[WSJ: The New Retirement Plan: Save Almost Everything, Spend Virtually Nothing]

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PFInterest
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[WSJ: The New Retirement Plan: Save Almost Everything, Spend Virtually Nothing]

Post by PFInterest » Sat Nov 03, 2018 10:38 am

Anyone else see this?
I liked at least they included a quote by someone who saw their frugality as a problem. they didnt follow up though.
i didnt like that for ms hall they seemed a little cagey about her income. whats 100K after tax? does that mean she makes closer to 150 (401k, std deduction, fed + state?)

you can google WSJ The New Retirement Plan: Save Almost Everything, Spend Virtually Nothing because i dont want to hear about how its behind a paywall.

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arcticpineapplecorp.
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Re: WSJ FIRE

Post by arcticpineapplecorp. » Sat Nov 03, 2018 10:47 am

PFInterest wrote:
Sat Nov 03, 2018 10:38 am
you can google WSJ The New Retirement Plan: Save Almost Everything, Spend Virtually Nothing because i dont want to hear about how its behind a paywall.
I did. I got this:
https://www.google.com/search?q=WSJ+The ... irefox-b-1

and every link is behind a paywall. So I guess you have to hear about how it's behind a paywall unless you want to provide a direct link that allows non-WSJ subscribers to read the article that is not behind a paywall.

I know Suze Orman hates the FIRE movement because she said, "I hate it. I hate it. I hate it. I hate it." There more have been more but I stopped counting after four "I hate it"s.

https://www.google.com/search?q=suze+or ... fox-b-1-ab

But I don't listen to Suze anyway.
"May you live as long as you want and never want as long as you live" -- Irish Blessing | "Invest we must" -- Jack Bogle

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JoMoney
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Re: WSJ FIRE

Post by JoMoney » Sat Nov 03, 2018 10:50 am

I searched this:
https://duckduckgo.com/?q=WSJ+The+New+R ... 4__&ia=web

and the top result worked for me, without a paywall....

[Edit:]... and now that I did it again, it didn't work this time :confused

Here's another site with the same article: https://www.advisorinvestmentnews.com/2 ... y-nothing/
"To achieve satisfactory investment results is easier than most people realize; to achieve superior results is harder than it looks." - Benjamin Graham

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mrspock
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Re: WSJ FIRE

Post by mrspock » Sat Nov 03, 2018 11:40 am

PFInterest wrote:
Sat Nov 03, 2018 10:38 am
Anyone else see this?
I liked at least they included a quote by someone who saw their frugality as a problem. they didnt follow up though.
i didnt like that for ms hall they seemed a little cagey about her income. whats 100K after tax? does that mean she makes closer to 150 (401k, std deduction, fed + state?)

you can google WSJ The New Retirement Plan: Save Almost Everything, Spend Virtually Nothing because i dont want to hear about how its behind a paywall.
TIP: For those who want to read it, open an "incognito" (Chrome) or "private" (Safari) browser tab and then follow the "duck duck go" link (https://duckduckgo.com/?q=WSJ+The+New+R ... 4__&ia=web) posted above. Click on the first WSJ link and it should work (at least it does for me but YMMV). Keep in mind opening the same WSJ link directly in the private browser won't work (behaviour of pay wall changes depending on how arrived at WSJ.com).

I think they do raise some good points, and I'm glad the movement (of which I consider myself apart) is being held accountable by the press. The points I speak of are that the FIRE movement blogs & proponents of the movement need to be transparent about where they derive their "retirement" income. If 40% of it comes from a website they run, that's very relevant for those who aim to achieve the things they are advocating. Secondly, while this wasn't raised in the article explicitly, I think it's related: just as financial advisors can have incentives (read: fees) which aren't aligned with the interests of those they serve, the same can happen with the FIRE "movement". If your goal is to get lots of views on your blog to make money, the content and advertisers who support the blog may begin to be impacted by this bias or motivation.

Definitely came across as a reasonably balanced piece, and the issues they raised are pretty legitimate IMO (e.g. excessive frugality & transparency). My only nit: they reference some absurd 4.5% withdrawal rate, when almost nobody in the FIRE or Bogleheads world would suggest such a thing.

Thanks for the suggested read.

randomguy
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Re: WSJ FIRE

Post by randomguy » Sat Nov 03, 2018 12:04 pm

mrspock wrote:
Sat Nov 03, 2018 11:40 am

Definitely came across as a reasonably balanced piece, and the issues they raised are pretty legitimate IMO (e.g. excessive frugality & transparency). My only nit: they reference some absurd 4.5% withdrawal rate, when almost nobody in the FIRE or Bogleheads world would suggest such a thing.

Thanks for the suggested read.
4.5% isnt absurd for FIRE. Historically it wilm work about 90% of the time and in the other cases you work flipping burgers for a bit. A personal retiring at 65 might not be abke to work in 10 years if things dont go well. A 49 year old doesnt have that problem.

Depending on your willingness to work in the future and age things like 6% swr can work out. Especially if you will be getting enough SS to live on in 25 years.

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Re: WSJ FIRE

Post by mrspock » Sat Nov 03, 2018 12:11 pm

randomguy wrote:
Sat Nov 03, 2018 12:04 pm
mrspock wrote:
Sat Nov 03, 2018 11:40 am

Definitely came across as a reasonably balanced piece, and the issues they raised are pretty legitimate IMO (e.g. excessive frugality & transparency). My only nit: they reference some absurd 4.5% withdrawal rate, when almost nobody in the FIRE or Bogleheads world would suggest such a thing.

Thanks for the suggested read.
4.5% isnt absurd for FIRE. Historically it wilm work about 90% of the time and in the other cases you work flipping burgers for a bit. A personal retiring at 65 might not be abke to work in 10 years if things dont go well. A 49 year old doesnt have that problem.

Depending on your willingness to work in the future and age things like 6% swr can work out. Especially if you will be getting enough SS to live on in 25 years.
Point taken, though my impression has been that 3% and 4% are the withdrawal rates which are more widely used by folks on here and various FIRE blogs. You make a good point that the "risk" is less for somebody younger in some ways because they are capable of working and working hard if required. Absurd was probably too strong an adjective to describe it, perhaps "questionable" might be better? :D

am
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Re: WSJ FIRE

Post by am » Sat Nov 03, 2018 1:35 pm

mrspock wrote:
Sat Nov 03, 2018 12:11 pm
randomguy wrote:
Sat Nov 03, 2018 12:04 pm
mrspock wrote:
Sat Nov 03, 2018 11:40 am

Definitely came across as a reasonably balanced piece, and the issues they raised are pretty legitimate IMO (e.g. excessive frugality & transparency). My only nit: they reference some absurd 4.5% withdrawal rate, when almost nobody in the FIRE or Bogleheads world would suggest such a thing.

