I’ll be honest after getting to FIRE myself I’ve backed away from reading most blogs on the topic. My interest has shifted from ‘getting to FIRE’ to ‘living in FIRE’ which changes what I read. But the other day I decided to skim some blogs and Reddit forums on getting there again and I fully admit I was a bit shocked by some of the ideas out there on FIRE.
Some people are like obsessed with the concept and saving as much as humanly possible, which from a old timer like me (I’ve been writing about this since 2006) is bloody stupid!
Saving a small fortune and then managing your investments is not a sprint which you can see how much you can save for as long as possible. It is in fact a VERY long journey. I had higher than average income, little debt and it still took my a decade to pull off. So the only sane way to really survive the long road to FIRE is enjoy the ride.
What?!?! That’s your advice? I know not very dramatic but I should perhaps tell a story of my own path getting to FIRE. At one point I was like those obsessed people, I had cut everywhere I could and was saving as much as possible but then something went wrong and all my plans blew up in my face. I couldn’t maintain that level of savings for very long because there was next to no slack. Then it occurred to me to really do this well on the long haul I had to back off on my savings rate. So we added spending back into the plan which gave us a bit more cushion and add some things back into our lives that we enjoyed. And honestly the amount of spending we put back in was less than 5% of our savings rate…it didn’t really change that plan all the much (I can’t recall the exact change but it was under a year more of working).
But you know what? It was a world of difference to my life. I enjoyed the world again. I mean I was literally a more happy person by just spending a little bit more. I had found that mythic thing called enough. Then as a added bonus when something went wrong I didn’t freak out because we had some cushion for those weird things that come up like a car accident. And then the irony started to kick in…I was beating my new lower goals anyway. I had aimed to leave work prior to my 45 birthday and I exceed that goal by leaving before my 40th birthday because I didn’t depend on getting a raise for my plan to work. So every raise at my job over those ten years accelerated the plan.
But the most important thing of all those long years of savings was this: I could literally ignore my savings for months at a time and just live my life. My life was not only about FIRE…I had a much more healthy and interesting life because I firmly put FIRE on the back burner. It could just simmer away with a few good habits and so when I was not interested in FIRE I could just forget about it and still make progress. Thus I never had a full burn out and never entirely gave up on the idea. I, of course, had moments of thinking: why bother? But I kept saving until I got interested in it again because I was spending enough that I didn’t feel deprived or left out. I still took vacations, we still ate out and I still made my own wine and beer but yes I also bought some as well. My kids never felt like we were poor but at the same time I never gave them everything they asked for either. They grew up loved and with enough things that they didn’t feel left out at school.
In short, I lived the middle life. Not saving too much and not saving too little but rather saving enough for us. And here is the fine print: that level of enough spending is different for everyone. So yes, try to cut back your spending until it hurts, but then back up 5% or so to find your ‘enough spending’ level. And realize that amount will shift over time. You won’t always be there but it is worth the effort to try and find your way back because getting to FIRE is a long road. It is totally worth it but only if you don’t give up your life to get there. You should be a fully developed person with lots of interests and hobbies otherwise you can find yourself bored in FIRE because you gave up too much of you life and now don’t have anything to do.
So the irony is this: the most successful people at FIRE isn’t those with the highest savings rate but rather those with the most happy lives. So live life, spend some of your money and stop being a cheap bastard.
Okay, your turn. How do you keep savings for the long haul?