Book Summary: Playing with FIRE by Scott Rieckens

Are you looking for a book summary of Playing with FIRE (Financial Independence Retire Early) by Scott Rieckens? You have come to the right place.

I jotted down a few key insights from Scott Rieckens’s book after reading it.

You do not have to read the entire book if you don’t have time. This book summary provides an overview of everything you can learn from it.

Let’s get started without further ado.

In this Playing with FIRE (Financial Independence Retire Early) book summary, I’m going to cover the following topics:

What is Playing with FIRE About?

Playing with FIRE examines the rising movement known as FIRE, or Financial Independence and Retire Early. 

This book describes in detail the author’s own life-changing journey and highlights the experiences of various FIRE devotees to show how you can change your investment and spending habits to pursue your passions and live a more meaningful life.

Who is the Author of Playing with FIRE?

Entrepreneur and Emmy-nominated producer Scott Rieckens is an entrepreneur, author, and a producer. 

In addition to his work with FIRE, he has produced videos and films for WIRED, Facebook, and NBC. 

His recent documentary, Playing with FIRE, documents his experience with the FIRE movement.

Who is Playing with FIRE For?

Playing with FIRE is not for everyone. If you are the following types of people, you may like the book:

  • Anyone interested in retiring early
  • Finance enthusiasts
  • The Amazon addict who lives paycheck to paycheck

Playing with FIRE Book Summary

Introduction

Scott Rieckens, like many Americans today, overworked himself to afford the lifestyle he thought he needed since graduating from college.

On his way to work one day, he listened to Mr. Money Moustache’s interview about the FIRE movement on a podcast. Rieckens’ life was forever changed. Financial Independence, Retire Early (FIRE) is a community dedicated to saving aggressively and investing low-cost to reclaim their most precious resource – time.

In five months, Rieckens had quit his job, cut his family’s expenses in half, and began filming a documentary about the trip. After two years, he is just nine years from retirement, the documentary Playing with Fire is done, and he has written a book.

In this book, you will discover hacks for making the most of your finances so you can focus on what matters most. FIRE converts have used their newfound financial independence to do a lot of things, including retire early, pursue passion projects, and simplify their lives. 

FIRE isn’t just for the wealthy, and it doesn’t require extreme devotion; it’s for anyone who wants to live a more intentional life.

Lesson 1: Scott Rieckens used to feel trapped in his lifestyle until he discovered FIRE

Working until mid-sixties is the norm for most people. Early retirement may be inconceivable without the security of a full pension, because they see it as a normal thing to do. Something doesn’t add up when you examine what people are working for.

Rather than overworking themselves for unnecessary luxuries, FIRE advocates a frugal lifestyle that allows people to focus on the important things in life instead.

Scott Rieckens, the author of the book, worked as a creative director in Coronado, California, to support his family’s beachtown lifestyle. 

At the same time, he and his wife, Taylor, felt they needed luxuries like their expensive Vitamix blender or eating out every night.

Despite having a combined income of $142,000 after taxes, the couple felt that they were doing well financially and could afford such luxuries. In addition, didn’t they contribute to their 401k accounts all the time?

However, there were still other major expenses awaiting them. In order to save for their newborn daughter’s college fund, the couple wanted to buy a house. 

The author began to despair after realizing how little their annual savings of $10,000 were. Could he afford these necessities by staying in his new salaried position for the rest of his career? If so, he would have to give up his entrepreneurial dreams. 

In the absence of a plan, he and his wife would have to take a big break if they wanted to change their situation.

Rieckens was on his way to work one February morning in 2017, listening to his favorite podcast, The Tim Ferriss Show, when he heard Mr. Money Mustache on the podcast. 

Canadian blogger Mr. Money Mustache, whose real name is Pete Adeney, retired at thirty near Boulder, Colorado. Since then, he has gained a cult following of those looking for financial savvy lifestyle choices that will enable them to retire decades early.

FIRE, or Financial Independence, Retire Early, is a growing movement among these “Mustachians.” Through an online retirement calculator, Scott Rieckens discovered he and his wife could retire in just 10 years if they cut their expenses in half and invested their savings.

