For the uninitiated, FIRE (or just FI, or FI/RE) stands for “Financial Independence/Retire Early.” FIRE adherents live frugally and save as much as...
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While I admire the FIRE movement and am actively pursuing it to a degree, I worry that its adherents in the United States fail to consider health care costs. If you assume you will stay healthy throughout your adult life, FIRE is not that hard to achieve. In other countries with universal health care this is not a concern. In the USA, however, a single hospitalization can lead to hundreds of thousands in bills. Imagine saving your $1M by age 40. You then retire to live comfortably on $40k/yr. At age 55 you fall down the stairs and break your hip. If you have been paying insurance premiums for the past 15 years on your $40k annual budget, your insurance sucks. High deductible means you would be on the hook for most of the bill for the ambulance, the ER, the hospital, the anesthesia, the surgery, and the rehab. Easily $100k in expenses. But then you get an infection and require more surgery and more rehab? Or maybe you develop a blood clot and get a pulmonary embolism? These ICU stays are going to be at least that much. All of a sudden you've burned through 4-5 years of planned spending in one year. You're only 55 but you've been out of the workforce for 15 years. Your earning potential is minimal.
I know this is ancillary to the point of the OP, but just something that bugs me every time I see a discussion of the FIRE movement.
Insurance sales-person right there. Don't question if you'd have more time to challenge said unjustified system, just say "they'll be sorry"
Also
Nonsense. Most programmers would continue to code regardless of having a paid job, so you'd have 15 years of side projects, plus at least 10 years of experience in a market that has been under constant inflation despite innovation and productivity ratings higher than any industry I'm aware of.
Lol no. Physician not insurance sales.
I guess it's all about probability here, There's a lower chance of all those things happening. Imagine you die just when you're about to FIRE?
I work in healthcare. Unexpected serious illness is much more common than you seem to believe.
Really? What's the probability here? 1 in 10 people? 1 in 3 people? Like I said, It's a game of probability and hope :)
Nice to hear of the success of a fellow Tar Heel!
One nit to pick, as I see this a lot:
I hate it every time someone uses that $75,000 figure. What you can get for $75k varies widely across the world and across time. The life you can live in SF for $75k will be much less luxurious than in a smaller city for the same amount. And because inflation is a thing, $75k may eventually be a pittance for anybody. Just quoting a random dollar figure feels so click-baity compared to discussing the underlying economic concept of diminishing marginal returns. There is no one universal dollar figure that signifies maximum happiness; it must vary by place, time, and the desires of the person earning it.
I feel like if you moved to a different country, like say the Philippines, $35k a year for two people would be overkill. If you ever try something like that, I'd love to read about it in another post of yours. Loved the post btw!
In my country 75k net dollars equivalent in a year would be pretty high, and of course pretty much unreachable for a programmer. But I agree it would be more than enough to be "on FIRE"; if we talk about net incomes even 40-45k would be okay and guarantee financial indipendence.
Same here, it would require a salary of 150k$ a year, meaning 12,5k$/month which is unheard of, no matter what kind of developer you are.
Great post. I agree 100% with this: "You might as well just start buying your freedom. You're buying more options, and that makes your career and working life a lot more fun."
I will try to get more into this FI FI/RE thing.
Great post! I’ve sort of been doing this before I ever heard about the FIRE movement.
I’m not worried so much about retiring early. I want the financial independence.
We are way to obsessed with consuming and “things”. Things will never make you happy.
If you have debts evaluate the debt snowball and free yourself. Pay yourself first.
Step off the Hedonic treadmill (look it up) people!
so little interest over a post so significative
The question at the end - happiness is an inside job is the answer :) you have to train your mind for sustainable happiness!
Amazing Post. Thanks for this!