What actually inspires someone to make FIRE a goal? Why does someone want to retire early? The reasoning might be different for everyone, but I’m guessing there’s a fairly common theme among them; that being, you just don’t want to work in some particular job until you’re 60 or 65. Whether your job doesn’t interest you, it’s just plain tedious, or you think you can use your skills for a greater good elsewhere but have a difficult time making a lifestyle change, everyone has their own origin stories. Allow me to share mine.
Nearing the end of my first day of full-time work, I joked to a colleague who had also started that day that we had one day down and about 40 years to go until retirement. That crack put the single day in perspective, for sure, but of course neither of us as of that first day had yet carried the weight of day-in, day-out monotony that can accompany many of the jobs we perform. A few weeks, a few months, and then a year go by, and all of that changes. Before that, there was always change, always a new cycle of something, whether a changing semester, a new sports team, a new dorm, a new anything.
I don’t want to come off as overly dramatic about it. To be sure, life continues to change in many wonderful ways. Getting married, having a baby, moving into a house – all things for which I consider myself fortunate. Having a stable source of employment is not a guarantee, and there are plenty of people who would go to great lengths to have one.
Understanding all of that, it’s difficult to keep the human mind from wandering. Even without compromising the quality of what we do, the simple fact that we might sit in the same place for years on end and perform what amounts essentially to the same task is wearing. Add on top that having to answer to others, who, while they’re doing what they’re supposed to, can make it difficult to enjoy the fruits of your labor. This year you may have brought in two new clients or multiple new projects, and then October rolls around and you still need to produce a report showing how much revenue you can bring in next year. It can be difficult to live in comfort for even a moment. And as we might grow in the ranks and take on additional responsibilities, we become the ones pushing this onto others, and the cycle continues.
But yes, this is how we pay the bills, and the bills, like taxes, never stop. And you can never stop your mind from wandering. For me, this is particularly so whenever I get the chance to take a vacation and for just a few days, it’s possible – slightly – to detach. In modern times of course it’s impossible to disconnect entirely – I certainly check my e-mails while on vacation – but it’s different than sitting at my desk and methodically responding.
At that first job, my employer offered a 401(k). At the time, I had a different outlook on things. I just assumed I’d be working in the same vocation for the next 40 years, as I had joked, and that I’d have plenty of time to save for retirement. My mindset at age 25 was that I’d take most of my leftover, disposable income, and use it to build a little net worth or possibly to save for a house. I ended up contributing very little, about $50 per bi-weekly pay period, to the 401(k), for a grand total of about $1,300 in principal for the first year, in addition to the employer deposit.
The rest of my unspent money – of which there was not all that much – I put in a savings account that earned in the neighborhood of 0.01% per year. I knew about the stock market, and I understood in theory how it worked, but I had no idea whatsoever of how I might become a voluntary participant in it. I invested the employer’s 401(k) account in a target-date fund with a targeted retirement age of 65, and never bothered to track it all that much. Needless to say, I was not an investor at that point. I figured if I could eventually save up and buy a house, I could accumulate some wealth that way, and that I’d have enough to retire by the time I hit 65.
After about three years, the creeping work-a-day malaise started to sneak up on me. My eyes would start to glaze over the computer screen while writing. My thumbs twitched while sitting in a meeting talking about business development. I’d come back from a week-long vacation and in under an hour of sitting at my desk, it was like the entire vacation never happened. Everything I had put off doing for the prior week weighed me down into a fatigue that made me almost wish I’d never left. Do they make a shirt that says “I went on vacation and all I got was a bunch of charges on my credit card statement”?
After about 4 years, I’d switched jobs. My new employer also had a 401(k), and by this point I was investing a little more than I was before – but not all that much. The new 401(k) was held by one of the large brokerage firms, which had a pretty nice app that would actually predict how much you’d have in retirement funds based on the amount saved and expected future return. The first time I looked, I was mortified at the result. I was 4 years into the 40 year track, and this thing projected about $3,000 per month in income – unadjusted for inflation – in 36 years.
In that same app user session, I bumped up my contribution rate to about 12% of my paycheck. Seeing the first few checks come in after that, each several hundred dollars lower, was like taking a punch in the wallet. But then watching the anticipated monthly income rise in the retirement projections offered a little comfort. At this time, I still had no thought about opening a personal brokerage account. Friends would talk about their investments and I’d merely nod along trying not to be the odd one out. “Oh yeah, ETFs, cool…”
Fast forward to about 7 years into full-time work. I’m at another employer, on my third 401(k). I had rolled the prior two accounts into this one, allowing me to view the cumulative value all at once rather than checking multiple accounts. 401(k) savings were no longer the issue. With my third employer, nothing changes in work-life. There’s some excitement to starting a new job, but after a while, the same pattern returns. And all the while, I’d think of things I’d rather be doing but have to return my attention back to my assigned tasks. Everything was fine – but that’s it – fine. At times you feel like you merely exist, but that you’re not living.
