MZ Generation Dreaming of Early Retirement... Are You Also a 'FIRE Tribe'? [Heo Midam's Youth Report]

Young Adults in Their 20s and 30s Dreaming of Early Retirement... Aggressive Investment Tendencies
Experts Say "Interest in FIRE Movement Among Youth Will Continue"

Office workers are taking a break at Cheonggyecheon in Jung-gu, Seoul.
[Photo by Yonhap News]

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[Asia Economy Reporter Heo Midam] # Kim (31), an employee at a marketing company, started studying financial investment after work since last March. Stressed by the vertical organizational culture and excessive workload at work, Kim began studying investments with the goal of early retirement. Kim said, "It's hard because I don't feel a sense of accomplishment even when working," adding, "The repetitive daily routine is boring, and I feel stressed whenever I have to use my annual leave due to personal reasons because I have to watch my boss's reaction." He continued, "I want to save money as soon as possible to leave my job. For that, I had no choice but to study financial investment."

Interest in the so-called 'FIRE tribe (Financial Independence, Retire Early),' who dream of early retirement, is increasing mainly among young people. The FIRE tribe refers to those who aim to retire in their late 30s or at the latest in their early 40s by drastically reducing consumption or aggressively investing to accumulate a large sum of money, thereby achieving financial independence.

According to the 'Ordinary People's Financial Life Report 2022' recently published by Shinhan Bank, the proportion of FIRE tribe members is higher among people in their 20s and 30s compared to other age groups. Among people in their 20s and 30s, 6.4% responded that they plan to retire in their 30s or 40s, which is six times higher than the 1.4% of people in their 40s. The average expected retirement age among the FIRE tribe in their 20s and 30s was 41 years old.

In particular, those who want to be part of the FIRE tribe had 1.6 times more assets in financial investment products such as stocks and twice as much in virtual assets compared to those planning to retire after the mandatory retirement age. This suggests that they are aggressively investing in high-risk, high-return financial products to quickly increase their assets for early retirement.

[Image source=Yonhap News]

Posts related to the FIRE tribe continue to appear on online communities as well. A netizen who identified as an office worker said through a real estate-related community, "My dream is to become part of the FIRE tribe. Right now, I am just a mere salaried worker, but my goal is to earn much more money than my current salary and retire in my 40s." He added, "These days, you can make money sitting still through stocks or coins. I feel foolish for just working hard and receiving my salary regularly."

However, as the stock and virtual asset markets have recently entered a downturn, there are opinions that caution is needed in investing. There is a concern that those dreaming of the FIRE tribe and focusing on high-risk investments may end up facing a debt bomb instead.

According to the 'Financial Stability Report' released by the Bank of Korea in March, the proportion of vulnerable borrowers among young borrowers was 6.6%, exceeding the average of other age groups (5.8%). Vulnerable borrowers refer to low-income borrowers in the bottom 30% of income or those with a credit score of 664 or below who have borrowed money from three or more financial institutions. The debt background of young people appears to be related to 'debt investment' in real estate, stocks, and virtual assets.

Experts predict that the FIRE tribe craze will continue in the future. Professor Kim Taegi of Dankook University's Department of Economics said, "The number of FIRE tribe members is currently increasing. While the past heavily relied on labor income, the future will see a higher reliance on non-labor income such as stocks and real estate." He added, "However, since the current stock and real estate markets are unstable, the FIRE tribe craze may temporarily slow down. Nevertheless, young people's interest in the FIRE tribe will continue."