Financial Independence Retire Early: What Does it Really Mean?

Financial Independence Retire Early: What Does it Really Mean?

Hey all! Hope you’re having a fantastic evening (or morning, or afternoon). I’d like to discuss a topic that is central to my mission: financial independence retire early.

This is such an important topic that I don’t really need a reason to discuss it, but something actually did prompt me. Like so many people out there, I listened to Paula Pant’s interview with Suze Orman recently.

Now, despite Suze’s apparently strong feelings on the matter, I am going to try to stay partial here. Which isn’t exactly easy to do, considering how many times she mentioned her private jet/private island. Yeah, that happened.

But my goal is not to criticize Suze; instead, I would like to reinforce the point that Paula made in her clip after the conclusion of the interview.

Before I do, allow me to back up a bit.

What is Financial Independence Retire Early?

I defined financial independence retire early in a previous post of mine, but this time I want to delve further into that topic. Additionally, I would like to address some of the shortcomings of the term that are becoming all too obvious in recent months.

FIRE stands for:

Financial

Independence

Retire

Early

At first glance, it seems like a harmless little acronym that works nicely due to spelling out the word fire. Plus, who wouldn’t want to retire early? That means you can just sit on a beach sipping cocktails all day, right?

Maybe tweeting @ your favorite celebs, and they respond because you’re kind of a big deal now…right?

Okay, probably not. But you may not be destined for that lifestyle anyway. In reality, early retirement is not for everyone. And I am not the only one who has highlighted the limitations of early retirement.

Truthfully, the RE part of financial independence retire early is something that sounds nice but may not actually be feasible. FI isn’t easy but is much more achievable than RE is.

What is Retirement?

There has been a lot of debate over what it means to retire, especially within the context of financial independence retire early.

If you were to work until the normal retirement age (soon to be 67), in most cases you work until then, growing your investments/retirement plans while working. Then, if you’re lucky, you might have social security or even a pension. Other than that, in the typical situation, you won’t be earning anything else at that point.

But you’re almost 70, so would you still have the motivation to keep working anyway? Maybe you would, but if you’re like most people, you probably wouldn’t.

And if you cease working completely, you are then retired. Pretty straightforward.

What is Early Retirement?

When things get a little less clear is when we think about early retirement. See, in the context of FIRE, some people have “retired” as early as 30 years old.

But the life expectancy for women is over 81 years here in the US now (76 for men). If you are someone who retires at 30 and lives to be 81, what are you going to do for 51 years?

I realize this situation would be the exception rather than the norm, but let’s pretend for a minute.

Of course, you could choose to spend more time with family, volunteer in your community, travel, and many other things for which you would have less time while working a full-time job.

As attractive as that sounds, though, it surely doesn’t sound like enough to fill up 51 years worth of time.

And that is what in many cases leads people to this semi-retired state of being. Some people choose “barista FIRE,” literally working as a Starbucks barista for 20 hours per week solely to claim the health benefits.

Others may choose to spend more time on what was their side hustle (like this blog!), and maybe that side hustle ends up making them money.

The point is that although that person is “retired” in the sense that they are no longer working a 40-hour per week full-time position, that doesn’t mean they just sit on a beach sipping cocktails all day long.

That would sure get boring after a while.

It’s About Options

This is where I’m going to back Paula up. As I mentioned above, although one may “retire” in the sense of leaving a full-time job, that doesn’t mean they never earn another penny for the rest of his or her life.

While listening to the interview with Suze, she seems to take it as an assumption that the RE person doesn’t earn another penny after retiring.

They may not. But they also might. That’s kind of the point here.

Suze also makes the point that people who retire “don’t have a passion.” Maybe. Or maybe they just don’t care for the 40-hour work week. Not everyone wants to be put in a box (cubicle?). Some of us march to the beat of a different drum. And that is okay.

Rather than admonishing those people, I think it would be more productive to acknowledge the fact that everyone is unique. What worked for you may not work for someone else. And while it’s true that sometimes “life is life,” I personally am not comfortable lying down and accepting my fate of a life I don’t find fulfilling.

What Does FIRE Mean to You?

There’s an old adage that says “life is what you make it.” Of course, there is merit to having universal definitions for certain concepts; gravity should always be gravity.

But in humans’ lives, things can be much more nuanced and complex. I don’t believe FIRE has to have one definition. FIRE can mean different things to different people.

For example, someone like Bill Gates could obviously retire this second and probably couldn’t run out of money if he tried. For others, maybe they have a comfortable $1.5 million portfolio – a sum that, while significant, is not completely failsafe.

And yet, both people could walk away from their 40-hour-a-week jobs today and call themselves retired. One may need to earn more money and some point; the other almost certainly wouldn’t. But while these are two entirely different scenarios, that doesn’t mean we can’t call both of them RE.

