Creating and Sustaining Financial and Lifestyle Freedom: An Investigation into the FIRE Movement

By Claire Harbour, Winnie Jiang and Antoine Tirard

These are times of unprecedented economic, political and social instability. We’ve all seen the headlines: credit card and student loan debts are piling up faster than ever in history. Nearly 40% of Americans would have difficulty paying for a $400 unexpected expense. While some are struggling with escalating energy bills, and others grappling with job loss or uncertain horizons, there is another, increasingly large group of people across the world who are choosing a focus on freedom and independence, away from the diktats of corporate life and conventions.

Our attention was drawn to the “Financial Independence, Retire Early” (FIRE) movement: people devoted to a program of extreme savings and investment that aims to allow them to retire far earlier than traditional budgets and retirement plans would permit. The 1992 best-selling book Your Money or Your Life by Vicki Robin and Joe Dominguez popularized many of the concepts used by people who are part of this community. Statistics about the growth of the movement are hard to find. What is clear, however, is that many younger professionals are less tolerant of the idea of working until they are in their sixties, and the ability to choose how they spend their time rather than being forced to spend it at work is growing in prominence and popularity. Social media and the ease with which information, tips and inspiration can be shared are facilitating the spread among ever-increasing numbers and diversity of people.

We wanted to understand what leads people to pursue financial independence, and what it takes to reach this sort of position: how strategic one must be to get there, and even to dig into the numbers, nuts and bolts of what it takes. We were also intrigued about what becomes of people when they attain financial independence. Do they live a clichéd Groundhog Day of sunbathing by a tropical pool and teeing off in the cooler hours at the golf course? Or is there continued purpose and meaning in “work” activities?

Our aim was to talk to different FIRE people and understand their backgrounds, their transition story and what financial independence and freedom look like for them. What we discovered is that there is no single recipe to make it – and definitely not a unique magic formula – but a lot of insights and advice that might inspire you if FIRE is your aim.

How Permjot achieved financial freedom and liberating success

Permjot’s trajectory towards financial independence was entirely accidental. His early years growing up in London “during the deeply capitalistic Thatcher era” opened him up to the possibility of achieving anything, with sufficient work and energy put in. But this did not translate into a particular aspiration towards independence at the time.

While working at EY, ultimately as Sales and Marketing Director, Permjot was involved with the “Entrepreneur of the Year” programs in London. The appeal of the constant flow of “over-polished” genesis stories, alongside glossy pitch presentations was dispelled by one more honest than average entrepreneur, who admitted that his success was far more “due to a series of accidents and coincidences”.This resonated deeply with Permjot as he reflected on his success up till then. He realized that he was “only doing well in this game at all because economic circumstances such as free university education and a rising property market had facilitated his rise”.

Serendipity, alongside a desire to connect deeply all around him, led Permjot to be invited to join an asset management fund being created by some more prominent figures than him, and they were fairly successful. A second fund did even better, thanks, “tragically” to the opportunities that arose from Brexit. Permjot gradually became aware that he had a significant income that was almost totally passive. This offered him the chance to spend his time differently.

An invitation to speak at a conference in Canada, in Nova Scotia, got him thinking. His experience and expertise in both investment and leadership turned out to be valued, and several parties asked him to stay on to do more. He enjoyed the smaller environment, compared to the metropolis of London, and could sense the need for help in developing talent and leadership in this growing place. Permjot’s ability to say “yes” to the requests was founded on the revenues he had from the fund, which gave him freedom of choice. As his decision to stay longer was firming up, he realized that he could also generate revenue from renting out his London house. It was by this time that he could see that, whatever he chose to do or not to do in his burgeoning life in Nova Scotia, he had the “psychological safety net” of financial independence on which to count.

The work that Permjot chooses to get involved with is frequently, though not always, pro bono. He is engaged in leadership advisory work for both local companies and those further afield, as well as board positions and mentoring. His network has been enhanced by his natural curiosity for understanding and developing other human beings. This combination of good work with what comes naturally has led to a feeling that he has “only done a day or two of what feels like ‘real work’ in the last five or six years. What I do fills me with joy and just does not feel like work”.

The story sounds almost too good to be true, until one digs a little further. Permjot admits to having been “far too ego-driven” previously. He has done significant work on himself, through reading and introspection, to rid himself of that, and make his work “about all the others involved, not about myself”. Not only has this led to great success for his clients, but also it has given him a sense of extreme liberation. He feels no attachment to what others think, and is now the one to push others into the limelight, rather than taking it for himself.

