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Breaking Free from the Retire Early Myth
Why I’m Embracing a New Path
In May 2022, I accidentally discovered we’d hit our FIRE target. FIRE stands for Financial Independence Retire Early, and it has a massive following. I say, ‘accidentally discovered,’ because although I track our net worth, I had not realized with our additional savings and portfolio growth, our FI number had snuck up faster than I expected.
A basic formula is to calculate 25X your expected annual spending.
- $40,000 means you need $1M.
Another method is the safe withdrawal rate (SWR). 25X equates to a 4% SWR. This means that if you have $1M, you can (probably) withdraw $40,000 every year and never run out of money.
If you have a longer time horizon, you can tinker with the numbers. A more conservative multiplier might be 33X.
In May 2022, our FI number was $1,250,000 which meant we would need to live on $50,000.
Do you know what I did when I found out we hit our FI number?
I kept working. I didn’t even tell my husband.
Though I was pleasantly surprised, I had a lot of doubts.
- We were living in Dubai at the time and had a fairly posh lifestyle. Though we’d been saving 40% of my salary, I’m not the lean FIRE or frugal type. At 48, having never cut a coupon in my life, suddenly having to live within a budget was giving me hives. As a result, I had serious doubts about being able to live on $50K per year.
- Inflation and currency exchange creep: When I say $50K, I am expressing that in Canadian currency, which given the strength of the greenback, is USD 37K at the time of this writing. Since we intended to move to Mexico after we left Dubai, the currency conversion was killing us out of the gate since everything is pegged to USD.
Inflation was another question mark. I’d heard rumblings of inflation in Mexico running at 8–10%. Factoring in exchange, I wasn’t sure how far our $50K budget would go.
It turns out that $37K will get you a shoebox rental and bathtub tequila.
Though you’ll see all kinds of popular blogs claiming you can live on USD 2,500 per month in Playa del Carmen, you’d be lucky to get by on USD 4K. I know this from having kept detailed track of our budget.
- Recession: Salaries in the UAE are tax free. Even though the company I worked for was nuts, the lifestyle and salary were a fair trade off. With the looming threat of recession, I figured it would be prudent to ride things out in Dubai. As it turned out, my role was made redundant in October, so my hand was forced.
There were six months between finding out we’d hit our FIRE number to my role being made redundant. When the shit hit the fan in October (my job loss), we decided to accelerate our move to Mexico to reduce costs.
I was so tired.
My job had been sucking the life force out of me for almost five years, but the paycheck and lifestyle kept me trapped.
For the first time in my life, I knew we had a cushion, and I could not fathom jumping into another corporate gig. Every part of my being resisted, and immediately, I decided I would take a gap year.
That is freedom and power in and of itself. For the first time in my life, I had no anxiety about bills or starving to death.
The break was intended to give me time to regroup and find or create work that aligned to my purpose.
What was my purpose?
In my daily meditation practice, I had started using intentions, and my intention was to shift my career into corporate mindfulness.
I wrote my intention on a piece of paper. Three times per day, I read the intention out loud or in my mind during my daily meditation practice.
Here’s what it said:
I am a mindfulness consultant and coach. As I help and heal others, I help and heal myself.
Three weeks after I lost my job, I got an offer from the only company on the planet I was interested in working at. Guess what that company offers to the world?
Corporate leadership and mindfulness solutions.
What are the odds?
To be clear, it’s not like the offer came out of thin air. I had in fact been in touch with them earlier in the year. I had met with someone from their recruiting team, but my last communication with them had been the dreaded:
We’ll keep you on our short list of candidates.
In other words –
Thanks, but no thanks.
We’re just not that into you.
Or so I thought.
It’s been a couple of months since I started, and I feel the most connected to this work than ever before during my two decades in corporate.
When life tosses you a chance at Purpose, you take it.
However, I was struggling with feelings of FIRE failure and guilt. In the slender slice of time between my job loss and my new job offer, my husband and I had launched our FI blog proclaiming our early work optional status and gap year.
That’s why in January, when I started working again, I felt like a total fraud.
Was I copping out? Was I being greedy by building more wealth? Would I end up dying with a boatload of money but not having lived? Why had I announced a gap year and started working straight away?
When I’m struggling with something, I do what I always do: I turn to books.
I stumbled on The Psychology of Money, by Morgan Housel. Everything around me slowed down when I got to this part.
I re-read this page several times, and I started to get comfortable with a new idea.
What if instead of letting others define FI for me, I could create my own FI definition?
Here’s the thing:
Even the heroes and legends of FIRE are not retired. They have only left the jobs they hated. Having hit their FI number, they now work on projects they love. The difference is that they are not beholden to anyone for a pay cheque.
Suddenly, I found myself rejecting the idea of early retirement and focusing on cultivating more purpose and alignment.
My new role was a huge support for that.
Instead of feeling guilty, I started to see that I am already living the life I had envisioned.
- Fully remote, flexible, and location-independent work
- Legitimate sense of purpose
- Lower cost and beach lifestyle in Mexico
- Continued learning (slowly picking away at Spanish)
- Generating passive income (though I’m exploring ways to increase this)
- Year-round sunshine
- Having enough time to write and pursue other passions
- Ability to live as a slo-mad (slow nomad) and continue traveling
- The ability to take or leave any employment that doesn’t support my life’s aspirations
In short, using the FIRE movement as a tool has given me the choice and flexibility to define life on my own terms. Since I’ve hit our FI target, I am no longer attached to the Retire Early part.
No matter if you are a fan or not, shifting your mindset to one of Financial Independence can open the world in new ways.
There is agency, choice, purpose, awareness, freedom, and flexibility.
What more can a person ask for?
I rest my case.
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