Is the FIRE Movement Contributing to Physician Burnout?

Over the past month, my wife and I completed our taxes and sent them to our accountant. Earlier this week, we were told we owed an extra $25,000! We were caught off guard to say the least. To preface, this is the product of being a high-income earner, a welcome problem. However, given that we consider ourselves financially savvy and that I write about personal and physician finance, this was an unforeseen expense. Though 2023 was my first full year of attending income alongside my spouse, we thought we appropriately withheld and saved. It was not enough.  

We live well below our means, pay six-figures towards our debt annually, and max out our retirement contributions, but Uncle Sam still wants more. It can feel demoralizing to work as hard as we do (collectively as physicians), do everything by-the-book, follow sound financial advice, and still feel it is insufficient. Trying to expedite financial independence while juggling the complexities of physician finance can be challenging, even overwhelming at times. In a year bombarded by high-interest rates, inflation, ‘shrinkflation,’ and more, is the FIRE movement contributing to physician burnout?   

What is FIRE?

The Financial Independence Retire Early (FIRE) movement was something I believe was born out of the 2008 financial crisis. With financial strife rampant shortly after the housing market imploded and the ensuing economic recession occurred, Americans looked for a ‘way out.’ Over the following years, and mainly as a response to economic pressure, individuals lived frugally in hopes of saving enough of a nest egg to live off the interest alone. Once they achieve this, they can retire well before the ‘normal’ retirement age and sail into sunset.

Investopedia published a comprehensive work titled Financial Independence, Retire Early (FIRE) Explained: How It Works. It states that FIRE is ‘a movement of people devoted to a program of extreme savings and investment that aims to allow them to retire far earlier than traditional budgets and retirement plans would permit.’ It explains that the FIRE movement targets the conventional retirement age of 65 and the industry that has grown up to encourage people to plan for this retirement age. By dedicating most of their income to savings, followers of the FIRE movement hope to be able to quit their jobs early and live solely off small withdrawals from their portfolios decades before they reach 65. 

This movement can be traced back to the publication of Your Money or Your Life (1992) by Vicki Robin and Joe Dominguez. I associate Sam Dogen from Financial Samurai and Mr. Money Mustache as some of the early adopters in the personal finance niche. As it applies to physicians, Leif Dahleen, founder of Physician on FIRE, was an advocate of FIRE early on. Jim Dahle of The White Coat Investor also frequently discusses the topic on his website. Though I frequently discuss the FIRE movement on this site, it has its risks and rewards.  

The Benefits of FIRE

What are the benefits of pursuing FIRE? Well, there are quite a few. Though these may seem intuitive, I wanted to break them down into three larger categories:

Financial Freedom

The first clear benefit of pursuing FIRE is its financial freedom. Though there are many variations of FIRE, the general concept remains the same. Save enough of your income to generate interest that covers your necessary living expenses. This allows one to be no longer dependent on their 9-to-5.  

For physicians, this would mean you are no longer handcuffed to your careers to maintain your livelihood. This may allow you to dial back your clinical time, avoid night call or weekends, or to quit medicine entirely. This freedom affords you peace of mind and the ability to renegotiate your life as you are no longer beholden to your income. You have more leverage.  

Prioritize Importance

Instead of titling this section ‘Retire Early’ it seemed more fitting to comment on what early retirement offers you. Not everyone who achieves financial independence subsequently chooses FIRE. I previously published a post titled Why Financial Independence (FI) Comes Before FIRE. I genuinely believe that physicians pursuing FIRE should pause after they reach financial independence before proceeding with early retirement. Perhaps once you are financially free, your outlook on your career will change.  

However, achieving FIRE allows one to work less or retire altogether. Either way, this affords you time. As we often discuss on our website, time will quickly become a physician’s most valuable resource after their financial house is in order. For those with aspirations of spending excess time with family, traveling, pursuing a side gig, or changing careers entirely, all these are made more achievable by reaching FIRE. 

Frugality Into Habit

Though the benefits of FIRE are plentiful, I think the last benefit I would touch on is habit formation. One of the side effects, if you will, of pursuing FIRE is the development of habitual safe financial practices. The very nature of the FIRE movement is living substantially below your means and saving a large portion of your income. Income is siphoned in large amounts to rapidly build investments, thus increasing market exposure and expediting the rate at which you can achieve FIRE.

However, this process does not happen overnight. Many doctors will have to maintain this lifestyle for a decade or more before the prospects of FIRE are within reach. As such, they will develop financial habits that they will likely implement in their lives post-FIRE, for better or worse.  

The Lifestyle of FIRE

As I alluded to above, there are certain practices one must adhere to while pursuing FIRE. One’s quality of life is highly variable based on income (i.e. a family physician who is the sole earner for their family may have a different quality of life than a plastic surgeon while ‘living on half’) but the principles remain the same. Depending on when an individual wishes to achieve FIRE will largely dictate the portion of their income they need to save. Maybe it is 25%, perhaps 40-50%, or more! This is all variable based on an individual’s target retirement age, current income, savings rate, real rate of investment returns, and expected post-FIRE expenses.  

What many fail to understand is that, often, physicians exit training in their early thirties. They have delayed their gratification for a decade or more. As these physicians come into their peak income earnings, the FIRE movement dictates they live on far less than they earn to achieve their goals of early financial independence. With average physician debt totaling $250,995 upon graduation from medical training, paying down this debt quickly and saving a substantial portion of one’s income can be incredibly burdensome.  

Before we go any further, it is critical to (again) keep in mind these problems are all completely self-induced. No one is forcing physicians to pursue FIRE. However, with the current economic pressures combined with the application of sound financial advice, many hope the pathway of FIRE will allow them to delay their gratification ‘just a little longer‘ to achieve real freedom. Easier said than done.

