I have to take this opportunity again to re-frame FIRE a little bit, this time for Mark Hulbert’s benefit. I am a long-time reader and admirer of Mark’s. I appreciate Mark finds a more fundamental argument around the FIRE movement, as do I. And that Mark recognizes there is danger involved with change.
Here is Mark’s thesis: This more fundamental problem is that the FIRE movement is irrelevant to almost all individuals, and as a consequence is dangerous. Only a very small minority of individuals have sufficient assets to retire early at more than a subsistence level.
Posted here, for reference: https://www.marketwatch.com/story/the-problem-with-the-fire-movement-2019-02-07
This, I think, is the fundamental misunderstanding. Critics can never look past their own paradigm of work-life. The one where you go work for someone else for forty years and if you are very servile and don’t ever call out the bad behavior, terrible stewardship and lazy thinking of your betters, if you live below your means (but apparently not too far below, or will have violated some other social contract construct) and “stay in school”, used here as a metaphor for some kind of structured, long-term work-life configuration designed by someone other than yourself. Then, the thinking appears to be, you have a better chance of reaching your old age with enough money for relative financial security, as long as no one with real money wants to crush you under the legal system, and you stay healthy.
Well, people want more out of life for themselves and their families. This being America, no one is waiting around for a corporation, government, king or wrestling promoter to make their lives great for them. People are already finding new vectors, new venues and marketplaces, and new form of money, value and exchange. For me, this is more the nature and spirit of the FIRE movement. Mark, Suze and others are looking at it too narrowly when they try to contain it within an older model of corporate life-work.
I think almost everyone, and certainly everyone who is currently employed in a traditional office or corporate job, has the assets they need to retire, not just early, but at any time. I think a comparatively small amount of savings is needed to break out of the old model career and ‘retire’. It is among the most important economic innovations to emerge, that the tools of business operations have been democratized. Now, everyone is a business. People take meetings while on their pottery wheel (yes, they took that meeting with me). It isn’t that people aren’t working hard. People are working way, way harder, because they want to, and because they can harvest more benefit for themselves than if they worked just as hard for someone else. It is such basic economics. People are self-optimizing their outcomes, and pundits are confused.
I also think the old fear model doesn’t hold up to the future. The dangers of future privation if people take economic risk today is, in my view, anachronistic and dystopian when viewed through the lens of likely futures. I am the last to suggest there is no risk of a social retrograde that diminishes mankind so substantially that the future is no longer bright. There is that risk. I just don’t see that risk as having the statistical advantage. Instead I see abundant, structural obsolescence which both will create wealth through its destruction/reinvention, and also return economic value to society through cost reduction. Collectively, and in the absence of corruption, there is more than enough wealth, opportunity, experience, fun, resources, and even time. Because I am a capitalist, I don’t even worry about how we will find our way to the best expression of our skills and technology to achieve this vision of abundance; I just need to know people have a good, strong, incorruptible playing field from which to work, and we will arrive at a future fundamentally peaceful, prosperous and free. I think as long as our society progresses toward utilization, stewardship, and a focus on individual experience through growth and development (which for the record is how I see the macro trend today. At least, when I am looking across the billions, and not just when listening to the broadcast news), then there will be economic safety for our elderly even if their private 401(k) balance isn’t as high as the retirement advisor of yester-year says it should be.