Retiring at 24 - Extreme FIRE is it possible?

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JediMisty
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Re: Retiring at 24 - Extreme FIRE is it possible?

Post by JediMisty » Thu Dec 12, 2019 4:03 pm

randomguy wrote:
Thu Dec 12, 2019 2:16 pm
JediMisty wrote:
Thu Dec 12, 2019 1:43 pm

Ummm. Have you ever tried "flipping burgers" for a living? It's exhausting and you get burned and you smell bad and your back hurts and you are mistreated. I did that sort of work to help pay my way through college and it motivated me to never ever ever ever do it again. I wish folks who are making 500k a year spent some time trying to live on the minimum wage that 40% of this country makes. My lifestyle through college was dismal. I couldn't afford dental or medical care that I needed. (I had to go to the hospital once after an accident and I never paid for it, so they must have written it off.) The idea that it's fine to retire early because you can always go "flip burgers" for $10/hour totally ignores what it would be like to flip burgers when you're 40,50,60,70 or <shudder> 80. I was so exhausted during that summer, I quit a week before the end of the summer. And I really needed the money. Yes, words do matter. We can agree that there is a not clear, solid line between retired, working part time, and semi-retired. However, the claims that one is retired when there is dozens of hours devoted to making money blogging or simply working a new job or starting a business is just silly. IMHO opinion:

Yep. I also dish washed, painted boxes, and a bunch other jobs that totally sucked. It isn't my what I would want to do for a half dozen years when I am "retired" but taking on say a 10% chance of having to do that might be an acceptable risk if you really don't like your job. And yes it would be an absurd choice for someone making 500k/year to make since they could work like 6 months more to pretty much eliminate the risk. The person making 50k/year who might have to work like 3 years to save that same amount of money though might decide that is an acceptable level of risk to take on. Going with 90% chance of success and a back up plan might be worth instead of getting to 95% and spending 3 years of your life.

And no we aren't talking about flipping burgers at 60, 70 or 80. We are talking about doing it at 30 (for this guy), 40, or early 50s. That is the whole point. A person who retires at 40 still has a ton of human capital that can be spent if needed if 5-10 years into retirement things look grim. They can take on risk because if things go bad, they can convert that human capital to cash.

Flipping burgers is sort of the worst case. I am guessing most people who can amass the cash by 40 to retiree, have enough skills for the next step up in jobs. You might not be able to get that 200k/year tech job anymore after taking 10 years off, but finding some computerish job that pays 50k might be pretty doable.
Well, looking at the numbers, it's less likely that the portfolio will run low enough in the earliest stages of retirement when either "flipping burgers" or even taking a job at 50k will become obviously necessary. I can see the rosy projections not becoming bleaker at first. If a 40 year old tries to rejoin the work force after being retired since 24, that will be tough. A fifty year old friend has a masters in plant pathology. She never gotten to work in her field because she was following her husband around the world for his career, which wasn't all that lucrative. She can't find anything now except temp work with no benefits. So she stays with a guy she hates because he pays the bills. The commonality is the rosy expectation that it'll all work out "somehow". Like these FIRE people who expect to live 60 years on 600 or 700k and think that flipping burgers is an easy solution. Or that their skills will be in high demand forever.

Scooter57
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Re: Retiring at 24 - Extreme FIRE is it possible?

Post by Scooter57 » Thu Dec 12, 2019 5:38 pm

The FIRE movement seems to me to be a result of young, helicoptered kids being pushed through the educational system without ever having time to just think and wander around and figure out who they are and what they want out of life. These are the kids who got the good grades and "good" jobs only to discover they get little pleasure out of the life they were programmed for.

I would hope that, after some years out of the workforce exploring, they might come back to the workforce with a better dea of what they would love working at and be more able to live meaningful lives. You can go back to school in your 30s or even 40s and train for any career. One of the best doctors I ever knew started practicing at 45 and practiced until she died in her 70s.

There is nothing sadder than a person who works for decades at a job they can barely stand, hoarding money in the belief it will finally let them do what they really want to do when they retire. So few people who live that way have the energy to do anything by the time they retire but travel around in bubbles filled with other retirees boring everyone else silly.

