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Exploring Some of the Negativity towards Financial Independence

I just got to know another friend leaving his job.

The job didn’t turned out to be bullshit but the job turned bullshit along the way. He is currently 50 years old.

However, unlike a lot of mainstream case study, my friend is an astute wealth builder and has already laid out a solid wealth foundation, and build upon that foundation such that he has alternate income.

He chose to leave his job. Willing to take on a job that paid much less but protects the sanity.

2 weeks ago, the New York Times wrote an article How to Retire in Your 30s With $1 Million in the Bank. The New York Times is widely read and so there was much conversation generated upon such an article. Not just that, Today Online, also syndicated the article so there were also local discussion. The main protagonist in the article is part of the USA blogging community and if you are connected to it you would not be unfamiliar with Carl from 1500 days.

I have to admit I was not a big reader of his blog (there is too much things to do, you just got to prioritize things) but happen to listen to a podcast his wife is part of.

While I can sort of expect that these article will have people agreeing and disagreeing, the main discussion I took interest is from mainstream media and thoughtful financial commentators.

Here are a few:

  1. Cullen Roche: My View On: The FIRE Movement
  2. Here’s why you shouldn’t retire super early — even if you can
  3. Millennials Dreaming of Retiring at 30 Have a Math Problem
  4. Animal Spirits Episode 45: Do We Need a Recession? (First Discussion)

The more negative discussions can be found in #2, #3 and #4.

I thought there are some interesting things that can be picked out, that we can learn from.

We all have Different Awakening Moments, but… After a While… They Seem Similar

Perhaps the main observation of how the initial article was that it brings out the various reasons why the people in the article sought to find solutions to their problems and chanced upon this money philosophy called financial independence, retire early (FIRE for short)

Carl from 1500 Days Awakening came from a particularly poor workday:

Carl was making about $110,000/yr and had benefits, but the stress hardly seemed worth it. He couldn’t unwind with his family after work; he spent days huddled over the toilet. He lost 10 pounds.

After one especially brutal workday, Mr. Jensen Googled “How do I retire early?” and his eyes were opened. He talked to his wife and came up with a plan: They saved a sizable portion of their income over the next five years and drastically reduced expenses, until their net worth was around $1.2 million.

Jason’s awakening was a very harsh, relatively high paying work environment:

He was deeply unhappy in his job, where over his career he witnessed drug costs skyrocketing, sick people battling with health insurers and the over-prescription of opioids and the resulting addiction crisis. His customers, angry, confused, financially stretched, often lashed out at the person behind the counter.

“There were days when I had 12- or 14-hour shifts where I didn’t use the restroom, where I didn’t eat, because so much work was piled up on me,” Mr. Long said.

Kristy’s awakening was when she had to watch a co-worker collapse after a long work day:

Ms. Shen’s wake-up moment came when she watched a fellow I.T. colleague collapse at his desk after clocking 14-hour days and get hauled away in an ambulance. For several years before that, she and Mr. Leung, following the path laid out by their parents, had tried to buy a house in Toronto’s ever-escalating real estate market.

But, Ms. Shen said, “It didn’t matter how much you saved, it was a goal post that kept moving. And I was seeing people stressed out paying their mortgages.”

Scott’s awakening was through one of the famous MMM’s article:

After hearing a podcast interview with Mr. Money Mustache, a.k.a., Pete Adeney, who The New Yorker called “the Frugal Guru” (he retired at 30), Mr. Rieckens became fired up. He told his wife they should ditch their leased BMW and quit eating out several nights a week.

Scott’s wife Taylor, at first didn’t get it. However, she also had her awakening moment:

“I never paid attention to the finances, I thought it will all work out,” Ms. Rieckens said. “After I had a baby, I had stress around how I could spend more time with her. I was almost a slave to my job because of the way we were living.”

The awakening for a lot of people is often when the pain becomes too much to bear and you start looking for solutions.

The pain, in a lot of our cases, is the stress we faced at work. So a lot of the times, the lure of financial independence is due to the push of jobs that give us too much stress, above our capacity at that point.

This is definitely not the only reason, and another reason I find it less talked about is that each of us have a different level of financial insecurity. When the sums suddenly seem to make sense, that wealth building can provide us with that security permanently, we jumped on that bandwagon.

