How is the FIRE movement doing?

[jennypenny]

... because if you oversave and have $3 million, you might as well spend it

Why? Do they give a reason? I don't get the 'unused resources = bad' concept, even removing ecological considerations from the equation.

Thanks for answering though. It helps.

[mathiverse]

I think the idea that "unused resources = bad" goes back to the fact that, in many people's heads, quality of life = cost of living. This statement implies that increasing the cost of your life will necessarily increase your quality of life. This statement also implies that unnecessarily reducing cost of living means that your quality of life has been lowered.

[AnalyticalEngine]

My observations here is that a lot of people get into FIRE with a scarcity mindset. When they hit a higher NW than they need, it causes them to look back on their lives and realize the times they let the scarcity mindset dictate their choices. Stuff like not going on that trip with your friends in college, not buying the nicer suit for your job interview then losing the job, the type of choices one makes under the scarcity mindset that aren't rational choices. When you combine that with a $5 million NW, it quickly turns into taking the $35k cruise because you can easily afford it and you might have missed out on experiences you regretted when you were accumulating under the scarcity mindset.

This is the problem/psychology Ramit Sethi targets. My personal issue with him is that he does it in a predatory way. Like instead of decoupling the scarcity mindset from money and discussing ways not to fall victim to it even with little funds, he instead does the self-help guru algorithm technique of making FIRE a strawman, framing not spending money as deprivation, then sells the audience an excuse to spend money. I sometimes think he exists in part just to make people feel better about spending money, like how most car ads exist to make people who already forked out $$$ for the new Lexus to feel better about it rather than to sell the car. People like gurus who tell them what they already want to hear.

In short, decoupling satisfaction in life from money is tremendously hard to do for anyone, let alone people who recognize they were trapped in the scarcity mindset and actually are pretty good at personal finance, so he sells satisfaction in life = spending money to this audience.

[jacob]

These observations combine well with the Wheaton scale. Given how the number of people occupying each stage is logarithmic, the bigger the movement gets, the lower the WL of the gravitational center. It sounds like it's currently around WL3.

Likewise, the bigger, the more "pop light" the message and the more entrepreneurs trying to cash in on it using the corresponding language. Also no surprise that mainstream personal finance has essentially co-opted the language of what was once "the cool thing".

[loutfard]

decoupling satisfaction in life from money is tremendously hard to do for anyone, let alone people who recognize they were trapped in the scarcity mindset and actually are pretty good at personal finance, so he sells satisfaction in life = spending money to this audience.

Thank you for your sharp analysis. I will relay it to a potential Ramith Sethi prey, a close friend.

Less interestingly, I observed myself feeling nauseous hearing Sethi speak. It's the predatory pushing people towards consumption far beyond satisfaction in life, and all the negative externalities that entails. Confirmation of my ever stronger sense of what satisfaction in life means to me.

[Western Red Cedar]

He actually says that spending is a skill and if you don't spend you'll forget how.

Why would he do that? I don't get the backlash coming from inside the house as it were. Is he justifying his elevated lifestyle? Is he trying to develop an audience of wealthier people? I don't get it.

I wouldn't actually put Remit Sethi in the FIRE movement. He fits better in the broader, "personal finance" space. So, it isn't really coming from inside the house. About a decade ago Mad Fientist actually mentioned him (and the Financial Samurai) as the antithesis of MMM. His book, I Will Teach You to be Rich, came out in 2009 before the movement really had much traction.

Almost everyone in the personal finance space has had to respond to or address FIRE in some capacity because it represents a significant population interested in personal finance. They also rely on those podcasts when promoting their new books/projects. Throwing FIRE in the title will probably get more clicks.

Why? Do they give a reason? I don't get the 'unused resources = bad' concept, even removing ecological considerations from the equation.

+1 to everything @AE mentioned about the scarcity mindset. There was a viral interview with a popular FIRE couple in which it was pretty apparent they were continuing to stack their chips, and didn't really have a healthy relationship with spending. One of the most valuable arguments I think Sethi and Perkins (Die with Zero) offer is to think and dream bigger.

Unfortunately, much of the conversation about resource consumption and carrying capacity gets lost in that discussion. But, I suspect if they were talking to an EREer with 50x expenses saved, who was quite content with their life, they might ask how they could use that money to further their environmental goals. If you have 30X, 50X, or 100X yearly expenses is there any tangible way to use that money to improve your life or the broader community in a manner that is a net-positive ecologically?

Some of this may conflict with the logic behind 1 JAFI, but I think the alternative approach is based less on minimizing harm and more on maximizing benefit. I've thought for a while that prioritizing 1 JAFI may actually represent a barrier to ERE 2.0.

The topic of scarcity has been on my mind, and I recently wrote the following in my journal.

With that said, I still haven't been able to completely shake the scarcity mindset. That mindset was likely a major variable in our current financial position, but at some point it loses its value. It is kind of like anxiety in that regard; helpful to prepare, but dangerous and self-destructive when left unchecked.

We'd likely be fine mathematically drawing down principle based on the backstops available after we turn 65. Yet, I continue to have to deal with lingering effects of the scarcity mindset. Fortunately, the nomadic lifestyle regularly challenges me in this regard. Exposure to unique opportunities and the realization that time passes quickly and that life is fleeting challenges me to continuously evaluate and adjust my spending.

We often talk about freedom-from and freedom-to, but I think the scarcity and abundance mindset is an equally valuable discussion. It seems like the scarcity mindset is pervasive in much of the FI sphere.

I actually think the scarcity mindset is a significant issue on the forum.

