Hello, everyone. It is me, your girl Chelsea
Fagan, keeping it real. I'm talking about
the FIRE movement today because the FIRE
movement is something that I've touched on a little
bit before on this channel and I definitely had some
criticisms to leverage at it. I'll link you guys to that
video in the description, but conversely we've
also throughout the years on TFD on places like our
website, newsletter, et cetera. And even on this very
channel, on other shows that are not mine, we published
stuff that was very pro FIRE. And for those who don't
know I should just quickly explain that the
FIRE movement is a very popular movement within
the personal finance community. I think it used to be a
little bit bigger than it is currently, but it stands for
Financial Independence/Retiring Early and it's
basically a system of managing one's personal
finances to optimize for the ability to retire
early or to be financially independent, i.e. not need to work earlier than
the typical retirement age. And of course we've published
a whole range of perspectives on the topic,
including from people who participate in the
movement themselves because TFD is not just
me and my opinions, even though those
are heavily featured, we also try to give a
voice to as many people who are living different financial
choices than me as possible. I mean, obviously I'm a
33-year-old, Manhattan dwelling, married, dual
income, no kid, child free, business owner, female CEO. Like, I'm not sure
that I represent the majority of Americans. But over the years my
feelings on the FIRE movement and what I would call the
individualist approach to finances has kind of evolved. I used to be pretty staunchly
against all that stuff. And to be fair, especially
in its earlier days, I think that the FIRE
movement as a concept definitely lived up to a lot of
the more negative stereotypes that were often ascribed to it. Some of the biggest early
voices in the FIRE movement fit into this very
narrow category that could be typified
by a rural dwelling, high earning, work from home,
white male, software engineer who is obsessed with
frugality and who's stay-at-home mom/wife who's
always just out of frame is doing all of the
unacknowledged and unpaid domestic labor and
child rearing that's allowing this dude to hyper
focus on gamifying money and also in many cases, produce
a lucrative blog of some kind. But ultimately I mean, that
caricature is a caricature. It's not an accurate slice of
all of the various people who make up the FIRE movement nor
are those life choices the rule of how people who pursue
that pathway have to live. But for me beyond
the demographic info of the person who
happened to be leading the conversation
at any given time, the underlying ideology
that often underpinned a lot of the FIRE
movement, especially people who fell into that
aforementioned category, tends to be an ideology that
I have a very difficult time with in the personal
finance world in general and it's also seen in
things like cryptocurrency. It's a very fundamentally
libertarian look at financial
ecosystem we live in, which is obviously
inherently quite political and policy driven. Basically, it's this
overarching view of this thing is bad
and not working for us. In the case of
cryptocurrency, that's the monetary system and constant
wealth concentrating upwards to the already richest among us. And in the case of FIRE, it's
often that Americans on average are not able to access a
dignified and comfortable retirement and often not
a particularly long one. And that in both cases we
need a kind of escape hatch to get around this
system and do it in what is usually a pretty
hyper individualist way. Now, in the world
of cryptocurrency there's a huge
extra layer, which is that this money is
being made ultimately by funneling other people into
these currencies underneath you in order to prop up a
deflationary currency system that is being treated
like a speculative investment. And as far as I'm
aware that's not something that happens
in the FIRE movement, but I do think that
in general reframing how we think of retirement as
an individual gamified pursuit of hyper managing your
money on a daily basis and optimizing for
frugality at all costs in order to have the kind
of comfortable retirement or work/life balance that in
many other developed countries is basically the norm
guaranteed by the state, seems like at best a
really huge misdirection. Because I also think that
in a lot of cases and again, in its worst excesses,
the FIRE movement with its focus on frugality
creates a tendency to become incredibly judgmental
about the individual spending choices that people are making
and associate those choices with what is keeping
a person in poverty or limiting their future
retirement options. When we know very
well that on aggregate what keeps people
in poverty or limits their retirement options
are socioeconomic factors. Things like stagnating wages,
runaway inflation, the student debt crisis, health
care costs and the fact that medical bankruptcies
are the leading cause of bankruptcies
in this country, a housing market that
is all but inaccessible to huge percentages
of young adults, and other various macroeconomic
factors that no matter how many subscription services
you cut out in your life, you're probably not going
to be able to overcome. Yes, we do talk on
TFD about things that you can be more budget
conscious about, that you may not need to be spending