If you are loving what you do with your life, you need a whole lot less money to get by. This generation seems to have missed out in the whole young bohemian/hippie phase that earlier generations went through on their way to becoming self-directed adults. Its just a shame they think they need a big pile of money to follow their dreams when they are still young. They don't.

randomguy
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Re: Retiring at 24 - Extreme FIRE is it possible?

Post by randomguy » Thu Dec 12, 2019 6:05 pm

JediMisty wrote:
Thu Dec 12, 2019 4:03 pm

Well, looking at the numbers, it's less likely that the portfolio will run low enough in the earliest stages of retirement when either "flipping burgers" or even taking a job at 50k will become obviously necessary. I can see the rosy projections not becoming bleaker at first. If a 40 year old tries to rejoin the work force after being retired since 24, that will be tough.
Historically it has been pretty obvious when you in a bad path with in 10 years. If things like the great depression, 70s, or 2000 don't happen in your first 10 years of retirement, you have plenty when they do happen. The 2010 retiree for example has like 40% more real money than they started with. They will be fine.

And think about what a temp job that you make 16k/year(i.e. you and you spouse work say 1k hours each) does when your spending 20k.

Personally I think living on 50k/year instead of 20k/yr is worth a decade of working. But I also don't hate my job.

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willthrill81
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Re: Retiring at 24 - Extreme FIRE is it possible?

Post by willthrill81 » Thu Dec 12, 2019 7:41 pm

randomguy wrote:
Thu Dec 12, 2019 6:05 pm
And think about what a temp job that you make 16k/year(i.e. you and you spouse work say 1k hours each) does when your spending 20k.
It doesn't even have to be as extreme as $20k. As long as you're not in the middle of a recession or depression, it's usually pretty easy for an able-bodied person in a halfway decent area to get a $25k job, let alone someone with real skills. For someone who has been spending $75k in early retirement, a $25k on the side and likely medical insurance could easily represents close to half of their annual spending. Reducing one's withdrawal rate by half for a few years could be enough to overcome a poor first decade for an early retiree.

But if you're spending $200k in retirement, returning to the workforce five years into retirement in order to significantly reduce your withdrawal rate is likely to be more challenging for most.
“It's a dangerous business, Frodo, going out your door. You step onto the road, and if you don't keep your feet, there's no knowing where you might be swept off to.” J.R.R. Tolkien,The Lord of the Rings

wolf359
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Re: Retiring at 24 - Extreme FIRE is it possible?

Post by wolf359 » Thu Dec 12, 2019 8:03 pm

willthrill81 wrote:
Thu Dec 12, 2019 7:41 pm
randomguy wrote:
Thu Dec 12, 2019 6:05 pm
And think about what a temp job that you make 16k/year(i.e. you and you spouse work say 1k hours each) does when your spending 20k.
It doesn't even have to be as extreme as $20k. As long as you're not in the middle of a recession or depression, it's usually pretty easy for an able-bodied person in a halfway decent area to get a $25k job, let alone someone with real skills. For someone who has been spending $75k in early retirement, a $25k on the side and likely medical insurance could easily represents close to half of their annual spending. Reducing one's withdrawal rate by half for a few years could be enough to overcome a poor first decade for an early retiree.

But if you're spending $200k in retirement, returning to the workforce five years into retirement in order to significantly reduce your withdrawal rate is likely to be more challenging for most.
Someone who was spending $200K/year in retirement has a lot more slack to trim than someone who planned on retiring on an income of $25K/year. The FAT FIRE person probably doesn't need to find a job, just to cut back spending. A FAT FIRE person also has a lot more options -- they could actually cut loose a couple hundred thousand dollars and BUY a job. This isn't an option for a LEAN FIRE person.

I'm defining LEAN FIRE as someone targeting an income that is below the median US income (less than $50K/year). I define FIRE as 1X median income to around 2X median income ($50K-100K). FAT FIRE is greater than 2X median US income. (greater than $100K/year)

Note: I know median US income is actually higher, but I also assume a paid off house, and I'm rounding to make the math easy. These are general ballpark estimates.

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willthrill81
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Re: Retiring at 24 - Extreme FIRE is it possible?