It was then that he realized he wasn’t needing a big break, but a lifestyle change.

Lesson 2: Financial independence means you don’t have to work for money

It may now seem boring to retire early. In fact, most people who become financially independent through FIRE aren’t actually “retiring” in the traditional sense of the word.

When you are financially independent, you do not need to work to cover your expenses. However, FIRE can give you a lot of career flexibility options.

Sylvia had just graduated law school and landed a job at a New Orleans law firm when Hurricane Katrina devastated the city in 2005. 

After the flood, Sylvia got rid of anything that wouldn’t fit in her car and began to move somewhere else. 

By normal standards, her spending habits were reasonable, but this experience made her aware of how quickly material possessions could disappear.

Therefore, she was motivated to adopt a frugal lifestyle; she reduced her grocery expenses to $50 a month and worked as a delivery driver on the weekends to supplement her income as an attorney. She continued to do these things even as her salary increased once she was free of her student loan.

Sylvia is now 38 and has been financially independent for six years. FIRE, however, has allowed her to do something she’s always wanted: start a law firm.

FIRE has been used by others to travel, do charity work, or pursue their creative passions. You decide what you want to do with your financial freedom at the end of the day.

You may be asking yourself, how much money is actually needed to accomplish this?

Let’s examine the math. You can achieve financial independence by saving and investing twenty-five times your annual expenses, according to the FIRE Formula.

In order to retire, the Rieckenses believed they could cut their expenses down to $60,000 a year, which would require them to save $1.5 million. Investing their savings could earn them up to 75 thousand dollars per year if they earned a five percent return.

By using the “4 percent rule,” they could even survive market slumps and inflation by saving an extra one percent of returns after withdrawing four percent of their income each year. 

Thus, their principal of $1.5 million will not diminish in the long run. In other words, they could live on that money forever!

All the author had to do was figure out how to get his family’s spending down to the projected $60,000 per year.

Lesson 3: The key to FIRE is aggressive saving and low-cost investing

We have seen that financial independence is a simple concept: you just need to trim your expenses and build up enough assets to be able to live off of the return. Taking a closer look at your finances is next.

You should start by looking at where every dollar of your money is currently going. You can make adjustments after determining what you’ve spent and saved over the past year. The general goal of FIRE is to save and invest 50 to 70 percent of your income. 

It is easy to save income and reduce spending by first focusing on the categories that take up the most of your income: housing, transportation, and food.

Scott and Taylor set out for a year of travel five weeks after deciding to pursue FIRE together. Additionally, they planned on moving to a more affordable city in order to save money

In Bend, Oregon, with its abundance of outdoor activities, highly rated school districts, and three-bedroom houses around the $350,000 price mark, they immediately felt that they had found their new home.

Transport was next on the agenda. They decided only to have one car because Scott planned to cycle to work. But what type of car is FIRE friendly?

The blogger of the FIRE blog Mad Fientist told the couple that while a leased car depreciates in value, a reliable, used car in the $5,000 range could last for a decade without substantial depreciation.

They needed an all-wheel-drive car because of the mountainous terrain around their new home, so finding a $5,000 car proved difficult. As a compromise, they bought a used AWD Honda CRV for $7,500.

It was now time to maximize their savings. Rieckens were new to investing when they pursued FIRE. Rather than investing all their savings in the stock market, they invested them in low-cost index funds, real estate, and entrepreneurship.

In low-cost index funds, algorithms are used to buy stocks across the market. Investments into index funds should act roughly in line with the general stock market growth rate of 10 percent per year. Investing in index funds can be extremely cheap, so you don’t have to worry about fund management fees eating up your returns. 

In addition, they are generally regarded as being one of the most profitable approaches to investing – just ask business magnate Warren Buffett, who recommends them over paying a money manager.

Even if you’re nervous about the inevitable fluctuations of the stock market, you can always adjust your savings goals and withdrawal rate to a level you’re more comfortable with. As a result, you would either have to work longer before retiring or reduce your expenses even further.

Lesson 4: Discuss your values first with your significant other, and find common ground with the FIRE community

Your enthusiasm will naturally spread to your friends and loved ones once you catch the FIRE, so to speak. Your partner needs to be committed to this new lifestyle if you are asking them to do it with you.