Is The FIRE Movement Contributing to Physician Burnout?

Disclaimer

So, is the FIRE movement contributing to physician burnout? There are a few issues to address to answer this question. First, it is essential to stress that FIRE is a choice. The financial pressures individuals face when pursuing a FIRE lifestyle are entirely self-induced. As we discuss our high-income profession and the woes we endure, we must remember that the financial pressures associated with the FIRE movement are of our own creation.  

Lack of Data

Second, though I often like to include statistics to back up my hypotheses, there is limited data on this topic, far less as it applies to medical professionals directly. Because of this, it can be difficult to determine the extent of the problem. Limiting your interaction to the message boards of specific physician finance blogs may make you feel this is a professional epidemic! However, that would be a sampling bias, right? Nasdaq published a well-written article titled Early Retirement Savers Are Burning Out. ‘Coast FIRE’ Might Be the Answer. Though they, too, comment on a lack of data, they reference some great posts from other finance bloggers suffering from over-frugality and burnout.  

Thought Experiment

Given that I cannot quote the incidence or prevalence of the problem, I will not attempt to do so. However, I do think philosophically (and financially) that over-frugality as a cause of burnout is an important concept to consider for our current generation of doctors.

It tracks that living a minimalist lifestyle to expedite financial freedom would be appropriate for certain motivated individuals. Who has not fanaticized about having millions tucked away, affording you nearly limitless time and freedom as you live off the interest it accumulates? This is made less burdensome for high-income professionals who are comfortable living on something closer to the average U.S. household income. However, it is vital to understand that this is likely only a good idea for certain individuals.  

Delayed Gratification

It is the very nature of our education and training that we delay our gratification far longer than many of our friends and family who pursue alternative career paths. While others enter the workforce, save for retirement, and start families, we are left grinding through medical school or working tirelessly as residents. We hold out for the inevitable day when we complete our formal training and make real ‘doctor money.’  

For many, this marks the point where physicians finally feel they can spend on themselves. As a physician finance blogger, I often feel obligated to correct the last sentence to read ‘…spend on themselves within reason.’ But who am I to tell you what to do? Living below your means, saving, investing, and paying down debt remains sound financial advice. I still encourage all early career physicians to have a financial plan that addresses all these priorities. I have, however, shied away from implying that FIRE is a requirement for that list. Why? Because extending extreme frugality beyond a decades-worth of formal training is hard and very well may lead some to burnout.

I echo what Dr. Jim Dahle of The White Coat Invest made famous: ‘Live like a resident for two-to-five years after you complete your training and pay down your debt.’ Though I work to practice what so many preach, believe me, it can be challenging. 

Personal Example

Even in my own life, it remains a point of contention. My wife and I are two hard-working physicians in a dual-income household; why can’t we repaint our house this year, tackle upgrades, or splurge on new clothes? Well, because we are working to pay off our debts within five years.  

My wife and I have not even considered entertaining FIRE until we finish paying off her debt, and honestly, I am not sure we will. Living life while we practice practical financial advice is difficult. When our five-figure tax bill was discovered, I felt defeated. We make a dual physician income, for crying out loud! We do not institute mythical tax write-offs and we proudly pay our taxes. We put six-figures towards our debt annually, keep an emergency fund, and afford a nanny so we can continue to prioritize our careers. We are doing everything that is so often advocated. However, after all of this, we still feel the squeeze.  

We can point the blame at no one other than ourselves. Our taxes are a product of my failure to appropriately withhold the correct amount as I transitioned out of training. Our struggle lies now in having to risk delaying our current debt elimination plan or stay the course and delay other lifestyle goals. Goals that act as rewards for our savings. I can imagine many purusing FIRE struggle with this very same issue.

Our financial pressures are self-induced. We recognize and remind ourselves of this regularly. No one is forcing us to treat our finances this way. Our debt aversion motivates us to eliminate our debt quickly, but more and more I find myself contemplating if our financial strategy is overly aggressive and contributing to our professional frustrations. Is there a better way?  

Is There a Better Balance?

Finding the right balance is difficult. What’s more, it is very personal. The peace of mind that sound financial practices bring is invaluable. Knowing I have an emergency fund that can address our unexpected tax bill is a huge relief. However, now I must navigate the repercussions of withholding more taxes this year while finding a way to replenish my emergency fund. All of this must be achieved while continuing to aggressively pay down our debt to free up more discretionary income and allow some financial wiggle room… and we aren’t even pursuing FIRE!

I am profoundly passionate about personal finance and its application to those in healthcare professions. I think anyone pursuing such a vocation should be able to practice with the freedom that financial independence offers. I genuinely believe that if most physicians could practice free from the burden of six-figure educational debt, we would be happier people. However, though so many preach frugality to expedite independence, I think, as a community, we must be wary of its overemphasis. There is a fine line between healthy habits and over-frugality. 

For some, FIRE may be the perfect choice. However, for many early career physicians, we need to make sure a balance is struck that prioritizes healthy financial practices while affording some lifestyle inflation. Where that balance lies is likely highly variable. That is the part that makes personal finance so personal. There is no ‘one-size fits all,’ which is equally applicable to FIRE.  

Take Home Points

The FIRE movement was established well before I educated myself on physician finances and will likely continue, given ongoing economic pressures. However, like any fad, it must be viewed for all its risks and rewards. For some, FIRE may be a great option. For others, perhaps a slower walk down the path toward financial freedom is equally as beneficial. Sometimes, the tortoise really does beat the hare. Either way, I think if the greater physician finance community continues to explore the varying paths toward financial freedom, we all benefit. As always…

Stay motivated!

The Motivated M.D.

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