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How to Refactor Your Finances - An Interview With a Programmer Who Retired at 34

ctreichler profile image Charles Treichler Originally published at triplebyte.com ・13 min read

For the uninitiated, FIRE (or just FI, or FI/RE) stands for “Financial Independence/Retire Early.” FIRE adherents live frugally and save as much as possible in order to achieve financial independence (the ability to never work again if they so choose). Financial independence (FI) is generally associated with early retirement (RE) but more broadly signifies personal autonomy and the ability to live according to personal values—rather than the dictates of a boss or a normal 9-to-5.

Interest in FIRE is growing rapidly, especially among programmers, and FIRE was recently featured by the NYT and boasts a 500K+ reddit community.

I wanted to know why FIRE resonates so deeply with software engineers, so I spoke with Brandon, A.K.A The Mad Fientist, a leading voice in the FIRE community—and a software developer himself before his retirement at age 34. I asked Brandon to explain the basics of FIRE and why so many programmers are getting on board.

Note: this interview has been edited for clarity and style.

What Is FIRE?

For those who don't know by now, what is FIRE?

FIRE is a pretty recent term, actually. It stands for Financial Independence/Retire Early. And I don't really like it. I prefer FI, which is why I'm the mad FI-entist and not the mad FIRE-entist, because I think Financial Independence is the important part. Early retirement is like the carrot at the end of the stick, but the real benefit comes from being financially independent, meaning that you have enough money to live your life without having to work again.

That sounds great. How do I get there?

So, the common number that gets thrown around is 4%. This is how it works: if you live on $40k a year, for instance, and you have a portfolio of 1 million dollars, you should be able to sustain yourself indefinitely because, if you've invested in a diversified portfolio of stocks and bonds, you should be able to withdraw 4% per year ($40k) and never run out of money. That all comes from the Trinity study, which looked at sustainable withdrawal strategies for retirement. How do you get there? You just spend less than you earn and try to invest as efficiently as possible, at as low a cost as possible.

That's pretty much FI in a nutshell. You save as much as you can and build up a stack of cash that can sustain your spending indefinitely.

Saving money is hard, so how do you encourage people to save money for FIRE?

It comes down to prioritizing what you want out of life and cutting back on all of the rest. For example, I don't care about cars. If a car can get me from point A to point B—hopefully using as little gas as possible—that's fine. I don't care if it has hubcaps, or if it's dented, or any of that stuff. If it's safe and it gets me there efficiently, then that's all I need a car for. Sure, I could go out and buy a Lamborghini right now if I wanted to, but I don't care about that enough to spend the money on it, so I don't.

But, I do care about other things. We live in the center of Edinburgh because it is really important to me to be right in the city, so that I can walk around, and get out during the day, and see people, and utilize all the things the city has to offer. That is important, so we spend a little bit more on rent than we do on our car.

Just because society, and advertising, and peer pressure is telling you that you should have all the fancy things, that doesn't mean that you actually want or need them. Obviously it's easier said than done, but that's really all it boils down to. You can't have everything. Luckily, you don't really want everything. You may think you do, but it actually won't make you happier. The key to FI is figuring out what's important to you and optimizing for that.

Software Engineers and FIRE

Why are there so many software engineers in the FIRE community?

I really think it's about efficiency. I'm sure a lot of developers would agree that refactoring is the best part of writing code—because you can make it super efficient, super clean, super brief and make every line useful. I think the same principles can be applied to your financial life and your life in general. If you're super efficient with your spending, and you're making a software engineering salary, then money piles up quite quickly. That's why I think there are so many software engineers in the FIRE community. They are used to systems and algorithms and efficiency, and it's like you're applying all those things to your financial life. You're refactoring your life pretty much all the time, which is just great and can get you to FIRE really quickly.

Why should programmers consider pursuing FIRE?

Because what else are you gonna do with all that money? You're earning a ton of money that you don't need to spend—and you won't be happier if you spend it. What else are you going to do with it? You might as well just start buying your freedom. You're buying more options, and that makes your career and working life a lot more fun.

Is software engineering a good career to pursue if you want to achieve FIRE?

Absolutely. I think it's an amazing career to pursue. Not only do you earn great money, but it also allows you to create things on the side that you love and that could bring in money and give you something meaningful to work on after you retire early. And that makes early retirement more fun, 'cause you can build interesting stuff and do fun projects that you probably wouldn't have been able to do otherwise if you didn't have programming skills. I think it opens up the entire world and is a great skill to have.

What things can trip up programmers on the path to early retirement?

