The people of the FIRE (Financially Independent, Retiring Early) movement are a special kind of personal finance nerd. They’re not the people who will tell you which stock is the hottest or how to speculate on real estate. They’re not showing off their new cars (unless it’s at least 10 years old) or an expensive electronic gadget. Instead, they’ll tell you exactly how many more years they have left to work, swap tips on where to buy the cheapest groceries, and speak in acronyms that may baffle even traditional finance folks.
Yet the San Francisco Bay Area — often trumpeted as the most expensive place to live in the country — appears antithetical to FIRE values. Rents are soaring; Ubers and Lyfts clog the roads; and avocado toast is so ubiquitous and overpriced, it’s not even worthy of a joke. But though the area has outstripped the rest of the country in terms of cost of living, high salaries have also minted many new millionaires. Some earned it the old-fashioned way: by saving and living frugally.
I know several people who became financially independent in their thirties or forties here after their tech company IPO’d and they got a giant stock payout. But as someone who has tried the FIRE lifestyle, one question remains: Is it possible to reach FIRE in the Bay Area without winning the IPO lottery?
The answer turned out to be… kinda.
The FIRE life is based on not-sexy, not-quick ways of getting rich and “retiring” early. It can be boiled down to something like this: make a middle class (or better) salary, then live as though you make minimum wage while investing in index funds. If that was all you did, you could retire far earlier than the average American (who retires at 61). But the people of FIRE take it further.
I first discovered the FIRE movement in 2012 via Mr. Money Mustache’s blog. “MMM,” as he is known, is the face of the movement and a media darling. He can come off as extreme, but he and his now ex-wife retired in their early thirties.
We managed without a car for over a decade. Then we had a kid and dealt with Zipcars and Muni during the first year of our son’s life.
So I tried his methods. I switched to an off-brand cell company, which cut our family’s bill in half. I bought a bike, but I lived on Telegraph Hill, and I’m not made of steel. My husband and I tried batch-cooking in a slow cooker but fell off the wagon, and then we tried again. We moved farther out to Ingleside, but by then, rents had doubled. We managed without a car for over a decade. Then we had a kid and dealt with Zipcars and Muni during the first year of our son’s life — probably my most Mustachian achievement. My son grew out of the infant car seat and needed a convertible one, which is basically a 30-pound baby throne. I wasn’t going to drag that in and out of a rental car, and I was sick of the Muni slog.
I felt like a fraud. Our savings rate hovered at around 30%, which put us at retirement in our mid-60s. Could I even call myself a FIRE devotee?
To find out, I reached out to locals pursuing FIRE through a Facebook group for the popular ChooseFI podcast. About half the people I spoke with worked in tech, while others were tech-adjacent, working indirectly with the industry. They included marketing professionals, chiropractors, pediatricians, real estate brokers, and, yes, software and hardware engineers — it’s unavoidable. But no one had received a big payout, or else they wouldn’t have been lurking on Facebook groups trying to maximize their paths to FIRE.
The moderator of the group is Allison, age 49, who FIRE’d four years ago with her husband, Dylin. Out of everyone I interviewed, they are the only people who had fully retired and were still able to live in the Bay Area. She was a project manager, and he was a marketing professional. “Unfortunately, none of these startups [they worked for] IPO’d or made it big,” said Allison, “so the main source of our net worth came from our salaries, not stock options.”
How did they do it? “We started investing in the stock market as soon as we got real jobs that offered 401(k) plans,” she said. “We maximized our income potential by taking advantage of the hot tech industry, and in several cases, changing jobs to increase our earning potential.” They also brought in extra income with side hustles, automated investments and bills—and kept their expenses low as well.
Is this method replicable in today’s San Francisco? Allison and Dylin bought their first home in 1999, when prices were, if not affordable, at least not totally bat-shit insane. They were able to buy that first home — a one-bedroom condo in the Oakland Hills for $186,000 — by saving 30% of their salaries, ending up with a 10% down payment. Then they bought and sold multiple times over the years, until they sold another condo in Mission Bay to pay off the Oakland condo in full.
“I’d rather have housemates and retire early than be locked in paycheck prison just for the luxury of living by myself.”
Making smart housing choices seems to be key for many people pursuing FIRE. Susan, 52, a former fashion/textile designer and current nonprofit employee, owns her own condo in Potrero Hill. “I have always had housemates,” Susan said, “which is how I can afford to be a homeowner as a single woman with a moderate income…I’d rather have housemates and retire early than be locked in paycheck prison just for the luxury of living by myself.”
Susan is financially independent, but not yet at early retirement. “The numbers tell me I am technically ‘FI’ for the lifestyle I’d like to transition to,” she said, “but that won’t be in San Francisco.”
For another perspective, I spoke with Ben, 41, who is both a commercial real estate agent and a landlord. He bought and rents out two multi-unit apartment buildings in the Central Valley, which takes a lot of guts. I asked him about buying a home, and he said, “Buying a house is overrated. I’m fortunate to be in such a position that I can rent out a room to somebody else. Not everybody who is married or has a family is willing or able to do that. That certainly helps.” He pointed out that it’s cheaper to rent these days than to purchase a property.
