Added to my collection of witty sayings, thanks!
I only know two people, married to each other, who are attempting this. They’re in their early 40s now. I don’t now where the E is supposed to kick in. But they, like I, spent most of their 20s in school, so got started on the savings late.
In retrospect, I should have spent more of my 30s with roommates. I was traveling so much for work and visiting my now wife (we were long-distance for four years) that there were some months I spent a minority of nights in my own bed. We were really able to accelerate the savings when we were finally able to move in together.
We both like our jobs and we worry about illness knocking one of us out early. So I don’t see us trying to retire early. Just trying to make sure that we can keep going if we lose one income, while feeling fortunate that we even have the option to save that much.
I think that’s a pretty extreme take on FIRE, though common because people tend to focus on the extremes - there are no viral TikTok’s of someone quietly saying “Excuse me, this isn’t my latte.”
My experience has basically been this: in my 20s I spent 3 years living in a $280/month Chicago apartment with no kitchen or bathroom working 50-hour weeks and walking 3 miles to work each way instead of spending $1.50 on the Red Line.
In exchange for that period (currently 5% of my life), I got to spend the next 30 years (50% of my life) without a single moment worrying about money. Every financial emergency my family has ever had got crushed. I paid off my grandparent’s house (we could not convince them it was smarter to pay it off early). I spent my career not fretting about raises, bonuses or promotions, and when they laid us all off it had the same emotional impact as the last day of school.
Better-written articles about FIRE make it a point to indicate who the relevant audience is. Good example here:
It’s an attractive idea — who doesn’t daydream about leaving their job for good? But it comes with some financial realities. The traditional model for FIRE prescribed by early torchbearers of the movement, such as Mr. Money Mustache, relies on earning a high salary while living minimally to keep expenses low.
“That message doesn’t actually work for most people,” says Jessica Fick, who along with her husband, Corey, runs The Fioneers, where they produce content and offer courses, coaching and retreats centered around financial independence.
“Most people don’t make software engineer salaries and can’t live on $30,000 a year,” she adds.
In other words, if you’re a normal person living on a normal salary, aiming to save enough to achieve FIRE is either going to require a lot of deprivation or take a decent chunk of time. If it’s the latter, Jessica and Corey think you ought to enjoy your life along the way.
The way I’m currently feeling about my present job role, I would loath to retire early, I’m enjoying it that much. I know that feeling could change at any time, but how I feel about it in the present moment is what mattets most.
Welcome to The Dope, and it’s great that you’ve found a job that fits you so well.
I thought FIRE was, by definition, extreme. Otherwise it’s just what I would call “sensible personal finances”.
Eh, that itself seems kind of oblivious to reality. True, most people don’t make software engineer salaries. But many people would be thrilled to have 30K a year to live on. Most people can live on 30K a year, regardless of how much they earn, but struggle to live on less. Not because they want to retire early, but because they have no other choice.
Agreed about 90%. Most people who can make a strong salary won’t live on $30K/yr. But one hell of a lot of people can live on $30K/yr (or $15K/yr) because they have no choice.
Prior to the advent of widespread well-compensated WFH, there was a hefty element of local cost of living mixed in. Out in ruralia it can be easy to live in a crap trailer, grow your own veg and eggs, and thus live for little cash cost. But the wages for nearby work sucked too.
With very few exceptions, if you were going to make serious money you needed to live in a relatively high cost city. Now for sure there is shitty tenement style housing somewhere in every expensive high-wage city on Earth. But the degree of QOL sacrifice needed to live there is well above the rural or small town case. Which meant rather few people would make that extreme degree of sacrifice. In the USA of course the baleful aspect of race is closely tied in with economic stratification of both jobs and housing.
The advent of WFH, and especially solo online entrepreneurial WFH, alters the equation a bunch. Far more people can now have big city incomes and rural cost of living. Nowhere near a majority of the populace, but if before 5% of the young graduates would be able to achieve FIRE if they so chose, the limiting number might now be 10 or 15%. Which 2x-3x is a hefty difference.
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Last week I was touring in Medellín Colombia. Great place; can recommend.
