Millennials. They’ve got answers. Their men are more selfless. They are all about work-life balance. And since they are (literally) taking over the world, it makes sense they’ve discovered (or, more accurately, rediscovered) a personal finance philosophy that allows you to liberate yourself from the rat race and retire early. Like way early. Like by 40.
Welcome to F.I.R.E., aka Financial Independence, Retire Early. It’s a lifestyle system designed to transform your relationship with money via a nine-step plan laid out by pioneering frugalista author Vicki Robin in her recently reissued best seller Your Money or Your Life.
Robin equates money to “hours of life energy.” So, explains financial writer Elizabeth O’Brien, “If you make $300 a day and want to buy a $100 pair of shoes, you ask yourself: Are those shoes really worth nearly a third of a day of your precious time on earth?” Robin even offers a “Life Energy Calculator” on her site. Her advice also includes: accurately assessing your net worth, tracking every dollar that comes in and goes out, dramatically reducing your expenses by rejecting consumerism, becoming a DIY ninja, saving aggressively, selling what you don’t need and investing wisely—all so you can “find and have ‘enough’ (and then some) rather than always seeking ‘more.’” The ultimate goal is to bank enough cash to fund six months of living expenses. Then, once the interest from your investments steadily exceeds your living costs, you can, in theory, quit your desk job and go hike the Himalayas.
Critics of the FIRE philosophy argue it may seem unattainable to those digging out from mountains of student loan debt, or whose basic cost-of-living essentials (rising rent, car payments, childcare) simply leave very little left over. We know plenty of dual-income families who couldn’t afford to buy investment real estate (like Robin did) even if they did their own plumbing, roofing and car repairs and wore out their clothes—some of the cost-saving initiatives Robin advocates.