THE FALLACIES & FARCE OF THE ‘FIRE MOVEMENT’

I recently read a couple of articles by younger FIRE bloggers which got me thinking about what it must be like to be newly exposed to and excited by the proposition of financial independence (or even financial betterment). What with all the zillions of websites, blogs, books, ‘personalities,’ etc., where does one actually start? It must feel like a monumentally overwhelming endeavor just to make sense of it all, acquire legitimate information and begin one’s journey.

I will concede that there does, in fact, exist quite a wealth of information out there, but the reality is this – most of it is complete and utter crap and the landscape is riddled with fallacy to the point of farce. In fact, the original title for this article was “The Bullshit & Buffoonery of FIRE,” because, frankly, that accurately characterizes the overwhelming majority of it. However, in light of the fact that my 4 readers are accustomed to a more refined tone and language, I opted for the current title.

It got me meditating on my FI journey, specifically reflecting back on myself as a young, eager investor who, at the ripe age of twenty-one, consistently espoused the mantra, “My number one career goal is to not have a career as quickly as possible.” I certainly possessed an acute focus smothered in the drive and boundless enthusiasm that only young adults seem to exemplify, but beyond that, I didn’t have much else. Obviously, I was able to figure it out over time. Sometimes learning was easy, oftentimes it was a result of bumbling about or just simply failing.

That was quite a while back, and in looking through the rear-view mirror of my journey, it is evident there were some pretty obvious things that I embraced that helped and others I avoided that did the same. So, dear reader, forthwith follows a missive to my younger self that captures my musings on how to successfully begin and achieve both financial betterment and independence while avoiding all the fallacy, farce, buffoons and bullshit.

AS EASY AS BEING FIT & HEALTHY

Let’s start with the good news. Actually, it’s great news. Becoming financially improved or independent is remarkably elementary. Fundamentally, it’s as easy as being fit and healthy. However, just like the inexhaustible cavalcade of theories, programs, and bizarre treatments like squid-ink enemas and such from crackpot shysters on how to lose weight and stay fit, sadly, the same exists in the FI and early retirement space. But you need to just bypass all that nonsense.

At it’s core, the formula is staggeringly facile – avoid the ridiculous and unnecessary, be sensible and expend a modicum of energy.

Specifically, in the case of financial improvement & independence: don’t buy stupid, unnecessary stuff; spend your money in a prudent, responsible fashion; and consistently invest. Do that, day-in-day-out, and you are guaranteed to get results. As you can see, the real barrier to success is discipline and intrinsic motivation. Period. Stay relentlessly focused on that.

MASTER THEORY & FUNDAMENTALS

Okay, Young Fate, now that you’ve got the principal formula, let’s dig a bit deeper into the basics of investing. As you’ll quickly learn in life, mastering theory is an essential prerequisite for success in pretty much everything. If you don’t know or understand the theory, you are both useless and hideously unqualified. You’ll be delighted to hear that, again, getting up to speed on this is not a particularly grueling task. In fact, it’s pretty fun.

Be sure to spend time studying economic theory and the basics of investing. You’ll end up doing this at both an undergraduate and graduate level, but it’s not necessary since all those books you’re going to read are available via your local library. As for the basics of investing? Same deal – stick to the legitimate ones, like those written by economists with PhD’s or investment titans. I’ll suggest, Graham’s, “The Intelligent Investor,” Buffett’s “Essays,” Malkiel’s “A Random Walk Down Wall Street,” and Bogle’s “The Little Book of Common Sense.” Actually, I’ll add Shiller’s “Irrational Exuberance” to get a keen sense of how dummies behave during ‘bubble times.’ Honestly, after you’ve got those down, you pretty much have it.

DON’T OVER COMPLICATE IT

Here’s another dose of reality – there really are only a handful of tried and true investment vehicles. Stick with those. Just like the aforementioned squid-ink enemas in the weight loss arena, you’ll end up seeing a vast array of insanely comical investment products, many of which are so complex that they are not able to even be described. These products are for those who are deluded from their own idiocy (aka the-soon-to-be-bankrupt). If it ain’t in Graham’s book or if Buffett doesn’t do it, stay away. None of this is particularly complicated, but there are many who would like it to be that way, mostly because they are attempting to take a dollar from your pocket to put it in theirs. Which leads us to…

BEWARE OF FALSE PROPHETS

You’ll see when the ‘FIRE Movement’ comes along that it is populated by some pretty fine folks. However, it is also rife with unmitigated, unqualified, self-promoting charlatans encased in a putrid cocoon of sales slime. Ofttimes they deftly conceal their disingenuous intent, however, there exist a couple of tools and tactics to detect and expose them.

If they have a publicist, a book deal with a non-academic publisher, have self-published a book (even worse, an e-book), offer coaching, charge for their time, are openly flogging any product or service, or have a dizzying-level of advertisements blinking about on their website, you can immediately assume that their primary motivation is, again, to take a dollar from your pocket to put it in theirs.

A safe operating assumption, like all forms of advertising, is that their principal motivation is to make money and they will do or say anything required to make that occur. To be fair, is this really true for all of these sorts? With perhaps about a 2% exception, yes it is.

