Is the FIRE Movement Responsible for this Historic Bull Market Run

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tvubpwcisla
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Is the FIRE Movement Responsible for this Historic Bull Market Run

Post by tvubpwcisla » Fri Nov 15, 2019 8:42 am

Sometimes I wonder if the FIRE movement is responsible for the stock market continuing to rally higher.

The FIRE movement teaches you to save a considerable amount of your paycheck into the stock market so you can reach financial independence and retire early. As more people do this it is flooding the market with capital. Could FIRE be responsible for the Bull Market?

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TomatoTomahto
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Re: Is the FIRE Movement Responsible for this Historic Bull Market Run

Post by TomatoTomahto » Fri Nov 15, 2019 8:48 am

I doubt it. Small fraction of population.
Okay, I get it; I won't be political or controversial. The Earth is flat.

Silk McCue
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Re: Is the FIRE Movement Responsible for this Historic Bull Market Run

Post by Silk McCue » Fri Nov 15, 2019 8:48 am

No more than any other group individual has contributed to the Bull runs of the past. So very little impact in my opinion. FIRE likely represents a very small percentage of the US investing public.

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RubyTuesday
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Re: Is the FIRE Movement Responsible for this Historic Bull Market Run

Post by RubyTuesday » Fri Nov 15, 2019 8:48 am

Yes it could

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Re: Is the FIRE Movement Responsible for this Historic Bull Market Run

Post by RubyTuesday » Fri Nov 15, 2019 8:48 am

But unlikely

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Re: Is the FIRE Movement Responsible for this Historic Bull Market Run

Post by RubyTuesday » Fri Nov 15, 2019 8:49 am

So final answer, maybe

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Re: Is the FIRE Movement Responsible for this Historic Bull Market Run

Post by aristotelian » Fri Nov 15, 2019 8:49 am

No it is not. You are confusing cause and effect. If everyone were adherent to FIRE, yes, they would have a lot of savings invested, but consumption would be massively decreased and corporate profits would go to zero. Fortunately, it is a small community that represents a tiny portion of the population. However, the historic bull run has helped many people achieve FIRE.

am
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Re: Is the FIRE Movement Responsible for this Historic Bull Market Run

Post by am » Fri Nov 15, 2019 8:51 am

Don’t think so. Most people don’t know what FIRE is. I think low interest rates, solid earnings, growth, and favorable tax policy have all contributed to this bull market. :sharebeer

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JoMoney
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Re: Is the FIRE Movement Responsible for this Historic Bull Market Run

Post by JoMoney » Fri Nov 15, 2019 8:51 am

We don't have a way to simulate market returns without a "FIRE movement", but I would suggest the easy money from central banks have had far more impact on current state of things.
That said, we had a decent sized market correction a year ago, so we're no longer on a "historic bull market run".
U.S. stock returns are broadly within range of historic averages.
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firebirdparts
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Re: Is the FIRE Movement Responsible for this Historic Bull Market Run

Post by firebirdparts » Fri Nov 15, 2019 8:52 am

I don’t think they have that kind of money.

From early in my accumulation years, there has always been talk of how USA demographics (“the” baby boomers) would impact investments and I think that is a much bigger deal.

If significant numbers of first-worlders begin to live frugally, you’ll probably see something quite new and interesting other that a bull market.
Last edited by firebirdparts on Fri Nov 15, 2019 9:02 am, edited 2 times in total.
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a_movable_life
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Re: Is the FIRE Movement Responsible for this Historic Bull Market Run

Post by a_movable_life » Fri Nov 15, 2019 8:52 am

There are so few of us that it's a drop in the bucket.

Probably due to cheap money from central banks, stock buybacks, and expanding markets.

