Suze Orman is a financial adviser and operator on CNBC. She's worth a lot of money, having presumably taken her own financial advice when she was in the money markets before TV came calling.
She has entered into a fierce debate, if indeed not actually starting the debate. The debate is two-fold. One, you need $5 million to retire. And two, FIRE is a joke. Now, FIRE I am fascinated with. FIRE is a movement - Financial Independence Retire Early - it has followers, if not disciples.
It was started by a bloke who retired in his 30s and espoused the virtues of it. He wasn’t especially wealthy, which is what sparked the movement's popularity. Basically it required discipline. Real discipline. Spend next to nothing, scrimp and save, and work hard. Save most of what you earn and eek out an existence with the rest of it. You will get a nest egg before you know it, and bam - FIRE.
Financial Independence Retire Early. There is merit in his approach. Most of us wouldn't do it, because it would be argued most of us couldn’t. But actually we could - we are just not disciplined enough. We want too much. Too much house, too much car, too much fashion, too many nights out. Suze Orman argues - and I agree with her - it's a waste and a fad. Because you retire too young, and your brain goes to mush.
We need to participate. We need to be places and do things, otherwise we shrivel up and die. Not everyone, of course, and this is why the debate is so fascinating. It's complex, everyone is individual. I wanted to retire young but when I could, I'd worked out I didn't want to - for the aforementioned reasons.
And it's also a truism for many that if you do what you love, you do well. And if you do well in a large number of areas of life, you do in fact end up with choices like being able to retire young. But because you have done well doing what you love, what you love is more fun than not doing it - hence you carry on.
But, where Orman missed the point, or is out of touch with reality, is the five million. Obviously you don't need five million, because if you did, no one would be retired. Virtually every retiree in this country doesn't have five million, yet they're retired. And you could well argue that in an age where saving for retirement is a critical debate, Orman does damage by making such ludicrous suggestions. Because, the young and impressionable and inexperienced might believe her - and therefore give up.
Like FIRE, what you need for retirement varies widely.
Someone here locally, a New Zealand version of Suze, was over Christmas arguing you really need two million. But that depends on your lifestyle. Are you downsizing, is your life and lifestyle shrinking, or are you cruising and in the south of France for six months of the year. The number will vary dramatically, depending on the answer. But here's what I've worked out - doing nothing is boring. And very few people can do something that they have to invent. Golf and drinking only gets you so far. You need to do what you love and if you're not loving it, do something else.