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©2018 by Merle van den Akker

Why I Don’t Believe In, But Do Support The FIRE Movement.


I have written about the FIRE movement (Financial Independence, Retire Early) before. And to be honest, I wasn’t too nice about the fact that I think it’s a massively non-viable movement for people who are now coming onto the job market, given the instability of their wage. I also had massive issues with the term “Financially Independent,” because I don’t think you’re very independent if most of your wealth is tied up in stocks (or other investments). What if the returns you were hoping for aren’t that great? What if the market crashes? I mean, it seems to do so all the time…

Regardless of me condemning it, I do actually support the FIRE movement, and anyone doing it. Is that hypocritical of me? Well, let me explain my argument, and you can decide on that after you’ve read it.



The FIRE movement revolves around saving and investing a lot of money early on. A lot more than anyone would save and invest if they weren’t banking on stopping work, or working less later in life. It also focuses on creating a minimum and a maximum on which you are willing to live both now and later. As in, what can you cut out (financially) and what aren’t you willing or even able to give up?

For example: how many times do you want to eat out per month now that you’re working and earning money? Also, how many times do you want to eat out per month when in early retirement? Not going out to eat at all, but always cooking at home saves a lot of money, because it is a lot cheaper. From those choices onwards it is calculated how much you can set aside a month, and how much you should set aside based on how you live now, and how you want to live later. It’s also important to know how quickly you can invest this, at what rate and for how long.

Ultimately, when push comes to shove, FIRE is all about having less now, to be able to stop working earlier and have the same amount to spend, or potentially even a bit more, later. And that, is a damn good philosophy.



I know it seems counterintuitive for a behavioural scientist to support this type of philosophy, knowing that most people are very steep discounters (i.e. they prefer having things now rather than having them later, A LOT). However, I think the current consumption patterns as they are seen mainly in the West (America, Europe), but also rich parts of Asia have gone absolutely haywire. Conspicuous consumption continues to rise, just like credit card debt (the latter mainly in the States). People seem almost eager to live outside their means and are becoming increasingly distant from what money actually means (and the fact it has limits).

On top of this not-so-great (utterly sh*t) development, we also know that people seem to continuously underestimate how much they need for retirement, and as a result, blatantly undersave. Meaning that once they do reach retirement they very quickly realise that what they have, is not enough. And there’s only two real solutions to that (if you’re on your own): either you continue earning, or you really have to cut down on your expenses.

Furthermore, you might have noticed that retirement ages are not-so-sneakily creeping up, because governments that used to assure us that there would be money left for everyone, have finally realized that as the population distribution changes (thanks boomers) issues may arise. Less people contributing to the funds, more people taking from the funds, and unsurprisingly the funds are struggling. I genuinely advise my generation to not count on any money coming from a governmental institution for retirement, because quite honestly, I don’t think there’s going to be much left. We are on our own now.



So knowing all that, cutting down on unnecessary (often conspicuous) consumption, re-prioritising what we want from our money and life, increasing our savings and investments and just planning a bit further ahead, is exactly what we should be doing. And guess what, that’s effectively FIRE.

Now, like I said before, I’m not a believer in FIRE, because of how the economic environment is changing for millennials. However, millennials are also the ones with the most debt (a lot is due to student loans and the rising cost of living, but it’s debt nonetheless). As such, being smart with money is going to be key for this generation, if we ever want to live comfortable, when working or retired.

I’m not making false promises. I’m not promising you that adhering to FIRE, or FIRE-light is going to fix all your issues. But it might make them a lot less worse. Continuously being in debt from consumption is bad. Being unprepared for retirement is bad. Not knowing where your money is going is worse. And not being able to take care of yourself financially, either now or later, is worst.




If you’re joining the FIRE movement just because you want to stop working early I wish you the best of luck, but I’m not too sure it’s going to give you exactly what you want. But it sure as hell is a step in the right direction.