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Re: Is the FIRE Movement Responsible for this Historic Bull Market Run

Post by WhyNotUs » Fri Nov 15, 2019 8:53 am

Number of real FIRE investors X Ave. Value of Annual investment= Y
Total Dollars annual investment / Y= a very small number (my assessment)

Unlikely to be a driver. Change from defined benefit to 401k type plans, age demographics, tax policy, repurchase plans, concentration of wealth to the investment class, and low fixed income rates likely to be bigger drivers.
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Re: Is the FIRE Movement Responsible for this Historic Bull Market Run

Post by Jack FFR1846 » Fri Nov 15, 2019 8:53 am

Changing laws have helped it. New employees now are often auto enrolled into a 401k and they have to opt out if that's not what they want. Others who actually hear that social security might reduce payments in the future or believe that somehow it's going away are increasing 401k contributions. I would think that the FIRE people are a zero effect or even a potential negative. Think about it. Their goal is to retire early, so that means that they are stopping their contributions early and withdrawing to live.
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Re: Is the FIRE Movement Responsible for this Historic Bull Market Run

Post by sperry8 » Fri Nov 15, 2019 8:54 am

tvubpwcisla wrote:
Fri Nov 15, 2019 8:42 am
Sometimes I wonder if the FIRE movement is responsible for the stock market continuing to rally higher.

The FIRE movement teaches you to save a considerable amount of your paycheck into the stock market so you can reach financial independence and retire early. As more people do this it is flooding the market with capital. Could FIRE be responsible for the Bull Market?
No. Earnings are about 3/4 of it... the rest is P/E expansion.
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Re: Is the FIRE Movement Responsible for this Historic Bull Market Run

Post by Valuethinker » Fri Nov 15, 2019 8:58 am

tvubpwcisla wrote:
Fri Nov 15, 2019 8:42 am
Sometimes I wonder if the FIRE movement is responsible for the stock market continuing to rally higher.

The FIRE movement teaches you to save a considerable amount of your paycheck into the stock market so you can reach financial independence and retire early. As more people do this it is flooding the market with capital. Could FIRE be responsible for the Bull Market?
In the case of Japan in the late 1980s I could buy a retail "weight of money" argument. Everyone was buying stocks and Japanese financial companies and westerners figured out imaginative ways of leveraging that up. Something like half the profits of the average Japanese company came from financial operations.

You did see a mania like that for stocks in the 1960s in the USA. And, again, in the late 1990s-2000 before the dot com crash.

Similarly in Emerging Markets in the mid 1990s before the 1994 Mexico crash and the 1997-98 SE Asia/ Russia crash. In those cases a lot of money coming from western investors, driving up very thin markets (few stocks, thinly traded).

But this time? The US market does not exist in isolation. There are huge Sovereign Wealth Funds, plus foreign savings vehicles - life insurance companies and investment funds.

So to point at the US retail investor and say that they are driving it? Does not seem at all likely.

I can point to certain sectors where low interest rates seem to have driven retail money in search of income - utilities and REITs in particular.

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JoMoney
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Re: Is the FIRE Movement Responsible for this Historic Bull Market Run

Post by JoMoney » Fri Nov 15, 2019 9:04 am

Maybe it's the Boomer's :mrgreen: and their underfunded pension systems dumping money into risky stocks hoping they'll pull out miracle returns to meet their commitments.
"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: Is the FIRE Movement Responsible for this Historic Bull Market Run

Post by wootwoot » Fri Nov 15, 2019 9:06 am

Is FIRE also the reason we have record unemployment numbers?

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JoMoney
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Re: Is the FIRE Movement Responsible for this Historic Bull Market Run

Post by JoMoney » Fri Nov 15, 2019 9:11 am

Blame the FIRE movement for some of the blackouts we've experienced in California.
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Re: Is the FIRE Movement Responsible for this Historic Bull Market Run

Post by FI4LIFE » Fri Nov 15, 2019 9:13 am

No. Name another person besides yourself who is interested in FIRE. Outside of the internet, I know zero people (excluding myself).

It seems like a "craze" because Google tracks your internet history and feeds you stories related to your interests. It is not a real movement from what I can tell in my rather large circle of friends and acquaintances.

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Re: Is the FIRE Movement Responsible for this Historic Bull Market Run

Post by KlangFool » Fri Nov 15, 2019 9:30 am

OP,

1) No.

2) A bigger and more interesting question is why the idea of FIRE looks appealing to the younger generation. It was not a popular idea of 10 to 20 years ago.

KlangFool

zxllxz
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Re: Is the FIRE Movement Responsible for this Historic Bull Market Run

Post by zxllxz » Fri Nov 15, 2019 9:31 am

I would like to suggest an alternative theory. Since interest rates have been at historic lows for the last 10 years, the only place to get a significant return has been in the stock market. This includes outside the U.S.. The inflows from Europe, due to negative interest rates adds to the market.

