What I Wish I Knew Before – Financial Bloggers Share What They Have Learned About FIRE And Personal Finance

The end of a year is already an introspective time, and now that Scott and I are officially empty-nesters, we are taking advantage of our slower, freed up schedule to dig even deeper. We are organizing our mementos, decluttering our stored items, updating our estate plan — various tasks which prompt us to get even more introspective about then and now.

Some of the tasks, like updating our estate plan, are obviously financial in nature. But even going through our stuff has a financial element – would we buy these things now? What could we have done with the money spent here and there? Could we have reached FIRE sooner with fewer purchases, better buying habits or some other different decisions?

Hindsight is always 20/20. Even if I regret a purchase or a missed opportunity, I made the best decision I could have made at the time. Still…what do I know now that I wish I knew before?

We reached out to our favorite financial bloggers to ask them that same question. Click the link to jump to their response. Responses came in from:

• Physician On Fire
• Cat @ Sisters For FI
• Michelle @ Frugality and Freedom
• Frogdancer Jones @ Burning Desire For Fire
• Abigail @ I Pick Up Pennies
• Andrew @ Living Rich Cheaply
• Laurie @ The Three-Year Experiment
• Max Out Of Pocket
• The Expat Investor

The insights are so varied but all valuable – proving that there is not a one-size-fits-all when it comes to financial decisions, financial planning or your FIRE journey.

Variety in FIRE – what it means and how to reach it (from Physician On FIRE, Sisters For FI and Frugality and Freedom)

Physician on FIRE

When I first learned about FI, I took the first definition I came across as gospel. You need 25x expenses, and I was ecstatic to realize we had that. 

I’ve since come to realize that the definition will vary from person to person and family to family. Some will be more comfortable with a higher multiple and lower initial withdrawal rate. Others will reach FI based on a cash flow perspective rather than a lump sum invested or some combination of both.

I’ve also since learned about the many different “flavors of FIRE.” There’s leanFIRE, baristaFIRE, seasonalFIRE… I’ve settled on fatFIRE as the variety that suits us best.

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Cat @ Sisters For FI

The biggest thing I’ve learned since discovering the FIRE movement was the very definition of retirement. FIRE isn’t really about retirement, instead it’s about designing a life that fits your goals, dreams and values. It’s a life that may be a bit unconventional and requires out of the box thinking.

I’ve learned that the RE in FIRE doesn’t have to mean retirement, instead it can mean re-setting, re-charging, re-educating or re-discovering. I’ve learned why financial independence was important to me and the many ways to achieve it. Once you know why you want to reach FI, everything else starts to align.

If I hadn’t discovered the FIRE movement, I would probably be continuing to follow the traditional path, work a 9-to-5, save towards retirement using the traditional methods, buy one house as an investment and go on 2 vacations a year, but since then I’ve understood the power of income generation outside of a 9-to-5. This has meant learning as much about real-estate, understanding alternative investments, starting up side businesses, educating myself on tax efficiency strategies and understanding debt and leverage.

More importantly though, I’ve also learned that you can BOTH maximize the benefits of a 9-to-5 while pursuing alternative financial independence strategies. It doesn’t have to be one or the other. I think that’s the beauty of FIRE – it’s not one straight line to achieving financial independence, but multiple avenues that influence each other.

I’m glad to know that FIRE isn’t just about retirement, but the ability to design a life that you want. For me this includes a lot of time flexibility which I can either negotiate from an employer or can create for myself, it means more travel which I can achieve through travel or house hacking, and it means continuous income generation from stock or real estate investments.

I think this is why I latched on more to the idea of FI rather than FIRE because the goal of financial independence changes the way you view your needs and wants.

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Michelle @ Frugality and Freedom

When I discovered FIRE in 2012, my impression was that it involved sacrificing time while young to rush towards early retirement goals – albeit in 10 years or less. The FIRE path seemed to mandate combining extreme frugal tendencies with overwork in full-time jobs and added side hustles, aiming for the highest savings rate possible.

Inspired by examples of those who’d escaped the rat race in a relatively short timeframe, I was initially satisfied to frontload my efforts. I worked 6+ days per week and tightened purse strings significantly to bring this freedom closer. However, I quickly found myself risking burn out on this restrictive schedule; no longer enjoying days off, which had become minimal-spend time for recovery or workday prep only. I became less tolerant of this deprivation and drudgery in the FIRE accumulation phase and started to look for alternatives.

I wish I’d known earlier about the nuance within the pursuit of financial independence, including that early retirement is only one possible option after FI.

