Hello, everyone.
It is me, your girl Chelsea Fagan, keeping it real.
I'm talking about the FIRE movement
today because the FIRE movement is something
that I've touched on a little bit before on this channel
and I definitely had some criticisms to leverage at it.
I'll link you guys to that video in the description,
but conversely we've also throughout the years
on TFD on places like our website, newsletter, et cetera.
And even on this very channel, on other shows that
are not mine, we published stuff that was very pro FIRE.
And for those who don't know I should just quickly
explain that the FIRE movement is
a very popular movement within the personal finance community.
I think it used to be a little bit bigger than it
is currently, but it stands for Financial Independence/Retiring
Early and it's basically a system
of managing one's personal finances to optimize
for the ability to retire early or to be financially
independent, i.e.
not need to work earlier than the typical retirement age.
And of course we've published a whole range of perspectives
on the topic, including from people
who participate in the movement themselves
because TFD is not just me and my opinions,
even though those are heavily featured,
we also try to give a voice to as many people who
are living different financial choices than me as possible.
I mean, obviously I'm a 33-year-old, Manhattan
dwelling, married, dual income, no kid, child free,
business owner, female CEO.
Like, I'm not sure that I represent
the majority of Americans.
But over the years my feelings on the FIRE movement
and what I would call the individualist approach
to finances has kind of evolved.
I used to be pretty staunchly against all that stuff.
And to be fair, especially in its earlier days,
I think that the FIRE movement as a concept
definitely lived up to a lot of the more negative stereotypes
that were often ascribed to it.
Some of the biggest early voices in the FIRE movement fit
into this very narrow category that
could be typified by a rural dwelling,
high earning, work from home, white male, software engineer
who is obsessed with frugality and who's
stay-at-home mom/wife who's always just out of frame
is doing all of the unacknowledged and unpaid
domestic labor and child rearing that's
allowing this dude to hyper focus on gamifying money
and also in many cases, produce a lucrative blog of some kind.
But ultimately I mean, that caricature is a caricature.
It's not an accurate slice of all of the various people who
make up the FIRE movement nor are those life choices the rule
of how people who pursue that pathway have to live.
But for me beyond the demographic info
of the person who happened to be leading
the conversation at any given time,
the underlying ideology that often underpinned
a lot of the FIRE movement, especially
people who fell into that aforementioned category,
tends to be an ideology that I have a very difficult time
with in the personal finance world in general
and it's also seen in things like cryptocurrency.
It's a very fundamentally libertarian look
at financial ecosystem we live in,
which is obviously inherently quite political
and policy driven.
Basically, it's this overarching view
of this thing is bad and not working for us.
In the case of cryptocurrency, that's
the monetary system and constant wealth concentrating upwards
to the already richest among us.
And in the case of FIRE, it's often that Americans on average
are not able to access a dignified and comfortable
retirement and often not a particularly long one.
And that in both cases we need a kind of escape hatch
to get around this system and do it
in what is usually a pretty hyper individualist way.
Now, in the world of cryptocurrency
there's a huge extra layer, which
is that this money is being made ultimately
by funneling other people into these currencies underneath you
in order to prop up a deflationary currency
system that is being treated like a speculative investment.
And as far as I'm aware that's not
something that happens in the FIRE movement,
but I do think that in general reframing
how we think of retirement as an individual gamified pursuit
of hyper managing your money on a daily basis
and optimizing for frugality at all costs
in order to have the kind of comfortable retirement
or work/life balance that in many other developed countries
is basically the norm guaranteed by the state,
seems like at best a really huge misdirection.
Because I also think that in a lot of cases and again,
in its worst excesses, the FIRE movement
with its focus on frugality creates a tendency
to become incredibly judgmental about the individual spending
choices that people are making and associate those choices
with what is keeping a person in poverty
or limiting their future retirement options.
When we know very well that on aggregate
what keeps people in poverty or limits
their retirement options are socioeconomic factors.
Things like stagnating wages, runaway inflation, the student
debt crisis, health care costs and the fact
that medical bankruptcies are the leading
cause of bankruptcies in this country,
a housing market that is all but inaccessible
to huge percentages of young adults,
and other various macroeconomic factors that no matter how
many subscription services you cut out in your life,
you're probably not going to be able to overcome.
