Want Early Retirement? Here’s What You Need To Know (Part 2)

Paridhi Jain Investing Money, Managing Money Leave a Comment

If you’re a little bit nerdy about personal finance, you’ll likely have come across the FIRE movement (“financially independent, retire early”). This is a rapidly growing global community of people who are actively working towards early retirement (whatever age that means to them, depending on their goals). 

I already wrote a post on how early retirement works, the basic concepts behind it, and what you have to do in order to hit that golden jackpot.

In today’s post, I sound like a little bit of a Debbie Downer. Today I’m going to shed some light on parts of this conversation that don’t often get talked about…because they’re super unpopular. It’s way more fun to talk about just how amazing it would be to not have to go to work every single day. Who can argue with that?!

But there are two sides to every coin. So, here goes. 


Alright, before you write me off, just hear me out.

Work isn’t inherently bad. I mean, your job might suck…but that doesn’t make all work bad. 

Sometimes, people who get obsessed about the FIRE movement demonise work, or paint it as being ‘stuck in the rat race’. They see the early-retirement as their ticket out of their job, and are actively working towards early-retirement for the purpose of not having to work anymore. 

“Yeah, duh Paridhi isn’t that the whole point of retirement?”

No, I don’t think it is. I actually think the term ‘financially independent’ is more appropriate. I think it’s great to be in a financial position where you get to set the terms of when you work, how much you work, and what kind of work you do. 

That means, you may even choose to do ‘work’ that doesn’t give you much of a financial return once you’re financially independent. You can be a full-time parent, or do community service, or volunteer with charities. Whatever floats your boat. 

When we start to paint ‘work’ as the enemy, we forget about the good things that work does for us. It gives people a sense of purpose and identity, it provides opportunities to socialise, it ensures people have routine and are engaged in productive activities. This is all really important for an individual’s mental health and wellbeing. 

Although I’m not financially retired myself, I do personally know people who attained the status of financial independence quite young in life. They all continue to engage in some form of work because it gives them meaning, purpose, as they do work they enjoy. 

Financial independence is great not because it frees you from having to work but because it gives you more freedom of choice in terms of designing a lifestyle that suits your needs and goals…including how much to work, and redefining what ‘work’ means to you. 

So instead of working like a maniac to attain a financial position such that you never have to work again…maybe you should be thinking more about how you’d like to be spending your time? What does ‘meaningful’ work look like to you? Unless you’ve got a plan in place for what you’re doing after you hit this magical point of ‘financial independence’, doing ‘nothing’ for several decades until you die sounds like the perfect recipe for an existential crisis. 


On paper, it’s not hard to figure out the math behind early retirement (there are even online calculators to help you out). In theory, you can cost and factor in many of the major milestones in your life like buying a house, having kids, where you want to live, how many vacations you want to take each year and so on. So you can roughly guesstimate how much you may need to save and invest to be able to retire and still have enough money for all those milestones. 

But…I haven’t met anyone yet whose life turned out to be a completely predictable straight line (and how boring would it be if life were that predictable?!) You may end up making a completely left-of-field decision with your life. Maybe you meet someone awesome in New York and decide to move there for good. Maybe you decide your life purpose is to build a school in Africa so you quit your day job and move there. Maybe you decide you want more kids than you planned for. Maybe someone in your family gets an unfortunate illness or injury and you have to drop everything to be their carer.

Life happens. You cannot financially plan ahead for every scenario. This is why some people who hit early retirement…end up returning to work a few years into their blissful retirement years. Here’s one example. Here’s another


Now, how do people manage to achieve early retirement on middle-class incomes in the first place? They save a huge percentage of their earnings. I mean…like more than 50% of their income, and sometimes 70 – 80% of their income. This is key to their ability to rapidly accelerate their progress towards ‘financial independence’ for two reasons: (1) they’re saving and investing more, and (2) their lifestyle costs less so they need less money invested in order to retire. 

There’s nothing inherently wrong with this at all. If (…if being the key word here) you can design a lifestyle where 20% of your income is able to buy you a lifestyle you find joyful, valuable and very importantly, sustainable, then there’s nothing wrong with this aspiration.

In fact, there are some really valuable lessons to be learnt from people who can live so frugally. This level of frugality often requires a completely different mindset around money and consumption. You’ll notice that people following the FIRE movement often value careful consumption (over mindless spending), minimising waste, and a more ‘minimalist’ lifestyle. These are all things most people could apply in their own lives to great benefit. 

BUT…there’s a point where it can become unhealthy. The reality is that achieving FIRE may require lifestyle limitations, and/or an aggressive savings strategy for many people. In that pursuit, people can become a bit obsessive and dogmatic in their views about saving money, which doesn’t always support a healthy relationship with spending money.

I don’t think things are that black and white. Who can say whether an annual trip to Disneyland with the kids is a waste of money? Or whether it is a waste of money to treat yourself to a day spa every month? That’s a totally subjective matter. So, there’s a big difference between careful consumption, and depriving yourself of spending on things that you actually do care about. 

Ultimately it comes back to figuring out what’s right for you. How important is ‘financial freedom’ to you? What and how much are you willing to sacrifice to get there? And is it worth it? Getting that balance right is a tricky exercise for every individual, and even harder for couples. 

“Okay, so like…you’re against the FIRE movement then?”

Uhhh, no. In fact, I think the world would be a much better place if everyone understood the core principles of the FIRE movement (…which is why we run financial education programs to begin with, haha). The underlying principles are all good things: be financially responsible, save better, invest better, be a more conscious consumer, stop mindlessly spending on stuff that doesn’t add value to your life

But you’ve got to figure out what financial independence looks like for you. Don’t take someone else’s version of it and try to replicate that because…it’s not going to be a custom-fit for your needs, goals, and values. So what are the chances it’ll make you happy? 

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