Thanks for the suggested read.
4.5% isnt absurd for FIRE. Historically it wilm work about 90% of the time and in the other cases you work flipping burgers for a bit. A personal retiring at 65 might not be abke to work in 10 years if things dont go well. A 49 year old doesnt have that problem.

Depending on your willingness to work in the future and age things like 6% swr can work out. Especially if you will be getting enough SS to live on in 25 years.
Point taken, though my impression has been that 3% and 4% are the withdrawal rates which are more widely used by folks on here and various FIRE blogs. You make a good point that the "risk" is less for somebody younger in some ways because they are capable of working and working hard if required. Absurd was probably too strong an adjective to describe it, perhaps "questionable" might be better? :D
If portfolio drops and 4% swr isn’t enough then can you imagine trying to get another job after not working years in your 50s? You’ll be competing with college grads for burger flipping jobs given the probable state of economy in this environment. :D

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Re: WSJ FIRE

Post by youngpleb » Sat Nov 03, 2018 1:57 pm

Haha I like that the article phrases things in such a way that it makes FIRE not seem realistic for the average person. All the ones who shake their heads at this article and the concept of FIRE can keep working to help keep the economy strong while I retire early :mrgreen:

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mrspock
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Re: WSJ FIRE

Post by mrspock » Sat Nov 03, 2018 2:08 pm

am wrote:
Sat Nov 03, 2018 1:35 pm
If portfolio drops and 4% swr isn’t enough then can you imagine trying to get another job after not working years in your 50s? You’ll be competing with college grads for burger flipping jobs given the probable state of economy in this environment. :D
The retiree should win hands down! Think of all those weekday shifts they will be available for?

In all honesty though, this would be a pretty depressing proposition for me (damn that ego of mine), so I’ve been playing it pretty safe with more like 30-35x expenses vs 25 and planning for a 3% SWR.

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Re: WSJ FIRE

Post by randomguy » Sat Nov 03, 2018 2:18 pm

mrspock wrote:
Sat Nov 03, 2018 2:08 pm
am wrote:
Sat Nov 03, 2018 1:35 pm
If portfolio drops and 4% swr isn’t enough then can you imagine trying to get another job after not working years in your 50s? You’ll be competing with college grads for burger flipping jobs given the probable state of economy in this environment. :D
The retiree should win hands down! Think of all those weekday shifts they will be available for?

In all honesty though, this would be a pretty depressing proposition for me (damn that ego of mine), so I’ve been playing it pretty safe with more like 30-35x expenses vs 25 and planning for a 3% SWR.
Not to mention the retiree is actually likely to show up for thier shifts. That alone puts you in the top 10% of employees:)

I sort of agree with you but I like my job.:) I would much rather work another 2-3 years now (i.e. about the time you would normally take to go from 25x to 30x+) than risk it later. But if your goal is to maximize retirement years, the odds favor quitting at 25x. If you have to go back to work 10% of the time for 5 years, that is only .5 more years of working. That is a fraction of the 2-3 years you need to get to 30x. The worst case sucks though:)

texas lawdog
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Re: WSJ FIRE

Post by texas lawdog » Sat Nov 03, 2018 3:05 pm

Thanks to those posting ways to read the article behind the paywall.

I have to wonder if the decline in iPhone growth suffered because of this new type of behavior?
Maybe everyone shouldn't have a new $1000 phone every few years

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Re: WSJ FIRE

Post by Ron Scott » Sat Nov 03, 2018 3:08 pm

A quote from the article say is all for me:

Brandon Ganch, 36, who retired from his job as a software engineer in 2016, said his frugality became an obsession and he stressed over small purchases by his wife. He often got upset when visitors took long hot showers at his former Vermont home or his wife ordered a “$15 main course instead of a $10 sandwich” at a restaurant.

“It wasn’t healthy,” said Mr. Ganch.
Retirement is a game best played by those prepared for more volatility in the future than has been seen in the past. The solution is not to predict investment losses but to prepare for them.

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Re: WSJ FIRE

Post by zaboomafoozarg » Sat Nov 03, 2018 3:09 pm

am wrote:
Sat Nov 03, 2018 1:35 pm
If portfolio drops and 4% swr isn’t enough then can you imagine trying to get another job after not working years in your 50s? You’ll be competing with college grads for burger flipping jobs given the probable state of economy in this environment. :D
I'd just go get a contract job maintaining legacy Java code, which will probably be the equivalent of archaic COBOL in 20 years.

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Re: WSJ FIRE

Post by zaboomafoozarg » Sat Nov 03, 2018 3:13 pm

Ron Scott wrote:
Sat Nov 03, 2018 3:08 pm
A quote from the article say is all for me:

Brandon Ganch, 36, who retired from his job as a software engineer in 2016, said his frugality became an obsession and he stressed over small purchases by his wife. He often got upset when visitors took long hot showers at his former Vermont home or his wife ordered a “$15 main course instead of a $10 sandwich” at a restaurant.

“It wasn’t healthy,” said Mr. Ganch.
I plan on retiring in my mid-40's but there's no way I'd take it ridiculous lengths like that to retire a couple years earlier.

Writers tend to pick the really successful bloggers or the extreme-frugality addicts for these articles. Those people garner more interest than regular people who just live like they earn $50k instead of $100k and are able to retire 10-20 years early as a result.

Yankuba
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Re: WSJ FIRE

Post by Yankuba » Sat Nov 03, 2018 3:30 pm

As usual, no mention of children, elderly parents, medical conditions or healthcare.

FIRE is doable if you are young and healthy and easier if you are dual income no kids but good luck if you have several dependents - especially if they have special needs.

