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From FIRE to HOT: Another Movement Telling You How to Manage Your Money?!

I have written about FIRE before. It’s a financial movement meaning Financially Independent & Retire Early, which banks on the idea that you should accumulate enough wealth early on in life, through hard work, smart saving and denying yourself any consumer-focused joy in life. This wealth then gets invested so you can live of the those returns (dividends etc.). Issue with FIRE is, as a movement, it’s on the far end of the spectrum, by which I mean that it’s rather extreme. And I mean REALLY extreme.


FIRE became popular a while back, especially as on popular knowledge sharing platforms (YouTube, Medium) a lot of people shared their stories. Some people managed to make over 1 million USD in a year and put all of that in the stock market. Very impressive. And that raises a key issue. According to FIRE you’ll need about a million USD to do this (there are calculators for this). But not everyone can make over 1 million USD in a “short” period of time, and have over 1 million USD left after settling a whole bunch of living costs either. For most people, this would take several decades, not less than one. And suddenly if you’re slaving away for 3 decades in a job where you’re mainly doing it for the money, whilst also not allowing yourself to spend on any type of non-necessity or even luxury, well, that doesn’t particularly fun. It also completely goes against the point of FIRE. If you were able to do this you might have been the very first person to ever fully disable their present bias. Or their sanity.

Now, because most people don’t want to do nothing but work and be money savvy for decades on end, a new contender has risen to the challenge. This new contender is called HOT (I’m not really sure what finance’s obsession is with warm things? Maybe it’s because financiers are often thought of as cold-blooded reptiles? Who knows…). Anyway, HOT or Happy, Opportunity rich and Time rich turns up its nose at FIRE. It’s core idea is that it’s the chasing after money which makes you unhappy in the first place, thereby rejecting a core pillar of fire. Whereas FIRE requires you to first earn, save and invest a lot of money, and then step out of the rat race and truly live your best life, HOT does it the other way round. HOT asks: what would make you happy? Then, how would you get there? And then lastly, what resources are needed for this? It's a completely different mindset.

What I did find funny is that when I was looking for descriptions and examples of the HOT movement and its participants, most sites that pop up are Dutch. Indeed. It seems that in my own home land FIRE has found itself a whole bunch of people who are money savvy, but not the expense of their happiness and (mental) health. It seems very culturally appropriate for the Dutch. Now as I don’t expect you to be able to read Dutch, I continued looking for articles in English, regardless of country of origin. And I have to admit, I was struggling. I did find some articles explaining to you how there are diminishing returns to earning and consuming, I’m also linking this article from Time, as I really did enjoy it and there’s this video talking about time, money and happiness . They are all good resources, but they don’t talk about HOT as a movement. Now if the writer cannot get to English, English will simply have to come to the writer. Meaning, I will put my translator hat on and explain the practicalities of HOT, exemplified by a Dutchie.

Today’s Dutchie is Chris, who runs the blog “the pursuit of hot: from rat race to Happy, Opportunity Rich and Time Rich”. About 4 years ago Chris and partner Martina decided to become more financially agile, but they also thought the investment into FIRE was way too high (I’m with you there folks!). Chris has managed, through re-education (or rather, additional education/training) and good negotiation to now only work 4 days in the week, rather than 5, and make more money whilst doing so. In a different post on his blog he explains he managed to achieve this: rather than staying with a company, Chris decided to go freelance. The reasons for leaving his company was a lack of flexibility in terms of working hours (Dutch culture took a while to get there) as well as a lack of challenge and career growth opportunities. All valid reasons if you ask me. When Chris had been freelancing for a couple of months the director of the aforementioned company reached back out to him to ask whether Chris would consider freelancing for them, working on a project basis, with much more challenging and interesting work. Of course, this was now on Chris’ terms, as a freelancer. Initially the wage went up (score). And another round of negotiation later (after about 6 months), Chris traded another wage increase for a reduced working week. Good job Chris! Now of course, this wage increase and working hour reduction is not going to get you from “rags to riches” in an instant. But that’s exactly the point. HOT doesn’t focus on the riches too much, or what society thinks the riches should be, but focuses on what you think you really want out of life, how to get there and then lastly, how much money and financial agility you need to make that happen. The framing is different, the order of questions is different and as a result the entire mindset is different. For those who can reach Dutch, Semmie explains the differences between HOT and FIRE quite well as well. The main differences being both the rigidity and the mindset. HOT is a lot less rigid, but also a lot more in the moment, where you can make choices in the now. These choices can be as straight forward as those of Chris and his partner, but they can also be a bit more extreme: there are people who figure out what their bare minimum to live off is and end up making that bare minimum to live in the Spanish mountains (seemingly a very Dutch thing to do). You could also argue that digital nomadism is aligned with HOT.


So there we have it, another financial movement, but one that seems a bit more grounded in reality and allows some fun into your life. With time for more than work, and a focus on Happiness as well. Good to know if you’re looking for the term: the H in HOT can refer to Happy, but is also often replaced with Healthy 😊


Behavioural Science

Personal Finance



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