As I’ve learned about different angles and grown in self-awareness, my strategy has changed over time. I am now much happier taking a “Slow FI” approach. I’m making intentional decisions that incorporate elements of my desired post-FI lifestyle into the present. This way, I’m enjoying the journey more, even if I will delay my ultimate FI date through a less aggressive savings rate.

Having also developed an understanding of “Coast FI”, I decided to semi-retire in 2017. I now work enough to cover my current annual living expenses, leaving my investments to grow to my desired FI number over time. My six months of seasonal work provide social interaction, skill development and a sense of purpose that I appreciate; while allowing me to exercise my wanderlust through slow budget travel the rest of the year.

Compound Interest (from Burning Desire For FIRE and I Pick Up Pennies)

Frogdancer Jones @ Burning Desire For Fire

I wrote a blog post a couple of years ago about the second-biggest financial mistake I made.*

Basically, I had absolutely no idea about compound interest and how you should leave retirement accounts ALONE to let them do their thing. We wanted a block of land, so I cashed in my superannuation, worth about 30K at the time. Fast forward a couple of years when we sold that block of land at a 30K loss!!! That hurt at the time, but what was worse was when I decided to write the post and calculated what that 30K would have grown to. 

Yep. Roughly 200K. That’s enough that, if I had it added to my net worth right now, I’d walk away from my job. Ouch.

(*Fun fact: ‘My Second-Biggest Financial Mistake – and What I Did To Teach My Kids About It” won the first Rockstar Rumble)

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Abigail @ I Pick Up Pennies

Mainly, I just wish that I’d started sooner. I got a late start (age 40) to saving in earnest because there were just so many other priorities. I wish I’d truly understood just how integral compound interest is — and how much I would change my mind about wanting to retire. (I initially didn’t.)

I’m still a noob when it comes to most investing topics. If/once I’m able to reliably max out my retirement funds, I’ll start investing in index funds, but that’s about the extent of it. Maybe I’ll save for a rental property, but the time to jump on that bandwagon was probably 2-3 years ago.

So I guess mainly I just wish I could go back in time and shake Past Me into prioritizing myself and my future over the latest doodad my ex-husband wanted.

Real Estate – including NOT buying (from Living Rich Cheaply and Three Year Experiment)

Andrew @ Living Rich Cheaply

As for what I wish I had known, it would be that investing in real estate out-of-state was possible. When I first stumbled on FIRE blogs, they were all about increasing your savings rate and plowing money into index funds. I’m a big proponent of cutting expenses and investing in index funds but those things alone were not cutting it. I live in a high cost area (NYC) and there’s just so much you can cut.  Most FIRE bloggers that I followed had high incomes and lived in lower cost areas. I felt a little disenchanted as being frugal and investing in index funds didn’t feel like it was getting me to FIRE fast enough. 

I was always intrigued about real estate investing because the use of leverage could boost my returns. I didn’t think it was possible to invest in real estate being that I lived in NYC and the prices were too expensive.  After reading how others who lived in high cost areas invested out-of-state, I jumped in. Yes, using leverage can be risky. And yes, investing in real estate can also be risky especially out-of-state, but my investments have done pretty well.  I think if you do your due diligence, you can limit some of those risks. With real estate, I now feel like FIRE may be attainable. 

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Laurie @ The Three-Year Experiment

I remember an acquaintance, trying to get me to join her network marketing company, asking about our financial situation. “We’re saving 25% of our income into retirement,” I arrogantly replied. That may have been so, but we subsequently added $12,000 in credit card debt, a 30-year, 5%-down house loan, and a car loan to our finances, weakening and derailing our financial goals. When we discovered the FIRE movement, a few years later, we kicked ourselves at our stupidity for wasting so much money on junk.

I wish we had understood the power of renting back then. If we had kept renting instead of buying a house we really couldn’t afford, because of our lack of down payment savings, we wouldn’t have lost thousands of dollars when we sold, including the entire down payment we put into the house. Both times we’ve sold a house, we’ve lost around $50,000, including real estate commissions, fees, and market value. 

I also know that the journey is part of the process. Sure, I’ve wished many times that I had grown up more frugal, so that I wouldn’t have wasted so much money along the way (I still wish that about myself), but I also know that the learning process is part of the value of our journey to FIRE. Without that constant tension between my immediate wants and my longterm desires, I wouldn’t have developed the self-discipline and humility that I have today around money and spending. 

