5 Reasons Ditching FIRE For FIOR Might Be Your Best Financial Move

November 11, 2019

I first coined the term, FIOR, in a post I wrote back in November 2017. If you’re not familiar with it, it stands for Financial Independence/Optional Retirement. I first introduced FIOR to the personal finance community when I started questioning my original FIRE goal. Specifically, I was questioning whether or not retiring early was the right goal for me. Ultimately, I decided just having the option to retire was really what I wanted. That’s the point that I ditched the FIRE movement for the more realistic version of FIOR. 

FIRE vs. FIOR

Before we jump into the 5 reasons ditching FIRE for FIOR might be your best financial move, let me first explain the difference between the two movements. FIRE stands for Financial Independence/Retire Early. Unlike, FIOR folks, FIRE adherents have the ultimate goal of saving enough money (usually 25x their annual expenses) to pull the plug on their corporate jobs and pursue a life of freedom as early as their 20s, 30s, or 40s.

Oftentimes, though, that early retirement freedom is supplemented with side hustle income to reduce the amount of money that needs to be saved and/or pulled from the nest egg for living expenses each year.

FIRE also becomes a little more difficult to achieve if you, like me, are in the midst of adulthood. Think: paying a mortgage, saving for college and retirement, and maybe even financially supporting parents.

Enter the FIOR movement. 

If you happen to be in a position in which early retirement is enticing and exciting but not necessarily the right goal for your life stage, consider switching to FIOR for a more realistic and leisurely journey toward financial improvement and eventually financial independence.

brunette, brunette gazing away
Me hanging out at our favorite coffee shop – with my wine shirt on. 🙂

1. FIOR Takes The Pressure Off

Let’s face it, achieving financial independence and subsequently an early retirement isn’t always easy. If you’re not earning a high income, it’s going to take lots of frugality, discipline, and perseverance to reach your goal.

That frugality and discipline is likely going to mean delayed gratification and could take several forms:

  • Smaller or non-existent vacations
  • Eliminating unnecessary expenditures (TV, dinners out, gym memberships, etc.)
  • Cutting back on clothing purchases
  • Driving older cars
  • Not living in your ideal location

By adopting FIOR, you’ll be able to enjoy life along the way by not having to be extreme in all areas. Sure you can’t splurge on everything, but you’ll definitely be able to splurge on a few things that are important to you while still maintaining a high savings rate toward your FIOR goal. This balance is something most family members are able to agree on.

2. FIOR Makes Work More Fun

When you’re on FIOR, work becomes more fun. At least it did for me. With every month that passes, I get a few steps closer to financial independence and the option to do whatever I choose to do. Since I feel more financially secure, I feel more freedom to speak my mind, ask for what I want, and try different assignments. And I have fun doing it.

Having fun at work might happen to you too. The more money you stash away for your future, the more secure you’re going to feel and the more fun your day job will likely become because, wait for it, you won’t need it. 🙂

brunette outside, brunette smiling, brunette riding bike
A bike ride I took after work last spring. What a great day.

3. Forget The Side Hustle And Enjoy More Free Time

I have a love/hate relationship with the idea of side hustles. As a wife, mother, full-time employee, and part-time blogger, I really take issue when the internet simply suggests starting a side hustle as a means of earning more money to supplement an early retirement.

Sure, side hustles are typically passion projects and can turn into full-time gigs that can replace a standard W2 job, but the time involved in building up a side hustle to replace full-time employment with benefits means a TON of work. Usually, that work happens during nights and weekends. You know, during the time you have to spend with your family and friends. And if you’re in a relationship with or even without kids, creating a successful side hustle can be extremely difficult.

I’m speaking from experience here. Building up this blog to the point that it actually makes some money has taken years and countless hours of work. I often question whether the time spent on it was actually worth it.

FIOR allows you to take the long and windy road to FI. When you’re taking that route, a side hustle to increase income doesn’t have to play a role in your plan.