I don't know if this is true of all software developers, but for me, you can get too obsessed with efficiency and too obsessed with the perfect code or the perfect algorithm. That was definitely what happened to me during my journey to FI. It was like I couldn't handle any sort of spending inefficiency, and I couldn't handle any sort of overspending on anything. I got way too obsessed with it. I think that's something that programmers should be wary of. Just like with your code, there's definitely “good enough.” Yes, you can maybe make it more efficient or cleaner or more perfect, but that's not really the goal. The goal is functioning code that's clean and easy to read. In the same way, you just wanna have a happy life where you're spending money in relation to your goals and your purpose and what you wanna do with your life. And yes, you can hyper-optimize, but there are diminishing returns, just like there are diminishing returns when optimizing code to a ridiculous level.

The Philosophy of FIRE

What about the trade-offs? What do you have to sacrifice to achieve FI?

If you do it right, there are no trade-offs. Sadly, I didn't do it right. I went too crazy, and I ended up depriving myself of things that were actually important to me. That resulted in me and my wife living in the woods of Vermont, not really doing anything and being sort of hermits, and that wasn't good for anybody. Once I realized what I was doing, we moved back to Scotland to be closer to her family, and I relaxed a little bit with money.

After that, I got to a great level of spending where I felt that even if I won the lottery I wouldn't spend any more, because I knew that the we were spending the right amount. The only reason I was able to get to that stage, though, was because I actually worked a couple years longer than I expected to. When I was working those extra years I was like, Okay, this is unexpected money, so this year I'm just gonna go crazy and spend as much as I want. We didn't actually end up spending that much more, but we did realize some things.

What did you learn by spending as much as you wanted that year?

One thing we realized was, Hey, we don't like eating out as much as we were that year. Because it lost the specialness, and it's less healthy than cooking for yourself. We also traveled a lot that year and realized that we didn't enjoy traveling that much—it just became a chore. It was like, Okay, I guess we gotta do the touristy things in this city. It wasn't fun and exciting like it is when you do it as a treat or something different every once in a while. It just lost the appeal because a lot of the appeal is in planning for it and getting excited about it—looking forward to it—and just the contrast with normal life.

If you can do those sorts of experiments on your journey to financial independence, then you actually become happier because you remove all the stuff from your life that wasn't actually important in the first place. It seems like most Americans' lives are just packed full of activities and stuff, and they're just overwhelmed by it. But what you actually want is to be in this beautiful equilibrium with your money where it feels like you can spend as much as you want, but you don't have to spend that much, because you know that spending that much won't make you happy.

I would just say, experiment both on the low spending side and the high spending side, and then just find that sweet spot. And then there's no trade-off. You're living the life you want to live. You're saving a lot of money so you never have to work again if you don't want to. I'm happier now than I ever have been, and my spending is still lower than probably a normal American.

How much money is enough?

There have been a lot of different studies about what level of income makes you happiest, and the last thing I read was something like $75k a year. I've earned anywhere from very little to quite a lot over my career, and I would say that $75k is probably a pretty good marker. I can't even imagine spending $75k a year, and if you have a partner, I can't even imagine what $150k spent in a year would be like.

I know that my wife and I can live very happily as a couple spending anywhere from, I don't know, $35k to $50k a year? I don't think we've ever spent more than $50k, and we're usually closer to the $40k a year mark, and we feel like we can do everything that we'd ever want to do. So $75k is great, because that's a huge buffer. You can spend that much, and have this great life, but you're also saving and getting the security and power that comes from having money saved up.

Some studies do report that more money can make people happier, so why not just focus on making and spending as much money as you can?

I don't think people should focus on making and spending as much money as they can because you're gonna be at the same level of happiness no matter how much you're spending, but you won't have the security, and you're gonna have a hell of a lot harder life because you're gonna need to sustain that level of income to sustain that level of spending.

I would just get good at being happy with what you have and definitely not focus on maxing everything out because that's never ending. If you think you're gonna be happy when you're spending a million dollars a year, and you actually hit that level, then, by the time you get there, everything's gonna change, and you'll be bored with it. You'll be like, Actually, I'll be happy when I spend two million a year. It's just a never ending cycle that a lot of people are actually caught up in, which is sad.

Many people love their jobs. Should they NOT pursue FIRE?

I would say you should still pursue it, but I would focus on the FI part of it, not the RE. For example, my wife is an optometrist. She loves her job, she loves helping people, she loves eyes, she loves reading about all that stuff, and she can't see the point of ever retiring. But she may change. Something may change with the industry, and she'll change as a person obviously. But having the security [of FI] is great because then she doesn't have to take any crap from any of her bosses or any of her clients. She picks and choose the best places to work and she works there. It gives you a lot of power and flexibility, so I definitely say that people should always be working towards that financial independence. But if you love your job, then obviously the early retirement part is not gonna be as big of a focus for you.