The Solution then may not be FIRE…. but often the alternative solutions are elusive

Given that many of our awakening is due to feeling too much pain from work, the solution could be to look for better work.

Your company could have been that company where things really not work out for you.

However, I think why the FIRE philosophy resonated with a lot of people was that job after job you do, you realize that you are:

  1. flunkies, who serve to make others feel important, e.g., receptionists, administrative assistants, door attendants
  2. goons, who act aggressively on behalf of their employers, e.g., lobbyists, corporate lawyers, telemarketers, public relations staff
  3. duct tapers, who fix problems that shouldn’t exist, e.g., programmers repairing shoddy code
  4. box tickers, e.g., performance managers, in-house magazine journalists, leisure coordinators
  5. taskmasters, e.g., middle management, leadership professionals

And they don’t work so well.

It is tough to find that good job that pays well, gives you autonomy, allows you to pursue some forms of mastery and gives you purpose.

Those jobs listed above, a lot of times pay good money.

This is why Mr Money Mustache say it is better to work, if you do not need to depend on the pay you get at  work.

Some Realities After Quitting Early

The main article and #2 shares what do people usually surround their life with in early retirement, and some of the struggles that they face.

Let me just say that these “struggles” are first world problems.

A lot of the times, you would rather mess with a struggle for identity then struggling to feed your 7 member household on a single income.

Fearing boredom, Mr. Jensen at first took on way too much, and he found it strange to be at the local rec center exercising alongside senior citizens, or shopping at empty big-box stores on a Tuesday. He also beat his own mother to retirement, which made for awkward family get-togethers.

But one year in, he has settled into his life of leisure, enjoying time spent raising his daughters, making sure they never see him vegging in front of the TV. Mr. Jensen also practices an activity that for many FIRE achievers seems to be the new golf: writing a financial advice blog.

Jason’s account of what he do daily is much more detail, and gives you an idea whether this is a good enough exchange for sacrificing spending now:

Mr. Long chronicled with dry wit and self-effacement his first year in retirement.

One month into FIRE, he wrote of the guilt he felt spending money (on video games), and his concern that he would be over his household budget. He spent his days with family, at the gym, doing housework, exercising. He had no regrets so far: “I made the right decision. This is life.”

In the second month, Mr. Long reported a 2.8 percent increase to his portfolio over the first two months, even after living expenses, and listed his accomplishments as more reading, more cooking, volunteering and “faster Rubik’s cube solves.” Stress levels were way down, he wrote: “A friend of mine said the sense of dread from my face was gone.”

In the months that followed, he rewatched the mini-series “Roots,” lost all interest in talk of FIRE now that he had achieved it, feared a looming stock market crash, had nightmares that “I’m back at work and arguing with morons,” finished a marathon in a personal best sub-three hours, felt moments of social isolation, took a two-week road trip across the heartland, and went twice to the beach in Florida with his wife and watched their net reach its highest point, despite not working, which he attributed to “the passage of the tax cut for wealthy job creators like myself.”

Sam from Financial Samurai, and some others, shared some of their struggles in #2:

  1. Identity crisis. This is especially so if you are an executive director at an investment firm
  2. Missing Camaraderie at Work
  3. Fear of the unknown
  4. Fearing a devastating stock market crash
  5. Fearing an expensive medical disease
  6. Struggle with the loss of income

You can see some of the points in #2 mirrors what Jason in the first article.

I think you can escape bullshit work. But you cannot escape your financial insecurities.

In the case of Sam, from Financial Samurai, his net worth is probably one of the higher ones, and he ensures that his wealth withdrawal is based upon very conservative financial instruments (less stocks, a lot of CDs, bonds and property in affluent city).

You have to ask yourself why is he so conservative since he is in investment banking, which means his competency with these things should be much better than a lot of wealth builders out there.

When his stream of wealth cash flow is conservative, it is less volatile. Suppose you decide to be conservative and decide to spend 2% of your initial year wealth machine, the size of your wealth machine needs to be much larger.

And his blog generates a lot of income.

When people ask me how much am I ready to quit, I would say it depends on different people.

Some requires their plans to be absolute foolproof. Then the answer is… you better have more… more than what your brain is thinking about.

Some are more risk seeking. Then the answer is, sit down with someone who knows more about this, and validate to see if your plan is sensible.