Post by willthrill81 » Thu Dec 12, 2019 8:17 pm

wolf359 wrote:
Thu Dec 12, 2019 8:03 pm
willthrill81 wrote:
Thu Dec 12, 2019 7:41 pm
randomguy wrote:
Thu Dec 12, 2019 6:05 pm
And think about what a temp job that you make 16k/year(i.e. you and you spouse work say 1k hours each) does when your spending 20k.
It doesn't even have to be as extreme as $20k. As long as you're not in the middle of a recession or depression, it's usually pretty easy for an able-bodied person in a halfway decent area to get a $25k job, let alone someone with real skills. For someone who has been spending $75k in early retirement, a $25k on the side and likely medical insurance could easily represents close to half of their annual spending. Reducing one's withdrawal rate by half for a few years could be enough to overcome a poor first decade for an early retiree.

But if you're spending $200k in retirement, returning to the workforce five years into retirement in order to significantly reduce your withdrawal rate is likely to be more challenging for most.
Someone who was spending $200K/year in retirement has a lot more slack to trim than someone who planned on retiring on an income of $25K/year. The FAT FIRE person probably doesn't need to find a job, just to cut back spending. A FAT FIRE person also has a lot more options -- they could actually cut loose a couple hundred thousand dollars and BUY a job. This isn't an option for a LEAN FIRE person.

I'm defining LEAN FIRE as someone targeting an income that is below the median US income (less than $50K/year). I define FIRE as 1X median income to around 2X median income ($50K-100K). FAT FIRE is greater than 2X median US income. (greater than $100K/year)

Note: I know median US income is actually higher, but I also assume a paid off house, and I'm rounding to make the math easy. These are general ballpark estimates.
Great point. I just shake my head at some of the folks who live in VHCOL areas claim that they need to spend $150k-$200k or more to live a decent lifestyle. Sam Dogen claims that he needs about $350k to "live comfortably" in San Francisco and seemingly refuses to live elsewhere for reasons that I cannot fathom nor that I can discuss on this forum. :shock:
For Dogen, it’s easy for people to scoff, since he has built a large following on the Financial Samurai blog, providing advice on how to build an early retirement safety net. And, yet, despite earning about $250,000 a year in passive income streams, he estimates he’s about $93,000 a year short of living comfortably in San Francisco, particularly if his family has another child.
https://www.forbes.com/sites/ryanderous ... 030d9e484f
“It's a dangerous business, Frodo, going out your door. You step onto the road, and if you don't keep your feet, there's no knowing where you might be swept off to.” J.R.R. Tolkien,The Lord of the Rings

randomguy
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Re: Retiring at 24 - Extreme FIRE is it possible?

Post by randomguy » Thu Dec 12, 2019 9:59 pm

willthrill81 wrote:
Thu Dec 12, 2019 7:41 pm
randomguy wrote:
Thu Dec 12, 2019 6:05 pm
And think about what a temp job that you make 16k/year(i.e. you and you spouse work say 1k hours each) does when your spending 20k.
It doesn't even have to be as extreme as $20k. As long as you're not in the middle of a recession or depression, it's usually pretty easy for an able-bodied person in a halfway decent area to get a $25k job, let alone someone with real skills. For someone who has been spending $75k in early retirement, a $25k on the side and likely medical insurance could easily represents close to half of their annual spending. Reducing one's withdrawal rate by half for a few years could be enough to overcome a poor first decade for an early retiree.

But if you're spending $200k in retirement, returning to the workforce five years into retirement in order to significantly reduce your withdrawal rate is likely to be more challenging for most.
If your spending 200k/year, you have the option of cutting your spending in half:) I don't want to discount the pain of going back to work. You aren't going do it for a few years most of the time. It is more like a decade (obviously we are hand waving about details like how much you are making) unless you go back off a false alarm (i.e. you retire in 2006, get worried and get a job in March 2009) and after a couple years you go . back to feeling safe. And yes I think you are likely to be able to get a better job. The point of the burger flipping is more that those jobs(or pretty much any entry level retail) are pretty much always available AND they are part time (working 3 days/week for 8 hours leaves a lot of time for the recreation stuff). It is tough to find a 100k/year job that will pay you 50k for only working 1k hours. At the low end, just about the only skills that are need are the ability to show up on time and actually work.

