We focus a lot on financial independence here at Think and Talk Money. That’s because achieving financial independence is the ultimate goal for most of us.
To me, financial independence does not mean retiring.
That’s why I don’t like the popular acronym, FIRE: Financial Independence, Retire Early.
Instead, I I like to view my financial freedom journey as FIPE: Financial Independence, Pivot Early.
Let me explain why I believe in FIPE not FIRE.
FIPE = Financial Independence, Pivot Early
Whatever it is that you truly want to do in life, financial independence makes it possible.
When you have financial independence, you have options. You can make decisions based on your core values instead of making decisions based on money. You can pivot, if necessary.
Financial independence is for people who want to be empowered to take more control of what they do with their working hours.
It’s not about quitting work. It’s about the freedom to pivot to other work, if you want. I’m convinced that humans are meant to be productive. We are social creatures who at our core want to be contributing.
That doesn’t mean we have to be or want to be employees. But, it does mean that we want to do something meaningful with our working hours every week.
That’s why I believe in the power of pivoting, not retiring.
Why I don’t like the name FIRE.
Part of the misconception about financial independence may stem from the name of the popular personal finance concept known as FIRE: Financial Independence, Retire Early.
It’s not uncommon for people to hear financial independence and immediately think that’s only for people who want to quit their jobs and retire. That’s how widespread FIRE has become in the personal finance space.
I agree with so many of the principles of FIRE. I just don’t agree with the name.
Financial independence is about much more than retiring early.
FIRE emphasizes saving more and spending less until you reach the point where your passive investments generate enough income to allow you to quit your job.
I love this part of FIRE: the idea of creating enough income streams so that you have the freedom to do what you want with your time. I share the primary goal of saving more money and spending less to achieve more life freedom.
I call this Parachute Money. I like to view each income stream as a separate parachute string. The more parachute strings you have, the safer it is to make a big change in life.
The problem for me is that the FIRE end game is suggested right there in the name: become financially independent so you can retire.
I don’t like that part. I don’t like what the word “retire” implies.
If you look it up, you’ll see that the word “retire“means to withdraw, to retreat, to recede.
None of those things sound appealing to me at all.
Each word implies moving backwards. I’m not working so hard to achieve financial freedom so I can move backwards in life.
I prefer to think of financial independence in terms of creating options. I prefer to think of financial independence as a way to move forward in life.
I think “pivot” better reflects that mission.
Pivot means to adapt or improve through modifications and adjustments.
That sounds so much more appealing to me.
With FIPE, financial independence is still the primary goal. But, the endgame is not to withdraw or retreat. The endgame is to adapt and improve how you spend your working hours.
FIPE = Financial Independence, Pivot Early.
Granted, the name “FIPE” is not as catchy as FIRE.
But, I think it actually better encapsulates the entire purpose of financial independence in the first place.
To explain, let’s look back at the modern day origin of FIRE for a minute.
Vicki Robin and Joe Dominguez are often credited for laying the groundwork for the modern day FIRE movement. Robin and Dominguez wrote an incredible book called Your Money or Your Life.
It’s one of my favorite personal finance books. You should definitely read it if financial independence is important to you.
In their book, Robin and Dominguez have a lot to say about the relationship between money, work, and time.
Guess what?
Most of us are doing it all wrong.
Most of us make the mistake of chasing money at the cost of our precious time. When you read Your Money or Your Life, you will start to value your time for what it’s really worth.
By making good choices about how to earn money- and as importantly what to do with that money- you can get the most out of your money and your life.
That’s what FIRE is really all about. It’s about choosing to use your working hours in a way that is more meaningful to you than clocking in-and-out as an employee each day.
It’s not about retiring from meaningful work. It’s about pivoting to work that is more meaningful to you.
FIRE proponents would likely agree that the goal is not to withdraw or retreat.
I think proponents of FIRE would actually agree with me that the end game is really not about withdrawing or retreating. The mission is always about moving forward, not backwards.
My belief is that people who are disciplined and skilled enough to reach financial independence in the first place are the type of people who don’t retreat or withdraw.
They may opt for periods of temporary retirement, as they should. But, I don’t think financially independent people are truly wired for full-time retirement.
That’s why you see so many people who have obtained financial independence continue to pursue income streams.
That might mean managing real estate investments, teaching others, or even starting a financial freedom blog.
So, technically speaking, most people who have obtained financial independence have not actually retired. They haven’t withdrawn or retreated. Instead, they have pivoted.
They are now spending their working hours doing other things. They may not be working full-time for an employer, but they’re still working.
They’ve achieved financial independence and have earned the right to pivot.
Financial Independence, Pivot Early.
Even FIRE leaders would likely agree that the end game is not to completely retire.
FIRE is not about retiring or quitting. It’s about pivoting to more meaningful life pursuits.
I don’t want to speak for Robin, but I think this is what she was getting at.
I also think this is what modern day FIRE leaders like Mr. Money Mustache and the Financial Samurai believe in. Not long ago, Financial Samurai actually wrote an excellent post called “Why Early Retirement / FIRE is Becoming Obsolete.”
I just think the name FIRE doesn’t accurately portray the mission. Pivoting early seems more appropriate to me than retiring early.
We all have the same goals in mind: financial independence. And, I believe we have the same end game in mind: pivoting to more meaningful work.
That’s why I like FIPE instead of FIRE.
Are you looking to retire early or simply to pivot?
What is it that you’re aiming for by getting your personal finances in order? If you want to retire early, there’s nothing at all wrong with that. You may be at the point in your career and life where that makes sense.
Personally, I’m not looking to retire early. That’s why I like to view financial independence as a chance to pivot.
Pivoting doesn’t mean you have to switch jobs or change things up just for the sake of change. It just means that you have that option if you want it or need it.
By the way, I’m not alone in viewing financial independence as a chance to pivot instead of retire.
Scott Trench, CEO and President of BiggerPockets has been beating this drum for a while. He’s also talked about it on the BiggerPockets Money podcast.
I’m in complete alignment with Trench. I like almost everything about FIRE, just not what the name implies.
With FIPE, the goal is not to retire. The goal is to give yourself the freedom to choose what to do next.
Whether you want to retire early or just pivot to a new chapter in your life, being good with money is key.
Do you like the name FIRE or FIPE?
At the end of the day, whether you like to view it as FIRE or FIPE, the mission is the same. We are all looking for the freedom to choose what to do next.
When striving for financial independence, the goal is to create options. Those options likely include pivoting to more meaningful work, rather than withdrawing or retreating.
Personally, I think the name FIPE better encapsulates that mission.
- Do you agree?
- What name resonates more with you on your financial freedom journey?
- Are you interested in retiring early or pivoting early?
Let us know in the comments below.