FINANCE
WHAT DID COVID DO TO THE FIRE MOVEMENT? WRITTEN BY BRENNAN HALLOCK
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Business Insider article from March 2020 claimed that the COVID-19 pandemic might turn the FIRE movement into the DIRE movement. Instead of Financial Independence, Retire Early (FIRE), it could become the Delay, Inherit, Retire, Expire (DIRE) movement. Looking back from where we are now, how accurate has this claim been? The FIRE movement has gained popularity with the millennial crowd over the last couple decades through financial gurus such as Pete Adeney (aka Mr. Money Mustache), Vicki Robin and Joe Dominguez (writers of Your Money or Your Life), and many others. It teaches a way of life that involves what the average American would
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consider an extreme savings rate (often 40-80 percent of income), and a low-cost lifestyle to fund retirement accounts and reach financial independence (defined as having enough money to fund your basic expenses without working) before—sometimes way before—standard retirement age. But what happens to a movement like this when a once-in-a-lifetime event like the COVID-19 pandemic happens? I remember sitting in my house looking at my phone last March watching the stock market plunge day after day in amounts I had never seen. In a span of less than a week, my retirement and personal investment portfolio lost over 26 percent. It was intimidating and a little scary, but mostly I remember being excited.
Buying into the principles taught in the FIRE movement, I knew this wasn’t just a once-in-a-lifetime crisis, this was also a once-in-a-lifetime opportunity. So I took all the extra cash I had and poured it into my investments. This sounds crazy to a lot of people, but one of the principles behind the FIRE movement is the belief that the stock market will have consistent recessions, and it will rebound to a higher level after each recession. These bear and bull markets are built into the math behind investing. If the stock market doesn’t rebound, the money in your bank account won’t be worth anything either, so there will be bigger problems to deal with. Losing your entire stock portfolio won’t be one of them. Based on this belief,