If you want to make sure you never work again when retiring at 24, a sub 3.3% SWR is probably smart. If you want to take say a 20% chance of never working again, you can bump that up to 4%.

randomguy
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Re: Retiring at 24 - Extreme FIRE is it possible?

Post by randomguy » Thu Dec 12, 2019 10:15 pm

willthrill81 wrote:
Thu Dec 12, 2019 8:17 pm
Great point. I just shake my head at some of the folks who live in VHCOL areas claim that they need to spend $150k-$200k or more to live a decent lifestyle. Sam Dogen claims that he needs about $350k to "live comfortably" in San Francisco and seemingly refuses to live elsewhere for reasons that I cannot fathom nor that I can discuss on this forum. :shock:
For Dogen, it’s easy for people to scoff, since he has built a large following on the Financial Samurai blog, providing advice on how to build an early retirement safety net. And, yet, despite earning about $250,000 a year in passive income streams, he estimates he’s about $93,000 a year short of living comfortably in San Francisco, particularly if his family has another child.
https://www.forbes.com/sites/ryanderous ... 030d9e484f
I totally understand the desire not to move away from friends, family and the rest of the social support network. I am willing to bet he also understands that he could live in SF for well under 250k/year and still have a pretty upper middle class life. I read it more as working and living on 350k/year maximized his enjoyment of life more than living on 250k/year and not working. I am guessing that all in all, he found work a pretty rewarding experience to start with so going back isn't too painful.

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willthrill81
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Re: Retiring at 24 - Extreme FIRE is it possible?

Post by willthrill81 » Fri Dec 13, 2019 12:01 am

randomguy wrote:
Thu Dec 12, 2019 10:15 pm
willthrill81 wrote:
Thu Dec 12, 2019 8:17 pm
Great point. I just shake my head at some of the folks who live in VHCOL areas claim that they need to spend $150k-$200k or more to live a decent lifestyle. Sam Dogen claims that he needs about $350k to "live comfortably" in San Francisco and seemingly refuses to live elsewhere for reasons that I cannot fathom nor that I can discuss on this forum. :shock:
For Dogen, it’s easy for people to scoff, since he has built a large following on the Financial Samurai blog, providing advice on how to build an early retirement safety net. And, yet, despite earning about $250,000 a year in passive income streams, he estimates he’s about $93,000 a year short of living comfortably in San Francisco, particularly if his family has another child.
https://www.forbes.com/sites/ryanderous ... 030d9e484f
I totally understand the desire not to move away from friends, family and the rest of the social support network. I am willing to bet he also understands that he could live in SF for well under 250k/year and still have a pretty upper middle class life. I read it more as working and living on 350k/year maximized his enjoyment of life more than living on 250k/year and not working. I am guessing that all in all, he found work a pretty rewarding experience to start with so going back isn't too painful.
If that's what he wants to do, that's perfectly fine. It's just difficult to hear someone say that they need to spend a third of a million dollars a year in order to live comfortably and that not smack heavily of elitism.
“It's a dangerous business, Frodo, going out your door. You step onto the road, and if you don't keep your feet, there's no knowing where you might be swept off to.” J.R.R. Tolkien,The Lord of the Rings

ohai
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Re: Retiring at 24 - Extreme FIRE is it possible?

