Why Joining The FIRE Movement Isn't For Me

Why Joining The FIRE Movement Isn't For Me

I don't know about you, but retirement can feel like it's a world away.

And retiring early? That's a whole other universe – something not even attainable in our dimension.

But an increasing amount of people are desperately trying to make early retirement a reality – and some of them have actually achieved it.

The reaction to this movement hasn't been entirely positive, to say the least. It even earned criticism from several high-profile personal finance writers, including Canada's very own Rob Carrick. He has been more level-headed than others, suggesting a "balanced approach" where you simply employ active saving for the future, while still enjoying yourself in the present.

So what is it about FIRE that has attracted so much criticism? And is there anything to love about it?

Let's check out:

What the heck is the FIRE movement?

FIRE stands for Financial Independence, Retire Early. The basic premise is to cut down your spending (aiming for about $30,000 a year), invest what you save (in index funds and retirement savings), and retire early in 10-15 years.

Some Canadians have made the lifestyle change. Take Toronto couple, Kristy Shen and Bryce Leung, for example, who retired at 31 and are now travelling the world on $40,000 annual investment income.

There's also Mr. Money Mustache (known as MMM), a driving force behind the FIRE movement's recent expansion into the spotlight. He's Canadian born but now living in Colorado.

Think you can make the change? Or are you still wondering if it's even possible?

Can the average Canadian realistically retire early?

Let's look at some numbers.

Retirement age in Canada

According to Stats Canada, the average age of retirement for Canadians has been increasing for over a decade now – 61.6 in 2000 and 63.8 in 2018. This is a bit lower for public sector employees, higher for private sector, and higher still for self-employed Canadians.

These numbers all conflict with the FIRE movement's devotion to retiring in your 40s and even 30s.

Retiring 20 to 30 years early...is that even possible? You're effectively doubling the amount of time you'll spend in retirement.

How much money do I need to retire in Canada?

There are lots of rules of thumb out there for figuring out how much you need to retire.

Usually they involve taking the amount of money you want to live on per year, then times it by 25. So if you want to live off of $30,000 a year, you'll need $750,000 saved up. This corresponds with a 2018 poll of Canadians who came up with the magic number of $756,000.

But with FIRE, you need enough to get you through 40-50 years of work-free living...So do you need to double this magic number?

No, not according to the FIRE gurus. This is where your investments come in.

And how much do I need to retire early in Canada?

Mr. Money Mustache uses the example of a $1mil retirement savings – $500,000 in taxable accounts (high-interest savings, for example) and $500,000 in your RRSP, CPP, and TFSAs.

You need the first $500,000 for when you're at prime early-retirement age, so around 35. Then you'll start withdrawing your earnings, leaving the principal as is.

Assuming 4% after-inflation stock market returns and a yearly withdrawal of $30,000, MMM calculates you can survive off that money for 23 years.

Meanwhile, your retirement investments in your RRSP and other accounts have accumulated much growth. Once you finish off the first $500,000, you can start relying on the second lump of money which has grown to $1,200,000 (assuming a 6%-7% return).

Related: Grudge Match: RRSP Vs. TFSA. The Battle For Your Savings

How long will it take me to save that up?

Assuming your partner is equally committed and you both make the average Canadian salary of $51,000 per year, spending $30,000 of that – it'll take you 13.8 years to save $1,000,000. This, of course, doesn't factor in the compound interest you'll be earning as you save.

$102,000 - $30,000 = $72,000 yearly savings

$1,000,000 / $72,000 = 13.8 years

Is it even possible to live off $30,000 a year?

People have done it. But it requires a dramatic change in lifestyle – dropping TV costs and cell phones plans may be one of the first steps.

The average Canadian household spending on goods and services is $62,183 – so the average Canadian would have to cut spending by more than half. With the rising cost of living, especially in Canada's biggest cities, this could prove very difficult – maybe even impossible.

Think about your own budget. Do you think you'd be able to make this cut?

Related: How To Budget Without Tracking Every Dollar

This all sounds too good to be true...

You're far from alone in thinking this.

In fact, Mr. Money Mustache replied to a few of the common criticisms...but I've got something to say about his responses too.

His claim: there are no downsides to the FIRE movement

If you think there is even the slightest flaw with the ideas behind FIRE, you're probably just not understanding it correctly.

This is by far the weakest argument he made, and for some reason he put it first in his list of rebuttals.

Of course there are downsides, there are downsides for everything. Just because you can make them seem positive doesn't mean they aren't downsides.

It'll be hard to change your lifestyle completely, live off less than you were before, and learn which sacrifices you're willing to make. Those are downsides – they may be worth it, assuming things work out, but they'll be hard nonetheless.

His claim: It doesn't matter how much money you make

[The ideas of FIRE] work even better, the further down the income scale you go.

His argument is that someone earning $200,000 a year will find it harder to change their expensive lifestyle than someone living on $20,000. The less you make, the more used to saving and being frugal you are.

But that doesn't erase the fact that the upper class make more. If they change their spending habits the same way someone in the bottom bracket does, they're much farther ahead already.

