Financial Independence Isn’t What You Think

In the week leading up to my fortieth birthday, my wife sat me down.

“Anything you want.”

I raced through the moral calculus, assuming this chance would never return.

“Like, anything, anything?”

She took a long breath. “Anything.”

It took three seconds.

“Okay. I want a two-day family budget summit.”

Disappointment, and a sinking awareness that she chose this man amongst other very good options, swept over her face.

“For your fortieth birthday, you want to talk about the budget?”

“Yes.”

Best. Weekend. Ever.

And it made us rich.

* * *

My wife knew that I was bitten by a bug, and as with most diseases it’s best to treat the symptoms and hope things heal naturally. The bug was called Financial Independence Retire Early—the FIRE Movement. An idle curiosity in the long past of schemes and dreams; for some reason, it grabbed me. I was enraptured with visions of selling everything, moving to a shotgun cabin, and saving like crazy. To my wife, crazy was the perfect word.

FIRE is the CrossFit of personal finance: a tiny subgroup willing to risk injury pursuing extreme perfection, evangelical that everyone should try, and inspired by a founder destroyed by his own methods. It resides mostly in remote corners of the internet, where retirement talk, wonky math, and anti-consumerism intersect to create a little village saving much, spending little, and telling everyone all about it. I am, by nature, obsessive, and this type of radicalism appealed to me. My wife was stupefied.

I was not the first to dream, nor was she the first to doubt. The historical term was “pecuniary independence.” It meant those with more than enough, who made their own choices about what to do. They were rare, but not as rare as you might think.

Sylvester Judd¹ was born one year after they ratified the Constitution and died the year before the Civil War. His life was antebellum America. Yet, Judd only worked for half of it. The rest he spent living on investments and penning histories of New England for fun.

Judd’s path to FIRE was bumpy. He went broke at thirty, worked his way back, and eventually bought part of a newspaper business. At forty-six, he sold it. He wasn’t extremely wealthy, but he knew what “enough” was, and he had it. People like Judd were not unheard of. Most towns sported at least one person who simply had enough, and spent their life pursuing scientific or literary hobbies rather than piling on more wealth.

By the 1890s, Harper’s Magazine editorialized that “pecuniary independence” should be the goal of every family, assuring readers that achieving independence the American way was “comparatively easy” in contrast to Europe. Ironically, today the magazine sells large tote bags celebrating cats with the Latin phrase Libertas Sine Labore—Liberty without Labor.²

Here was the important distinction: the term “financial independence” was not yet synonymous with “not working.”³ It meant free to choose interesting work.

* * *

Contrarians were bubbling to the surface. The term for someone who did nothing wasn’t “retired” but “loafer.” It was not a compliment. Loafers played billiards and drank beer, aiming to do as little productive labor as possible. They were the nineteenth-century boys are video gaming crisis. Walt Whitman⁴ reveled in it, pledging to “loaf at my ease, observing a spear of summer grass,” instead of Going Ahead. Parisians celebrated this new affluent, thoughtful man—the flâneur—as a sign of culture; the United States, not so much.

If loafing wasn’t your thing and Whitman wasn’t your writer, you could always build a cabin with Henry David Thoreau. Thoreau embodied “ultraism,” an extreme rejection of consumerism. Ultraists believed in living simply, eating no sugar, rejecting masturbation (an urge they blamed on sugar), and spending as little as possible. The most famous was Sylvester Graham, who created his Graham cracker to give horny boys something sugarless to chew on when they got “the urge.” There were so many books on extreme frugality before the Civil War that a satirist wrote New Experiments: Means Without Living. Life could be so good; you didn’t have to enjoy it at all.⁵

No one took this farther than Thoreau. In the idealized story, visionary Henry D. abandons the destructive world of capitalism, goes to a pond in the woods, builds his own cabin like a real man, and proceeds to show that the simple life is better.

We skip the parts where he left Walden Pond, returned to capitalism, and ran a successful factory. That the pond was on someone else’s property. That his mother brought him food so he wouldn’t starve. You know. Details.

Nothing brings this into perspective like the incident where Thoreau, trapped in a lightning storm,⁶ found shelter in an immigrant family’s rented cabin. Thoreau proceeded to berate his kind hosts for not building their own home and for feeding their children butter and fresh meat. These ignorant fools came to America because “here you could get tea, and coffee, and meat every day,” without understanding the true “liberty to pursue such a mode of life as may enable you to do without these.” Thoreau embodied a sentimental delusion of simplicity, without all the harsh bits about starving babies and getting your kids to a better place.

