Amongst the many adjustments companies worldwide made because of COVID-19, the introduction of remote working truly changed the working experience. As people all over the world stayed at home and worked amidst their newfound freedom, many Koreans who once strongly valued the importance of job security started questioning if the office life was for them at all. On top of that, the expansion of economic uncertainty led Koreans in search of a financial plan to secure them for the future. With the Korean press having introduced the stories of existing American FIRE enthusiasts in late 2018, and again following the success of the book Playing with FIRE (2019) written by Scott Rieckens, many rushed to be a part of what seemed to be the golden ticket to financial independence. As stories of local FIREs gain publicity on National Television or become bestsellers, now is the time to evaluate changes the movement has brought to society in Korea and how we should navigate ourselves through this phenomenon.
Understanding FIRE
Financial independence, retire early (FIRE) is a movement where advocates aggressively reduce expenditures and increase investments to gain financial freedom in hopes to retire at an early age. Enthusiasts aim to save a set amount of annual expense and eventually secure enough accumulated funds to retire and live off withdrawals from said funds.
The term was first coined by Vicki Robin and Joe Domingue in their book Your Money or Your Life (1992) based on a nine-step program aimed to provide a guideway to better one’s relationship with money. Although the book was not a hit upon the first release, it gained popularity during the late 2000s amongst millennials as they struggled to enter the workforce due to the economic downfall caused by the Global economic crisis in 2008.
Worldwide FIRE enthusiasts vs Korean FIRE enthusiasts
The most interesting factor about FIRE is the way it has settled in different countries. The original and most well known FIRE movement revolves around Vicki Robin and Joe Domingue’s nine-step program which includes specific rules that act as a guideway to calculating the amount of money one needs to retire and spend after retirement.
In Korea, however, although FIRE enthusiasts do follow existing formats, they have added their own color by incorporating their values and creating new terminology. If FIREs in America identify themselves according to variations of the movement differentiated by strategy, Korean FIRE advocates direct themselves towards distinct ways of securing income additional to their basic salaries which they label under the term “pipeline.” They gain additional income mainly through stock investment, real estate, side-hustles, and aggressive saving.
Kim Hyun-jun, General Manager of F&B Franchise Company LASAN and FIRE Activist said, “With the pandemic showing no means of ending, the future of most individuals in Korea, especially small enterprise owners, has been seeming less and less hopeful. Restricted in movement, I believe that FIRE was our way of reconnecting with the outside world and holding on to hope, perhaps seeing retirement as a form of compensation of all the missed opportunities.”
Fire in Action
Every FIRE is different from the other.
Youtuber Keily, who owns Youtube Channel FIRE Enthusiast Keily and uploads videos related to the movement, is one of many Koreans who embarked on a journey towards FIRE after experiencing dissatisfaction and depression at the office. She offered insight to her experience and said, “During my fifth year at the office, I found myself constantly feeling disconnected from my surroundings and unexcited for the future. Hoping to escape the blues, I started searching the web for retirement options and encountered the idea of early retirement through investment in stocks. Just like that, without even knowing what FIRE was, I found myself heading towards it.”
She spoke of the loneliness that follows the journey to becoming a FIRE enthusiast in Korea. “With older Koreans being used to the concept of community life, my relatives and parents have especially been struggling to accept the very idea of quitting work and retiring early. Also, balancing three pipelines - investing in stocks, running a NAVER Blog, uploading content on YouTube - and trying to meet up with friends who live in completely different worlds from mine has been a challenge.”
The myths and misconceptions of FIRE do indeed make the journey more difficult, but the personal growth involved may be one factor that gives more appeal to the movement. Besides the comparatively staple methods of creating pipelines, many of the MZ generation have been converting their homes into tiny workshops, creating and selling a variety of products such as homemade cup holders and baked goods on online shopping platforms such as ABLY and idus after office hours or during their holidays. Many document their unpredictable journeys on social media platforms to check on their progress and make additional profit. YouTuber Keily added, “YouTube is interesting in the fact that it gives me motivation and is a place of pride as I watch myself grow, but at the same time acts as a source of distress due to the negative comments and often excessive workload.”
Two Sides of FIRE
Though the process of achieving success in FIRE requires great sacrifice and can be at times rigorous, one achieves the ability to spend purposefully and live a life that is not bound by the time of others after retirement. Interestingly, FIRE is not only beneficial for individuals but can also bring about positive change in society.
According to a study conducted by Saramin in 2020, a Korean human resource (HR) services company, it was found that the average competition rate for new hires in 2020 was 36 to 1. As hinted in the statistic, the increasing youth unemployment rate and competition in employment have been an ongoing societal issue in Korea. However, there is a possibility that the FIRE movement may ease these issues.
While the average workers aim to remain at their jobs and make their way to higher positions until retirement, FIRE enthusiasts aim to achieve financial independence and retire as soon as it is secured. In other words, they would be contributing to an increase in job vacancies for the unemployed. Companies will also be able to benefit from enthusiasts as they would be gaining employees that work with high efficiency at a relatively low cost. In the long term, this can result in self-motivated industrial growth and maximization in profit.
General Manager Kim stated, “My job and I are in a win-win relationship. It is vital that my current company grows and succeeds so I can save for retirement. My main pipeline in stocks depends on my salary, meaning that the opportunity to invest grows with the company.”
Aiming towards financial independence can also allow enthusiasts to gain financial literacy at a younger age. According to OECD/INFE 2020 International Survey of Adult Financial Literacy, it was found that individuals across the entire sample on average scored just 53% on self-reported financial knowledge. Suggesting that understanding personal finances would be a great asset to individuals all over the world, and even better if gained at an earlier age.
Of course, there are negative aspects that follow the FIRE movement. “The top priority of FIRE enthusiasts is to focus on saving and investing to gain as much profit as possible. Until early retirement, they live by the sense of accomplishment and self satisfaction that comes from asset growth,” said Lee Jong-heon, a Professor in the Department of Business at Jeju National University and General Manager at Maze Land Jeju.
“However, the ‘stability’ that is assumed to follow after retirement is not actually ‘stable.’ The basic profit structures of FIRE can be disrupted at any moment depending on the market and state of law. Realistically, enthusiasts would be betting on ‘risks’ to aim for ‘stability’ only to gain ‘instability.’ If this social narrative was to become dominant, the stability and productivity of the current social structure would be challenged.”
Another concern comes when considering the value of retiring early. There are indeed flaws behind office life, but the benefits are equally hard to ignore. Professor Lee explained, “Using dichotomous thinking and deeming work as meaningless and life as meaningful is a very dangerous way of thought. Although it can at times be stressful, work can be a place to develop problem solving skills, boost self-esteem, find satisfaction in socializing and acquire psychological stability.”
Future of FIRE
There truly is no right or wrong way to approach the FIRE movement. However, it is vital that those interested conduct thorough research on what the movement is and prepare a plan suitable to their lifestyle before jumping onto the bandwagon. Mental toughness and patience are essential as results aren’t made overnight and there aren’t many resources for one to turn to during times of distress. Finally, the key to achieving success in FIRE lies in one’s will, even if that means simply reading a book about stocks or asking a parent about personal financing. When small efforts combine and financial literacy is achieved, the road to financial freedom will be all yours.