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Re: WSJ FIRE

Post by arcticpineapplecorp. » Sat Nov 03, 2018 3:41 pm

thanks for the links not behind the paywall.
Attendees at “FI Chautauqua,” a week-long financial independence conference, spent up to $3,000 this year (not including airfare) to go to Greece and hear leaders in the FIRE community share tips.
that doesn't sound particularly frugal.
FIRE adherents are often millennials and younger members of Generation X who have college degrees, above-average incomes and the discipline to adopt a strict do-it-yourself approach to retirement.
I think the above average income part helps. It's easy to save $150,000 a year if you make $200,000 a year (75% savings rate). But try saving $37,500 on a $50,000 a year salary (75% savings too) and living on the remaining $12,500. Not as easy.
"May you live as long as you want and never want as long as you live" -- Irish Blessing | "Invest we must" -- Jack Bogle

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Re: WSJ FIRE

Post by Ron Scott » Sat Nov 03, 2018 3:58 pm

zaboomafoozarg wrote:
Sat Nov 03, 2018 3:13 pm
Ron Scott wrote:
Sat Nov 03, 2018 3:08 pm
A quote from the article say is all for me:

Brandon Ganch, 36, who retired from his job as a software engineer in 2016, said his frugality became an obsession and he stressed over small purchases by his wife. He often got upset when visitors took long hot showers at his former Vermont home or his wife ordered a “$15 main course instead of a $10 sandwich” at a restaurant.

“It wasn’t healthy,” said Mr. Ganch.
I plan on retiring in my mid-40's but there's no way I'd take it ridiculous lengths like that to retire a couple years earlier.

Writers tend to pick the really successful bloggers or the extreme-frugality addicts for these articles. Those people garner more interest than regular people who just live like they earn $50k instead of $100k and are able to retire 10-20 years early as a result.
I know... Part of my post was tongue in cheek.

I'm 62 and when I was in my late teens I a few of us expanded our minds with David K, a real hippy who, in his late 30s, had firmly committed to "retiring a year at a time". We found this to be a fascinating approach to life. He'd work for a couple years, save save save, and then just quit for a year. He'd travel abroad, hobo or commune, write a book, or just hang around NYC, whatever he fancied at the moment. His attitude was "if I wait until I'm old I won't enjoy it and if I try it all at once I can't afford it." Hard to argue...
Retirement is a game best played by those prepared for more volatility in the future than has been seen in the past. The solution is not to predict investment losses but to prepare for them.

am
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Re: WSJ FIRE

Post by am » Sat Nov 03, 2018 5:01 pm

It’s amazing to me how a lawyer in late 30s was able to save 1.5 mil assuming no inheritance? I’d rather work later or find something more tolerable and lower paying then live like a college student or close to poverty.

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Re: WSJ FIRE

Post by bligh » Sat Nov 03, 2018 5:47 pm

zaboomafoozarg wrote:
Sat Nov 03, 2018 3:09 pm
am wrote:
Sat Nov 03, 2018 1:35 pm
If portfolio drops and 4% swr isn’t enough then can you imagine trying to get another job after not working years in your 50s? You’ll be competing with college grads for burger flipping jobs given the probable state of economy in this environment. :D
I'd just go get a contract job maintaining legacy Java code, which will probably be the equivalent of archaic COBOL in 20 years.
There are many options available to the kind of intelligent, disciplined and resourceful people that the FIRE movement attracts. You don't have to be flipping burgers or bagging groceries. Though you could. You could put in a few hours on the weekends via Uber/Lyft and help partying young people get home safely. You could open a small store building something you enjoy creating and sell it on Etsy. You could move to another lower cost of living country where for a few years for a change of scene (hell I'd want to do this regardless of financial situation). You could (as you suggested) return to your original profession/industry in some capacity.

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Re: WSJ FIRE

Post by Whakamole » Sat Nov 03, 2018 6:07 pm

bligh wrote:
Sat Nov 03, 2018 5:47 pm
There are many options available to the kind of intelligent, disciplined and resourceful people that the FIRE movement attracts. You don't have to be flipping burgers or bagging groceries. Though you could. You could put in a few hours on the weekends via Uber/Lyft and help partying young people get home safely. You could open a small store building something you enjoy creating and sell it on Etsy. You could move to another lower cost of living country where for a few years for a change of scene (hell I'd want to do this regardless of financial situation). You could (as you suggested) return to your original profession/industry in some capacity.
I can't talk about the others, but a friend was trying to sell homemade jewelry on Etsy and could not sell anything. Nobody can compete with people selling bulk purchases made from Alibaba.

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Re: [WSJ: The New Retirement Plan: Save Almost Everything, Spend Virtually Nothing]

Post by LadyGeek » Sat Nov 03, 2018 7:05 pm

I removed an off-topic post which violated WSJ's Subscriber Agreement (terms of use).

As noted earlier (by JoMoney) the same article is available in Advisor Investment News: The New Retirement Plan: Save Almost Everything, Spend Virtually Nothing
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Re: WSJ FIRE

Post by randomguy » Sat Nov 03, 2018 8:00 pm

arcticpineapplecorp. wrote:
Sat Nov 03, 2018 3:41 pm
thanks for the links not behind the paywall.
Attendees at “FI Chautauqua,” a week-long financial independence conference, spent up to $3,000 this year (not including airfare) to go to Greece and hear leaders in the FIRE community share tips.
that doesn't sound particularly frugal.
FIRE adherents are often millennials and younger members of Generation X who have college degrees, above-average incomes and the discipline to adopt a strict do-it-yourself approach to retirement.
I think the above average income part helps. It's easy to save $150,000 a year if you make $200,000 a year (75% savings rate). But try saving $37,500 on a $50,000 a year salary (75% savings too) and living on the remaining $12,500. Not as easy.
If your living on 20k/year you cant go on a 5k vaction. But obvious a 5k bussiness trip is OK😁


High percentage of savings is hard with high income. When your paying 40% in taxes, you cant save 75%. but saving 10x of expenses is possible. I am guessing most people making 200k/year ate pasying 30k+ in taxes which will make 75% hard. There are definitely exceptuo s

