By: Physician Philosopher Fire is a passionate and unforgiving substance.  It keeps you warm, heats your meals, and provides light in the dark.  When wielded carefully, it is a force to be used for good.  Financial FIRE (Financial Independence Retire Early) is no different. We all remember what it was like when that FIRE lit up the dark cave we previously lived in. It was a true lightbulb moment. On the flip side, fire can also be destructive and deadly.

For financial FIRE chasers, we all remember the first time we became FIRE fighters after we shared FIRE with someone else and got burned. 

These interactions make us shy away from having the same conversations in the future.  It forces us to use caution when discussing FIRE. Otherwise, the FIRE we chase might just burn us like the dog who finally caught the tire he chased. Today, we will discuss how to avoid becoming FIRE fighters by avoiding those who are most likely to burn us.

Three Necessary Items to Make a Fire

Before we get started let’s discuss the ingredients to a fire.  There are three required items: heat, fuel, and an oxidizing agent (usually oxygen itself).  That’s your science lesson for the day.  You’re welcome. There is oxygen present in every conversation.  So, all we need is a little fuel (specific groups of people) and some heated conversation and, alas, we have a FIRE that has the potential to destroy any relationship.  That’s the moment we become FIRE fighters. Having these experiences is the reason that I stopped sharing FIRE principles in person except to a select group of people (that I’ll discuss at the end of this post). So that we don’t get burned, we must answer the following questions… Are there specific groups of people we should use caution around (i.e. stealth wealth)?  Are there specific groups of people that are likely to burn us if FIRE topics are discussed? The answer is yes. I’ll give you four of the most common groups of people that provide a highly flammable environment that will burn you if your heated FIRE conversation gets too close. But before we discuss the groups, let's talk about why this FIRE burns so badly…

The Basic Premise:  Talking FIRE Produces Heat

As previously pointed out, oxygen is always there.  The fuel is the groups of people we are about to discuss in the next section. That’s two of the three necessary items for a fire. Where does the heat come from that burns us when we discuss FIRE? Well, first let’s discuss the two components that allow us to FIRE and then embolden us to want to talk about it: 1) saving a high percentage of your income (> 25-30%) to build wealth 2) living a frugal life and keeping your expenses low. To obtain these two components, any conversation about FIRE will discuss two important topics.  These topics are the real sources of heat that cause a combustible conversation with the groups below. The topics are:

• Investing efficiently
• Being frugal (I support moderate frugality)

Now that we know the sources of heat, it will make more sense what groups of people are more likely to burn us if we discuss our FIRE plans in public. Let’s dig in.

Group 1: The Joneses

It’s hard to keep up with the Joneses. The Joneses have it all!  Awesome cars, the house, a private school for the kids, designer clothes, and they eat lavish meals and travel on the regular.  They fly first class, of course. Why does this crew get burned by FIRE discussions?  Because it’s so damn hard to achieve FIRE when you are upside down in debt, which is normally the case for most Joneses. This may come as a surprise to you, but spending money does NOT = wealthy.  If you are in training or a newly minted medical professional, read that last sentence again. In fact, spending a lot of money usually means the exact opposite.  The above items do not build wealth (I’ll leave the house = asset debate alone). The Joneses’ net worth is usually and unsurprisingly underwhelming. This group of people will get very upset with you if you discuss frugality in front of them.  They’ll tell you to “live a little!”  They support the notion (despite the science: see graph below) that spending more and more money makes you happier and happier.   It’s tough for the rich.  Someone much wiser than me once said it would be easier for a camel to pass through the eye of a needle than for the rich to reach the promised land. They’d have to give away all of that stuff that doesn’t build wealth first! Share FIRE with the Joneses, and you better believe your friendship will get burnt to a crisp!  Just avoid the conversation, or you better have that fire extinguisher handy.

