Joshua Storm Becker

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FI/RE Will Not Liberate Us

The sidebar of the /r/FinancialIndependence subreddit describes it's community:

"This is a place for people who are or who want to become Financially Independent (FI), which means not having to work for money. Financial Independence is closely related to the concept of Early Retirement/Retiring Early (RE) - quitting your job/career and pursuing other activities with your time. This subreddit deals primarily with Financial Independence, but additionally with some "RE" concepts. At its core, FI/RE is about maximizing your savings rate (through less spending and/or earning higher income) to achieve FI and have the freedom to RE as soon as you wish. The purpose of this subreddit is to discuss FI/RE strategies, techniques, and lifestyles whether you are retired or not."

This subreddit currently boasts over 800,000 members, with a number of offshoot subs. This subreddit may not be immensely popular, but the principals it espouses are within certain demographics. Software engineers being the most representative profession of FIRE communities. The appeal of FIRE is that of freedom: no longer needing to depend on an employer to provide for one's basic needs. The assumptions of the FIRE model are quite capitalist, and therefore viewed as "realistic" by much of it's readership. The most notable assumption being that market growth of the past is generally representative of future market gains. This assumption is how you end up with things like "the 4% rule," the idea that if you have sufficient capital accumulated in investments, and you only withdraw 4% of the initial capital each year, the market gains will practically always offset the 4% withdrawals over the long term (the actual number percentage is a hotly contested debate and many users aim for a lower 3% withdrawal rate).

In this community you will find people often talking about their savings rates, and you will not uncommonly see users quoting their savings rates from 50% up to 90% (that is, cash flow saved divided by total cash flow in, over some period of time). A savings rate of 20%, over twice the 7.9% US 2019 average, would be considered quite low within the community. Some users achieve these incredible savings rates by living with family for low or no rent, avoiding "lifestyle inflation," strictly using public transit, etc. and of course, it helps immensely to make above average incomes. Many users relish at the a thought of achieving their "number" - the amount of money they need for which they fuck right off and drop out of the workforce entirely. Users in the community usually convert their target net worth into number of years working, based on their current income and savings rate, so will often quote that they have "X years left before FIRE."

Now, the users of the subreddit are generally not wealthy. Intergenerational wealth can trivially provide for one's basic needs, no need to sweat the details of specific percentages or years of work. On the contrary, I would argue, many find themselves subscribing to FIRE principals because they have experienced some financial trauma in their past. That financial trauma has had a lasting impact on them such that they are willing to forego as much consumption as possible in order to achieve what they perceive to be a guaranteed standard of living.

If my tone reads as critical here, that is not my intention. In fact, I believe the principals of FIRE are generally quite logical considering the society it's community has grown up in. My argument here is merely that FIRE as a goal is a symptom of structural issues in our society, and that the users in the community should consider alternative approaches to their struggle. And any true criticism here is not just pointed at others: the use of the word "us" in the title of this post is not merely for style. Another reason I write this is I believe these people are reachable. By that, I mean I believe these people hold the view (either explicitly or implicitly) that our society is fundamentally broken, and that those of us fighting for a better world should view the FIRE community members as potential allies (dare I say, comrades).

Why do I call FIRE a symptom? Surely I don't think people wanting to save their money is a bad thing? My critiques can be boiled down to this:
  1. FIRE principals often exacerbates individual's neuroses by ignoring the fundamental source of one's struggle.
  2. FIRE is purely individualistic, ignoring systemic change in favor of singular focus on individual freedom.
  3. FIRE principals often reinforce oppressive systems and implicitly encourage bootstrap theory.
My first argument may only apply to a subset of the community, but I have noticed this in myself so think it is an argument worth walking through. I propose above that many people are drawn to FIRE because of their experience with "financial trauma." What do I mean by this? Anyone who has spent an extended period of their life living near/below the poverty line likely already knows: the mental and emotional toil of not having enough. Constantly having to weigh each decision based on if you will have enough to provide for one's basic needs in the face of uncertainty. "I have $200 from my paycheck. The car payment is due on Tuesday, and is $100. But the rent is due in 2 weeks and I only have $300 saved up for the $700 rent. Can I let the phone bill lapse again to make sure I get those other bills in on time? Oh, I forgot about my son's fieldtrip, the school wanted $20 for that, do I have to tell him he can't go? I don't want to stop my son from having the best education they can, so is the field trip worth it? I hope the check engine light doesn't stay on, I can't afford a car repair right now. My foodstamps have been reduced, but I'm not sure why and I didn't get the letter informing me in time so now I'm standing at a Walmart checkout without any way to pay. How will we eat this week? etc. etc." I don't think I am exagerating to say this is a daily if not persistent experience for many in America. Couple with this the context of living in a society of excess, and the struggle is exacerbated as it becomes not just a question of how do you make due, but why are you struggling when society says as individuals we should all be capable of providing for ourselves, by ourselves.