on, ways in which our consumer culture is driving things that
may not be making us happy, and could be sabotaging
our long term finances. But it's important to
remember that especially if these things are going
to become more accessible the real victories have to
be won on a larger scale. And it can feel impossible,
but local and state laws have huge impacts on
a lot of these things. And for example, the recent
successful unionization at Amazon shows that even
against literally the most powerful and large
corporations in the world, there can still be collective
action that's successful. But even something as
seemingly simple as me being a business owner in the
state of New York, we at TFD are able to offer what is a
fairly competitive maternity leave and it's mostly
due to the fact that New York state subsidizes
a large amount of it. There is no federal minimum
for how much states have to subsidize and if we
were in another state, the cost would be
massively higher for us and harder to
shoulder that burden. Which is why it's
so important to me that rather than
putting pressure on women to scrimp and save
and kill themselves to go back to work two weeks
after giving birth and pay out of pocket for
absolutely everything in terms of child care, that we
understand that there are ways to advocate so that
we don't have to live this way. And I do think that I
used to be a little bit too far on that side in
terms of how I framed things. I could and even can
sometimes still be pretty judgmental about these
fairly individualist pursuits of gamifying the financial
system that we live in, in order to maximize
results for yourself. Because it does so often
feel like it comes hand in hand with shaming
and ostracization and judgment of people who don't
play the game as well as you, rather than admitting that
the game is rigged and sucks. But one thing that
I have learned as it comes to
financial independence specifically is that a
framework that it does offer us in terms of how we
think about our choices, is that it prioritizes above
all else, valuing our time. It can be easy when we
think of money to think just in terms of dollar
bills, but for example, if you're working a job
that has you working incredibly long hours
for higher wages, you may actually end
up with a job that has a lower hourly wage than
another in which your salary is lower on paper, but much of
your time is given back to you. Now, you could use that
for generating more wealth in terms of side income. You could use it for furthering
education and certifications to possibly improve your
main source of employment. Or you could just use
it to [BLEEP] have fun. But I do think there is a way
in which financial independence as a concept can dovetail
with what I consider to be my little, Democratic
Socialist Utopia, where we realize that this paradigm where
we're all working ourselves to death, competing over who
can be the most seemingly busy, and defining ourselves by 9:00
to 5:00 jobs, is not the move. And another thing that I do
think financial independence as a framing can offer us
is the importance of moving beyond your 9:00 to 5:00 job
as a means of defining you and thinking really
critically about what you would do with your time
if it was yours to have. We're often so obsessed with
this very particular metric of success and identity that
statistically a lot of people end up, when it comes
time to actually retire, super [BLEEP] depressed. It's not a perfect
science, but it's probably fair to say that if
we were focusing more on the different aspects of our
personality and interests well before retirement, we
wouldn't feel such an identity crisis or a crisis of
what to do with our time when it came time to
actually claim it back. The point of life
should be to enjoy it and always maximizing for
money is not necessarily maximizing for what
makes a truly financially independent and joyful life. I also believe that thinking in
terms of financial independence can and should be
accessible to people who are at lower incomes. In our recent interview
with Sarah Wilson a.k.a. Budget Girl, talking
about how she entered into the world of
long term wealth building starting at an income
just above $19,000 a year and now has a net
worth over $200,000 is really practical in terms
of showing the way that this can be done without
either having to engage in hyper
restrictive frugality or having a six figure
software engineer salary while living in rural Iowa. And while I do think
it's important to stress that for most people being
able to retire at a young age is not going to be totally
financially possible even if you do make a lot of the
right financial decisions, I also believe that
there are many really thoughtful and
important approaches to financial
independence that anyone can integrate into their lives. And you guessed it, I'm here
to promote some [BLEEP].. For those who are
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man for himself, how many times can I cancel my
Netflix subscription until I'm able to retire at 35, we're
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code YoutubeVIP at checkout at the link below. I hope to see you there. I'll be there, I'll be
having a great time. And as always, guys,
thank you for watching and don't forget to hit the
Subscribe and Join buttons and to come back
every Monday, Tuesday and Thursday for a new and
awesome videos goodbye.