It is difficult to work out deeper insecurities (perhaps NLP will help?)

Not Everyone can Achieve FIRE… It is meant for the Higher Income Group

Article #3 sounds like sour grapes.

However it is not without basis. The summary of the article is yes, FIRE is not bad, but for most of us, do watch out. If you do not make a high income, your hopes might be brought up too high and you will be left with disappointment. We have a retirement problem because people are underestimating the cost in retirement, which is going up year on year.

The article seem to be addressing an audience that is mainly based in UK. This is because the numbers cited is referencing UK figures:

In the U.K., the median salary is around 20,800 pounds ($27,000) after tax, according to data from the tax authorities. Assume half of that goes on needs and 30 percent on wants. That leaves 4,160 pounds for savings per year. All things being equal, on this wage alone it would take 55 years to save 230,000 pounds, assuming zero interest, or 430,000 pounds, assuming 2 percent compound interest. Even a life of monastic discipline, spending only on housing and necessities, would require 25 to 30 years of work to get to the above, admittedly broad-brush, numbers that still fall short of the minimum pension pot experts say non-homeowners require.

This article, was discussed in a UK FIRE subreddit, and when you ask the people practicing on the ground, they seem to think that the numbers do not add up:

I think there is a lot of debate over whether the journalist’s figures were correct but it seems that the journalist do not have a very good understanding about the philosophy.

In his example, he cites an almost 80% spending as a percentage of his monthly income and a very conservative compound interest rate. Now, if you are at least up to date, some of the reasons early retirement is possible is that your savings rate is much higher than normal (approaching at least 40-50% of your disposable income) and that  you deploy it into higher yielding wealth assets.

Thus, if he wishes to do a comparison of UK vs USA, at least those would have to be held constant.

Granted I do agree that you can have an acceptable standard of living, and still pursue FIRE if your income is high.

Given this, we should be comparing the higher income earners of UK versus that of the higher income earners of USA (not median income).

From what I read and find out (probably an article or discussion for another day), the income in UK for the higher income earner is much lower than in the USA or Singapore. This means that it might be difficult to get a high savings rate necessary to be…. early in retirement.

However, the mileage could vary, because your expenses can be kept low (if you are not living in London), thus you might be able to make decent money, keep your expenses low and invest in Vanguard Exchange Traded Funds (ETF).

While I agree that higher income greatly eases the journey, coming up with an article like this deflates your fellow citizens. And might push them to give up on study the philosophy.

The philosophy, do have much merits that even if you do not end up at your destination, you might end up in a pretty good situation.

Underestimating Certain Uncertainties

What has been brought up by the more thoughtful thinkers are that these group of people may be underestimating the uncertainties.

The two podcasters at Animal Spirits work in a wealth management firms, have colleagues in the planning space. And Cullen Roche at Pragmatic Capitalism is pretty sharp (not the first time I mentioned it here on the blog).

The main contention is probably that the money needs to last for a long time and there can be a lot of things happening during this period.

  • Graduating with student debt.
  • The rising cost of childcare.
  • High cost of living in high income areas.
  • The inconveniences of living in low income areas.
  • The risk of a long bear market in stocks.
  • Long-term health and emergency risks.
  • The sustainability of withdrawal rates over a 40-50 year period.
  • The importance of work as a means of purpose.
  • Nice stuff is, well, kinda nice to have at times.

These are valid, and the conclusion from the three of them is that likely, they have to go back to work some day.

They also Earn Income from Blogging…. and Technically some have Work Income still

The main article subtly wishes to let the readers know that somehow… everyone starts a blog. Through the article, we also got to know that for some one half of the spouse is still working.

I think it is one thing to have accumulated wealth but its another form of psychology to have no income coming in, and start spending down your money.

Technically, when you are accumulating wealth, you have a few levers such as cash flow from your earned income, and your investment rate of return. If your investment rate of return under perform, don’t worry there is your high savings rate.

When you are de-accumulating wealth, you don’t have that cash inflow from work, so you depend solely on your investment rate of return. If you have a bad investment sequence of return, or you do not manage your wealth assets well, your wealth might decline faster than projection. How would you pivot when things do not work out?

The psychology is probably different if you are still getting some earned income.

In that case your wealth machines, are more of your contingency money, or a very very very large emergency fund.

Technically, I would consider them to be still working.

