Edition 30: Flavors of Financial Independence (FIRE movement)

Plus: Getting Covid, Financial Unfairness, iBotta and Using Less Oil

written by oz chen

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Today’s compliment: you’re on fire with life.

A big personal update: I tested positive for Covid earlier this week. Since Sunday I’ve been feeling like shit, so I probably caught the Delta in Mexico. This is despite already being vaccinated twice with the Pfizer shot.

To be honest, I thought I would’ve gotten Covid sooner in the past 1.5 years before the vaccine rollout. Thanks to vaccines, my symptoms are not crazy – it feels like a bad flu.

Symptoms: Headache, fatigue, coughing, congestion. Over the course of the week, the worse parts of fatigue and headache have abated. But what really sucks is losing my sense of smell. On Wednesday I grinded fresh coffee beans, buried my nose in for the ritual smell….and nothing!

I’ll try to look at it from the bright side – at least I can’t smell any foul things either.

PSA: stay safe, get vaccinated, and look out for the 3rd booster shot.

Today’s edition will cover the different flavors if FIRE, Financial Unfairness, iBotta and Using Less Oil.

πŸ”₯ Different flavors of the FIRE movement, explained

We’ve all entertained the thought: What would I do if I won the lottery?

A less common thought: How much money do I need to save in order to life off it forever?

That second question is at the crux of the Financial Independence / Retire Early movement: F.I.R.E.

Here’s how F.I.R.E. works, at a high level:

  1. Calculate your average annual living expenses. Assume a higher average taking into account unforeseen expenses as you get older. For example you might only spend $36K a year as a 20-something, but you might be spending $50k/year as a 40 something. Let’s use $50,000/year.
  2. Multiply that number by 25 to get your retirement number. This would be $1,250,000.
  3. Invest your money in the stock market. Many use a 50/50 stock bond mix which has historical returns of about 8%.
  4. By withdrawing 4% or less per year, your money *should* last forever over assuming average long return stock market returns.

Instead of working endlessly towards a vague goal, the FIRE number gives a baseline to work towards.

As personal finances go, there’s no “one size fits all” approach. Some people may be willing to work a little longer for a more lit retirement, others want to quit their jobs ASAP and build their tiny homes out on the prairie.

That’s why a bunch of different FIREs have sprung up:

F.I.R.E. strategiesTradeoffs for retirementTime to retirement
LeanFIRE πŸ’ͺ🏼Quit work earlier in exchange for leaner retirementFastest
FatFIRE πŸŽ‚Stay working longer for a nicer retirementSlowest
BaristaFIRE β˜•οΈWork part time jobs to cover expenses + moderate retirementModerate
CoastFIRE 🌊Work enough to cover expenses, let investments compound into FIRE number after decadesMost relaxed for young people. Moderate and depends on compounding

BaristaFIRE feels most appealing and realistic to me, because I like coffee. Kidding, it’s actually more about motivation.

Most people still want to feel useful past retirement. If I can retire at 40, I’m still going to want to produce creative work. If I can just cover my living expenses through writing, course creation and the occasional consulting, I’d be happy.

Which type of F.I.R.E. seems most interesting to you?


As I’ve written before, financial models are useless without good mental models.

There’s a ton of risk associated with the assumptions of these models. Especially when it relies on putting your money into a stock market that can change dramatically year to year.

Here’s a quick Twitter thread I put together on the motivation to retire early. If you want financial freedom, then it’s worth defining what you want freedom FROM and what you want freedom TO do.

♻️ Food for thought: Risk

β€œRisk means more things can happen than will happen.”

– Finance professor Ellroy Dimson

Risk is another way of saying possibility. There are always infinite possibilities, meaning that risk typically represent the unintended or negative possibilities that we just can’t fathom.

Reminds me of another gem: “Make plans and God laughs.”

⚠️ The financial unfairness of losses: it takes more gain to offset a loss

I find this to be the most depressing part about money: If an investment goes down 20%, it takes much more than a 20% gain to break even again.

  • Losing 20% from $50,000 = $40,000
  • Gaining 20% from $40,000 = $48,000. You’re still down $2,000. You would need a 25% gain from this lower number to get back to your original $50,000.

This is a good exercise for any investment, but especially for BIG assumptions like the ones outlined in the FIRE movement.

For example, with CoastFIRE, it’s possible to retire with a $200K portfolio if the money stays in the stock market over the course of decades, hopefully earning the average 8% per year.

If the stock market goes down and decimates your portfolio by 30%…then what?

Here are 2 calculators that help you figure out how long you’d need to make up for a loss.

Personal Economic Recovery Calculator – gotta love that it’s hosted on a site called Dinky Town. I like that it considers inflation and if you continue to make contributions even after a loss . That simulates the opportunity to buy low and sell high.

For slightly different charts, you can also check out this calculator from the Canadian Financial organization.

πŸ’° iBotta: Get $5 for uploading your receipts

There’s a lot of cash back apps out there. My standard is still to use Rakuten for online shopping, but recently my friend turned me to something that offer a “double dip” opportunity.

iBotta is a website and app that offers cash back at various vendors, but with one neat twist: they’ll give you $5 back for each receipt uploaded from your shopping trips. I just did this from Rite Aid and got $5.

The double/triple dip opportunity for every grocery trip:

  • Add your cards to a cash back rewards network like Dosh
  • Pay with a card that earns rewards, like the 2% cash back on everything Capital One Card
  • Go shopping, then upload a pic of your receipt to get $5 back.

To sweeten the deal, you can get $10 for free after submitting your first receipt.

Sign up using this link and put use this as the referral code: IXKMJVJ.

🎩 Better non stick pans = less oil = better health

I’m not great with kitchenware. I’ve legit kept using the same pot since I graduated from college.

Months ago, I scraped pot bottom.

Some of my pans’ coating have scratched off, making those surfaces much stickier than cooking. This is also probably toxic AF.

As a result, I found myself using a lot more olive oil than necessary. That’s a cost to my health and some change.

After doing some research, I went on Amazon and ended up picking these 3 pots/pans which would cover 95% of what I cook:

Many of these are supposedly Free of newfangled toxins I haven’t heard before like PFOA, APEO, PFAS.

Now, I don’t normally nerd out over random purchases like this. But a lot goes to say for upgrading stuff that you’ll use everyday.

Just for fun:

1:15: “The horse crip walking you see that?!” Watch Snoop Dogg and Kevin Hart comment on the Olympics

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