SEEK SAGE MENTORS, THEN BECOME ONE

With the combination of a simple formula, informed by theory and using historically valid investment vehicles, you’re pretty much set. That said, what can really boost things is to have a sage mentor or two. By sage, I mean specifically wisdom that is borne by experience and success. In the context of financial independence & early retirement this means someone who has achieved both. They do exist, so seek them out. You will find that they are humble, willing to share and offer informed guidance. For free. In fact, they are the antithesis of those discussed above – they are the ones willing to take a dollar from their pockets and put it in yours. Once you are in a similar position, I encourage you to do the same.

Sadly, you will come to see that the ‘FIRE movement’ is abounding with those offering all manner of well-intended ideas and tools on how to become financially independent or retire early when they are currently not, thus making them both unqualified and highly unreliable. To paraphrase Star Wars’ Obi-Wan Kenobi at Mos Eisley, “These aren’t the ‘mentors’ you are looking for.”

To take advice on financial independence or early retirement from someone who is neither is tantamount to learning to fly a 747 from someone who does not have a commercial pilot license. In short, it makes them unqualified on anything other than two things: jack & shit.

ESCHEW DOGMA – MULTIPLE PATHS TO THE SAME DESTINATION

While you, thankfully, will not experience much of this in the initial 10 years of your journey, you will, ultimately discover that when the ‘FIRE movement’ becomes a thing, there will, rather rapidly, coalesce a set of espoused ‘rules’ that will transmogrify into a peculiar specimen of dogma. There will be those who unceasingly demand that it is imperative to ‘Do A to get to B’. For example, you must subsist on ramen and King Cobra for years to have a savings rate of X%, you must have a certain asset allocation, you must only invest in index funds, you must have a certain financial amount by a specific age, you must obsess over spreadsheets & retirement calculators, yadda, yadda, yadda. You get the point. Young Fate, I know that you are already thinking that all of this is a load of crap. And you are correct.

The reality is that there a multiple paths to the same destination. What will end up working for you, may not be even remotely successful or right for someone else, so carve your own destiny by understanding all the approaches and tools and using them to achieve your unique circumstances and goals. You don’t have to eat ramen to save to buy a home. You, in fact, may have index funds, individual equity holdings, a source of income via a dividend portfolio and real estate holdings all at once. Bottom line – use your education and savvy to guide you to make it work and squelch the noise from dogmatic boners.

AN ATTEMPTED POLITICIZATION OF A MOVEMENT

I really hate to break it to you, but you know how there’s always some group of histrionic douche-bags who have an undying compulsion to politicize everything? Whelp, they ain’t going away. In fact, it’s going to get far, far worse as your life wears on. You see, there’s this thing called social media. Aww, just forget it and be sure to stay away from it like you do with TV. However, unlike TV, social media serves to make you both stupid and depressed simultaneously.

Anyway, you’re going to see the term ‘FIRE movement,’ which is, in fact, a subtle form of politicization driven predominantly by the media. While, I’ve used the term repeatedly in this missive, it is done intentionally as a set up for this simple point. There is no ‘movement,’ so don’t buy into that. It’s twaddle for twits. If you’re confused, please refer back to sections 3 and 4 above.

Next, your desire for and/or achieving financial independence or early retirement is not political. At all. In fact, it is extraordinarily personal. Hence the term, personal finance.

The act of choosing to save, invest and grow your money does not somehow create an obligation to make the world a better place or otherwise force a mandate of philanthropic benevolence. Anyone who says different is simply attempting to dupe you in to their own personal agenda.

That said, you should engage in those pursuits because they are worthy. But rather than being some poseur who types sanctimonious platitudes on a computer, just quietly go out and start a social enterprise and save some lives. You know when Dad says, “Walk the talk?” This is exactly what he means.

THIS AIN’T NO PARTY, NO PANACEA

I’m not quite sure how to tell you this, kid, but I happen to know the most important thing about financial independence. I also know that you do not. You’re likely going to find this, perhaps, a somewhat bitter kernel of knowledge, but here goes.

Having money or being financially independent does not solve all your problems. It ain’t the panacea that most of the globe believes. In fact, it does one thing and one thing only – it provides you with options. Don’t get bummed out or discouraged as this is quite a magnificent thing indeed. And while it certainly mitigates the worry of paying your electric bill next month, you are still on the hook for negotiating your life and all its other attendant components: health, love, relationships, growth, development, service to others, and, of course, the never-ending torrent of routine, banal tasks.

The goal remains an admirable and extraordinary one and, without question, is worth pursuing. Just don’t hoodwink yourself into believing it’s going to change either the challenge or joy of living your life very much.

LIFE IS MADE OF MEMORIES, NOT MONEY

So, you’ve got it all down now. Like I said initially, it’s not particularly complex or difficult so long as you are both disciplined and consistent. You will get results.

All that said, here’s the most important thing I can tell you. Life itself is a magical and wonderful journey and you should consider yourself exceedingly fortunate to have one.

Yes, your FI goal is worthwhile, but it should never, ever come at the expense of memorable moments, experiences, adventures and relationships. For these represent the elegant beauty, the quintessence, of life and are the things that make it truly worth living.

Always keep that top of mind. I’m here to tell you that you are in for a fantastic ride, Young Fate, so go out there and live life to its fullest and on your own terms. Pursue all of your goals with passion and excitement. Be kind, always try to do the right thing, and invite others to join your life as you join theirs.

Remember, this journey’s only one-way ticket long, so collect as many memories as you can and know the best of them can never be bought.