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Re: WSJ FIRE

Post by Sam1 » Sat Nov 03, 2018 8:05 pm

randomguy wrote:
Sat Nov 03, 2018 8:00 pm
arcticpineapplecorp. wrote:
Sat Nov 03, 2018 3:41 pm
thanks for the links not behind the paywall.
Attendees at “FI Chautauqua,” a week-long financial independence conference, spent up to $3,000 this year (not including airfare) to go to Greece and hear leaders in the FIRE community share tips.
that doesn't sound particularly frugal.
FIRE adherents are often millennials and younger members of Generation X who have college degrees, above-average incomes and the discipline to adopt a strict do-it-yourself approach to retirement.
I think the above average income part helps. It's easy to save $150,000 a year if you make $200,000 a year (75% savings rate). But try saving $37,500 on a $50,000 a year salary (75% savings too) and living on the remaining $12,500. Not as easy.
If your living on 20k/year you cant go on a 5k vaction. But obvious a 5k bussiness trip is OK😁


High percentage of savings is hard with high income. When your paying 40% in taxes, you cant save 75%. but saving 10x of expenses is possible. I am guessing most people making 200k/year ate pasying 30k+ in taxes which will make 75% hard. There are definitely exceptuo s
This. We pull around 420k HHI and take home around 45% of our paychecks when you include the almost 10% 401k contribution, state and federal taxes, healthcare, FICA etc. I think last year our federal tax bill was 70k with AMT.

Sam1
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Re: WSJ FIRE

Post by Sam1 » Sat Nov 03, 2018 8:08 pm

bligh wrote:
Sat Nov 03, 2018 5:47 pm
zaboomafoozarg wrote:
Sat Nov 03, 2018 3:09 pm
am wrote:
Sat Nov 03, 2018 1:35 pm
If portfolio drops and 4% swr isn’t enough then can you imagine trying to get another job after not working years in your 50s? You’ll be competing with college grads for burger flipping jobs given the probable state of economy in this environment. :D
I'd just go get a contract job maintaining legacy Java code, which will probably be the equivalent of archaic COBOL in 20 years.
There are many options available to the kind of intelligent, disciplined and resourceful people that the FIRE movement attracts. You don't have to be flipping burgers or bagging groceries. Though you could. You could put in a few hours on the weekends via Uber/Lyft and help partying young people get home safely. You could open a small store building something you enjoy creating and sell it on Etsy. You could move to another lower cost of living country where for a few years for a change of scene (hell I'd want to do this regardless of financial situation). You could (as you suggested) return to your original profession/industry in some capacity.
I think it would be incredibly hard as a retired older person to become an Uber driver. I witnessed my parents driving skills decline over time. Not to mention at least half retirees are women and women face a much greater risk being an Uber driver. I doubt anyone who is struggling with their portfolio is going to want to take money out of the market to start a business in old age. Most retirees don’t want to move to another country and be away from younger family members they depend on and love. Even pets. The truth is there aren’t that many options after you’ve been out of the workforce for decades which is why people are cautious about retiring even when they are probably more than fine financially.

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Re: WSJ FIRE

Post by drk » Sat Nov 03, 2018 8:21 pm

zaboomafoozarg wrote:
Sat Nov 03, 2018 3:13 pm
Ron Scott wrote:
Sat Nov 03, 2018 3:08 pm
A quote from the article say is all for me:

Brandon Ganch, 36, who retired from his job as a software engineer in 2016, said his frugality became an obsession and he stressed over small purchases by his wife. He often got upset when visitors took long hot showers at his former Vermont home or his wife ordered a “$15 main course instead of a $10 sandwich” at a restaurant.

“It wasn’t healthy,” said Mr. Ganch.
I plan on retiring in my mid-40's but there's no way I'd take it ridiculous lengths like that to retire a couple years earlier.

Writers tend to pick the really successful bloggers or the extreme-frugality addicts for these articles. Those people garner more interest than regular people who just live like they earn $50k instead of $100k and are able to retire 10-20 years early as a result.
Addict is exactly the word for people like that guy. Someone with those kinds of rage and control issues has things to resolve that have nothing to do with FIRE.

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Re: WSJ FIRE

Post by bradshaw1965 » Sat Nov 03, 2018 8:36 pm

drk wrote:
Sat Nov 03, 2018 8:21 pm
zaboomafoozarg wrote:
Sat Nov 03, 2018 3:13 pm
Ron Scott wrote:
Sat Nov 03, 2018 3:08 pm
A quote from the article say is all for me:

Brandon Ganch, 36, who retired from his job as a software engineer in 2016, said his frugality became an obsession and he stressed over small purchases by his wife. He often got upset when visitors took long hot showers at his former Vermont home or his wife ordered a “$15 main course instead of a $10 sandwich” at a restaurant.

“It wasn’t healthy,” said Mr. Ganch.
I plan on retiring in my mid-40's but there's no way I'd take it ridiculous lengths like that to retire a couple years earlier.

Writers tend to pick the really successful bloggers or the extreme-frugality addicts for these articles. Those people garner more interest than regular people who just live like they earn $50k instead of $100k and are able to retire 10-20 years early as a result.
Addict is exactly the word for people like that guy. Someone with those kinds of rage and control issues has things to resolve that have nothing to do with FIRE.
This guy is a big deal in the FIRE community blogging as the Mad Fientist. This was just a year in his life, he self analyzed and chilled out. A lot of Bogleheads could do for some self analysis and regrouping their approach, it's part of a growth mentality.

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Re: WSJ FIRE

Post by AlohaJoe » Sat Nov 03, 2018 8:39 pm

randomguy wrote:
Sat Nov 03, 2018 8:00 pm
High percentage of savings is hard with high income. When your paying 40% in taxes, you cant save 75%. but saving 10x of expenses is possible. I am guessing most people making 200k/year ate pasying 30k+ in taxes which will make 75% hard. There are definitely exceptuo s
Isn't $30,000 only 15% of $200,000? That seems like not very much to pay in taxes.

I just tried an online state & federal tax calculator and someone living in California, married filing jointly, and taking only the standard deduction has to make at least $750,000 all in wages in order to pay 40% in income and payroll taxes, leaving them $450,000 to save or live on. In order to save 10x expenses they need to be living on $41,000 a year. So they'd have a 55% savings rate.

75% is hard (maybe with some large tax deferred contributions it becomes somehow possible?) but it seems like 55% is reachable in your scenario.
Last edited by AlohaJoe on Sat Nov 03, 2018 8:47 pm, edited 1 time in total.

