How FIRE Can Help Mitigate Disaster

We all like to think glowingly about our future.  Raising our families, fun vacations, memorable meals, and retirement, of course!  We spend a great deal of time thinking and planning about what fun things we are going to do and how we will go about doing them.  In the Financial Independence Retire Early (FIRE) community, we use high savings rates to reach Financial Independence (FI) much quicker than our non-FIRE peers.

But unfortunately, S^&T happens, and our best-laid plans could go up in smoke.  However, the same skills you use to propel yourself on the path to FI can serve you well when everything that can go wrong, does go wrong.

Health issues, natural disasters, wars, zombie invasions, plagues, civil unrest, swarms of locusts, hyper inflation, stock market crashes, and just plain old bad luck are just some of the many things that have popped up before and could occur again.

(Wait…did he just say zombie invasions?)

Yes. Remember the Pokemon Go craze?  Tell me those people aren’t zombies!

How does following the path to FIRE help prepare us for when disaster strikes?

FIRE Seekers Live Well Below Their Means

Savings rates of 50% or higher are common in the FIRE community.  (I’m not there yet, but we are making strides)  Saving at such a high rate provides two benefits when the bad times set in.

1. All the savings accumulated can be used to support your lifestyle in the event your job disappears, or health issues arise. Have to rebuild after a disaster?  That big chunk of change will come in handy.
2. By living below their means, FIRE seekers often live more simply than others and have less material possession.  So when the S&*T hits the fan and these possessions are lost, it impacts the FIRE seeker much less than those trying to keep up with the Joneses.

They are Financially Flexible

By saving up a large nest egg, you have the ability to step away from your day job if the circumstances dictate.  Many in the FIRE community also develop passive income streams which reduce your need to work a typical 40+ hour work for someone else.

As an example, if you have an occupation that depends on being physically fit (such as a police officer, construction worker, landscaper, etc.), and suffer health issues, you may lose your ability to do your job.  A FIRE seeker could pull from their savings to support themselves or use passive income to cover a portion of their costs.

FIRE Living Helps Develop Useful Skills

Do It Yourself (DIY) is a mainstay principle of the FIRE movement.  The ability to tackle a project or need without having to pay for someone else’s services provides substantial savings that help propel us towards Financial Independence.Since we no longer have to trade our time to work for others we have the opportunity to devote our time to learning new skills.  Some of these skills could be the difference between life and death in an emergency situation.

However, perhaps the most important aspect of DIY is the learning that takes place.  Developing the skills to fix things or solve problems helps in two ways:

1. We reduce our reliance on others to meet our needs. This is important, because in the event of a disaster like a tornado, flood, or fire, those “others” may not be around.  It is possible that the only one you can count on is yourself.  How are you going to feed you and your family?  What about heat and clothing?
2. These DIY skills make us valuable to others. Think of a post-apocalyptic world.  In this world, money may have no value.  Trade and barter of goods and services will likely be the “currency” of the times.  What better way is there to provide for you and your loved ones than to have a stockpile of skills that you can trade for food and other essentials.

They Think Outside the Box

One of the cornerstone tenets of the FIRE community is the ability to view a problem from a different perspective.  This unconventional approach has helped develop lucrative alternatives to such things as housing (house hacking – courtesy of Coach Carson), high cost of living areas (geoarbitrage), travel (travel rewards), education (Youtube and Treehouse), and Investing (Index Funds – See The Great Financial Migration Part 1 and Part 2).

When the world is crumbling all around you, this trait can be a life saver.  The availability of goods and services may be severely compromised.  The usual solutions to problems may not be suitable.

They Are Hardened by FIRE

“If you’re going through hell, keep going” – Winston Churchill

Chasing FIRE is simple (live below your means and invest the difference), but it is not easy.  Living below your means while everyone around you is living above their means can wear you down.  It takes discipline to resist the lure of lifestyle inflation.  It requires determination, mental and emotional toughness to stay the course over years and decades.

In fact, many folks on FIRE find great enjoyment in experiencing some measure of discomfort (i.e. building sweat equity for DIY projects, hiking, biking, camping, and other activities out in the elements.

When the S$%T Hits the Fan (SHTF), this toughness can be invaluable.  Things will be hard.  It’s this toughness that can help you persevere while others flounder.

So while the happy benefits of pursuing FIRE are obvious (freeing up your time to chase your passions, improved health and relationships, no money worries, etc.).  The ability of FIRE to better prepare you and your family for disaster should not be dismissed either.  It just goes to show that the FIRE lifestyle can serve you well regardless of your future circumstances.

Thanks for reading.