Retire Early or Live Fully? The FIRE Debate

Yeah, it seems to start with this fundamental belief, like the core belief of the people who adopt this movement is that work in a job, like to be employed, that this is an inherently bad thing that should be eradicated from your life as quickly as possible. And so, and again, so much of that, and I don't know, it seems to place leisure above all else in a lot of it. And again, like you said, it's different. There's different brands of it, different flavors of it. But the fundamental kind of like understanding, the fundamental belief is that work, working for somebody else, being employed by somebody else, this is a bad thing. And so we want to eradicate it from our lives as completely as possible, as quickly as possible.

Hey everybody, another episode of Business Lunch we want to welcome you to. I am your host Roland Frasier and my co-host Ryan Deiss is here too. Ryan, how are you doing today?

I'm doing exceptionally well and I think today we're talking retirement. Is that right?

Yeah, yeah.

It's, uh, grabbing that gold watch and riding off into the sunset. I know it's something you and I have been looking forward to for a really long time.

That's just so not true.

I like that.

I like that. Yeah, it's really funny. I always get a kick when I read or hear people who are retiring at 25 and 30 years old because life is long. And I guess it's just how you define retire. To me, the traditional definition is, I'm leaving my job. I'm not going to work anymore. If you stop working at one job and that was your kind of main gig, whether you're 20, 30, 50, 60, 80, Yeah. It doesn't matter. But if you are continuing to be in the workforce at all, to me, in my definition, you're not retired. Clearly, for a lot of people, retired means leaving whatever they're doing right now or whatever they have had to do to earn a living, which I think if you are doing something that you don't love for a living, then absolutely it makes sense to figure out how can I stop doing that and have enough money to survive and do things that I want to do. And we I think you and I have had a talk about this before. To me, I kind of define it as if you can make money doing something you would otherwise do for free, even if it didn't pay you, then that's the ultimate thing. That's the holy grail of work. You agree with that?

Of course. And so what we're talking about, I guess just to kind of set it up, we're talking about this whole FIRE movement, right? Do you kind of want to set that up?

Financial independence, retire early. Financial independence, retire early. So FIRE, which is not at all a new concept. People have been trying to do that forever. But, you know, if you put the word FIRE behind it, then it can become a movement, which it has. And it's something that a lot of people are trying to do. And there are different iterations of it. There's regular FIRE. Then there's Lean FIRE. We're basically going to starve ourselves. I would probably call that Hell FIRE. And then there is the one where you are still living pretty large but putting, you know, a bit of your income away. They call that Fat FIRE. So I think it's kind of interesting because what the whole thing boils down to is save as much as you possibly can, throw the savings into diversified index funds, And, um, and then do side hustles. Um, and then the level of how penurious you want to be, like how, how frugal am I going to be? How much am I going to cut my expenses to effectively defer gratification by not spending money on things right now that I otherwise might? And also, and I think this is key, and this is to me a very smart part of this, defer major life events that are going to be very costly. So having children would be a big one. It could be getting married, but getting married might give you two incomes and help you get fired faster. So I think that I think it's it's cool to think about that that even in the fire movement there's a spectrum from we're really really really gonna challenge ourselves and live ultra lean all the way to maybe one of the people that I was reading a thing about. is, um, is still— is living off of about $250,000 a year, uh, which was 50% of a $500K income. You know, so that, that's cool. I think if you look at classics like The Richest Man in Babylon by George Clason, that says take 70% of your income and live off of that, save 10%, uh, do fun things with 10%, and give 10% to charity. Uh, those are all kinds of things to think about, but generally the concept is that they want to get out of having to work and particularly having to work in the job that they don't love as fast as possible. Is that kind of your take on it as well?

Yeah, it seems to start with this fundamental belief, like the core belief of the people who adopt this movement is that work in a job, like to be employed, that this is an inherently bad thing. that should be eradicated from your life as quickly as possible. And so, and again, so much of that, and I don't know, it seems to place leisure above all else in a lot of— And again, like you said, it's different. There's different brands of it, different flavors of it. But the fundamental kind of understanding, the fundamental belief is that work, Working for somebody else, being employed by somebody else, this is a bad thing. And so we want to eradicate it from our lives as completely as possible, as quickly as possible.

