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FIRE May Not Be So Hot

Aug. 02, 2018 8:12 AM ET66 Comments
Roger Nusbaum profile picture
Roger Nusbaum


  • Make sure you're fully informed on your retirement plan decisions.
  • Understanding the consequences of very early retirement.
  • Make good decisions for your future self.

The FIRE movement fascinates me. FIRE stands for Financial Independence/Retire Early. There is a lot that is positive about the mindset that goes with feeling independent and with having a solid financial foundation (which does not have to mean having millions in the bank) of being able to pay for emergencies like veterinary bills or car trouble, being to financially weather a change in jobs such that you don't get a pay check for a month or two or endure some sort of bigger financial hardship.

Like any path, there are of course drawbacks to FIRE and they seem to mostly effect the future you if you "retire" in your 30's, all the more so if your version of FIRE includes a tiny house.

In a lot of my posts lately, I've talked about optionality. Someone living the FIRE lifestyle in their 30's who is either not working at all or just taking side gigs to make $15,000/yr to cover groceries, the cell phone bill and gas and living "permanently" in a depreciating house on wheels is depriving their future selves of a lot of optionality.

Some of the FIRE bloggers do in fact retire in their 30's with $1-$2 million and depending on how things work out, they absolutely can make it. Candidly I am not sure how someone on their 30's will accumulate that kind of wealth without a lot of stock options or inheriting it. Some can, but that is very rare. As a percentage of the population there aren't that many even considering the stock options or inheritances. If you're in those cohorts then you do have optionality in terms of retiring at 35 and making it work but that is very few people.

A common saying is that people's biggest investment in their lifetimes is

This article was written by

Roger Nusbaum profile picture
Roger Nusbaum is the ETF Strategist for AdvisorShares. This Arizona-based professional has over 25 years of industry experience. He is also a well-known financial commentator covering ETFs, retirement planning and portfolio management for AlphaBaskets.com and at TheStreet.com. We think Roger is particularly insightful on exchange-traded funds, risk management and investing in international markets. Visit Roger's work at TheMaven (https://www.themaven.net/etf/) and AlphaBaskets (http://alphabaskets.com)

Analyst’s Disclosure: I/we have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it. I have no business relationship with any company whose stock is mentioned in this article.

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