September 14, 2021
In today’s article, I’d like to address some typical questions, comments and criticisms of the FI movement and the idea of leaving full-time work with a non-gigantic sum of money AKA retiring early.
And let’s be real, as a group we’re still the minority. So we’re bound to get a ton of baffled and even angry people trying to throw shit on what we’re doing.
Doing something different often makes people feel uncomfortable, because it prompts them to question how they’re playing the game of Life. And that maybe – just maybe – they don’t have it all figured out after all.
Of course, the natural reaction is to push back against that feeling. To be clear, I’m not saying we have it all figured out either!
We’re just playing the game in a different way which happens to come with a whole bunch of sexy benefits like freedom, wealth and being able to live a healthier, more satisfying lifestyle.
But I’m getting carried away. Let’s tackle some of these comments…
Many one-off expenses are actually kind of expected over a long period. Car replacement, property maintenance, additional health costs, and so on.
The easiest way to prepare for these things is to have some cushion built into your plans for when random things happen. This can take many forms.
Holding extra cash. Being open and willing to earn some income after leaving full-time work. Being flexible with your lifestyle and spending. Open to taking a little extra from your investments than planned. Or simply saving a little extra in the first place.
All are very reasonable and sensible things to do.
You can either plan for this in advance by building more investments before leaving work, or you can do a little bit of work to cover the extra costs.
Remember, even one day of work for one person is likely to be about $200 ($25 x 8 hours). That’s $10,000 per year, which would go a pretty long way to covering additional costs.
And that means you still have an enormous amount of freedom – 6 out of 7 days off!
More on how to reach FI with a family here, from someone who is doing it.
This is a judgement call for each individual based on what you think you need to live a good life.
There’s no set prescription of how much you’re supposed to live on. We can tailor it to suit what we each prefer. You can certainly work longer to spend more if you like.
Some people feel no need, considering we already have it pretty damn good in modern-day Australia. Not to mention the fact that spending more isn’t necessarily going to make us any happier.
Personally, I would rather have freedom sooner and then I can decide whether it’s worth working more to bump up the luxury, rather than the other way round.
This lets us see what we’re really giving up (freedom and control of our time) in exchange for a fancier lifestyle.
You can either buy one before you leave work, sell off some investments to buy a home with cash, or go back to work for a year to qualify for a mortgage.
People have this weird fear of being locked out of the housing market forever. If you’re saving and investing a healthy amount, that’s a ridiculous fear to have. Your wealth is growing and your investments are earning returns.
Yes, sometimes property markets boom, but it doesn’t last forever. At any time down the track you can still buy a home if you prefer.
If the fear is too much, just buy before leaving work and build this into your plans.
Is it though? Better than relying on a paycheck.
Remember, you have investments PLUS the capacity to do some type of income earning activity if you want/need to.
If living solely off investments is too scary, maybe just switch to semi-retirement where you work a couple of days per week and live partly off investments.
Funnily enough, a couple who picks up a bit of part time work goes a long way to covering a modest level of spending like $50,000. So even with poorly performing investments and a measly amount of work, there’s still plenty of cash to keep things running smoothly.
See previous point. You’ll still be in a dramatically better position than everyone else who didn’t bother saving and building wealth before that happened.
When the prepared person leaves work, they will also have some backup plans to smooth out the bumps along the way (see emergencies question).
This comes from people who are hung up on the strict definition of the word ‘retirement’.
To them, it can only mean golfing, watching TV, holidays and shopping. The solution is to change how YOU think about the word retirement.
To me, retirement simply means the point where you can afford to leave mandatory work and start doing whatever the hell you want.
What’s the point of it? To spend more time on other things which are often neglected due to the demands of full time work.
Health, family, hobbies, contribution, learning, kids, pets, passions, and just time to slow down and enjoy life other than working all week. The list is endless.
You also have the breathing space to start a little business, low-paid or even volunteer work without needing to think about how you’ll pay the bills.
You get to design your life around what you want to do, rather than what you have to do.
It’s not about that. See above.
This comment usually comes from people who think you must work full-time all-the-time to be a useful member of society.
But that’s a pretty sad way to measure the value of a human life.
