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FIRE – Why Financial Independence Doesn’t Have to Equal Retiring Early

Short for “financial independence, retire early,” the FIRE movement has spread like a blaze among many younger and middle-aged workers.

These workers maintain a high savings rate, often through relatively frugal lifestyles, to build wealth quickly. With their savings, they invest to create passive income streams.

Because with enough passive income, you can cover your living expenses and working becomes optional.

But should you quit working entirely just because you can afford to? After all, we all want to do something meaningful with our lives. And when you take money out of the equation, it opens up endless possibilities to spend your life in the most meaningful possible way.

Financial Independence Is a Universal Goal …

Everyone ultimately wants to reach financial independence (FI). Most people just don’t realize it.

To retire safely, you need to be financially independent — to be able to pay your bills with your savings and investments. In other words, financial independence is a prerequisite for retirement.

So if you ever plan to retire, you’re already pursuing financial independence. The question then becomes your time horizon — when do you want to reach financial independence, and optionally retire?

As you review your long-term financial goals and retirement strategy, start thinking in terms of a retirement horizon — or, better yet, an FI horizon — of how many years you want to work before reaching financial independence. You can then work backward to save and invest enough to make it happen and reach FI quickly.

… But Retiring Early Is a Marketing Hook

In my other life, I run a business teaching people how to reach FIRE with real estate. And I freely admit that we use the concept of “retire early” as a marketing gimmick to attract attention.

Why? Because everyone knows what “retire early” means. It’s simple and clear. Financial independence, in contrast, means something different to everyone.

For instance, in the context of launching your adult children from the nest, the term financial independence can refer to your kids earning enough to pay their bills and move out on their own. In retirement planning and personal finance circles, financial independence means having enough passive income to cover your living expenses.

So as attractive as financial independence is, it makes a terrible marketing hook or rallying cry for the masses. Which means most people first arrive at the notion of FIRE through the early retirement side of it, rather than the financial independence piece.

But here’s the thing: there are only so many pina coladas you can sip on a beach before you get bored with sitting around. The FIRE movement may initially attract adherents with the image of relaxing on a tropical beach for the rest of your days, but the reality of FIRE looks far different.

It looks, well, more like normal life — except better, because you have complete freedom to design your perfect life when you don’t have to worry about earning an income.

What to Do With Your Life Post-FI

You don’t need to be wealthy or financially independent to create your perfect life. You can and should use lifestyle design principles starting now, today, to start sculpting your life to be exactly how you want it.

But even so, the more money and passive income you have, the more options you have. Upon reaching financial independence, you can devote every waking moment to living a fulfilling, meaningful life.

Consider the following options as you start creating a vision for your life post-financial independence.

1. Keep Working (If You Love Your Job)

Some people have already found their life’s calling. They don’t pursue financial independence because they want to go sit on a beach — they pursue it more as an exercise in building wealth, flexibility for the future, and to leave behind a legacy in their estate planning.

As much as you might love your job today though, the future remains hazy. You could become unable to work for some reason, or your career could go down in flames over an unforeseen crisis. Or you could simply get bored of it as the years go by.

If you love your work, I applaud you. Keep doing it as long as you still love it. The day may come, however, when you want to pursue a new dream, and if you’re financially independent on that day, nothing will hold you back from embarking on that new adventure.

2. Find a Fun, Meaningful New Job

Only 15% of full-time employees worldwide find their work engaging, according to a Gallup poll. The rate in the United States is higher at 30%, but that still means 70% of U.S. workers don’t like their jobs.

What would you do if money were no object? If you already had enough money coming in to cover your bills, what work would you pursue?

In all likelihood, you’d pursue a different job than you have currently. It could be something fun, like teaching people how to ski or scuba dive. Or you might prefer a laid-back, easygoing pre-retirement gig like pouring wines at a local winery.

Or maybe you’d want to change the world for the better, working at a nonprofit that champions your favorite cause.

Whatever your perfect job, you can pursue it with abandon once you no longer need a salary to pay the bills.

3. Start a Business

Your perfect “job” may not be a traditional job at all. Many people find their greatest fulfillment working for themselves, creating a business that combines their skills and passions with the world’s most urgent needs.

The beauty of starting your own business is that you don’t have to follow a formula or someone else’s rules.

