dumb money (ep. 4): financial independence, retire early

what that the FIRE movement gets wrong

Hi friends, welcome back to dumb money!

The driving principle behind this series is simplicity. I believe that as long as we direct our efforts toward developing high-value habits, it’s possible to win the money game with minimal time and effort.

Today, I’d like to share my thoughts on the Financial Independence, Retire Early (FIRE) movement, which has gained significant popularity in the post-pandemic years.

The resurgence of FIRE makes sense when considering the most recent job satisfaction report—employee engagement in the U.S. has dropped to its lowest level in more than a decade. This decline is especially pronounced among younger workers and remote workers, both of whom have been experiencing a growing disconnect between company culture and individual values.

Financial independence—which is the ability to support yourself without a steady paycheck—requires diligent planning and discipline. But to achieve such a status decades before the typical retirement age takes extreme living standard sacrifice. In order to retire early, FIRE followers save upwards of 70% of their salary.

Once financially independent and retired, devotees withdraw ~4% of their life savings annually to cover living expenses. With the stock market and fixed-income assets historically offering returns higher than 4%, individuals can rely on dividends and the law of compounding to maintain financial security for the remainder of their lives.

When done successfully, FIRE empowers you with both financial and time freedom. With happiness being as elusive as it is, striving for financial independence may be a more practical pursuit for most—by not having to worry about money, you can instead focus on other aspects of your life that contribute to happiness.

I think FIRE is an extreme response to everyday problems such as an unfulfilled life, job dissatisfaction, and a scarcity mindset. The assumption seems to be that FIRE can serve as a one-size-fits-all solution to life’s most challenging issues.

While FIRE addresses these issues, it is most definitely not the right solution.

Here are five questions, concerns, and opinions I have on FIRE.

1) When frugality becomes your main hobby, what happens after you achieve financial independence?

We’ve all felt the joy of getting a good deal. Studies have even shown that shopping a sale can give you the same feeling as getting high.

While I believe everyone should pursue a frugal lifestyle, FIRE devotees tend to veer into obsession: saving money becomes a life’s purpose. As an outsider looking in, I can only imagine the thrill these people must feel while working toward the promised land. Watching your bank account grow as a direct result of your efforts must feel intoxicating.

But what happens after you hit your necessary savings threshold? Do you lose a core piece of your identity?

Elle Griffin shared a similar sentiment in her piece titled “You’d still work if you didn’t have to”:

“This is something the anti-work movement has neglected. If you are anti-work, what are you for? What activities do you wish to engage in instead? And if you had the ultimate freedom to do those things, might some of them look like work today?”

I’m sure it must feel great quitting a job that you despise. But will it be as easy to give up this addiction-like hobby, the one thing you devoted the last two decades of your life to?

The concept of lost purpose scares me.

2) The FIRE utility equation

Bear with my economics degree for a second here.

People who engage in FIRE project that:

Cumulative life utility from doing FIRE > Cumulative life utility from not doing FIRE

Pretty self explanatory. But there’s a second utility equation constraint, serving as an input to the one above, which I believe people don’t think about as much:

Utility gained from not working in your 40s and 50s > Disutility from "over-saving" in your 20s and 30s

That’s something I can’t quite agree with.

I love living in the city with my roommate. I love being able to consistently visit my family back in Los Angeles every few months. I love traveling to my friends across the country and seeing how they live.

But if I wanted to save over half my income so I could retire early, these would be the first of many activities that I’d have to cut out of my life. 

Furthermore, commitment to FIRE begins in your early 20s and is realized in your 40s. In other words, at age 40, you are forced to live out the plans you made for yourself two decades ago. Who knows if those plans will still align with your values and desires after 20 years of life experience and change?

I’m sure retiring early is great. But instead of banking on future fulfillment, I’d much rather live each year to the fullest.

3) Money is best spent with others

When striving towards FIRE, your relationships with others will suffer. They may not fully deteriorate, but they will take a substantial hit.