His claim: FIRE isn't really about early retirement

Everybody uses the FIRE acronym because it is catchy and "Early Retirement" sounds desirable. But for most people who get there, Financial Independence does not mean the end of your working career. … Early retirement means quitting any job that you wouldn’t do for free — but then continuing right ahead with work in something that works for you, even when you don’t need the money.

This is a realistic response that actually paints the FIRE movement in a good light – while also admitting that a lot of its fame is just successful marketing.

If FIRE was about quitting the job you hate to work for minimum wage at something you love, then it makes sense. There's more to life than chasing higher paycheques.

But it goes against the claim that your investments will be enough to support you until you can withdraw your retirement funds. And...well, basically all other claims of FIRE. Can you really become financially independent if you don't make thousands of dollars from your blog after retirement?

His claim: You can be happy on ANY level of spending

Happiness is your goal in life, and it comes from meeting certain core human needs. The thing is, that there are many ways to meet each of these needs — some of them free and some of them shockingly expensive.

I'm all for living below your means, but there are certain realities that come with not making that much money.

So yes, you can be happy even if you cut down your spending, but it's hard to be happy on any level of earning – and the two often go hand-in-hand. If you earn less, you spend less...but does this make you any happier?

Related: Money Isn't Everything, But Happiness Is: Happy Go Money Book Review

His claim: It doesn't depend on a booming stock market

Our uninformed opponents think that FIRE-style early retirees are extra vulnerable to [market crashes]. But in reality, it’s just the opposite: we are on a safe island, far above the choppy seas of the everyday economy.

His response to the concern that you'd be extra vulnerable to a stock market crash is that FIRE-devotees know how to get by on little funds...but he fails to address the fact that he suggests to put up to 2/3rds of your earnings in investments.

This would be a major blow, no matter what way you look at it.

And it does depend on a booming stock market because you need to be earning a return on your investments in order to live on your first $500,000 for 23 years. Maybe you'll learn the skills to live on less than you think you need, but in a crashed economy, FIRE wouldn't work. Period.

His claim: Education, health care, and high cost of living areas are tiny obstacles

The potentially costly monsters mentioned above are simply things that cost money. So if you get better at managing your money, do you think these problems will loom larger, or smaller, in your life?

Not everything is surmountable. If you don't make enough to afford these things, then you don't make enough. This seems like something he can't even fathom, let alone factor in his equation.

He tells you to move for better university fees or health care, but what about moving costs? Or buying a new house? Finding a new job (assuming you're moving before you retire early)?

His claim: You're just scared to try

His response seems backwards – isn't FIRE supposed to make us perfectly capable of handling anything? After all "health care" is just a "comically tiny" obstacle. But here he wants you to ignore what could go wrong...because it might not.

I'm all for optimism, but there needs to be some sort of realism in the mix. If your entire system of sustaining yourself depends on things going at least somewhat smoothly, you'll be in for some very hard times if something bad happens – no matter how low the possibility.


It may seem like I completely disagree with everything Mr. Money Mustache has to say, but that isn't the case. I agree on many things:

  • you can get by on less than you think you can,
  • it's important to re-evaluate your spending to see where you can cut down without sacrificing your happiness,
  • it's important to save for the future.

But despite the strong allure of "early retirement," it just seems too good to be true. And though it might be true in some cases, this lifestyle clearly isn't for everyone.

And the worst part is, his actual teachings are covered up by this seemingly unrealistic dream. It's not really about early retirement – it's about being happy with what you have, and learning that you don't need a whole lot.

You can work an entry-level job with no degree and get by just fine. That's inspiring!

Promising early retirement is just far-fetched and unrealistic for many people.

But this is just my opinion

And it can work for some people if you're making enough to sustain yourself.

Have you guys been paying any attention to the FIRE movement? How do you feel about it?

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Editorial Disclaimer: The content here reflects the author's opinion alone, and is not endorsed or sponsored by a bank, credit card issuer, rewards program or other entity.

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Steveark 's picture

I agree with you, but I don’t fault MMM for his opinions. After all he is running a very profitable business and it is very possible that the numbers work out just the way he runs them in most situations and maybe in most future ones. It isn’t unusual in sales to maximize the benefits and minimize the detriments of any product, and FIRE is a product if you are one of the handful of people running a six or seven figure influencing business in this community.

Among other things, I’ve been a lobbyist, and while I always tried to explain both sides of my issues to political leaders I spent a whole lot more time emphasizing the good parts than the bad ones. Because I was selling, selling something I believed in, but I was still selling.

May 06, 2019 @ 1:42 pm
HowToSaveMoney Team
HowToSaveMoney Team's picture

Hey Steve,

Thanks for your great comment. You're right – I definitely don't fault him for his opinions, nor do I blame him for selling a product. We all need to make a living, after all.

But I do believe it's important to get the other side of the opinion out there. Debate is healthy and promotes truth, after all. :)

May 07, 2019 @ 5:39 pm
Money Beagle's picture

I hear you. I am in the same boat and I agree with most everything you wrote. It often makes me wonder how people that write blogs that make a lot of money can claim to be living on so little when they are probably making a great deal of what we would consider 'side hustle' income.

