Step 1: The first step to financial independence is to admit you have a financial problem

As cliché as it may sound, truly the first step in the FIRE process is to admit you have a financial problem and address it.  The fact you are reading this, most likely means you have already come to this conclusion, but for those of you who have yet to admit you have a problem, please continue to read.

When I moved to Alaska, I had no idea I had already taken a huge step down the path of realizing I had a financial problem.  Between the 2 mortgages, 2 new car loans, student loans, and credit card debt, my wife and I stepped into Alaska with well over 500k of debt.  Embarrassing as it is, I honestly don’t know exactly how much debt we had, but I am certain it was in the 500-750K range, not counting interest! By moving to a place with a slower pace of life, I noticed some strange things.  The richest people in the town, the guys with millions in halibut IFQ, boats and permits, lived in average or below average homes and drove “beaters with heaters.”

  For far too long, our society has been built upon debt, both at the government and individual level.  There is a major flaw in our advanced society, when the average family cannot afford 500 dollars for an emergency, without going further into debt. Everywhere you turn, there is somebody trying to take your hard-earned money; this is why the advertising business is a multi-billion-dollar annual industry.  In order to break free from the rat race, you must realize you are even in the race to begin with. https://www.cbsnews.com/news/most-americans-cant-afford-a-500-emergency-expense/

“Keeping up with the Joneses” and the debt that goes along with it, in my opinion, is responsible for the rise in depression rates across the globe, but specifically in the United States.  This is a topic requiring further discussion in the future.  Whether it’s a 30-year mortgage, or a 10 year car loan, when we sign that piece of paper, we are stating we will pay the lender a set amount of our paycheck every month, for the next however many years. The only way to break this destructive cycle is to get ahead of the problem, by reducing our debt and living well below our means.  Instead of taking a loan out for a brand-new car, we should consider a used “beater with a heater” instead.  After all, a car is simply a means of transportation necessary to get you from your home to your job. 

The primary goal of the FIRE movement is to obtain financial independence, or simply to have enough money or assets working for YOU that YOU no longer must work for them.  In order to even begin this process, you must reverse this trend from what’s “normal” and become “abnormal, in order to escape the rat race.”  For you to be successful on your pathway to FIRE, you first have to realize that you aren’t even on the path, and modify your course so you are.