What FIRE Got Right and Wrong About Investing

The Financial Independence movement sold an untenable dream

FIRE gave us financial literacy and a reason to save, but forgot to mention that early retirement without purpose is a recipe for an existential crisis.

Key Takeaways

• FIRE teaches smart money habits but can lead to isolation.

• Financial freedom without purpose feels empty.

• Most FIRE bloggers didn’t retire—they built businesses.

The FIRE movement attracted burned-out knowledge workers like moths to a flame. The movement, which stands for Financial Independence, Retire Early, promises freedom and prosperity to those who are willing to make short-term sacrifices. From around 2017 to 2019, I was a hardcore devotee. We even named our company Brooklyn F-I, the F-I representing financial independence.

I was making a relatively modest but respectable salary to support one person back then and knew that if I wanted to stop living paycheck to paycheck, I had to make a drastic change.

I wrote a slightly academic article about the movement's origins for The Journal of Accountancy in 2018. I interviewed two of the great podcasters, Brad and Jonathan of ChooseFI, for my little personal finance podcast in 2017. I was in the throes of limerence¹ with the movement because it provided a clear and disciplined framework to save and invest money.

FIRE is a powerful set of ideas, and like any good ideology, it’s compelling enough to get people really, really into it. I wouldn’t call it a cult, but the way in which young professionals² devote themselves to it is cult-like.

Personal finance is a messy series of decisions to make. You have to understand complex mathematical concepts in order to feel in touch with your savings and spending. The FIRE bloggers came with their safe withdrawal rates and their mega back door Roth IRA posts and truly opened up thousands of people’s eyes to strategies typically only available to people wealthy enough to have a million dollars in the market for a financial advisor to manage. I love that FIRE is about democratizing financial advice. It’s how I ended up in finance. Unfortunately, the DIY attitude is harmful to people who actually just can’t follow through on some of the more complex strategies the movement evangelizes.

What FIRE Got Right

1. Compound interest is your ticket to freedom

If you start investing early, you give compound interest decades to work its magic. FIRE blogger Mr. Money Mustache³ hammered this point home in his classic post The Shockingly Simple Math Behind Early Retirement. His philosophy: save hard, invest consistently, and let time do the rest. I agree. Math can be terrifying, but it’s also kind of sexy when it shows you how your 25-year-old self’s $ 300-a-month investment can turn into $100K without doing anything else besides not touching it. It’s like a savings plan and a time capsule.

2. Free yourself from unnecessary spending

One of the most useful aspects of FIRE is that it forces you to examine what actually brings you joy. The Frugalwoods blog popularized the idea of extreme frugality not as deprivation but as a path to a richer, more intentional life. It’s not about never going out—it's about realizing that maybe you don’t even like brunch that much. And that not going out to brunch a few times could potentially mean you can afford to take that extra trip to see your college friend. It’s about learning to love living on less.

3. Educate yourself about money—no one is going to do it for you

FIRE teaches financial literacy in a world that otherwise prefers you to stay financially illiterate. Vicki Robin’s Your Money or Your Life was a foundational text for FIRE, making the case for aligning your spending with your values and breaking free from the paycheck-to-paycheck cycle.

At its core, FIRE is about one simple principle: the sooner you can invest a large sum of money, the sooner you’ll be able to take advantage of the freedom it offers. Money doesn’t have to be complicated, and that’s what I loved about FIRE. The real gift of FIRE isn’t early retirement—it’s clarity. Even if you don’t make it to a million-dollar portfolio, just understanding how much your life costs is a form of power.

4. Invest like an adult (i.e., don’t chase the hype)

FIRE was a quiet rebellion against the “get rich quick” energy of early stock picker bloggers. It taught a generation of office workers how to build wealth slowly, through boring, diversified index funds. No fancy stock picking, no YOLO call options—just automatic contributions to a total market ETF, and maybe a Roth IRA. FIRE made long-term investing cool again, which might be its most radical accomplishment. And also excellent marketing for Vanguard. It's the financial equivalent of discovering that oatmeal is actually delicious when you make it with cinnamon, brown sugar, and the smug satisfaction of not losing your shirt in GameStop.