Now in his fifties, Permjot thinks often about how to evolve his life and work. However, as a lover of football analogies, he explains, “you can be a really great striker between the age of 19 and 27, while after that peak, it really is not so easy; whereas you can be a defender right up to the age of 40 or so… in the end, what we all need to do is to pivot slowly, and do stuff that is age-appropriate. Ten years ago, I was helping startups and youth, while now I focus more on strategy and leadership development.” He loves to revise and renew his work regularly, both in the belief that it is important to fit with changing conditions and also because he loves to keep on exploring.

The identity shifts that Permjot has gone through are clearly delineated, and will indeed continue their movement. He once again reminds us that this is thanks to the privilege of having that fundamental financial freedom and safety, knowing that there is always a “plan B, C, D or E”. While he still feels that he is not ready to just read, that is an option for the future, should he choose, but one senses that there is a great deal to be done yet, before that stage. The accidental “retiree” has much to offer, teach and share yet.

Escaping the corporate grind: Rachel’s journey to financial freedom, simplicity and joy

Rachel grew up in Belgium, and has felt her way towards financial freedom over the past five years or so, intuitively, but without a great deal of strategy at the outset. She grew up in a small town, where her father had a middle management job, and her mother was the entrepreneur, owning and running a hair salon. Having spent most of her childhood in and out of the salon, as well as with her grandparents, who had a construction business, the desire to create and grow a business was with her from the start.

Having received mixed messages from her parents about the value of a university education, Rachel dropped out of university after a year, feeling the call of “doing work and making money”. She wasn’t  fascinated by hair like her mom, but rather  the body and skin, from a more medical point of view, so she studied as a beautician and began working with a surgeon, offering therapeutic treatments after surgery. At the same time, she set up a pub with her boyfriend of the time, and she found herself running two substantial businesses at the age of 20.

The issue that Rachel had with her professional life at this stage was that she found herself being dismissed as “the beautician who does massages and nails”, whereas her work was far more complex than that. So, she decided to add another dimension, and attracted by the expat lifestyle, she took off  to work in Spain, where she worked firstly as a beautician in a spa, and soon found herself promoted to managing it operationally, as well as training all the staff. But her husband did not adapt to life far from home, and an amicable divorce ensued. Fortunately, however, they decided to keep the pub active, while Rachel remained away. This created her first source of passive income. She was loving her life abroad, but still working for a boss and not yet consciously planning to push the boundaries further.

The itch to go to university for her own benefit was sufficient that she finally scratched it by bagging herself a place at top universities in the US and the UK, graduating top of her class in both bachelor’s and master’s degrees. The diplomas bought her a ticket into corporate life, and Rachel joined  Tata Steel in the UK, which provided opportunities to work  and move to other European countries. She climbed her way  in progressively more senior roles, rising fast, but all the time knowing that she did not really appreciate “working for a boss”. Her ascension implied much travel and stints of expatriation, plus even more stress, and she added the dimension of constant search for more.

She could see that “she would not make it to ten years” in this corporate environment. She burnt out at nine, and chose to step away from this career to which she was so ill-suited, despite her clear talents. “Burning out was the best thing that happened to me, because I was just following the crowd up the ladder, and doing ‘what I was supposed to do’, and not what I really wanted to do.”

She realized she wanted to grow old and look back on her life with pride and fulfilment, not regrets. The life she had been living would not provide that, and, as she explains, “it felt like someone else’s life”. What is more, the terrible stomach aches that had kept her constantly consulting doctors to find out what was wrong, instantly became a thing of the past. Her choice at this stage was to opt for more freedom, more travel, her hitherto guilty pleasure, and so Rachel sought out ways to make money online, starting by tutoring languages, then doing translation, and on to the coaching and consulting she now does. But it was “the first five bucks” that were transformational in her thinking. “If I can make five bucks online, I can make five hundred or five thousand”. And she has not looked back.

Rachel’s life is now simple, freeing and fulfilling. She has found a way to reduce her expenses to a minimum, but continuing work that she loves, to a level that suits her. She has choices. The route to this solution was gradual: “I went from five days’ work a week to four, then three, with more and more time spent remotely. I tried various different formulae”, but in the end, her decision to focus on coaching ‘people like her’ to find their own version of freedom from the corporate grind has been conclusive. She enjoys speaking and through her weekly videos on YouTube she inspires her viewers to make money from anywhere. Rachel also has online courses, books and freelance projects that bring money in. She lives in other people’s homes for free, having hit on house and pet sitting as a way of life, and thus has very few living expenses. She spoke to us from Portugal, where she enjoys the beach and a swim daily, and was soon off to Australia, to keep on benefitting from sun and blue skies. Rachel plans to buy a small house or apartment in Portugal some time soon, a “sensible and modest place”, that keeps her in the sun.

