Do We Need FIRE Or Do We Just Need A Break And Career Change?

Even after more than a decade, the OGs of local finance bloggers are still producing absolute bangers. I am talking about Tree Of Prosperity, Cheerful Egg and Investment Moats. Their recent articles resonated strongly with me in their own unique ways and ignited a deep reflection about my own pursuit of FIRE.

Honestly, even at the peak of the bull market in 2021, I had serious doubts I would ever retire early. Definitely not before age 40. And right now, in the depths of a bear market, it is a case of being both unable and unwilling to do it.

Are The Benefits Of FIRE Overrated?

Chris from Tree Of Prosperity shared that he is resuming legal work. This was both shocking yet unsurprising at the same time. A paradox, yes.

Shocking because by my personal estimates, his household should easily have $3m in liquid assets (stocks and cash) and another $2m in illiquid assets (home equity and CPF). Even at a conservative 4% yield for his liquid assets (quite sure his dividend yield is higher), he can generate $120k of yearly income which could provide 30-50% buffer for his relatively frugal $80k annual household expenses.

Seems like more than enough to FIRE, right?

Yet his decision is also unsurprising because in a bear market, I am sure his Early Retirement Masterclass training business is adversely affected. And in this inflationary environment, maybe 50% buffer for expenses is the minimum for his tolerance. Moreover, almost every retired person is always anxious whether a medical crisis will wipe out significant chunks of wealth. And Chris is not exactly the healthiest person I know.

So maybe it is better to take preemptive measure and go on the attack rather than look for employment when the FIRE status is in jeopardy.

Perhaps maintaining relevance and participating actively in society would be more beneficial for both his physical and mental health. A note to self, maybe there might only be so many hikes I can go on before I become bored.

Ensure Financial Security As Early As Possible

The odds of me attaining Chris’ household of wealth is lower with each passing year, especially if I want it to be inflation-adjusted.

So maybe a more attainable short-term goal for most people including me is ensuring financial security early. Kyith from Investment Moats  shared on his baseline lifestyle that he would want to protect at all costs. It probably amounts to less than $10,000 for him and being able to buy >100 years of that lifestyle helps to keep the anxiety at bay.

Ironically, I think all financial bloggers possess this anxiety to some degree to want to write about finances. And I am no different. Having my current level of savings and wealth has mitigated some of the irrational fears, but not as much as I had projected a decade ago.

With an additional family member this year, I guess it is time to recompute the numbers needed for my family’s financial security. My gut feeling is once my boy turns 7, $35k should do it. This probably calls for a separate post.

Simple Guide To Enable Sabbaticals And Career Changes

The obsession with money and FIRE tends to take root from a ill-suited job or vocation. I know, because, been there, done that. FIRE is mostly an avenue to escape from the current lifestyle. Maybe if I am more more optimistic, some are currently satisfied but pursue it to open up more lifestyle options.

More importantly, achieving financial security will provide one the confidence to make a desired but risky career change. Interestingly, all three bloggers I have featured have made big changes in their careers in recent years.

And yes, you don’t need to be financial whiz to achieve financial security to take a sabbatical or be a digital nomad. Lionel from Cheerful Egg updated his simple guide to make it financially. A big change I noticed in his philosophy is that he has embraced robo-advisors to simplify things even further.

When I first started on my financial journey, I thought what Lionel preached was probably suitable for 90% of the population. A few years ago, I revised it upwards to 95%. And today, I believe the percentage is probably 98%, which also includes yours truly.

Conclusion

You do not want to obsess over money and your personal finances throughout your entire life. Especially if you are likely to continue working for as long as you are able to. Hopefully, having enough money is just an enabler for you to make your big choices.

And choices, no matter how great they appear to be at first, always involve trade-offs.

Even after one FIREs, there is always the worry of losing that status and the opportunity cost of giving up additional money/income. The desire for more financial security and less financial anxiety might mean that you need to be prepared for a more spartan lifestyle.

And if you envy Lionel’s opportunity to work remotely in Bali (if that means he can go back to writing one article a week, great news for me as a reader), there is always another perspective (great writing from Nataly btw!)

Thanks for reading.

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