Why Does the FIRE Movement Get So Much Attention | Deep Questions Podcast with Cal Newport

00:00:00.000 | [MUSIC]

00:00:05.400 | All right, so we have a question here from Erica.

00:00:09.720 | Erica asks, why do you think there is a lot of attention and

00:00:12.420 | hype on the FIRE movement, but not as much attention on other

00:00:16.240 | career options such as part time or contract work?

00:00:21.920 | You know, Erica, it's an interesting question.

00:00:23.840 | There has been a lot of attention on the FIRE community.

00:00:28.240 | There was, I think, a moment maybe a few years ago where this reached a peak.

00:00:32.120 | I think it's kind of dying back down again.

00:00:34.440 | And I'll talk about that in a second.

00:00:35.640 | But for the listener who doesn't know what we're talking about,

00:00:38.440 | FIRE stands for Financial Independence Retire Early.

00:00:42.920 | It's a movement mainly of sort of middle class,

00:00:47.000 | highly educated knowledge workers, so salaried knowledge workers.

00:00:50.080 | Where the whole notion is, if you have a good salary,

00:00:54.080 | like you're a computer programmer, and you bring your expenses,

00:00:57.520 | you get very comfortable living cheaply.

00:00:59.280 | You get this double edged advantage where, A, you can save a lot of money,

00:01:05.800 | because you're only living on a little bit of money you earn.

00:01:08.240 | And B, because you live cheaply, the amount of money you have to save

00:01:13.080 | to then sustain your lifestyle just off of savings,

00:01:16.960 | the formal definition of financial independence, becomes much lower.

00:01:20.160 | And basically, if you do this math, if you can live on,

00:01:25.480 | these numbers aren't precise, but it's roughly speaking,

00:01:27.560 | if you can live on 20% of what you make,

00:01:30.280 | then 10 years of savings, more or less,

00:01:34.360 | will be enough to in perpetuity cover that 20%,

00:01:39.800 | and you'll be financially independent.

00:01:41.400 | All right, so that's the FIRE movement.

00:01:42.600 | Mr. Money Mustache is a big player in that movement.

00:01:46.760 | I wrote about him in Digital Minimalism.

00:01:48.520 | He actually blurbed Digital Minimalism.

00:01:51.240 | Nate and Liz Thames, the Frugalwoods,

00:01:54.520 | they have a really interesting blog.

00:01:55.800 | I talked about them in a recent New Yorker piece of mine,

00:01:58.920 | and they're interesting examples of FIRE proponents.

00:02:03.080 | And there's a bunch of others.

00:02:04.680 | This is why I think a lot of attention goes to movements like FIRE,

00:02:08.840 | is extreme examples are a useful way to illustrate powerful,

00:02:16.200 | but much more generally applicable principles.

00:02:19.640 | This is something that advice writers know.

00:02:22.840 | You give the big example that's out there

00:02:25.880 | because it purifies and clarifies what the underlying mechanism is,

00:02:30.360 | and it purifies and clarifies the aspirational appeal of that mechanism.

00:02:34.200 | It's the best way to make the more general point.

00:02:36.840 | So the more general point that's being made by the FIRE movement

00:02:39.640 | is that you have way more flexibility than the culture makes clear

00:02:45.160 | to play around with this income expense equation.

00:02:48.360 | There's this cultural pressure that, you know,

00:02:51.480 | you get moved to whatever city that you get pushed into

00:02:55.000 | because that's where the job is.

00:02:56.520 | And then once you're there, you take your salary

00:02:58.840 | and you basically spend most of it.

00:03:00.600 | And if you're really on the ball,

00:03:03.320 | you can save 15% in your 401k,

00:03:06.040 | and that plus social security might take care of you when you're 65.

00:03:10.040 | And along the way, when you're about to get married or buy a car,

00:03:14.520 | try to put a little bit more money aside.

00:03:16.200 | And the underlying principle that the FIRE movement points out

00:03:20.040 | is you have way more control over that than you think.

00:03:22.440 | You don't have to just live at whatever amount of money you happen to make.

00:03:27.880 | You have to live just right there.

00:03:29.400 | That doesn't give you the return you think it does.

00:03:32.120 | Are you really way more happier when you're 35

00:03:37.640 | than when you were when you were 22?

