The other week I received an email asking if I worried about what would happen if everyone wanted to achieve FIRE.
I’m not the deepest philosophical thinker, but at first thought it’s a fair question. If everyone were saving 20% or more of their income, or investing in index funds, then FIRE might be harder to achieve.
I imagine the following MAY happen:
Index investing would become less efficient with everyone indexing
Asset valuations would get more expensive with more people saving money
Credit card rewards would cease with no one making late payments
Employment would reduce with less profitable businesses
Consumer options for goods and services would reduce with less profitable businesses
In other words, FIRE currently works because the minority are exploiting the economy.
It’s easier to make money when everyone else spends money.
But if everyone were to FIRE, investment returns would go down and compensation for labour will go up, encouraging more working and spending. And people will always follow the almighty dollar.
That is why I believe not everyone will ever want FIRE. I have no concern about that at all. People love to earn and spend their money too much.
I know at times, when you are in the FIRE space, it feels like it is normal.
But trust me. FIRE is far from normal. This space is a very small minority.
For most, FIRE is something that you light when you are cold. Most people haven’t even heard of early retirement, or considered it as a possibility. Most people barely even consider a standard retirement if our national savings rate is anything to go by.
Even though it was fun to let my mind drift for a bit, I won’t be wasting any more time thinking about such a what if. Consumption will reign supreme! Always has, always will.
Us FIRE folk will always be the abnormal ones I’m sorry (or pleased) to say.
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