FIRE can help you retire early. But at what cost?

A typical day for Sean Cooper used to begin at 5 a.m.

After getting up, Cooper would work at home until 7:30 a.m. on one of his many side hustles — which included freelance writing, money coaching and even working in a supermarket for a time — before heading into the office to spend ten hours working at his primary job as a pension consultant. 

Cooper would head home afterward and work for a couple more hours on yet another side project before going to sleep. Then, he’d get up and do it all over again. Cooper  often — much to his mother’s dismay, he jokes —  worked more than 100 hours per week. 

But his austere lifestyle had a clear goal: getting out of debt as quickly as possible. Cooper was able to pay off his Toronto home just three years after purchasing it in 2012 at the age of 27. In addition to using side hustles to multiply his income, he also moved into the basement and rented out the rest of his house, cooked his own meals, forgoed outings (except for very special occasions) and swore off expensive trips. 

“My mother struggled to raise my sister and myself, and she struggled to pay a mortgage. I felt bad for her and I didn’t want to deal with that stress myself. I definitely wanted to own a property because my parents instilled the benefits of homeownership in me at a young age, but I just wanted to get rid of the mortgage as quickly as possible,” he said. 

Cooper’s extreme frugality in pursuit of financial independence has a lot in common with the FIRE (financial independence retire early) movement. While Cooper has never counted himself a devotee of FIRE, his financial journey would be viewed as a FIRE success story. FIRE advocates achieving financial independence and retiring before the typical age of 65 — in some cases, several decades earlier. Those who pursue FIRE do so by either maximizing their savings rate, their income, or likely some combination of both. Some also concurrently invest large portions of their savings in order to live off those investments in perpetuity. 

Often it comes at great expense to social relationships or even quality of life. And as that realization sets in, some find themselves asking whether extreme saving and early retirement is even worth it at all. 

The cost of financial independence

FIRE has grown in popularity as the cost of living in Canada continues to rise, making it harder for younger generations to obtain the same standard of living as their parents. In this climate, FIRE can seem like an aspirational goal. Tales of frugal savers who’ve shed the shackles of debt and managed to retire decades before the age of 65 have flooded the internet, inspiring many to take up the torch themselves. 

Online forums in support of FIRE are cropping up around the internet. The subreddit /financialindependence offers tips on how to achieve the lowest possible cost of living, while posters swap stories about how FIRE has helped them reach their financial dreams. While the acronym itself highlights early retirement, the forum also discusses buying and paying off a home and becoming financially secure enough to try out a less lucrative career. 

As FIRE has spread, however, so has backlash against the movement. 

Financial psychologist Moira Somers noticed this phenomenon as she’s followed the growth of FIRE. She explained that in reading coverage of individuals or families who’ve successfully retired early, she finds the reaction to these stories on social media can often be hostile, and even somewhat envious. Somers notes that the subject probably elicits such strong reactions in people because money is the common denominator in every major decision we make in our lives. 

“I've been surprised by the amount of ... mean-spiritedness that this movement has drawn every time you see a story in the media about somebody who managed to pay off his house early or a couple who decided to do this,” she explained. 

“The meanness that it seems to elicit and the disdain is just astonishing and it reminds me once again, how much emotion is tied up with money and with financial decisions.” 

Tales of successful early retirees also lend themselves to a certain level of privilege.

“FIRE is realistic, only, if you have a big salary, a low mortgage and no children or other expenses life costs,” writes Lynn James, personal finance expert and founder of the blog Mrs. Mummypenny.

Many who are successful with FIRE need some kind of boost to help them get ahead. For example, Cooper was able to live at home for the duration of his undergraduate degree, which allowed him to save for the down payment on his home. 

There's also the question of whether the pleasure of early retirement is worth the sacrifices one often has to make to get there. A simple Google search of the term “FIRE movement” yields the following first-page results “Why we ditched the FIRE movement and couldn’t be happier,” (MarketWatch), “The FIRE movement and the trouble with penny pinching,” (The Financial Times), and “Millennial millionaire who retired at 30 explains the sacrifices he made to get there,” (Fox Business).

Brad Klontz, a financial planner and co-founder of the Financial Psychology Institute, has his own reservations about F.I.R.E. and the concept of early retirement in general. 

“Why would you want to retire early?” is his first question. “That sounds like a terrible idea.

“What I want people to do is start to think through some of these assumptions. Is it a good idea for you to retire early? I would suggest to you that it’s probably not. What are you going to do when you retire early? When you look under the hood and behind the curtains, a lot of people end up going back to work.”  

What I want people to do is start to think through some of these assumptions. Is it a good idea for you to retire early?

Klontz notes that many people achieve financial independence by living through what they fear most. 

“It can be extremely devastating. If you have so much anxiety around money that you can’t enjoy your life, you are living what you fear most and that is the experience of poverty, of lack, of scarcity. People will acquire large amounts of money and still experience what they fear the most, that experience of scarcity.”

However, not everyone has achieved financial independence through self deprivation. 