Ralph Waldo Emerson was more transcendental. The great theorist saw a thrifty life as means to the ends of independence. Emancipated from consumption, the need to earn abolished, you were free to experience “frugality for gods and heroes.”⁷

Emerson was Thoreau’s best friend. Like Whitman, he contained multitudes of contradictions. Emerson lived without working because his first wife died, leaving behind a trust fund. He sued her family, won the money, and promptly quit his job to travel Europe writing profoundly about not working. Financial independence is rarely what it seems.

* * *

As Transcendentalists contemplated their navels and Ultraists starved, more active types up and left town. Back-to-the-landers are a pre-FIRE movement still active today. In the 1840s, salaried jobs increased and office despair rose. Young clerks scribbled away, pining to escape the boss, the clock, and the paycheck. Men’s magazines urged them, “Be men, therefore, and with true courage and manliness dash into the wilderness with your axe and make an opening for the sunlight and for an independent home.”⁸ Big talk.

Ed Morris acted.⁹ Starting out penniless in Philadelphia, he squirreled away money, avoided “taverns, oyster-houses, theaters, and fashionable tailors,” and managed to save two years’ pay. With that, he bought his own printing press. He was ready to be the next Benjamin Franklin.

The money ran out in a year. The Morris family spent two decades in and out of debt, unable to sleep at night, yearning for financial peace. Ed read about it constantly. His wife complained he was obsessed with the idea. She was happy in Philly. But slowly, one article slipped to her at a time, he wore her down. Forty years old, they sold everything, moved to New Jersey, and bought a farm.

Like thousands after him, Ed Morris found the dream different from reality. He first reported to the Census as a gentleman farmer. Ten years later, either of frustration or failure, he was a real estate agent. His real success came in writing down their story, Ten Acres Enough, and tirelessly selling the dream of freedom through farming. His biography of self-ownership sold through eight editions in two years.

Ten Acres Enough inspired generations. New York intellectual Ralph Borsodi,¹⁰ who wrote the bestselling Flight from the City, was one of them. Rebranding small farms as a “new way to family security,” Borsodi moved to a farm where he also established a “School for Living.” Readers followed, fleeing the materialism of the Roaring Twenties, and then the implosion of the Great Depression.

Borsodi struck a nerve. So popular was Flight from the City that a Department of Agriculture official published a kind of fool’s guide to farming. People whose knowledge was “limited to literature that depicts the attractive features of farm life in vivid colors” were simply unready to be snowed into their farmhouses for weeks with nowhere to go and nothing to eat. This more realistic manual went through an amazing twenty-four printings¹¹ in ten years.

Inspired, Scott and Helen Nearing fled to Vermont.¹² The Nearings were extreme: no electricity, plumbing, or coal stoves. Twenty years later they produced their own bestseller, Living the Good Life. What began as a 1930s pursuit of “Depression free living as independent as possible from the commodity and labor markets” had, by the 1950s, become a self-sustaining farm selling maple syrup. All this was done, remarkably, working just four hours a day! Thousands flocked there to learn how. The Nearings became counter-culture celebrities, lauded by the press for discovering the way back to Thoreau’s Walden Pond.

It was all true, except for the parts that weren’t.¹³ Borsodi and the Nearings did live on the land, but they hardly survived on farming alone, much less four hours’ worth. Borsodi, an early adopter of remote work, kept his $215/month salary (roughly $3,300 today) from New York City firms by having his paperwork mailed to the farm. This was nothing compared to the Nearings.¹⁴ One student couldn’t figure out why she kept failing where her famous neighbors succeeded. She discovered their original farm was purchased with money from life insurance left by Helen’s former lover and sustained when Scott’s wealthy father left around $1 million ($21 million today). Homesteading is much easier with two massive inheritances.

Today’s back-to-the-landers mix the joys of manuring one’s patch of grass with a whiff of selling the dream. Julliard grad, turned trad-wife, turned Mrs. American Pageant winner Hannah Neeleman shows over 10 million Instagram followers her favorite products alongside her wholesomely gorgeous farm life family in Utah. On the other side of the country, self-described “Christian libertarian environmentalist capitalist lunatic farmer” Joel Salatin built a Virginia homestead with over $1 million in annual sales. He now hawks online $995 training guides. The course is pitch perfect to 200 years of eager buyers. Homesteading “can provide the independence, self-reliance, and security we all desire” to “survive and thrive even if the stock market crashes.”¹⁵

Rugged independence still sells, just as it did when ten acres was enough.

