Carl Jensen and his daughter harvest tomatoes at their home in Longmont, Colorado. Jensen, who earned $110,000 plus benefits writing code for a medical device, retired at 43 after he and his wife saved a sizeable portion of their income over five years and drastically cut expenses. Image Credit: New York Times

New York: Carl Jensen experienced what he calls “the awakening” sometime around 2012. He was a software engineer in a suburb of Denver, writing code for a medical device.

The job was high-pressure: He had to document every step for the US Food and Drug Administration, and a coding error could lead to harm or death for patients. Jensen was making about $110,000 (Dh404,030) a year and had benefits, but the stress hardly seemed worth it.

He couldn’t unwind with his family after work; he spent days huddled over the toilet. He lost 4.5 kilograms.

 People always assume there’s an external circum-stance: ‘Oh, you must have received an inheritance’. We’ve just chosen to live far below our means. That itself is a radical idea.

 - Carl Jensen | Former medical programme


After one especially brutal workday, Jensen searched online: “How do I retire early?” and his eyes were opened. He talked to his wife and came up with a plan: They saved a sizeable portion of their income over the next five years and drastically reduced expenses, until their net worth was around $1.2 million.

On March 10, 2017, Jensen called his boss and gave notice after 15 years at the company. He wasn’t quitting, exactly. He had retired. He was 43.

Although Jensen’s story may seem exceptional, a more modest version of the stockbroker who makes a killing on Wall Street and sails off to the Caribbean, he is part of a growing movement of young professionals who are intently focused on quitting their jobs forever.

Millennials have embraced this so-called ‘FIRE’ movement — the acronym stands for financial independence, retire early — seeing it as a way out of soul-sucking, time-stealing work and an economy fuelled by consumerism.

Followers of FIRE tend to be male and work in the tech industry, left-brained engineer-types who geek out on calculating compound interest over 40 years, or the return on investment on low-fee index funds versus real estate rentals.

Indeed, much of the conversation around FIRE revolves around hacking one’s finances: strategies for increasing your savings rate to the hallowed 70 per cent, tips for cheap travel through airline rewards cards, ways to save nickels and dimes at the grocery store.

Some practice “lean FIRE” (extreme frugality), others “fat FIRE” (maintaining a more typical standard of living while saving and investing), and still others “barista FIRE” (working part-time at Starbucks after retiring, for the company’s health insurance). To be “firing” is to slash one’s expenses to maximise saving while amassing income-generating investments sufficient to support oneself. To have “fired” is to have achieved that goal.

“A lot of people think you’re a new-age hippie,” said Jensen, who sold his four-bedroom, four-bathroom house, downsized to a more modest home and maxed-out retirement accounts while firing. “They can’t even wrap their minds around it.”

In retirement, Jensen and his wife and two daughters plan to live on roughly $40,000 a year generated from investments. Because his wife works, they have yet to draw on those accounts. It’s a life rich on time but short on luxuries: Groceries are bought at Costco, car and home repairs are done by him.

“People always assume there’s an external circumstance: “Oh, you must have received an inheritance”,” Jensen said. “We’ve just chosen to live far below our means. That itself is a radical idea.”

Equally radical is opting out of the workforce in your 30s or early 40s, a time of life when men and women are normally leaning into their careers or, less happily, enduring the daily grind to pay the bills until Social Security kicks in.

Jason Long, a pharmacist in rural Tennessee who retired last year at the ripe old age of 38, said his father had a hard time understanding why Long couldn’t continue to work and collect his $150,000 salary. But Long said he was deeply unhappy in his job, where over his career he witnessed drug costs skyrocketing, sick people battling health insurers and the over-prescription of opioids and the addiction crisis. His customers, angry, financially stretched, often lashed out at the person behind the counter.

“There were days when I had 12- or 14-hour shifts where I didn’t use the restroom, where I didn’t eat, because so much work was piled up on me,” Long said.

Like Jensen, he had been saving a sizeable portion of his income over the past decade, and he and his wife had a paid-for house and an investment portfolio worth a little more than $1 million. Why stick around?

“The reality is the numbers are there for me,” Long said. “To go to a job that’s making you miserable every day, it doesn’t make sense to pad the bank account at that point.”

The FIRE adherents are also benefiting from a lengthy bull run in the stock market and, in some cases, the privilege of class, race, gender and background. It’s difficult to retire at 40 if you work a minimum-wage job, say, or have crushing student-loan debt, or did not have the same opportunities as others because you grew up poor in a crime-ridden neighbourhood.

But if, as Robin said, FIRE adherents “don’t have the aspirational part” of earlier generations, why are they so determined to quit the workforce? Many millennials haven’t been working longer than a decade, if that.

It’s about having agency, she said: “The worker in this economy has very little sense of control over their existence. People are expendable. You’re a young person and you look ahead and you say, ‘What’s there for me?’”

 

The many types of ‘FIRE’ adherents

Millennials have embraced this so-called ‘FIRE’ movement — the acronym stands for financial independence, retire early — seeing it as a way out of soul-sucking, time-stealing work and an economy fuelled by consumerism. Followers of FIRE tend to be male and work in the tech industry, left-brained engineer-types who geek out on calculating compound interest over 40 years, or the return on investment on low-fee index funds versus real estate rentals. Indeed, much of the conversation around FIRE revolves around hacking one’s finances: strategies for increasing your savings rate to the hallowed 70 per cent, tips for cheap travel through airline rewards cards, ways to save nickels and dimes at the grocery store.

Some practice “lean FIRE” (extreme frugality), others “fat FIRE” (maintaining a more typical standard of living while saving and investing), and still others “barista FIRE” (working part-time at Starbucks after retiring, for the company’s health insurance). 

To be “firing” is to slash one’s expenses to maximise saving while amassing income-generating investments sufficient to support oneself. To have “fired” is to have achieved that goal. 

 

— New York Times News Service