Utah-based Chris Mamula, a physio-therapist-turned-personal-finance blogger who retired with his wife at the age of 41, is an example of an early-retiree who took a different approach.  Unlike Cooper, Mamula and his wife avoided major expenses like mortgages early on in their marriage, and rather waited until they could comfortably afford them. This allowed them to save money while still enjoying life. For as long as Mamula can remember, he and his wife lived off her salary and banked his. 

“I definitely wouldn’t describe what we did as extreme frugality at all. I would feel like a total fraud if I said we were living an extremely frugal lifestyle,” Mamula explained. 

The couple also maintained their hobbies and frequently got together with their group of friends, who all participated in a range of outdoor sports. Mamula notes that he and his wife are “pretty hardcore skiiers,” and also enjoy other outdoor sports like climbing. 

Despite their balanced lifestyle, by the time they discovered FIRE, they already had a six-figure portfolio and their home was completely paid off. 

"It just became about “refining our plan,” he explained. 

While they already had a high savings rate at the time, what really prompted the couple to get serious about financial planning and early retirement was finding out Mamula’s wife was pregnant in 2012 ahead of a spontaneous move from Pennsylvania to Utah. After the move, Mamula notes that the family actually reduced its earnings since his wife never returned to full-time work after their daughter was born. 

Still, Mamula, who was 35 years old at the time, retired just seven years later at the age of 41. 

Retirement isn’t always all it’s cracked up to be

Where he ran into challenges, though, was during the transition from working full-time to retirement.  

“I think maybe we romanticize retirement as in, ‘Once I escape my job everything is going to be perfect.’” 

While his life is definitely more enjoyable in many ways — he gets outside more often, he has much more time with his daughter — early retirement also came with its own challenges. 

“I underestimated how hard it was going to be just leaving my job and the people I worked with, working towards a goal and being part of a team.”

In order to deal with these changes, Mamula eventually had to redefine retirement for himself and his family to mean “building a better lifestyle.” In what he dubs “mini-retirement”, Mamula’s wife continues to stay at home with their daughter part-time while he builds a new career as an author and financial blogger. 

Klontz explained that Mamula’s internal conflict is to be expected, as work often provides friendships and social interaction. “If all of a sudden that’s gone, that could be a devastating blow, too.” 

He explained that having a day job adds meaning to our lives in a number of ways. 

“The dirty little secret is that a lot of people who are very successful with the FIRE movement — it’s not like they’re not working anymore. They take some time off and then they go back to work,” he explained. 

“It turns out that work and making something valuable in the world is sort of a basic human need.” 

  “I’m trying to make up for lost time now”

Cooper, who’s become something of a model of financial independence since paying off his mortgage in 2015, never stopped working either — never even slowed down. Instead, he’s made a career out of advising people on how to eliminate financial burdens in order to remove some of the stress from their lives. 

Just weeks after he literally torched his own mortgage contract at a mortgage-burning party in Toronto, Cooper got to work writing Burn Your Mortgage, which was published two years later in 2017. In addition, the now-famous ex-mortgagee continued working full time as a pension analyst for three years after his mortgage was paid off. Since then, he’s been working the equivalent of full-time hours as a blogger and financial coach and recently began a new role as a mortgage broker in Toronto. 

While he’s happy to be financially independent, the last few years have allowed Cooper to reflect on the price of that freedom. 

“I think I definitely could have had more fun if I had paid it off in even five or six years. I’m trying to make up for lost time now I could have taken a few more trips and maybe I’d be married by now. I’m still trying to work on that, but they say hindsight is 20/20.” 

He adds that part of the problem with finding a partner has been how little other people in his age group relate to him. As it turns out, money, bills and day-to-day life are great conversation starters. 

“It seems like people are so out of step with me. So it hasn't been easy in terms of that...I kind of feel like a fish out of water sometimes.” 

Klontz emphasizes that putting off happiness in the hopes that it’s going to come later is a “huge mistake.” 

“You gotta think about ‘what am I going to do when I get there?’ When I wake up in the morning, who’s going to be there?” 

Klontz explained that the obstacles faced by Mamula and Cooper are common amongst those he’s worked with who are successful at achieving financial independence. But, he stresses, pursuing FIRE doesn’t have to be all or nothing. 

He equates money hoarding to shopaholism — only for savers. The key, he states, is neither aggressively saving or spending. Rather, we should aim to achieve some balance in our lives.

In the meantime, Cooper is finally trying to do just that. He fills his time with travelling and working, and tries to take trips every three to four months. 

“Some people ... would argue that I wasted the best years of my life, but now, you know, I'm able to travel while I'm still young and it's not like I have to wait until my sixties or seventies to do a lot of those things. In the last year I’ve seen six countries, and I speak to some of my friends and they say, ‘oh those places are on my bucket list.’”

Klontz stresses that, in moderation, pursuing FIRE can have positive results for many people. It only becomes unhealthy when devotees forgo their present happiness in the hopes that financial independence will make them happier later on.

And if you’re not happier, he warns, you can’t do it over again. 

"You’ve basically missed out on the only thing that matters, which is having an enjoyable life.”

Illustration by Taryn Gee.