The FIRE movement (Financial Independence, Retire Early), has become a wildly popular concept over the last decade, but it's also become wildly controversial.
Today, Andy talks with Lisa Harrison, the writer and podcast host behind Mad Money Monster. She’s had her story featured on major media outlets like Yahoo Finance, MarketWatch, and Forbes. She started off in love with the FIRE movement and the idea of early retirement but then had a change of heart.
We’ll be diving into how she discovered FIRE, what changes she made to her lifestyle and what caused her to abandon the idea of early retirement altogether.
Discovering Early Retirement and FIRE
Lisa and her husband discovered FIRE when they were considering buying a house. But they backed out at the last minute when they realized they lacked the financial education to handle the process efficiently. That was their catalyst for a financial reboot.
Lisa then started discovering FIRE blogs and podcasts and learned as much as she could about the financial movement. She then launched her own blog to write about her own personal journey to financial independence. At the time, she and her husband had a young daughter and had the ambition to reach FIRE so they would have more flexibility, more freedom and more time with their daughter.
Adjusting to the FIRE Lifestyle
Both Lisa and her husband were bringing in separate incomes. Her husband worked as a contractor and had a variable income from month to month. The first step they took was to live on only Lisa’s income and save her husband’s income.
At one point they hit a savings rate of 70% (they lived on 30% of their income and saved 70%). They cut the cord on cable TV, removed subscriptions, gym memberships and even cut down eating out to the minimum as well as coffee dates (which they used to do every weekend!). The plan was to retire early, so it was all worth it.
They even tried living in a camper van, just for the holidays. But after trying it a couple of times Lisa decided she didn’t love it, and holidays were meant to be comfortable, not painful. An idea that was good to experiment with but not something they were interested in long term.
Why they Stopped Pursuing FIRE
Lisa argues it was a cumulative effect of various different things that brought her to stop pursuing early retirement and FIRE.
She said she sees too many people making money by writing about being early retired. Lisa argues that to her, early retirement means completely ceasing to work. To her, early retirement isn’t about changing jobs and it’s not about pursuing entrepreneurship. She wanted to seriously cease working and live off investments.
After some time, her blog was evolving into a second full-time job with deadlines, deliverables, and a large time commitment. In fact, it was even more stressful than her regular corporate job because this time she didn’t have a team of people to help her. In her mind, this would mean she’d have to manage a business out of early retirement – which felt disingenuous.
She took a step back and realized that she did not hate her job. Her job lets her work from home two days a week and she enjoys several benefits and stability. In the end, she decided that working at her job was best.
Figuring Out What's Best for the Family
Lisa realized that she DID want cable and she DID want a nice car. She wanted to enjoy life now, and not later.
However, FIRE hasn’t been useless. Lisa and her husband still have a pretty high savings rate of 50% and they’re not forgetting the future.
But one thing she has realized is that, especially while her daughter is still young, she doesn’t want to forego a nice family vacation. She doesn’t want her memories with her daughter to be “Oh, how can we save another $2?”. She wants her daughter to have nice memories as well.
Lisa has realized, through her FIOR (Financial Independence, Optional Retirement) journey, that it’s all about finding what is right or you and your family. In her words:
“If a 70% savings rate is going to make you feel uncomfortable because you can't get your pizza on Friday night, don’t do it!”
Grateful for the FIRE Movement
Lisa does not hate the FIRE movement. In fact, she says that if it wasn’t for the FIRE movement, her family wouldn’t be in the position they are today.
Since 2015, she and her family have been very focused on their finances, and have eliminated all debt except their mortgage. That’s a huge feat in itself. They’re now going full-on with their investing, and they still find the FIRE movement motivational and inspiring.
As she says, you need to pick and choose who you follow, who resonates with you and who is being genuine. They now focus on financial improvement instead of financial independence. Lisa and her husband own two properties and like the idea of buying more properties and celebrating the small wins along the way.
As Lisa says herself, it’s important to enjoy life today. Although they’d like to hit their FI number sooner rather than later, they are happy with reaching the normal retirement age and having a very comfortable retirement instead.
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