Want to retire at age 41? Author and documentary filmmaker Scott Rieckens is on track to do it. But it’s not easy: he and his wife first had to transform their lavish lifestyle based on the principles of the controversial FIRE movement.
FIRE stands for “Financial Independence, Retire Early” and for some it means severe cuts to their spending, saving as much as 70 per cent of their income in order to save the massive amounts required to stop working before they hit 50.
Rieckens has authored an illuminating book on the topic detailing his own personal journey toward this goal, Playing With FIRE: How Far Would You Go for Financial Freedom? (New World Library, 2019), and a related documentary (FIRE) that will be released digitally in November.
“When I found the FIRE movement, I realized it was a real antidote to problems I had that I couldn’t define,” Rieckens said during an interview with the Star. “It helped me figure out what I really needed and wanted. What stuck with me was how simple it was. If I’d known that earlier, my life would have been fundamentally different. So, by writing this book, I can pay it forward and catch the next guy.”
We asked Rieckens some questions about the FIRE movement and his personal experience with it.
Is it difficult to keep financial independence in mind as you make budget cutbacks?
It’s not a super-easy path. It takes work and discipline. We (my wife and I) trained ourselves to scrutinize any expenses. Finding the balance between spending and cutting back isn’t fun. For example, I work from home and sometimes I need to get out of the house and go for a coffee. At first, we were trying to cut out those things, but a friend told me that this was a common issue and advised us to create an allowance for each of us in our monthly budget. It provided us with spending money that can’t be judged and it really helped. It also reminded me of the difference between want and need.
The feeling of freedom now that we have our finances under control far exceeds any negative feelings about having to cut back. The juice is worth the squeeze.
Why would I give up something I love — such as sailing a boat or swimming at the pool — for a goal that is years in the future?
If you value the boat club or the swim club more than you value having the flexibility and freedom to do whatever you want with your time, by all means, keep those things in your life. As one of the gurus advises, spend lavishly on the things you love and cut ruthlessly the things you don’t.
The trial is to realign your spending with your values. We are bombarded with tens of thousands of ads each day and we’re victims of thinking we need those things. There are lots of societal pressures to keep up with the Joneses, even if their lives don’t reflect your values. FIRE just helps you consider things for yourself. It’s a framework on how to apply your money toward compounding or something that creates sustained wealth.
Tell me about the “10 things that make you happy” exercise…
It’s something I came up with. As a member of a couple, you assume you know what makes the other person happy, but why not confirm it? When each of us made a list, it allowed us to have a conversation about making larger changes based on happiness. Why not align our spending with that list?
I recommend that people return to their lists annually and check in. Your lists can change and it’s worth continually trying to explore.
If the list is your only takeaway from an exploration of the FIRE principles, it still has value.
Will FIRE work if I can’t handle the massive rate of savings required?
I realized early on that there seemed to be set rules for FIRE and one that seemed non-negotiable was the 70 per cent savings rate. That’s just silly. Your savings rate is up to you; you’re still better off than you would have been, no matter what the amount of improvement.
FIRE is not about a drastic savings rate. It’s entirely up to you how hard you push things. Seventy per cent is drastic and intense and it’s not the reality for a lot of the people I meet who are applying FIRE principles.
In Toronto, the cost of living is very high. Is it still possible to pursue FIRE?
A high cost of living typically comes with higher-paying jobs that offsets the cost somewhat. But major cities are places where there tends to be a lot of interest in FIRE because life is so stressful. FIRE can be an antidote to that if you realign the way you spend your time and money to match your values. Anyone, anywhere can pursue FIRE at any given time. However, if you’re feeling a strain, it’s possible to relocate to places where the cost of living is lower.
GEO-arbitrage sounds like a disease. Why is it a useful FIRE concept?
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Luckily, it’s not a health condition, it’s a lifestyle design decision. It basically means relocating in order to take advantage of lower costs elsewhere. It’s a tactic that people might not consider right away because we tend to resist change and it seems like a big one.
If I decide to take this journey solo, won’t it be lonely?
The most magical part of the FIRE movement is the community. There are meetups all over the country, Facebook groups and a ton of people talking about this online and scrutinizing things. Impromptu meetings happen. It’s valuable to talk to people who understand this path and it’s incredible to spend time with people who have similar values. Then, you don’t have to do it alone.
This interview has been edited and condensed.