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Is This the End of the FIRE Movement?

Matt Spillar

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As the uncertainty surrounding the coronavirus pandemic continues to swirl, I’ve been seeing articles in the mainstream media speculating that this could be the “end of the FIRE movement.” The stock market is tumbling, unemployment is rising at record levels, and many people are feeling the strains of the current times. These articles claim that since we’re undergoing a recession that pursuing financial independence and retiring early will no longer be as attractive of an idea. To me, this thinking is completely backwards.

Rising Unemployment Numbers

In March, some reports show that over 10 million people lost their jobs. These difficult and uncertain times are showing people firsthand the importance of building up financial freedom, so that you are less reliant on your job. By building up a savings cushion, you’re reducing the stress and anxiety that comes with living paycheck to paycheck. It turns a job loss into an inconvenience, rather than a crisis.

I’ve experienced two periods of unemployment in my life. In late 2014, I was looking for work for about six months. It was a very difficult time for me. My self esteem took a hit, our savings slowly dropping month by month. When I finally found a full-time job I was motivated to learn as much about personal finance that I could. I never wanted to feel that stress about money again. We built up an emergency fund, began our debt payoff journey, and I built up marketable skills to bolster my resume. This blog is a result of those efforts during that period of time!

In 2017, I was laid off from that job as the business hit an extremely rough patch. This put me on the job hunt again, but this time I found one in six weeks. The stress level was nowhere near how it was the first time around, because we had built up a level of financial freedom (more savings, less debt, more marketable skills).

The people that have been pursuing financial independence are likely the best equipped to ride out this recession. It’s backwards to think that this uncertainty will lead to people wanting to spend more money, or be MORE reliant on their jobs. Going through these difficult times will have people seeking more security in the future. I’ve experienced this firsthand in my own life as we’ve been pursuing this journey of financial independence.

You’ll Never Regret Saving Money

There’s no downside to saving money. My peace of mind has grown significantly since we became debt free and built up an emergency fund. There is a balance to be found, don’t deprive yourself now, but save as much as you can for later. You don’t want to delay everything for the future, this is one reason why we prioritize travel so much in the present. However, if you find a proper balance I can’t imagine a scenario where you’ll regret saving money, or not be grateful that you were prepared for hard times.

During this time of social distancing, many of us are practicing frugality out of necessity. We’re spending less on going out, travel, entertainment, and other areas as we stay home. This can be a good period of practice, and shows that it’s doable to spend less.

Retirement Doesn’t Have to be the Goal, but Freedom Should Be

The main focus of the FIRE movement isn’t necessarily about retiring early. The primary goal is to achieve financial independence, giving yourself the freedom and options to pursue whatever you want. This could include continuing to work full-time, or it could mean pursuing other side projects where income isn’t the sole driver. Work isn’t a negative thing, we as humans are wired with some level of desire to be productive. However, work becomes much more enjoyable and life is more freeing when it’s by choice rather than by necessity. As we’ve seen the past few weeks, our jobs are not guaranteed, so it’s better to be prepared in case that scenario happens.

Financial independence is a spectrum, as your savings and skills grow, the further you move along the spectrum. The ultimate goal is to achieve 25 times your annual expenses (often called your FI number). As you move further along the spectrum, you’re buying back time. Not only are you building a level of security against emergencies, as your savings grow you have other options available such as taking a sabbatical, changing careers, or staying home with your kids. Money is a tool that can be used to buy freedom.

Most of us have more free time nowadays, as we stay home and practice social distancing. While inconvenient at times, we should also look at this as an opportunity. This is a chance to think through what we want out of life, get our finances in order, and build new skills.

Final Thoughts

We’re clearly going through turbulent times right now. Having some level of fear amidst this uncertainly is completely normal. However, the sentiment being reported in the mainstream media about the end of the FIRE movement is largely misguided. Yes, maybe it appears more difficult than it did a few years ago, but we knew recessions would eventually hit. This recession should be another example of the importance of building up savings, paying off debt, and investing for the future. The pursuit of financial freedom should become even more widespread.

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