You could start an online business with very little overhead or startup costs, perhaps teaching your unique expertise in an online course. Or you could learn to become a bookkeeper. Or convert your favorite hobby into a money-making business. Or anything else that tugs at your heartstrings.

Here again, you don’t need to reach financial independence before getting started. Nothing stops you from starting a business on the side of your full-time job — in fact, your side hustle could help you reach financial independence faster, and or even earn you more money than your day job.

You get to call the shots when you launch your own business. Make a difference in the world while working for yourself, and you’ll never look back at your old timesheet job.

4. Freelance or Consult

If you like the idea of working for yourself but have no interest in growing a company that employs other people, you can always become a freelancer or consult for other companies.

Whether you write, shoot photographs, edit videos, design graphics and illustrations, build websites, or perform any other skilled work, people need your abilities. They’ll pay you to do what you love, on your own schedule and terms.

Those skills may involve advising and consulting others rather than doing particular tasks for them. Don’t let your knowledge and skills go to waste just because you’ve reached financial independence — put them to use helping others to succeed.

As for finding clients, it takes some work in the beginning. But put in the effort to learn how and where to find freelance work and you gain complete control over your schedule and earnings for the rest of your life.

And again, you don’t have to reach FI first. Start building your freelance or consulting business on the side of your full-time job, and at a certain point, you’ll realize you don’t need that full-time job anymore.

5. Become a Creative Artist

No one says you have to starve as an artist. If you’re financially independent, you can pursue your dreams of writing novels, painting, playing music, making indie movies, or any other creative work.

Not every artist becomes a billionaire like J.K. Rowling. But when you don’t need the money, you can do it for the pure joy and passion of it, without worrying about how you’ll pay the rent this month.

6. Volunteer

The world needs your skills, your knowledge, and your time.

Whether that means building houses for displaced people, teaching financial literacy, developing infrastructure in a village in the developing world, offering medical aid, combating corruption, or any number of other charitable works, there are endless ways you can volunteer and build a better world.

If you need ideas, start by looking into the many charitable organizations that are always looking for volunteers.

No one says you have to stick around your own backyard, either. No other country has the wealth of the United States, and many need your help far more urgently.

I thought I knew what poverty looked like, having worked in low-income communities throughout Baltimore. Then I saw the sprawling scrap-metal shantytowns of South Africa, the stone hut villages of Oman, the tarp roofs in Thailand, and it redefined my notions of poverty.

Combine your love of travel with your desire to make a difference, and you’ll find endless ways to volunteer abroad at little or no cost.

7. Explore Other Ways to Change the World

The list above is far from exclusive. If you love children, you can adopt those with no one to care for them. If you love animals, start your own rescue shelter.

Volunteering for other charitable organizations is a noble endeavor, but perhaps what the world needs most is a new one with a fresh approach to solving enormous problems.

As someone who doesn’t need to work to pay your bills, you sit in a unique position to start your own nonprofit charity. You can organize fundraisers, recruit volunteers, and make sure that every donated dime and hour goes straight into the cause, rather than toward administrative bloat or executive perks or compensation.

As your wealth grows, you’ll also find yourself increasingly in a position to fund philanthropic projects of your choice. Bill Gates doesn’t hold a monopoly on philanthropy. Why should he get to have all the fun of changing the world?

Build wealth, reach financial independence, and bend your considerable will, skills, and resources toward creating a better world for future generations to inhabit.

Final Word

When I reach financial independence, I plan to do all of the above. I plan to continue working, both within my business and my freelance work. I plan to write novels, travel with my family, and volunteer abroad.

But I’m not waiting to do all these things. I gave up my six-figure income to start a business, then began freelance writing on the side for fun and to diversify my income. My family and I already spend the majority of the year overseas, and in normal years we visit 10 or more countries.

Critics of the FIRE movement paint the high savings rate as a sacrifice, and accuse those pursuing FIRE of “living for the future.” Don’t fall into that trap. Build passive income and plan your financial independence, but keep the present in mind when you design your perfect life.

G. Brian Davis is a real estate investor, personal finance writer, and travel addict mildly obsessed with FIRE. He spends nine months of the year in Abu Dhabi, and splits the rest of the year between his hometown of Baltimore and traveling the world.