That’s pretty much exactly what happened to me. I got my largest series of raises of my career, and was being considered for either management or chief engineering type positions when I pulled the plug. I had about 20 years in.
But that brings me back to putting the focus on the FI part. Being financially independent doesn’t mean you have to retire early. It just means you have the choice to. And that is extremely liberating. Even shitty days at the job are more manageable when you know you can just leave if it gets too bad. It’s easier to turn down a promotion into a position you might not actually want when you don’t need the paycheck boost.
Some of the most satisfied folks I worked with were still basically working the same lab/test jobs they started in because they didn’t want to do anything else, and didn’t need more money. While some of the least satisfied ones were constantly trying to move up the ladder to support their ever-increasing expenses.
I don’t know. I do know that my parents just retired and I have to actively harangue them to spend their money and enjoy themselves. The marathon isn’t particularly healthy either.
On the one hand, it feels to me like MTV cribs or something: a few people bragging about a lifestyle that is unrealistic for the majority of people. I have been in well-paid employment all my adult life, invested sensibly in pensions and the stockmarket. I will have a comfortable retirement, but right now, at the age of 44 I don’t even own my own home yet* and I certainly couldn’t afford to retire tomorrow.
On the other hand, if we’re talking soft retirement, then that makes sense. That is to say, building up enough of a nest egg that you can switch to doing a job that you’re passionate about, or a small-scale business, with minimal financial risk. This makes a lot of sense, and I have to say, if I were living my life over again I would seriously consider a job in finance / banking / commercial law for a few years to then have the financial heft to do whatever I wanted with the rest of my life.
* This is largely because I have been working as an expat for many years, but still.
I have a friend whose dad was big on saving as much as possible for retirement. He took this to heart. He and his wife both had good full-time jobs. They struggled to live on his income alone, and invested every cent she earned. As his income increased over the y4ears he began contributing some of his earning toward retirement savings.
When he was in his late 40s he met with his investment guy and realized he could retire any time. So, at 50 he quit working. But he quickly became bored. He now is juggling 3 part time jobs (and they are all “fun” jobs). I text him to see if they want to get together for dinner or drinks only to find that he is scheduled to work! He had more free time prior to retirement.
The math can be done on this, but the majority of folks don’t possess the numerical literacy it takes to do that math.
A person’s career is whatever that person wants/needs it to be. If I have accumulated the financial assets I need to pay my bills for the rest of my life - regardless of whether I’m 35, 55, or 75 when I hit that milestone - then why should I feel compelled to work another day at a job I don’t love?
I recently shifted careers and took a pay cut in exchange for better mental health. I was only able to do so because the new job is I the same state retirement system as the old one, so the impact on my pension plan is worth it to me. And I have no kids to worry about. I feel very fortunate to have been able to get out when it became obvious that I needed to.
But even the old job was public sector stuff and I wasn’t exactly rolling in money. I definitely see the appeal in accepting 15 years of stress in exchange for early retirement or, more realistically, early “soft” retirement.
Almost a year later, I still feel like I’m on a working vacation and that’s with a 40-hour job. There’s a lot to be said for a midstream swap if you can afford it.
Tough to do in places like New York or San Francisco. Although my wife bought a small 1 BR in her early 30s in Hoboken, NJ where we ended up living for years until we had kids. By that time we had enough money saved up to buy a larger 2BR place while keeping the old one as a rental property (which is all paid off now).
It’s nice having that extra income come in each month. Plus rent keeps going up while my mortgage payment always stays the same!
Child care is another huge expense. Working from home IMHO is the best thing ever since we don’t have to pay $1000 a week for a nanny. Like that’s ridiculous. At my old job one of my analysts jokingly asked if he could be my “manny” (male nanny). I’m like “don’t laugh. It would be a pay raise for you!.”
Nothing - but I really wonder how many of the people who want to to retire super early also want to live a very simple life? I’m going to use some real-ish numbers . I have a pension and a common amount for people who retired from my employer is $82K per year. - and from what I’ve found out digging around, I would need to have at least 1.6 million in savings to buy a annuity that would give me that sort of income. $82 K a year is probably fine for someone retiring at 55 today until they are 95 even with inflation , especially with additional savings and SS kicking in at some point. What sort of lifestyle will $82K provide in 20 years for someone who stops working at 40 and won’t be able to collect SS yet ?
There isn’t - but there’s also a difference between not working for someone else and being retired.
