Throughout my journey to achieve a balance between life and medicine, I’ve been drawn to the principles of the Financial Independence Retire Early (FIRE) movement and the many options that financial independence unlocks.
Right now, 57% of my fellow physicians are living at—or above—their means, according to Medscape’s Physician Debt and Net Worth Report 2020. I wonder how many of the 43% who self-report living below their means have achieved financial independence.
As a physician, retiring early may not be your priority. After all, you’ve dedicated a substantial amount of time and money to train for this profession, and no doubt, it’s a calling. To me, it’s the option that matters, which is why I’m calling it FIORE: Financial Independence with the Option to Retire Early. Options are liberating. They free us to live and practice medicine with purpose and passion.
During this three-post series, I will introduce the concept of FIRE (FIORE), explain how physicians can benefit, and direct you to resources to learn more or get started quickly. Are you already a FIer? If so, please join this conversation!
What is FIRE?
FIRE is the acronym for Financial Independence Retire Early, which is a growing global movement. Its origin can be traced to the 1992 publication of, Your Money or Your Life: 9 Steps to Transforming Your Relationship with Money and Achieving Financial Independence, by Vicki Robin and Joe Dominguez, which was fully revised and updated by Vicki Robin in 2018.
The theme explored in the book is this: If someone thrust a gun in your ribs and said, “Your money or your life?” what would you do? Most of us would turn over our wallets because we value our lives more than we value our money.
Or do we?
Time is arguably a person’s most precious and scarce resource, and Robin and Dominguez argue that we waste far too much of it earning money so we can buy a big house, a new car, and other stuff that society deems important. In other words, “We’re trading our life to buy things that don’t matter.”
The authors lay out a revolutionary sequence of steps to transform the reader’s relationship with money, “taking you back to basics — the basics of making your spending (and hopefully your saving) of money into a clear mirror of your life values and purpose. It is about the most basic of freedoms — the freedom to think for yourself.”
While Robin and Dominguez are credited with lighting the spirit of FIRE, it was the internet that facilitated its spread.
FIRE blogs began popping up as early as 2007, beginning with an extreme version of frugal living described by Jacob Lund Fisker (Early Retirement Extreme), that repelled some people who stumbled upon his original posts, but I must admit, fascinated me. But by 2012, when Pete Adeney (aka Mr. Money Mustache “MMM”) began blogging about FIRE, calling out the “ridiculously expensive lifestyles” people consider “normal” but are stealing their freedom and leaving them in debt, the ideas began captivating a much broader audience.
Why I Prefer FIORE
The stereotypical FIRE practitioner, or FIer, is an “ambitious, often middle-income earner using a simple formula of high savings rates (50-70% of their incomes) + frugal living (minimalism) + low-cost stock index fund investing (Warren Buffett’s standard investment advice) in order to reach financial independence within a short time period — usually around 10 years.” This comes from the observations of Scott Rieckens, another FIRE blogger, whose passions for the movement inspired him to create Playing With Fire—a documentary and a book by the same name.
Iterations of FIRE kept coming, with Fat FIRE, Lean FIRE, Barista FIRE and more. My own iteration of the movement is what I call FIORE—with an italicized O to emphasize the many Options that Financial Independence creates, and this especially rings true for us as physicians. The concept is liberating, and the meaning of fiore in Italian is flower, which seems appropriate. The pros as I see them include decreased financial stress (and let’s face it, in this profession we can all use less stress!), as well as increased control over your overall situation including work, with the ability to reassess why you chose to become a doctor and whether to stay in the profession. Some will choose to retire early and pursue other passions, and I would venture to guess that the ones who choose to stay may feel reinvigorated by their choice, and in a healthier place knowing they are not financially trapped. It would potentially give the option to negotiate from a place of strength rather than a place of fear.
Intrigued? Why not give it some thought? As a start, write down the top ten activities that truly make you happy, whether by fulfilling a desire for purpose, instilling a sense of calm, restoring vibrancy, or simply making you laugh.
There are no wrong answers. Whatever brings you the greatest joy on a day to day basis.
Next, think about your spending and savings. Do your expenses align with the list you just made? If not, perhaps some of the expenses deserve a second look. Can the ones that don’t align with what’s most important to you be eliminated? And if so, can you invest your new “savings”?
It’s worth thinking about.
The AAMC recently reported that the four-year cost to attend medical school for the class of 2020 surpassed $275,000 at over half of all medical schools and exceeded $350,000 at 19 schools. Approximately 71% of 2020 med school graduates finished in debt to the tune of around $200,000. And that’s before residency and fellowship training begin, a time when resources are scarce and many defer payment on the looming debt while interest accumulates.
The upside is that medicine can be a lucrative profession.
High salaries are alluring, especially when negotiating that first physician contract after so many lean years of training. Just beware of the siren calls of a new house or car or other luxuries that accompany it. Those can pull you quickly and deeply into a vortex of debt. And that is where so many physicians get stuck.
Physician on FIRE writes: “Physicians, on average, are notoriously bad with money. We are singled out in The Millionaire Next Door as being the worst accumulators of wealth among high earning professionals. Meanwhile, the demands of our jobs are increasing, bureaucratic requirements are stifling our ability to practice autonomously, and burnout is on the rise.”
In the next two posts, I will share additional resources from the FIRE community and provide a few tips that have been most helpful to me so far. I am not an expert by any stretch, but am interested to see where this could take us, and share ideas that may reach younger physicians early enough so they can make better choices than I did. Even if only one person embarks on a journey to early financial independence and FIORE by reading this, it will be worth having shared the concept. If you are that person, please let me know!