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zaboomafoozarg
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Re: Is the FIRE Movement Responsible for this Historic Bull Market Run

Post by zaboomafoozarg » Fri Nov 15, 2019 9:37 am

The opposite is more likely true.

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Re: Is the FIRE Movement Responsible for this Historic Bull Market Run

Post by zaboomafoozarg » Fri Nov 15, 2019 9:45 am

KlangFool wrote:
Fri Nov 15, 2019 9:30 am
2) A bigger and more interesting question is why the idea of FIRE looks appealing to the younger generation. It was not a popular idea of 10 to 20 years ago.
It's popular to me because every job I've had since graduating 15 years ago has required me to work 60+ hour weeks for a large portion of the year.

Stress levels are always high, schedules are always tight, deadlines are always looming, and my blood pressure is already getting too high in my 30s.

I want out ASAP.

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Re: Is the FIRE Movement Responsible for this Historic Bull Market Run

Post by WhyNotUs » Fri Nov 15, 2019 9:53 am

Because some people have figured out that the system is set up to use and dispose of them. They are looking at how to save money and create more choice in their lives rather than being entrapped in a consumerist cycle that reduces their choices.

zaboomafoozarg wrote:
Fri Nov 15, 2019 9:45 am
KlangFool wrote:
Fri Nov 15, 2019 9:30 am
2) A bigger and more interesting question is why the idea of FIRE looks appealing to the younger generation. It was not a popular idea of 10 to 20 years ago.
It's popular to me because every job I've had since graduating 15 years ago has required me to work 60+ hour weeks for a large portion of the year.

Stress levels are always high, schedules are always tight, deadlines are always looming, and my blood pressure is already getting too high in my 30s.

I want out ASAP.
I own the next hot stock- VTSAX

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Re: Is the FIRE Movement Responsible for this Historic Bull Market Run

Post by KlangFool » Fri Nov 15, 2019 9:55 am

zaboomafoozarg wrote:
Fri Nov 15, 2019 9:45 am
KlangFool wrote:
Fri Nov 15, 2019 9:30 am
2) A bigger and more interesting question is why the idea of FIRE looks appealing to the younger generation. It was not a popular idea of 10 to 20 years ago.
It's popular to me because every job I've had since graduating 15 years ago has required me to work 60+ hour weeks for a large portion of the year.

Stress levels are always high, schedules are always tight, deadlines are always looming, and my blood pressure is already getting too high in my 30s.

I want out ASAP.
zaboomafoozarg,

It is the same for me since I started 30+ years ago. The working condition had not changed. But, somehow, the younger generation no longer thinks this is acceptable.

KlangFool

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Re: Is the FIRE Movement Responsible for this Historic Bull Market Run

Post by KlangFool » Fri Nov 15, 2019 9:56 am

WhyNotUs wrote:
Fri Nov 15, 2019 9:53 am
Because some people have figured out that the system is set up to use and dispose of them. They are looking at how to save money and create more choice in their lives rather than being entrapped in a consumerist cycle that reduces their choices.

zaboomafoozarg wrote:
Fri Nov 15, 2019 9:45 am
KlangFool wrote:
Fri Nov 15, 2019 9:30 am
2) A bigger and more interesting question is why the idea of FIRE looks appealing to the younger generation. It was not a popular idea of 10 to 20 years ago.
It's popular to me because every job I've had since graduating 15 years ago has required me to work 60+ hour weeks for a large portion of the year.

Stress levels are always high, schedules are always tight, deadlines are always looming, and my blood pressure is already getting too high in my 30s.

I want out ASAP.
This may be it. They no longer accept the glorified notion of work.

KlangFool

MotoTrojan
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Re: Is the FIRE Movement Responsible for this Historic Bull Market Run

Post by MotoTrojan » Fri Nov 15, 2019 9:57 am

I think it’s that pesky Reddit group WallStreetBets.

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Re: Is the FIRE Movement Responsible for this Historic Bull Market Run

Post by KyleAAA » Fri Nov 15, 2019 10:05 am

No. The FIRE movement is very, very small with insignificant assets in the grand scheme of things.

keystone
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Re: Is the FIRE Movement Responsible for this Historic Bull Market Run

Post by keystone » Fri Nov 15, 2019 10:10 am

What % of the population is really into the FIRE movement? I would guess that it's well under 1%. I don't even know anyone in real life aside from myself who plans to retire early.