Yeah, I think the other interesting thing is that there are people that said, like a few of the interviews that I've seen are somebody that they never got to see their parents and they, you know, their parents worked all the time and they were, you know, they never really had any money and they've decided that With their kids, they want to be there. So they wanted to— prior to having the kids, they wanted to get in a place where they wouldn't have to be in a 9-to-5 or a 9-to-9 job and that they could actually take the time to have a rich family life. Obviously, what we teach with Scalable is that if you have a business and you get people to run it and you've got the right systems, then you can You can have it all, right?

Yeah.

And I think that's part of the challenge that I have with FIRE is this too, is I've seen far too many people who deferred gratification and a life event happened, family illness, personal illness and health, disability, death, bankruptcy, economy collapsing. name it, theft, you know. And, um, my— one of my ones I just heard that I couldn't even believe when I was reading a book about the synthesizer guy that I like is that he had somebody that was going to invest in his company, which was going to totally save him, and put the deal together and everything. And the investor was a very, very wealthy person who didn't trust the government, and so had all of their wealth, $125 million in bearer bonds. Bearer bonds are generally owned by whoever holds them. They were deposited, deposited in the World Trade Center.

Oh, no.

The day that the planes hit the World Trade Center, 9/11, the courier who was supposed to pick them up to put them on a plane to London to go get the financing facility with them as collateral was late getting to the building. Good for the courier because the courier lived. Bad for $125 million of assets that literally went up in smoke, right? So like, you talk about anything can happen. Anything can happen. So to me, this, this, uh, complete starve yourself of joyful uses of money, um, to, to get some to get to some place where you feel, you know, that you now are free is, is very often illusory because things come along. Life doesn't have a plan like your plan always. And so I think that's something to be careful. So that's a philosophical, you know, bias that I have.

Well, similarly, like when you think about kids, I mean, we've had friends and, and, um, my heart goes out to them. My heart goes out to anybody listening to this right now who's in the situation where they wanted to wait to have kids until they were more financially you know, ready. And by the time that came around in their mind, they might've been financially ready, but they weren't biologically as ready as they were before. And now they're needing to basically spend all this money in, you know, additional fertility treatments that have wiped out all the savings that they had built up.

Wow.

That, you know, if they'd had the kids before, and again, this is not a, again, my heart goes out to them. I don't want to make it come off at all like I'm like blaming them for anything. I think everybody's making the best decisions that they can. And it's of course a balance. I've also had friends who they went out there and bought Lamborghinis because they had a good year, second homes because they just thought that the ride would never end. And they wound up having to sell those at the worst possible time and lose lots of money.

It's hard.

But I think if you just adopt the mindset of we're not going to do this thing until we have the money, you need to know that that just default setting Isn't perfect in and of itself. My wife and I were having this conversation while we were, you know, together, you know, in Europe because we were, you know, we were gone for a bit and got— we're gone long enough we actually started to miss our kids, um, which takes about like a week or so, um, with 4 kids. Like, we're usually happy to like get, get a little bit of break, but we are now. And, and we were just talking about how— because we have a beach house, as I know you know— and when we bought that beach house, it was a stretch. Like, somebody on paper could make the argument that This is maybe not the best financial situation. We had enough for the down payment and things like that, but it was definitely, you know, a stretch. I'm so glad that we did it because we've had so many amazing memories there with the kids that had we waited until we were quote unquote ready, we would have missed out on. Now we would have had plenty of other things. And so that's fine. But if you just say, um, you know, we're not going to do any of this stuff. until we are quote unquote retired, you run the risk of life happening. You run the risk of it happening longer than you thought, and you run the risk of missing out on a lot of pretty cool things along the way. And it just, it's the default setting to me of I can't have both. And I think that's what irks me the most. Like, so what would you say if somebody, one of your boys, right? Comes to you and is like, yeah, I'm gonna be, you know, we're doing this FIRE thing. What would you say to them? What would your advice be if somebody that you knew and trusted, young person, young couple said that they, they were going to go all in on the FIRE movement. What, what would you say to them? What questions do you have for them?