Post by ohai » Fri Dec 13, 2019 12:41 am

willthrill81 wrote:
Fri Dec 13, 2019 12:01 am
randomguy wrote:
Thu Dec 12, 2019 10:15 pm
willthrill81 wrote:
Thu Dec 12, 2019 8:17 pm
Great point. I just shake my head at some of the folks who live in VHCOL areas claim that they need to spend $150k-$200k or more to live a decent lifestyle. Sam Dogen claims that he needs about $350k to "live comfortably" in San Francisco and seemingly refuses to live elsewhere for reasons that I cannot fathom nor that I can discuss on this forum. :shock:
For Dogen, it’s easy for people to scoff, since he has built a large following on the Financial Samurai blog, providing advice on how to build an early retirement safety net. And, yet, despite earning about $250,000 a year in passive income streams, he estimates he’s about $93,000 a year short of living comfortably in San Francisco, particularly if his family has another child.
https://www.forbes.com/sites/ryanderous ... 030d9e484f
I totally understand the desire not to move away from friends, family and the rest of the social support network. I am willing to bet he also understands that he could live in SF for well under 250k/year and still have a pretty upper middle class life. I read it more as working and living on 350k/year maximized his enjoyment of life more than living on 250k/year and not working. I am guessing that all in all, he found work a pretty rewarding experience to start with so going back isn't too painful.
If that's what he wants to do, that's perfectly fine. It's just difficult to hear someone say that they need to spend a third of a million dollars a year in order to live comfortably and that not smack heavily of elitism.
$350k itself is actually not unreasonable if you live in some place like San Francisco or New York City. Let's say you get $250k after Federal and local taxes. Your rent is $5k to $7k a month, kids in school for $40k a year each - it adds up.

I don't think Sam is being really honest about why he is going back to work though. For example, he wrote a lot before about getting passive income from a real estate crowd funding company, which went belly up. Why has "$250k " not changed for several years? Is he growing his assets at all, or was this just the high point?

Staying in San Francisco, the city, also seems like an artificial constraint - more like an excuse - when there are great suburbs like Lafayette, Pleasanton, San Ramon, etc. which offer the same cultural profile as (upper middle class) San Francisco, are in the same area, and have great school systems (one of his complaints about San Francisco is that public school there sucks).

wrongfunds
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Re: Retiring at 24 - Extreme FIRE is it possible?

Post by wrongfunds » Fri Dec 13, 2019 9:06 am

BH forum seems to have definite antipathy towards the FIRE crowd in general. BH don't like FIRE individual who assume $30K as annual expenses and BH don't like $350K as annual expense either. They both are equally maligned.

Seems pretty ironic to me.

260chrisb
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Re: Retiring at 24 - Extreme FIRE is it possible?

Post by 260chrisb » Fri Dec 13, 2019 9:39 am

TallBoy29er wrote:
Wed Dec 11, 2019 10:58 am
I'm past the point of caring about stories like this. Chart your own course, course correct along the way, and have fun doing it.
Yes, this!! I'm way past the point of caring for any more of these stories.

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Re: Retiring at 24 - Extreme FIRE is it possible?

Post by kadye » Fri Dec 13, 2019 9:53 am

wrongfunds wrote:
Fri Dec 13, 2019 9:06 am
BH forum seems to have definite antipathy towards the FIRE crowd in general. BH don't like FIRE individual who assume $30K as annual expenses and BH don't like $350K as annual expense either. They both are equally maligned.

Seems pretty ironic to me.
BH forum likes BH crowd, i.e. upper middle class (50 to 90 percentiles.)

wrongfunds
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Re: Retiring at 24 - Extreme FIRE is it possible?

Post by wrongfunds » Fri Dec 13, 2019 10:04 am

Anybody who is poorer than me has made stupid life choices. Anybody who is richer than me was unfairly handed out the spoils and does not deserve it.

I am the *real* self-made person.

Funny thing is whole bunch of BH do have this latent attitude without even realizing how it comes across to an impartial third party.

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Re: Retiring at 24 - Extreme FIRE is it possible?

Post by sailaway » Fri Dec 13, 2019 10:07 am

wrongfunds wrote:
Fri Dec 13, 2019 10:04 am
Anybody who is poorer than me has made stupid life choices. Anybody who is richer than me was unfairly handed out the spoils and does not deserve it.

I am the *real* self-made person.

Funny thing is whole bunch of BH do have this latent attitude without even realizing how it comes across to an impartial third party.
We have just switched themes. A page ago it was "Anybody who retires earlier than I is a useless, lazy leach. Anybody who retires later than I is wasting their life and missing out on joy."

wolf359
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Re: Retiring at 24 - Extreme FIRE is it possible?

Post by wolf359 » Fri Dec 13, 2019 10:34 am

wrongfunds wrote:
Fri Dec 13, 2019 9:06 am
BH forum seems to have definite antipathy towards the FIRE crowd in general. BH don't like FIRE individual who assume $30K as annual expenses and BH don't like $350K as annual expense either. They both are equally maligned.

