The FIRE Movement grew out of Robin & Joe’s FI Thinking, by folks who really wanted to get on with their lives and not be tied to a job.
When, in 2018 Robin met with a reporter from Der Zeit (a popular German magazine) she thought in a fresh way about how she went from living on $150 a month to her current quite middle class lifestyle, it didn’t seem to walk in step with retiring early. In reality, Your Money or Your Life isn’t about retiring. It’s about engaging more deeply with your life, your family, with society.
- Financial Intelligence – getting the most for your money/smart shopping.
- Financial Integrity – aligning earning and spending with values and purpose.
- Financial Independence – having passive income equal to your needs so you work by choice not by necessity
- Financial Interdependence – building relational wealth, networks of reciprocity, sharing, mutual aid, community, in tune with nature.
All of this adds up to what we call FI thinking, which means you are alert to opportunities (like having your house produce income), resilient, resourceful, multi-talented, always learning, making yourself useful to others (for fun or profit). It’s transforming your relationship with life.
Robin tells her story:
“When I met Joe Dominguez umpteen years ago, he explained his approach to money and investing. I put a small inheritance ($20,000) into government bonds at 9% interest (that’s $1800/year in 1970, $150/month. While that sounds extreme, $150/month in 1970 is $975/month in 2018 dollars. Which is still slim.
Every scrap of money I made above expenses for the next two decades was reinvested. When Your Money or Your Lifewas published in 1992, I lived on about $600/month, or about $1,000 in current dollars. Much of my economizing came from sharing just about everything with a group of friends living in a huge house in Seattle, plus the very frugality habits we discussed in Chapter 6 of the original Your Money or Your Life.
By 2004, when I was diagnosed with cancer, I’d grown my nest egg to earn about $1000/month in income. At the same time I got a book contract and that 35K after taxes, etc. bought me a new car and paid the out of pocket expenses for my surgery, chemo (which I soon stopped) and some alternative treatments. As part of the spiritual healing from cancer, I moved out of that group house and struck out on my own.
Whoa! I didn’t have enough money to be single, so I worked part time for a non-profit – some of which I stashed to earn more income. A few years later I started social security, calculating that the 2 years of current income would not be exceeded by social security income from waiting until I was 84. Another book advance added to my savings and bought me help with editing. In 2008 I looked at my bank account, at all those savings, and realized I might expand my lifestyle a bit without compromising my long term financial security. I found a house and tell part of that story in this Seattle Times Op-ed. As I calculated how I might afford the house, a woman moving to my island suggested we buy it together, for a greatly reduced price as it was at the pits of the downturn and the bank let it go for a song in terms of the local real estate market. It turns out we each had enough cash to make the purchase price without a mortgage. Fast forward two years and my house partner needs to move back home to take care of her mother. As luck would have it, right then I got another advance to write a book, which covered the cost of an editor plus being able to buy my house-partner out. I converted both the family room and the garage into two studio apartments and these, plus an occasional airbnb of my guest room means my house now provides a third of my income, and pays my taxes and insurance as well.
With housing covered and actually being a “profit center” I live comfortably on just over $2500 a month. And still save. And lo and behold, updating Your Money or Your Life again for 2018 I got another advance, paid another editor and got to invest, this time in small businesses in my local community and some solar companies.
In short, I came by my house the old fashioned way: saving, saving and more saving. Always saving, adding to my cushion and then investing the cushion while preserving some cash in the bank. Delaying purchases until I had cash. Never carrying a credit card balance. Using creativity to “make-do” so it never felt like deprivation. And then, when necessary or possible, harvesting more income from some of the ways I like spending my time anyway.”
When Robin explained this to the Der Zeit reporter she smiled and said to the 73 year-old matriarch of the FIRE movement,
“You’re just like us millennials.”
Robin said : “I took that as high praise.”