FILE vs FIRE – Finding what is right for you.

Jay Zigmont, PhD, CFP®

It used to be that the goal was to retire and ‘get the watch.’ People would work 25 years at one company, pay their bills, and then retire (often with a pension). Those days are gone. Retirement is no longer ‘guaranteed’ for anyone and may not even be a choice for many. Even for those who may be able to retire, it may not be the right choice.

The FIRE movement (Financial Independence, Retire Early) has grown in popularity lately. The concept is simple: Grind, hustle, and save now so that you can retire early. Sacrifice now for retirement early. The principles of FIRE are sound. There are even variations, including Lean FIRE, Barista FIRE, Chubby FIRE, Fat FIRE, and others. Effectively, each level of FIRE reflects a different life in retirement, with Lean being closer to eating Ramen Noodles and Fat FIRE having your own private chef. The bottom line for FIRE is that the goal is to retire early and ‘turn off’ work (like a light switch).

Retirement is not the goal for everyone. In my research with Childfree individuals, many people seem interested in following their passions. Following their passions might be a career they love or running their own business. The difference is that they are ok working and would be happy to keep working as long as possible. I had a great conversation with Ryan, who explained that he could retire but loves what he does. His answer was to pick the clients he works with, work no more than 25 hours a week, and never work before ten or on Fridays. He is ok if clients leave (they have) and he works remotely from wherever is nice at the time (most recently Palm Springs).

For those who don’t want to retire, FILE (Financial Independence, Live Early) is a better option. FILE prioritizes financial independence to live a life you enjoy, now and in the future. It may mean making the same sacrifices as a FIRE life, but with a different goal. If FIRE is an on/off switch for work, FILE is a dimmer switch. It is about finding a balance between time, freedom, and money.

The commonality between FIRE and FILE is Financial Independence. Financial independence means that you have managed your money to a point where you can make ends meet and don’t have to worry about finances every day. That may seem like a luxury to many, but it is possible with careful budgeting, staying out of debt, and saving/investing. Financial independence happens when you are intentional and follow a plan. It isn’t exactly sexy, but spending less than you make and saving for the future is the bottom line. Your behaviors with money will have more of an impact on if you achieve financial independence.

FILE is different because you can enjoy your life before you retire (if you ever do). Your goal in FILE is not stopping work at some arbitrary age (or net worth) but in living your best life both now and in the future. That changes the way you save and invest. Instead of investing everything in a retirement plan, you might invest in yourself or your business idea. This investment in yourself will slow down your progress towards retirement but may lead to a more fulfilling life now. It does require that you have faith in yourself and that you can achieve FILE, which may be the hardest part.

Some questions to ask yourself:

• Do you want to retire? If so, when? And what do you want it to look like?

• If you don’t want to retire, what do you want to do? What is holding you back?

• Would you prefer to have more money or follow your passions?

• What are you willing to give up now for your ideal future life?

• Are you happy?

The problem for many people is that they cannot see a different future. Retirement looks attractive as at least it is an endpoint. But if you are not happy now, why wait to change it? The challenge with FILE is that you have a chance to do what you want when you want if you are willing to change. You can keep chasing more zeros in your bank account, but will it truly make you happier? It may seem crazy to take a pay cut, but if you would be happier doing something else (which pays less), why not do it? You might not be able to afford as much ‘nice stuff,’ but what is your happiness worth?

Some tips to achieve FILE:

• Set a budget and live within it. It does not have to be overly restrictive, but you need to know your Musts, Shoulds, Coulds, and Won’ts.

• Get out of debt. Debt is stealing from your future. If you want to achieve financial independence and do what you love, you need a solid foundation that does not include debt.

• Make a plan. Have a financial plan that reflects your ideal life. Set guardrails for what you can (or can’t) spend. Set goals and measure your progress towards them.

• Save and invest. Investing in FILE may be just as much in you and your ideas as it is in the market. Saving for the future (rather than retirement) may also require different investments and combinations of taxable and tax-advantaged accounts than the ‘norm.’

• Celebrate your wins. Celebrate when you achieve milestones and remind yourself why you decided to follow a FILE life.

• Live your own life. Comparison is the theft of joy. Live your own life by your standards and your plan. The only person you need to impress is yourself.


Jay Zigmont, PhD, MBA, CFP® is the Founder of Childfree Wealth, a life and financial planning firm dedicated to helping Childfree and Permanently Childless people. Dr. Jay is a CERTIFIED FINANCIAL PLANNER™, Childfree Wealth Specialist, and author of the book “Portraits of Childfree Wealth.” Dr. Jay is the co-host of Childfree Wealth Podcast. His Ph.D. is in Adult Learning from the University of Connecticut.

He has been featured in Fortune, Forbes, MarketWatch, Wall Street Journal, New York Times, Business Insider, CNBC, and many other publications.