How To Retire Early

This post originally appeared on All The Wiser

Wondering how to retire early? Meet FireCracker and Wanderer. No, they’re not the latest indie pop sensation, although they have caused a bit of a stir. The Canadian couple made headlines when word got out that they were retired… in their early thirties.

FIRE actually stands for “financially independent, retire early,” and is used to describe a state in which people build up enough of a nest egg that they can live off of portfolio income. Ms. FireCracker and her husband, the Wanderer, have been working toward early retirement planning so that they could quit their jobs as engineers and live the good life. What exactly does that entail? Traveling, pursuing their passions, and best of all, not having to worry about money.

“Early retirement planning” is hardly mainstream, but it’s not unknown. We’ve interviewed the early retiree-jet-setting super couple behind GoCurryCracker!, and The New Yorker even profiled the godfather of retirement, Mr. Money Mustache. However, FC and W stand out because they’re incredibly young, not to mention outspoken. While many have heralded their accomplishments, they’ve also received their fair share of cynicism for becoming millionaires.

One especially controversial stance FC has taken is that the reason she and her husband are rich is because they haven’t fallen into the “trap” of buying a house, a decision about which they’ve written on their blog, The Millennial Revolution. They called the phenomenon of needing to buy a house “house horniness.”

I spoke with FC about what it means to be retired early, what early retirement planning could mean for you, and the true meaning of no regrets.

This interview has been condensed and edited for clarity.

Maintaining Money Perspective

WB: You emphasize how growing up with little means made you hyper aware of your finances and good with money, but for many people it’s just the opposite. What about your experience made you swing the way you do?

FC: I think it’s all a matter of perspective. Since I grew up in China, I saw other people who were even more poor than we were. So my parents always made sure I knew how fortunate I was and to be grateful. It was only when we came to North America that I felt poor. And only because the bullies at school told me so. But luckily, I maintained that perspective that the rest of the world lives on so much less, so it never really got to me.

FC in Engelberg, Switzerland; courtesy of The Millennial Revolution

WB: I’m not sure if you read Neal Gabler’s article in The Atlantic — The Secret Shame Of Middle Class Americans. In the article, it talks about how there are many people who appear to be living prosperously, but are actually scraping by. For those who grew up in the prototypical American (or Canadian) life (parents with a house, a nice car, etc.), why do you think there is the disconnect when it comes to saving and investing? Is it because we’re too ashamed to think about money? A keeping up with the Joneses mentality?

FC: Again I think this is about perspective. Someone making 50k/year will still be happy and feel rich, if they are living in a neighborhood where everyone else is making 20k/year. But put that person in a neighborhood where everyone is making 100k/year, and they will no longer be happy. As humans, we want to feel accepted and we can’t help but compare ourselves to our peers.

But here’s the thing. If you derive happiness from the approval of others, you will never truly be happy. You can’t control how other people think, and trying to keep up with the Joneses to make that happen will only cause you more stress. Once you let that go, and focus on how to live a life that makes you happy, rather than a life to impress others, you’ll be able to get a better handle on your finances and use that to buy your time back.

Pursuing Early Retirement

WB: When you decided to retire early, what did your parents say? What do they say today? As you know (and emphasize) a lot of Millennials view financial management very different than our parents, so I imagine that even though you put your dollars where your mouth is, they had something to say. What advice would you give to other Millennials in dealing with boomer cynicism?

FC: As a Chinese person, it’s almost sacrilegious to NOT buy a house. My parents are distrustful of the stock market and only believe in real assets (like a house). So to be a contrarian is insanely difficult. But that being said, I’m living my life exactly how I want to and I’m very happy. I have zero regrets. I think my parents will eventually come around to my way to thinking once they see a) how happy I am and b) how I’ve mitigated all my risks with many backup plans.

My advice to other Millennials is to live a life YOU want to live, not someone else’s. Remember that the #1 regret of the dying is “I wish I’d had the courage to live a life true to myself, not the life others expected of me.”