Furthermore, if FIRE happened to be mainstream, I don't think it would necessarily be good for the stock market since consumer spending would go way down.

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Re: Is the FIRE Movement Responsible for this Historic Bull Market Run

Post by stan1 » Fri Nov 15, 2019 10:15 am

There was a notion a few years ago that boomer 401K and IRA retirement accounts were responsible for the historic bull run and that the market would tank when they started to retire and withdraw. Hasn't happened.

Individual super savers (greatest generation "millionaires next door", boomers with a $1M 401K, and millennials who save 50% of income to FIRE) are a small percentage of the population and don't influence the market. It's easy to get in your "bubble" and think a lot of people are just like you but if you look around your community and region including all the people you interact with on a daily basis you'll realize that it's a small segment of the overall population.

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Re: Is the FIRE Movement Responsible for this Historic Bull Market Run

Post by quisp65 » Fri Nov 15, 2019 10:18 am

I guess they are counting no recessions as being what defines this Historic Bull Run? I would give credit the fact from 2000-2010 or so the market went sideways and thus we are due for it and then we've had historic low interest rates for quite a while.

I looked 20 years before 2000 and about 20 years after 2000 on Portfolio Visualizer looking at US stocks and the 20 years before 2000 looked much better. I still remember the culture at work that was created were everyone was investing. There's even a Simpsons episode on it.

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Re: Is the FIRE Movement Responsible for this Historic Bull Market Run

Post by deltaneutral83 » Fri Nov 15, 2019 10:27 am

I wouldn't think the FIRE movement is 100/0 in their asset allocation?

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Re: Is the FIRE Movement Responsible for this Historic Bull Market Run

Post by michaeljc70 » Fri Nov 15, 2019 10:37 am

am wrote:
Fri Nov 15, 2019 8:51 am
Don’t think so. Most people don’t know what FIRE is. I think low interest rates, solid earnings, growth, and favorable tax policy have all contributed to this bull market. :sharebeer
+1

Too few people are doing it. Most people cannot cover a $1k emergency and live paycheck to paycheck.

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Re: Is the FIRE Movement Responsible for this Historic Bull Market Run

Post by InvestingGeek » Fri Nov 15, 2019 10:41 am

Consumption (anti-thesis of FIRE movement) and earnings are up too.

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Re: Is the FIRE Movement Responsible for this Historic Bull Market Run

Post by michaeljc70 » Fri Nov 15, 2019 10:44 am

zaboomafoozarg wrote:
Fri Nov 15, 2019 9:45 am
KlangFool wrote:
Fri Nov 15, 2019 9:30 am
2) A bigger and more interesting question is why the idea of FIRE looks appealing to the younger generation. It was not a popular idea of 10 to 20 years ago.
It's popular to me because every job I've had since graduating 15 years ago has required me to work 60+ hour weeks for a large portion of the year.

Stress levels are always high, schedules are always tight, deadlines are always looming, and my blood pressure is already getting too high in my 30s.

I want out ASAP.
I think you will find that more people in tech try to FIRE than most other professions. I think this is because people burn out or know that as they get older it is harder to get jobs that will continue their career/salary trajectory. I retired because I don't want to work a boring job for what I made 20 years ago (and that is not adjusting for inflation) if I don't have to work.

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Re: Is the FIRE Movement Responsible for this Historic Bull Market Run

Post by bertilak » Fri Nov 15, 2019 10:45 am

JoMoney wrote:
Fri Nov 15, 2019 9:04 am
Maybe it's the Boomer's
Go ahead. Blame the Boomers. We can take it.
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Re: Is the FIRE Movement Responsible for this Historic Bull Market Run

Post by EnjoyIt » Fri Nov 15, 2019 10:46 am

KlangFool wrote:
Fri Nov 15, 2019 9:55 am
zaboomafoozarg wrote:
Fri Nov 15, 2019 9:45 am
KlangFool wrote:
Fri Nov 15, 2019 9:30 am
2) A bigger and more interesting question is why the idea of FIRE looks appealing to the younger generation. It was not a popular idea of 10 to 20 years ago.
It's popular to me because every job I've had since graduating 15 years ago has required me to work 60+ hour weeks for a large portion of the year.