On one of the half-day tourist tours I met a late-20s couple of Canadians who were WFH small-scale entrepreneurs. They presently live cheaply outside Cancun Mexico and had tired of living adjacent to quite such a tourist zone.
They were now wandering around Colombia on the cheap to select another city in which to settle for a couple / few years. We did not discuss FIRE as such, but it was clear their ideas ran along the lines of earn big, live cheap, and that’s easier in e.g Colombia than in the rural USA or Canada. Meanwhile, when you can live anywhere, why accept the economic parameters of your home country as an unalterable given? Why indeed?
As we’ve discussed in other threads, the exact legal status of international WFH, work or tourist visas, residency requirements, etc., is murky at best. I make no comment on that aspect here. But regardless of their exact compliance status in Mexico, they had been making it work for a couple years already.
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If you have no other choice, you have no other choice. But that has nothing to do with whether saving enough to achieve FIRE is going to involve deprivation or whether it’s at all realistic to expect people to live like that when they do have a choice. Just looking at that article about the people who saved 78% of their income - I might be willing to slash a $10,000/month budget in half but there is no way I am living with my parents and relying on them for free childcare unless the alternative is living in my car. Sure , some people will but just because some people will doesn’t mean most people will. If you are talking about people who just don’t enjoy anything that involves spending money , who don’t like vacations or eating at restaurants or any hobbies/activities that cost money they might not feel deprived saving a huge percentage of their income - but most other people will , because saving that much is often going to involve not spending anything that isn’t necessary. It won’t be just driving a used car instead of ever having a new one - it means using the cheapest bar soap I can find rather than the $15 shower gel. It means never going to a theatre or even renting a streaming movie for $5. Sure, it won’t always mean that - living on 20% of a 500K salary isn’t going to be that hard and I might not feel deprived . Living on 20% of a 50K or even $100K salary is very different.
When it first showed up in the early 90s, it was pretty much about the idea that true fiscal responsibility came from agency - what you would call “sensible personal finances” still left people dependent on earned income from indifferent companies to varying degrees. It advocated avoiding lifestyle creep so people could increase their savings rate from the typical“ 10-15% to (ideally) over 50% and growing their investments until those could support them. It was basically a counter to “The Millionaire Next Door” for people that weren’t small business owners, with the same idea of a modest, comfortable lifestyle unencumbered by financial insecurity.
In the 2000s, the idea got jacked by minimalism/frugality gurus and you got a few prominent stories of yuppies with high salaries living in trailers while hoarding as much as possible so they could quit working in their 30s, though “quit working” typically meant writing a book or starting a blog/YouTube channel about how they quit working at 30.
And that guru-style FIRE IS popular. When I talked about FIRE in the 90s and retiring in my 40s - 20 years early! - people’s eyes glazed over. When the image became a 30 year-old software developer posting pics of herself clubbing in Ibiza saying she “retired” the word really got out.
Most people can live on 30K a year but either don’t know how or want a 300k lifestyle which you can’t do on 30k a year.
I make just above 30k a year right now. I am debt-free, pay my bills on time, and have a retirement plan. I also drive vehicles more than 20 years old, don’t travel much (but I do some of that), and no longer have expensive hobbies. I’m not running up credit card debt buying things I can’t afford. A lot of people making my wages do, in fact, buy more than they can afford and live beyond their means. They want stuff and they want it NOW. And they want NEW, not six months old.
But you’re not going to be able to do FIRE on 30k a year because even with the most frugal living there’s only so much a month you can save then invest.
Also, while the whole “homestead” thing might not require much cash what you save in money you’ll spend in hard work and sweat. There’s no such thing as a free lunch (unless maybe you’re a trust fund kid).
It’s interesting, I mentioned before we save about 30% of our income, but this year I developed a more ambitious plan, and I’m worried we’re not going to be able to pull it off. I opened a 401K through my job which offers a pittance of a match. Should have done it sooner but I was convinced we didn’t have the money to spare. Now due to that and a modest FSA we have about a 10% reduction in my take home pay. I opened a 529 and increased what I was setting aside monthly for my son’s college. I’m not going to force him to attend our alma mater, but it would be nice if he had the option. We had a bunch of money that we were going to spend on a house just sitting there, so we stuffed that into a conservative short-term account (dynamic multi asset something.)