I don’t know where you live or what you do or how old you are - but I’d be really surprised if it’s “not too difficult” for a significant number of people right out of college to live on 1/3 of their income. The average house in my area goes for over 500K. ( and that’s a house that’s under 1200 sq feet. ) You would need a household income of around $100K to be able to afford it - and that’s spending 30% of your income just on housing. To buy that house and live on 30% of your income total, you’d need an income of like $300K. Sure, there are places where house cost less than $500K - but salaries tend to be lower in those places, too
Yes, of course it is dependent on your location. I live in St Louis, MO, where housing costs are pretty reasonable. I worked in engineering where starting salaries can be pretty nice (more so now than back when I started, but even then they were good salaries).
I can’t remember the exact numbers, but I think our “starter home” (probably around 1800 soft) was about $220k. Back then mortgage rates were pretty low (again, I don’t remember exactly) but the mortgage was probably about $1200/mo, maybe less. My starting salary (without considering my wife’s, since we weren’t married when I bought the house) would have allowed about $2k/mo in expenses using the 1/3 rule. So it was doable, especially once she finished school and her starter salary chipped in as well and I got a few raises. But I absolutely concede that living on $2k/mo is impossible in some locations.
The big thing was that even after we were both working and earning significantly more, we didn’t immediately move out of that small house, even though our peers were living in much bigger and more expensive places. We also kept driving our “college cars” and just generally keep expenses down for those first 5 years or so.
But again, I’m not putting my particular path out there as “obviously it will work for everybody”. I didn’t even truly “FIRE”, since my wife still works. What I’m saying is that if a goal of financial independence at a young(ish) age makes you sit down and actually write down a plan it can only be a good thing. Nothing can replace actually doing the math.
There are plenty of places, career choices, and lifestyle choices that make FIRE difficult or impossible. But these aren’t universal obstacles.
The tenets of FIRE would advise against buying an average house. If you want to save money quickly:
Live in a cheap house - something small and old in a less desirable neighborhood. Don’t spend money upgrading it; you don’t recover all of that cost when you sell.
Eat cheap food. Don’t go out to fancy restaurants. In fact, don’t go to restaurants. Shop at Kroger, Walmart, Costco. Buy bulk, don’t buy organic, don’t buy name brand, buy store brand.
Drive a cheap car. Look for something about 5 years old with high miles, maybe a few dents and scratches. The high miles turns off a lot of buyers, so the price will be low - but high miles at 5 years means mostly highway miles, which are the kindest miles to a car, so you should have pretty good reliability for the next 5-10 years. Low purchase price, low sales tax, low insurance cost. Learn how to do your own maintenance. Wash it (if you must) by hand.
Enjoy cheap entertainments. Movie theaters are $20 a seat these days. Stream something for $5 instead. Or get a book.
Don’t get a gym membership. Go run or ride a bike. Do pushups in your living room, chin-ups in your basement.
Wear cheap clothes. Don’t shop at Macy’s, shop at Target. Better yet, Goodwill or Salvation Army.
Sure, I’m just pushing back at the notion that working 40 years is the same as “making something” of yourself. It’s a narrative mostly pushed by people with privilege.
If somebody has the means to retire early to a frugal lifestyle and that’s the choice they make, more power to em.
We do most of those things and can only save about 30% of our income. And it’s not all retirement savings. It’s also earmarked for my son’s education, a down payment on a house (which we’re currently losing a big chunk of, due to medical expenses), our next used car, and all anticipated future expenses ranging from home maintenance to the next major appliance. The only major ongoing expense we have that isn’t strictly necessary are my son’s swim lessons, but I don’t want my kid to drown, so there we are.
If I cut out all of our frivolous/discretionary expenditures I could maybe boost savings by 5%. But who wants to live that way?
It’s easy enough to say, “Well, FIRE’s not for everyone,” but everywhere I look I see people squeezed even more than we are.
I guess I feel the same way about FIRE as I do about those articles about how people paid off $50,000 in student loans in three years. How nice for you.
It reinforces the belief that if people just tried harder, sacrificed a little more, they would be able to overcome these obstacles and find prosperity. That’s the narrative that has been pushed, that’s why these articles are getting clicks, and why these people are getting pats on the back, because they reinforce that bootstraps narrative.
I’ll just tell the stories of my son and his close friend for nearly his entire life (they met in first grade and became best friends then). They both worked at Microsoft during the 90s and accumulate options literally worth millions. (My son told me once that if he had cashed no options he would have retired after 10 years with $17M. He did cash some for a car, for down payment on a house and probably ended up with about $10M.)
Anyway friend retired in the late 90s and has not worked since. He goes to a lot of movies, travels to exotic places, got married, fathered a daughter who is now in college and has really done nothing for his life.
