What if everything that you've been told about the fire movement, the Financial Independence Retire early movement about sacrificing your best years to retire early, is missing the point or totally wrong? If you've ever felt like the traditional path to financial independence means giving up your present for some far off future, well,
this episode's for you. I'm about to show you how to redefine fire so you can be financially free while still living fully, enjoying the journey and being rich with experiences. The Fire movement, it's all about retiring early by saving aggressively. But is that really the path to financial freedom? I don't know. What if I told you that there's a way to be financially independent and live a
rich, fulfilling life along the way? See, many people see this traditional family, it was a big thing, and this big movement of fire and retire early and have that independence, but they sacrifice their best years of life thinking that they can enjoy life later. But is that really what you want? So in this video, I'm going to show you how to redefine fire so you can achieve financial independence while being
rich in experiences. So let's explore some things. Let's just talk about what is the traditional fire movement and what does that look like. The way that this was built or the way that this was presented was to take an inordinate amount of your income, 50 to 70% of your income, and put it away to invest it in low cost ETF and index funds to build a large portfolio large enough to retire early, typically in your 40s. So, and then they use the 4% rule
to live off the savings. So they figured out, how much do I need to create this life, multiply it by 25 times the annual expenses, and I can draw down 4% of this portfolio and live the rest of my life. Now it's possible, but there's some nuances and there's some things that I think are missing here and we kind of missed the whole point of it. The fire movement has grown so much in popularity, but only a small percentage of people, 9% or so of Americans, feel like they're even on track to retire
early. So think about this. You're earning $100,000. You're going to save 60%. That means, that means that you're going to save 60%. That Means you're living on 40%. You would need to save roughly that for 15 to 20 years to hit a two and a half million dollar number to be comfortable in an early retirement. And so the problems with this is this Is that the extreme frugality, the, the restrictions is like this highly restrictive diet or a
highly restrictive budget. I've talked about this before. We cannot build a rich life through deprivation. There's just no richness in the experience through deprivation. So that frugality and working long hours just to accumulate cash, accumulate cash. What ends up happening is many people end up with burnout and they're just not enjoying life. And so if I am, here's the thing that I do know. If you don't enjoy the path to financial freedom, you will not enjoy the destination
of financial freedom. And in fact, we have to be careful because you may not even get there. There was A study, a 2022 study of fire followers that found 72% of them, 72%, almost three quarters, experienced burnout. Okay. And it was due to the intense savings and the restricted spending. Now there's someone now he did not live a fire life. He lived a good life. But I think this is the thing that we also have to be careful of. John Rulin was the author of
Giftology, a wonderful, wonderful book. And he had four beautiful daughters, a wife. He worked hard, he played hard, he made sure that he took time for his family and he devoted that time to his family. In fact, if he was with his family and you tried to call him, his assistant would answer the phone and say, hey, unless it's life threatening, he'll call you back when he's done with his family or with done with his trip. He
understood that. But imagine if he would have been in the fire movement where he's saving 60%, he's working long hours, he's not doing things with his family as much as he did. Because here's the challenge. John unfortunately passed away at age 44. So had he followed the fire movement, he would not have had the years ahead of him to enjoy it. But instead, John created experiences for his beautiful wife and his beautiful four daughters for the time he had here, okay, he was
gone way too early. But I think this is one of the risks with the fire movement when we talk about it now. The other risk I think that gets pushed aside and not thought about is that the majority of retirement plans are built on a 30 year window. In fact, the 4% rule that they use was built for a 30 year time horizon for retirement. But if I'm going to retire in my 40s, okay, now they're talking about a 30 year retirement, save from 60
to 90, that's or even 55 to 85. But if I retire in my 40s, I need another decade to do decades for that money to hold out. And there is a much greater risk, it's what I call longevity risk, that you run out of money because of the volatility of the market, because the market's underperformed, because of unexpected expenses. You just have much more exposure because you're trying to get your money to lit, to hang on for 40 to 50 years instead of 30. So when you do that, the whole planning
mechanism, it's not impossible. You just got to change the way you plan. You got to change the way you do it. And too often we aren't, or those that are following the fire movement are not. So that's one of the other problems. And I think the other problem is that the last problem that I'll highlight and we'll talk about some of the various fire movements is this is the fact that there's this very, very narrow focus. And that narrow focus is on a number. That's it. I got to hit the
number. My fire number, my fire number, my fire number. And I get it. We all need to have that number. I do it with my clients. We do the plans, we do the money machine master plans. And even in the book, I have you do it. Okay, but if we're solely focused on the number, we ignore the other aspects of life. We ignore relationships, we know health, we ignore life experiences. We have no richness of experiences in life. And I think that that's the problem.