What’s left in the day to day budget is… Not a lot. It scares me a little. Especially because we are going to hit our health insurance out of pocket max in February, leaving us less wiggle room for fuck ups.
I wish we could make a dent in our major expenses, but they are non-negotiable. Somehow our income-based student loan payments went up despite us having had a child.
This isn’t FIRE. This is “buy a house within five years and retire on time and pay for our kid’s college and/OR Roth IRA.”
These seem like modest goals to me. But the increased aggression of our savings is going to be an adjustment for everyone - especially me. I’m just used to buying stuff I’ve decided I need. I’m not quite sure how to make it work. But I’m trying to go with the idea that I’ll find a way because I won’t have a choice (technically I do have a choice, but I automated a lot of these decisions, so it doesn’t feel like it.)
My husband and I agree on long term financial goals together. I am responsible for day to day implementation so I know our budget and savings progress intimately, on a daily basis. He is responsible for doing research and preliminary recommendations for investments. He usually presents me with three good options and we decide together. This works for us. But it means money is constantly on my mind and not as frequently on his.
Sounds stressful. If it were me, I’d divide the savings and budget tasks between the 2 of you. For the investment side, I’d put the money in a retirement-year-targeted index fund and forget about it until that year approaches.
I’m thinking of FIRE, but in the most cheapskate way possible. I will most likely never get the million or multi-million dollar nest eggs many Dopers have, but I will try to generate as much passive/easy income as possible and move to the cheapest possible place to live. I don’t mind shoestring budgets.
This is a short-term investment. We were looking at the 9-month CD rates, which are pretty good, but the Dynamic Multi-Asset thing is a potentially greater reward with a little bit of risk - still the most conservative of all of our investments. We plan to pull it out in three years. We feel good with this choice. (I also feel good managing the budget because I’m in love with the YNAB app - you can pry it from my cold, dead hands. And I’m the one who needs to watch my spending.)
My point is like - I’m having a hard enough time adjusting to relatively minor increases in our savings goals. I’m used to just buying things if I decide I want/need them. The way we set this up creates the illusion of scarcity. I have to think through every purchase. The level of deprivation in which hard-core FIRE people live for years is hard for me to imagine.
And I have been poor, I have been all things, from a 17-year-old legally emancipated minor paying for my gasoline with rolls of nickels to a poor kid at a rich school spending wildly on credit cards to try to keep up with my peers, to a frugal graduate student married into a wealthy family, which has had a complicated impact I cannot easily summarize here. It’s not that I don’t understand on an experiential level the ways in which people are forced into deprivation. But very few people would choose deprivation, and it’s especially hard to choose it when you’ve already been living the good life.
I agree. It’s what a textbook once said about misers: “Misers put themselves through misery because they are afraid of falling into poverty which would subject them to the very misery they are putting themselves through now.”
Saving for an early retirement makes good sense. But saving to the point of brutal deprivation of yourself generates considerable suffering, which the whole point of life is kind of to spare you from.
I don’t want to point out the obvious here, but what is your usual timeline between making the decision to buy something and actually making the purchase (of items that are not necessities)? I find that adding a few days, maybe a week or two for expensive items, between deciding to buy something and actually buying it allows me to reassess if this is something I really need to have. Quite a few times I end up not buying the thing. Going through that process it doesn’t feel like deprivation, as you’ll buy the things you really want and skip the stuff that you only thought you wanted.
I’ve done that before, but it you really look at where I’m spending the most money, it’s not the big ticket expensive stuff, it’s $20 or $30 here and there that adds up fast. Almost entirely spent on Amazon.
How necessary the things are varies a lot. I recently bought a bathrobe. I don’t currently have one. Do I need one? Arguably not. But I’ve encountered enough situations where I thought, “Gee, I could really use a bathrobe” that I finally bought one.
That’s the kind of stuff I have to think harder about.
The fact that you are being thoughtful about it puts you way ahead of most people. It’s the impulse buying that gets most people.