Playing with FIRE: The Documentary is available on Amazon Prime. The story follows a young couple with a small child who discover the FIRE (financial independence/retire early) movement and construct a new life that fits within the FIRE model. I wrote about my overall take on the documentary, but in case you're more of a Cliff's notes person, here are my notes divided onto categories.
Federal Reserve Stats:
Average American saves 3% of their income
Nearly half of US households cannot come up with $400 for emergency without borrowing or selling something
69% of Americans have less than $1000 in savings
34% have no savings at all
78% of US workers are living one paycheck from the edge
On Society
We have a consumerism culture, rat race culture
Capitalism drowns us in messages about what we need
We are spending money we don’t have to buy things we don’t need to impress people we don’t know
Way back when you didn’t have the money, you didn’t go out and buy it
Credit cards, loans, debt are the norm
Get a job, buy a house, work until you’re 65, get a pension, employer will look out for you
FI is about not having to abide by society’s rules (we need to write a new rulebook)
On Retirement
Retirement crises: fewer pensions, less defined benefit plans, health care costs
There was a time that people didn’t retire; they died at 62 or 63
They set up social security when hardly anyone got to 65
Now, due to medicine and nutrition, people living longer
On Financial Independence
Financially independent: enough money in your assets that you don’t have to work a job and you can live off of the income from that
Save enough money so that money can generate enough income in retirement to live on
FI number: yearly living expenses and multiply by 25
Not about making all the money in the world, about doing the most with what you have
It’s more fun to be rich than look rich
Cut hard on stuff you don’t care about, spend lavishly on what you love
You don’t have that many discretionary hours
Concepts are easy: on surface it’s cutting your spending and boosting your income; psychology and emotion behind it
We treat money like it’s infinite, but hours in our life are finite
You have to want something more than you want stuff – otherwise it feels like deprivation
Replicable model that anybody can achieve
Early retirement can mean constructing life in a different way
Financial independence can mean taking on more risk, expanding your options
Saving is not a sacrifice, it’s an opportunity
You can practice frugality out of necessity or practice it out of privilege
On Working Towards FI
Simple but it’s not easy
At some point, you realize, your lifestyle becomes a burden
“Where is it all going? We work too hard. We should be in a better position.”
“I can buy this lifestyle, or I can buy my time back.”
FI can radically transform your life within a few weeks
Going against the grain is difficult, requires discipline
FIRE can destroy your career on one end and save your life on the other
“We can’t lose if we keep happiness in the forefront”
Big three things: housing, car, food
It’s not just about the decision around money, what you’re buying, the house you want, it’s about happiness
Make food in bulk, make a meal plan
Still have to go to work on the journey – and can’t spend money, drive what you want
Nobody can make you quit except you
Need to know why you’re doing what you’re doing
Sometimes it gets boring just waiting for the numbers to work out in your favor
Essential: being happy during the transition
Make decisions based on happiness
On Investments
Rental properties, index funds, purchasing or starting businesses that can be run by a team of managers (hands off)
The market relentlessly goes up over time
On Money
Illiteracy makes you a pawn, literacy makes you sovereign
Your relationship with money can evolve
Money is a tool and if your figure out money life is easy
Sense of security around money only goes so far
We don’t teach financial literacy and planning in school; people don’t know if they’re on track
We will all get to live in a better world if we all are more rational with our money
Comments