For all that we talk about FIRE and how it's the way to secure a financially sound future early in your life, I understand that it can be overwhelming.
FIRE stands for Financial Independence, Retire Early, meaning you gain enough capital to step back from your work earlier than the average retirement age.
However, this is challenging for physicians, who often start their careers comparatively later in life, leaving them very little time to save for an early retirement. It's why you see physicians often working past the average retirement age in the first place.
But as hectic as FIRE can get, the benefits can't be overlooked. FIRE is an achievable lifestyle plan that enables doctors to achieve the satisfaction of a fulfilling career without spending their entire lives on it. It enables financial security at a faster pace, which is all we ultimately want after working so hard to become a doctor.
There are several reasons why FIRE is gaining traction in the medical fraternity, so let's talk:
- How FIRE Eventually Leads To Less Stress And More Free Time
- Why Following FIRE Helps You Gain Better Financial Literacy
- FIRE And Fulfillment In Your Medical Career
Combining Intense Budgeting with an Investment Portfolio
This is likely not your first time hearing about FIRE, but if you're still new, here's a refresher:
FIRE is an investment movement that incorporates frugal spending habits and hardcore savings while building on investments that provide long-term sustainability, all for the ultimate goal of retiring early.
Although we don't know when the phrase became popular, the movement itself has been going strong since the 1990s.
Several key factors are involved in getting started with FIRE, which we have highlighted here.
However, the basic rule of thumb is to save enough very early on so that you can get through the next 40 to 50 years of your life without depleting your savings. It's wealth that builds upon itself, without returning to work to supplement your savings.
FIRE has gained significant traction in the past decade, with an increasing number of Americans adopting financial habits that build upon it. But everyone requires different strokes, which is why we have seen FIRE diversified into several different versions such as:
Fat FIRE
Fat FIRE is the most approachable variation of the FIRE movement, designed for individuals who want to save without compromising too much on their current lifestyle.
Of course, this means the person in question needs a higher salary to maintain both their investment plans and relaxed spending habits.
Read: FIRE vs. Fat FIRE
Lean FIRE
Lean FIRE is for those who really want to retire as fast as possible, as if they can't spend another minute at the hospital. Think of a minimalist lifestyle, with no ‘luxuries' to maximize savings to their best extent. It's restrictive, with many followers living off of less than $25,000 annually.
Barista FIRE
Barista FIRE is truly the best of both worlds. If you don't want to continue working a regular 9-to-5 job but still have more spending room, you'll find Barista FIRE easier to follow due to its more approachable lifestyle. It's also helpful for people who don't necessarily want to stop working after gaining financial independence, but rather work less without the mind-numbing grind.
It's why you find physicians gravitate towards it more; it helps us stay connected to our goals, whilst offering the safety net of extensive retirement funds to pull from.
Also read: Barista FIRE for Doctors
How FIRE Helps Elevate Your Life (Despite the Trouble)
Making people aware of FIRE is our modus operandi. This is why you won't find a shortage of articles that detail its many aspects, such as how to adjust it to fit you best, like with Coast FIRE, what rules can be ignored, and which to stick by the most.
FIRE can be a lot to manage as a physician, but what it offers in return is undeniable in its benefits.
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Getting back financial autonomy
Physicians are often expected to lead a lifestyle with all the glitzy, glamorous trappings expected from some of the most industrious and intelligent workers, almost anywhere in the world; houses with high maintenance bills, luxury sports cars to signify social status more than practical use, designer clothes, and the like.
All of which will amount to zero savings, unpaid student debt—accruing more interest as we speak—and no plans to retire before your 80s. By which time, health issues and disabilities await to force you into early retirement. And if you were relying on employer-sponsored health insurance…
FIRE can save you from spending for the sake of putting on a show, which will cost you for the rest of your life, while your peers enjoy early retirement on a cruise.
The mindfulness that accompanies reasonable frugality, asking questions about whether your spending habits are influenced by changing social trends or your needs, can set you apart from most high-income earners who struggle to achieve true wealth.
More time for a stress-free future
While FIRE places a lot of importance on the ‘financial independence' aspect, that is not the only point of the movement. What makes FIRE so worthwhile is that it enables early retirement, freeing up time for your later years to spend with family, friends, grandchildren, and even mentees.
You can finally slow down and pursue hobbies for which you had no time before, and develop a sense of self beyond the walls of a hospital.
Securing a financially sound front
Most Americans are not—and probably cannot—save enough to retire in their lifetimes, and for high-income earners, it's less about income and more about bad financial habits.
FIRE, as its core, helps you build wealth that works for you, instead of the other way around. Instead of being stressed about withdrawal rates and balancing a portfolio in your 60s, smarter financial choices at the beginning of your career will help maintain a good lifestyle through the decades of work and after.
Freedom and flexibility
Being able to achieve financial independence not only secures your future but also affords you the freedom to be flexible with your goals in the long run.
Instead of fixating on keeping a job to stay afloat, you suddenly have the time and freedom to make choices based on your values, rather than your needs. A paid-off house could mean anything from having the luxury of travel to having the means to pursue more fulfilling causes, such as volunteer work and philanthropy, and avoid a loss of purpose and meaning later on in life.
