Reaching FIRE with a generous heart!

Reaching FIRE with a generous heart! - featured - text

For those of us living in The Netherlands, Western Europe or the West in general, we are so lucky! The Netherlands is the 12th richest country in the world. The Netherlands has a poverty rate of just 7.9%. Far lower than India (60.4%) and even the United States (16.8%). We are so rich and we don’t even know it or perceive it that way.

Last week that was really an eye-opener for me. Hoarding cash and investing a lot of money is fun. But I think it’s very important to keep your eyes open for those not so fortunate. Generosity is an important trait to reach FIRE joyfully and peacefully.

The balance between FIRE and generosity

The quickest way to reach financial freedom is to increase your income and cut your spending. It’s simple as that from a math perspective. However, there is more to life and money than just saving like Scrooge McDuck.

In my opinion, showing compassion to those in need is far more important than reaching FIRE a few years earlier. Some facts from ATD Fourth World:

  • More than a billion people live with less than a dollar per day.
  • 2.8 billion people, that is to say almost half of the global population, live with less than $2 dollars per day.
  • 448 million children are underweight.
  • 876 million adults are illiterate, two-thirds of which are women.
  • Every day, 30,000 children under 5 die from avoidable diseases.
  • More than a billion people don’t have access to healthy water.
  • 20% of the global population have 90% of the wealth.

How do you feel about 448,000,000 children being underweight right now and 30,000 children under 5 dying every day?

Only thinking about increasing your wealth so you can retire early while so many people are struggling to survive each and every day is just selfish. Can you solve the problem yourself? Evidently not. But you can definitely become part of the solution.

Should I stop my FIRE goals altogether?

I’ve thought about this question a lot last week. My answer was a clear no. Being generous is not conflicting with reaching financial freedom. It is just another element I need to allocate capital to. As an investment in other people.

There are many reasons to do good to others. I derive my reasons from a Christian compassion for other people in the world and to honor God.

Remember this: Whoever sows sparingly will also reap sparingly, and whoever sows generously will also reap generously. Each of you should give what you have decided in your heart to give, not reluctantly or under compulsion, for God loves a cheerful giver.
2 Corinthians 9 verse 6 and 7

I don’t want to save and invest money aggressively with the view it’s mine and mine alone. Yes, I work hard for it and yes, I live frugally to build up a nice nest egg. But I never want to close my eyes for those in need so I can retire earlier. A generous heart is essential to reaching early retirement in peace.

Reaching FIRE with a generous heart! - collage small
30,000 kids such as those on the left and right die every day… We all can do something to help make those kids as happy and joyful as those in the middle. They all deserve the opportunity.

What am I going to do differently?

Not something drastic. But last week gave me a changed mindset on money and reaching FIRE. It changed the reason why I want to reach FIRE. Not for myself but to help others.

However, I do think that I should increase my charitable donations. There are different views on how much you should give to charity. There is no one-size-fits-all for this. But if you live in a rich country such as The Netherlands or the US, chances are high that you can donate more than you currently do.

Like the Bible verse says: “Each of you should give what you have decided in your heart to give”. Not reluctantly but with joy! For 2019, I’ve set my donation goal at €4,000. This is an increase of 35% compared to my previous yearly donation.

Obviously, higher charity contributions will negatively impact my savings rate, net worth and future retirement date. But the joy I get from helping others in small and personal ways cannot be expressed in money!

With my changed mindset about money and those in need, I hope to set a positive example for you and my kids to follow.

Making an impact in other people’s lives is what you want to leave behind when you die. Not a multi-million dollar investment portfolio you’ve selfishly been trying to protect.

To my readers: what are your views on reaching FIRE as soon as possible and being generous? Do you see a contradiction or challenge?
Related articles:

How to manage money as a family and reach financial freedom?

Financial Freedom Progress Report (FFPR) – March

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4 thoughts on “Reaching FIRE with a generous heart!”

  1. Wow, this is something I haven’t read about on any blog. Interesting.
    I’ve actually donated to charity over the last few years, nothing groundbreaking and definitely not in the thousands of euros. Take last year as an example. I donated about 200 EUR to Amnesty International and the Red Cross together. However, I stopped it since I was in doubt on how well my donated money got used. The main reason for this doubt was that these large organizations require quite a bit of money that is used on non-charitable related expenses such as salaries, lobbying within Europe, etc.
    Most of these expenses are needed because otherwise these organizations just won’t be able to work in today’s world but it didn’t sit well with me. I mainly find it a bit sad that I know a certain percentage will NOT go to those in need of it. As such, I’m still on the fence about charity and donating to it. That said, I do agree that we should actually take it into account in our expenses.
    In the end, I might give in a different way than donating money, like rolling up my sleeves myself and help locally.

    1. Hi, thanks for stopping by!

      I agree and share your concerns. That’s exactly why I always check the expense ratio of a charity. To be classified as a charitable organization (and are eligible for tax exemptions/benefits in the NL) the expense ratio must not exceed 25%. I find that way too much. I think an expense ratio of 10% is fair. Helping people in very difficult to reach areas is totally different from selling cans of Coca-Cola globally with a very efficient supply chain. So I expect expenses to be higher.

      Anyhow, the main point is to help others. So we are fully aligned on that aspect! 🙂 All the best and thanks again for your comment!

  2. This is a nice approach and I am in awe for your 2019 goal, thumbs up! I only donate to projects / people I can personally relate to, it can be my daughters school, a petting zoo or somebody in need (mostly during Christmas, birthday or other special occasion). Maybe I need to look somewhat further to make an impact, thanks for the heads up.

    1. Thanks a lot! I fully agree that you should donate to causes that you personally relate to. Otherwise it just doesn’t feel like you’re making an impact.
      Living frugally to reach financial freedom earlier feels a bit at odds at donating to charity. But in my opinion it’s complimentary. Thanks for stopping by and you’re welcome!

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