Have you heard of something called the FIRE movement? Do you subscribe to it or are you able to actually live it? It's a really interesting idea but I think instead, I subscribe to a different iteration of the FIRE acronym: Financially Independent and Reimagining Everything.
What is this newfangledy FIRE Movement anyways? I'll describe what I understand of the original movement, what I think those of us over 45 should consider instead and how to actually walk the talk and still progress toward your personal goals. How to alter your mindset to more quickly get to a life where YOU have more freedom and possibly more happiness.
Hopefully at this stage in our lives, you've been saving and working toward an eventual retirement. We learned the virtue of hard work and saving from our parents and grandparents and I'm hoping you've been able to invest a bit or set money aside for a time in the future when you're NOT working.
At the same time, we are sandwiched between the Baby Boomers and the Millennials and from the younger cohort we're reminded to look after ourselves and live a bit along the way.
Now there is a more recent philosophy and more radical approach that some Millennials or those even younger are considering or trying to live out. The FIRE movement. It stands for Financially Independent Retire Early and it's pretty extreme. From what I can understand, those heading down this path pretty much give up all unnecessary spending in order to save every penny possible, invest well and hopefully only work for 15-20 years to "retire" in your 40's instead of your 60s or 70s. At first glance, it sounds great! Retire from the work grind and travel for the second half of your life, way more than our parents and grandparents were able to. It's only when you start to dig into the details does it become significantly less appealing. No stopping today for a coffee on the way to work. No dining out…..EVER. No paying for fun eccentricities like cable television or seeing an occasional movie, whether at home or Heaven forbid, an actual cinema you'd pay like $12-18 per person.
You pretty much would spend ALL of you young years working and staying in to avoid spending money. Sounds less appealing to me now and since I actually did spend money in my 20s, 30s and even 40s on coffee, cable, movies and travel, I'm way past the ability to hop in and join the FIRE Movement. What I think those of us over 45 should consider instead is a different iteration of FIRE. Financially Independent, Reimagining Everything.
I do know I don't want to work for someone else until I'm 67 and then take retirement, hoping my health and financial investments allow me to enjoy my "sunset" years. Nope. Not happening. First, I plan to live a long time and make daily personal health choices toward such a plan, so living until I'm in my late 90s or possibly even crossing over the 100 year old line could still happen. That would be a long sunset.
Also I have been saving and investing and now wish I had been even more frugal and investment-focused in my 20s and 30s. I now then have to ensure my retirement savings and investments last me a LONG LONG time.
Finally, I don't want to live right now at the expense of saving to do it all when I'm another 15-20 years older. What if I continue putting my head down and focus on work and then something happens and I NEVER get the chance to play and go and see what I want? I want to get out and travel and ensure I'm creating the life that I want today AND still planning and preparing for the life I want tomorrow.
So I now subscribe to my new version of FIRE. Financially Independent and Reimagining Everything. I know that financial security allows for more independence and freedom to consider more choices and possibly create a better life path.
I am and have been actively planning so my money actually works FOR me. I don't have to either be physically sitting at a desk or checked in to work for someone else for me to increase my financial health. I have been able to focus on my savings and investing with people who can advise me and are much smarter than me in this sense so hopefully, each day, my money is working for me and growing to secure a better tomorrow.
I believe optimizing your financial health opens many doors. It may provide you with better future healthcare options. It may provide you to move to a geography of your choosing that allows you more time with your eventual grandkids or more time on a beach or more time on a mountain or more time doing whatever…..whatever it is YOU want. I believe investing in your financial health gives you the freedom to take risks in the future. The future you may not even be able to see yet.
So talking about it is one thing but how do you actually walk the talk and still progress toward your personal goals? What's it feel like to subscribe to and actually live the lifestyle of Financially Independent Reimagining Everything? It comes with reevaluating and reprioritizing in your life. What's most important to you? Stuff or experiences? Okay - that's a slanted question. But truly, are these "little" expenses worth compromising a present and future that is much more financially secure and freeing?
Let's add it up:
A daily cup of expensive coffee at $3/day x 5 days a week x 52 weeks = $780
Fitness center membership you haven't used in 3 months - $30 x 12= $360
Dinner out once a week for you $30 x 50 = $1,500
Cutting these expenses alone saves $2540 per year. Over 10 years, that's $25,400 before any interest or investment potential.
Buying a car is another great example. Sales folks talk about a low monthly payment as it's easier for us to digest or take on. But what happens if you lose your job? If COVID 19 displaces your income for 4 months? What if even in the situation where you HAVE to buy a car, you choose a nice used one with less bells and whistles for $20,000 instead of the new souped-up version for $37,000. Regardless of the monthly payments, that frees up $17,000 to invest and grow and actually work FOR you instead of draining from your pocket.
Personally, I significantly reduced unnecessary expenses - I mean, come on, I have enough clothes, jewelry, and stuff. There shouldn't be much I truly need to buy. In fact, as I've really evolved my thinking over the past few years, I actually want to declutter and get rid of anything that's not of value or need. I find I really need much less than what I previously thought.
I pay for only the lowest level of cable and internet access. I don't stay in fancy hotels when I travel. I bring my prepared food almost everywhere possible in a cooler. It allows me to ensure I'm not eating unhealthy crap when away from home and saving me significant money. I have a glass of wine or prepare my cocktails at home, where it's only $3/glass versus $10-20.
What's important to me now is NOT seeing the latest movie when it comes out or getting the trendiest new clothing. Instead, I make daily spending choices to support my personal goals of living longer and happier with experiences instead of stuff.
I listen to experts like Suzie Orman and Dave Ramsey and have a financial advisor who keeps up on the data and trends so I don't have to. I look at this as investing my time in ME and my financial health now and going forward. That it's another way I am actively planning and creating the life I want today and tomorrow. These don't even feel like sacrifices but instead just changing up my habits a bit. I do splurge every once in a while - and that's fine - but never to the point where I allow it to derail what I want and my timeline to achieve. THAT is my priority.
I hope you lean in more with me and with our DestinationU community. You can find additional recommendations to improve your financial health in my Destination Unknown book and website resources to help you create your plan. I also invite you to join in and tackle our free weekly personal challenges in the Facebook group or receive inspiration to get out and play more and find yourself through adventure in my Instagram posts.
My goal is to provide real-life guidance and resources to help you create the steps to make your next chapter - especially for those of us over 45 - to make your next chapter your best.
Remember to spend a bit of time today investing in what YOU want and what you deem important. Soon you'll find these decisions - no matter how small they may feel now - are either working toward your vision or away from your vision. It's up to you.
Get out there and invest in yourself to more quickly get to your NEXT.