If you believe people who write articles on the internet claiming to be financially independent or retired by the time they are 30 years old, you might be a sucker.
The FIRE (Financially Independent Retire Early) movement gets a lot of buzz on the net, primarily because of the universal appeal of not having to work anymore. Who wouldn't want to retire by 30 and spend their most healthy adult years enjoying life? Authors who claim to be retired young typically lay out systems anyone can follow to achieve retirement in 10 years or less. But what they might not disclose are the generous sources of HEFA (HElp From Above) they may be using subsidize their own retirement.
Around the office, I'm known as "The Pessimator", because my writing is so often pessimistic of those who claim to have achieved financial independence and/or retirement at an early age. Its possible I'm just jealous - after all, it hasn't happened for me. You'll know I've achieved FIRE when there is a noticeable absence in my article production. But I don't think of myself as pessimistic; I simply think there is information so called FIRE starters are keeping quiet, much the way gamblers and day traders will talk endlessly about their wins and never about their losses. Meanwhile, we know both groups lose a lot.
So why write an article whose sole purpose seems to be to kill the dream so many of us have? Am I really that sadistic that I want to remind people that they will be slaving away in their awful jobs with no hope for rescue until they're old and grey? What is my problem with living the dream...even if the emphasis is on the word dream?
My motivation for driving this point home is that by putting up a dream so rare and difficult to achieve, FIRE articles are essentially just long-form click-bait. It bothers me that readers finish FIRE-based articles believing the reason they are not yet retired has to do with their lack of willpower. The truth is much less glamorous than the beat the system refrain most often found in articles about retiring young.
My opinion is basically this: you show me a young retiree, and I'll show you someone who got some major help along the way. I call this "Help From Above" (HEFA), and it refers to money people get from either non-repeatable sources, or from events that have a lot more to do with luck (or perhaps divine intervention) than strategy.
1. Inheritance
If I were to bet on the single most common way super young people quote / unquote retire, it would be that they have received an inheritance. And although losing a loved one is awful, planning your retirement based on what you'll get from an inheritance is neither reasonable nor predictable. When talking to someone bragging about their FIRE, I always poke around for signs of an inheritance - just so we're all speaking the same language, if you know what I mean.
2. Trust fund
Anyone who claims to have planned their early retirement who was given a trust fund by a parent or grandparent should be forced to keep working until they are 65, regardless of their financial position. What could possibly be easier than being handed a dump-truck full of money, just for the accomplishment of turning 18 years old?
3. Lottery
I'm sure it is rare for those claiming to have achieved FIRE to be lottery winners, but it would not surprise me if it has occurred once or twice. If you get your number called out of a random pool of millions, the only strategy you used was buying a lottery ticket in the first place. In fact, I think if you win the lottery should not be allowed to refer to yourself as retired. You didn't work to achieve that title: you won it, based purely on dumb luck.
4. Social Security
The sad reality is that retirement is synonymous with Social Security in many countries, including the United States. Social Security is the ultimate form of HElp From Above.
5. Disability claim
I'll bet this source of funds fuels more than one or two FIRE braggadocios. Having a disability sucks, I'm sure, but as a means to achieve early retirement, its not exactly repeatable.
6. Life insurance payout
Receiving funds from a life insurance payout is a little like having a working spouse. I'm sure it is difficult to lose a loved one, but it is not as though your FIRE-based retirement was based on a strategy you implemented (unless, of course, you have a secret).
7. Laundered money
Laundered money is on this list because its illegal, and not an easy process to replicate. But the one thing going for it, is you do have to work to launder money. So maybe this is a legit source of funding for your FIRE?
8. A Gift
Receiving a gift large enough to fuel a retirement is the exact opposite of planning. If you ever discover that someone giving you advice on how to achieve early retirement received a large cash gift, tell them to stick their advice where the sun don't shine.
9. Working Spouse
This is another common theme among people who brag about being retired young: they have a working spouse. If one member of your marriage is working full time, you ain't retired.
10. Stock market score
Earlier I noted how often day traders talk about their wins and rarely about their losses, even though they almost always lose. But once in a while traders or investors can make a huge score. Unless they can prove its a pattern they can repeat over and over, a single big stock market score is absolutely no different than the dumb luck of winning the lottery.
11. Sold a "lightning in a bottle" business
The moment someone sells a business, they become the greatest self-proclaimed business genius of all time. This one is a huge source of braggadocios...or perhaps I should say, braggadouche-bags. Some people have the skills to repeatedly build and sell winning businesses. But all too often, people who sell businesses for a large profit are winners of good timing and circumstances.
12. Royalties
If you have the skills to create and sell something that yields royalties, then you've earned the right to brag about it. But to keep that fact hidden and instead draw attention to your strategy for FIRE is deceptive.
13. Lawsuit winnings
Some people make filing lawsuits their full time job. Most of these types of suits get dismissed before they get a chance to get rolling. But once in a while a frivolous suit ends up netting a nice win for the accuser. Planning your retirement around the hopes of winning a frivolous lawsuit is, well, frivolous.
14. Ethnic Reparation Payments
While it does suck that so many ethnic groups were treated even more poorly in by gone eras than they are today, reparation payments cannot be considered a reasonable strategy for achieving FIRE. Obviously, to even qualify you would need to be part of the affected ethnic group. And if this strategy is not repeatable, that's a good thing.
15. Employment Insurance
With so many funds sloshing round in Employment Insurance, it is a virtual certainty that some young FIRE retirees have found a way to utilize EI to help fund their retirement. With any luck they'll get caught and charged with fraud, because voluntary retirement is not an acceptable reason to be collecting Employment Insurance.
16. Welfare
Hiding your savings and making it seem as though you can't make ends meet is pretty devious, but I wouldn't be surprised for a second if essentially stealing from the welfare system is fueling more than few FIRE retirements.
True Financial Independence and Retire Early strategies should be applicable to anyone. They should be repeatable and, of course, legal. Achieving FIRE should be just that: an achievement, not some gift that fell from heaven. For those few of you who actually have figured out how to codify a repeatable process for early retirement, I tip my hat. But for the other 99% of people who brag online about an accomplishment that is really more like a lottery winning, you need to stop writing click bait and start writing something of substance.
Do you agree that most people claiming to have retired young got HElp From Above? Or have you witnessed first-hand the effects of a working, repeatable strategy?