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4. FIOR Allows You To Scale Back Your Savings Rate

Trying to reach an early retirement could mean a staggering savings rate. Some folks on the FIRE path reach a savings rate of 70% or more. At one point, our savings rate hit 70% but it wasn’t easy. In order to do so, we increased our income and scaled back significantly on almost everything.

Switching to FIOR will allow you to scale back your savings rate. You probably won’t be scaling it back to 10%, but scaling it back to a more reasonable percentage is going to give you breathing room to enjoy your journey and not just the final prize.

German Shepherd on the floor, German Shepherd sleeping
Mad Money Pup enjoying a leisurely day on her journey to FIOR.

5. FIOR Gives You Options

Most of all, FIOR gives you options. The FIOR movement doesn’t necessarily end with early retirement, although it could if that’s what you ultimately decide. When you’re on the path to FIOR and you reach FI, you have the option to quit your job, change jobs, stay on the job, or anything else you can dream up.

It might take you a bit longer to reach FIOR, but crossing the finish line will be just as rewarding and might even turn out to be the best financial move you ever make for your life.

Whether you’re on FIRE or FIOR, reaching financial independence is key to changing your life and the lives of the people you love forever.

Which flavor of FI do you prefer?

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7 Comments

  • I’m definitely down with FIOR and I thank you for putting it out there. We’re late to FIRE so our goal is to retire EVENTUALLY so we don’t have to work until we die. While we’re getting there we are working full time and enjoying raising our 10 year old. We want to enjoy our time with him while we can so doing fun things together like taking vacations is something we’re not skimping on. Thanks for the great post!

    Reply
  • Good read. Think this is still Fire just not ERE. The uk average saving rate is 5% so anything like 20-50% is extreme to most folks. Just in the Fire world would you feel this is not enough. FIOR can take less time as you can drop hours without having to stop work, so for me reach the goal of no longer having to work a full time job, but still choosing to do some paid employment. Cheers

    Reply
  • Thank you for this post! Hub and I are in our late-40s, have a good amount saved already but facing 2 teens entering college in the next 2-3 years. FIRE is just not possible for the type of retirement we want to have (FatFI). We plan on working until 55-60, but are trying to adopt some of the FI concepts earlier. I loved the concept of FIOR when I heard you on the FI podcast and have been following your blog since then. Please keep it up and know that you are appreciated!

    Reply
  • This is what we plan on doing. We should reach fi in a few years. I am a stay at home dad and my wife is a labor and delivery Nurse. She loves her job and no desire to stop working. But cutting down on hours, longer vacations, giving power and church service missions is our WHY.

    FI just means you have options and more choices and more freedom is a good thing.

    Reply
  • I absolutely adored your podcast in choosefi, i laughed like crazy hearing you at traffic, big hug from Mexico thank for the inspiration!

    Reply
  • FIOR all the way. I think we are FIRE but DH won’t do it. I can’t get him to pull the plug. But what FIRE did? Well 6 weeks ago he started a company. We took a 66% paycut and now are living on a much tighter budget than we have in years. We were saving like 50% of our salary and multi-6 figures annually to give you an idea of our savings. But he won’t retire (43) and I’m 41. We have over $100k per kid saved for college (11 and 8) and enough to fund a 6 figure retirement. But he won’t pull the plug. He tells me when the kids are done with college we’ll talk. He just sees them as the reason he has to work.

    But now he LOVES his job. Being a founder of a startup and doing something crazy and wild that he’s working on. No more corporate job. Yeah he knows we’ve risked millions literally in salary but if we weren’t FIOR I don’t think he’d have done it. I stay at home and work part-time. I would love for him to quit. But he won’t. I decided that FIRE doesn’t work if people won’t quit.

    Reply
    • Thank you for your thoughtful comment and congrats on your husband’s new venture! It sounds like your family is definitely FIOR. You know what they say. If you do what you love you’ll never work a day in your life. It sounds like your husband’s new business is falls right in line with that.

      Enjoy your journey and freedom to pursue your passions!

      Reply

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