I had started to put some of my paycheck into a high-yield savings account to accumulate an emergency fund. The account paid 1% per year – at the time, the best savings rate around. I’d check it at the end of each month and see about $40 in interest payments – a vast improvement on prior efforts at savings, but a far cry from a respectable return.
It was around this time that a co-worker and I had a conversation in which she mentioned FIRE. I had no idea what it was, and jumped straight to Google after our call. Intriguing yes, but probably not for me – I couldn’t just start dumping a chunk of my paycheck into savings, and I’d never accumulate enough money anyway to retire early. I pictured myself eating store-bought ramen noodles in a very modest living space if I were to start pursuing this concept.
But the idea stuck. It was one of those things I just couldn’t stop thinking about. The more I thought about it, and the more I considered the logistics of it, the more I thought maybe it was possible. By then I was in my thirties, so obviously the notion of retiring completely by 40 was out, but that didn’t mean that 45 or 50 were out of the question. And it wouldn’t have to be a total retirement, maybe just taking a job that I was passionate about, or gave me more freedom.
Like many things, starting is the most difficult part. I actually called on the phone to get the paperwork to start my first brokerage account, at a time when I didn’t use the phone for anything else. The rep was incredibly helpful and directed me to the online registration, and as soon as I went through the process was immediately reassured by how simple it was. I took money from my high-yield savings account and deposited it into the brokerage account, and then started scrolling to search for investments.
I did more research than I do now, reading various investor reports, long-term outlooks, risk ratings, etc., and ended up splitting the investment between two mutual funds: one for long-term blue chip growth and the other a mutual fund investing in over the counter stocks. As to the latter, I figured myself daring by investing in something slightly more volatile, convincing myself that over the long run it would trend upward.
The first trading session, the value of my investment went up by 0.4%. It feels like winning a hand of blackjack – which it shouldn’t, because you don’t want to treat stock market investing like gambling. There was some elation in the fact that it had increased in value on the first day, but more than that, I had started a process toward saving something in addition to my 401(k). Maybe not enough to achieve FIRE, but perhaps enough to consider retiring earlier than the seemingly inevitable age of 65 or 70.
The second day the market experienced a bout of the volatility that’s plagued it for the past decade and dipped by about 1.5%, leaving the value of my holdings less than the principal I contributed. Not a good feeling. But by the end of about a week, they were back up, slightly. I’d hit the point of no return. Unfortunately I had picked up a new habit of checking the stocks app on my phone every time I had the phone in my hand – not a good habit! What was important, however, is that I overcame that initial fear of the market itself. It definitely was not as daunting as it once seemed.
I started making regular contributions from each paycheck to the brokerage account, and started diversifying my holdings. I bought industry-specific mutual funds, index-tracking ETFs, and individual shares of stock. After experiencing a few significant dips but seeing the account values come back up in subsequent days or months, I started understanding the nature of long-term investing and the importance of not panicking when the market declines. It’s still never easy to have that stock app light up in red with a day of declines. And sometimes you start questioning everything when a single day’s trading wipes out weeks or months of gains at once. It’s a rollercoaster indeed, but it always seems to advance back to the starting point and then creep a little further forward.
And now we arrive at the present. I’ve done the math and figured out how to meet the goal of “retiring” in my 40s. I don’t plan to do nothing afterward – I have high hopes of taking a new job that sparks a passion, and of course, spending more time with my family and hopefully doing a little more exploring of the world.
I use my calculations as a guide for how much money to contribute to my investment accounts, but I deviate constantly. Life has a way of not being linear. Sometimes I need the cash and can’t make a contribution – other times I contribute more. This is not precise, it’s rough; everything is a ballpark figure or based on estimates. But it’s not junk and it’s not pure speculation – I hope.
Finally, you might ask – if you were so bored in your jobs, why didn’t you just find one that you liked now to lessen the slog? And to that I answer by saying, simply, that I’m extremely risk averse, to the extent of practically being scared of my own shadow. I love the thought of doing something about which I’m more passionate, but I have a – perhaps irrational – fear of insecurity. My work is fairly stable and does interest me in that strange, professional way. Do I want my business card pinned to my tombstone….? Not really, but it wouldn’t be the worst thing in the world.
Is that an evasive enough answer? I have a feeling there are plenty of people who get it. You’ve worked, you’ve studied, you’ve accomplished something in your professional life. Yet you need a little more freedom because there are too many things you hope to see or do that might never happen if you don’t make a sweeping change. And at the end of the day, you may just want to spend a little more time with your family and friends. That’s what FIRE or retirement generally can be all about – planning your financial well-being so that you can afford the most precious resource we have: time.
I hope you liked this brief look into my thought process about why I’ve chosen to save and invest with FIRE as the goal. I’ll continue to share stories like these as the journey toward early retirement progresses, and someday I hope to share the story of finally reaching it.
The FIRE Investor's Guide to Early Retirement 