Financial Planning for Doctors

A therapeutic index is a marker of a drug’s safety profile.  The narrower the therapeutic index the harder it is for a drug to have its intended effect without having a serious consequence.  For example, Warfarin – an anti-coagulant used for atrial fibrillation – has a very narrow therapeutic index.  Not enough warfarin, and it isn’t effective to prevent an atrial thrombus.  Too much, and it can produce lethal GI or intracranial bleeding.  I would argue that while the therapeutic index for financial independence is quite wide, the therapeutic index for FIRE is narrow.  Not enough focus on FIRE, and you likely won’t ever retire.  This happens to many doctors.  Too much, and the side effects of FIRE can produce some major unintended consequences. This is why I don’t focus on FIRE on The Physician Philosopher.

Why I Don’t Focus on FIRE

Like reading a package insert for a new drug, let’s discuss some of the unintended consequences of an early focus on FIRE.  Go down the FIRE rabbit hole too early, and you may battle with some of these side effects.

FIRE Can Magnify the Pain

Planning is essential to financial success. Intentional planning through Life Planning (Click here to learn how to Life Plan) is even more important to keep the right perspective.  It is through this careful planning that my wife and I have determined that we need somewhere between $2.5 to $3.5 million in order to be financially independent.

To get to our number by our desired age, my wife and I have a six figure annual savings goal and a wealth accumulation rate (WAR) north of 30%.

Despite the amount of cash we are stock-piling into retirement savings, the time until we FIRE is still a decade away.  Having such a long journey until we “get there” is depressing.  Even if we increase our savings rate by 150%, it would only shave a year or two from our timeline.

This is a big part of why I don’t focus on FIRE on this site.  It can cause an unintended negative mental space, which I don’t need. This is particularly true if you FIRE as an escape hatch from a job that you don’t love.

Once you start on the FIRE journey, the aspects of your job that you’d like to change become magnified.  This can progress to a point of being unhealthy, because we want to shorten the timeline.  Instead, learn to enjoy the process.  Great things in life take time, and FIRE can steal this mentality from us.

FIRE Can Steal Contentment

Could we lower our FI number by being more frugal?  Yes.  We could.  But that’s not the life we want to lead.  We want to be able to give faithfully, travel when we want, pay for our kid’s college educations, and enjoy our time how we please.

If you combine a deep desire to FIRE with severe frugality, it can lead to a life of discontentment.  At some point, you begin to feel like you are sacrificing today for tomorrow.  A healthy balance can be lost.

The goal should not be to save every single dollar that we can so that we FIRE as early as possible. Instead, we should find a balance that allows us to enjoy today while we save diligently for tomorrow.

When FIRE is not wielded carefully, it can result in a perspective that judges every dollar that we spend.  It can be challenging to spend money for enjoyment.  With the wrong lens in place, FIRE can steal your contentment.  Since we know that being content is the real secret to financial success, this can prove dangerous.

FIRE Steals the Focus

The journey to financial independence is one that is meant to be enjoyed.  The goal isn’t to achieve the end (FIRE), it is to enjoy the means (the journey).  Time is money, but money can’t buy time.

Some promote ultra minimalism and frugality to achieve their end goal of FIRE.  Why? Because they think FIRE will make them happy.  Yet, many people who get to retirement (whether early or late) find that it isn’t all it was cracked up to be.  They didn’t have a plan.

Instead of finding a way to carve out a productive and satisfying journey along the way to financial independence, many view retirement as the answer to their problems.  While the entire purpose of this blog is to promote financial independence as a tool to fight the road to burnout, early retirement isn’t the “end all, be all” answer that many claim.

The focus should be on finding contentment in a job you love while on the way to financial independence. FIRE should not be Plan A, B, and C.  Instead, financial Independence should act as an escape hatch.

Why Not FI and Partial FIRE, Instead?

Financial Independence creates opportunity.  It shows us the way to financial freedom.  The closer we get, the more power it can wield.  However, the power does not have to be the power to quit.  Instead, it can be the power to create a job we love.

What might this look like?

It might look like Partial FIRE.  This may involve a three day weekend each week, or a day off in the middle of the week that serves as an island of respite and restoration.

Partial FIRE may also look like carving out the parts of your job that you can’t stand.  Maybe this means working in a certain location, or avoiding a certain kind of procedure.  As you near financial independence, the leverage is in your hands.

Whatever your Partial FIRE looks like, remember that it does not have to involve quitting completely.

On the contrary, it should involve making your job more and more enjoyable with each passing year.  After all, from the beginning of time, humans have found meaning in being productive.  We are not meant to lie on the beach sipping an umbrella drink forever (or playing 27 holes of golf every day).

Take Home: Why I Don’t Focus on FIRE

FIRE can be a powerful and unforgiving substance.  It can prove to be a great tool, or a big risk.  It all depends on your perspective.

While I don’t focus on FIRE, you might be closer to the end of the journey and find it a force for good.  Either way, I encourage you to focus on enjoying the journey along the way.

Has FIRE proved to be a force for good in your life?  Have you noticed negative side effects of a focus on FIRE?  Leave a comment below.

TPP

10 thoughts on “Why I Don’t Focus on FIRE (Financial Independence Retire Early)”

  1. Fantastic post. Sometimes because the general trend is a lack of preparation for retirement, those of us interested in personal finance swing to the opposite end of the spectrum in response.

    This is further exacerbated in the medical community by the discontent with our healthcare system and the threats of potential cuts looming in upcoming years. All of this can lead some of us to push the gas pedal to the floor. Articles like this help remind us that moderation in all things is key.

  2. Great post! Sometimes when I read FIRE blogs, it makes me feel like if I’m not full blown retiring at 45, I’m not a true believer. Truthfully, I like what I do and enjoy most aspects of it. Financial independence for me is about having the ability to say “I’m not doing this part” without fear of what losing income to make my monthly expenses meet. For me, it’s about saving aggressively now so that I can be more free to do what I want later—maybe that’s retiring at 45 or 60, but it’s on my terms.

    • Honestly, the slogan on my site should read “work because you want to, not because you have to”… that’s the philosophy I follow.

      I love what I do, and I love my life… I just want to be able to pick and choose the things that derive me the most passion and energy and follow those things (while discarding the other parts).

      TPP

  3. Great post! I’m right there with you being over a decade + from being at a point where FIRE could be achieved. Solely focusing on FIRE for such a long period of time would be cancerous on a career on which I’ve just begun (only three years out from residency). Thank you for the reminder and encouragement in seeking this balance. I want to enjoy and cherish this time now with young kids, not longing for FIRE time at which point they are about the leave the nest. Keep up the good work!

  4. 100%. It’s the journey, not the destination. Don’t forget to enjoy the road along the way and ruin the now in the pursuit of “getting somewhere”. In the end, there’s no “somewhere” to get to, only the present. Important to keep that in mind!

    • Amen! It’s like the sign that says, “Free beer tomorrow!”

      Time is a funny thing, and the present is all we really get. We can look fondly on the past, but it is never ours again. And the future does not belong to us either. Only the present.

      TPP

  5. Great post! As a young physician out of training (3 years out) and now that I’ve started reading all the physician financial blogs and posts about FIRE-it is a great goal to work on, but like you stated, we still have to remember to live today along the way (I constantly have to remind myself of this esp being 10 years in remission from cancer-must keep things in perspective!)
    Love reading your blog!

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