I started this blog just over three years ago to chronicle the last leg of our journey and share our approach to Financial Independence. In 2019 our first child was born and life got busy. When I went back to work in late 2019 I stopped reading other personal finance blogs. We had another baby, life got even busier. I have only recently started being an active member of the FIRE community again. About two months ago I started reading other blogs again and quickly realised that a lot had changed in the 18 months that I was missing in action. I was shocked.
The majority of FIRE blogs used to be about sharing one’s journey and lessons learned along the way with others. It was about helping others. Now the focus of many bloggers and so-called “finfluencers” (finance influencers) seems to have shifted to selling questionable digital products under the pretence of writing about FIRE and helping readers on their path. Obviously, their real motivation is to make a quick buck. Some even go one step further and basically sell products and courses to wanna-be finfluencers on how to get rich blogging and selling products… Where does it end?
These kinds of people have always been around, but until recently there were very few in the FIRE space. Most of them used to hang out in the crypto / trading / MLM / <enter a get rich quick scheme of your choice> universe. That has changed.
Coincidentally, while I’ve been trying to wrap my head around what happened to my beloved FIRE movement, I’ve noticed that both other bloggers and readers have started speaking out about this topic. Finfluencers have also been a hot topic in the media in recent months. A few weeks ago Tanja Hester from Our Next Life published a thought-provoking article announcing that it is time to “retire the FIRE movement”. While I don’t agree with all of the points she makes in this article, I completely agree with her view that the FIRE movement has been co-opted by the “get rich quick” crowd. Here is a quote from her article:
Now, however, so many of the loudest voices are pushing products at every turn, reminiscent of the “I got rich buying real estate, so now come to my seminar so I can take a bunch of your money that I claim to not need.”
I think Tanja is spot on. Don’t get me wrong, bloggers and other content producers have every right to get paid for their work. Running a blog is hard work, and so is producing podcasts and making Youtube videos. Writing an original article can take days. Of course, people should get paid for their work and their contribution to the community. This is true for bloggers who are still on the path to FIRE and those who have already reached their goal.
However, it is quite obvious that the FIRE Community has changed and there are now a lot more players with different motives than there were just a few short years ago. If you’ve followed our story you probably know that Mr. Flamingo lost his life savings in his early 20s because he was manipulated into pouring all of his money into a very high-risk investment. So I feel quite strongly about these kinds of people trying to profit from the FIRE movement and taking advantage of inexperienced investors.
The Who is Who in the FIRE Movement
To illustrate the various groups who are now floating around the FIRE Movement, I’ve created this chart:
Let’s go through the different groups starting from the bottom.
The first group at the bottom of the pyramid currently consists of two subgroups:
The FIRE Enthusiasts
This is the core group of the FIRE community – normal people with normal jobs who are on the path to Financial Independence. These are people who want to grow wealth slowly. Their goal is freedom and living a fulfilling, meaningful life.
Books these guys love:
Your Money or Your Life
The Simple Path to Wealth
The Millionaire Next Door
The “Get Rich” Followers
These are people who are looking for ways to make money with minimum effort and in the fastest way possible. They might also strive for Financial Independence, but their motivations and values are different from the FIRE Enthusiasts.
Books these guys love:
The 4-Hour Workweek
Hustle Harder, Hustle Smarter
Big Money Energy: How to Rule at Work, Dominate at Life, and Make Millions
Bloggers and Other Content Creators
In this group, we find all the FIRE bloggers (and personal finance bloggers who cover related content) as well other FIRE content creators – YouTubers, Instagrammers (to a certain degree) and podcasters.
The big difference between this group and the two groups at the top of the pyramid is that these are people who are as much part of the FIRE community as the FIRE Enthusiasts. The only difference is that they have decided to add their voice via a blog, podcast or other kinds of content. This group is an extension of the first group and both groups interact all the time, it’s a two-way relationship.
Bloggers and other content creators may or may not make money from their content. Some have ads on their websites and some affiliate links for products they use. They may, for instance, recommend personal finance books they like on their recommendations page and include an Amazon Affiliates link so they earn a few cents if a reader buys a book via the link on their website (I have links like this on my Resources page myself). Or they might recommend a service they use (like Sharesight, YNAB, etc.) and get a small commission or a credit if a reader signs up via their link.
YouTubers might make some money from their videos, podcasters usually have a sponsor they announce at the start of the show. Others might sell some low-cost budget templates in their Etsy store. As you can see this is all quite harmless, doesn’t muddy the message the FIRE content creators are trying to convey and certainly doesn’t hurt the reader/listener in any way.
Others (myself included) simply offer followers the option to support them – either with a one-off or a regular contribution.
