achieving financial freedom one lazy step at a time

The ethical side of FIRE

Apparently some people wonder if this financial freedom/early retirement stuff is morally right or wrong.  Cheesy finance posted the question here and I was only going to type a short comment. And then I started typing and the short comment turned into a long one, which turned into this post …

The tax side

The ethical debate seems to be revolving around the question if we are committing a mortal sin because we will pay less taxes. Personally I have zero issues with it. I find our government incredible wasteful with the money people had to work so hard for. Frugality isn’t a trait often found in government bureaucracy. If they are just going to waste it, I do not feel very inclined to keep on providing my money to them. I also would like a much smaller government as in my mind they are now active in area’s better left to the private sector. Cutting the government budget in half would be a good start. And then cut it in half again …. This because I firmly believe a smaller and more efficient government would benefit our society a lot more than the over bloated wasteful one we have now.

So for me the tax side of FIRE is not a problem, on the contrary 😉 I sometimes refer to my frugal living as financial guerrilla warfare against the ever hungry government caterpillar.

The bigger picture

What I do wonder is if by checking out early from the workforce if we are slowing down the progress of society in general. With progress being defined as a better standard of living for the most people possible. Sure, most of us have jobs that do not really contribute to this and the job itself will be done by somebody else, so no actual loss there. But I have found I get more stuff done when I am working. I get pretty lazy without external pressure. That might just be me off course. And a whole lot of people who have reached FIRE seem to keep pretty busy or devote more time to self-development. But since, once FIRE reached we do not pay a lot off taxes, are we contributing in another, perhaps a more meaningful, way to society?

I have been wondering, where are the FIRE people who did truly exceptional stuff in their retirement? Stuff they would have never done if they still needed to work and is not only personal development but does benefit society as a whole? An innovation, a charity accomplishment, or even making big amazing structures for burning man …

Perhaps I look at it the wrong way. Perhaps the impact of the FIRE community will not be a few big exceptional accomplishments (because realizing the big exceptional accomplishment would probably turn into work at a certain point). Perhaps the impact will be more in a sort of grass root movement. Lots of people whom make small improvements in their own personal life and community because they have the time to do it. Buying less useless crap and focusing on meaningful experiences and relations with other people cannot be bad for our society.

Perhaps it will only be when a certain threshold of FIRE people in the society is reached that network effects and scalable stuff will start to happen and the impact on the whole society become visible….


  1. Team CF

    “Frugality isn’t a trait often found in government bureaucracy.” you got that right!

    “Buying less useless crap and focusing on meaningful experiences and relations with other people cannot be bad for our society.” think you hit the nail on the head with this one!

    Glad you wrote the post instead of the comment, like it.

    • finan112_wp

      Didn’t want to hijack your post with a very, very long comment …

      • Team CF

        WDYR already did 😉

        • finan112_wp

          I noticed and thought ‘better not add another one …’

  2. geldnerd

    “financial guerrilla warfare against the ever hungry government caterpillar”… That is a gem… I could not agree more, most governments have drifted far from the original task of government. Decluttering works in my home, it could (should) also work for government.

    • finan112_wp

      Decluttering of the government, yes!! We need a Marie Kondo for our government!

  3. geldistijd

    “The ethical debate seems to be revolving around the question if we are committing a mortal sin because we will pay less taxes”.
    Actually the discussion started here (dutch), about what is FIRE all about: in my opinion it is about the meaning of life, how can someone spend the lifetime in a more sensible way than working like hell.
    But I noticed that many FIRE people only have dollar signs in their eyes and are simply focused on interest rates without caring about life around them.

    • finan112_wp

      Sorry, I wasn’t aware of your post. Although spending your lifetime in a more sensible way is definitely on off the goals of FIRE the problem with that is that it is very, very personal. I have already posted how I would view my post FIRE life but the thing is, that is what will work for me, but probably for nobody else. And to have that life you need to reach FIRE first. And reaching FIRE is a numbers game. So with the pursuit of happiness being hyper individual and most of the people in the community still trying to achieve FIRE I think it is understandable that when we do get together we are talking numbers, interest rates, investments and taxes… Left and right you sometimes have posts pop up on how we increase our happiness, meaning in our life. Even if it is a post about that I try to put a link to frugality in it so other people get some relevant information. For me buying a Vespa motorcycles made me a lot more happy but in the post I talked more about the numbers and how cheap it is compared to a car and even cheaper alternatives people could do. I really like digging up old techno music on the net and one of my goals is to do more meetups with friends and have small, cheap parties. But I haven’t really posted about that part. I did do a post about several ways to enjoy music without braking the bank … Honestly, I would feel weird doing a post about the emotional side of it and thus fcosu on the practical side of it. I am afraid it comes with the territory of most of us being number geeks …

  4. Hard L

    The consistent fallacy in this and most other posts about taxes is to factor only the USG in the discussion, i.e., national but not state and local government. Doing so fails to distinguish how strongly Our Constitution defines the limited role of the central government. Since 1933, constant expansion of the federal government has run amok with spending, which is antithetical and against We the People.

    As We are seeing with the current tax reform, the proposed elimination of deducting state and local taxes (SALT), exposes how expansion by the USG affects how states respond; states with high taxes expand government, as residents deducted SALT. Without SALT, the “fear” is more people will migrate to low-tax states but bring their “more government” voting patterns. Note that, post 9/11, the explosive expansion of the USG has resulted in a majority of the ten richest counties in the US now ring DC, and that that expansion turned Virginia blue at the state and national level.

    At the crux of this issue for FI is the relationship between the vote and the wallet, a topic of discussion that most, if not all, FI groups prohibit. This does a disservice to the FI philosophy at it’s core, as it skews the discussion. Check out “We the People and FI”.

    • finan112_wp

      This is a Belgian blog but since our tax rates are higher than yours (and we have 6 governments for a country of only 11 million people) taxes do indeed play an important role in FIRE planning. But I am starting to understand why one would want to avoid the discussion. It’s not a very productive – or amusing – use of ones’s time ..

  5. Project Lonica

    I believe you are trying to get away too easy by stating that you don’t like the way tax money is spent. I mean, by using it as an excuse for trying to pay less taxes and even see it as some kind of noble guerrilla thing.

    In whatever way a government spends money, there will always be a group of people who see it is a waste of the taxes they paid. Maybe you think spending tax money on new highways is a good idea and maybe I don’t agree with you. That’s why we have created some kind of a democratic political system.

    Anyhow, the bigger part of tax money goes to health care. Another big part to education, infrastructure, safety and solidarity with people who need help (for whatever reason). These collective systems only function because we pay for them together. You are using them, just as I am.

    It will never be spent in you ideal way, nor in mine. But IMHO that is a bit of a lame excuse for trying to make it sound a good thing to pay less taxes. Then be brave and step out of the system completely.

    • finan112_wp

      I guess we have a fundamentally different view on the government and it’s role in society. Having more than 50% (that is if you include VAT) of what you earn taxed away for 47 years just isn’t right to me. When building up your stash their is unfortunately no way to avoid this but if I can achieve FIre in 20 years and then have my effective tax rate reduced to around 10% this should get me closer to 25% to 30% average for my entire life which is in my opinion a more than acceptable rate (Australia for instance hovers around 35% of GDP, New zealand around 20%, both are a western modern social democracy so it can be done …). Stepping out of the system is unfortunately not possible (except for either the very poor or the very rich). The only thing posiible is changing system, meaning moving country but that too is either a young or rich man’s game. Young isn’t in the cards any more, but the rich …

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