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Abstract

r sifting through stacks and stacks of papers helping my mom clip coupons as a child. Many of my clothes were “hand-me-downs” from my brother. I wanted a life of abundance and no coupon cutting. Yet, the most successful followers of FIRE have to sacrifice a lot, no matter how much people say, “It’s not that bad.” Some people actually like activities that happen to cost a lot of money. Hiking and biking everywhere may not be a great solution for everyone.</li><li>FIRE really only works if you learn and commit to it early in life. What about the guy in his 50’s that had an amazing career and suddenly gets a terrible manager or worse — fired? He may not be able to just pick up and leave or find another gig very easily. FIRE is off the table for this person if they weren’t thinking about it years ago. Fifty is still an early age to retire, but too late to start FIRE. They may have been content working for another ten years, but work just became miserable overnight. The usefulness of FIRE for this person is somewhat limited.</li></ol><h2 id="e312">Not Smart Enough</h2><p id="1e1a">So, while I could have kept investing from high school into my adulthood and been done. I thought I could have the best of both worlds. The only way to truly be financially independent and not have to sacrifice anything was to build a successful business — or so I thought.</p><p id="8355">I was smart enough to make a good income working in corporate, but squandered money on countless business ventures. For two decades after graduating college, I poured tens of thousands of dollars into ideas that were never going to see the light of day. I thought I could shortcut my path to financial security when there was a much easier, albeit longer way.</p><ul><li>I didn’t realize that most businesses fail within the first 5 years</li><li>I didn’t realize that what’s more important than the product is your network</li><li>I didn’t realize that I was way underfunded to realistically market any business idea</li><li>I didn’t realize that my lack of focus would eventually kill every business I launched</li><li>I didn’t realize working 60 hours per week at a full-time job makes it almost impossible to launch something else</li><li>I didn’t realize that most business owners are not super-rich, and they’re certainly not sitting around, sipping daiquiris on the beach</li></ul><p id="5344">Ironically, starting FIRE early enough with a decent corporate job could have easily had me sipping those daiquiris on the beach in my forties.</p><p id="013c">So, in many ways, I burned myself by pursuing a path that I was ill-prepared to take and then continuing down that road when I could have gotten off years earlier.</p><h2 id="ef64">The Road is Hot</h2><p id="67f7">Working

Options

in a high-stress career to make lots of money and dump it into failed business ventures eventually takes a toll on family and health. You haven’t saved enough for retirement, and you don’t have enough energy to work 60 hours per week anymore.</p><blockquote id="d1ad"><p>…your best FIRE years may already be behind you.</p></blockquote><p id="6f85">I wasn’t even forty before my health started falling off a cliff — regular heartburn, high blood pressure, early-stage arthritis, and chronic inflammation was just to name a few.</p><p id="268f">Doctor appointments lead to tests, which lead to prescriptions, and more tests. Even with the best insurance expenses add up in time and money.</p><p id="aa6d">By mid-career when you start realizing what’s really important (i.e. health and family) your best FIRE years may already be behind you. And some of those health conditions are not so easy to reverse.</p><h2 id="092b">More Fuel to the Fire</h2><p id="2744">At the peak of my career, while still experimenting with side businesses, we relocated to a new city for a great job with a pre-IPO company. The few thousand shares I received would have greatly accelerated my retirement plans if we had gone public. Instead, I was laid off within three years of joining the company — last man in; the company never went public. By this time, I was now in my mid-forties and jobs were just not found in two months. It took me nine to find something comparable, and then my wife was laid off from her job two years later.</p><p id="330c">And in the middle of all of that was my cancer diagnosis.</p><p id="1c94">So yeah, even with the best plans and an early jump on FIRE, things can go sideways in any given year for multiple years.</p><h2 id="8c7e">A Look Down the Road</h2><p id="64b9">It’s great to say, “I should have just lived off half my salary starting when I was 20,” but most of us are not blessed with such vision, no matter how many investing books we read.</p><p id="8619">If FIRE at least makes you more conscientious about spending, then that’s a good thing.</p><p id="f384">Your success will be influenced by a lot including your job, your spouse, your kids, your parents, your health, and all your financial habits. Some are easier to control than others. What if your parents get really sick and you need to support them financially?</p><p id="833e">It’s hard to pick the right road in your twenties with the right vehicle for the journey — some luck up, but it’s best not to beat yourself up over it.</p><p id="ea13">As I send a child off to college in a few years, I no longer try to plan too much ahead, other than just to save as much as possible. The only thing I am certain of is there being another expense around the corner.</p></article></body>

The Road to FIRE is Paved with Fire

The many ways I’ve been burned so far

Photo by karenfoleyphotography on iStock

One of life’s greatest tragedies is having to experience so much of it before knowing what’s most important to you. Financial security is a big one for many, but the path to get there is literally a “choose your own adventure” scenario, fraught with many road hazards. To make matters worse, if you start in the wrong vehicle, on the wrong road, it can take a lifetime to reach the right destination. My experiences are somewhat a roadmap for what not to do in striving for financial independence.