Group 2: The Inefficient Investor

This group could be subdivided into a few others. That division would include: the person with a “financial guy,” those that are “too busy,” and the ones who think they have it all figured out and, yet, are investing in individual stocks, actively managed funds, or some extreme portfolios. We can all argue the merits of using someone else to help with your finances, but the truth is simple.  If you can learn to do it yourself, it’ll save you money.  The only real exception to this is if you don’t have the mental fortitude to stick to the plan in a down market. If you save $50,000 per year and gain 8% in the market, a 1% AUM (assets under management) will cost you over a million dollars in a typical thirty-year career.  It’ll cost you north of $5 million dollars in retirement. Let that sink in…. $6 million bucks over your life.  Still, think you don’t have the time? Oh, and using actively managed mutual funds with an expense ratio of 1% will do the same thing when compared to index funds.  It’s the same math. Doing both (the AUM financial advisor and actively managed funds) really puts you even further behind the eight ball. Investing can be quite simple (and efficient) if we want it to be. The investing efficiently side of the FIRE argument (typically in low-cost index funds with expense ratios <0.1%) really burns the inefficient investor.  It heats them up. When the discussion starts, they will stop you short and tell you they simply don’t have time to work this stuff out.  The irony is that they would have a lot more time after they retire early if they would just put in a small amount of work now. Sharing FIRE concepts with this group is unlikely to change their mind, and much more likely to tarnish your friendship. Don’t get burned, or bring your extinguisher.

Group 3: People ahead of you on the journey

If you are going to breathe the fire, be prepared to put it out.

This one should be obvious. If you are sharing how you plan to FIRE when you are 45 and the person you are talking to is 50, then there is a high chance of the conversation going south! It’s all gonna go up in a blaze. No extinguisher would be powerful enough for this conversation.  Just avoid the conversation. It makes sense, though, really.  You are telling these people they missed the boat and did it all wrong.  If I were in their shoes, I’d get offended, too. Don’t be a jack ass. Just be considerate and avoid having a FIRE conversation if people substantially older than you are around.  It’ll save you the pain and loss of friendship.

Group 4: The moral imperative group.

I’ll readily admit that I focus much more on the FI (Financial Independence) than the RE (Retire Early). So, this group doesn’t get all hot and bothered by my financial discussions as often as the other groups.  It’s still an important group to mention. When I get to my FI number, I’ll simply cut out the parts of my job that I don’t love.  That should happen between 42 and 45.  Maybe sooner. But the current plan is to keep working until 50. You should know, though, that there is a group of people who feel you are doing something morally corrupt by leaving the workforce early.  Particularly if you have a job in medicine. You spend ALL of those years obtaining specialized training in order to help people.  Wouldn’t you feel bad if you just gave it all up and stopped helping? What will all those people do? Who is going to fill your shoes? The simple answer is that I plan on cutting back, not quitting altogether.  I have some specific things I’d like to retire to, and some of them include still doing medicine for people who really need it. Likely on the mission field. If you really do plan to retire early, FIRE topics will turn heads and create some judgment.  Be prepared to answer how you will contribute to society if you plan on leaving the gig early. It’ll save you from pulling the pin on that extinguisher.

So, who SHOULD I talk to about FIRE?

You should discuss FIRE with people coming behind you on the path or currently on the path next to you.  This may prevent them from making many of the same mistakes that others have. Otherwise, they end up being one of the Joneses with lots of stuff, but little wealth. It also helps them make a strong plan to build wealth by shedding the debt they have, preventing further accumulation of debt, and saving efficiently. Financial independence is important.  For me, I feel like I can truly be a better doctor when my financial situation does not feel like such a burden. My family and I have a plan, and I know if I stick to it that we will get to our goals. Once financially independent, I get to practice the parts of medicine I want to because I choose to and not because I have to.  That’s a sure way to job satisfaction. That’s powerful!

Take Home

The take-home here is simple.  Be careful who you share your FIRE with.  It may kindle a spark in our younger medical trainees or younger colleagues, but will often light your relationships at work on FIRE in the groups described above. It is hard keeping such a powerful secret to yourself, but sometimes it is worth it.  Find the right outlet.  You’re currently reading mine. Otherwise, share FIRE at your own peril and be ready and willing to become a FIRE fighter. Republished with the permission of The Physician Philosopher.