Seems pretty ironic to me.
I really think that the age really bothers some people. When people who are 60 talk about retiring by down-shifting into consulting, reducing hours, or having 4-12 rental properties in addition to a fully funded retirement, nobody bats an eye. Semi-retirement and full retirement are both legitimately grouped under the heading of retired.

But if the same financial situation and plan are being executed by someone who is under 40, then... KNIVES OUT!


-----------

As for the choice of locking in a low income:

More than half of seniors in the United States have incomes below 37.5K/year, including Social Security. The specific percentage varies by age group, but more than 80% of seniors over the age of 75 are at or below that income level. It is realistic that retirees can live on a low income without a job. Many already do so.

If you're 24, however, nothing is generally forcing you to stop working. You have so many more options than someone whose body is breaking down and they may be physically unable to work. If you have the options, then it's probably better to pick a higher income level for the rest of your life. One More Year syndrome is discussed a lot for prospective retirees, but playing OMY in your 20's or 30's is not a real problem.

Some of the haters assume that everyone who FIRES does so at a poverty income. The truth is that FIRE is voluntary, and you can pick any income level before exiting the rat race. The worst case is that if you FIRE and fail, you go back to work and get a job like everybody else's everyday life. A former next-door neighbor of mine did this. He early retired, then discovered that he had not properly accounted for health care costs and living in a HCOL area. It took him a few years to figure this out, then he went back to work to replenish his nest egg. A few years after that, he sold his house, moved to a lower cost of living area, and retired again. The second time around he was much better prepared. He increased his investable assets and structurally reduced his costs.

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Re: Retiring at 24 - Extreme FIRE is it possible?

Post by smitcat » Fri Dec 13, 2019 10:38 am

wrongfunds wrote:
Fri Dec 13, 2019 9:06 am
BH forum seems to have definite antipathy towards the FIRE crowd in general. BH don't like FIRE individual who assume $30K as annual expenses and BH don't like $350K as annual expense either. They both are equally maligned.

Seems pretty ironic to me.
I have seen this all before - many (most) of these early FIRE will be back in the workforce before many years pass.
To get excited about it is on either side is likely a waste of time.

Sam1
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Re: Retiring at 24 - Extreme FIRE is it possible?

Post by Sam1 » Fri Dec 13, 2019 10:38 am

wolf359 wrote:
Fri Dec 13, 2019 10:34 am
wrongfunds wrote:
Fri Dec 13, 2019 9:06 am
BH forum seems to have definite antipathy towards the FIRE crowd in general. BH don't like FIRE individual who assume $30K as annual expenses and BH don't like $350K as annual expense either. They both are equally maligned.

Seems pretty ironic to me.
I really think that the age really bothers some people. When people who are 60 talk about retiring by down-shifting into consulting, reducing hours, or having 4-12 rental properties in addition to a fully funded retirement, nobody bats an eye. Semi-retirement and full retirement are both legitimately grouped under the heading of retired.

But if the same financial situation and plan are being executed by someone who is under 40, then... KNIVES OUT!


-----------

As for the choice of locking in a low income:

More than half of seniors in the United States have incomes below 37.5K/year, including Social Security. The specific percentage varies by age group, but more than 80% of seniors over the age of 75 are at or below that income level. It is realistic that retirees can live on a low income without a job. Many already do so.

If you're 24, however, nothing is generally forcing you to stop working. You have so many more options than someone whose body is breaking down and they may be physically unable to work. If you have the options, then it's probably better to pick a higher income level for the rest of your life. One More Year syndrome is discussed a lot for prospective retirees, but playing OMY in your 20's or 30's is not a real problem.

Some of the haters assume that everyone who FIRES does so at a poverty income. The truth is that FIRE is voluntary, and you can pick any income level before exiting the rat race. The worst case is that if you FIRE and fail, you go back to work and get a job like everybody else's everyday life. A former next-door neighbor of mine did this. He early retired, then discovered that he had not properly accounted for health care costs and living in a HCOL area. It took him a few years to figure this out, then he went back to work to replenish his nest egg. A few years after that, he sold his house, moved to a lower cost of living area, and retired again. The second time around he was much better prepared. He increased his investable assets and structurally reduced his costs.
There is significant risk to exiting the workforce and giving up a good paying job with benefits. Just ask many women who exit the workforce after having children and it takes them years to get back to where they were. You have way less negotiating power with an employer when you’re an unemployed job seeker.