In “The Infinite Value of Time With Others,” Scantron makes a compelling case on money as a network good:

“But, inevitably, [FIRE] misses the mark. Your friends, most of your family, and social circle will not be retired at 40. You may have sole custody over your time, which is great, but it doesn’t matter if you have no one to share that time with. The FIRE folks may also have more money than their peers but for a lot of things, money is also a “network good”. It derives value from how many people around us also have access to it.”

By focusing solely on financial independence and early retirement, you sacrifice the present moments and relationships that give life its true value. You may end up with more money, but without the shared experiences and connections, its worth diminishes.

What is money, if not a tool to provide safety and create lasting memories for your loved ones?

A few weeks ago, my sister sent me a touching NYT article titled “How I Learned to Spend Money on Love” that shares a very similar sentiment:

After Dad died, Mom sold their house and gave away everything in it in a matter of weeks. Isn’t that revealing? That without love, the material world ceases to have much meaning?

With her great romance over, Mom now spends her remaining savings on us, family. She insists on giving me gas money and buying me Korean groceries. When I argue that I’m a fully independent adult man, she says I’m still a baby and that I should shut up.

When Mom passes away, she’ll leave behind a zero balance: zero savings, zero debt. I like that. It means she spent every dime on love.

Money can't replace love, but it can be a powerful resource that nurtures and strengthens it.

Living for the future means missing out on the joy and fulfillment that come from spending time and money on loved ones today.

4) Early retirement is a band-aid solution to general life dissatisfaction.

Perhaps we view the FIRE movement as our holy grail because we over-index on the freedom and pleasure we feel from days off.

The uncomfortable truth is that our values are relative. We crave rest after work, comfort after struggle, connection after isolation.

Earning a long weekend and dedicating the extra day off to self-care or catching up with friends will always feel more rewarding than playing 18 holes every weekday afternoon with strangers.

Failure to recognize this is a result of lazy reflection. Choosing work as the scapegoat for your problems is a boring excuse generated from a lame existence. Please, I implore the higher powers to grant us the clarity to never let our work dictate our self-worth and ambition.

Besides, was work really that big of an issue? Didn't work provide you with aspects of life you looked forward to? A commute that allowed you to get your steps in every day? The 2-3 work friends you could talk to about anything? The status and respect you gained when introducing yourself to new people?

5) Time freedom is overrated.

Young professionals glamorize the potentiality of time freedom. With our energy and zest for life, we believe we could travel the world, start a few businesses, and mend our relationships with all our loved ones—if only we had the time.

Khe Hy, host of The Examined Life podcast, argues that time freedom is overrated¹.

Khe gained ultimate time freedom when he left his Wall Street job at 35. However, he soon learned that there were many problems that could not be solved with more time and money: problematic relationships with others, low self-esteem, and addictive habits, to name a few.

Khe believes that if getting rid of these issues were a priority, one would have addressed them even before gaining time freedom. For example, consider activities like working out, which people make time for despite busy schedules.

In other words, it’s not time that’s the root of most problems. It’s our lack of initiative to improve ourselves.

In the decade since quitting his job, Khe has observed many people who, after achieving time freedom, realized they no longer had an excuse for failing to solve their deeper problems. Lacking meaningful ways to spend their newfound free time and unable to reconcile their personal deficiencies, many end up returning to work.

Psychology research has shown that younger people tend to regret actions more than inactions. Because we have lived less, the short-term consequences of making a fool of ourselves feel dramatic and amplified.

But as people age, we tend to regret inaction more. The opportunities missed by not taking action become more apparent.

This is particularly relevant when considering FOMO, where FIRE becomes a two-headed monster.

You can experience FOMO by not participating in FIRE, feeling like you’re wasting your life away at your job.

Conversely, you can also experience FOMO by participating in FIRE, like when you inevitably have to remove yourself from the “Japan 2025 Trip” group chat.

Ultimately, the key is to find a balance that suits your personal values and goals. Whether you're chasing financial independence or savoring the present moment, it's important to reflect deeply on what truly brings you satisfaction.

After all, both action and inaction come with their own set of regrets.

It's about choosing the ones you can live with.

1. ~23:00 minute mark