Retirement, in the traditional sense, has been a series of decisions that span almost a lifetime, a person’s entire adulthood, starting with that first paycheck.

It comes as the most jolting of revelations that a third of Americans enter their so-called golden years with less than a thousand dollars in their nest egg, along with a wobbly promise from social security to deliver a monthly stipend.

For baby boomers, the very definition of retirement has changed to reflect the times in which they live, taking into account the convergence of several realities: too many of them haven’t saved enough, they’re living longer, find themselves facing the spectre of outliving their money and working past normal retirement age, whether they want to or not.

In less than two generations, the word retirement, once a narrowly defined, institutional concept, has become a word of almost limitless meaning.

No doubt, hearing the worried dinner table conversations and seeing endless coverage of the R-word in the general and financial media, millennials are witnessing first-hand the financial freight trains headed toward their boomer parents, good people who followed the old rules, working long and hard, hoping to someday earn a little R&R.

Instead, they face a world of declining income, second-mortgages, mounting healthcare costs, longer life spans and the all consuming worry about outliving their money.

Millennials are not satisfied with this recipe for the golden years, and their distrust and restlessness has given birth to a new paradigm: FIRE.

Financial Independence Retire Early

The Financial Independence of which they speak is simply having enough passive income from investments in the market, real estate or a side gig to leave a regular 9-to-5 job and never go back to working for someone else. Millennials desire a life of fulfilled passions, a life lived on their terms, without giving an employer control over their earnings, their lifestyle or their emotional state. Simply put, they want to tell their employers, “take this job and shove it! I have a life to live!”

But Financial Independence is more than just retiring early; it’s about living one’s own plan, not one that has been designed by society’s norms. This is a wonderful thought, but it’s not new. The millennials didn’t create it and they don’t own it it.


In less than two generations, the word retirement, once a narrowly defined, institutional concept, has become a word of almost limitless meaning


Ever since Mr. Flintstone toiled in the quarry, people faced a full lifetime of work. There was no “retirement.” You started working when a parent put a tool in your hand to do some back-breaking agrarian chore, and you likely died forty, or fifty or sixty years later, with that same tool in your hand. You worked almost from cradle to grave.

The concept of retirement is less than a hundred years old. By the 1920’s, life expectancy began to inch up, and sixty five years of age became the magic standard set by the new Social Security Administration on August 14, 1935. When FDR’s gang established the “normal retirement age” as 65, the life expectancy for men was 62. Sneaky bureaucratic bastards! But we outsmarted them and started living longer. Yeah, we’ll show them! We wanted to live longer so we could start enjoying this new thing called retirement!

And that’s when the game changed.

A whole new process was born. First, private pensions paved the way for the public pension called Social Security. By the nineteen eighties, SSI was hinting at a shaky future, pensions began to fail due to fraud and mismanagement. In response, “self-sufficiency” became the new buzzword, as self-managed 401(k)s, IRAs, and ROTH accounts eventually replaced the trust that we once had in private and public pensions.

Boomers adapted to the thought of saving for a brighter future, a golden future, in fact, but with mortgage payments, tuition payments, car payments, utility payments, and putting edible food on the table, they found it to be a challenge of great magnitude.

And added to these necessities of life was the ever mounting tax assault that bored at them from every angle, along with its evil twin, rising healthcare costs. Out of necessity, another new concept was born: working in retirement.

What? Working in retirement. Isn’t that an oxymoron? Is that like “this page left intentionally left blank”? WTF?

Enter the ever-observant millennials. Their new FIRE paradigm challenges the inertia and status quo of old school retirement planning. The recipe looks like this: Save like a mad dog (up to 75% of your income), keep expenses at austere levels for a number of years, work your regular job and a side gig or three, get as close to debt free as you can, create multiple streams of passive income, flip your employer the bird, and self-actualize your ass off, dude.

If you’re human, you cannot help but fall in love with this aggressive, radical approach to living life on one’s own terms. It’s the new cocktail, equal parts Andrew Carnegie, Richard Branson and Jack Kerouac.