It'll be interesting to see how many comments you end up with here. I have definitely noticed that many FIRE bloggers give each other comment love but any non-FIRE post is met with practically nothing. It was always great to see the sharing that went on within the personal finance community, but I think the argument could be made that FIRE has pretty much separated itself into its own group.

May 07, 2019 @ 9:32 am
HowToSaveMoney Team
HowToSaveMoney Team's picture


I really appreciate your comment and glad you're feeling the same. It will be interesting to see for sure, FIRE devotees are a passionate bunch.

May 07, 2019 @ 5:39 pm
Jerome's picture

MMM is so unbelievably ignorant of the real world it's comical. His view comes from quite the bubble. It's very white. It's very privileged. It's ignorant of the true nature of poverty. It sloughs off the real costs of education or health care. He repeatedly says, "just earn more" several times, which proves that he's ignoring reality or targeting a specific market that believes this, or both. He's incredible ignorant of the luck factor

Frankly, the three things you check in your conclusion aren't a credit to MMM, but are common basics from many sites like this one.

MMM, and seemingly, the FIRE "movement" are full of it. Go ahead, retire as early as you can make happen. Just don't pretend that you aren't extremely lucky to do so, and that everyone can just do it too.

May 08, 2019 @ 1:14 pm
Marpy's picture

Actually, he is right about a lot of things - look at all the crap people spend money on that is really meaningless to quality of life or actually degrades it. That Tim Hortons habit can easily cost 2K a year, smoking 5K a year and it will kill you, that expensive phone plan that keeps you glued to your phone while the world passes you buy - do you really need it??. Now if that is what someone really wants and is happy with it, then fine . But if they get up every day wandering why they are stuck in that rut, then its not so fine and they need to do something about it.

May 08, 2019 @ 2:48 pm
Marpy's picture

A lot of the time, lifestyle has nothing to do with ones wealth which is why you see very welthy people living relatively modest lives and very poor people (in debit up to their eye balls) living high on the hog. Its all about choices and feeling comfortable with the choices made.
The person who has the real problem is the person who is stuck in a rut knows they are stuck in a rut and every day wishes they could do something different but do not.
Be it the FIRE movement , something in between, or blowing all your money, what is really important is being where you want to be and being happy with it. I know people in all 3 categories and they are/ were happy with life and that is all that mattered.
- Aunt that died at 93 - never made much money, was not a material person and was happy every day of her life till she got sick at 92 years old. She lived in her own home, cooked all her own meals (would not eat in a restaurant if you paid her to do so) loved her kids and grand kids more than anything else and left a $750,000 estate when she died and was happy to do so. As far as she was concerned, she had every thing she wanted in life.
- friends that blow every penny they make including taking out home equity loans as the value of the house goes up to buy more toys and vacations - they know that the day they retire, everything including the house gets sold as they will not be able to afford it and they are headed for an apartment with what ever income pensions bring. They don't care, they are happy with their life style and thats all that matters.
- Then you have myself - took the middle of the road , did not do without much if anything but did save some of my income on a consistent basis for retirement. Worked out well and I retired in my mid 50's and live a comfortable retirement. I am happy with that.
Its more important that you are where you want to be than anything else and if you are not, you need to do something about it! ;-)

May 08, 2019 @ 2:39 pm
Stephen Weyman
Stephen Weyman's picture

Very insightful comments Marpy and I agree the way he drives people to focus more on their needs instead of their wants does serve to snap us out of our blind materialism and excess. It really is all about purposefully choosing what is right for you and not getting stuck in that unhappy rut.

May 08, 2019 @ 5:02 pm
Sharon's picture

Not unlike "The Secret" true believers in FIRE are very dedicated ( can I say invested?) in their beliefs.( thought it was just a version of Freedom 55 when I first heard of it) I suspect if the stars align, it can work - for a while. Home ownership is a balancing act- taxes never go down and maintenance of the property can make a big hole in a fixed income. As you pointed out, big returns come from big risks, a stock market meltdown and a FIRE practitioner can get burned- to a crisp. Learning to differentiate "want" from "need" is an important message and losing some of the excesses our Western world indulges in is also a key element but there are those who take it too far ( the guy who brings his blown bulbs to hotels he is in, c/o same to the desk then takes the new ones home leaving the bulb originally there back in the lamp) Yes there are folks out there who only seek to save every dime they can they say they are happy that way but all I see is people traumatized by a fear of insufficient funds to the point that they live such a truncated life, they r dead before they died.
When I knew I needed to retire a little early I made the changes you mentioned- cut back on the TV plan negotiated with my various providers for better deals bought all the big tkt items that were nearing replacement while I was still earning.( also maxed my savings & TFSA) I have about half the amount "required" for retirement . BUT with all my pensions- work & govt plus my Investments I'm very comfortable now and for the immediate future ( hey nobody's crystal ball goes that far)
Sad that the true messages ie less is more, happiness is not stuff is getting tangled up in this "Pie in the Sky" vision. Everyone wants a quick fix and sorry There ain't no such thing as a free lunch- there r always costs.

May 08, 2019 @ 6:39 pm

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