Yeah, I mean, I think I would, I would say that's awesome. What, what is it that appeals to you about that? And then listen to what they said. I, I have learned that it is very important to support first because people want— I wish I could use some examples, but if I did and they, and the people were listening to this podcast, they'd know that I was talking about them. But, um, there are There are a lot of people that come to us doing things that don't really make financial sense. Your beach house, to me, let's say that you came and said, you know, hey buddy, I'm thinking about doing this beach house. It's a stretch. What do you think? I would encourage it because I'd say you're, you're smart with your money. You're, you know, I'm a buckets of money person. I think you are as well, right? It's like, so as long as you've got money in the bucket of not income-producing, but probably decent investment long-term capital appreciation, you know, and you can put that there, and that's— you've still got your emergency money, and you've still got, you know, the money to do good things for other people and the other things you want to do, then I think you should do it. I am a very— I am very much life is short and life is long, and you never know which is going to be, right?

Right.

So that's exactly it. Just in case it's short, Have some freaking fun. And also, as you mentioned, and my favorite story from my own personal was listening to the guy behind me in the Southwest Airlines flight that was talking. He was like, you know, 70-some years old, and he's talking about how he had deferred and had crappy things all his life. So now he just bought a really nice car, and all of his other friends who had nice cars when they were in their teens, 20s, 30s, 40s, 50s, and 60s had nice cars. Now they can't afford a nice car, but he's got like a Corvette or Mustang or something. I'm like, so now you've had 50 years of not having what you want, and you're in kind of this different place in life. Who do I feel sorrier for? Do I feel sorry? I mean, personally, I would rather be 80 and not able to afford the sports car and had it when I was younger than, you know, the other way around. But so, so to me, it's like I don't want to be eating dog food when I'm 80 years old, but I want to have enjoyed my entire life. I want to have helped our kids and other people. I want to have done the things that— we even look at that with travel. We do the far away hard trips now because we might not be able to do those later. My wife wants to go to Alaska on a cruise. I'm like, you know what? A lot of 80-year-old people on those cruises. I'm pretty sure we can do that then. Not a lot of 80-year-old people trekking through the, you know, the jungle to go see gorillas in, you know, Africa. Let's do that first. Um, so I, I guess to me, it's, it's— I like that it is a thing people can rally around. And if that's what you need to be, you know, for, for a system and you like it, this is what I would tell my kids. If that's what you need, um, to do that and that will get you on the track to having the life you want, I support you 100%. Uh, I want you to sprinkle in a thought about be sure that you have time to enjoy things now because maybe tomorrow doesn't come, but maybe it does. And so if you can balance that, you know, and then, then that to me is a great way to get what you want all the— all along, to have a great rich life all along. And the easiest way to do that, in my opinion, is the buckets of money. You know, if I've got my bucket of money for retirement, I've got my bucket of money for let's go play and do some stuff. As long as I don't tap one for the other, then I'm probably going to be okay with both. But if I put everything in, and this is something that I think can happen to the FIRE people, is you put everything in and then it's 2007, 2008 and you were all in on real estate and you get just demolished, or it's 2000 and you have a market crash.

Right.

Those things happen too, historically. Now, historically, if you hang on to them forever, you will, you will do well. But, um, I, I think it's just important to know that if you have all your eggs in one basket in terms of, like, investments, that's not necessarily good. But if you have all your eggs in one basket in terms of time of your life, that also can be not good.

Yeah, I think it's good. Sorry, what were you going to say?

What do you tell your kids? They come to you and say, we're fired up about FIRE.