The most striking conclusion for Rachel is the liberation from believing that she needed a lot of money to compensate for her corporate paycheck.  She makes more money now than back in corporate while spending much less. She wears shorts, and does not buy new, fashionable clothes at all. She does not need or use a car, nor pay utility bills. Her footprint is truly light, economically and environmentally, and above all, she is happy. Sticking to a base in Europe means that healthcare is not an issue, and she has a pragmatic view on how to move around safely: “when I get to a new place, I find a doctor and a dentist, so that I know where to turn if necessary”. Meanwhile, she reveals that she lives for less than €1,000 per month, and lives in a way she finds more than luxurious. Of course, she has money coming in from various sources as well as the return on investment when she sold the bar with her ex as well as her own house  a few years ago.

Keeping things simple is a heady recipe for Rachel. She maintains her friendships and her work relationships on line, and creates new and interesting connections wherever she might be. In the end, she is very basic in her demands, and this gives her the freedom and independence she so craved when “stuck in corporate”. She recently visited her parents in Belgium, and had an aha moment: “I was walking the dog with my mom in the middle of the day, realizing that the opportunity to use my time freely would never have been possible in my previous life”. It all came down to listening to her gut, both physically and metaphorically, and Rachel is not going back.

From the high seas to financial security: the strategic journey of Abel to FIRE status

Abel grew up between the Netherlands and his seafaring captain father’s overseas postings, so always had a taste for the exotic and the different. His path towards a full-on FIRE lifestyle is without any doubt the most planned and strategic of our article. Having got over his desire to be a ship captain like his father, he took the route of studying business in his home country, and then going to the UK to become a chartered accountant. He already could see the reasons behind this action: it was the best qualification globally for a profession that would offer him mobility.

Early success led Abel to be promoted fast, and then to be offered a finance role at one his clients, a shipping company. Married for years already, Abel and his wife started to enjoy the benefits of their early sacrifices. Life in London was expensive, and on the salary of a trainee accountant, they were happy to go and buy white label cans of baked beans at Tesco’s on Saturday markdown days, and to shuttle round London in their small, student car. One thing they were naturally good at was being “Dutch” about their finances (Abel joked that Holland is where the Scots go for their training!). So, very soon, they found they could live on only one salary, while putting the other one aside, and then, as their revenues grew, the results of the savings generated the equivalent of a “third” salary. They were already on the path towards financial independence, even though they had not yet heard of FIRE.

The untimely demise of Abel’s father in law at only 58 raised all kinds of questions and debate. A keen sailor, he had “picked out” the boat he would buy when he retired from his career as a doctor, but in fact he never got to sail in it at all. The young couple vowed they would not submit to the same sort of destiny, and became far more intentional. They began reading self-help books, such as The 4 Day Work Week and The Success Principles. These tomes got them thinking about priorities regarding time and money, and set them on the path of creating and shooting for smart goals.

They were extremely careful to avoid “lifestyle creep”, watching their friends buy cars, bigger houses and more. With their ever-growing list of goals, the couple stuck to their plan, and paid attention to the end goal. One of these was to do an MBA at a top school, and finally in his mid-thirties, Abel did the Executive MBA at INSEAD. He entered the program as a CFO, with his eyes firmly fixed on the goal of becoming a CEO. Thanks to the challenges to his thinking during the study, he left realizing that he had no desire whatever to become a CEO. And that freedom remained his top motivator.

His company, which had financed half his MBA, had other plans, however, and offered him a CEO role of a division upon return. Abel wisely negotiated for that role to be “interim” rather than definitive, and began using the time he had been carving out for his MBA to take on “side hustles”, including consulting, non-executive roles in boards, teaching and more. He was “delegating like hell”, in order not only to be a good leader, but also to keep a control of the time he was making to begin a new way of living. Over the years, Abel created such value out of his side hustles, that they were getting so much in the way of his day job that he could step away completely, becoming a location-independent portfolio careerist. While he was still “working”, now he was doing so uniquely for opportunities that interested and motivated him, and not just for money. It was at this point that he could declare absolute FIRE status.

When we spoke, Abel found himself at another crossroads. His wife is now “fully retired” and enjoys the complete range of the experience of living full time on boats – South East Asia in winter, Northern Europe in summer. And yet, Abel still finds it hard to “say no to offers of money for work” – not through financial need, but more due to the inherent interest he still finds in doing work for and with others. His conclusion was that he is now committing to being fully able to spend all the time he wants sailing, “within three years”. One challenge, going to a two-day board meeting in Luxembourg, you might need to spend two weeks out of the natural cycle of sailing, in order to be in the right place from which to fly and so on. He was somewhat embarrassed at the “luxury” nature of this problem, but nevertheless realistic that it was an obstacle he intended to remove. Once that is achieved, neither he nor his wife will engage in any further “work”, and be free to spend all day every day on a boat or engaged in other pleasurable activities.