Try having your partner complete the “Ten Things Exercise” if you are unsure if your partner will be receptive to FIRE.

The author delayed discussing FIRE with his wife Taylor for several weeks after learning about it; he was afraid she would think it was just another of his short-lived entrepreneurial obsessions. In addition, he recognized that she was the main breadwinner in their household; suggesting that she should forego the luxuries she spent her money on could easily have resulted in a fight.

On one occasion, he suggested that she write down ten things that made her happy each week. He was delighted to find that her list resembled his own, which he had drawn up earlier in the day. 

Although both had listed things such as spending time with their daughters and being active outdoors, neither list included the beach life they had invested so much money into.

It was clear that their current spending pattern did not reflect their values, so when the author told Taylor about FIRE, she was interested.

If you share your plans with friends, you might want to avoid being dogmatic or preachy. FIRE can often be a difficult concept to swallow for your friends, even if their new financial insight benefits you.

Instead, you can better find people who share your passion and will join you on your journey by getting involved with the FIRE community.

Around the time they left for travel, Scott’s idea for a FIRE documentary started to gain attention. 

Travis Shakespeare, a senior vice president at BBC Worldwide and former FIRE convert, sent him an e-mail about the project. Scott and Taylor were joined by a crew within weeks of starting their journey.

Through the making of the FIRE documentary, Scott and Taylor met Mr. Money Mustache and hundreds of others practicing the FIRE lifestyle. Taylor expected a cult-like atmosphere at the four-day Camp Mustache retreat where the crew was to film. As a result, she felt at home with a diverse group of people.

We’ll see in the next section that enthusiasm for FIRE is driven by a set of shared values that appeal to a wide range of people.

Lesson 5: FIRE is suitable for people of all income levels, and it can be as flexible as you like

If you don’t make six figures, you might wonder if FIRE is just a trend for the rich. If you don’t earn much, how are you going to save 25 times what you spend each year?

FIRE is not dependent on a higher income to become financially independent.

Consider Kalen, a 26-year-old management analyst from Evans, Colorado. The prospect of working until her mid-sixties made her feel tethered and unsatisfied, and some have called this “millennial depression.”

Kalen began to become interested in investing at the same time. As a starting point, Kyle’s mother recommended a few FIRE blogs, and the rest is history.

Kalen and Kyle have been living the FIRE lifestyle since 2016 on a combined income of less than $50,000. In six years, their annual expenses will have decreased to $32,000, enabling them to achieve financial independence. Yet FIRE is more than just achieving an early retirement.

FIRE focuses on valuing happiness over material possessions, regardless of whether one achieves financial independence in five or thirty years. Everybody has that option- regardless of their income bracket.

One of the biggest stumbling blocks for many when it comes to FIRE is how extreme it sounds. The FIRE approach can and should be flexible, even if some FIRE converts go to extreme measures in order to save money.

This lesson was painfully learned by the author and his wife while staying with Scott’s parents in Iowa. The couple realized to their horror when December rolled around that they hadn’t budgeted for Christmas. 

Clearly, spending their usual $1,500 on the holiday was out of the question. It proved impossible to turn the $150 left in their “shopping budget” into presents for the whole family.

A new frugal lifestyle suddenly felt like a burden – but FIRE is about making choices that make you happy long-term. There was no need to wait until they became financially independent in order to live their best lives!

They resolved the Christmas problem in a FIRE-friendly way. In order not to ruin the celebrations with their new lifestyle, they gave their toddler Jovie secondhand books, which she loved, and bought their nieces new presents. The couple decided not to give friends gifts.

When Scott and Taylor moved to Bend, their spending had dropped to $60,000, and they were nine years away from financial independence. Nevertheless, Christmas in Iowa taught them to be deliberate about how their spending reflected their values, not always be frugal.

Final Summary

You can take control of your finances with FIRE, regardless of whether you move to a cheaper town or just cut down on your Starbucks visits. 

While it is possible to retire in a relatively short period of time by using aggressive savings and low-cost investments, FIRE is more about aligning your consumption habits with your values to maximize your quality of life.

Further Reading

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