The Mad Fientist's Journey to Financial Independence

Let's talk a bit more about your story. How did you first get interested in FI?

I was always really efficient with my money. I was always saving. I was always frugal, but I didn't have any goals—I just wanted to get rich. Not because I wanted to buy fancy cars or a big house or anything. I just wanted to have a portfolio to manage, and I liked the idea of having a lot of money saved up. I did that for the first part of my career, but I had no real goal or purpose for that money. Then in 2011 I came across earlyretirementextreme.com, and I was like, Oh, this is amazing. You mean, I could just buy my freedom earlier in life? This is incredible. From then on, it was just like “all hands on deck” for that goal. I just ramped up my savings even more.

Taking a step back, how did you become a programmer?

In my junior year of high school, I took pre-calculus, and I had a teacher named Mr. Burns. I was one of the youngest kids in the class—it was mostly seniors—but I think I was at the top of the class. He took me aside and said, Hey, you're obviously good at math, and it looks like you like it, so do you wanna learn how to program computers, 'cause that's a good way to use those types of skills in your career? I said, Yeah, that sounds great. So I started going after school to learn Visual Basic.

He taught me a lot about programming, and I started using those skills to program my TI-85 graphing calculator during classes, which was fun because I was bored in class, but nobody's gonna yell at you for having a calculator. I'd do stuff like write a virus that I would put on my friends' graphing calculators. It wasn't like a real virus, it would just show a screen that said, You are infected, and the only way they could get out of that screen was a password that I had programmed into it. Fun stuff like that. Later, I went to UNC Chapel Hill, and I majored in computer science. That was pretty much the start of it.

What was your career like? Did you have a lot of different positions along the way?

Yes, I ended up having three different jobs during my career. My first was in Scotland. I studied abroad for my junior year in there during undergrad and ended up meeting my now wife. As soon as I graduated, I moved back over and got a job. At first, it was desktop applications, using VB6, but luckily we convinced them to go to web-based applications after a little while, 'cause shipping CD's is just crazy, especially when they're boxing and things. So we went to web-based applications, so that was VB.NET and ASP.NET. I stayed there for, two or three years, and then I ended up moving back to the States with my wife.

I kept working remotely for them for a while though. Then I ended up getting a job in downtown Boston for a financial company. Again, that was C#, .NET and ASP.NET and things like that. Then I ended up moving to Vermont, but kept working for the Boston company remotely, and then I ended up getting a job at Dartmouth, which was my final job, doing Ruby on Rails web development for them.

The best thing that happened in my career was having the ability to leave a job. I obviously saved up money way before I found FIRE was possible, and that allowed me to just quit jobs without having another one lined up, which led to great pay raises and remote working arrangements.

How did quitting your jobs lead to pay raises and other perks?

The biggest boosts in my salary came when I left a job. When I left Scotland I was like, Hey, I'm leaving Scotland. This has been great, thanks for everything. But they were like, Wait, wait, wait, do you wanna keep working remotely? So that was already a huge boost, because at the time I was commuting into the office five days a week. I was like, Wow, you're gonna let me work remotely—and you've offered me 25% more than I was earning when I was actually commuting in? That was awesome.

And then the same thing happened again when I was working for the company in Boston. I was like, Hey, I gotta go. I'm gonna move to Vermont. I'm gonna stop working. And it was exactly the same. She said, "Hey wait, wait, you can keep working remotely if you want and, by the way, here's over a 50% raise.” It was crazy, and then she ended up giving me another boost when I said I was gonna start working for Dartmouth. But I ended up enjoying that boost for just a few months because I did end up going to Dartmouth.

Thanks for telling us about your life, Brandon.

Why Isn't Everyone Happy All The Time?

We end our interviews with this philosophical question: Why isn't everyone happy all the time?

That's just not how people work. I wish everyone could be happy all the time, but it just doesn't happen, no matter what. People seem to blame their scenario or their situation for why they're not happy, but I think it's just how people are. Even now that I have a 100% control over my day to day life, and I can do whatever I want whenever I want, there are still days when I don't feel great, or I feel bummed out, or I feel lazy, or sad. It's just how humans are. But luckily there are things you can do to help that, like going to the gym a lot, something I do more now that I don't have a job. That's really helped, and I wish I'd done it when I was working 'cause that would have made my working life a lot happier. Obviously, financial independence gives you the freedom to do exactly what you want, which helps, but there are just some days when you're still not happy and you just have to roll with it. I wish we were all happy all the time.

