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How Should Product Managers think about Financial Independence?

Unless you're a owner of a company, a Founder of a unicorn startup, inherited some money, it's like you saved your money.  We're talking about a sizable chunk of money to buy your biggest purchases and to save up for trips and retirement.

Financial independence and financial freedom is now being more mainstream to talk about in recent years, popularized by Mr. Money Mustache, Financial Samurai and others who achieved their financial freedom relatively young and lived to tell their tale.  It's a tale told more now in Reddit forums and copy-cat bloggers all try to mimic, replicate and live to tell the story (literally).  I was always intrigued myself (who isn't) to invest the money I didn't spent on expenses from my paycheck and save it for a rainy day.  Like most people maybe I had wild notions of making a big buck from penny stocks -- but I've since learned and reformed, sometimes the hard way.

These Financial Freedom people call themselves as seeking FIRE which is an acronym for: Financial Independence, Retire Early.  Most of you might already know about this but there are endless strategies from more conventional Personal Finance to strategies on expense management.  Most are divided into two camps: ones called LeanFIRE and others called FatFIRE.  As you can imagine, LeanFIRE subscribers are those that are meeting a goal where they can live off of their savings, dividends and other cash flow investments or passive income streams to meet basic needs.  Typically it'll mean living frugally (and that depends on the person or household).  FatFIREs on the other hand live large, even in retirement.  Their goals are multiples of what LeanFIRE is.

By all accounts, the FIRE movement started in the tech industry.  Mr. Money Mustache and Financial Samurai, two of the most followed FIRE bloggers, both had their careers in tech.  And it would make sense, tech workers likely have higher pay, higher changes of cashing out with their RSUs or other stock options in startups.  The outsized returns allow for an early, and young exit, which is one of the characteristics of the RE part of FIRE.

Does FIRE mix with Product Managers?

As FIRE started in the tech industry, how should Product Managers think of Financial Independence?  And what are the unique things that PMs have in their toolbox that gives them a certain perspective of FIRE.  Do PMs reach FIRE earlier than other tech workers?  These are some questions we want to explore.

Product Managers as a whole and in general are better equipped to become FIRE-capable.  What do I mean by that?

First of all, Product Managers (you lot) are all master planners.  You can take a project with high-level requirements and bring it down into bit-sized user stories to do.  Reaching FIRE is a similar type of execution-like problem that needs a step-by-step plan.

You're paydays are like the Sprint Planning meetings, where you plan on how you use your money.  It's even likely the same cadence if your employer pays you bi-weekly and your sprints are also two weeks in length.

Product Managers like you also thrive in uncertainty or ambiguity.  Though we may or may not do this formally, we assign probabilities to the solutions we piece together each Sprint. The probabilities and trade-offs of doing this over doing that, navigating sunk costs with opportunity costs.  We tend to do this well and learn from iterations.  Similarly, personal and self-directed investing is similar in know the probabilities of certain outcomes to know if we have enough or do not have enough for early retirement.  Balancing these aspects under uncertainty is part of the job of a PM and a FIRE starter.

Product Managers like yourselves need to understand what is highly valuable or not.  This is the typically prioritization exercise we go through when we decided what to work on in the products we create.  We need to know what is absolutely necessary as a foundational piece and balance that with what is just nice to have.  This is very much an exercise of frugality and efficiency which Product Managers have become very good at.  It's similar to expense management or thinking of Marie Kondo's concept of tidying up.  Buy only what you want and need and what gives you joy even (like experiences).  Do less of the things that you buy because it gives you status, fame or makes you look a certain way amongst your tribe (though a certain level of that is understandable).  And cut down on eating out so much or ordering from UberEats and GrubHub, damn it!  (Yes, I'm talking to you!)

I would say that Product Managers as a whole, are predisposed to being greatly attracted to FIRE if they have any inclination to personal finance and are retirement focused.

As for...

Do PMs reach FIRE earlier than other tech workers? 

Please comment below if you're a PM that has achieve FIRE or want to share you current FIRE journey.

This is a guess but we hope to devote more articles like this in the future.  Product Management is an eclectic profession -- once where people from all walks of live and increasingly so.  We here at have come from IT, engineering, humanities, fine arts backgrounds so we are a kaleidoscope of things, not just our current job role title.

The main question becomes, does the average or typical PM have a good enough career, salary and all of that to make them successful at reaching FIRE at least as well as others in tech?

Most of the stories, and bloggers we follow in the Financial Independence, Retire Early (FIRE) space have all had traditional technology roles.  Some made it to become tech leads but less people I've come across have self-disclosed their title as Product Manager.  That's not to say that we haven't or aren't interested.

There may be a few possible reasons why.

Product Managers love their job so much they don't think of Early Retirement.  (Highly unlikely)

Product Managers typically are brought on to startups at a later stage, unlike engineers who might be the first employee and get a larger share of the equity.  (Somewhat likely and plausible)

There are less Product Managers out there than other tech workers so the sample size is smaller and less chances of meeting a PM that is broadcasting their FIRE journey. (Probably likely)

If we look at the recent Product Manager Jobs salary survey we did here, we can see that PM jobs pay about the same as a senior developer.  I think it's much more likely that for every PM there's probably 3-7 developers so the PM world is smaller.  There's also the chance that PMs don't receive as much or as large a chunk of the equity in a company because of the stage in which they join a company and there's less out-sized (FU type) returns that would make product people choose to retire early.