YOLO vs FIRE: Which One is Holding You Back?

The YOLO vs FIRE mindsets have been silently battling it out for years.

Whenever I explain financial independence to someone outside of the F.I.R.E. movement, I’m usually met with some backlash. I often hear this response:

“I work hard for my money so why would I want to deprive myself of things I want? What’s life if you can’t spend your money? YOLO! You can’t take it with you!”

I understand where people’s mindsets are when they say this because I used to live by this mindset as well. However, I’ve not only changed my stance but have also redefined what YOLO should really mean to people.

Let’s break down this issue and bring to light the solution.

What is YOLO?

YOLO is an acronym for You Only Live Once. Generally, speaking, it’s the mindset that you should do/buy what you want now because you could die tomorrow.

For example, someone with the YOLO mindset would say that you should buy that big house you want because if you died tomorrow, at least you got to enjoy it for a day.

What is F.I.R.E.?

FIRE stands for Financial Independence / Retire Early. Overall, people with the FIRE mindset generally believe that you should avoid living frivolously so that you can save more money for assets and your retirement.

The goal is to “retire early” (or be able to retire early) much sooner than the average person. While most people retire between 65-70, F.I.R.E. enthusiasts aim to retire in their 50’s, 40’s or even 30’s.

You can read more about the FIRE movement, here.

YOLO vs FIRE: Which one is right?

There is a clear winner in my opinion. And it isn’t surprising that I believe the FIRE mindset is the better route to choose from. Here’s why you should reject the overall YOLO mindset:

1. When living by YOLO, you make short term decisions that have long term consequences.
   You may enjoy that fancy house, but what you really end up doing is robbing yourself.
   Think about it. You don’t just lose out on the money you spent on the purchase price.
   You lose out on the interest, time you now have to spend to pay it off, and also the extra money you could have made from investing that money instead.
2. Statistically speaking, you’re going to live a long life.
   In fact, the CDC says that the average person lives to be 78.6 years old and that overall life expectancy continues to increase.
   Of course, I realize that anyone could die very soon. That’s why it’s important to be mindful of what is truly important to you. (I’ll touch more about this below.)
3. It’s an excuse to avoid managing your money responsibly.
   Listen, I’ve met a few die-hard YOLO enthusiasts. Most of them have one thing in common. They have a lot of nice things but no real assets to support their spending. Financial IQ is non-existent. If they would die tomorrow, their family is going to have to figure out how to manage the debt they left behind, instead of inheriting some wealth.

How to redefine YOLO for a better life

Contrary to what some people believe, the F.I.R.E. movement does not consist of people unwilling to spend a dollar.

People within the movement intentionally decide what is worth their money and what is not. They know the value of time and therefore choose to invest their money in a way that allows them to spend less time working their lives away.

Remembering that you only live once is important. If you closed your eyes for a second and envisioned the very best life you could live, what would it look like? What would really make you happy?

Material things like fancy cars, expensive outfits, jewelry, Pinterest-worthy seasonal decor, etc. will inevitably become old and dated. Everything around you was once money and that money was once time.

What if, instead of spending money on your daily “want” items, you saved that money and invested it? What if that money turned into enough to start your own business – a business that could make you money even when you slept?

Moreover, what if that business made you so much money that it would supply you with all those materialist things you want free and clear without hurting you financially?

For me, financial independence and FIRE is my YOLO. 

I know that I only live once so I want to make sure that I live the very best life possible. I’ve had to redefine my mindset. That meant learning to be intentional and mindful about what actually makes me happy.

Here are just a few things I’ve learned since joining the financial independence movement:

1. Traveling can be free with travel rewards.
2. There are a ton of free things to do with your kids that are just as fun as paid activities.
3. Investing isn’t scary, in fact, it can be very passive.
4. Money doesn’t have to be a secret. When people talk about money, it’s amazing how much you can learn.
5. Having a long term positive plan like FI keeps people from living stagnant lives. You always have a goal you’re working towards and you also inspire others to do the same.
6. You can turn generational struggle into generational wealth.
7. When you join a community of people with the same mindset, you get a new kind of family.

So what does your best life look like? Do you have to debate YOLO vs FIRE and pick a side, or can it be redefined to a meaningful balance between the two? Let me know what you think in the comments.

P.S. Want to know what helped to break my entire mindset? It was this one simple book.