Playing With FIRE

Playing With FIRE

How Far Would You Go For Financial Freedom?

Scott Rieckens (/10)

Summary

What if a happier life was only a few simple choices away?

A successful entrepreneur living in Southern California, Scott Rieckens had built a “dream life”: a happy marriage, a two-year-old daughter, a membership to a boat club, and a BMW in the driveway. But underneath the surface, Scott was creatively stifled, depressed, and overworked trying to help pay for his family’s beach-town lifestyle. Then one day, Scott listened to a podcast interview that changed everything. Five months later, he had quit his job, convinced his family to leave their home, and cut their expenses in half. Follow Scott and his family as they devote everything to FIRE (financial independence retire early), a subculture obsessed with maximizing wealth and happiness. Filled with inspiring case studies and powerful advice, Playing with FIRE is one family’s journey to acquire the one thing that money can’t buy: a simpler — and happier — life.

Review

I enjoy non-fiction books that teach using a journey

The Third Door by Alex Banayan does this for entrepreneurship. The Game by Neil Strauss does this for "pick-up."

This book does the same for FIRE. If you've read any sort of personal finance book, this will largely be review. That being said, its the first personal finance book I've read that actually tells a story.

Criticism and praise aside, I read the entire book in one sitting.

Notes

Disclaimer

These are quick notes that cover the basic ideas in the book. Do your own research about important topics such as investing.

Better resources on FIRE than you'll find in my notes

My Notes

Introduction to FIRE

  • FIRE is an acronym for "financial independence, retire early."
  • Financial independence - you make enough from investments to cover your expenses.
  • Retire early - you reach this point way before the 'social standard' of 65 years old.
  • You do this by focusing on spending less, investing intelligently (& arguably aggressively), and earning more.
  • Once you reach FI, you pretty much do what you want because you don't have to work in order to support your lifestyle. Sounds cool.
  • Study after study shows that the marginal quality of life/happiness increase that comes from money tapers around a 60-75k per year salary.
  • More than just math, FIRE preaches principles of minimalism and intentional living.
  • Intentional living - reflecting on what you truly value and doubling down on it. Reflecting on what brings little benefit and ruthlessly eliminating.
  • Live below your means. Invest the difference. Do this for a long time. The better you do at this, the sooner you will retire.

The 10 Key Ideas From Playing With Fire

  1. The 4% rule is the governing math for FIRE investments. If you save 25x your average annual expenses and invest it such that you expect a 5% annual return, you can safely withdraw 4% of your money every year and live off of that.
  2. Exercise in intentional living. What are the 10 things every week/ month that make you happiest? What do you derive the greatest joy from in your life & routines? What do you most look forward to doing in your life every month? (Make a list of ten).
  3. What do you spend the most money on every month? (Make a list of ten). How well do these lists match up?
  4. FIRE preaches buying used reliable cars. This is difficult for some people--see Chapter 5 for details
  5. Some cities have a much lower cost of living than others. California is expensive y'all.
  6. Geoarbitrage - saving money because of currency/ cost of living differences. Getting dental work in Thailand. Working remote for a CA company while living in Iowa.
  7. The simplest investments in FIRE are low cost total stock market index funds.
  8. Don't be penny wise and pound foolish. The biggest impact on being frugal come from your house, car, and food. The 80/20 of FIRE savings come from optimizing around decreasing those 3 expenses.
  9. When pursuing any 'extreme' lifestyle, it helps to build like minded community. Find other FIRE enthusiasts to support your journey.
  10. FIRE is about optimizing spending around happiness. This makes sense.

Live below your means. Invest the difference. Do this for a long time. The better you do at this, the sooner you will retire.