We’ll skip the Grey Area for now and move straight into “get rich” territory – let’s meet the Wolves in Sheeps Clothing.
The Wolves In Sheep’s Clothing
There are two kinds of people in this group:
a) New content creators who want to make money online and picked the FIRE Movement as their niche. They pretend to be part of the FIRE community, but they really are just after money. These guys want to profit from the FIRE community (and possibly reach FIRE in the process).
b) Formerly legitimate FIRE bloggers/content creators who have sold out.
These guys often refer to their blog/website as their “online business”. They use advanced online marketing strategies and are often SEO (rather than personal finance) experts. Here are some of the things you will find on their websites:
- “Reviews” and “comparisons” of questionable financial products and services (like investment firms you’ve never heard about, loans and credit cards). These “reviews” are of course usually positive and include many affiliate links.
- Lots of affiliate links to unrelated products or products and services the website owner has never used themselves. These usually pay them a big commission if a reader signs up (examples include credit cards, loans (including payday loans!), investment services and other people’s courses (often about making money online!).
- Courses the website owner has created (often about reaching FIRE, investing or making money online).
- Sponsored (=paid) posts (often portrayed as guest posts).
- Self-published e-books that cost a lot more than normal books you can buy in a book shop.
- Words like “exclusive”, “signature”, etc.
- A lot of talk about cryptocurrency, trading and other ways to get rich quickly.
- These guys often don’t write the articles on their sites themselves. Many hire ghostwriters to create content on their behalf.
Unfortunately, there is now an ever-growing number of new bloggers who display pretty much all the things I listed above from the start. Their sites have little informational value and they are usually nowhere near as financially secure as they pretend to be. While experienced readers know to just ignore sites like this not everyone sees right through them. Of course this doesn’t mean that a website is bad just because you find one of the things on the list above. However, if you find a number of them and very little proper content, there is a very good chance you are dealing with a Wolf in Sheep’s Clothing.
These guys basically make money teaching the Wolves in Sheep’s Clothing how to get rich running and growing their online businesses.
Things you’ll hear from Leeches:
- “Lifestyle business”, “location independent”
- “Secret formula”, “fool-proof system”
- “Make money while you sleep” (which is ironic, because by simply following common FIRE advice – investing in index funds – you will make money while you sleep without running some dodgy scheme)
I recently watched the awesome Neflix documentary series “Money Explained”. The first episode is about get rich quick schemes and refers to what leeches do as “coaching schemes”. I highly recommend you watch this episode if you haven’t yet.
These guys are often former or current Wolves who are (or claim to be) successful running their online businesses and now want to “share their success secrets” with others. Yeah right.
The Grey Area
The members of this group move around in the grey area between group 2 (the genuine bloggers/content creators) and group 4 (the Wolves in Sheep’s Clothing).
Here you’ll find a variety of practices. Most people in this group are either
a) Genuine bloggers/content creators who are experimenting with new ways to monetise their blogs
b) New content creators who are genuinely interested in FIRE but who would not have started a blog if it wasn’t for the financial incentive
Things you will find on the websites of this group:
- More affiliate links for things like credit cards and web hosting and associated services (Bluehost anyone?)
- Some courses, e-books and other offerings (usually about FIRE or other personal finance topics)
- Some sponsored posts from services the content creator uses personally
- A general sense that this content creator is trying to reach FIRE by selling products about reaching FIRE (this is where something called “paradox of practice” starts – more on this below.
There are many different shades of grey here. Some legitimate content creators have some questionable stuff on their sites but 95% of the content they provide is still free and helpful. In a case like this, it is the reader’s job to find the nuggets and ignore the rest.
At the same time, many “Wolves in Sheep’s Clothing” blogs start off looking like Grey Area websites but soon step it up and turn into full-blown “lifestyle businesses”. This level is also a bit of a slippery slide. It’s not always easy to see what the intent of content creators in this group is, so it’s important to be careful.
There is a line that goes somewhere through this group and that separates the FIRE community from the get rich crowd.
The FIRE Community vs The “Get Rich Quick” Crowd
When you look at the different groups described above it is easy to see who really is part of the FIRE community and who is just pretending. The “Get Rich Quick” followers are not really after the information and ideas shared by the FIRE Enthusiasts and content creators. What they are really after is the information the Wolves in Sheep’s Clothing and the Leeches provide.
The FIRE Community is a very young community in the grand scheme of things. There have, of course, always been people who sell the “Get Rich Quick” dream, snake oil salesmen, manipulators and scammers. I believe it’s a shame that the latter group is slowly taking over the FIRE Movement and makes it so much harder to find genuine content.
