How desirable is FIRE really?
Living a thrifty, modest lifestyle, which not only means more money in your portfolio and account, but also saves on resources is precisely what frugalists learn to do on the path to achieving FIRE. If you’d like to retire at 40, you also need to learn how to manage your own finances – how do you create financial plans and budgets? How do the stock markets work? How do I invest my money to achieve maximum, long-term profit, while only assuming the risk I’m able to?
FIRE is a good life lesson when it comes to being prudent and understanding finance. But FIRE definitely isn’t for everyone. Living on a shoestring, saving every penny and doing several jobs at the same time for decades isn’t something everyone wants to do. Having to make huge sacrifices now to maybe retire at 40 (to then perhaps have to live frugally afterwards) is too great a hardship for many people.
“And what would I do then at 40?” is something many people ask themselves. Being retired at 40 when all your friends are still working may mean a very lonely existence – and work isn’t always a necessary evil, it provides a sense of purpose and source of satisfaction for many people.
Then there are also considerations of a purely financial nature: do I really want to spend exactly the same amount of money all my life and watch every penny? What happens if my circumstances change – children come along or health problems arise? How are the markets performing? What about inflation? Have I factored my AHV contributions – which I also have to pay when not in employment – into my calculations? And how can I insure against the risks of death and disability?
A frugal lifestyle has to be properly planned and well thought through – or you see FIRE as a personal challenge to retire at 40 without trying to achieve it at all costs – and retaining the flexibility to simply scale back or to go on working for a bit longer. There are also individual FIRE models, such as for people who only want to give up their main job while working part-time after retirement, or who’d be happy to retire at 50 or 55 and simply wish to have greater financial independence.