What this article covers
Opher Ganel argues that the RE in FIRE shouldn’t mean retiring to years of doing nothing, but the freedom to do what you value without worrying about money. Borrowing a lesson from NASA projects, he shows how to define maximum and minimum “mission success” for your own financial independence, and why a plan that works for a healthy 30-year-old on $30,000 a year abroad may not hold up at 70 or 80.
Key Takeaways
FIRE should mean freedom to do what you value, not retiring to do nothing
Opher Ganel rejects the gold-watch idea of retirement as years without anything productive. He echoes the suggestion, quoted from Ben Le Fort, that FIRE could stand for “Financial Independence, Retire (to) Entrepreneurship,” and defines retirement as doing what makes life meaningful without having to worry about money.
Define a minimum mission success for financial independence, then plan around it
Drawing on his NASA project work, Ganel suggests starting with the maximum plausible outcome, then deciding the smallest outcome that would still make life worth it. That minimum success criterion drives your requirements, plan, schedule and budget, and you can “up-scope” if resources allow.
An early retirement plan has to survive aging, rising healthcare costs and changing goals
Early retirees living on about $30,000 a year in low-cost countries may be fine at 30 but strained at 70 or 80 as healthcare needs grow. Because needs and goals evolve, Ganel argues your definition of retirement can’t be static, and your plan should account for the risk that things won’t go as planned.
What Does FIRE (Financial Independence, Retire Early) Really Mean?
In the early 90s, I was approached by an Ameripise representative who wanted to sell me retirement planning services. I was taken aback, given that I was in my early 30s and broke, but I have to give the guy credit for being forward-looking :).
He asked me, “When do you want to retire?” “Never,” I replied. I still hadn’t thought about what retirement would mean to me personally, so it only existed as the widely accepted notion of reaching the point in life when you don’t do much of anything productive, not something that I had any desire to aspire to.
Retirement Is a Personal Goal: What Does Your Ideal Retirement Look Like?
Planning for retirement is one of the biggest goals of personal finance, and like any other portion of personal financial planning, it’s deeply personal. What will YOUR retirement look like in an ideal world? I bet it’s not identical to my ideal, but the process of defining that goal, and much of the process of achieving it are similar enough that we can learn from each other.
What will YOUR retirement look like in an ideal world? I bet it’s not identical to my ideal, but the process of defining that goal, and much of the process of achieving it are similar enough that we can learn from each other.
In his recent piece on FIRE, conventionally an acronym for “Financial Independence, Retire Early,” Ben Le Fort refers to a proposed modification for the last piece of the acronym. He says, “John and David from “Debt free Guys” appeared on the Bigger Pockets Money Podcast recently and used a phrase that crystallized this concept for me. They suggested FIRE should be renamed ‘Financial Independence, Retire (to) Entrepreneurship.’ ”
This resonated with me, as I’ve felt for a while that retirement should not be about the proverbial (and long defunct concept of a) gold-watch sendoff to years of doing nothing of substance or consequence. Rather, in my mind, retirement should be about doing what we want, what we value, what makes our life meaningful to us, without having to worry about money.
Retirement should be about doing what we want, what we value, what makes our life meaningful to us, without having to worry about money.
What Does FIRE Mean to You, and Will Your Plan Hold Up as You Age?
Over the years, I’ve read blog posts written by people who could be (and maybe are) poster children for the FIRE movement. These are people who retired in their 30s and started living a life molded by their desires, choices, and ideals. They traveled the world, moving every few weeks or months from one country to the next. They blogged about their new life, which over time seems to develop into a business centered around sharing with the world their thoughts and experiences of a life after checking out from the rat race.
One concern I had, considering if that sort of life was what I would want to develop for myself and my family, was that their $30k/year budget was tiny by First-World standards. They were able to do this, among other things, by carefully picking the countries they live in for more extended periods. After all, rent and food are much cheaper in, say, Cambodia or the Philippines than in Sweden or the US. However, what works when you’re a healthy 30-year-old may not work as well as you age. How well will their plan hold up when they hit 70 or 80 and need ever more (increasingly expensive) healthcare?
This raised the question of what retirement meant to me, and by extension what it means to you or anyone else. It also made clear that the answer cannot be a singular unchanging one, because as long as we live, our needs, desires, and goals evolve, so our definition of retirement itself can’t be static.
