This weekend I watched a documentary about a couple’s FIRE (Financial Independence Retire Early) journey. FIRE is a lifestyle choice that involves:
- Deciding on life priorities (necessities and what makes you happy)
- Mapping your budget to those priorities
- Maintaining a high savings rate – often 50% of income or more
- Investing to generate passive income
- Eventually living off passive income alone (reaching financial independence) when savings reach 25 times one’s annual expenses
- From that point, traditional employment is optional
The book Your Money or Your Life (1992) sparked the FIRE movement. The authors were the first to crystallize the idea that in the work world, we trade our life energy for money. Wouldn’t we be happier if we spent less energy making money, or if we required less money to live on? These ideas were taken to their extreme in The 4-Hour Work Week (2007): Get rich by outsourcing your work to the poor and being as hands-off as possible! Yes, I have read both books.
So, I watched Playing with FIRE, featuring Scott and Taylor Rieckens. As the documentary begins, they are a dual income couple in their early 30s with a toddler. They have lived in ultra-pricey Coronado, California (near San Diego) for the past 6 years. The average home costs 1.8 million USD. We have no idea why they chose this location or how it fits in with their goals. Scott is a brand strategist and video producer for big business and Taylor is a corporate recruiter.
The film reveals little about their income and expenses except that they enjoy the good life, and he’s stressed. Their new book, also called Playing with FIRE, may provide more details. They note housing (32% of income), cars (2 luxury vehicles) and food ($2000/month) as their 3 biggest expenses. They state a savings rate of 8%. My first question is, what about childcare? It is never mentioned.
From online sources, their income and expenses look something like this:
$142,000 combined after-tax income ($11.8K/month)
- $3200/month housing
- $2500/month nanny
- $2000/month food (mostly dining out)
- $1000/ two leased cars
- ~ $1000 / savings
Leaving $2100/month for everything else (including a boat club membership and stellar vacations). The same online sources say they had $190,000 in savings.
Scott was inspired by The 4-Hour Work Week and by Mr. Money Mustache (blogger / FIRE ambassador) to question his lifestyle. In short order, he convinces Taylor to overhaul their life and adopt FIRE. She believes she’ll gain more time at home with their child. The film follows how it worked for them over the first year of changes.
Here is the sequence of events:
- Scott quits his job, making Taylor the family’s sole breadwinner. My jaw dropped! His reasoning is that he wants to start his own business that is not location-dependent. This business turns out to be making a film about their FIRE journey. The next step could be becoming a lifestyle guru, or it could be making more (non-corporate) films. On their blog, he says, “We spent a pretty penny making this film.” He and the other producers raised $200,000 to make the movie. It is not clear if Scott put up their personal savings. They ran a Kickstarter campaign which raised another $102,000. This enabled Scott to pay the crew and to travel around the country to FinCon (Florida) and Mr. Money Mustache’s home (Colorado), while the director and all the featured financial influencers worked for free. Meanwhile, Taylor can and does work remotely.
- Scott and Taylor need to save for a down payment on a home in a less expensive area. Why can’t they use the equity from their current home? They were renting. So, they live rent-free with her parents in Seattle OR for a month and with his parents in Bellevue IA for two months. They learn basic skills like grocery shopping and meal planning!
An aside: Scott’s dad was an excellent role model (not his fault his advice was ignored) and their Iowa home looks like heaven!
Lots of people live with their parents to save for a house, or they receive a gift of a down payment. But it’s unusual to do so after earning such high incomes and quitting a job to follow a dream.
Here is where my anger starts to grow, because Taylor works full-time (secluding herself in a home office) while Scott spends extra time with their toddler between road trips. So much for Mom’s goal of getting to “be with her baby”. It appears she has given up her lifestyle for exactly zero benefit.
- Next, they rent a home in Bend, Oregon to see if they like it. Nothing is said about moving from a beach town to having to shovel snow all winter! They offload their leased luxury vehicles and buy a used SUV, which Taylor finds humbling. They reach a satisfying goal – filling up their first Emergency Fund. They’re tempted to buy a $500K house because it’s so much cheaper than Coronado, but they decide to hold off, eventually purchasing a more affordable (but still over-budget) home.
Another aside: My favourite moment is when 2-year-old Jovie checks out the new house and squeals, “Right across the street – Library!”
That is the story. They’re now a year into their FIRE habits, they’ve increased their savings to 54%, and they expect to become financially independent in 10 years.
It is unsaid that Taylor’s salary alone has funded the emergency fund, the down payment, all their expenses, and their 54% savings! Scott has no income and could even be spending down their old savings to make his film. At this rate, little Jovie will be 12 before Mom gets to spend any more time with her.
I just realized that Taylor single-handedly supported their family for a year on 25% of their former combined salaries (her salary minus half to savings). That is impressive! But I wonder how long she is expected to remain selfless while Scott either turns Playing with FIRE into a big brand, or he develops other projects that will bring in actual income.
I think the FIRE movement has some good qualities such as learning budgeting and life skills, living within your means, increasing savings, and planning for retirement (at any age). Significantly, it is better for the environment. My beef is that it disparages “normal” 9-to-5 employment and promotes a belief that anyone who works for a traditional employer is a mindless drone who hasn’t woken up yet; and that no one is happy unless they work their own hours and on their own terms. Fortunately, there are millions of nurses, pharmacists, police officers, firefighters, teachers, social workers, electricians, truck drivers, and others who serve the public when they need to be served. Many of them even derive joy from their work, and don’t choose to limit their career to a 10-year window. Another issue I have with FIRE is that most adherents are willing to live in any number of locations with a cheap cost of living, and usually settle far from extended family and friends. I’ve done that, come full circle, and I prioritize extended family relationships over most other values.
I enjoyed watching Playing with FIRE even though I did it with a critical eye. Rom was quite inspired by the FIRE message. He said Scott should have tried out his business idea as a side hustle for a while instead of quitting his job so soon! Link thought it was about rich, privileged white people and completely unrelatable. We had a good discussion about how often women make sacrifices to put a husband or boyfriend through school or otherwise support someone else’s dream.
All in all, it was thought-provoking. As a bonus, I enjoyed seeing so many appearances in the movie by personal finance bloggers/influencers: Millennial Revolution, Millennial Money, The Minimalists, Mr. Money Mustache, Mad FIentist, Get Rich Slowly, Daily Stoic, Rich and Regular, Our Next Life, Afford Anything, The Scholarship System, ChooseFI, and more.
[This is not a sponsored post. I paid to rent the movie online!]
Do you have an opinion about FIRE? Is it for you?