the FIRE lifestyle.
  3. Coaching high school tennis, a way to stay involved in the community.
  4. Being a husband and stay-at-home parent, the most important full-time job ever.
  5. Starting a new online business given we've all learned through the lockdowns that an online business cannot be shut down

Early retirement isn’t the elixir to everlasting happiness, but it sure beats commuting to work and sitting in meetings all day long!

Make sure once you retire early you hold onto your capital. The first rule of financial independence is to never lose money. The best way to protect your assets is to sign up with Personal Capital to stay on top of your finances. That which you can measure, you can optimize.

There's no rewind button in life. Make sure you live your best FIRE lifestyle possible!

Personal Capital Savings Planner

Further FIRE Lifestyle reading:

If I Could Retire All Over Again, These Are the Things I'd Do Differently

FIRE Confessionals I: Surviving A Bear Market

FIRE Confessionals II: A Bull Market Phenomenon

Fat FIRE: My Favorite Way To FIRE

Lean FIRE: For The Minamalists

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