00:03:39.400 | You make a lot more money at 35.

00:03:42.600 | You've probably increased your spending to match that money,

00:03:46.120 | but, you know, you lived on a lot less money when you were 22.

00:03:49.320 | Were you miserable? Probably not.

00:03:50.760 | These are the type of questions they push.

00:03:52.680 | What if you had stayed at that level of spending you had

00:03:54.760 | when you were 22 now that you're 35?

00:03:56.440 | Think about all the flexibility you would have with your money.

00:04:00.280 | What about if you move somewhere cheaper?

00:04:01.880 | So this was the big point I made in my recent New Yorker article

00:04:04.920 | about the great cubicle escape.

00:04:06.440 | I talked about Bill McKibben and his wife, Sue Halperin,

00:04:09.000 | how they moved to the Adirondacks.

00:04:11.800 | He quit the New Yorker, they moved to the Adirondacks

00:04:14.360 | in part because it was incredibly cheap to live there.

00:04:18.040 | And because it was so cheap to live there,

00:04:19.880 | Sue and Bill could just do freelance articles

00:04:23.400 | at their own leisure and live quite comfortably.

00:04:26.600 | And then when Bill had a hit book with The End of Nature,

00:04:29.800 | he said, "This is great.

00:04:31.400 | Instead of trying to go ride this wave

00:04:33.240 | and make as much money as possible,

00:04:34.680 | this will buy me the ability to basically

00:04:37.800 | sell any book to a publisher that I want to write

00:04:41.400 | and I'll get a reasonable advance on it."

00:04:43.000 | And because we live cheaply,

00:04:44.040 | if I just write a book every two or three years

00:04:45.960 | on whatever I want to write about,

00:04:47.080 | that'll kind of cover all of our expenses.

00:04:48.440 | I don't even have to do the freelancing anymore.

00:04:50.120 | They hacked the equation.

00:04:52.280 | Let's bring down the expenses.

00:04:54.040 | Now we can get by with a lot less money.

00:04:56.840 | That is the general point.

00:04:57.880 | I think that is the appeal.

00:04:59.080 | So, Erica, when you talk about career options

00:05:00.920 | such as part-time or contract work,

00:05:02.440 | this is actually where you get to.

00:05:05.240 | Most people, once they're exposed to fire,

00:05:07.800 | is thinking, "I'm going to sell the 3,000 square foot house.

00:05:11.640 | I'm going to move over to the Eastern Shore.

00:05:15.960 | I'm leaving Fairfax to go to Chestertown

00:05:20.120 | or something like this.

00:05:21.400 | And I'm going to buy a house

00:05:22.760 | that's a fraction of the price.

00:05:24.920 | And I'm going to live on half the money.

00:05:27.640 | And I'm going to do contract work.

00:05:29.320 | And I'm going to take three months out of the 12 off every year

00:05:33.560 | or work three days a week."

00:05:35.160 | That type of engineering and flexibility

00:05:37.320 | that you can have more options than you think

00:05:39.320 | to contrive what your work life works like.

00:05:42.040 | You have a lot of flexibility on your expenses.

00:05:43.880 | You have a lot of flexibility on how you want to earn.

00:05:45.880 | And getting out there and actually exploring those options,

00:05:48.920 | that is the lesson of fire.

00:05:50.280 | Not this idea that you have to fully be financially independent

00:05:54.920 | and living on this incredibly small amount of money

00:05:57.080 | and it's all coming out of your savings

00:05:58.600 | and all of that nonsense.

00:05:59.960 | That is all a distraction.

00:06:01.320 | That's not why fire is popular.

00:06:03.160 | It's not that people want to live on $18,000 a year in a trailer

00:06:06.680 | because they could technically be financially independent

00:06:08.920 | by the age of 27.

00:06:09.960 | It's that they want to take back control and say,

00:06:12.200 | "I have way more options to engineer my life

00:06:14.840 | than the culture is telling me."

00:06:16.200 | So, Erica, you're right to say fire seems a little bit extreme,

00:06:21.240 | but that extremeness, I think, is why it's appealing.

Why Does the FIRE Movement Get So Much Attention | Deep Questions Podcast with Cal Newport

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