Playing with FIRE: the movie

This is the story of Scott and his wife Taylor as they dive head-first into the world of financial independence, in an attempt to spend less of their life working and more of it doing what they love.

It's a world far removed from mainstream america, where half of people couldn't get $400 if they needed it today.

It's a world of full-on frugality. Saving up enough to never need to work again.

How much are we talking?

What's ordinarily considered high savings (10-20%) still has you working for 30-50 years. Significant savings, like 50%, can reduce your working life to just 17 years.

Even just going from two cars to one car, still a BMW, frees up 5 years of Scott and Taylor's lives.

The marshmallow experiment

"The BMW felt like something I deserved" says Taylor, admitting that this even sounds silly to say out loud. When she did give it up for a Honda, she felt deflated, with a lack of status.

Of course this was their plan - to spend less and make some sacrifices for the long-term pay-off of a life of freedom. But at times this seemed difficult because the pain was immediate and the reward far off in the future.

A friend who watched the movie with me compared it to the famous marshmallow experiment, where kids we given the option of one marshmallow now, or two in 15 minutes.

Later in the movie Taylor speaks about having to turn down her (above-budget) dream house. "It's so hard to have what you want right there but not be able to do it." I'm sure the kids in the experiment can relate.

Peer Pressure

So why do we spend all this money on stuff? One of the experts begins to explain, "I feel like there's this hoard mentality that you need to get away from..."

(Does she mean herd mentality - being influenced by peers to adopt behaviours on an emotional, rather than rational, basis. Let's hear her out...)

"I feel like there's this hoard mentality that you need to get away from and it's really difficult when there's so much peer pressure to buy all these fancy things, to go out for dinner and buy the houses and buy the cars that everyone else is choosing. Going against the grain is very difficult."

Perhaps "hoard mentality" is her new term. A combination of herd mentality (following the crowd) and the purchasing and hoarding of possessions that we don't really need. Interesting.

Spending what we don't have

Vicki Robin, explains "Here's the number of hours you have in your life. You don't have that may discretionary hours." Discretionary hours are the ones left once necessities are subtracted. Spending money means we need to spend time working to earn that money.

"We treat money like it's infinite. When you think of the hours in your life it's finite. That translation is a real butt-kicker."

"But what would I do?"

Scott asks a hometown friend, "What would you do If I told you that tomorrow you had enough to never work again?"

"I'd probably go to work. I enjoy working. I enjoy my vacations, but I like to have something to do. There's days when I'd rather not, but what would I do otherwise?

This responses fascinates me. I'm not sure if he literally can't imagine what he would do with more free time (which would be sad); or if he assumes that once he stops paid work he literally does nothing.

The RE in the FIRE acronym stands for Retire Early. The word retire scares people off. In the dictionary it's the cessation of work. But in the FIRE context it's more about the freedom to do what you want.

A friend of mine tweaks the acronym a bit and is aiming to be Financially Independent, Recreationally Employed. She'll do stuff that she wants to do, rather that what someone pays her to do.

"But I like my job"

Maybe so. Right now. Taylor heard that she's currently looking at working for another 35 years 4 months. She said "I really love my job. I love what I do. And when I think about working that long I still feel a little depressed."

While she likes it now, she might not like it in 20 years time. Or the job might not be there.

Find your Why

The movie featured a fair bit of free advice, and a lot was about having your own purpose and motivation:

"Find what you love and spend lavishly on that, but cut back HARD on everything else." Work out your priorities with your spouse/family. This might include the 10 things exercise that Scott and Taylor do.

Figuring out the why is important, "otherwise clutter will return and debt will re-accumulate".

"You have to want something more than you want the stuff ... otherwise it's going to be a difficult journey"

"People focus too much on what they're giving up and on what they're getting"

Scott was a bit underwhelmed upon reaching some financial goals during the experiment. "It's a number on a screen. It brings security but not happiness." My take is that the financial goals are actually more milestones than goals. His actual goal is to be able to do the work of his choosing and to spend more time with his daughter. The financial numbers are more indicators that he is making progress towards the goal.

Be OK with being different

Taylor says the experience is "100% worth it" and "transformational". She met people who have "completely altered" how she looks at retiring, finance, family and life.

"I don't have to abide by the rules of society. I didn't question that before. I'm like a totally different person."

What's she talking about? Many people think 65 is retirement age, but it's just a number set by bureaucrats for social security purposes.

Many people think a flash car is a sign of success, but it's "more fun to BE rich than to LOOK rich".

Many people think saving money is a sacrifice, done out of necessity. But saving can be an opportunity and a privilege.

Many people think talking about money should be taboo. But it can be good to share tips, ask advice and encourage each other to a better future.

Good peer pressure

The movie included Camp Mustache - a gathering of people who are on this journey. Later this year there'll be a Camp Mustache Australia. In the meantime there are local meetups in many places.

Yesterday I saw a message from a guy in a local group here. He and his wife have reached a major milestone in their journey. Sharing it in a group, he received much congratulations and encouragement.

Being able to do good

"If you can get yourself free from the need for money you have no choice but to do work that is better for you and better for the world."

"Once you have enough, you're not in this survival mode. So naturally you start thinking about giving back ... to use your skills to give back to the world."

Where to watch it

You can see the movie on iTunes, Amazon, Google Play or Vimeo. Or you can buy the DVD on Amazon.

How much super will we have?

Will we be OK in old age? How much will we have? One of the great things about living in Australia is superannuation. Our employers are required to pay into an investment account for our retirement. In recent times, my wife and I have been in several conversations with friends who are wondering (or worried) if their balance will be enough. That's what inspired this article. Great question It's a great question to ask, especially around the age of 35 to 40. At that point, old age is less of a distant abstract concept. It's becoming a medium-term reality. At 35 the number of years of living off super is possibly more than half of your remaining years. At 40 you may consider yourself about half way through your working life. Looking at your balance, it's easy to think that twice that balance may not be enough. Read on, because I have good news for you. It's better than you might think As I've mentioned in earlier posts, compound growth means the investment grows f

But wait... there's less!

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