I’ve always believed in the notion of going through life in the correct way. However ambiguous it may seem, when it comes to personal finance and FIRE in particular, there’s definitely a way in which it should be executed in order to maximise efficiency

Don’t Swim Against the Current

Each adventure through life should, of course, start with amassing enough of a nest egg as early as possible, in order for it to compound for longer. Saving money should be of the utmost import to the graduate because as the years go by, saving will become harder. Not just because their expenses will increase with the burden of children and lifestyle inflation, but because they won’t be riding inside the tailwind of compound interest.

It’s easier to keep expenses lower from the very beginning than to reel them in at a later date. If you have to cut your expenses in half, it will feel like deprivation. If you never increased them in the first place, you’ll not feel that pang of loss. You’ll also get the added benefit of not needing to save as much in order to reach your goal**.**

The time complexity of your FIRE pot
O(2^m+t)

Starting early also allows your family to develop a sense of thrift whilst all parties work. Trying to reduce your spending by 50% as a single income / stay at home parent duo would be a lot harder to execute, as along with the added difficulty of trying to change ingrained habits, you’ll also be competing with the home-maker who potentially has less to gain and more to lose from a reduction in spending.

Instead, if you go through life in the right way, you will both be willing to spend less in order to save more. By the time you have children, you’d be in a much better position to reduce your workload or switch to a single income household as your stash would be happily compounding on its own.

The Boggy Marsh

A way to visualise this is to think of life as traveling through a boggy marsh.

You begin your journey on dry land and not carrying much baggage, running through the dry shrubs like a spring whippet. 

You may pick up a companion on your adventure. Teaming up you’ll be able to reduce your load even further as each person scouts dryer pathways and helps carry the load. 

As you venture further into the marsh, the mud will become thicker and the brush denser, you’ll begin to struggle.

You may introduce a third or fourth companion into your party who cannot aid you in traveling through the marsh, you will actually have to carry them yourselves and go through deeper territory. Your companion may also have to be carried because they will be consigned to care for your other party members, making you the sole adventurer pushing forward and clearing the pathways.

Pretty soon you’ll become overburdened with the weight of the world on your back, carrying 3 useless companions with you throughout the waist-deep mud.

You’ll never get out of The Boggy Marsh!

Your main advantage would have been to traverse faster at the very beginning of your adventure, to pick up less luggage and to run faster. Knowing that it will become much, much harder to escape the marsh later down the line. 

You could have almost reached your destination whilst you were still light, nimble and eager adventurers, only taking on more burdens when you almost saw the exit.

You could have spent your time when you were faster and on dryer ground building wading mechanisms and safety vehicles, knowing that you would need them when the marsh got deeper.

Why would you rush into the densest, most hazardous pit of the marsh as quickly as you could without first scouting out the area and making provisions?

Putting on your X-Ray Goggles

As Wait But Why likes to say, you need a special pair of X-Ray goggles to see through the mist. The mist is covering the financial blueprint that would help zipline everyone through life with ease. Visualising scenarios like The Boggy Marsh help us to see through the mist.

Most people tackle the marsh head-first without provisions, they find themselves stuck in the deep mud, barely able to move until they reach traditional retirement age. A lot of FIRE followers have found a way to get out of the trap that they’re in and reach the exit quicker than most, but why not go into the marsh prepared? Avoid the pitfalls and sprint through before taking on more burdens?

The Need to Fail and Learn

The majority of people I’ve spoken to who follow the FIRE path first failed to find their way, this includes myself. I had to save negative £10k over a 2 year period before finding the FIRE movement and getting my finances in order.

Most people acknowledge that they need to fail to learn. A part of being human is testing new theories and learning from them, but this shouldn’t need to be the case with finance.

This one blueprint has the ability to alter most people’s lives in a monumental way. If we, as children, were taught how easy our life would become if we focused on saving as a priority. If we knew how far a tiny amount saved back then would stretch decades into the future, everybody would follow suit.

Surely this should be the most important subject in a student’s syllabus? The key to success. But no, it’s not even taught at all. 

This needs to change!

Click here to read part 2 of The Boggy Marsh