Your FIRE Strategy Won’t Work, But You Still Need One

Your FIRE strategy won't work, but you still need one

Most people pursuing FIRE have knowingly or unknowingly defined a strategy.
The strategy often have a few quantitative and qualitative goals such as:

  • I will retire when I am 35 with $1,000,000 in the bank
  • I will retire when I am 35 to spend more time with my kids

Most people calculate their financial independence number as a strategic goal.

The strategy to reach the goal is often defined as a few initiatives coming in many shapes and forms:

  • I will save 50% of my income for the next 10 year
  • I will increase my income by 10% each year
  • I will start spending time on things that really matter and cut down on things that don’t give my energy

Now, having a strategy with clear goals is great, but…

Your FIRE strategy is not going to work

I’m 100% sure your FIRE strategy won’t work.

How do I know this? I make strategies for Fortune 500 companies for a living.

Here’s the truth: I have never seen a strategy and its goals come 100% true.

This is why I am 100% sure your strategy will not work.

Why your FIRE strategy will not work

The reasons why strategies don’t work for companies is that:

  1. The economy is changing constantly
  2. The political landscape is changing constantly
  3. Consumers’ preferences are changing constantly
  4. Shareholders’ preferences are changing constantly
  5. The Earth is changing constantly

With so many things changing all the time, how can companies realistically create a strategy for the next five or even ten years that will not change?

It’s the same for people like you and I who have a FIRE strategy:

  1. The markets and the returns we rely on are changing
  2. Our jobs are changing (for better or worse, to being fired, hired or headhunted)
  3. Our families are changing (growing or shrinking)
  4. Our passions and hobbies are changing
  5. We grow smarter and our priorities are changing (yesterday hanging out with friends was most important, now raising a family is more important)

You see? The world is not as static as our FIRE strategies make them.

This is why I get tics every time I see people having long discussions in forums about how to calculate their FI number with seven decimals taking into account all sorts of variables.

You don’t need to find the perfect savings rate of 43.28% or safe withdrawal rate of 3.28%. You don’t need to include future expected tax rate changes. You don’t need to (and you can’t) forecast the markets other than using historic averages. You don’t need to precisely forecast your future expected spending. Why? Because you can’t and it is a waste of time.

You just need approximate numbers to set a goal. Don’t spend too much time on it. Set the goal and update it yearly.

Big Fortune 500 companies understand this when we create the strategy at the C-level. Eventually though, the finance department will turn those calculations into a 100,000 row Excel document.

You will not make this mistake. Make sure your FIRE strategy goal is dynamic and understand you can’t forecast it precisely.

If you don’t do this, you end up being precisely wrong rather than approximately right. You also end up wasting a lot of life energy that could be used on something better.

Why you still need a strategy

Even though your FIRE strategy won’t work, you still need one.

My clients always understand this. I always tell them when we develop the strategy that it will not work. At least not every part of it. That is the point of a strategy.

A strategy is perfect for understanding how to get from A to B.

You still need a quantitative and qualitative goal.

You still need to define initiatives for how to reach the goal.

You just need to understand that it will not be straight line from A to B.

Just as the world around you, the direction of that line will be non-linear and change many times. Even the goals will change.

As long as you have an idea about the direction and how it can change, you will end up in a good place. Even though it will be different than what you initially expected. As someone wise once said: “Shoot for the moon. Even if you miss, you’ll land among the stars”.

Let’s raise our glasses to dynamic strategies based on always changing approximate goals and flexible initiatives.



Financial Nordic August 29, 2019 - 18:59

Good points!

Definitely one of the biggest reasons why people need a clear strategy is accountability for themselves and also a clear path to follow.
But it’s also true that everything is changing all the time, and strategy should always be flexible. I don’t even want to make too strict FIRE-strategy for my self at this point of life 🙂

– Financial Nordic

Carl Jensen August 30, 2019 - 10:22

So true! The reason I have this blog is first of all for accountability too. Good to hear your FIRE strategy is also flexible 🙂

Reply August 23, 2019 - 10:37 Reply
Carl Jensen August 23, 2019 - 11:59

Haha, see it as motivation 😉

European Dividend Blog August 23, 2019 - 09:30

Loving this!!! Both from a professional point of view and a personal point of view.

Even though my goal is to reach FIRE, my wife and I often talk about “cashing” in early to quit our jobs and make a mini-retirement. This is not my strategy, nut is correlates to the goal of having a good life, and to be happy with my kid and my wife. I really think to whole FIRE community really can benefit of these more philosophical and holistic approach like you, me and Fireat33 represent (my personal interpretation 🙂
Basically, it means: Save as much money as you can without compromising your happiness, and have them work for you in the best way possible and then spend it on the best possible way in your current situation.

Carl Jensen August 23, 2019 - 20:49

I very much agree with you, EDB. Having a good life and being happy should always be a priority over following a strategy or certain goals blindly – I know for certain our FI journey will take many detours 🙂


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