The skills that Abel and his wife have brought from their previous careers to contribute to this new situation are mostly those involved in running a business. Every year they hold a two-day strategy off-site in a nice resort somewhere, and treat their life just like a business. They look at strategy and plans versus results, not only financially but also in terms of healthy, longevity-driven lifestyle. They have quarterly closings, and adjustments to their plans as a function of these. They tend to agonize over purchases that seem luxurious, even though they have a budget of €90K a year to spend. One crucial factor is knowing your numbers. Abel is constantly dismayed at how often those who come to him for advice don’t have “their number”. The classically quoted 4% rule* is not revolutionary, but many people contemplating financial independence have not yet grasped it.

What are Abel’s recommendations to someone contemplating FIRE? Start young! Make a positive gap between what you save and what you earn, from the very outset. Plan, and use financial goals, tricking yourself, if necessary, to take the steps required to save or sacrifice. Be more frugal than your friends. It really won’t kill you when you are 25 to drive an old, shabby car, unlike your friends who are feeding their egos with a BMW. And, if you are starting a little older, be careful: don’t take bigger risks with investments than necessary. The number one rule of investments? Don’t lose money! And the most important rule overall? Find increasing ways to enjoy the time, the freedom, while keeping tabs on the numbers for discipline and security.

Getting to financial freedom: diverse journeys, open-ended possibilities and different strategies

So, what do these three financially independent individuals teach us, in their similarities and differences? Perhaps the overriding theme is that freedom and independence do not seem to automatically imply a stop to professional activity. All three of our subjects expressed a very keen desire to remain busy, but with the caveat that this be in areas of their own choice, and under their control in terms of both quantity and quality.

Another aspect is that of scale. We can see clearly that it is not necessary to have millions in order to attain financial freedom; rather it is a series of choices around lifestyle that lead to freedom as each person defines it.

The route to this increasingly coveted status is almost infinitely variable, and it may not even be obvious at its outset that this is what it is.

Finally, it is extremely important to see that there is no final endpoint, no nirvana, which requires no further reflection or action. The lives of those who have reached a financial independence do not mean that they have reached the ultimate place where no adjustments need be made. Indeed, the ever-shifting nature of identity, fortune, place in society and so on is a real factor to be taken into account, at all times. Indeed, in their ongoing research on the post-financial freedom journey of successful entrepreneurs, Winnie Jiang and Bala Vissa have discovered some early insights that these individuals encounter emotional ambivalence in their daily lives. While experiencing a sense of joy and freedom, they also grapple with feelings of emptiness and anxiety due to the seemingly limitless possibilities that lie ahead. They continue to struggle when being asked « What do you do now? » and are constantly seeking labels to define their identities and purposes to guide their lives.

Building on the wisdom acquired along the way by all three of our subjects, we share some questions to be asking yourself along the way towards your freedom, whatever the age at which you hope to reach that, as well as some tips to keep in mind as you go.

10 Questions to help decide if this is a path for you

1 – What do I want my own life to look like?

2 – What is the meaning of work for me?

3 – Where and how do I want to be spending my time?

4 – How will money help me achieve my goals?

5 – When do I want to be financially independent?

6 – How much money do I need for my own version of independence?

7 – What am I willing to sacrifice?

8 – How am I building my skills and expanding my learning?

9 – How can I maximize my investments?

10 – How will I stay motivated and accountable on my journey towards financial independence?

8 Tips and tricks to help you get there

1 – Start early, wherever possible. Saving even 10% of your salary from your twenties onwards is a massive advantage. Compound interest is your ally.

2 – Break your plans down into milestones that are more easily understood and motivating: e.g. aim first to get out of debt (student, credit card, etc.), and then move on to simple savings, before more complex investments.

3 – Determine clearly your “big rocks” and non-negotiable elements: health, relationship, family, adventure, etc…

4 – Wealth is built by having a high savings rate, not primarily investment returns so the question is, how can you achieve a high savings rate?

5 – Do an honest audit of your current lifestyle — you might be surprised by how much or indeed how little you actually spend.

6 – Set goals and review regularly, just like any other enterprise.

7 – Ensure that the criteria for goals and review contain not only numbers and financials but also more intangible measures like happiness.

8 – Remember that there is simple no “one size fits all” for financial independence

*What is the 4% rule?

The 4% rule is a popular retirement withdrawal strategy that suggests retirees can safely withdraw the amount equal to 4 percent of their invested net wealth each year and not run out of money before they die.