F.I.R.E: New Definition


Change The I, Please!

Before you get mad: I do like the term F.I.R.E… but something is wrong. Before I move on let’s first look at the ‘old’ definition of F.I.R.E in the personal finance community.

F.I.R.E is short for Financially Independent, Retired Early.

Doesn’t sound bad right?

Ok, now let’s look at a simple (exaggerated) example to show why this is a flawed definition:

Tomorrow you win the lottery or you get a big inheritance. You heard the F.I.R.E term before, feel great and you buy a huge mansion on a beach in Hawaii, 10 beautiful Lamborghini’s… the list goes on.

After you bought everything you’ve ever dreamed off, you turn your money over to a crappy financial advisor who earns his money solely based on commissions from the investing products he sells.

You turn the rest of your money over to a broker charging huge commissions because you, now on F.I.R.E, know very well that the financial industry always looks after you.

Awesome, you can go on a cruise now!

While cruising around the world, you as a rich man have a conversation with another rich man. He is also on F.I.R.E, but he’s on F.I.R.E in the ‘new’ definition. The other guy starts talking how he invests in the stock market, funds start-ups, buys real estate and likes venture capital deals.

Luckily, these big boats have a really expensive internet connection and you start crowd funding and start-up funding away because you are rich and know everything about money.

Fast forward a couple of years… You just got back home from your multi-year cruise. There is a foreclosed sign on your door, your wife left you for another rich guy and you start wondering where you got of track.

Introducing the ‘new’ F.I.R.E definition


F.I.R.E is short for Financially Intelligent, Retired Early – PersonalFinance-Online.com

Just think about it.