They don't feature in the smashed avocado-laced headlines, and you won't see them living the high life on Instagram.
And while they may be as equally impacted as other Millennials by the high cost of capital city housing, they're not succumbing to the (understandably) crushing fear that they may never own a house in a trendy suburb.
And, sorry Generation X, but they intend to retire before you do, too.
They're the group of young Australians who self-identify their financial circumstances and plans by the acronym FIRE — Financial Independence, Retire Early.
Yes, the full phrase is a little clunky, but that's not stopping them. And they intend to have the last laugh.
FIRE enthusiasts, if you can call them that, are a small but vibrant community of twenty- and thirty-something Australians (and their overseas cousins) who are committed to achieving financial independence as soon as possible, with the goal of retiring from work — or at least having the freedom to choose to — decades earlier than their parents and grandparents did.
Refreshingly, these aren't the 'How I bought 108 properties by 23' crowd. There's little-to-no financial engineering and not much — if any — debt. Instead, the FIRE crowd are taking a leaf out of the book written by the Boomers' parents: work hard, live frugally, and save aggressively.
And it feels like the movement is growing. What's perhaps most stark about this movement is that it's a neat, if uncomfortable, counterpoint to the generally accepted view of the hopelessness of the financial challenges faced by Millennials. Not that those challenges aren't real — it's just that those following a FIRE philosophy are making hard choices to take control of their financial futures.
Talking to a couple of investors, Tristan and David, who are pursuing a FIRE strategy, a couple of themes kept recurring.
According to Tristan, "The idea of working to 65, commuting 2 hours a day and not being able to access retirement money until we were old didn't sound too fun. We liked the idea of being in charge of life by being financially independent enough to do what we wanted."
Dave agreed: "I was motivated by the thought of having to work my whole life in a job I didn't like. Or just for the money to pay bills, while having no control over how I spend my time. Looking around and talking with other people in the workplace and society in general, they didn't seem all that happy about it and just seemed to accept it. Doing the same unsatisfying thing with no end in sight. I quickly decided that wasn't ok for me and there had to be another way."
FIRE-followers are often the ones moving out of the big cities, or at least to less expensive parts of them. They're eating at home, rather than going out (the data are fuzzy on the at-home consumption of avocados), and they don't drive new cars or travel.
"It's really about finding a happy life for you, that doesn't consume your entire income, because that's going to get you nowhere", according to David, while Tristan identified some of the lifestyle adjustments, including what you do and buy and how you travel:
"Spending significantly less than you earn is tough if it means (probably) renting on the outskirts of the city, solely using public transport, mostly eating Aldi-bought food and so on. It's an extreme version of long-term patience reaches the goal, which doesn't suit some people."
When I asked them what advice they'd give people considering the move, David summarised the numbers nicely: "The amount you need to save and invest is directly in line with how much you spend. Put another way, the less you spend, the less investments you need to support that spending, and the faster you'll become financially independent.". Tristan agreed, adding that being part of a community helps. "Find people on the internet who have already achieved FIRE, or are on the way to achieving it, to see how they're doing it."
Foolish takeaway
Forgoing consumption today allows them to achieve financial independence earlier, thanks to the miracle of compounding. And there's a real freedom from mastering your consumption and taking control of your financial life. But it does require sacrifice. It's a lifestyle that's not for everyone, but for those who embrace it, the rewards are early retirement and, yes, financial independence.