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Re: WSJ FIRE

Post by AlohaJoe » Sat Nov 03, 2018 8:46 pm

Sam1 wrote:
Sat Nov 03, 2018 8:05 pm

This. We pull around 420k HHI and take home around 45% of our paychecks when you include the almost 10% 401k contribution, state and federal taxes, healthcare, FICA etc. I think last year our federal tax bill was 70k with AMT.
$70,000 federal taxes on $420,000 in income is 16%. Where did the other (55% - 16%) 39% of your paychecks go? Isn't the maximum annual FICA $8,000? That's another 2%. (Or if you had two paychecks 4%, I guess?)

Is your healthcare 20% of your paycheck? (I don't live in the US but I've read healthcare is expensive now!)

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Re: WSJ FIRE

Post by Sam1 » Sat Nov 03, 2018 8:54 pm

AlohaJoe wrote:
Sat Nov 03, 2018 8:46 pm
Sam1 wrote:
Sat Nov 03, 2018 8:05 pm

This. We pull around 420k HHI and take home around 45% of our paychecks when you include the almost 10% 401k contribution, state and federal taxes, healthcare, FICA etc. I think last year our federal tax bill was 70k with AMT.
$70,000 federal taxes on $420,000 in income is 16%. Where did the other (55% - 16%) 39% of your paychecks go? Isn't the maximum annual FICA $8,000? That's another 2%. (Or if you had two paychecks 4%, I guess?)

Is your healthcare 20% of your paycheck? (I don't live in the US but I've read healthcare is expensive now!)
State taxes of around 5 %
401k it almost 10%
FICA of 4 %
Healthcare is not expensive...$300 a month for entire family

I realize this doesn’t add up (totals 36 percent) so I’d have to check my taxes from last year. I just know my salary is 180k and I bring home $8,200 a month. So that’s bringing home 55% of what I’m paid. Similar for my spouse. The rest of our income is in the form of a bonus. Last year we owed a few thousand when we paid our state and federal taxes.

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Re: WSJ FIRE

Post by randomguy » Sat Nov 03, 2018 8:58 pm

Sam1 wrote:
Sat Nov 03, 2018 8:08 pm
bligh wrote:
Sat Nov 03, 2018 5:47 pm
zaboomafoozarg wrote:
Sat Nov 03, 2018 3:09 pm
am wrote:
Sat Nov 03, 2018 1:35 pm
If portfolio drops and 4% swr isn’t enough then can you imagine trying to get another job after not working years in your 50s? You’ll be competing with college grads for burger flipping jobs given the probable state of economy in this environment. :D
I'd just go get a contract job maintaining legacy Java code, which will probably be the equivalent of archaic COBOL in 20 years.
There are many options available to the kind of intelligent, disciplined and resourceful people that the FIRE movement attracts. You don't have to be flipping burgers or bagging groceries. Though you could. You could put in a few hours on the weekends via Uber/Lyft and help partying young people get home safely. You could open a small store building something you enjoy creating and sell it on Etsy. You could move to another lower cost of living country where for a few years for a change of scene (hell I'd want to do this regardless of financial situation). You could (as you suggested) return to your original profession/industry in some capacity.
I think it would be incredibly hard as a retired older person to become an Uber driver. I witnessed my parents driving skills decline over time. Not to mention at least half retirees are women and women face a much greater risk being an Uber driver. I doubt anyone who is struggling with their portfolio is going to want to take money out of the market to start a business in old age. Most retirees don’t want to move to another country and be away from younger family members they depend on and love. Even pets. The truth is there aren’t that many options after you’ve been out of the workforce for decades which is why people are cautious about retiring even when they are probably more than fine financially.

The FIRE crowd is in their 30s and 40s. 10-15 years later they are going to be in their 50s. Most 50 year olds are good enough drivers for Uber. The ability to work is why a person retiring early isn't the same as one retiring at 60.

afan
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Re: [WSJ: The New Retirement Plan: Save Almost Everything, Spend Virtually Nothing]

Post by afan » Sat Nov 03, 2018 8:59 pm

I get the frugality and goal of financial independence. But I don't get the whole retire early thing. For people of this age their ability to generate income for another 30 years is their most valuable asset.

Being ABLE to retire at 40 is great. But actually doing so is like liquidating millions in investments, converting it to cash, dousing it with lighter fluid and setting it on fire.

I want Financial Independence, Retire Eventually (or die on the job, as the case may be).
We don't know how to beat the market on a risk-adjusted basis, and we don't know anyone that does know either | --Swedroe | We assume that markets are efficient, that prices are right | --Fama

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Re: [WSJ: The New Retirement Plan: Save Almost Everything, Spend Virtually Nothing]

Post by agilesheltz » Sat Nov 03, 2018 9:04 pm

Sam1 wrote:
Sat Nov 03, 2018 8:54 pm

State taxes of around 5 %
401k it almost 10%
FICA of 4 %
Healthcare is not expensive...$300 a month for entire family

I realize this doesn’t add up (totals 36 percent) so I’d have to check my taxes from last year. I just know my salary is 180k and I bring home $8,200 a month. So that’s bringing home 55% of what I’m paid. Similar for my spouse. The rest of our income is in the form of a bonus. Last year we owed a few thousand when we paid our state and federal taxes.
401K is savings, not part of your taxes

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Re: WSJ FIRE

Post by randomguy » Sat Nov 03, 2018 9:11 pm

AlohaJoe wrote:
Sat Nov 03, 2018 8:46 pm
Sam1 wrote:
Sat Nov 03, 2018 8:05 pm

This. We pull around 420k HHI and take home around 45% of our paychecks when you include the almost 10% 401k contribution, state and federal taxes, healthcare, FICA etc. I think last year our federal tax bill was 70k with AMT.
$70,000 federal taxes on $420,000 in income is 16%. Where did the other (55% - 16%) 39% of your paychecks go? Isn't the maximum annual FICA $8,000? That's another 2%. (Or if you had two paychecks 4%, I guess?)

Is your healthcare 20% of your paycheck? (I don't live in the US but I've read healthcare is expensive now!)
Here is a generic case for 2018
400k income
2 kids
81k of federal taxes
16k SS
5.8 medicare
102k in taxes

Thats 25% off the top. You will save some on 401(k)s and pay some in state taxes (i.e. CA will be like 30k). Makes it hard to save 75% when 20-30% goes to taxes. Make enough that your tax rate is north of 40 (say 37% feds + 5% state) and saving 60% is impossible. And yes this is definitely a first world problem especially since savings rate is a meaningless number without context.