5. Autonomy over your time is worth more than any luxury good

At its heart, FIRE is about reclaiming your time. It’s about refusing to spend 40+ years asking a manager for permission to go on vacation or book a dentist appointment. Even if you never hit your FIRE number, just working toward it shifts the power dynamic—you start to see your job as a choice, not a life sentence. That mental shift alone can be worth more than a raise. FIRE says: you own your time, even if you're not fully free yet. And that’s a great feeling.

What FIRE Got Wrong

1. Living on less can limit your options for love, friendship, and community

When you train yourself to say “no” to every dinner, every trip, and every social event, you’re also saying no to potential relationships. Cutting expenses ruthlessly means cutting experiences too. Money is social—whether we like it or not. The $18 cocktails and destination weddings might feel frivolous, but they’re often how we build bonds, make memories, and, frankly, meet people. You can only suggest "coffee and a walk" so many times before people stop texting back. And while I’m all for intentionality, isolation isn’t a great tradeoff for hitting your savings target five years early. Relationships are an asset class too—just harder to rebalance.

2. Obsession with no spending can make you miserly, unpleasant, and hesitant to trust

There’s a fine line between being frugal and being a pain in the ass no one wants to hang out with. When you spend years in a scarcity mindset, it can calcify into a permanent lens: you see every purchase as a threat, every offer as a scam, every act of generosity as a trap. That’s not financial freedom—it’s the erosion of trust. Jacob Lund Fisker, the creator of Early Retirement Extreme, took frugality to almost monastic levels. But if you’re meticulously reusing paper towels and refusing to tip because it’s “not in the budget,” you’re not just optimizing—you’re becoming insufferable.

3. FIRE uses rules of thumb as certainty—like the 4% rule

The famous 4% rule says you can withdraw 4% of your investments annually and never run out of money. But that rule is based on historical stock market data and assumes a world that behaves predictably. And, as we’ve all learned in recent years, the world is unpredictable. Big ERN from Early Retirement Now has done the math (all of it, in excruciating detail), and his work shows how sequence-of-return risk—aka, retiring right before the market tanks—can permanently kneecap your portfolio. Yes, the 4% rule is a fine starting point. But it’s not gospel. It’s a napkin sketch of a plan in a world that requires architectural blueprints and someone to read them.

4. Tracking every cent and checking accounts daily leads to obsession, not freedom

If the goal is freedom, why does FIRE often create a prison of financial micromanagement? There’s a fine line between being intentional with money and making your entire existence about optimizing spreadsheets. I’ve seen people spend hours optimizing credit card points, budgeting to the penny, and obsessively forecasting their net worth growth in early retirement. If the goal is freedom, why does it look so much like a full-time job? There’s a difference between being intentional with money and making your entire personality “guy who knows the exact APR of his high-yield savings account.” Don’t mistake control for peace. Peace doesn’t usually involve three different apps and a pivot table.

5. Oversimplifying complex strategies

“A backdoor Roth IRA is so easy, you’d have to be an idiot not to pull it off.” That’s the tone I’ve picked up from a lot of financial independence bloggers.

A backdoor Roth is a tax-saving strategy that lets high-income earners contribute to a Roth IRA, even though they technically aren’t allowed to. It’s a loophole. A workaround. A perfectly legal one.

But as someone who’s both a financial advisor and actually prepares taxes, I can tell you—it’s not that easy. It’s a multi-step process, and if you mess it up, it can cause some real headaches.

DIY-ers love to act like something’s simple once they’ve figured it out. Meanwhile, our firm fixes dozens of incorrectly reported backdoor Roth IRAs every year.

It’s not the end of the world if you get it wrong, but let’s not pretend it’s the easiest thing in the world either. It’s kind of a pain in the ass.

How to Fix It

It’s about balance.

And it’s all about investing in things other than the stock market and rental properties. Although, if you need to create a fake stressful job for yourself to pretend your life has meaning, managing rental real estate might just be the thing for you.