What if everyone is on the path?

Cullen Roche’s negative comment about this philosophy is that, in its effective form, it is not scalable.

Per economics, if you spend 100% of your $100, another person have $100 to save/spend. If everyone save a large part of their income then the economic multiplier will be severely weakened.

Financial Independence is about you contributing to the macro-economy for a limited period of time, then wishing other people continue to contribute to the economy and so your wealth machine(s) can continue to grow and generate wealth cash flows for your retirement.

It is, to a certain extend a little self-centred if you look at it from this angle.

Financial Independence Tenets from Cullen Roche

Cullen Roche thinks the journey itself has a lot of positive merits. However, we do not have to take it to the extreme.

With that, he refines and came up with some thoughtful tenets:

Find out what is enough for you. This one is gold in that Cullen says a lot of finance is very simple. It is just asset and liabilities matching. What gets people into trouble is that they develop a need for a lot. And due to needing a lot, they spend a lot. This won’t work well for any of the retirement schemes.

Don’t do what you love and don’t work to retire, work to find a purpose. This one is very odd. Cullen explains that we want people to contribute to the greater good. He seem to allude that the reason that you are paid a lot of money is because you generated a lot of value, hence people most of the time reward you correctly. A good life is a life where you do good work. Good work is not always something that you love to do. This is a bit difficult to accept but in the perfect world, I can see that you do your job well, and people reward you for the value it brings. If you do not add enough value, then you have to move up to deliver higher value. It is not always the work that you like. What drives satisfaction, according to him is not something you are passionate about but something that eventually you are good at. I do not 100% agree with this.

Real financial independence is balance. Cullen probably understands that financial independence is an alleviation of our insecurities with money. Thus, the pursuit of it is to free ourselves from that insecurities. He believes we will not easily be free from these constrains. The right pursuit is to spend intently on happiness endeavors.

Saving is not the key to financial success. The economic concept is that instead of saving, you should be investing in enhancing your human capital, or building up wealth machines. Both these items will produce greater future income. If you enhance you human capital, it allows for higher future cash inflow.

Follow these basic financial rules. This article itself is pretty good.


I do find the article pretty good because I thought people would connect some of the frustrations we faced at work, which triggered people to do something about it.

The problem with the article is that it seems to package it as something millennials are doing more and more, when the main guy in the interview is older than me (so clearly not an millennial).

Personally I do not think that the scenario where a large part of the population would pursue this path will bring our economy to a standstill.

The main reason is that:

  1. People tend to think this is too extreme and would not pursue it
  2. People still like to spend now
  3. People do not have the high income to allow them to comfortably spend and still save a large chunk of money

This is still a very niche subject.

Here are My Topical Resources on:

  1. Building Your Wealth Foundation – It is imperative you know these stuff as early as possible, because this is the most important stuff
  2. Active Investing – For the active stock investors. My deeper thoughts from my stock investing experience
  3. Learning about REITs – The Deeper stuff on REIT investing
  4. Dividend Stock Tracker – Track all the common 4-10% yielding dividend stocks in SG
  5. Free Stock Portfolio Tracking Google Sheets that many love
  6. Retirement Planning, Financial Independence and Spending down money

Negatives of Financial Independence



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George @

Monday 1st of October 2018

Every employed person looks forward to FIRE. However, for you to succeed, you need to ensure that you first grow your savings and net worth in general to avoid the disappointments that might follow if you retire without doing so.


Sunday 16th of September 2018

One of the underlying requirements of F.I.R.E is for your investment capital to grow, and I reckon from a theoretical angle that's not going to be possible if majority of the population is undertaking F.I.R.E.

Granted there are other components such as government expenditure and capital investments, if people stop spending in a capitalist society, that's going to drag down growth and your investment return will perhaps be correspondingly affected (on basis if you are mainly long equities).

So maybe not such a good idea to encourage F.I.R.E amongst the general populace. Kyith don't give the secrets away!! :p


Monday 17th of September 2018

Hey RB35, hope you are having a fulfilling early retirement now haha. I think it is one of those things, such as vegetarian, that will not always be mainstream. But the idea is... if it becomes like vegetarian that a lot of people are doing, how would it work out. Granted there are some subculture such as credit card rewards that might still beef up for the fall in spending. I think it might not do very well for your portfolio haha!

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