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Re: [WSJ: The New Retirement Plan: Save Almost Everything, Spend Virtually Nothing]

Post by Sam1 » Sat Nov 03, 2018 9:13 pm

afan wrote:
Sat Nov 03, 2018 8:59 pm
I get the frugality and goal of financial independence. But I don't get the whole retire early thing. For people of this age their ability to generate income for another 30 years is their most valuable asset.

Being ABLE to retire at 40 is great. But actually doing so is like liquidating millions in investments, converting it to cash, dousing it with lighter fluid and setting it on fire.

I want Financial Independence, Retire Eventually (or die on the job, as the case may be).
Me either. I think most of these FIRE people are trying to fill some sort of psychological void. I don’t even think about retirement. I enjoy my life today and enjoy working. If I was so unhappy that I needed to eat rice and beans at home so I could quit working, I’d instead look to change careers, move to a different part of the country etc. i have always pursued jobs with good work/life balance as enjoying life on a daily/weekly basis is important for me. It makes me sad these people are focused SO much on retirement like it’s the holy grail. They say they wouldn’t do anything differently if they had more money but I don’t believe that. Like if you’d won the lottery you’d still only drink $5 bottles of wine ($5 bottles mentioned in the article)?

I also believe that money, especially spending money, does buy happiness in many ways. I appreciate luxury travel, amazing restaurant meals, high quality clothing and fabrics, taking taxis when the weather is bad, a well decorated home etc. Could I be happy without these things? Yes. But if I can save money, continue to build wealth AND have these things by maintaining a job, then no way I’m giving them up to sit at home or do whatever free activity the FIRE people brag that they do.

I also think giving up so many years of income is foolish. My own father retired early by I’d say at leAst 5 years. The last years of his career were the easiest as he’d built his business years ago and he earned the highest salary he ever did. You can’t just look at the percentage you remove from a retirement account but also have to take into account the money you aren’t contributing by retiring.

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Re: [WSJ: The New Retirement Plan: Save Almost Everything, Spend Virtually Nothing]

Post by AlohaJoe » Sat Nov 03, 2018 9:13 pm

afan wrote:
Sat Nov 03, 2018 8:59 pm
Being ABLE to retire at 40 is great. But actually doing so is like liquidating millions in investments, converting it to cash, dousing it with lighter fluid and setting it on fire.
What if you don't want/need those millions? Isn't it the same as "if you've won the game why keep playing" where people are often counciled to stop investing in equities at some point?

(Disclaimer, I retired at 42, so obviously I'm biased.)

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Re: [WSJ: The New Retirement Plan: Save Almost Everything, Spend Virtually Nothing]

Post by EddyB » Sat Nov 03, 2018 9:28 pm

afan wrote:
Sat Nov 03, 2018 8:59 pm
I get the frugality and goal of financial independence. But I don't get the whole retire early thing. For people of this age their ability to generate income for another 30 years is their most valuable asset.

Being ABLE to retire at 40 is great. But actually doing so is like liquidating millions in investments, converting it to cash, dousing it with lighter fluid and setting it on fire.

I want Financial Independence, Retire Eventually (or die on the job, as the case may be).
Money isn’t everything (to everyone).

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Re: [WSJ: The New Retirement Plan: Save Almost Everything, Spend Virtually Nothing]

Post by EddyB » Sat Nov 03, 2018 9:36 pm

Sam1 wrote:
Sat Nov 03, 2018 9:13 pm
afan wrote:
Sat Nov 03, 2018 8:59 pm
I get the frugality and goal of financial independence. But I don't get the whole retire early thing. For people of this age their ability to generate income for another 30 years is their most valuable asset.

Being ABLE to retire at 40 is great. But actually doing so is like liquidating millions in investments, converting it to cash, dousing it with lighter fluid and setting it on fire.

I want Financial Independence, Retire Eventually (or die on the job, as the case may be).
Me either. I think most of these FIRE people are trying to fill some sort of psychological void. I don’t even think about retirement. I enjoy my life today and enjoy working.
Consider the equally simplistic caricatures or amateur psychological profiles the “FIRE people” might use to describe you. Do they seem fair or meaningful?

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Re: WSJ FIRE

Post by AlphaLess » Sat Nov 03, 2018 9:43 pm

Ron Scott wrote:
Sat Nov 03, 2018 3:08 pm
A quote from the article say is all for me:

Brandon Ganch, 36, who retired from his job as a software engineer in 2016, said his frugality became an obsession and he stressed over small purchases by his wife. He often got upset when visitors took long hot showers at his former Vermont home or his wife ordered a “$15 main course instead of a $10 sandwich” at a restaurant.

“It wasn’t healthy,” said Mr. Ganch.
Presumably, the point of retirement is to have a stress free life.

When 'retirement' becomes your day job, i.e., counting every penny, that's no longer a retirement.
"You can get more with a kind word and a gun than with just a kind word." George Washington

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Re: [WSJ: The New Retirement Plan: Save Almost Everything, Spend Virtually Nothing]

Post by zaboomafoozarg » Sat Nov 03, 2018 10:07 pm

Sam1 wrote:
Sat Nov 03, 2018 9:13 pm
But if I can save money, continue to build wealth AND have these things by maintaining a job, then no way I’m giving them up to sit at home or do whatever free activity the FIRE people brag that they do.
Many people who retire early don't do so on a shoestring. I actually plan to spend quite a bit more, about $50k per year. That's 50% more than I've ever spent in a year before.

I'm not really big on material luxuries though. Didn't grow up with them and don't see a need for most of them.

But I do value the luxury of time.

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Re: WSJ FIRE

Post by z3r0c00l » Sat Nov 03, 2018 10:27 pm

Whakamole wrote:
Sat Nov 03, 2018 6:07 pm
bligh wrote:
Sat Nov 03, 2018 5:47 pm
There are many options available to the kind of intelligent, disciplined and resourceful people that the FIRE movement attracts. You don't have to be flipping burgers or bagging groceries. Though you could. You could put in a few hours on the weekends via Uber/Lyft and help partying young people get home safely. You could open a small store building something you enjoy creating and sell it on Etsy. You could move to another lower cost of living country where for a few years for a change of scene (hell I'd want to do this regardless of financial situation). You could (as you suggested) return to your original profession/industry in some capacity.
I can't talk about the others, but a friend was trying to sell homemade jewelry on Etsy and could not sell anything. Nobody can compete with people selling bulk purchases made from Alibaba.
Flipping burgers or working at WalMart sounds better, and more promising, than driving for Uber or selling trinkets on regretsy.