Brandon, thank you so much for your time!


Brandon, A.K.A. “The Mad Fientist,” hosts a popular podcast and blogs at madfientist.com.

Charles Treichler is Triplebyte's Content Manager. Email questions or comments to charlie@triplebyte.com

Discussion

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stevensonmt profile image
stevensonmt

While I admire the FIRE movement and am actively pursuing it to a degree, I worry that its adherents in the United States fail to consider health care costs. If you assume you will stay healthy throughout your adult life, FIRE is not that hard to achieve. In other countries with universal health care this is not a concern. In the USA, however, a single hospitalization can lead to hundreds of thousands in bills. Imagine saving your $1M by age 40. You then retire to live comfortably on $40k/yr. At age 55 you fall down the stairs and break your hip. If you have been paying insurance premiums for the past 15 years on your $40k annual budget, your insurance sucks. High deductible means you would be on the hook for most of the bill for the ambulance, the ER, the hospital, the anesthesia, the surgery, and the rehab. Easily $100k in expenses. But then you get an infection and require more surgery and more rehab? Or maybe you develop a blood clot and get a pulmonary embolism? These ICU stays are going to be at least that much. All of a sudden you've burned through 4-5 years of planned spending in one year. You're only 55 but you've been out of the workforce for 15 years. Your earning potential is minimal.

I know this is ancillary to the point of the OP, but just something that bugs me every time I see a discussion of the FIRE movement.

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lewiscowles1986 profile image
Lewis Cowles

Insurance sales-person right there. Don't question if you'd have more time to challenge said unjustified system, just say "they'll be sorry"

Also

You're only 55 but you've been out of the workforce for 15 years. Your earning potential is minimal.

Nonsense. Most programmers would continue to code regardless of having a paid job, so you'd have 15 years of side projects, plus at least 10 years of experience in a market that has been under constant inflation despite innovation and productivity ratings higher than any industry I'm aware of.

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stevensonmt profile image
stevensonmt

Lol no. Physician not insurance sales.

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jessekphillips profile image
Jesse Phillips

High deductible has a annual payment cap, generally much lower than 100000.

But say you did have to pay 300,000 or more. In those 15 years you likely did not spend the 40,000 a year and thus you saving will grow some.

When you pay off your medical bill, you may not have your 40,000 to spend each year so you cut back a little. Maybe take on a lower paying job if you are worried about it. Then eventually get back to FI.

The consider the alternative. You are working 75,000 a year and you spend it, you have some savings for retirement and you have a large medical expenses with insurance paying 80% you owe 200,000 of the 1,000,000 medical bill. Now you need continue work to pay the medical, living costs, and you are much worse off then the one who follows a FI plan.

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stevensonmt profile image
stevensonmt

You've misunderstood my issue with the FIRE movement, but your argument is still specious in that it assumes spending even less than what was a predetermined minimum. If one's goal is FIRE and can reliably live on less than that, then that person would simply have reached FI even earlier.

My issue is that healthcare costs are inevitable, unpredictable, and largely ignored by the movement. I'm not arguing against the concept of living as frugally as possible in your indentured servitude so as to end that servitude sooner. I'm arguing that true financial independence in a country that does not provide universal healthcare coverage requires far more in assets than what any FIRE plan I've read ever mentions. Because the likelihood of costly healthcare needs increases with age, they are most likely to occur when it is too late to "cut back a little...take on a lower paying job ... get back to FI." Again, my only argument is that many of the bars for FI I see (such as passive revenue from investments of 40k) make no allowance for this issue. If your annual expenditures in good health are $40k, plan for a lot more to avoid being surprised by a 2-week ICU stay, 4 week inpatient rehab stint, and 6 weeks of outpatient rehab or worse permanent need for assistance either through home health aids or nursing home placement.

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jessekphillips profile image
Jesse Phillips

I suppose you could be right. This article is the first I heard of FIRE so I haven't read any plans. That needing medical prevents cutting back other costs.

But I thought I still covered the medical because they are supposedly have high deductible insurance so the 300,000 seems unlikely to actually be the cost.

Couldn't find a laid out plan so I searched for the specific issue and it seems they have reasonable answers to things.

google.com/amp/s/www.nytimes.com/2...

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stevensonmt profile image
stevensonmt

Yes my concern is somewhat exaggerated but the solutions posited in that article are:

  1. Spend thousands flying around the world to get cheaper healthcare -- probably a wash unless you already built travel expenses into your budget;
  2. Spend $700/mo (about 20% of the 40k/yr budget);
  3. Get insurance through your working spouse -- not FIRE.