Making Money On The Side After Early Retirement

WB: I know a lot of people who choose to pursue early retirement planning then end up traveling or nurturing a side hustle/passion they’d already began or were thinking about beginning (for instance, you now teach coding). But what if a person doesn’t have a clear cut passion past their 9–5? Should you only pursue FIRE if you have something else you really want to do with your life? Or is there something to be said for achieving FIRE, then kicking up your feet and seeing what happens next?

FC: As an engineer, I’m a very risk adverse person. So I like to have backup plans for the backup plans. That’s why I built up side projects even before we quit. But that’s not to say other people HAVE to do the same thing. Sometimes you won’t really know what your passion is until you try it. And becoming financially independents gives you the option to try out hobbies or volunteer experiences, things that you normally wouldn’t have considered. So you could very well, become FI, and then try different things until one hits. If money isn’t an issue anymore, why not?

Buying A House As A Millennial

WB: You’re very adamant that buying a house isn’t a good option for Millennials. Can you think of an example where it might be?

FC: Okay, let me clarify. Buying a house isn’t a good option for Millennials if it is unaffordable and if rent wins when you do the math (this is currently true for Toronto and Vancouver). But if you do the math, and it makes more sense to buy, then go for it! Just make sure you account for all the additional costs NOT included in the mortgage calculator (insurance, property tax, maintenance/condo fees, land transfer tax, closing costs when you sell). The issue is that a lot of people don’t realize how many extra costs come with home ownership. They just plug it into the mortgage calculator, compare it with rent and say “I’m good to go!” That’s not how it works.

The happy couple in Santorini. Courtesy of The Millennial Revolution

WB: Reading your proposal story put a huge smile on my face. You and your husband are obviously financially aligned, which is huge. What advice would you give to young couples who may not be as aligned as you are? Maybe one person is a saver while the other is a spender, or maybe one person is debt free while the other person has student debt and consumer debt.

FC: Hooboy. That could very difficult. One of the main reasons we were successful in our financial journey is because we rowed in the same direction. If one person wants to save, the other wants to spend, or if one wants to buy a house, the other wants to rent, you could have a hard time getting your finances in order. In that case, the dominant person wins, and it won’t matter what I say.

Everyone Can Work Toward Early Retirement Planning

WB: Have you ever stopped and panicked and felt crazy for doing this?

FC: Oh definitely. When I first quit my job I was totally freaking out and thinking all sorts of negative thoughts. But as we traveled and I spent more time in retirement (it’s been over a year now), I realized it’s not scary at all. Our investments actually went up after retirement, and we are always checking our backup plans, making sure we’re in good shape. I think fear of the unknown will only remain a fear, if you stay stuck where you are. Once you have your plans in place (and all backup plans to mitigate risk), you’ll see that reality is much less scarier than your brain made it out to be.

WB: You’re an engineer with valuable — and employable skills. Do you believe your route can work for anyone regardless of profession?

FC: Yup. You don’t need to be an engineer to do this. In fact, if you’ve ever read Andrew Hallam’s book “Millionaire Teacher” you’ll see that teachers can do it too.

WB: A lot of people pointed out that you’re young with no kids. Do you think your perspective will change when you have kids, and you’ll want to settle in one place? Incidentally, where do you settle when you’re not traveling?

FC: We’ve met multiple couples who are FI with kids. So it’s completely doable. In fact, if we do end up wanting to settle down, all we need to do is find a low-cost city in Canada, and move there. Becoming financially independent gives you endless options because you are not tied to 1 city for work.

FC in Santorini; courtesy of The Millennial Revoluiton

Travel After Early Retirement

WB: Fun question: what’s the coolest place you’ve visited? Where are you looking to go next?

FC: There are SO many it’s hard to pick! I’d say Switzerland. Hiking in the Swiss Alps is an unforgettable experience and completely changed me. I think that was the first time my fear completely went away and I was like “yup, this is the life I want to life and I have zero regrets”.

Header photo credit: Arnel Hasanovic

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