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Re: [WSJ: The New Retirement Plan: Save Almost Everything, Spend Virtually Nothing]

Post by ladders11 » Sun Nov 04, 2018 1:20 am

Sam1 wrote:
Sat Nov 03, 2018 9:13 pm

It makes me sad these people are focused SO much on retirement like it’s the holy grail. They say they wouldn’t do anything differently if they had more money but I don’t believe that. Like if you’d won the lottery you’d still only drink $5 bottles of wine ($5 bottles mentioned in the article)?
No, I disagree with your sentiment. Once you've sunk time into your career, you need to keep at it for the money whether you like it or not.Some people are treated badly at work for no fault of their own. Some people's careers didn't materialize into anything enjoyable. It is very difficult to build knowledge, skills and experience and somehow gain the credibility to practice your trade at a high level.

Even at a youngish age like 35, if you wanted to switch careers requiring a new degree, you'd need to outlay $50,000 on that degree and 2-6 years in school while somehow making ends meet. Do you want to work and do night school? Then you're in your 40's IF you are able to get into that new career.

This is the issue we face in enjoying work, the serious switching costs and lock-in to our profession, quickly being aged out and denied opportunities.

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Re: [WSJ: The New Retirement Plan: Save Almost Everything, Spend Virtually Nothing]

Post by chipperd » Sun Nov 04, 2018 1:40 am

I don't understand the why those who don't agree with the FIRE movement (most of whom have a dog in that belief system: ie: Suze), need imply a psychological problem. Live and let live the way I want to live in the face of consumerism is the basic FIRE premise. Why the need to pathologize?

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Re: [WSJ: The New Retirement Plan: Save Almost Everything, Spend Virtually Nothing]

Post by mlebuf » Sun Nov 04, 2018 2:19 am

When I was in my 20's, I believed that having complete control over one's time is the greatest luxury that money can buy. Fifty plus years later, I still believe it's true. I don't believe one should lead a life of great deprivation with the sole goal of retiring early. However the simple fact is that the more one saves and invests in the early education/career years, the sooner one will be able to retire. The math always wins.

Several university faculty colleagues and myself retired between ages 47 and 53. We did that by supplementing our university incomes with writing, speaking, consulting activities and investing that additional income in mutual funds and/or real estate.

I encourage young people to begin saving and investing as soon as they get of school with the ultimate goal of becoming work optional. The day will almost surely come when they will want or have to exercise that option.
Best wishes, | Michael | | Invest your time actively and your money passively.

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Re: [WSJ: The New Retirement Plan: Save Almost Everything, Spend Virtually Nothing]

Post by Ron Scott » Sun Nov 04, 2018 2:55 am

ladders11 wrote:
Sun Nov 04, 2018 1:20 am
Sam1 wrote:
Sat Nov 03, 2018 9:13 pm

It makes me sad these people are focused SO much on retirement like it’s the holy grail. They say they wouldn’t do anything differently if they had more money but I don’t believe that. Like if you’d won the lottery you’d still only drink $5 bottles of wine ($5 bottles mentioned in the article)?
No, I disagree with your sentiment. Once you've sunk time into your career, you need to keep at it for the money whether you like it or not.Some people are treated badly at work for no fault of their own. Some people's careers didn't materialize into anything enjoyable. It is very difficult to build knowledge, skills and experience and somehow gain the credibility to practice your trade at a high level.

Even at a youngish age like 35, if you wanted to switch careers requiring a new degree, you'd need to outlay $50,000 on that degree and 2-6 years in school while somehow making ends meet. Do you want to work and do night school? Then you're in your 40's IF you are able to get into that new career.

This is the issue we face in enjoying work, the serious switching costs and lock-in to our profession, quickly being aged out and denied opportunities.
This much rings true: Corporate America continues to blow it on job design and staff motivation. Creating jobs that people feel passionate about costs no more than creating hardship, and the payback is obvious. We know how to create exciting, spirit-lifting workplaces and repeatedly fail to do so.

This failure will come home to roost when the competition for talent intensities and those employers who don’t get it won’t be able to keep up.
Retirement is a game best played by those prepared for more volatility in the future than has been seen in the past. The solution is not to predict investment losses but to prepare for them.

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Re: WSJ FIRE

Post by Momus » Sun Nov 04, 2018 3:00 am

arcticpineapplecorp. wrote:
Sat Nov 03, 2018 3:41 pm
thanks for the links not behind the paywall.
Attendees at “FI Chautauqua,” a week-long financial independence conference, spent up to $3,000 this year (not including airfare) to go to Greece and hear leaders in the FIRE community share tips.
that doesn't sound particularly frugal.
FIRE adherents are often millennials and younger members of Generation X who have college degrees, above-average incomes and the discipline to adopt a strict do-it-yourself approach to retirement.
I think the above average income part helps. It's easy to save $150,000 a year if you make $200,000 a year (75% savings rate). But try saving $37,500 on a $50,000 a year salary (75% savings too) and living on the remaining $12,500. Not as easy.
There is absolutely no way in hell you can save 150k net on 200k gross income.

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Re: WSJ FIRE

Post by JoMoney » Sun Nov 04, 2018 3:06 am

Momus wrote:
Sun Nov 04, 2018 3:00 am
...
There is absolutely no way in hell you can save 150k net on 200k gross income.
True... you'd be paying more than 50k in federal income tax + OASDI/Medicare
Taking out state and local taxes it gets even worse.
"To achieve satisfactory investment results is easier than most people realize; to achieve superior results is harder than it looks." - Benjamin Graham

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Re: [WSJ: The New Retirement Plan: Save Almost Everything, Spend Virtually Nothing]

Post by Ron Scott » Sun Nov 04, 2018 4:29 am

chipperd wrote:
Sun Nov 04, 2018 1:40 am
I don't understand the why those who don't agree with the FIRE movement (most of whom have a dog in that belief system: ie: Suze), need imply a psychological problem. Live and let live the way I want to live in the face of consumerism is the basic FIRE premise. Why the need to pathologize?
I don’t think it’s pathological to FIRE but it isn’t an inspired solution either.