I always knew I wanted to be wealthy from the time I was in middle school. I was one of those weird kids that actually liked watching the financial news channels. I remember a teacher in high school giving the entire class detention for talking too much. Detention was held after school by the dean of students. He handed each of us a page of the stock tables from the back of the Wall Street Journal. Our punishment was to write one column of stock quotes including the company name, closing price, high, low, etc. It was about 100 rows per column, and I enjoyed the assignment way too much for a 15-year-old.

…with this supposed head start, I should have been retired years ago.

My zest to invest continued while in college. I regularly read the monthly DRIP investment newsletter, learning which stocks I could buy directly from companies to reinvest my dividends. Texaco and Coca-Cola were some of my firsts.

So, with this supposed head start, I should have been retired years ago. As the big “5–0” approaches quickly in a few years, it’s pretty obvious, I probably won’t ever hit my FIRE number, and I have to be okay with that. I took a big gamble trying to become financially independent another way, and I certainly didn’t have the right vehicle for that path.

The FIRE Problem

While I love the end goal of FIRE, I’ve always struggled with the concept on how most get there for two reasons:

The concept leans more towards frugality versus abundance. Being the second-born child in a middle-class black family, I grew up knowing what frugal meant. I can still remember sifting through stacks and stacks of papers helping my mom clip coupons as a child. Many of my clothes were “hand-me-downs” from my brother. I wanted a life of abundance and no coupon cutting. Yet, the most successful followers of FIRE have to sacrifice a lot, no matter how much people say, “It’s not that bad.” Some people actually like activities that happen to cost a lot of money. Hiking and biking everywhere may not be a great solution for everyone.
FIRE really only works if you learn and commit to it early in life. What about the guy in his 50’s that had an amazing career and suddenly gets a terrible manager or worse — fired? He may not be able to just pick up and leave or find another gig very easily. FIRE is off the table for this person if they weren’t thinking about it years ago. Fifty is still an early age to retire, but too late to start FIRE. They may have been content working for another ten years, but work just became miserable overnight. The usefulness of FIRE for this person is somewhat limited.

Not Smart Enough

So, while I could have kept investing from high school into my adulthood and been done. I thought I could have the best of both worlds. The only way to truly be financially independent and not have to sacrifice anything was to build a successful business — or so I thought.

I was smart enough to make a good income working in corporate, but squandered money on countless business ventures. For two decades after graduating college, I poured tens of thousands of dollars into ideas that were never going to see the light of day. I thought I could shortcut my path to financial security when there was a much easier, albeit longer way.

I didn’t realize that most businesses fail within the first 5 years
I didn’t realize that what’s more important than the product is your network
I didn’t realize that I was way underfunded to realistically market any business idea
I didn’t realize that my lack of focus would eventually kill every business I launched
I didn’t realize working 60 hours per week at a full-time job makes it almost impossible to launch something else
I didn’t realize that most business owners are not super-rich, and they’re certainly not sitting around, sipping daiquiris on the beach

Ironically, starting FIRE early enough with a decent corporate job could have easily had me sipping those daiquiris on the beach in my forties.

So, in many ways, I burned myself by pursuing a path that I was ill-prepared to take and then continuing down that road when I could have gotten off years earlier.

The Road is Hot

Working in a high-stress career to make lots of money and dump it into failed business ventures eventually takes a toll on family and health. You haven’t saved enough for retirement, and you don’t have enough energy to work 60 hours per week anymore.

…your best FIRE years may already be behind you.

I wasn’t even forty before my health started falling off a cliff — regular heartburn, high blood pressure, early-stage arthritis, and chronic inflammation was just to name a few.

Doctor appointments lead to tests, which lead to prescriptions, and more tests. Even with the best insurance expenses add up in time and money.

By mid-career when you start realizing what’s really important (i.e. health and family) your best FIRE years may already be behind you. And some of those health conditions are not so easy to reverse.

More Fuel to the Fire

At the peak of my career, while still experimenting with side businesses, we relocated to a new city for a great job with a pre-IPO company. The few thousand shares I received would have greatly accelerated my retirement plans if we had gone public. Instead, I was laid off within three years of joining the company — last man in; the company never went public. By this time, I was now in my mid-forties and jobs were just not found in two months. It took me nine to find something comparable, and then my wife was laid off from her job two years later.

And in the middle of all of that was my cancer diagnosis.

So yeah, even with the best plans and an early jump on FIRE, things can go sideways in any given year for multiple years.

A Look Down the Road

It’s great to say, “I should have just lived off half my salary starting when I was 20,” but most of us are not blessed with such vision, no matter how many investing books we read.

If FIRE at least makes you more conscientious about spending, then that’s a good thing.

Your success will be influenced by a lot including your job, your spouse, your kids, your parents, your health, and all your financial habits. Some are easier to control than others. What if your parents get really sick and you need to support them financially?

It’s hard to pick the right road in your twenties with the right vehicle for the journey — some luck up, but it’s best not to beat yourself up over it.

As I send a child off to college in a few years, I no longer try to plan too much ahead, other than just to save as much as possible. The only thing I am certain of is there being another expense around the corner.