My son left MS around 2001, spent about four years helping to raise his 4 kids and wrote a book about his experiences at MS. It was self-published and never sold much. He enjoyed raising the kids (he had always related to kids younger than him) but eventually got bored and went back to MS. In the meantime he wrote a book on debugging practices. It contained 50 programs, 10 each in five different languages, each guaranteed to contain one bug. (Naturally, one alert reader found one more bug.) It was published by a standard publisher, maybe Addison-Wesley, and has been translated into Polish. (Why only Polish?) After about ten more years at MS, he left again and wrote another book that could/should have been (but wasn’t) called “Why software sucks” published by MIT press. It has been translated into Chinese. Anyway, after a year of idleness he got another job, this time with a consulting company. Call it XL Tech. When Company A is considering buying Company B, they hire XL Tech to examine the operations of company B to ensure that everything that company has told them about itself is reasonably accurate. XL Tech would send a team to do a site visit and my son would specialize on their computer ops. He made several visits to France (he is fluent in French) and once went to Belarus (where he saw a hockey game and discovered that the Belarusian national team has a player named Gretzsky who wears, needless to say, number 99) and then Talinn. He speaks neither Belarusian nor Estonian. But the main point is that he working as a free-lancer. He works as often as he wants, probably about 2/3 of the time.
So you tell me which life you would have wanted to lead. I know which one would have bored me to tears and which one I would have enjoyed.
It is particularly problematic for women to do this. It’s not impossible but I’d call it unlikely.
If having kids is important to a woman, as in a major life goal thing, she’d be best off to start before 30.
On the other hand, if a woman doesn’t want kids at all (and that doesn’t change) have at it.
There’s not just one answer to that.
A lot depends on the person and what they want to do. There are some opportunities only open to the young (people under 40). There are some people engaged in work that can be done into late old age. Then there’s a matter of what people want - some want to travel extensively. Some want to live quietly at home and work on their garden. Some have elaborate hobbies. Some are social butterflies. Some are introverts and would happily live alone in the woods or the middle of a desert.
I’ve never had a multi-decade career plan. I work at a job in order to pay the bills. I value experiences over a large house, picket fence, and other stereotypical trappings of “the good life”. I like doing my art work and craft work. I travel cheap when I travel. I don’t require a large income (although it was nice while I had it, and I do miss flying airplanes so I’m glad I did it when I did have the income) so I do well despite being “just” on the lowest rung of middle class. I have a retirement plan that can keep me at about this lifestyle level through my 90’s, although I expect to be working until 70 (though I have a backup in case my health requires me to quit working earlier). Meanwhile, I still get to enjoy my life and doing things that I want to do. It wasn’t FIRE, but it worked for me.
Very true that.
Don’t forget student loans - I know too many people who are still at home with their parents or living with multiple roommates because of how much student loans eat up their income.
It would be great if each person could choose which life they would want and have the means to live that life.
It really seems like a lot of people in the thread are almost offended at the idea that some people have a different concept of how they want to handle their careers and lives than their own.
How about “if it works for you and it is really what you want, good on you” as a mentality? If that involves on-again, off-again employment, world travel, and so forth, great! If that involves staying closer to home and living a more quiet lifestyle, great! And anything in-between
The real issue, as I see it, is not what each person’s preferred lifestyle looks like but figuring out what that lifestyle actually is and actually achieving it. Some people know exactly what they want out of life at birth and others never really figure it out at all. And that’s assuming that goal is actually achievable in the first place.
So, coming back around to the OP, there’s no reason to be perplexed by the idea that some people think a hard FIRE lifestyle is for them. No, it won’t work for everybody. And, no, it won’t be achievable by everybody.
But that’s no reason to be perplexed or borderline offended by it. A more traditional “climbing up the ladder”, steadily building income, etc lifestyle absolutely doesn’t work for a lot of people. They would hate having to do it and no amount of financial security or accumulated professional reputation would change that. Different strokes and all that.
Honestly they both sound kind of boring. But at least your son is doing SOMETHING which he obviously doesn’t find boring compared to his friend, who I picture as Russ Hanneman from Silicon Valley.
I don’t know what I would do if I came into some big windfall of money. I think that’s why a lot of rich people end up running foundations and charities and whatnot. It gives them something to do that looks like work where they can hobnob with their peers and go to fancy galas. I saw a special about lottery winners that said that’s a common problem where people suddenly get the money to be able to do accomplish whatever they want, but then can’t figure out what they want to accomplish.
About twenty years ago, Jamie Johnson, one of the heirs to the Johnson & Johnson fortune, made a documentary called Born Rich featuring himself and other rich kids about how they spend their time and money. As I remember, at the beginning, he turned 21 and came into his money so his father sat him down and encouraged him to find a hobby. I think the father’s hobby was collecting rare books and manuscripts. (I remember one bit in which one of the subjects described the exhausting process of having a custom suit tailored, what with the multiple appointments necessary.)
Edited to add, unlike a lottery winner, these kids had grown up in great wealth so it wasn’t a sudden change for them.