To me, financial independence early retirement means having the freedom to pursue any of the following:

  • Freedom to do you want when you want to do it
  • More time for friends and family
  • Traveling
  • The ability to turn your side hustle or passion project full time
  • Starting your own business

…and the list goes on. I do realize that starting your own business seems counterintuitive to the idea of early retirement.

But that’s also kind of my point. FIRE can mean different things. There is not just one definition.

So no, Suze, financial independence does not necessarily mean flying your private jet to your private island. FIRE is what you make of it.

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This Post Has 21 Comments

  1. I agree. True definition of FIRE is different for everyone. “FIRE is what you make of it.”

  2. Well put. Everything we do we do for our own reasons, and as long as we are intentional and goal-oriented in our decisions then we are doing what is right for us at that time. Also, did she mention a private island and plane? I only remember hearing that 2 or 3 times, plus a few more in her interview with Stacking Benjamins, and I’m guessing a few more times with other podcasts. Way to stay connected with your audience, Suze.

    1. Haha, totally didn’t sense the sarcasm at first. It is what it is. I will keep spreading the message of a broad definition of FIRE.

  3. I love this post! For me, retiring early means the freedom and flexibility to live my life on my own terms. It really helps to know what you treasure most. I’m not interested in a private jet or a private island either.

    1. I’m glad you liked it! And I don’t expect to ever have a private jet, but I dunno…it wouldn’t be so bad not having to deal with airports anymore. Hah!

  4. Fire for us means freedom. The freedom to decide if we want to work or not or if we just want to take the opportunity to completely change the course of our lives. Our goal of being financially independent is purely to have the money to buy ourselves time. Time with our families, travelling or just time to spend to doing what makes us happy.

    1. Definitely. That is the Vicki Robin philosophy which I feel is much more sensible than anything Suze says.

  5. I think we need to stop looking at it as retiring early (as acronym-handy as that may be) and start looking at it as changing courses mid-life. Just about every FIRE blogger seems to keep going (some even start podcasts) after “retiring” so clearly they’re still doing a fair amount of work.

    1. I agree completely! I would certainly get bored, even though I do want to travel quite a bit. But I also want the flexibility to be able to set my own schedule. The traditional work life is just not conducive to that.

  6. My husband is “retiring early” from his current employer. He is burned out, having worked there for 25 years, and is eligible for his pension. We now have the opportunity to make some life changes, such as moving 1000 miles south. It would be nice to be financially independent, unfortunately, rising healthcare costs ensure that one or both of us will need to continue working, in some capacity, for another 10-15 years.

    1. Ugh, sorry to hear that. It’s a huge issue in my opinion. Healthcare should not be a barrier. I am hopeful that our country will start to address that (rather large) problem soon.

  7. I thought FIRE was all about quitting your job, retiring early to a beach and balling out, blowing all your money before running out of cash at age 60, to ultimately depend on social security. Isn’t this what FIRE is about? Lol

    Suze Orman is a character.

    1. A character indeed! Yet she has backtracked a bit since then. I honestly think the initial thing was a PR move, but oh well. She still has her private island and jet.

  8. This is a great read. I feel like it really explained FIRE well and how it is going to be different for everyone. There should be no cookie-cutter model for fire, life or anything else. We need to make it our own so that it works for us.

    1. Personal finance is personal!

  9. If I am going to be honest, I don’t really want to “RE”. All I want is FI so that I can focus on the things that make me feel accomplished. Helping people through their financial journeys. If I were to retire early, I think I would just wither away. Gotta stay sharp!

    1. I agree. Everyone is different and has different goals. And that’s kind of the point – we don’t have to all be the same. That seems to be an idea that too many people believe, and I definitely want to push back against it. Thanks for stopping by.

  10. I think the FIRE community is so interesting, and people really get hung up on what it means to be retired. In fact, it’s funny because the post we put out a month or so ago ruffled some feathers because we didn’t feel like someone making a full-time income from blogging is retired, just changed jobs. Whatever people consider retired, the point of pursuing financial independence is to have more FREEDOM to CHOOSE what you want to do in your life. However, I think it’s also important that FIRE people understand their privilege in striving for FIRE. A large portion of the population must keep working whether they feel fulfilled or not. Appreciate you emphasizing the options aspect.

    1. I remember you saying that at FinCon. Slightly different on my take, I suppose. But we can all have out own take. Personally your take does not upset me. 🙂

  11. THANK YOU!! I loved this article! RE like life is what we make of it. I love the examples and insights you give here. It’s also interesting as you mention Suze that she assumes an RE has no passion – that’s because her passion is obviously making money and since that is her passion there must be no other passion in this world, lol

    Thanks again for detailing out the differences. It seems as of late those of us who REed have been under “fire” (I had to) One result I like is articles like this that are supportive of different lifestyles.

    1. Thanks Bonnie! I appreciate it. For sure, the most important thing that I always try to say is that there is no one-size-fits-all. Or, personal finance is personal, as they say. 🙂

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