Stress levels are always high, schedules are always tight, deadlines are always looming, and my blood pressure is already getting too high in my 30s.

I want out ASAP.
zaboomafoozarg,

It is the same for me since I started 30+ years ago. The working condition had not changed. But, somehow, the younger generation no longer thinks this is acceptable.

KlangFool
I think it is like a pendulum. Years before, people were content with 1 working member of the family, smaller house, 1 car, stay at home parent. Then, people wanted more and two working family members with a much higher consumption came to be. Then we started having more luxuries and everyone wanted them getting people to work more and more. I think we reached the peak of the pendulum swing culminating in the Great Recession. This new generation seems a bit more content with having less but enjoying life more. I think this trend will likely continue for a few decades.

Just my theory.

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Re: Is the FIRE Movement Responsible for this Historic Bull Market Run

Post by Silk McCue » Fri Nov 15, 2019 10:47 am

bertilak wrote:
Fri Nov 15, 2019 10:45 am
JoMoney wrote:
Fri Nov 15, 2019 9:04 am
Maybe it's the Boomer's
Go ahead. Blame the Boomers. We can take it.
We are doing all we can to support our cohort.

Cheers

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Re: Is the FIRE Movement Responsible for this Historic Bull Market Run

Post by renue74 » Fri Nov 15, 2019 10:52 am

Everybody I know doesn't even know what FIRE means.

I'm pretty sure it's a small % of the population. Or maybe I don't hang out with millennials who are skipping avocado toast so they can retire by 29.

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Re: Is the FIRE Movement Responsible for this Historic Bull Market Run

Post by CyclingDuo » Fri Nov 15, 2019 10:57 am

tvubpwcisla wrote:
Fri Nov 15, 2019 8:42 am
Sometimes I wonder if the FIRE movement is responsible for the stock market continuing to rally higher.

The FIRE movement teaches you to save a considerable amount of your paycheck into the stock market so you can reach financial independence and retire early. As more people do this it is flooding the market with capital. Could FIRE be responsible for the Bull Market?
FIRE? Too funny! :mrgreen:

Consider that we may be just starting this one...

https://joefahmy.com/2019/11/09/weekend ... ng-started

https://finance.yahoo.com/news/dow-3000 ... 22790.html

https://www.marketwatch.com/story/the-s ... 2019-10-29
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Re: Is the FIRE Movement Responsible for this Historic Bull Market Run

Post by averagedude » Fri Nov 15, 2019 11:07 am

The FIRE movement being responsible for this historic bull run is like last years thanksgiving dinner being responsible for my existing 10 pound weight gain.

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Re: Is the FIRE Movement Responsible for this Historic Bull Market Run

Post by sschoe2 » Fri Nov 15, 2019 11:50 am

TomatoTomahto wrote:
Fri Nov 15, 2019 8:48 am
I doubt it. Small fraction of population.
Unfortunately the typical American is still living paycheck to paycheck regardless of their income, using credit cards to make up the difference, little to no retirement savings, and minimal financial literacy. FIRE and other savers are a small minority of the population. There have been a constant stream of articles that support this.

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Re: Is the FIRE Movement Responsible for this Historic Bull Market Run

Post by peseta » Fri Nov 15, 2019 12:20 pm

What's funny is that the answer may be "yes" to the question if it's flipped around: "Is this historic bull market run responsible for the FIRE movement?"

:happy

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Re: Is the FIRE Movement Responsible for this Historic Bull Market Run

Post by YRT70 » Fri Nov 15, 2019 12:39 pm

I think the FIRE movement is way too small for that. What may have had some influence: minimal or even negative bond rates in many parts of the world drive people to invest in equity.

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Re: Is the FIRE Movement Responsible for this Historic Bull Market Run

Post by MichCPA » Fri Nov 15, 2019 1:22 pm

KlangFool wrote:
Fri Nov 15, 2019 9:30 am
OP,

1) No.

2) A bigger and more interesting question is why the idea of FIRE looks appealing to the younger generation. It was not a popular idea of 10 to 20 years ago.

KlangFool
I wouldn't necessarily say its 'popular' now. It seems like its a couple of people who used to make a ton of money at high stress jobs decided to quit. The only difference between FIRE and what used to happen in this case is that they blog about it and claim they are retired instead of just taking a lower stress job.