[Western Red Cedar]

This is the problem/psychology Ramit Sethi targets. My personal issue with him is that he does it in a predatory way. Like instead of decoupling the scarcity mindset from money and discussing ways not to fall victim to it even with little funds, he instead does the self-help guru algorithm technique of making FIRE a strawman, framing not spending money as deprivation, then sells the audience an excuse to spend money. I sometimes think he exists in part just to make people feel better about spending money, like how most car ads exist to make people who already forked out $$$ for the new Lexus to feel better about it rather than to sell the car. People like gurus who tell them what they already want to hear.

In short, decoupling satisfaction in life from money is tremendously hard to do for anyone, let alone people who recognize they were trapped in the scarcity mindset and actually are pretty good at personal finance, so he sells satisfaction in life = spending money to this audience.

I'd probably quibble with this characterization a bit.* I'm not a fan of his, and don't consume a lot of his content as his presentation bothers me, but I watched the Netflix show, a handful of YouTube videos, and have heard him on the Mad Fientist and other podcasts a few times. One of his skills is quickly figuring out where someone is at financially and their psychological relationship with money.

His approach is helping someone define and describe their "rich life" and then looking at how their spending and decisions align (or don't) with that description. It seems to me that much of the time he is helping people who are deeply in debt, or helping couples reconcile different views and behaviors around finances.

The interviews with the Mad Fientist were interesting to see how he approached someone who was satisfied and had decoupled spending from satisfaction. It revealed how someone who ascribes to systems theory and ERE could get creative with spending to enhance their life (in this case, learning nuances about brewing and roasting coffee from a local expert in Scotland, and eventually roasting his own beans).

*I completely understand the predatory vibe though.

[jennypenny]

... because if you oversave and have $3 million, you might as well spend it

I think I figured out why this puzzles me when typing an answer in the launch thread.

That said, I don't think 'knowing the value of a dollar' was the key to their launching. Knowing that money is simply a resource, and a limited one at that (like time), helped them to decouple their planning and goal-setting from their educational kitty.

We specifically advised our kids not to look at the money we gave them and say "I have X amount of dollars, what could I do with that?" We taught them to ask "What would I really like to do?" and then ask "What resources do I have that I could use to achieve that?"

Wrt FIRE, I'd never think "I have 2 million dollars, what could I do with that?" which is the vibe I get from the current state of the FIRE movement. It's the framing that bothers me. I'd ask the same question above about what I wanted to do and then see if I could pull it off. Boxing oneself into the money category seems limiting to me. My goals and dreams are bigger than things/experiences I can purchase.

[AnalyticalEngine]

I think the issue is that the FIRE movement started at WL5 but has slowly been going down in Wheaton levels over the years to the point it's now at WL3, as Jacob said. This means it can be hard to tell the difference between FIRE and simply being conventionally wealthy (with all the mindset that entails).

Money is just an abstraction after all, and it's only as useful as your ability to later convert it into real things. Moving past the money mindset is WL6, and most FIRE people are just not there. Even at CampFI, whenever I brought up ERE, I got the usual reply of it being deprivation. This is also why stuff like Ramit Sethi/Die With Zero seems revolutionary to the FIRE crowd: when you've been trapped in the scarcity mindset your entire life and can only see life in money terms, it is legitimately helpful to have someone pointing out just how much life you are trading for an abstraction.

Incidentally, I think ERE could regain a lot of traction with the FIRE crowd, who view "live life in terms other than money" as a cutting edge paradigm, if it was pitched simply as a way to "live your best life" with less focus on cost cutting, which the FIRE crowd views as deprivation.

[jacob]

Incidentally, I think ERE could regain a lot of traction with the FIRE crowd, who view "live life in terms other than money" as a cutting edge paradigm, if it was pitched simply as a way to "live your best life" with less focus on cost cutting, which the FIRE crowd views as deprivation.

I pushed back hard on the idea that frugality=deprivation in this recent podcast: viewtopic.php?p=291647#p291647

I'm not sure how it came across.

I suspect it all comes down to "show, don't tell". While moving from an RV to house-owner got my PR-rating from negative to neutral, I'm still not a natural when it comes to instagram-arguments. I just don't care that much about appearances/prefer to leave it to others.

[Jin+Guice]

I agree with what everyone is saying.

I think the failure mode of FIRE is not decoupling the scarcity mindset from money. To me this is the point of FIRE, otherwise being frugal sucks. So IMO, if you aren't decoupling scarcity from money, you aren't even doing FIRE.

I haven't viewed much Ramit material, though I thought his interview with the FIRE couple illuminated a lot about what happens if you don't decouple scarcity from money or think about what to do with the extra monetary and non-monetary resources you gain.

I agree with what @WRC said that, in that interview, he very quickly determines both participants psychological issues with money. In their case, they can't give him a reason not to spend more because they only don't spend to accumulate more money and the reason for accumulating ever more money clashes with reality. This causes them to be severally anxious and appear somewhat unstable during the interview. Projected onto every member of the FIRE community, this is a strawman, but for the two people in the interview it is a reality.

The scarcity mindset is all around us. I fall prey to it in almost every aspect of my life at one point or another. I'm thankful for this place which allows me to lessen my scarcity mindset around finances.




One reason I love ERE is because I was a giant Rage Against the Machine fan when I was a kid. One heuristic I use is that the machine eventually consumes all. I'm not even exactly sure what the machine even is, but it takes everything that is countercultural, interesting, cool and unique and eventually makes it bland and saccharine and sells it back to the masses.

Imo, FIRE is the best way to fight back, because the closest I can come to saying what "the machine" is, is that it's unchecked consumerism for the sake of consumerism. The idea that one doesn't have to sacrifice to consume less is as threatening to consumerism as I know how to get.

ERE is better because it not only includes what not to do (FIRE, i.e. consume less) but also a method for uncovering what to do.