Million-Dollar Advice from 15 Personal Finance Bloggers
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“If you only have a few hundred thousand, or a million, or two million dollars, I’m here to tell you … if a catastrophe happens, if something happens, what are you going to do? You are going to burn up alive.”– Suze Orman
One of my favorite bloggers, Paula Pant of Afford Anything, interviewed financial superstar Suze Orman on her podcast. When asked of her opinion of the FIRE (Financial Independence Retire Early) movement, Suze said, “I hate it. I hate it. I hate it.” In her words, “You will get burned if you play with FIRE.” As someone who encourages people to achieve financial independence and leave the traditional workforce early if they want, it’s a difficult listen. But it’s not just the content that bothered me. I don’t enjoy listening to a pretentious person who brags about flying on her private jet, owning five homes, and living on her very own island tell us that “$2,000,000 is nothing, it’s pennies in today’s world.” Suze is a “downer,” warning us that the sky is falling and we’d better be prepared for the day when we are hit by a bus. Well Suze, you can kiss my ass!
The concept of FIRE has gone mainstream in recent years, but it’s often portrayed as an exclusive club, primarily made up of young men who earned high salaries as software engineers, hedge fund managers, or information technology experts. In other words, FIRE is a luxury afforded by those lucky few who earned gobs of money. That stereotype has begun to shift, especially as side hustles are helping millions of people create independent income sources. Nevertheless, the FIRE community is not as diverse as it could be, and that gives it a bit of an image problem.
But the real point of controversy with FIRE comes from the “retire early” component. Plenty of people have reached the financial independence stage and have left the traditional workforce. But have they retired? Not likely. And this is where assumptions come into play. For example, Suze Orman says that her multi-billionaire friends “would feel sorry for the people who retire early, because they don’t have a passion.” In fact, at age 67, Suze came out of retirement because she was bored. As she says, “just sitting and doing nothing will get to you after awhile.” Who are these people who are FIRE’d who have lost all passion and are just sitting around? I don’t know anyone who fits into that category! This concept of retirement is so outdated that it doesn’t fit the majority of retirees, whether they are in their 40s or 70s.
So maybe it’s time to retire the RE part of FIRE? Retirement has a negative connotation – to abandon, withdraw, stop. Personally, I’d like to think that I am rewiring and reinventing myself as I pursue my passion of writing and creating the Early Exit Academy. It’s true – I’ve left the traditional workforce and my savings have afforded me the time to explore this new life, but there’s no way I’m retired. So for me, FIRE means Financially Independent, Reinventing and Exploring. It’s a period of discovery and an opportunity to align my money with my values. And if I’m less successful than I had hoped, then I may rejoin the work force. But there’s no way I could live without passion, regardless of my employment status.
The Suze Ormans of the world thrive on fear. The world according to Suze is one in which robots replace humans, causing high unemployment rates and the loss of our tax base and the destruction of social welfare programs, including Social Security. It is a world of runaway inflation and global recessions. A world in which we’ll all be tucked away in costly nursing homes living out our last few years (if we are lucky). Around each corner is a bus waiting to plow us under. And to be prepared, we’d better save tens of millions of dollars!
Well Suze, there’s no amount of money that can spare us from a catastrophe. Health care costs are the number one cause of bankruptcy in the United States. It’s a broken system. And having a job is no guarantee that the company’s disability or health insurance will save us from outrageous medical expenses or a debilitating condition. Yes, lightening strikes. But where do I want to be when it strikes? Do I want to be walking toward my car in the employee parking lot after another long day at the office? Or do I want to be hiking on the Inca trail to Machu Picchu? Life is short, and very often, the stress of work takes a tremendous toll on our emotional and physical well-being. It’s going to be a sucky life if you spend it waiting for the thunderbolt to strike you down.
Here’s the thing that drives me nuts about “expert advice” from Suze Orman and others: money drives the world and you need as much of it as you can get. When someone tells me that $2,000,000 is “pennies in today’s world,” and $3,000,000 isn’t much better, I feel like a pauper. I may as well give up now. Or spend all my money on fun stuff because I’ll never be able to retire anyhow. I guess I’d better work until I drop.
In the US, the median household savings for those approaching retirement (ages 55 to 64) is $120,000. That includes ALL savings, not just retirement savings. So to suggest that people need millions of dollars for a decent retirement is tone-deaf. And if you want to retire before you’re a senior citizen? Well then, you’d better save tens of millions of dollars – because after all, you want to be prepared for that lightening strike. It’s a gospel of despair. And when you preach despair, you move people to inaction. What’s the point of saving and investing if I still won’t have enough at the end of the day?
The philosophy of Suze Orman stands in direct contrast with the foundation of the FIRE movement and its modern era guru, Vicki Robin (see Your Money or Your Life). Vicki explains that many people are attracted to the FIRE concept because they want to control their own destiny. They realize that “the worker in this economy has very little sense of control over their existence. People are expendable. You’re a young person and you look ahead and you say, ‘What’s there for me?’” (see NY Times article). FIRE is about taking control of your destiny and finding that point when you have enough money to live a more honest and rewarding life.
Money seems to be the ultimate goal to Suze. After all, it allows her to have her very own private island. I can’t argue with that. But the battle to get more and more money creates casualties. Even if you love your career, at some point, a toxic work environment, high levels of stress, and long work hours have a diminishing return on the quality of life. And this is what makes the FIRE community unique. Money is a TOOL to enrich one’s life. And ultimately, the purpose of money is not to buy more stuff or to impress other people. Instead, money buys time, and that’s the most precious commodity of all.
Dr. Brenda is a financial coach, educator, researcher, and sociologist. In addition to blogging at The Five Journeys, she is the founder of the Gutsy Women Club. Her passion is guiding people on their journey to financial freedom through coaching at DrBrendaMoneyCoach and online courses at DreamBigMoneyAcademy.com.
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