Yeah. I think it's important to separate. Like, the thing about FIRE is it combines 2 things that I think actually have very little to do with one another. And the first is financial independence. And the second is retirement. And you can have both of them differently. And I think that they need to be— I think in attaching them, That's where maybe some of the— that's where maybe you can get a little bit astray. So what I would say is, let's first talk about what does it mean to be financially independent? That's basic good financial management, good financial planning. What that also means is spending less than you make. So, you know, you talked about buckets.

Yep.

I teach my kids, you're going to have some kind of income, whether, you know, it's from babysitting or whether it's like grandma, grandpa, like giving you like Christmas money, whatever that income comes in, You need to have some buckets that this money goes into. A certain percentage can go into an I want to spend right now fund. And it shouldn't be the majority of it, but maybe you do put a certain percentage in. This is my fun money fund. This is the money where I want to basically be able to do that thing that I want to do because god dang it, it's fun. And life, like you said, is sometimes short. That's a bucket. You also need to have a savings bucket. This is where I'm paying my put money in my future bank. And you said, you know, George Clason, that 10%, you know, whatever that number is, I, the more that can be the better, but I don't know that you necessarily want to do that at the complete expense of the fun money fund. The fun money fund should be less, certainly if what you're saving is less than 10%, but it should be something. Even if it's just, I'm going to use this to go, you know, and buy that little, you know, that little ice cream cone for myself or something. And then there should be the, you know, a good chunk of it is for spending money today. And so as long as you've got some money to put in the savings bucket and some money to put in the fund bucket, then you're practicing some good, solid, basic, you know, financial management. Now, let's say we've checked that box. I think the next thing that you want to tackle as any just adult How can I make sure that my vocation is something that I find meaningful? Because I do believe that it is very, very difficult in life to—

Can I go one thing in between those 2?

Yeah.

So the first one, which I like, is that you separated the difference between living a good life and retirement, right?

Yeah.

So for retirement, the FIRE movement uses kind of the same thing that most of the financial planners use, which is that you should have 25 times the income that you— you should have 25 times the net worth or the savings that you want to have of your retirement income.

So let's say then you can live off of 4% interest, which is kind of the low average.

Which is the same thing, right? 2 sides of the same coin. So either the 4% rule, you can withdraw 4% a year to live off of, assuming a 30-year retirement. If you're trying to retire at 20, hopefully you're going to live more than 30 years, so that number might have to be higher. But generally, so if you want $100,000 a year, you need to have $2.5 million. If you want $200,000 a year, you have to have $5 million. And so that's the retirement side, which to me is different from the living, enjoying your life stuff.

Absolutely.

Think about that. How do I reverse engineer my retirement? If you want to use that rule, just say 25 times my desired retirement income, I should have now. I should get to that before I feel I am ready to retire. I should also have a bucket so that I'm living, enjoying living my best life. And then we get to what you're going to talk about now.

Yeah.

And I think the question that you have to ask when it comes to retirement is not what am I retiring from, but what am I retiring to?

Yeah.

And the most miserable people in the world that I know are people who have retired from something they didn't like into nothing. And so now they have no vocation, they have no calling, there's no area of their life where they're adding value. And by the way, this doesn't have to be something that makes you a lot of money. I know very happy people who retired from high-paying jobs into essentially volunteer work that they love and brings them tremendous fulfillment, and they continue to add value. And so my thing would be, okay, let's check the financial planning box and make sure that we're being responsible. That we're living on less than we make, that we're saving for the long term, but that we're also providing for some fun money today 'cause life might be short.

Check, check, check.

Got it. Now, how do we make sure that we're adding value to this earth? 'Cause that is where fulfillment is gonna come from. Now, that could come in the form of being a stay-at-home mom, which last I checked doesn't pay very well and is incredibly exhausting and a tremendous amount of hard work, but can also be very fulfilling, my wife tells me, right? It can be that for a season. Maybe it is. No, I want to continue to work in this job because I love the work that I'm doing. But I think especially if you're a young person, asking the question, not just saying, not just operating under the assumption that work is bad, work is life-sucking, work is something to be avoided. I don't want to be in somebody's employ. I must be doing my own thing at all times as though that's always better. Spoiler alert, it ain't. been plenty of days where I know both of you just wish we had fricking jobs working for other people.

