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In this episode, Chelsea gives an updated, nuanced look at the FIRE movement and the quest for financial independence generally, from problems within the movement to how to find it actually helpful.

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Hello, everyone.

It is me, your girl Chelsea Fagan, keeping it real. I'm talking about the FIRE movement today because the FIRE movement is something that I've touched on a little bit before on this channel and I definitely had some criticisms to leverage at it.

I'll link you guys to that video in the description, but conversely we've also throughout the years on TFD on places like our website, newsletter, et cetera. And even on this very channel, on other shows that are not mine, we published stuff that was very pro FIRE. And for those who don't know I should just quickly explain that the FIRE movement is a very popular movement within the personal finance community.

I think it used to be a little bit bigger than it is currently, but it stands for Financial Independence/Retiring Early and it's basically a system of managing one's personal finances to optimize for the ability to retire early or to be financially independent, i.e. not need to work earlier than the typical retirement age. And of course we've published a whole range of perspectives on the topic, including from people who participate in the movement themselves because TFD is not just me and my opinions, even though those are heavily featured, we also try to give a voice to as many people who are living different financial choices than me as possible. I mean, obviously I'm a 33-year-old, Manhattan dwelling, married, dual income, no kid, child free, business owner, female CEO.

Like, I'm not sure that I represent the majority of Americans. But over the years my feelings on the FIRE movement and what I would call the individualist approach to finances has kind of evolved. I used to be pretty staunchly against all that stuff.

And to be fair, especially in its earlier days, I think that the FIRE movement as a concept definitely lived up to a lot of the more negative stereotypes that were often ascribed to it. Some of the biggest early voices in the FIRE movement fit into this very narrow category that could be typified by a rural dwelling, high earning, work from home, white male, software engineer who is obsessed with frugality and who's stay-at-home mom/wife who's always just out of frame is doing all of the unacknowledged and unpaid domestic labor and child rearing that's allowing this dude to hyper focus on gamifying money and also in many cases, produce a lucrative blog of some kind. But ultimately I mean, that caricature is a caricature.

It's not an accurate slice of all of the various people who make up the FIRE movement nor are those life choices the rule of how people who pursue that pathway have to live. But for me beyond the demographic info of the person who happened to be leading the conversation at any given time, the underlying ideology that often underpinned a lot of the FIRE movement, especially people who fell into that aforementioned category, tends to be an ideology that I have a very difficult time with in the personal finance world in general and it's also seen in things like cryptocurrency. It's a very fundamentally libertarian look at financial ecosystem we live in, which is obviously inherently quite political and policy driven.

Basically, it's this overarching view of this thing is bad and not working for us. In the case of cryptocurrency, that's the monetary system and constant wealth concentrating upwards to the already richest among us. And in the case of FIRE, it's often that Americans on average are not able to access a dignified and comfortable retirement and often not a particularly long one.

And that in both cases we need a kind of escape hatch to get around this system and do it in what is usually a pretty hyper individualist way. Now, in the world of cryptocurrency there's a huge extra layer, which is that this money is being made ultimately by funneling other people into these currencies underneath you in order to prop up a deflationary currency system that is being treated like a speculative investment. And as far as I'm aware that's not something that happens in the FIRE movement, but I do think that in general reframing how we think of retirement as an individual gamified pursuit of hyper managing your money on a daily basis and optimizing for frugality at all costs in order to have the kind of comfortable retirement or work/life balance that in many other developed countries is basically the norm guaranteed by the state, seems like at best a really huge misdirection.

Because I also think that in a lot of cases and again, in its worst excesses, the FIRE movement with its focus on frugality creates a tendency to become incredibly judgmental about the individual spending choices that people are making and associate those choices with what is keeping a person in poverty or limiting their future retirement options. When we know very well that on aggregate what keeps people in poverty or limits their retirement options are socioeconomic factors. Things like stagnating wages, runaway inflation, the student debt crisis, health care costs and the fact that medical bankruptcies are the leading cause of bankruptcies in this country, a housing market that is all but inaccessible to huge percentages of young adults, and other various macroeconomic factors that no matter how many subscription services you cut out in your life, you're probably not going to be able to overcome.