My concern is only for folks planning to retire and stay in the USA. Healthcare is not something you might need, it is something you will need at some unpredictable point in some unpredictable amount.

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jessekphillips profile image
Jesse Phillips

You had me going at first, but after going back to the article I realized that isn't what they were suggesting.

"she took a job after he retired). Should they need to self-insure in the future, Mr. Jensen would likely use a health care cooperative like Liberty HealthShare, as other FIRE adherents have"

So never mind, I'm out.

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stevensonmt profile image
stevensonmt

Cool, I'm not sure how the health share plan that requires a commitment to a faith-based lifestyle and still costs 15% of the 40k/yr budget contradicts my point, but yeah we're done.

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acho_arnold profile image
αςнο αяηοℓδ

I guess it's all about probability here, There's a lower chance of all those things happening. Imagine you die just when you're about to FIRE?

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stevensonmt profile image
stevensonmt

I work in healthcare. Unexpected serious illness is much more common than you seem to believe.

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acho_arnold profile image
αςнο αяηοℓδ

Really? What's the probability here? 1 in 10 people? 1 in 3 people? Like I said, It's a game of probability and hope :)

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stevensonmt profile image
stevensonmt

Hope is not a strategy. My only point is the target of $1-2M is far too low in the USA. Especially as the vast majority of people are going to require healthcare services at some point. Those exceptions are largely tragic early deaths.

In the absence of universal healthcare, those costs are huge. So the FIRE community should either advocate for adoption of universal health care, or recognize the target number needs to be much higher than simply .

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acho_arnold profile image
αςнο αяηοℓδ

Again one can argue that what ever number you chose isn't high enough becaue many things can go wrong. What if the US economy crashes and the currency get's devalued? What if youre target was $5 million and you constantly have emergencies that burn away the capital?

It's really a game of probability and hope. How you can chose how safe you want to be but you can never be safe enough in my opinion.

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tvanantwerp profile image
Tom VanAntwerp

Nice to hear of the success of a fellow Tar Heel!

One nit to pick, as I see this a lot:

There have been a lot of different studies about what level of income makes you happiest, and the last thing I read was something like $75k a year.

I hate it every time someone uses that $75,000 figure. What you can get for $75k varies widely across the world and across time. The life you can live in SF for $75k will be much less luxurious than in a smaller city for the same amount. And because inflation is a thing, $75k may eventually be a pittance for anybody. Just quoting a random dollar figure feels so click-baity compared to discussing the underlying economic concept of diminishing marginal returns. There is no one universal dollar figure that signifies maximum happiness; it must vary by place, time, and the desires of the person earning it.

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wizardrogue profile image
Joseph Angelo Barrozo

I feel like if you moved to a different country, like say the Philippines, $35k a year for two people would be overkill. If you ever try something like that, I'd love to read about it in another post of yours. Loved the post btw!

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krisaore profile image
krisaore

In my country 75k net dollars equivalent in a year would be pretty high, and of course pretty much unreachable for a programmer. But I agree it would be more than enough to be "on FIRE"; if we talk about net incomes even 40-45k would be okay and guarantee financial indipendence.

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kremsku profile image
kremsku

Same here, it would require a salary of 150k$ a year, meaning 12,5k$/month which is unheard of, no matter what kind of developer you are.

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0n1r1k0 profile image
0n1r1k0

Great post. I agree 100% with this: "You might as well just start buying your freedom. You're buying more options, and that makes your career and working life a lot more fun."

I will try to get more into this FI FI/RE thing.

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robertswilley profile image
Robert Swilley

Great post! I’ve sort of been doing this before I ever heard about the FIRE movement.

I’m not worried so much about retiring early. I want the financial independence.

We are way to obsessed with consuming and “things”. Things will never make you happy.

If you have debts evaluate the debt snowball and free yourself. Pay yourself first.

Step off the Hedonic treadmill (look it up) people!

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abdurrahmaanj profile image
Abdur-Rahmaan Janhangeer

so little interest over a post so significative

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codingmindfully profile image
Daragh Byrne

The question at the end - happiness is an inside job is the answer :) you have to train your mind for sustainable happiness!

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maestromac profile image
Mac Siri

Amazing Post. Thanks for this!

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webware5 profile image
webware

Thanks for spreading the good news. I just recently found the ChooseFI podcast, and thus Brandon and all the others FI figures. I'm on the good path now, and spread the news to anyone who seems interested.