So I'm honestly not a huge fan of the Far Moon. I am a huge fan of finding your path to financial freedom and finding it as early as possible not because of the, because of the money, but because of the choices you get in life. And doing it in a way though, that is sustainable, that isn't through deprivation and real deep, deep deprivation. There is discipline in the process. We'll talk about specifically what to do, but this is the thing that I think we need to look at Now. There are
various fire movements. Some of them came about because they realized that it wasn't necessarily sustainable. And some of them were even more aggressive. Like the one movement is the lean fire movement. This is like really minimalist. I mean aggressively, aggressively saving as much as possible. Live on less, live in low cost areas and reach fire. But you're going to be in a much lower lifestyle type of perspective when we're in this lean fire. Now contrast that with what they call fat fire.
Okay? It's retiring early, but more comfortable. In other words, remember I said the typical fire movement says 25 times your annual expenses is what I need. These folks are looking at 30 to 40 times of the annual expenses. So you have a bigger pool that gives you flexibility and gives you cushion. If there's ups and downs, margin for error. If you need to do something, you want to do something differently, there's more flexibility, it's great, but it takes longer to get to that number. And
so that's one of the challenges. And then I think that you can look at Coast Fire is another one where you save aggressively in the early years and you build enough of a nest egg that it will build and compound on its own, that it will, it will grow on its own because you're continuing to work and allowing the portfolio, the machine, if you will, to grow while you continue to work. So it allows you more flexibility to pursue some
things later on. But you don't have to be as aggressive on a long term basis, but you're aggressive early and then allow it to take hold. And the power of time and compounding do that. And I think then the last one I'm going to touch on is this idea of barista fire. I just like it because it's a barista fire and I'm a coffee fiend and everything. So this is actually partial financial independence where you don't completely stop working. You still, you still save aggressively. You put as much
as possible away. But you know that you're going to have a part time job. It could be a consulting gig. I mean, they called it, you know, barista. Like you're going to go work at Starbucks. I don't know, you know, but you're in semi retirement, so you are doing purposeful things. You might be working for a charity or a nonprofit and getting some supplemental income. And so by virtue of having additional income as you work. Look, I think about it with me, I don't know that I'm ever going to
really truly retire. I'll always be out speaking, I will always be writing. I will always be doing this for many, many years now. Will I be taking on a book of business and a bunch of clients? No, I don't do that now. I don't take on, I take on very, very few clients, specific clients. You know, I'll help people build their money machine master plans. I will work as a family CFO on an annual basis for a handful of families. I'll take on a group to coach them for 12 months
and everything. But I'm not building a financial planning or advisory business like I've had in the past. So that's. That's how I look at it. But I want to introduce you to my version of FIRE because I think this is a better way to look at it. And hopefully this is something that you can embrace. And it's still about financial independence. But to me, FIRE doesn't stand for financial independence. Retire early. It. It stands for financial independence, rich in
experiences. Here's what I want to do. I want you to achieve financial independence. I want you to achieve a level of financial freedom that you are no longer tied to a job that you have now choice in your life. Because if I am tied, remember in my book building your money machine, where, you know, I'm talking about building the money machine, why am I trying to do that? Because we have been taught, we have been indoctrinated into earning, earning, earning.
Get a good job, get a good career, get a good profession, build a good business, make money, make money, make money. That's great. You're on the earnings treadmill. But what they never told you about, what they never. And what we're talking about on the show and what the concept of the build of the money machine is all about is how do I get off the treadmill of earning so I can have the enjoyment, the
freedom, the choice in life? And the only way to do it is you have the earnings machine, which is your job, which is your career, which is your profession, which is your business. But you use it to build the money machine. That's your portfolio, that's the assets. That gives you your time back, that gives you legacy, that gives you choice. And now what you've done is you've separated your ability to earn from the efforts to earn it. And when you do that, that's where freedom lies. That's where
choice lies. And so this idea of financial independence, rich in experiences, is about not being tied to a job, but having the flexibility to make choices, to be able to have control of your time. Now, the rich in experiences part is to live meaningful experiences, to have a life full of meaningful experiences. And here's the key along the way, not completely putting it off for a decade or two decades, until
you're in your 50s or your 60s or your 70s. And unlike John, who passed away at 44, if he had put it off, he didn't have any of those memories with his family. But they have that to hold on to, to be able to embrace it. And so I want you to build it in a way that allows you to experience the joy along the journey as well as the Joy in the destination. And that's where my definition of fire comes in. Now, how do you do this? I'm going to talk about
some principles and then some steps here, okay? The first is this. To build wealth without sacrificing experiences, you need to be intentional. Now, I hear people say it all the time. You gotta get work, life, balance. This isn't about balance. Work life balance is a myth. It does not exist. This idea of balance is kind of like you have a weight here and you have a weight here, and they're playing tug of war, and on average, you're balanced in the middle, but
they're playing tug of war. That's conflict, okay? It isn't balance we need, it's harmony. We need that the choices are in harmony with the vision of our life and what we want. And that harmony is a result of being intentional. Being intentional with your time, being intentional with your dime, okay? Be intentional with how you relate, who you bring into your life. There is a Princeton Research survey that says that Happiness
plateaus around $75,000 a year. Now, I don't know if that's true or not, but there is a certain point for sure that more income doesn't equate to more happiness. Because I think even at that rate, I have seen people that make $20,000 a year that are joyous as ever. I've seen people that make a million dollars a year that are miserable souls. So the number isn't what's driving it, it's how we're living our life. That is.