But here’s the catch you must’ve seen coming.

Let’s pick an age at which to light this fire. Let’s say 40.

By age 40, you’ve been in the workforce about twenty years and, barring serious illness, you can expect to live to age 80. That’s forty years of retirement. So FIRE math says you work twenty years to support the remaining forty. This is a complete reversal of old school retirement planning, where you work for forty years, and maybe get to retire for twenty.

The millennials’ must be saluted for their optimism. It gives us hope for the future.

But will it work?

For some it will. For most, no.

We don’t want to pee in anyone’s punch bowl, but this FIRE thing boils down to a long term exercise in self deprivation, an uber-sized form of delayed gratification that will take the grit of a Spartan to pull off.

Pay Yourself First (PYF) has been a reliable concept for a long time. That is, pay yourself 10% of your paycheck before you pay anybody else. You must adjust your living expenses to get this done, no matter what. Everybody can save 10% of their paycheck. Everybody spends at least 10% every month on pure crap. PYF is about cutting the crap!

Save or invest that 10%, and over time, you will build an incredible amount of wealth. Compared to FIRE, PYF may seem like a piker’s plan, so you gotta ask yourself, “why aren’t there more rich people around if PYF was this simple?”

Because it isn’t that simple. Taking just 10% to pay yourself first requires commitment, diligence and a passion to trade some enjoyment today for a secure tomorrow. So. imagine the grit it must take to save 75% of your paycheck, or 50% or 20%, and live like a pauper for a decade! We love the FIRE idea, but will this be practical for most? Not really.


But if you are trapped in a job you absolutely hate, that stuff is all on you, Kerouac, when you leave it all behind to live in the gig economy, so tread carefully down that road!


Here are a few key takeaways from FIRE that everyone can pull off to ensure that retirement will be a secure and fulfilling one:

  1. Save 10% or more. PYF. Bank accounts. IRA accounts. ROTH accounts. And the mother of all PYF accounts: 401(k) with employer matching.
  2. Reduce expenses. You gotta eat. You don’t need to shop at Whole Foods when there is an Aldi store in the neighborhood. McDonald sells $1 coffee. Better yet, bring your home brew in a reusable Thermos. You don’t need $4 designer coffee. Cut the crap. Capeesh?
  3. Reduce debt to the bones. It makes sense to carry a mortgage on a home. Credit cards are for the needy: I need those jeans, I need that top, I need, I need, I need!
  4. Start a side gig. We are in the gig economy. Find one. Working more than forty hours in your day job is the standard. Prepare to work another ten to twenty hours a week on your passion, your interest or start a business that you alone control. Besides PYF, side work makes all the difference in your attaining your wealth creation goals more quickly.
  5. Create passive income. Real estate is the go to, but that takes money. If you are young and just starting out, or even already retired, think about that magic thing called the internet for generating passive income. Start a blog, start as service business, dropship products through DBA Amazon, sell used stuff on eBay. The opportunities are limitless, so look for opportunity under every rock!
  6. Invest your 401(k), ROTH or IRA “passively” in growth markets. Don’t try to be a stock picker. Buy a little stock market every month, that is, a stock ETF that tracks one of the many major indices. Dollar cost average, do not time the market! You are not that smart or that lucky, which makes you just like the rest of us.

Take a thoughtful, honest look at what retirement means to you. Some people think of white beaches and little umbrella drinks, while others see a life of working at something they love, which by definition, is no longer work. Or perhaps a balance between the two.

You may love your day job, fun challenging work that may pay you a bundle of money and has very few aggravations, so why would you ever leave, given the pay, the perks, the benefits and the matched 401(k)?

But if you are trapped in a job you absolutely hate, that stuff is all on you, Kerouac, when you leave it all behind to live in the gig economy, so tread carefully down that road!

Keeping Money is an Active pursuit!

What’s in your Bucket?


Never. Lose. Money