Even for those in the FIRE community who did not experience this trauma, they surely feel some dissatisfaction with our society that expects us to work 40+ hours a week just to get by, and they see that the consolation prize of getting to occassionally buy shit we don't need is not freedom.

Fortunately, many individuals find themselves escaping that precarity, but the scars remain. Every expenditure is well calculated, because you never know when things could get bad again. FIRE offers a path to security for these people, or it appears to: "never worry about your finances again! Just save up X dollars, and you can subsist on it forever! How does one save up X dollars? Well, just save as much as you can! Avoid consuming if at all possible! Down to lower your standard of living? Even better! That means X can be a smaller number and the amount saved per year goes up, so you'll get there even faster!" in order to "achieve FIRE" many have to lock themselves into the same scarcity mindset, constantly stressing about every single expenditure and refusing to spend unless it's absolutely necessary.

Now, I am all for encouraging people to consume less, and to make more conscious choices about their consumption, but this approach to "financial freedom" seems roundabout at best. The problem is that our society does not provide an adequate minimum standard of living, so your solution is to focus on the future and lower your current standard of living so you can potentially feel some notion of freedom years down the line? Would it not be more productive for the 800,000 users to fight for our collective liberation by demanding society provide an adequate standard of living for all, regardless of ability? Some in the community may argue they espouse FIRE principals because they want everyone to benefit from the idea that we can all live on market gains. But how could that be possible? The market gains come from somewhere: Labor cannot simultaneously be exploited while everyone gains from it, someone must be exploited, unless you believe scarcity is a solved problem. Further, to suggest someone making median income in the US ($31,133 in 2019) could save anywhere near 50% of their income while maintaining a reasonable standard of living is laughable. If we use the median full-time worker income of about $46,800 (2019) it becomes slightly more feasible, but only if you like lentils and hate children. I digress.

Now, some may reject the notion that market returns are oppressive or exploitative, but I encourage the reader to consider if the financial trauma I describe above would occur in a society that did not depend so heavily on the profit motive.

I am not trying to say here that those on the "FIRE Path" should stop saving their money and give up hope of ever feeling free. Rather, I am saying that financial freedom is not sufficient, even if it is necessary. This is made clear by the countless posts chronicling the misery of those striving for or having achieved FIRE. It is easy to dismiss these individuals suffering as the complaints of the immensely privileged, but I believe the root cause of their suffering is very similar to the cause of the suffering for those who do not have enough to get by.

Now, the FIRE community does have a response to those failings. Many users will commonly say you need to "have something to retire to," which is to say have some purpose other than just the arbitrary goal of stowing away X number of dollars and quiting your job. And I agree with them, in order to find some notion of happiness I believe we need to find some framework for our lives to give it purpose. I want to encourage those on the "FIRE Path" to find that purpose in direct action to try liberate others from the struggle they went or are currently going through. The struggle of feeling stuck in a system that does not truly value you as a person. The struggle of being in a world that expects you to get by on your own, and if you can't to either live in squalor or die. The struggle of having to work on things you honestly do not care about.

I think there are a number of ways those holding the privilege of financial independence can help others achieve similar freedom, and it isn't by teaching people about the 4% Rule: it's by starting an employee-owned company where each worker has a say, making the work they do so much more purposeful. It's by using your time to help organize workers at large corporations. It's by creating a community garden, free for anyone to take from. It's by starting a community fridge, or some other "free store". It's by creating a community where needs are considered more important than wants. You can become a full-time activist, or turn your dream of homesteading into a dream of making an intentional community. I am not saying you need to give away all of your cash that you worked for, but rather that you now have the freedom to use your time to help people and in that bring purpose to your life in "retirement". Instead of espousing the benefits of acquiring capital that allowed you to have this freedom, you can work to create alternatives routes to that freedom that do not necessarily depend on capital. And you can start now.