The current state of affairs in the FIRE community creates a few problems:
- The FIRE Enthusiasts have to constantly look out for Wolves and their manipulative messages, especially if they are new to Financial Independence.
- “Get Rich Quick” Followers move conversations away from traditional FIRE topics (frugality, happiness, investing in index funds, etc.) to typical “Get Rich Quick” topics.
- Genuine FIRE bloggers and other content creators might get lured in by both Wolves and Leeches and might even be accused of being part of the “Get Rich Quick” Crowd.
A Paradox of Practice
A Paradox of Practice means that someone promotes a strategy to become rich to others when this strategy is not what made them rich. They don’t practice what they preach. The best example of this is the ultimate hypocrite of the personal finance world – Robert Kyosaki (I love Rich Dad, Poor Dad as much as the next FIRE Enthusiast, but the guy is a complete sell-out).
I first learned about this concept in M.J. DeMarco’s book The Millionaire Fastlane (which is not a book about getting rich quickly by the way, although the title might suggest otherwise).
It refers to people who are wealthy (or on the way) because they found a way to sell their advice to people (this is what is making them money), all the while pretending that their success is based on the principles they teach.
Imagine the following: You’ve put on some weight and want to make changes to your diet and lifestyle. You find a weight loss program you like and decide to sign up. During the first meeting of your group, you realise that the group coach is a grumpy, overweight woman. What would you do? You would leave. Would you take them seriously? Hell no. Would you take their advice? Definitely not.
Now think about this example in the context of personal finance. We don’t carry our investments around for everyone to see like the extra weight on our hips. It is a lot easier to fake being rich and successful (especially online) than it is to pretend to be trim and healthy.
This is the problem with the Wolves in Sheep’s Clothing and the Leeches. They might say things like “I want to help you achieve Financial Independence”. Translation: “I want YOU to help ME achieve Financial Independence by giving me money”.
In her article mentioned above, Tanja from Our Next Life manages to verbalise something I have been thinking about a lot but have not been able to put into words: The chasing. Here is how she describes it:
The problem isn’t the doing, it’s the chasing. You innately know the difference, and you can spot it from a mile away. You can sniff out the folks who are clearly doing something for the love of it versus those who are primarily trying to enrich themselves. […] At the very least, we should ask why people who claim to be selling a path out of the hustle can’t seem to escape the hustle themselves.
Tanja argues that the chasers who claim to have reached FIRE already either didn’t save enough and still need to accumulate more money or they are unable to define what “enough” means. Whatever the reason is, it should make you suspicious.
Why would someone keep chasing if they have reached a point where they don’t need to earn an income anymore? Why would they push questionable products down reader’s throats? Why would someone try very very hard to sell you their “fool-proof system” to get rich if they have achieved everything they are promising to teach you?
Is the FIRE Movement Corrupt?
Let’s get back to the question I asked in the title of this (very long) article. Is the FIRE Movement Corrupt? I guess my answer is yes and no. Yes, there are many shady characters floating around the FIRE Movement now and the “Get Rich Crowd” has definitely made its mark. In a way, it was only a matter of time.
The good news is that there is still a very strong part of the movement that stands for what the FIRE Movement was originally about: creating wealth to live a happy, meaningful life. There is still a lot of quality information out there and people who are happy to share their stories and insights.
I believe Tanja is right when she says that it is time to “retire FIRE” and split the movement up.
We should turn this
Two distinct groups in different universes. Wouldn’t that be nice? Yes, it would be. But it won’t happen, of course. So all we can do as genuine FIRE Enthusiasts is to keep doing what we have been doing this whole time: help others out, produce quality content, share our stories and focus on what the FIRE Movement is really about.
To finish this monster article I’ll share some quick tips on how to sniff out members of the “Get Rich Quick” Crowd.
How to Protect Yourself from Get Rich Quick Schemes
Whether you are new to Financial Independence or a long-term FIRE Enthusiasts, here are a few tips to navigate the FIRE Community and to avoid falling for traps:
- See blogs, Youtube videos, Instagram posts by finfluencers and podcasts as encouragement, inspiration and entertainment, not advice.
- When you are just starting out, all the basic info you need can be found online and in books for free. You don’t need to buy any “systems”, “secret methods” or anything else to get started. You can find my favourite websites and books on my resources page.
- Be sceptical!
- If you start following a particular content creator, ask yourself:
- Has this person achieved (or on the way to) what they are writing/talking about?
- Are they trying to sell you something?
- Are they wealthy (or getting there) because they use(d) the same methods they are trying to teach you? Do they practice what they preach?
- Take advice from people with a proven track record of both doing and being successful at what they are preaching.
Thanks for reading! 🙂