IMPACT COMMUNICATION
AND INNOVATION
AND INNOVATION
Last year, the pension reform proposal put forward by President Michel Temer aimed to set the minimum retirement age at 62 for women and 65 for men. As life expectancy increases worldwide (with Japan leading at 83.98 and Brazil at 75.5 years), it is expected that changes will be made to labor laws and how to handle the growing number of people leaving the workforce. In reality, however, the very logic of aging is shifting as we achieve higher life expectancies through medical treatments and behavioral changes.
While transhumanists are trying to end aging or even eradicate death, others identify with the movement known as FIRE. The acronym stands for financial independence, retire early (financial independence, retire early), and followers of this lifestyle aim to retire between the ages of 30 and 40. In a report published on the BBC website, Chris Stokel-Walker introduces some of the people who identify with this new perspective, starting with British economist Barney Whiter.
Whiter recounts that when he started high school in 1981, his parents decided to buy a house, which would be paid off in installments over many years—a common practice among the British. With a recession hitting the country, interest rates rose to 17%, forcing Whiter's parents to save so much that they cut out vacations and even their newspaper subscription. His father stopped buying beer and started brewing his own. That was when his attitude toward money changed: "I began to understand that owing a lot of money to the bank was a scary thing."
After a 20-year career in the financial market, Whiter realized that while his salary had improved after getting specialized training, his lifestyle had not followed the same logic. Consequently, Whiter decided to start saving at least half of his salary every month to ensure a comfortable retirement. He also stopped taking the subway, started biking to work, and quit drinking. Today, at 48, Whiter is proud to have retired at 43, a goal he only achieved after discovering the blog Mr. Money Mustache, run by a Canadian who became famous for retiring at 40.
The FIRE movement is characterized by members' commitment to living as simply as possible, saving at least half of their salary for 20 to 30 years, and retiring around age 40. Although the group's goal might seem like an endless sabbatical at first glance, these individuals actually seek financial independence to live a simple, healthy, and harmonious life, free from the competitive and stressful corporate environment.
Although the idea is not entirely new, the internet and the proliferation of blogs on the subject have given FIRE perspective and reach, making it popular worldwide. Today, as noted in the BBC report, there are podcasts like Firedrill that receive about 7,000 downloads per episode and rank in the top 100 most popular podcasts on Apple.
Curiously, this community of young people is going against the habits fostered by millennials: about two-thirds of millennials have saved nothing for retirement, according to a report by the National Institute on Retirement Security in the United States. This equates to 58% of Americans under 35 who do not even have a retirement account. The same applies to the United Kingdom, as pointed out by a retirement expert interviewed by the BBC: 1,500 British millennials surveyed in 2017 were saving only 4.6% of their salary for retirement.
While financial advisors generally suggest saving an average of 12% to 15% of one's salary for a comfortable retirement, this percentage is often seen as too low by FIRE supporters—especially since their goal is to retire as quickly as possible. To achieve this, people like 25-year-old financial analyst Craig Curelop adopt philosophies like "own everything, use nothing." For instance, although he owns a car, he doesn't drive it; he rents it out through a website and uses a bicycle instead.
This was also the strategy Curelop followed when he rented out his bedroom on Airbnb and started sleeping in the living room. "I decided to make a pseudo-bedroom in my living room by putting up a partition wall and a curtain. I lived like that for a year," he says. His savings were so significant that he was able to buy a duplex last year, as well as another house this year—which, incidentally, has all its rooms rented out except for the one Curelop uses. "I'm saving between $3,000 and $4,000 a month. In this way, I should have saved between $60,000 and $70,000 in the 18 months since I started that setup in my house."
But FIRE also has its critics, such as financial planning consultant Damien Fahy: "It seems to me like an extreme version of the Atkins diet. They have a lot of positive points and some good foundations in financial planning, but I really think this is an extreme version that doesn't necessarily work for everyone." Furthermore, another controversial aspect of the FIRE movement is: how much money is actually needed to retire at 30 or 40? Some critics argue that they underestimate the true amount required, as retiring at 30 means you still have to account for the 50 years you might live afterward. Even so, it remains difficult to quantify the amount needed to feel secure when adopting such a strategy.
On the other hand, many FIRE followers do not see this retirement as a definitive end to working. In the case of 28-year-old Gwen Merz, she accumulated about $200,000 in real estate, stocks, and cash to leave her IT job at 27 and start the Firedrill podcast: "I'm not retired. I still have to work, but I have the freedom to choose to do what I really enjoy, even if it doesn't pay as much." Her hope is that her investments will provide a good quality of life for when she truly decides to stop working. After all, FIRE is not just about money; it is also a community, a network of partnership and support. "There are more people out there who don't care if you're driving a 13-year-old car," she comments.
In addition to the old car, Merz also avoids buying other products, such as video games, which she considers superfluous. She also doesn't eat out at restaurants as often as she used to and doesn't travel much. Based on this type of behavior, another criticism arises: is it worth suffering in the short term for a long-term, yet uncertain, gain?
For Merz, this type of argument misses the point of FIRE: "If you are depriving yourself too much, you won't be happy, and you won't be able to maintain the habit." One tip Merz gives is to cut everything that might not be necessary until it becomes uncomfortable, and only then try to adjust to find balance again. "You should be able to live your life in the best way possible, but that doesn't mean you have to spend tons of money. You don't need to go to an expensive bar downtown. You can invite your friend over for a drink for much less," she explains.
Whiter also applies FIRE to his entire family, avoiding consumerist habits like gifting children the latest smartphone models, for example. For the Brit, it’s not about a life of deprivation, but rather a simple life. “It makes no sense to live miserably for 20 years only to then live miserably for another 20 years after retiring,” he comments.
In this sense, what Whiter and Merz, as well as other FIRE proponents, argue is that what matters is being able to break free from the current logic of the job market to have more balance and the freedom to work on what you want and what makes sense. “Humans have an intrinsic need to work. We need to feel like a valuable member of society, and that won’t stop being the case just because you have an arbitrary number in your bank account,” Whiter argues.
The idea behind this movement, therefore, is to achieve financial independence through flexibility and by rejecting certain consumption habits that are presented to us as “normal” or even “desirable,” in order to focus on what is truly important. “I felt trapped by the system. I felt like I was in a prison, working to support a lifestyle I didn’t actually want,” Whiter reveals. “A big part of this (FIRE) is emotional and psychological. You have to live it to understand how powerful it is.”
