I'm an ambivalent convert to FIRE - Financial Independence Retire Early.
The basic gist is:
- Minimise your expenditure,
- Save 20x your annual expenditure,
- Retire early while maintaining the same lifestyle.
That's it. There are a lot of crappy books about FIRE, but the concept is simple.
So I try to spend a little less, and I try to save a little more, and I dream about stopping work while I'm still young enough to enjoy it.
Of course, human psychology and habits are less simple. It is so tempting to buy a sandwich from Pret rather than take your own lunch. Sure, let's go to the pub after work and buy drinks which are cheaper at the supermarket. A holiday in the sun - why not?!
All those things increase your monthly expenditure. They chip away at your savings. And they increase your quality of life.
Now many of us have had a few-hundred days of being confined to home, and with the imminent threat of economic doom, we've been forced into a FIRE lifestyle.
(Yes, I know some people are getting takeaways every day, and spending hundred on videogames or office furniture. And others are being thrown into poverty.)
We've had a brief glimpse at what everyone doing FIRE would look like for the economy. No more sandwich shops, or travel agents, or quirky boutiques.
And we've had a brief glimpse at what our lives would be like stripped back to the minimum. No fancy food, no going anywhere you can't walk to, no meeting friends for a cheeky pint.
I'll be honest. It's not amazing, is it?
Could you survive stuck at home forever? Sure. Many people have it worse. And modern technology means that the world can come to you.
After a while, I daresay we'll all be Stockholm-Syndrome'd into believing that this is the life we want.
I don't think there's anything wrong with the FIRE philosophy. And I don't judge anyone for wanting to pare their spending back. But I worry that artificially forcing people into it will backfire. People will conflate the misery of the pandemic with the misery of not spending money, and we'll see an explosion of spending - and consequent lifestyle inflation - if this pandemic ever subsides.