Financial Independence Retire Early (UK) is a popular movement. I am going to give my view on the Financial Independence Retire Early (UK) why I think it’s a sham and what you should do instead to achieve financial independence and retire early in the UK.
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Financial Independence Retire Early UK – WHY IT'S A SHAM
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This may put the cat amongst the pigeon but this is my problem with the FIRE movement. I will, of course, present a counter of something you should definitely be doing.
Hmmm… I’ve only just started looking into FIRE but I don’t think it’s just about saving a lump sum and then sitting there. It’s about investing and making your money work for you. It also depends on your definition of financial independence of course
Regarding the 1st point about saving, it is out of context to say that FIRE only talks about being frugal and saving, as it always includes investing as a third step, so the proper context should be spending as least as possible to save and invest as much as possible to take the advantage of compound interests overtime.
2nd the retire early part of it is more related to have the time and freedom to follow your passions instead of HAVING to work ton a dead-end job you don't enjoy.
3rd regarding strategy, you can account for your own strategy within your FIRE amount, including insurance, care home, etc. etc. as your number should include all your expected expenses, so if you believe you will need it, you can include it.
Finally, agree, you should be doing something that you enjoy and if you are young enough you may be able to find something early on, if not then FIRE can be a good solution to be able to work on finding that thing you love later on. Balance.
Good point of view to open up the discussion though… I wish I've found FIRE earlier in my life to take advantage of it earlier on.
Thanks for sharing.
I've been saying these things on my channel too. I'm changing the name of the movement to Financial Independence Recreational Employment. This concept makes much more sense. New sub.
Gained a sub! Sick guy 🤙
I like some things and dislike some things from the FIRE movement. I like that it promotes saving/investing at a young age. Im 48 years old, and I was one of the few out of my friends who did this in their 20’s and 30’s. They bought McMansions and nice cars and contributed very little to retirement. They are in for a HUGE wake up call when they retire, or have to work past 62, 65, 67, etc.
What I don’t like about the FIRE movement is as you said about your twilight years. I know someone’s mom who bought a 55+ community house and was going to ride that out. Things changed as she had health problems and was forced in a senior living in her 70’s. Luckily she had a bigger nest egg to move into a nice senior living center. If she followed the FIRE movement, she would be probably moving into an assisted living because that’s all she could afford.
My only beef with FIRE is they say there is a number that you can retire comfortably. Unless you are super rich in the top 1%, there is no specific number for any of us that we can retire comfortably because you don’t know how your health can change your life in your 60’s, 70’s or 80’s.
I'm quite confused as to who you follow on instagram that tells you FIRE is about putting all your savings in cash. I mean, head to r/FIREUK on reddit and you get more investment oriented posts than r/UKInvesting has. You can't find a FIRE oriented blog/youtube channel that doesn't preach the magic of compound interest every other day, twice on sunday.
So I hope you can understand why, for most people interested in fire, to start off your video saying "in your experience" FIRE advocates hoard cash can come off as quite off-base.
Now your point about not enjoying life is totally on point. I do notice that most people who get burned by FIRE (pun intended) approached it with a very unhealthy mindset of "every dollar I spend is a dollar wasted". You can totally retire early by saving 30% of your income which still allows you to live your life happily, or increase your income so that even a 50% saving rate leads to a life of fulfillment.
If you ever want to make a update video on this topic, i'd approach it with the idea that FIRE can be summed up somehow this way: Consistently invest a portion of your monthly income until you can live indefinitely of the interests without depleting your inflation adjusted capital , with a healthy focus on maximizing the enjoyment you get out of every pound you spend so that you never regret any pound you invest.
And definitely check out more sensible sources on the subject, because you'll see that they often think the same way you do.
Dude
Terrible video, guy knows hardly anything about FIRE.
I'm of the older generation 59 years old – and people where doing F.I.R.E long before the acronym was applied. To be honest most of the people I know who did this (and I know a few) didn't just sit on a sofa waiting for death. Most of the people I know wanted to get to a position where they didn't have to work, but could continue to work if they wanted….one of my friends is a music teacher, he does it because he loves teaching kids, but didn't need to work from his mid 40s – he made a lot of money as a musician in his younger days. I know several people in this situation who do something because they want to, not because they have to, and that makes a massive difference to how you feel and how you live your life.
My understanding is to use FIRE to use it as a tool to get out of the corporate world and retire from that world (Retire Early). But it doesn't mean retire early and live on a beach, it means then you can do what you love and you have money in the background to always have as a safety net and to live freely (Financial Independence). Or you can even go work but don't have to. Work is more enjoyable when you don't have to go, but just want to.