But if you sat inside eating rice and beans while your peers formed meaningful connections and had priceless experiences during your 20s, who cares if you have a million dollars in your 401(k) when you turn 40?

What I don’t like about FIRE is that it’s too extreme. It has to be to become a movement. (Just look at Big ERN, who at one point lived in a mobile home, though I’m not sure of his current whereabouts.) Just like any religion or set of beliefs, inevitably sects form. And with FIRE, we get things like “Fat FIRE,” which just means you need to save a lot more money and live a pretty luxe lifestyle while still working.

Have you ever met a rich person who doesn’t spend money? Someone with more than enough money to take care of their lifestyle and more, yet they scrimp and save and won’t allow themselves (or their families) little luxuries or convinces. You know, the friend who has a trust fund who sends you a Venmo request for $8 for the bottle of the wine “you” bought to bring to the party.

Or the Dad who insists the family take their eight suitcases on the public bus when on vacation instead of hiring a private van. In my opinion, this is one of the worst types of relationships you can have with money - it’s the Smaug the Dragon mentality of “It’s mine and I won’t let anyone take it away.” If you’ve spent years of your working life desperately scrimping and saving, it’s very difficult to simply turn it off, switch gears and start spending what you have on things you love.

Money Is Just Paper Without Purpose

On my weekly podcast, The Liquidity Event, we keep answering Reddit questions like:

“I’m retired. I’m 45, and I’m bored and lonely—even though I have a lot of money."

The problem: these people had a goal, worked toward it, and it fueled them. Now that they have achieved it, they have unlimited freedom—and no idea what to do with it. And even worse, sometimes no one to share it with. They are unicorns, roaming the world, being admired for their freedom, but it is a lonely, solitairy life.

Reading books and traveling the world are not passions. These are things you can do to make yourself happy, to enrich your mind and fill up the days. Think of the poets and great intellectuals who had unlimited time and money to roam the world. Did that lead to happiness? No. Edgar Allan Poe, Lord Byron, Virginia Woolf—brilliant minds, plenty of freedom, and yet not exactly a beacon of well-adjusted joy.

The FIRE bloggers are happy. Why? Because they have a purpose. They are not just travelling the world and reading books, they are telling people about it. Telling thousands of people about it and making money from it. Sure, they retired from their corporate jobs, but now they have thousands of readers hanging on their every word. They have to get up and write that blog post or record that podcast because people need them to.

Did you ever stop to think about how the people who got famous and rich as FIRE bloggers were not actually retired? They’re entrepreneurs. They run blogs that generate advertising revenue, and they collect payments from credit card companies. They host retreats for like-minded early retirement hopefuls. They host ad-supported podcasts. They offer one on one consulting. They are effectively running referral marketing businesses - every time you read about a new credit card offering a generous sign-up bonus on a travel-hacking blog, chances are there’s a “retired” person collecting a nice referral fee from your click. There’s nothing wrong with this at all. Writing and podcasting about something you believe in and sharing it with a growing audience is incredibly rewarding. I just wonder if it’s all a bit too aspirational.

The life of freedom they preached was a balloon pop of a dream for many people who saved diligently and took their advice.

"Save seven figures, quit your job, and you’ll have all the freedom in the world!"

Except...these bloggers keep making money from those Chase Sapphire referral links, the Substack subscribers, and the coaching.

The problem with FIRE is that the people who evangelize it already have a purpose: they evangelize FIRE to their followers.

It’s a giant, benevolent Ponzi scheme. But I don’t hate it.

So, be aggressive about saving. Really, I think FIRE’s principles at the core are very good ones. But don’t forget to live your life and take a chance on an experience once in a while.

1. A psychological term that basically means you’re in the throes of love but you’re mostly just obsessed and not actually in love. Wikipedia: https://en.wikipedia.org/wiki/Limerence

2. Many of whom are highly paid knowledge workers like software engineers.

3. This one blogger who went by Mr. Money Moustache was such a hit that his followers are part of a moment called “Mustachianism.” Nick Paumgarten wrote an excellent profile of him in 2016 for The New Yorker.