There are a ton of people who aren’t in traditional employment who are doing really nice things in the world, many of which are adding far more value than the bureaucratic bullshit, endless email-chains, and pointless meetings happening elsewhere at many workplaces.
Is the point of life to work, or to live?
Maybe it’s both. But this way, you get to choose the balance.
Well, we can always make more money if higher spending is desired.
Pretty much everyone who becomes financially independent and leaves their job ends up doing something productive which earns some money later anyway.
So there’ll likely be plenty of extra spending capacity down the track for those who leave work with ‘just enough’ and find themselves wanting to spend more.
I’ve never actually heard of anyone retiring and having this ‘problem’ though. The opposite usually happens. People find they need less than they thought to live a satisfying life.
This thoughtful comment is usually targeted at those like myself who retire early and live on $50,000 or less per year.
Pretty judgemental and closed-minded at best. Entitled and extremely lacking perspective also comes to mind.
We’re simply not playing the hyper-consumer game that many others are playing. Is that wrong?
It’s like people playing football and saying that football is the best game ever – the only game that could possibly be worth playing.
But a group of us notice others playing basketball and it actually looks pretty good. We decided to join, and now we’re having a great time playing basketball too.
So your answer to that is “No, no, this is all wrong – get your arse back over here and play football.”
You’re measuring other people’s lives based on your own criteria. With the same boring and faulty assumption: spend more = better life.
This is a big problem… if your life goal is to earn the most money possible and have the biggest safety net you possibly can.
Yes, there’s an opportunity cost to retiring early. But what about the opportunity cost of the life and time you’re missing out on by staying at work to amass more money?
Once you move past the fear of having enough, that feeling quickly dissipates. That usually happens when you finally admit to yourself you don’t need an expensive lifestyle to be happy.
Chasing after an ultra-affluent lifestyle comes from our desire to feel significant and important. Because we think it means something.
If you want more money, you can always go back to work. People seem to think once you leave your job you are somehow locked out of the workforce forever. That’s ridiculous.
Sure, maybe you can’t get the exact same job again. But who cares?!
If you’ve reached FI, you already have enough investments to sustain yourself forever. Even part time income would be 100% surplus!
By the way, this isn’t designed to be a general FAQ about FIRE. I’ve already got that on this page under ‘Getting Started’, along with the most common investing questions under the ‘Getting Started Investing’ section.
This is a reply to the pushback on the idea of opting out of the rat race with a decent but not staggering level of wealth.
I’m trying to take these comments seriously. But most of them are based on thinly veiled excuses and a bunch of hand-wringing because people are doing something different from the standard treadmill of 40 hours a week for 40 years.
Many criticisms of FIRE and anything related typically stem from fear.
Fear or the unknown. Fear of having enough money. Fear of not being able to live the ultra-consumer dream. Fear of what others will say. Fear of not fitting in or being liked. Fear of losing the identity and sense of importance we get from a job.
Some are valid concerns, but many are imaginary problems that are easily solved with a little thought, some common sense, and, well, a little courage.
In general, if you actually listen to the people in the FI community, you’ll know damn well the last thing we are is fearful.
When you take control of your life and decide to be 100% accountable for everything, you no longer worry about what might happen. You just know you’ll figure it out when it does and be perfectly fine.
Here are some resources you may find useful on your wealth building journey:
Sharesight: A great portfolio tracking tool for share investors, and free for up to 10 holdings. It tracks all dividends, franking credits and capital gains, which is incredibly helpful at tax time. Saves me a lot of time and headache!
Mortgage broker: My personal broker of 10 years is More Than Mortgages. Highly rated and award winning, Deanna and her team been super helpful over the years and can assist with anything home loan related, including refinancing and debt recycling.
My book: After 5 years and hundreds of articles and podcasts, I decided to distill everything down into an easy to follow book. Designed as a complete roadmap to achieving financial independence and retiring early in Australia. Available in paperback, ebook, and audio.
Just so you know, if you choose to use these resources, this blog may receive a financial benefit at no extra cost to you. Thanks in advance if you do. And to be clear, I only ever recommend things I use myself and genuinely believe in 🙂