And that's where the intent comes in. To know what is meaningful to you, to know what is important to you, to make sure that it is built into your plan, into your financial plan. Instead of savings. The other part of this is, Instead of savings 50 to 70% like they do in the traditional fire movement, I tell you, in the wealth priority ladder, I want you at 20 to 25%. Call it 20 to 30%. And that will give you a little cushion to allow you to enjoy the
experiences of your life. When we build a plan. When we build a plan for a client, one of the questions we ask, and when I work with clients, is to ask them, what are two or three visceral sustainable joy points that you can have in your life? In other words, what are the things you, your spouse, love to do that have lasting joy? Because the pursuit of unending wealth isn't the objective. The pursuit of sustainable joy
is. And so I ask them, because when we talk about sustainable joy, visceral Joy, I'm talking about something that's meaningful to you, not momentary pleasures. Okay? Momentary pleasures are things that you might buy off of Instagram or things that you see a neighbor has and that's cool, and you go buy it. Okay? But something where you know that's lasting. Like, for instance, in my case, my wife and I, we love to travel. All right, y'all, we love travel. And we don't travel. We don't travel
cheap, okay? We want to create rich experiences. Now, we don't go into debt to do it. We do it smart because it's built into a plan. In fact, my team knows that there is a number that we have allocated every single year to our travel because that creates bonding, that creates our experiences. That's the thing that her and I absolutely love. And so that's one of our three joy points. And it's built into the plan so we can make it happen. It's important to do
that. So when you build your fire plan based on my definition of fire, it is important to make sure that it includes those things, because here's what I know. If you have those joy things, you have one things to look forward to. Two, you have things that keep you moving because it's just the same thing, as. You'll see diets, where they say, this is your cheat day.
Well, I don't know that it's a cheat day. It's part of the plan to keep you engaged in the process of the diet versus being so ultra restrictive that you're miserable every step of the way, and you're constantly fighting at the strings of. Of desire because you just wanted that little piece of cake, and there's no latitude. It's dogmatic. I don't want that, because you will not stay on the plan. When we build the plan, we build joy points in that
are meaningful and specific to you to make that happen. So let's just talk about the actionable steps of what this new fire approach would look like. Okay? Step one, you have to know your number. Now, that number is going to change. So you'll decide on that number. You'll figure out that number today, and you'll modify it. My number has changed repeatedly, and in fact, it continues to go up. Part of it is because life changes. I. You know, my. My
son gets married now. He has a wife now. Then he has two grandkids. You know, I got two grandkids. All of that changes things, and the number changes. But I need to know at least where I'm going for the Moment because it sets the trajectory. It makes sure that I'm looking at the right horizon, it makes sure that I'm going the right direction. And so it's about calculating that number. Now I have a tool that
makes it easier for you to do that. And this is a ballpark. It's not like, it's not like the money machine master plans that I, that I work with my clients on. When we put those things together, we beat it up. We test it, we stress test it. I know your income, I know your assets, I know your liabilities, I know the expenses. We test it out, we run a thousand different simulations of what happens if the market goes up, market goes down, all
those things. This will at least give you a ballpark though. Here's what I want you to do. To get it for free, go to melabraham.com number, melabraham.com number. It is a Excel worksheet. You can go in, you can put some numbers in. It'll give you a ballpark so you know what you're looking at. Now don't get all freaked out when you do it and you go, oh my God, that number's big. Here's what I know. Your wealth is not linear. Your wealth creation is
not linear. It is exponential. And it will continue to grow. And once you get the momentum in your money, it will grow upon itself. It is the reason that the subtitle of my book says, get your money to work harder for you than you did for it. That's what we're trying to do. So step one is making sure you know the number. Step two is invest for growth. Okay? In other words, I want you to invest for long term growth. I'm not trying to trade, I'm not trying to time the
market. I'm not trying to, to win the game. That's not winnable in the sense of trying to guess what the tops of the market are and what the bottoms of the market. I can't do that. No one can. Hedge fund traders with the best machines, the best equipment, the best computers, the best analysts, the best information, and the best kind of algorithm. They still can't do it long term. So why fight it? We build a portfolio. We build a
one fund, two fund, three fund, four fund portfolio. We build it. Now, it'll get more complex as you get critical mass, but the very beginning, keep it simple so I can get you in the game. Low cost, low fee, index funds, ETFs. To start over time. You put in, you can put in real Estate and other investments. But you follow chapter 12 in my book, the Wealth Priority Ladder, because it gives you specifically what dollar goes where and why. Then in this step, it is important for you to
