Young People Shouldn’t Stress About FIRE

When I started blogging, I often lamented that I didn’t learn about FIRE when I was in my 20s. I could have saved more and retired from my engineering career with a bigger retirement fund. The earlier you start saving, the more your investment can compound. However, I have a change of heart recently. I’ve been perusing the FIRE subreddit and young people in their 20s are stressing out too much about FIRE.

A few days ago, I saw a post by a 22-year-old guy. He is earning $70,000 per year and has some money saved up. He lives with his parents and aims to retire early with 12 million dollars. It seems like he is stressed out about the contradiction of moving out on his own and investing more for early retirement. If he gets an apartment, he won’t be able to save as much and it will take longer to reach his goal.

As a 50-year-old guy, this seems insane to me. It will take years to accumulate 12 million dollars. So many things can change along the way. There is no need to stress out so much about early retirement when you’re 22. FIRE is like sailing to a destination. You try to head in the right direction most of the time and correct your course as necessary. There is no straight road from $70,000 to 12 million dollars unless you get lucky with an inheritance.

Young people

When I was 22, I didn’t care about retirement at all. I was busy with work, going out, making friends, dating, growing up, and having a ton of adventures. I was learning how to be an adult. That period turned out to be the best time of my life. I have many fond memories from those days. Life was so much fun back then. Everything was new and exciting. Life was good in my 30s and 40s too. But it was much smoother. Once you have a family, you focus on that. Things evened out and the years flew by. That’s when I worked on achieving financial independence.

Fortunately, I was already frugal and started saving when I was 22. I contributed 10% of my income to the 401k and increased it every year. After several years, I maxed out my 401k contribution, Roth IRA, and invested more in my brokerage account. It worked out pretty well and I retired from my engineering career at 38.

Now, I’m glad I spent some money frivolously and made some mistakes when I was 22. You learn from your mistakes and grow. Those years helped me become a confident adult. After college, Mrs. RB40 joined the Peace Corp. She left to see the world for 3 years. She noticed a big difference in maturity when she came to see me. I wouldn’t have grown as much if I lived at home and saved every penny.

Top 3 things to focus on

Young people in their 20s shouldn’t stress out about retirement. FIRE is a marathon, not a sprint. They should focus on the present and enjoy it. Lay the foundation for FIRE and put it on the back burner. You need to learn good financial habits first. Here are my recommendations for the top 3 things to focus on.

1. Start saving

Start by saving 10% of your income. Contribute to your 401k and Roth IRA. Once you maxed those out, then invest in a good passive index fund in a brokerage account. The goal is to increase your saving rate to 50%. Once you hit 50%, you’ll be well on your way to financial independence. Meanwhile, read about investing and FIRE in your spare time. Don’t obsess about it too much.

2. Find the right partner

Finding the right partner is the most important part of your FIRE journey. your journey will be much easier if you find someone with a similar financial goal. On the other hand, the wrong partner could make FIRE impossible. Mrs. RB40 and I are both frugal. We highly value financial independence. We wouldn’t have gotten this far if we didn’t have similar goals.

Unfortunately, I don’t have specific advice on how to find the right partner. Dating seems crazy these days with all the apps.

3. Build confidence

Guess what. I had zero confidence when I was in college. I was a nerdy engineering student and I didn’t have any money. After college, I got a job and lived by myself. I had to find an apartment, learn to cook, pay the bills, find a dentist, buy furniture, and all sorts of mundane stuff. That’s when I became an adult. Those few years gave me a ton of confidence. Money helped too. I could buy what I wanted and take girls out to nice places. It was way better than being a poor college student.

Living with your parent can save a lot of money, but I don’t think it’s the right choice for most young people. It’s better to learn to be independent and take care of yourself. Besides, it’d be tough to attract a partner if you live at home. IMO…

Want to come hang out at my parent’s house? Uh, no thanks…

Wrap up

Alright, I have more, but I don’t want to bore you with too much. People in their 20s should enjoy life and have fun. Learn how to be an adult and build the confidence to face the world. They shouldn’t stress out about retirement yet. Once you have a family, life will smooth out. At that point, you can focus on FIRE and invest more.  

What do you think? Should young people save more or put FIRE off until later? I think there are more important things than FIRE when you’re 22.

Image credit: Tetbirt Salim

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