So the—

but I think asking the question, how can I truly enjoy my work? How can my work both pay me and be fulfilling? And if that's the question that you continue to ask, and if the answer is, well, it's not today, okay, what would need to be true for it, for that to, for me to have both of those? Would I need to shift into a new field?

Yeah.

Does that mean I need new skills? I need new, different relationships? Uh, does it mean that I need to, um, ascend within this company or jump to a new company? But if you just ask the question, what would need to be true for me to put in, you know, 40, 50 hours a week if necessary, and love it? Not necessarily every day, but enjoy the work that I'm doing and have it pay me. Because if you can have that and you're practicing good financial management, You get it all because the most terrifying thing in the world and my biggest fear and what I would say to my kids, if you want to retire, what are you retiring to? Because if you're merely retiring from but you're not retiring to, and the same question that I ask friends, colleagues, clients of ours who are thinking about selling their company, oh, you want to sell your company?

Great.

What's next? Because if the answer is, I don't know, then figure that out before you sell the company. I think the same is true when it comes to retirement. How do we make sure that we can have both? What would need to be true?

If you're—

if you just ask the question, you're going to come up with an answer. Um, I think that's going to be far more impactful, far more, um, interesting, far more fun, and way more lucrative and less risky than just saying, I'm willing to grit my teeth and bear it and have a sucky, miserable life to suck it all away for that day, magical day when I get to quote unquote retire. Yeah. To what?

Yeah, I think that's, uh, I think that makes a lot of sense. And, and I will also say That I have watched friends who are older retire and pretty much wither away. I've watched friends that are younger retire and feel completely lost for years, and that retiring too is really, really important. And I and I would say you said you thought the most miserable person would be the person that that left something they hated and didn't know what to do. I'll tell you what I think even more miserable are the people who love what they do and then cave to the press. pressure of people saying they should retire because that's the goal. But the people don't get that the person gets so much fulfillment out of what they do that they really probably shouldn't retire.

Yeah. I love what I do.

I would do it if they wouldn't pay me. I really, really want to keep doing it as long as I possibly can. So I would be very, very unhappy. It would be like, you know what? You really love golf. You really love golf and everybody's telling you, but you know what? You've played a lot of golf for years. You should probably stop now.

Yeah, it's time. It's time.

Right? Yeah.

No, you're so right. You're so right. Yeah. Far more miserable than the person who left something they hated to nothing is the person who left the thing they loved. And I think that's true whether it's a job. My dad loves the work that he does. He's worked in the same job forever, for almost as long as I've been alive. And we were together. I was like, when do you think you'll retire? He's like, hopefully never. I like what I'm doing. I like that I can show up and add value. You know, my dad's in his 70s, um, and, uh, and, and, and I— and that's why he's so dang happy, and it's why he's so vibrant. And, um, and, and I— and so that's true if you have a job, and I think it's especially true if you have a company. Sell your business on a good day. Sell your business because you're excited about the next thing, more excited about the next thing than the current thing. Um, but if you think that you have to You know, live in misery running a business that you hate. You don't. You don't. Please don't.

I like that as a place to kind of wrap up. Anything else you want to say?

No, I think that's— I agree. I think that's a good place to wrap. So, yeah, our FIRE friends out there, you can have both. You can have both. I love— do, do the financial independence part, but you don't necessarily have to retire early unless you know what you're retiring to.

Yeah. Or at least do fat FIRE.

Yeah, ball out.

You got some stuff that you're gonna enjoy. All right, guys, hopefully that, uh, that is helpful to you in thinking about kind of finances and FIRE programs and all that stuff. And, um, we'd love to hear your thoughts on it, and we'd also love to have you share this with friends. And see you next time on Business Lunch.

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