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Re: Is the FIRE Movement Responsible for this Historic Bull Market Run

Post by michaeljc70 » Fri Nov 15, 2019 1:30 pm

MichCPA wrote:
Fri Nov 15, 2019 1:22 pm
KlangFool wrote:
Fri Nov 15, 2019 9:30 am
OP,

1) No.

2) A bigger and more interesting question is why the idea of FIRE looks appealing to the younger generation. It was not a popular idea of 10 to 20 years ago.

KlangFool
I wouldn't necessarily say its 'popular' now. It seems like its a couple of people who used to make a ton of money at high stress jobs decided to quit. The only difference between FIRE and what used to happen in this case is that they blog about it and claim they are retired instead of just taking a lower stress job.
I think the blogging is the lower stress job. :shock: Some of them makes hundreds of thousands of dollars from their blog.

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Re: Is the FIRE Movement Responsible for this Historic Bull Market Run

Post by KlangFool » Fri Nov 15, 2019 1:44 pm

MichCPA wrote:
Fri Nov 15, 2019 1:22 pm
KlangFool wrote:
Fri Nov 15, 2019 9:30 am
OP,

1) No.

2) A bigger and more interesting question is why the idea of FIRE looks appealing to the younger generation. It was not a popular idea of 10 to 20 years ago.

KlangFool
I wouldn't necessarily say its 'popular' now. It seems like its a couple of people who used to make a ton of money at high stress jobs decided to quit. The only difference between FIRE and what used to happen in this case is that they blog about it and claim they are retired instead of just taking a lower stress job.
MichCPA,

I disagreed. People blog about almost everything. It took a certain level of interest from many people before it is widespread and shows up in public consciousness.

Many of my family members were FIRE. And, this happened without the word FIRE being created.

KlangFool

stan1
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Re: Is the FIRE Movement Responsible for this Historic Bull Market Run

Post by stan1 » Fri Nov 15, 2019 1:59 pm

"Retire Early" means different things to different people. To some it means not working. To others it means a different job that's fewer hours, less stress, or more enjoyable. Maybe we used to call that semi-retired. This seems to be a big part of the misunderstanding between BH and FIRE communities and maybe helps us understand each other better.

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Re: Is the FIRE Movement Responsible for this Historic Bull Market Run

Post by livesoft » Fri Nov 15, 2019 2:05 pm

No.

Any time someone borrows a trillion dollars and hands it out to all takers, then some of the money will support a Bull Market Run until the money stops flowing.
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Re: Is the FIRE Movement Responsible for this Historic Bull Market Run

Post by LilyFleur » Fri Nov 15, 2019 2:28 pm

michaeljc70 wrote:
Fri Nov 15, 2019 10:44 am
zaboomafoozarg wrote:
Fri Nov 15, 2019 9:45 am
KlangFool wrote:
Fri Nov 15, 2019 9:30 am
2) A bigger and more interesting question is why the idea of FIRE looks appealing to the younger generation. It was not a popular idea of 10 to 20 years ago.
It's popular to me because every job I've had since graduating 15 years ago has required me to work 60+ hour weeks for a large portion of the year.

Stress levels are always high, schedules are always tight, deadlines are always looming, and my blood pressure is already getting too high in my 30s.

I want out ASAP.
I think you will find that more people in tech try to FIRE than most other professions. I think this is because people burn out or know that as they get older it is harder to get jobs that will continue their career/salary trajectory. I retired because I don't want to work a boring job for what I made 20 years ago (and that is not adjusting for inflation) if I don't have to work.
Several of my friends got laid off in their late 50s/early 60s. They had saved, and decided to retire rather than go through the stress of trying to find a new job, do a longer commute, etc.

I retired because in my 50s I was not able to find work in the area in which I had trained and previously worked (college degree), and ended up in a job usually done by a high-school graduate. It was 2/3's the income I had been earning before I quit at the birth of my youngest child 24 years ago, and with NO health insurance and only a week of vacation and a difficult commute. Ageism is real, and that was the best job I could find. I did well in the stock market, and retired early. I am healthier and have time with my family and friends.

I also have friends who have not saved as aggressively and feel like they will never be able to retire.

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