Within the FIRE community Financial Independence is very well defined – it's the ability to meet your living expenses through passive income i.e. work becomes optional.
You shouldn't confuse FIRE with frugality. There is such a notion as 'fat' FIRE. The more you can invest for longer, then the quicker you will grow your investment and the earlier you can reach FI.
If you have properly invested your funds it shouldn't matter what age you retire at – you stick to the safe withdrawal rate ~ 4% p.a. that should last you indefinitely as it should be growing faster than you're withdrawing barring a stroke of very bad luck with the market.
Maybe do your research before you slag off something you clearly don't know much about!
Fire is all about investing and living off of the interest and not simply stashing money in a savings account. If somebody age 20 starts investing £500 a month at a 6% growth rate. This will be worth 500k age 50 with an annual return of 30k – equivalent to potentially a 40k salary, on average, with no drawdown of the initial. Compared to the state pension age of 70 maybe 72 by then. You could enjoy retirement 20 years earlier. This is exclusive of any private pension that you will likely be able to claim aged 60.
Seems like you have a misunderstanding about FIRE. Biggest thing you’re wrong about is that it advocated saving. Some savings, yes. But being able to retire early is primarily about living below your means and investing. Also, people approach the goal in various ways. Some want a large amount to live off (Fat FIRE), some are more comfortable with a lean budget (Lean FIRE) and others are just going for FIRE. Your painting the movement with a very general brush and giving the wrong impression of what the movement is about. You obviously aren’t well versed in this subject and when confronted with people with actual knowledge you simply say “this is my experience”. Yikes – it’s fine to admit where you are wrong. This is how you become more knowledgeable and can be an asset to your clients instead of being stubborn and pushing a false narrative.
Thanks. Finally a realistic perspective. One common thing that that people in the FIRE movement don't seem to factor in, is children. Children from 0-18 cost a huge amount of money.
I think you've over generalized the F.I.R.E. process. This movement is not just a 'Save Money' and sit on your (as you'd probably say – Bum) and whither away. There is a definite investment in revenue generating intruments (i.e Dividend Stocks, Real Estate, etc.) to keep you in a state of being able to live freely, utilizing your time as you see fitand desire. I think your approach is quite rigid.
You just shit talked the FIRE movement then recommended everything that fire also recommends!
Retire early means leave the traditional work force and do what you want with your time. Starting your own business for example. Nobody leaves the workforce at 30-40 and sits on their butt all day watching TV. Most of these arguments are straw man arguments against FIRE.
No one in FIRE says just save, they all promote investing…
At the age of 40 I managed to pay off my mortgage. BUT I had no pension, no savings or investments. So I decided to remortgage my house and buy another one to let out. Fast forward 7 years and I still have my own house and 3 buy-to-lets, some investments, 2 pensions and cryptocurrency. I literally went atomic lol! I wish I had started everything earlier but I enjoyed life. I still enjoy life and have a job I really enjoy. I’m hoping to retire at 60. I agree, you have to enjoy life while prepping for retirement. New to your channel 🙌🙌
In London there r prostitute houses in soho that don't move. Prostitution is illegal in England. I'd say it beyond setting an example to the word these lot r pedigree. Shameful. Boycott uk today remember oxfam scandal? Double standards?
Boycott uk
Gee this guy is out of touch with what FIRE is actually about. Feels like he heard of it from a 3rd removed source or browsed it for about 35 minutes and decided to make a video because he stumbled across the idea of frugality and his "I live in the moment" attitude was threatened. A lot of us live in the moment, but it's just about learning that there's only so much money can buy to equate happiness, a lot of things that make us happy are free, and that the rest of the money you end up realizing is kinda wasted, is much better put to buying you FREEDOM rather than upgrade that 2nd BMW you think you "need". I wanna give people a primer on FIRE, if this is the first time you stumbled across this:
– Be frugal? Yes, to the a certain workable extent helps, meaning stop buying shit you don't need. That 2nd car? That apartment with a room more than you need? However splurge on that vacation with friends visiting whatever place, because that's the truly powerful memory maker that you'll cherish. But sure, it's a spectrum, and you can be as frugal as possible too. Once you start having "FU money" to leave a job for a year or whatever when it gets too much, you'll be thankful you saved and you might end up seeing that freedom and peace and lack of stress can get kinda addictive actually.
– Just to give an example of how frugality CAN be smart: rotate these subscriptions like Netflix / Disney / Hulu, instead of having everything active at once. Once you've seen all there was to see on netflix, unsubcribe and switch to Disney+ or Hulu for the next few months. Rinse repeat. You still get to enjoy all they have to offer, you get to live with intent, and it can make you more grateful too. Why wouldn't you want that? People complain about distribution of wealth, but that's essentially what this is: you're redistributing your wealth to the companies by having all subscriptions, even when it's not necessary to. I just wanted to clarify the frugal point with some actual example that came to mind, from the communities he's bashing. Point in case: you still get everything AND you pay less.