Some who find themselves disenchanted with their jobs become attracted to FIRE as a cure instead of engaging in the potentially more productive search for personally satisfying work. The whole headtrip about consumerism being unhealthy and frugality as godly must seem like a crappy consolation prize for those who would appreciate a more rewarding career but do not seek or find such satisfaction. It is the tail wagging the dog and can create a feeling of cognitive dissonance.

“FIRE is not a substitute for finding your bliss” should be in the fine print.
Retirement is a game best played by those prepared for more volatility in the future than has been seen in the past. The solution is not to predict investment losses but to prepare for them.

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Re: [WSJ: The New Retirement Plan: Save Almost Everything, Spend Virtually Nothing]

Post by ignition » Sun Nov 04, 2018 4:48 am

Ron Scott wrote:
Sun Nov 04, 2018 4:29 am
chipperd wrote:
Sun Nov 04, 2018 1:40 am
I don't understand the why those who don't agree with the FIRE movement (most of whom have a dog in that belief system: ie: Suze), need imply a psychological problem. Live and let live the way I want to live in the face of consumerism is the basic FIRE premise. Why the need to pathologize?
I don’t think it’s pathological to FIRE but it isn’t an inspired solution either.

Some who find themselves disenchanted with their jobs become attracted to FIRE as a cure instead of engaging in the potentially more productive search for personally satisfying work. The whole headtrip about consumerism being unhealthy and frugality as godly must seem like a crappy consolation prize for those who would appreciate a more rewarding career but do not seek or find such satisfaction. It is the tail wagging the dog and can create a feeling of cognitive dissonance.

“FIRE is not a substitute for finding your bliss” should be in the fine print.
True, it is not a panacea but it still pays to be FI I think. When you're FI, you have options. You're not obliged to retire. If retirement doesn't work for you, go back to work. Only now you don't depend on a salary when finding work. You can take any job you like and not worry about the money. Or you can work part time and spend more time with your children/family/hobbies that interest you. You don't have to work until you drop dead or work long hours in the office to advance your career. You can do whatever you want which seems very appealing to me.

if retirement works for you, great! You aren't obliged to go back to work. What matters is that you're happy, not what someone on TV or the internet says you should do or how you should feel.

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Re: [WSJ: The New Retirement Plan: Save Almost Everything, Spend Virtually Nothing]

Post by Ron Scott » Sun Nov 04, 2018 5:59 am

ignition wrote:
Sun Nov 04, 2018 4:48 am
Ron Scott wrote:
Sun Nov 04, 2018 4:29 am
chipperd wrote:
Sun Nov 04, 2018 1:40 am
I don't understand the why those who don't agree with the FIRE movement (most of whom have a dog in that belief system: ie: Suze), need imply a psychological problem. Live and let live the way I want to live in the face of consumerism is the basic FIRE premise. Why the need to pathologize?
I don’t think it’s pathological to FIRE but it isn’t an inspired solution either.

Some who find themselves disenchanted with their jobs become attracted to FIRE as a cure instead of engaging in the potentially more productive search for personally satisfying work. The whole headtrip about consumerism being unhealthy and frugality as godly must seem like a crappy consolation prize for those who would appreciate a more rewarding career but do not seek or find such satisfaction. It is the tail wagging the dog and can create a feeling of cognitive dissonance.

“FIRE is not a substitute for finding your bliss” should be in the fine print.
True, it is not a panacea but it still pays to be FI I think. When you're FI, you have options. You're not obliged to retire. If retirement doesn't work for you, go back to work. Only now you don't depend on a salary when finding work. You can take any job you like and not worry about the money. Or you can work part time and spend more time with your children/family/hobbies that interest you. You don't have to work until you drop dead or work long hours in the office to advance your career. You can do whatever you want which seems very appealing to me.

if retirement works for you, great! You aren't obliged to go back to work. What matters is that you're happy, not what someone on TV or the internet says you should do or how you should feel.
No argument here. FI should be a goal.
Retirement is a game best played by those prepared for more volatility in the future than has been seen in the past. The solution is not to predict investment losses but to prepare for them.

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Re: [WSJ: The New Retirement Plan: Save Almost Everything, Spend Virtually Nothing]

Post by chipperd » Sun Nov 04, 2018 6:05 am

Ron Scott wrote:
Sun Nov 04, 2018 5:59 am
ignition wrote:
Sun Nov 04, 2018 4:48 am
Ron Scott wrote:
Sun Nov 04, 2018 4:29 am
chipperd wrote:
Sun Nov 04, 2018 1:40 am
I don't understand the why those who don't agree with the FIRE movement (most of whom have a dog in that belief system: ie: Suze), need imply a psychological problem. Live and let live the way I want to live in the face of consumerism is the basic FIRE premise. Why the need to pathologize?
I don’t think it’s pathological to FIRE but it isn’t an inspired solution either.

Some who find themselves disenchanted with their jobs become attracted to FIRE as a cure instead of engaging in the potentially more productive search for personally satisfying work. The whole headtrip about consumerism being unhealthy and frugality as godly must seem like a crappy consolation prize for those who would appreciate a more rewarding career but do not seek or find such satisfaction. It is the tail wagging the dog and can create a feeling of cognitive dissonance.

“FIRE is not a substitute for finding your bliss” should be in the fine print.
True, it is not a panacea but it still pays to be FI I think. When you're FI, you have options. You're not obliged to retire. If retirement doesn't work for you, go back to work. Only now you don't depend on a salary when finding work. You can take any job you like and not worry about the money. Or you can work part time and spend more time with your children/family/hobbies that interest you. You don't have to work until you drop dead or work long hours in the office to advance your career. You can do whatever you want which seems very appealing to me.

if retirement works for you, great! You aren't obliged to go back to work. What matters is that you're happy, not what someone on TV or the internet says you should do or how you should feel.
No argument here. FI should be a goal.
Agreed. I think people conflate FIRE with stoppage of work. In my case, by the math, I am financially independent, so I have reduced work to a level that provides me with the balance I feel suits my life at this time. Less work is in my future. To each his/her own. My concern is with those "experts" who have a financial stake in other's working to the benefit of the expert, then the expert going on about how folks should work longer. That's a problem

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