automate everything. So if you're contributing to your 401k, if you're contributing to an IRA, if you're contributing to a brokerage account, I want it fully automated. I want all the friction out of it. So it is. So it is automatically happening now. At the same time, the plan you create and you're investing and you're paying your bills has to also take into consideration the two or three joy points. So there has to be money set aside, some sort of allocation of something for
something for you to look forward to that is meaningful. And too often when we build these things out, we don't put that in as a line item. Joy is a line item. It's necessary in your life now. Doesn't mean that you might have to be be in a situation where maybe you're taking a big vacation every other year or every couple years until your income is at a level that you can make it happen. But it's still something to look forward to and it has to be in the plan or it will not happen. So step
two is invest for growth. But at the same time, we want to make sure that you're investing for your future experiences too. And then step three is you can look, I put this in here, but I want you to look at the other fire options and say, what might fit my life? I don't want you to be so overly aggressive because you look at, okay, is it a coast? Is it barista? Is it fat fire?
What is the thing that I'm looking at? And then modify it so it's more connected to my definition where you are also having allowances for joy along the journey. Okay? So that's step three. And then step four is really about optimizing your time. You have to be flexible in this journey to financial independence. Stuff's going to happen. It's not a straight line. You're going to have setbacks, you might lose money, you might make a bad decision,
you might lose a job, your income might go down. Whatever it is, it happens. So, so make sure that you give yourself the flexibility to do that, but also give yourself the flexibility to have time for yourself. Okay? Time for yourself, for your relationships, for your health, for the other domains of your life to make that happen. The one way to do this is to create a list of experiences
and passions that you. And if you're in a committed relationship or an intimate relationship that you and your significant other have. Create those experiences. Create the bucket list and start checking them off and start to pursue them and use them as rewards as you hit financial milestones in doing that. Okay, and then step five. Step five is all about
reviewing with a rhythm. I don't want you to be so caught up in restrictive thinking around your money you're spending that you are looking at the numbers every day. If you're looking at numbers every day, it's going to freak you out. It would freak me out. But I do want you to check the pulse on the patient every month. Reconcile your bank accounts. Know where did I start at the beginning of the month? Where am I at the end of the month? Did I overspend in some of these categories?
Did I underspend? What did I need to do? Are there any changes to do? But in the process, I need you to celebrate the wins, no matter how small they are. Because when we stack micro wins together, we get big, big movement and big motivation and momentum. Okay? I also want you to look at the lessons, the three lessons maybe you learned and that you might change for the next month. And doing that, and then ask yourself, what are the three priorities that you need to have in the next month?
That's the. That's the way to do it. Now, that leads me to this last little piece, and that is this. You have to look at this and say, this isn't about a number. It's about living a journey. And that journey is the journey you were put here to walk. Your journey is different than mine. Your journey is different than your neighbors. Your journey is different than the ones that you see on social media. It's for you to live your journey. See, life isn't about some end
goal of retirement. Life is about living fully expressed, in alignment with your values, with your goals, with your vision, with your dream, and being able to be intentional with every minute of your time and to be intentional with every dime and be intentional with the experiences that you make. This is what fire should be about. Financial independence, rich experiences. It doesn't have to be about extreme frugality, limitation, deprivation,
and all of that. Because I don't want you to give up the best years of your life completely. I just want you to be disciplined during the best years of your life and enjoy the journey so you can have joy through all the years of your life. Okay? I hope that this helps you. I hope that you'll take the first step. I hope that you'll take control. The whole point of this show is to help you master your money so we can reduce the financial stress and allow you to
have a life of choice. Is to educate you. It's to empower you, is to equip you to be in control of your financial destiny and let that financial destiny be the one that you define and not anyone else. Not your upbringing, not where you were born, not how you were raised, not your degree, not the expectations of society, social media, media, but you and you alone. All right. I hope this helps. I hope that you found this valuable and I hope to see you on the road to financial freedom until I get a
chance to see you in another episode. Always, always strive to live the life that outlives you. See you next one. Thank you for listening to the affluent entrepreneurship with me, your host, Mel Abraham. If you want to achieve financial liberation to create an affluent lifestyle, join me in the affluent entrepreneur Facebook group now by going to melabraham.comgr group and I'll see you there.