Yes, we do talk on TFD about things
that you can be more budget conscious about, that you
may not need to be spending on, ways in which our consumer
culture is driving things that may not be making us happy,
and could be sabotaging our long term finances.
But it's important to remember that especially
if these things are going to become more accessible
the real victories have to be won on a larger scale.
And it can feel impossible, but local and state laws
have huge impacts on a lot of these things.
And for example, the recent successful unionization
at Amazon shows that even against literally the most
powerful and large corporations in the world,
there can still be collective action that's successful.
But even something as seemingly simple as me
being a business owner in the state of New York, we at TFD
are able to offer what is a fairly competitive maternity
leave and it's mostly due to the fact
that New York state subsidizes a large amount of it.
There is no federal minimum for how much states have
to subsidize and if we were in another state,
the cost would be massively higher for us
and harder to shoulder that burden.
Which is why it's so important to me
that rather than putting pressure
on women to scrimp and save and kill themselves to go back
to work two weeks after giving birth
and pay out of pocket for absolutely everything in terms
of child care, that we understand that there
are ways to advocate so that we don't have to live this way.
And I do think that I used to be a little bit
too far on that side in terms of how I framed things.
I could and even can sometimes still be
pretty judgmental about these fairly individualist pursuits
of gamifying the financial system that we live in,
in order to maximize results for yourself.
Because it does so often feel like it comes hand
in hand with shaming and ostracization
and judgment of people who don't play the game as well as you,
rather than admitting that the game is rigged and sucks.
But one thing that I have learned
as it comes to financial independence
specifically is that a framework that it does offer us
in terms of how we think about our choices,
is that it prioritizes above all else, valuing our time.
It can be easy when we think of money to think just
in terms of dollar bills, but for example,
if you're working a job that has you working
incredibly long hours for higher wages,
you may actually end up with a job that
has a lower hourly wage than another in which your salary is
lower on paper, but much of your time is given back to you.
Now, you could use that for generating more wealth
in terms of side income.
You could use it for furthering education and certifications
to possibly improve your main source of employment.
Or you could just use it to [BLEEP] have fun.
But I do think there is a way in which financial independence
as a concept can dovetail with what I consider
to be my little, Democratic Socialist Utopia, where we
realize that this paradigm where we're all working ourselves
to death, competing over who can be the most seemingly busy,
and defining ourselves by 9:00 to 5:00 jobs, is not the move.
And another thing that I do think financial independence
as a framing can offer us is the importance of moving
beyond your 9:00 to 5:00 job as a means of defining you
and thinking really critically about what
you would do with your time if it was yours to have.
We're often so obsessed with this very particular metric
of success and identity that statistically a lot of people
end up, when it comes time to actually retire,
super [BLEEP] depressed.
It's not a perfect science, but it's probably
fair to say that if we were focusing more
on the different aspects of our personality and interests well
before retirement, we wouldn't feel such an identity
crisis or a crisis of what to do with our time
when it came time to actually claim it back.
The point of life should be to enjoy it
and always maximizing for money is not necessarily
maximizing for what makes a truly financially
independent and joyful life.
I also believe that thinking in terms of financial independence
can and should be accessible to people
who are at lower incomes.
In our recent interview with Sarah Wilson a.k.a.
Budget Girl, talking about how she
entered into the world of long term wealth building
starting at an income just above $19,000 a year
and now has a net worth over $200,000
is really practical in terms of showing the way that this
can be done without either having
to engage in hyper restrictive frugality
or having a six figure software engineer salary
while living in rural Iowa.
And while I do think it's important to stress
that for most people being able to retire at a young age
is not going to be totally financially possible even
if you do make a lot of the right financial decisions,
I also believe that there are many really
thoughtful and important approaches
to financial independence that anyone
can integrate into their lives.
And you guessed it, I'm here to promote some [BLEEP]..
For those who are looking to approach
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about every cutthroat man for himself,
how many times can I cancel my Netflix subscription until I'm
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I hope to see you there.
I'll be there, I'll be having a great time.
And as always, guys, thank you for watching
and don't forget to hit the Subscribe and Join buttons
and to come back every Monday, Tuesday
and Thursday for a new and awesome videos goodbye.