There is a healthy and active FIRE community online. FIRE, for those unfamiliar, stands for Financially Independent, Retired Early. Most often, the retired early part implies retirement in your 40s, if not your 30s. But the question becomes: do you really want to leave the workforce at a young age? Instead, would you rather be financially independent, so that you can choose when and if you want to work? Are you so miserable working that you wish to never again get paid to do so?
Life can be a tough slog sometimes. You wake up, work out, fight traffic, put in your 10 hours, eat, play with the kids, and if you’re lucky, get an hour or two to spend with your spouse or a good book. Whoa, sounds brutal. That’s how I feel some days, as I’m sure all of us do.
The debate over whether to merge finances or not after a couple commits to a long-term relationship continues to rage. Seemingly every week, another article in a financial publication pops up discussing the merits of “to merge or not to merge.” For me and my family, the question was never open for debate. All money is family money: all debt, all investment capital, everything.
The idea behind mental accounting is that people naturally separate money that has different intents from each other. For some reason, economists consider this a bad idea. From the website Investopedia (emphasis mine): “According to the theory, individuals assign different functions to each asset group, which has an often irrational and detrimental effect on their consumption decisions and other behaviors. “
Optionality in investments refers to the right to do something, but not necessarily the obligation to do so. The right combination of optionality and underlying portfolio assets more often than not leads to better outcomes than a traditional portfolio. Building optionality into your life, particularly early on, can lead to better life outcomes, too.