Should We Sacrifice Time For Money?
If I were so inclined, I could convince someone to get me a job in finance within the next six months, making a conservative salary of $70,000. If I were to take this job - and Jennie continues to work at her current company - in 6-7 years we’d have enough saved to never have to work again.
This isn’t my opinion. This is math based on our current savings/spending rate - assuming that neither of us gets a single raise over the next decade. This also assumes no financial mishaps over the next five years: long term medical bills, family, layoffs, war, nuclear fallout, or having twins/triplets. But when we assume no raises, and the fact that Jennie and I are human beings and not mannequins (and won’t just let events steamroll us), I think we can manage a good portion of these risks.
Knowing all this:
Why are you and Jennie leaving for your RTW (round the world) trip at age 30 (September 2018) when you could leave at age 37 and never have to worry about money again?
The Costs and Benefits of FIRE
(Financial Independence, Retire Early)
I admire the FIRE (Financial Independence, Retire Early) mindset. I think it’s a wonderful and empowering way to give people something to work towards that’s drastically different from how society teaches us to live. It’s especially useful to help people get out of debt and live within their means.
But beyond this is where I start to question its usefulness. After a certain point, you’re simply sacrificing time for money - with diminishing returns.
Here are the five limitations of FIRE:
5 Limitations of FIRE
1. Not all time is created equal
Jennie and I view our thirties as the prime of our lives. Not just because good health is never guaranteed to anyone, but because the risks we take today have more upside than downside. We currently have no mortgage to pay, no kids to feed, and no aging family members to take care of. Psychologically, we’ll probably never be more amenable to change than we are in our 30s - less set in our ways, more open to new ideas.
And what’s the worst case scenario if we get tired of travelling and life as a digital nomad? We’d simply pick up where we left off and go back to a 9-5 job. Is that so hard in our thirties?
If someone came to us today and offered five extra years in our early thirties in exchange for 10 years of my 50s, 60s or 70s, we would take that trade in a heartbeat. That’s how we value time. You may not have the same values, but the point is that time isn’t created equal, and we shouldn’t be sacrificing it for a “number” and forget to actually live.
Side note: I wouldn’t do the same trade for five years of my early twenties. I was an idiot back then.
2. Everything compounds over time
Not just money. Bad habits, unproductive hours, stress, meaningless relationships also compounds over time. We all know the opportunity cost of not investing: historically it’s 8-10% a year. But what’s the opportunity cost of lost time, time you could’ve used to figure out what gives you meaning and purpose?
How do we put a value on that?
It’s easier to fixate on money because it’s the most convenient thing to measure, but I think it’s a poor substitute for what we really want to do and the person we want to be.
At the end of the day, no matter how much you accumulate, money is just options on the future. By setting a goal to achieve FIRE 7-10 years down the line, all you’re doing is delaying a decision you needed to make anyway. Seven years later, you’re “done,” holding a bunch of options you could’ve used 7 years ago to do what was important to you. Now you still gotta figure out what that is. In other words, you’re back to square one - only with a few extra bytes of memory in your bank account.
3. Beyond the bare essentials, money has no utility
Daggett: I've paid you a small fortune.
Bane: And this gives you power over me?
- The Dark Knight Rises
I attended a private high school in Taipei, where pretty much everyone (else) came from wealthy families. I’ll never forget something that a friend of mine told me. It’s a statement that I’ve thought about for a long time, because I think it’s both funny and insightful.
He said to me, “there’s nothing to buy.”
It’s true. Our basic needs have stayed the same since the age of the caveman: food, clothing, and shelter. With more money, we simply invent more complicated ways to satisfy those needs. But fundamentally, they’re the same. In my opinion, the luxury mark-up for anything is just a 20% markup for quality and an 80% antidote to boredom and existential dread.
What’s more, people allow themselves to become compromised by money. Money makes them keep their heads down, accepting the dirt that needs to be shoveled, to prop up a system they don’t believe in. So nothing changes. I understand that impulse very well: there’s a more expensive mortgage to pay for, higher end restaurants to dine at - a lifestyle to maintain.
Outside of covering my basic needs and the basic needs of my old and decrepit future self, I just don’t see a point. When you don’t need the one thing that somebody can offer, you take away their power over you. You allow yourself to become completely unpredictable.
4. We have no interest in [early] retirement
None at all. Jennie and I are repulsed by the whole concept. What would we do in retirement? Read all the books we’ve been meaning to read? Travel to all the places we’ve been meaning to travel to? We could just as easily do those things now. In fact, we do.
And if we’re actually working on something that we enjoy, something that’s tied to our passion, and embedded into our very lifestyle, to retire from our work would be the same as retiring from life. The things we work on now should be the things we can build upon for the rest of our lives.
5. We’re skeptical of external measures of success
Remember that scene in The Dark Knight where Heath Ledger’s Joker sets fire to the mafia’s mountain of cash? The looks of confusion on their faces is priceless. They literally don’t know what to do next. It’s not that I want to be the Joker per se, I just don’t want to have to measure myself by other people’s metrics.
Whether you make $1,000,000 a year or have $1,000,000 sitting in your savings or brokerage account - that’s what society tells you you’re worth. You could choose to feel good or feel bad about it, but the end result is the same: your inability to decouple your internal sense of satisfaction and meaning with some external measure of value.
By making your own rules, you gain the leverage to say or do anything that you feel is right. From there, a vista of new options open up that you never thought was possible.
Our Goal: To Lead a
Well-Ordered and Time-Rich Life
This entire post was just my roundabout way of saying that an obsession with anything, FIRE or otherwise, isn’t healthy. Delaying gratification to the point where you miss out on the prime of your youth simply doesn’t make sense. Or as Warren Buffett puts it, “it’s like saving up sex for your old age.”
Are the basic needs of Jennie, me and the members of my family taken care of for the foreseeable future? Yes? Then money becomes instantly irrelevant until that answer trends toward a no. If achieving FIRE happens naturally within the flow of our life and the direction Jennie and I want it to go, then that’s all well and good. But if not? We really couldn’t care less.
The narrative that people often adopt is: “If I can just get to X, then I can give myself permission to do Y.” FIRE is no different. But here’s the truth:
You never needed permission to do anything.