Thanks for coming back to the Planning for Your Purpose blog! The purpose of the blog is to introduce financial planning concepts that I come across every day. I want to start discussions that will educate, benefit, and help to improve your financial life. Ultimately, to help you focus on your telos!
What’s the FIRE movement?
It’s the result of combustion of course. But seriously, in the financial world, FIRE stands for Financial Independence Retire Early. The purest form of the FIRE movement is to live your life the most frugal way possible, eliminate debts, so you can save as much as you’re able, and retire as soon as possible. For many, that includes no eating out, only buying used clothes, altogether simply getting rid of any expenses that aren’t fundamental to living. There are infinite degrees between living on ramen noodles in a van down by the river to being a slave to full on commercialism, but many FIRE movement devotees demonstrate some extreme parsimony.
There are other aspects, of course, to FIRE and many are based in sound financial planning and investing basics. As with most fads, it’s important to separate the valuable information out from the less advisable pieces.
Should I do it?
Look, you do you. If you are willing and interested in sacrificing or surrendering your lifestyle with the primary goal of not working as soon as possible, this could be a great strategy for you. It’s not for me – for a lot of reasons. One is I love my job.
My family went through a huge transition and amount of stress to allow me to get where I am today and to have my own business. We made the decision as a household to undergo some shorter term pain to set up a happier career that would make working longer better for us. Similar to deciding to full on embrace FIRE, this is a major lifestyle decision we made for our family.
Another reason FIRE is not for me is because I’m like a bird, in that I really like shiny things. Fancy things. Whatever. Another is I doubt I could sell it to my family, and if I could, I’m not sure I’d want to subject my kids to that type of lifestyle.
I do fully support the idea of living more frugally. I do patch holes in my clothes and wear them until they completely fall apart. I pack lunches the vast majority of the time. I shop sales and clearance. I drink a lot of coffee, but I brew it at home and take a thermos so I don’t buy coffee out. I definitely subscribe to a lot of components of FIRE; which to me are just ways of being frugal.
Is it right for you? Maybe. I think most of us can benefit from living more frugally, closely examining our spending, and making informed decisions about it.
Is your spending aligned with your goals and values?
I think we can all benefit from a self examination of our finances, one way to help determine if FIRE is right for you is to assess your current spending and saving versus your core values and goals. I’ve laid out a five step process to help you walk through this in another blog, basically, what you’re doing is analyzing your goals and spending item by item and making decisions going forward about if you need to change goals or lifestyle.
For a lot of families, just the exercise of creating goals is difficult.
This is the biggest win of the FIRE movement to me. It’s gotten a lot of attention and there is a lot of information and interest around it. What does that do? It causes people to do research, read about it, and ultimately LEARN more. I think most people would benefit from learning more about personal finance and if this is a way to do it, then it’s a win.
I’ve said this in other blogs, but financial education in our country is severely lacking. I will mostly support anything that causes people to learn more about personal financial planning. That’s why I do this blog. That’s why I do what I do. That’s one of the big things that inspires me, knowing I make a difference in the lives of families every day.
Whether or not you want to dive in fully, you can learn a lot from the FIRE movement. I think at a bare minimum, you can get some additional education from this. I think it creates an opportunity for everyone to assess their spending, savings, goals, and values. What can you cut from your budget? Where should you spend or save more? What can you reduce? Do you have financial goals? Are they aligned with your spending? Is your time? It’s a worthwhile exercise and I wholeheartedly recommend you go through it.
Take some time and evaluate if your spending and saving truly align with your priorities. It’s a great soul searching exercise and you may discover a realignment will give you more joy.
As always, save early and save often. Having a current financial plan is the best way to know where you are financially compared to where you want to be. Some of your financial goals may be a long way off and some are likely coming soon. The earlier you start on the path of creating a financial plan, the easier it will be to get there or to make adjustments so you have a better chance of getting there.
Call CERTIFIED FINANCIAL PLANNER™ professional Dennis LaVoy with Telos Financial at 734-468-3050 now to schedule a meeting to review your financial situation and craft a strategic financial plan for you. Telos offers free consultations and would love the opportunity to meet with you and discuss this in more depth. Don’t forget to check my website and blog for more information as well as my youtube channel for videos.
Telos Financial is Plymouth, Michigan’s financial planner for Xennials, Millennials, Generation Xers, young professionals & their families. Financial advisor Dennis LaVoy, CFP®, CLU® founded Telos Financial to serve high income and high net worth young professionals. Dennis uses his experience, knowledge, and skills to build lifelong relationships with his clients. He is the financial advisor for Plymouth, Ann Arbor, Detroit, and across the country focused on helping clients pursue their goals.
The views expressed are my own opinions and do not apply to every situation. Your situation may vary so make sure to consult a professional for advice prior to making any decisions.