– "Nobody became rich by saving money". Well, two things here: invest, don't save. And the other is.. why do companies "save money" via low wages, cutting health benefits, etc? Yea, exactly, to get rich, not to get poor. 2nd grade logic. Sorry, I meant to say kindergarten. He might've as well said "I gained my virginity back by fucking"… or.. "Look. How Proud. I am. To be. Ignorant"
– Related to this point above, look up "opportunity cost" and "the power of compound interest". Seriously, look these up. It's why you want to save as much as possible early on and why a lot of us end up doing that. Let me make your job even easier: there's a great video on yt from PlainBagel called "Waiting to invest is costing you a lot". You're welcome.
– FI and RE are two separate things that simply the same point of convergence: most of us are into FI but not necessarily into RE. In fact a lot of us (and probably not wrong if I say most of us) recognize it's only about FI, escape the grind, and start working meaningful jobs, or work less, or work more but something you love. Start your own small business, volunteer at an animal shelter, whatever.
Sir, if I could give out awards for ignorance, you'd be the one that the award was named after.
Fire is boring. I became financially independent age 36 and briefly "retired" but it was dead boring (already travelled the world) so am refocussing on a career in the same sector but salary is somewhat irrelevant.
I've got my own version of this video! I agree with quite a bit of this. Not entirely though! How do you feel about the 4% rule? I might be ok with £625k… 😉
Finally, someone said it!
Good video and advice, especially about finding balance. Spend less than you earn and invest the rest, is simple idea that really works. The problem is where surrounded with advertising and marketing designed by experts in psychology that want us to endlessly buy stuff we don't reall need. Recognising that and finding the balance is the key as you say.
The FIRE movement is, simply put, about living below one's means and investing a percentage of one's salary (usually at least 12-15 %), more will get you there faster, in order to retire at an earlier age than, say 65. That would be just awful to strive for now wouldn't it? Implying the FIRE movement says you can "save" your way to financial independence is misleading because you have to save AND INVEST in order to grow your wealth over time. You don't have to live in extreme frugality and forego all, another false implication. If you are saving money, you are not making money??? If you stick it in a bank you won't, but you have to save first and then find ways to invest it. If you don't want to "forego" all your wants, then don't do FIRE, but growing wealth requires you to forego spending some of your money so that you can invest it instead. The flaws are that you actually have to make some sacrifices. You don't get something for nothing. For you to say you are a financial advisor and that FIRE is a sham is absolutely mindboggling to me. You should be encouraging people to become financially independent as early as they are motivated to do so. The more financially literate and responsible people become, the more they are empowered in their lives and feel they have control and choices in their future. I really don't understand all you so-called financial people discouraging people about FI or FIRE. And your answer to how much someone needs to retire early is…A LOT??? That's the best you could do?? I bet most people that are FI, like myself, or who are on the FIRE journey can give a better general answer to that easily. I'm disappointed. I'm glad I stopped using a financial advisor over25 years ago. Sorry, nothing personal.
I agree
The scary part of this video is that you claim to be a financial advisor. Incredibly ignorant and stereotypical views. Perhaps you are an advisor for the herd, selling annuities lol.
I don’t think you quite understand the FIRE movement
I don't buy into it because all I hear is I'm a millionaire and I retired early (these people don't seem to take into account 1.) any government benefits they may be able to get at say 65 or whenever the retirement age is the less you work the less benefits you will actually get when you hit that golden number, 2.) Medical bills a lot of times you will have to pay what insurance does not cover and in some cases that number has been in the hundreds of thousands so there goes half of your 1,000,000 that you saved up to retire early 3.) When everyone starts drinking the Kool-Aid so to speak I turn around and run (Rev. Jim Jones People's Temple Jonestown Massacre).
The fire movement say Invest in low cost tracker funds or something that pays. You missed the whole point of the fire movement. It's to draw a income you can live on. I do get you said that at the end but it's fundamental to the fire movement. To simply add it at the end like it's not part of it is silly
This chap makes the point that you might need care. This is true, so your best plan should be to spend all you savings before you need care.
When you are miserable and in a state care home at least you'll have the good memories to look back on. The state will pay for your care if you've spent all assessts.
If you can accumulate around half a million by age 50 and be debt free you could easily retire early.
You just need a decent job with a good pension higher employee and employer contributions.
Great content once again Pete!