In other words, sticking it out in my rent-controlled apartment, despite my, ahem, eccentric landlord could still lead me to FIRE. As long as I don’t plan to retire here — nearly everyone I interviewed cited leaving the Bay Area as part of their early retirement strategy.
“I would be completely remiss to speak about my FIRE successes without acknowledging the overwhelming amount of luck and privilege I’ve had along the way.”
Jacob, who works in a San Francisco-based technology company, is about to FIRE next year. He is the youngest person I interviewed, and he freely admitted that there’s privilege required to do something like this at such a young age. “I would be completely remiss to speak about my FIRE successes without acknowledging the overwhelming amount of luck and privilege I’ve had along the way.” He points out that he is white, male, and able-bodied, and that he has financially stable parents. Although not everyone I spoke with had all these boxes checked, everyone had some.
But privilege alone generally creates the opposite effect. Jacob could easily blow all his money in the Bay Area and still complain about making ends meet. FIRE, in any area and in any economy, requires a lot of planning. “I will be moving into a 710-square-foot mobile home in Santa Cruz that I purchased for $216,000 earlier this year,” Jacob told me. His housing expenses will go from almost $1,500/month to only $400/month, less than one-third of the cost of his current living situation. He said that the home also has a 210-square-foot room that could be rented out to cover housing expenses, if needed.
Plans within plans within plans. Some refer to this as living by design, not by default. While the Bay Area is expensive, it also hosts a wealth of opportunities.
Ben, the realtor, said that he might be able to FIRE faster elsewhere, but in his line of work, he makes more money here. “Commercial lease rates and property values are higher here, meaning that if I’m able to build the right type of relationships, I can earn more money doing less work here.” He added that being in the Bay Area made him somewhat recession-proof compared to working in the Central Valley during a recession, which he described as “tough.”
There’s also a spectrum to financial independence. Christine, 38, introduced me to the term “BaristaFI,” meaning you have enough money to leave a full-time job and work a passion job or launch your own business. It’s also known as Fuck You money — you don’t need your job, but you either like it or are willing to work to build a bigger cushion in actual retirement.
Christine explains, “I am running my lifestyle business, financial-coaching, and managing my own time and daily schedule.” Her schedule allows her to enjoy a semi-retired lifestyle.
One key point about the FIRE movement is that almost no one intends to retire in the traditional sense.
If you’re only partly “FI,” it means you need to make some money at some point, but not immediately or a lot. Often, people have a regular savings account to spend until they start making enough to cover their expenses (while leaving their tax-advantaged retirement money to grow), or they have enough money in an index fund that they can draw a small stipend out of the earnings, without touching the principal. Or they have a paid-off house, no car, no kids, and such a stripped-down lifestyle that they can get by on a lower income.
Ben seemed to be in a similar situation. “There are a lot of days when I no longer go into work, so maybe I’m almost there.” He suspects he could fully retire in a year.
One key point about the FIRE movement is that almost no one intends to retire in the traditional sense. We do not want to play golf and volunteer at the historical society, or maybe we do, but only for a few years — or part time. If you’re driven enough to figure out how to retire early, you aren’t going to be happy Netflixing and chilling until Medicare kicks in, or even binge-drinking margaritas on a beach. Most of us want to FIRE so that we can do whatever we want to do — usually a very long list of things — without sweating over whether or not we could make a living off it.
“My post-FIRE dream is to slow-travel the world,” Susan explained to me. With that in mind, she took a part-time job working 30 hours a week with a nonprofit. It’s remote, and although “the pay is absolute crap,” it comes with health insurance and offers her enough to pay her bills. She said that she’s planning to use the role to experiment with slow travel, without giving up a paycheck.
I didn’t find a single teacher, police officer, dog walker, or actual barista contemplating a financially independent life. I’m sure that there are some, but it is almost universally true that their FIRE plan will involve a move out of the area. And even those who worked in a lower-paying job had a spouse in tech.
That applies to me as well. The only reason we can even attempt to be “FI” is because my husband works in tech. Then again, the main reason we stay in San Francisco in the first place is because he works in tech. The golden handcuffs are real.
Short of becoming a two-tech-income household, I still don’t see a way toward FIRE without giving up more than is worth it for me personally.
For me, part of the whole point of living in San Francisco — far from my family, where I find it more stressful to raise a child — is to enjoy the area. But that means eating at exciting restaurants, day trips to wine country, occasional weekends in Russian River, and living in an accessible neighborhood. Even doing these things cheaply is not cheap.
I did not buy a home in 2010. I cannot have a roommate. I hate cooking. The majority of my extended family lives in San Francisco, not outside it. Short of becoming a two-tech-income household, I still don’t see a way towards FIRE without giving up more than is worth it for me personally.
For those who are willing to make these kinds of concessions, it might just be possible. So when will you retire?