* * *

Freedom from work, rather than to work, revived in the twentieth century. The first popular treatise on how to retire earlier than all your friends was 1919’s Financial Independence at Fifty by Victor de Villiers.¹⁶ The Magazine of Wall Street claimed he had invented a new “Building Your Income movement.” De Villiers preferred financial independence (FI).

As proof of concept, he offered himself, a “comparatively young man who has made himself financially independent a number of years before fifty.” The book set the basic rules for all FI manuals to follow. There were steps (six of them), an ode to compound interest, and a motivational sermon to cut down on spending. You, too, could retire by skipping expensive splurges.

This movement fizzled out. A grand jury indicted de Villiers for mail fraud.¹⁷ He had used his writings to drum up suckers, reportedly stealing all the investment money as “fees.” He also pled guilty to falsely selling a miracle health food which was just sweetened chocolate.

The idea languished until a dozing accountant in Heathrow Airport overheard passengers sharing the story of a drug smuggler who, not wanting to press his luck, retired rich. Being an accountant, he did the math and realized he, too, could retire young without once risking federal prison. Paul Terhorst and his wife, Vicki, did just that. In 1988 they published Cashing In on the American Dream: How to Retire at 35, a look back on their big leap of financial faith.¹⁸

Before he knew it, Terhorst was on Oprah. The math wasn’t new. The boldness was. The Terhorsts swapped their American dream home to live on the cheap abroad, a term later dubbed geoarbitrage. The Terhorsts were the real deal. They remain retired today, traveling the globe on the cheap and living lives of active leisure.

Joe Dominguez retired both earlier and younger than the Terhorsts, but published his book later. By 1992, when Your Money or Your Life exploded onto bestseller lists, he had been retired in an RV since 1969. Dominguez birthed the abbreviation FI. “FI-ers,” he explained with his co-author Vicki Robin, experienced “having enough—and then some.”¹⁹

Neither Terhorst nor Dominguez created any of this. Both mentioned regularly encountering others already living their exact lifestyle. It turns out, people had been doing this since Sylvester Judd was scribbling histories of New England. Finally, someone had popularized how. Their students, many originating out of crunchy anti-capitalist circles, gravitated to the freer culture of California. And it was in California that the FIRE, as fires are wont to do there, slowly grew into something larger.

* * *

At the dawn of Web 2.0,²⁰ The Motley Fool opened a chat board called the “Retire Early Home Page.” In August of 2000, just a few months after the dot-com crash, user “fzabaly” began short handing financially independent, retired early to FI/RE.²¹ From there, the spirit of the Lord took hold. Wander0692 posted “Has anyone else noticed how ‘FI/RE’ looks like the word ‘fire’? I remember attending church . . . and the preacher saying . . . Take our hearts and set them on fire . . . FI/RE is a fire that burns in me . . . So, from now on, I’m gonna drop the slash. A ‘FIRE’ it is. May it be ever thus.”

And, wander0692, ever it was.

As the computer engineers thronging Silicon Valley raked in money, FIRE became a cult movement and Your Money or Your Life an antihero text. Here was a way to cash out of the game. They began reading it, talking about it, and doing it. Being tech savvy and coming of age with the internet they helped build, many started webpages. The FIRE bloggers arrived.

Children born color blind into a technicolor world, FIRE bloggers didn’t understand why everyone chased things that shimmered at the cost of their lives. Something about their smartass language, in-your-face realism, and hipster mustaches struck a chord with thirtysomethings of the early 2010s. Gen X logged on and realized they could catch up to the Baby Boomers in half the time.

Retire young exploded. The term went through the Looking Glass of podcasts, YouTube, Instagram, and TikTok—anywhere anyone could say anything about how free they were. The movement quickly became a parody of itself. Warped enthusiasm birthed many sub-genres: LeanFire (extreme frugality), Fat Fire (the opposite), Barista Fire (working part-time for benefits), Boat Fire (FIRE on a boat), and Fast Fire (retire as quickly as you can). The Motley Fool once listed fifteen distinct groups.²²

Dominguez, though, became a victim of falling interest rates and his faith in government bonds. As rates plummeted, his tiny nest egg forced him to live off ever smaller returns. He ended life in a Seattle group home, his income cut roughly in half.²³

The earliest FIRE bloggers, meanwhile, nearly all went back to work. Jacob Fisker (Early Retirement Extreme) went into Chicago finance. Pete Adeney (Mr. Money Mustache) started a construction business. Sam Dogen (Financial Samurai) went to a Fintech but only lasted four months. These new pioneers of old pecuniary independence found what one 1870s thinker already knew: “Idleness is but another name for misery.”²⁴