There are a lot of people in the FIRE movement who can be judgmental about others’ spending. I think they underestimate the power of growing up frugal. For those of us who didn’t grow up that way, it is not automatic behavior. Changing your spending patterns is one of the hardest things I’ve ever done, and it’s incredibly hard for most people to modify their defaults. But it can be done, of course; it just takes time and persistence. 

Health Savings Accounts called out among many other lessons (from Max Out Of Pocket and The Expat Investor)

Max Out Of Pocket

One thing I now know about FI that I wish I had known a few years back is that it really should be looked at from a position of abundance, not scarcity. When I initially stumbled across the concept, I became way too interested in further optimizing my spending/expenses. This put me in a scarcity mindset when what I really needed to do was focus on the income/job-change part of the equation. I started putting too much money away and would stress over smaller purchases. At the same time, all of this somehow made my high-stress healthcare finance job even more unbearable. 

As a result, like you, I probably locked a little too much into tax-deferred accounts when I was in lower tax brackets. My thought was it was the best way to accelerate my path to FI. I was so focused in on the RE side of FI/RE because that is all I read about. I figured I would just do a ROTH conversion ladder later while sitting on the beach someday. In reality, I just needed a job change. 

Flash-forward a few years, I am now enjoying a new job in healthcare finance after relocating to New England. I am also now making a much higher salary to where those tax-deferred account contributions would probably be a little more tax efficient. Since I plan to keep working now, the ROTH conversion ladder strategy really doesn’t apply. On the positive side of things, I don’t really need to put much away for retirement at this point and I can cash-flow my W2 income if I wanted to. 

Since I work in healthcare finance, there is one last thing I wanted to mention that should not be overlooked. Health Savings Accounts (HSA). I was lucky enough to have access to these early on and have been growing my account since 2009. I have over $50,000 set aside already. If you can get in on one of these accounts you can defer/shelter income from FICA and Federal taxes and build in some protection from unexpected healthcare expenses. Getting in early when you are young and at a lower risk for health issues is key. Healthcare is a big piece of the FIRE equation and this account can really help mitigate some of that risk.

The Expat Investor

When I started working my first job in 2007, I didn’t know anything about FIRE. Since growing up poor, I knew at least one thing that I didn’t want to have the same life that I grew up with. So I decided that I will either invest my money in stock or real estate. I started with just my 401k with a low-cost index fee. I knew from reading and researching that I didn’t want to pay the high fees. After I felt comfortable enough I decided to take a bit of risk and start investing in individual stocks.

My breakthrough in accelerating my FI was when I was offered a job overseas to work with a 6 figure salary. I knew to reach FI and reach my goals. I would have to think outside the box because being normal and following the herd of people working 9 to 5 wasn’t going to cut it for me. The job worked out for me because I was single and where I was at housing and food was all taken care of. I was able to bank all of my salaries and working oversea did have its benefit of tax-free up to a certain amount.

During this time I found out about Boglehead, FIRE, developing an asset allocation plan, and dividend stocks. I started to build my portfolio to include dividend stocks, index funds, P2P, and real estate. I plan to have enough monthly income to cover my expenses. I’m working toward $40,000/year + of passive income. I have spent countless hours researching personal finance/investing and trying to change my perspective to achieve my goals.

Looking back now there was so much that I didn’t know. Things I wish I would have known was:

• Developing an Asset Allocation Plan: Stock%/Bond%
• How to properly structure my portfolio to maximize tax efficiency: ex. Taxable, Roth, IRA, 401k, REIT
• Creating a budget & keeping a good record of my income and expense
• Looking at my portfolio as a whole instead of separate accounts.
• Time in the market is better than timing the market because you can never buy time.
• Learning about HSA triple tax benefits (Health Savings Account)

Working toward FIRE will help me achieve my goals of traveling, spending time with families, and volunteering my time to help other people in need. The decision of being FIRE will be my way of life.

How will you rethink your financial moves?

I know I am guilty of the scarcity v. abundance trap that Max Out Of Pocket alluded to. I also didn’t take advantage enough of my 9-to-5 to build up our real estate, like Cat @ Sisters For FI pointed out is possible. I’ll need to look up SeasonalFIRE and BaristaFIRE, now that Physician On Fire has turned me onto even more variations than I knew!

Most of all, what I wish I knew before was not to take anything too seriously. I took traditional financial advice too seriously – almost like gospel, so I didn’t explore entrepreneurship for myself till my mid-30’s and FIRE till 40! I took saving too seriously – worrying about the future so much that I didn’t enjoy the present. Even now, I try not to take the FIRE canon too seriously and continue to experiment and question and discover for myself.

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How about you? How will you redirect or refine your FIRE journey or other personal finance moves?