Exploring fire, experiments, and money memories

Welcome to the Intentional Dollar weekly newsletter — great work taking this small step to move your money forward. I’m Logan, a Certified Financial Planner™, and I’m excited you’re here!

What’s inside?

• One tool to experiment with

• Two quotes from others

• Three questions to dig deeper

• Four lines of poetry for the point

_{One tool to experiment with:}

FIRE:

When would you like to retire?

Traditional retirement comes at the crossroads in life where we stop working. For some, this comes in their 50s or 60s, other might be hopeful to retire at all.

But beyond the normal retirement confines, there’s a community that adheres to a different retirement philosophy: financial independence, retire early, or FIRE. The FIRE group ardently aims to retire far earlier than the normal group — somewhere in their 30s or 40s.

Since many people work primarily to earn a living, the common goal is to build enough wealth to become your own employer (pay yourself through your assets), and avoid paycheck dependence from a job you may or may not enjoy.

The FIRE group aims to accomplish this task at hyper speed through hyper accumulation. This often mandates strict adherence to a thin lifestyle for 10-20 years while squirreling away enough chips to safely provide income for years to come. By doing this, they effectively buy their independence and can leave the workforce.

This requires saving 50-70% of income until 25-30x annual retirement expenses are saved.

Why 25-30x expenses? That’s a range of assets that will allow you to distribute retirement income at a safe withdrawal rate. 

On the surface, this seems like an attractive approach for those disciplined enough to implement. With life expectancies pushing out, trading 10-20 years doesn’t appear to be a bad deal. However, it’s worth looking deeper into the tradeoffs.

When we make a decision to flip the frugal switch all the way on, there are a lot of current things we might miss out on.

The future is uncertain. (This is not a pitch to live for today alone and neglect future you, but another call for balance.) Just as spending all your money today neglects future you, saving too much money today neglects current you.

You might stay in a job you don’t enjoy because of the pay. You might place unnecessary pressure on yourself to hit financial targets. You might lose valuable relationships. While there is enormous potential value in FIRE, there is enormous real cost.

I think one of the illusions with retiring early is believing that retirement and independence create happiness. This is similar to the fallacy of thinking a certain income or net worth will bring happiness. You can have all the independence in the world, but if you squander it, or live in fear of losing it, you won’t truly cherish it. It’s not independence that’s the target, it’s the ability to control your time, and do higher purpose activities.

Even if we hit our FIRE number and have the ability to walk away from a career, we still have to reset and find a new purpose and mission to aim for; we are purpose driven beings.

If you are aggressively stacking your chips for this purpose, lift your head up and ask yourself some questions:

• Is there a way I can implement some of my future retirement desires now? (get creative!)

• What if I found a lower paying, higher purpose job? Purpose is a constant, infinite game.

• I want to retire early, and then what? What will you do?

Some of us look at retirement as a race. A race that we run as fast as we can, our heads down until we cross the finish line. When we look up, too much of our life has passed, we’ve missed out on too many things, we have regrets.

Don’t make retirement your main target; rather, bring financial prudence and discipline to a career that brings you meaning — balance good saving and good living.

_{Two quotes on experiments:}

If you try something and don’t get the results you want, run a new experiment. Just because a specific budget doesn’t work for you, doesn’t mean all budgets don’t work for you. Keep iterating.

_{Three questions on money memories:}

1. What’s the worst money memory that I have?

2. What’s the best money memory that I have?

3. What lessons can I draw from my best and worst money memories?

Which question stuck with you? Questions like these are spotlights for the mind. Reply to this email and let me know which one shined light on a previously dark cave.

_{Four lines of poetry for the point:}

Contact Me:

Content ideas, questions? Reply to this email or reach out to me at [email protected]