Yes, we do talk on TFD about things that you can be more budget conscious about, that you may not need to be spending on, ways in which our consumer culture is driving things that may not be making us happy, and could be sabotaging our long term finances. But it's important to remember that especially if these things are going to become more accessible the real victories have to be won on a larger scale. And it can feel impossible, but local and state laws have huge impacts on a lot of these things.

And for example, the recent successful unionization at Amazon shows that even against literally the most powerful and large corporations in the world, there can still be collective action that's successful. But even something as seemingly simple as me being a business owner in the state of New York, we at TFD are able to offer what is a fairly competitive maternity leave and it's mostly due to the fact that New York state subsidizes a large amount of it. There is no federal minimum for how much states have to subsidize and if we were in another state, the cost would be massively higher for us and harder to shoulder that burden.

Which is why it's so important to me that rather than putting pressure on women to scrimp and save and kill themselves to go back to work two weeks after giving birth and pay out of pocket for absolutely everything in terms of child care, that we understand that there are ways to advocate so that we don't have to live this way. And I do think that I used to be a little bit too far on that side in terms of how I framed things. I could and even can sometimes still be pretty judgmental about these fairly individualist pursuits of gamifying the financial system that we live in, in order to maximize results for yourself.

Because it does so often feel like it comes hand in hand with shaming and ostracization and judgment of people who don't play the game as well as you, rather than admitting that the game is rigged and sucks. But one thing that I have learned as it comes to financial independence specifically is that a framework that it does offer us in terms of how we think about our choices, is that it prioritizes above all else, valuing our time. It can be easy when we think of money to think just in terms of dollar bills, but for example, if you're working a job that has you working incredibly long hours for higher wages, you may actually end up with a job that has a lower hourly wage than another in which your salary is lower on paper, but much of your time is given back to you.

Now, you could use that for generating more wealth in terms of side income. You could use it for furthering education and certifications to possibly improve your main source of employment. Or you could just use it to [BLEEP] have fun.

But I do think there is a way in which financial independence as a concept can dovetail with what I consider to be my little, Democratic Socialist Utopia, where we realize that this paradigm where we're all working ourselves to death, competing over who can be the most seemingly busy, and defining ourselves by 9:00 to 5:00 jobs, is not the move. And another thing that I do think financial independence as a framing can offer us is the importance of moving beyond your 9:00 to 5:00 job as a means of defining you and thinking really critically about what you would do with your time if it was yours to have. We're often so obsessed with this very particular metric of success and identity that statistically a lot of people end up, when it comes time to actually retire, super [BLEEP] depressed.

It's not a perfect science, but it's probably fair to say that if we were focusing more on the different aspects of our personality and interests well before retirement, we wouldn't feel such an identity crisis or a crisis of what to do with our time when it came time to actually claim it back. The point of life should be to enjoy it and always maximizing for money is not necessarily maximizing for what makes a truly financially independent and joyful life. I also believe that thinking in terms of financial independence can and should be accessible to people who are at lower incomes.

In our recent interview with Sarah Wilson a.k.a. Budget Girl, talking about how she entered into the world of long term wealth building starting at an income just above $19,000 a year and now has a net worth over $200,000 is really practical in terms of showing the way that this can be done without either having to engage in hyper restrictive frugality or having a six figure software engineer salary while living in rural Iowa. And while I do think it's important to stress that for most people being able to retire at a young age is not going to be totally financially possible even if you do make a lot of the right financial decisions, I also believe that there are many really thoughtful and important approaches to financial independence that anyone can integrate into their lives.

And you guessed it, I'm here to promote some [BLEEP].. For those who are looking to approach wealth building and financial independence from a perspective that's holistic, community minded, and not about every cutthroat man for himself, how many times can I cancel my Netflix subscription until I'm able to retire at 35, we're offering an all day summit on May 14 called the Financial Independence Summit. So on May 14 from 11:00 to 5:00 PM Eastern, we will be holding our fourth official all day summit with replays of every session available if you can't join us live.

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I hope to see you there. I'll be there, I'll be having a great time. And as always, guys, thank you for watching and don't forget to hit the Subscribe and Join buttons and to come back every Monday, Tuesday and Thursday for a new and awesome videos goodbye.