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A New Survey Debunks the Myths of the Financial Independence Retire Early (FIRE) Movement

Daniel Caughill
A New Survey Debunks the Myths of the Financial Independence Retire Early (FIRE) Movement

If sipping piña coladas beachside on a Wednesday afternoon sounds nice to you, you've probably also dreamt of early retirement. You're not alone.

Over the past five years, Google searches for "Financial Independence Retire Early" has increased by 94%, and there’s even a catchy acronym for people who subscribe to both sides of the equation: the FIRE movement. But a recent survey from TD Ameritrade shows that we may have misunderstood the FIRE movement all along, with proponents a lot more willing to work than we originally believed.

What does the FIRE movement really care about?

People who are familiar with—but not a part of—the FIRE movement usually assume it's about one thing: retiring as early as possible so you can kick back at the beach for the rest of your life. And for good reason. There are several FIRE podcasts and blogs and out there where individuals break down the minimalist budgets they live on after moving to coastal towns where the cost of living is low and the tax breaks are high. But according to TD Ameritrade's survey (of 1,500 adults aged 45 and older with at least $250,000 in investable assets), the "FI" portion of the acronym is a lot more important than the "RE."

Financial independence defined: a state in which an individual or household has sufficient wealth to live on without having to depend on income from some form of employment.

Although one-third of those surveyed said that leaving a 40-hour-a-week job was the most appealing aspect of financial independence, three-quarters of financially independent respondents claimed that achieving that independence was more important than actually bowing out permanently from the workforce. In fact, more than 4 in 10 of both the financially independent and non-independent respondents plan to continue working after they "retire"—both because they enjoy what they do and because they don't want to live frugally in retirement.

So what's the difference, then, between FIRE enthusiasts and the rest of us? Apart from having the peace of mind that they're financially secure, the main difference lies in what they plan to do for work and who they're planning to work for. Most FIRE-ees tend to embark on a self-made career path after reaching financial independence, either by growing their blog, consulting, managing properties or monetizing some other hobby they find meaningful. In fact, the trend is so strong that one member of the movement attempted rebrand the "RE" in FIRE as "Recreational Employment."

A well-known figure of the FIRE movement, Carl Jensen, told TD Ameritrade: "Your goal should be to move on to something else." For Jensen, that means a second career running his FIRE blog, 1500 Days to Freedom. "The money in early retirement is just the tool that you use to move onto that next phase in your life.”