The FIRE movement and privilege: Let’s be honest here
Privilege. What a loaded word. Throw it in any discussion and watch defensiveness take a life of its own. Pair the topic of privilege with FIRE (Financial Independence Retire Early) and it’s an even more taboo topic, but really, it shouldn’t be. Privilege is something that should be acknowledged and talked about as seamlessly as we do about the weather.
By talking about privilege we are able to envision a world built on equality, that benefits all people. In regards to FIRE, that equality begins with financial literacy.
So, let’s talk about the FIRE movement and privilege.
What is privilege?
Let’s start with the Oxford definition:
privilege/ˈprɪvɪlɪdʒ/: a special right, advantage, or immunity granted or available only to a particular person or group.
When spelled out, it’s quite simple to understand, but why is the concept of privilege so complex? Well, it’s because it affects all aspects of a person’s identity. This includes: sex, gender, race, sexual orientation, religion, socioeconomic status, physical ability, country of origin, language, and the list goes on.
However, privilege isn’t just a list of advantages and disadvantages. It’s far more nuanced than that, as intersectionality often is. Privilege affects everyone differently. In some cases it benefits individuals, in other cases, it oppresses, which results in systemic inequality.
To fully understand the impacts of privilege, it’s important to view privilege through empathetic eyes.
How does privilege play into the FIRE movement?
I’m a huge fan of a lot of the FIRE (Financial Independence Retire Early) principles: make as much as you can, live below your means, and invest the rest. It’s pretty simple, really. However, that’s easy to say for someone who has a high income and isn’t worried about where their next meal is coming from.
For the most part, the FIRE community is made up of individuals who are able-bodied, straight, white, male, educated, and are often high-earners. It’s always going to be easier to achieve FIRE if you have more privilege, as it provides more opportunity.
Frugality is something that those below the poverty line know all too well. For people who are trying to make ends meet, living paycheque to paycheque, and are in debt, it is near damn impossible to squeeze any money out of a budget to invest.
So does that mean that FIRE isn’t actually for everyone?
Maybe.
Although in most cases, the principles of increasing one’s income, saving and investing, and creating financial security, are all admirable things, it’s still important to recognize that even the ability to have any financial literacy is a privilege in itself.
FIRE influencers: Let’s be honest about who we are talking to
!https://anakresina.com/wp-content/uploads/2020/09/Screen-Shot-2020-09-06-at-11.31.23-AM-1024x689.png
Photo by Samantha Hurley from Burst
In a Vox article, the guru of FIRE, Mr Money Moustache (also known as Pete Adeney), states that “Getting rich people excited about consuming less is by far the most effective way to [protect the environment], which is why I mainly write articles targeted at my fellow wealthy Americans.”
Great! That is important to note. Recognizing that FIRE is aimed at wealthy people and is more achievable by them is important to acknowledge.
I know for myself, the reason I stumbled upon the movement is because I had a bit of extra savings that I didn’t know what to do with. Now, although I was already quite frugal, and diligent about saving, what I didn’t know was, that investing, would get me closer to my own financial goals.
That being said, even having some extra cash resulting in financial security can be a privilege. That’s why financial literacy is so crucial in educating and levelling the playing field of building wealth.
Racism, sexism, and privilege
Nearly 17 million households live in poverty in the US, 3.2 million live in poverty in Australia, and 3.2 million in Canada. When poverty is compounded with major credit card debt, no retirement savings or emergency funds, it’s not surprising that the idea of FIRE seems impossible for many.
On top of that, any other systemic discrimination such as racism or sexism plays its own part in financial privilege.
For example, in the US as recently as 1968 it was legal to racially discriminate against BIPOC from renting, buying property, or even getting mortgages from banks.
Similarly, in Australia, an [Aboriginal individual wasn’t able to own property until 1966](https://www.aph.gov.au/about_parliament/parliamentary_departments/parliamentary_library/pubs/bn/1011/indigenousaffairs1#:~:text=The Aboriginal Lands Trust Act,freehold title to former reserves.), which only further impoverished communities based on race.
By denying BIPOC access to property, which is one of the biggest accumulators of generational wealth, BIPOC are greatly disadvantaged through centuries of compounded inequality.
Sexism is another example of discrimination. With women on average earning less than men (In Australia, the national gender pay gap is currently 17.9%), and taking time off to care for children, women not only earn less but have less wealth accumulated in their retirement funds than men. In Australia, women on average retire with 47% less than men in their Super. The disparity is staggering.
Privilege and money: Driving change through financial literacy
If you’ve drunk the FIRE kool-aid, you’re probably a huge fan of the promise of financial freedom.
I know I am. I love the idea of not having to stress about finances. Plus the principles are quite simple: Earn as much as you can, spend way less than you make, and invest the rest.
Of course, this all makes sense in principle. And for many, it’s quite achievable as long as you’re employed with a decent wage, young enough to start investing, and have luck on your side (such as a 10-year bull market).
“By acknowledging privilege, we are able to recognize that everyone’s individual journey is unique. This allows for empathy and understanding which allows for examining systemic injustices that play into privilege.”
However, it’s important to note that FIRE is not possible for everyone. Privilege plays a lot into how much you can make and how you spend your money. By acknowledging privilege, we are able to recognize that everyone’s individual journey is unique. This allows for empathy and understanding which allows for examining systemic injustices that play into privilege. With a better understanding of that, we are able to consider ways to equalize power. How can we change the system of oppression and privilege that isn’t advantageous for anyone (or at least a select few)?
How can we build a world on equality and fairness? I think a lot of that begins with financial literacy. Being able to share resources and education around finances is paramount in financial growth. Learning about debt, how to file taxes, and why it’s important to understand interest rates is a step in the right direction.
I must admit, the FIRE community does a great job of sharing and supporting one another in achieving financial freedom. The FIRE movement in itself is an advocate of better financial literacy, which ultimately can benefit anyone and everyone.