As long as we live, our needs, desires, and goals evolve, so our definition of retirement itself can’t be static.
How to Define Financial Independence the Way NASA Defines Mission Success
Even if your definition of financial independence isn’t static, you have to come up with a definition for “mission success.” Having worked with several NASA projects, here’s what I learned that can help in this process.
First, come up with the maximum plausible (positive) outcome. Then, assuming things go wrong or that you simply can’t afford the full-blown successful outcome, figure out how little of that outcome would still make the mission (in this case, your life) worth it. That smaller outcome becomes your “minimum mission success criterion.”
From that definition of minimum mission success, you flow down your requirements for achieving it. Those requirements then guide your designs, leading to your plan of action, your schedule, and your budget.
Of course, if your resources allow for more than that minimum, you can always “up-scope” your plans to get closer to your maximum mission success.
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How Your Vision of Retirement Sets Your Financial Independence Budget
If your personal ideal of retirement is sitting in front of a TV all day long every day until your last day, it may not matter very much where you live (beyond having good TV programming) or what sort of home you live in (beyond the basics of indoor plumbing, reliable electricity and water, and acceptable protection from the elements). If that’s the case, find the least expensive location and housing solution that allows your ideal retirement, and budget around that.
On the other hand, if your ideal retirement is traveling the world, staying in “destination” locations for months at a time, your baseline “freedom” budget will be much higher, especially if you don’t want to limit yourself to cheaper Third-World countries.
If starting your own business is how you envision your personal ideal, then you need to figure out what sort of business that will be, what budget will make it possible, and how long and how much you need to have on hand and coming in from non-work sources to provide a runway for successfully launching that business.
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The Bottom Line: Plan FIRE for Changing Goals and Things Going Wrong
As you can see, Financial Independence is no less a personal goal than any other aspect of personal finance. Whatever you decide you want to pursue, make sure your planning takes into account the risk that things won’t go to plan, and the likelihood that as you age, your needs and goals will evolve, with whatever that may mean for the financial resources you’ll need to put in place before you declare your Financial Independence Day.
Frequently Asked Questions
What does FIRE stand for?
FIRE is conventionally an acronym for “Financial Independence, Retire Early.” The article notes a proposed alternative, “Financial Independence, Retire (to) Entrepreneurship,” which reflects the idea that early retirement often means pursuing meaningful work or a business rather than stopping work altogether.
What does retirement really mean in the FIRE movement?
Opher Ganel argues that retirement should be about doing what you want, what you value and what makes your life meaningful, without having to worry about money. In his view, it isn’t a gold-watch sendoff to years of doing nothing of substance.
Is it risky to retire early on a small budget by living abroad?
It can be. The article describes early retirees living on about $30,000 a year by choosing low-cost countries, and points out that what works for a healthy 30-year-old may not work as well at 70 or 80, when healthcare needs, and costs, tend to rise.
How do you define financial independence for yourself?
Ganel suggests borrowing NASA’s approach to mission success: first identify the maximum plausible positive outcome, then decide the smallest outcome that would still make your life worth it. That minimum success criterion sets your requirements, plan, schedule and budget, and you can scale up if your resources allow.
How much money do you need for financial independence?
It depends on your vision. Someone who wants a quiet life at home can choose the least expensive location and housing that supports it, while someone who wants to travel the world for months at a time, or launch a business, will need a much larger budget and enough non-work income to provide a runway.
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Disclaimer: This article is intended for informational purposes only, and should not be considered financial advice. You should consult a financial professional before making any major financial decisions.
About the author
Contributing Writer, Wealthtender
My career has taken some unexpected turns, from earning a PhD in experimental high-energy physics, to conducting cosmic-ray research in Antarctica, to supporting NASA projects and programs, to running my own consulting business. I also run several other small businesses and help my wife run her Marriage and Family Therapy practice.
Those experiences taught me to question assumptions, think critically, and recognize that real-world decisions of any significance rarely have simple answers that apply to everyone. Today, I bring that perspective to writing about personal finance. Drawing on my analytical background, business experience, and research, I explore financial decisions, challenge conventional wisdom, and help readers understand the tradeoffs that can affect their financial well-being. To complement my own research and experience, I also weave insights from financial professionals into my articles, drawing on their expertise and real-world experience helping clients navigate financial decisions and challenges.
At medium.com/@opher-ganel, you can read more of my articles and subscribe to receive email notifications when new ones come out.