Stormbringer
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Re: Retiring at 24 - Extreme FIRE is it possible?

Post by Stormbringer » Fri Dec 13, 2019 10:42 am

I've known two people who FIRE'd in the 90's:

One received about $900K when he was 28, and within 10 years he had to return to work.
One received about $30M after taxes at age 32, and most of it was gone by age 47.

I think it is particularly hard to do for young people.
"Compound interest is the most powerful force in the universe." - Albert Einstein

LiterallyIronic
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Re: Retiring at 24 - Extreme FIRE is it possible?

Post by LiterallyIronic » Fri Dec 13, 2019 10:58 am

smitcat wrote:
Thu Dec 12, 2019 11:33 am
LiterallyIronic wrote:
Thu Dec 12, 2019 11:21 am
I'm under the impression that you can retire at any age if you have 25x your annual expenses saved up.
"I'm under the impression that you can retire at any age if you have 25x your annual expenses saved up."
25X is a general rule that might work for a typical 25-30 year retirement given you believe in back testing.
For longer time periods and/or a more detailed description of longer time frames suggest you read the earlyrtirementnow site.
Start with the safe withdrawal rate series here....
https://earlyretirementnow.com/safe-wit ... te-series/
Oof, that article series is way, way above my pay grade. Not only do I not understand what's it's talking about, I can't stay interested in reading more than a few words at a time, so my eyes just skip around the page (which also contributes to me not understanding it, because I can't even force myself to read the text in order). Blah.

I'll just stick with the simple life. Save up my 25x and retire whenever I get to that $600k. And if I run into problems, I'll just cut back my spending. Don't know what I'd do with $2,000 per month with a paid off house, anyway.

sjt
Posts: 328
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Location: NC

Re: Retiring at 24 - Extreme FIRE is it possible?

Post by sjt » Fri Dec 13, 2019 10:58 am

Stormbringer wrote:
Fri Dec 13, 2019 10:42 am

One received about $900K when he was 28, and within 10 years he had to return to work.
One received about $30M after taxes at age 32, and most of it was gone by age 47.
It's also the case with many lottery winners, athletes, etc. Easy come, easy go - sounds like your two individuals happened upon money and blew through it.

Its often different with the fire crowd, many know the value of a dollar and sacrifice during their earning years to reach the FIRE goal.
"The one who covets is the poorer man, | For he would have that which he never can; | But he who doesn't have and doesn't crave | Is rich, though you may hold him but a knave." - Wife of Bath tale

wrongfunds
Posts: 2309
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Re: Retiring at 24 - Extreme FIRE is it possible?

Post by wrongfunds » Fri Dec 13, 2019 11:00 am

I feel pity for both but I sympathize with the 1st guy and have zero sympathy for the 2nd one. I guess I am real BH now?

Scooter57
Posts: 1347
Joined: Thu Jan 24, 2013 9:20 am

Re: Retiring at 24 - Extreme FIRE is it possible?

Post by Scooter57 » Fri Dec 13, 2019 11:00 am

Stormbringer wrote:
Fri Dec 13, 2019 10:42 am
I've known two people who FIRE'd in the 90's:

One received about $900K when he was 28, and within 10 years he had to return to work.
One received about $30M after taxes at age 32, and most of it was gone by age 47.

I think it is particularly hard to do for young people.
Given that the decade from 28 to 38 is one of the best health and highest energy level that a person will experience during a long life, doing what you want during that decade is a great gift. Perhaps that person got to spend time with little children, when they were in the most rewarding years of parenting (before the teens set in!). Perhaps they got to see the world in an adventurous way, rather than lying in a cruise ship deck chair in their 60s. Perhaps they wrote that book when they were at the height of their mental powers, recorded that album and toured when they still had the energy to keep up with the brutal hours demanded. Perhaps they invented something worthwhile, instead of helping billionaires become richer on Wall Street. I would give a great deal to have the brain power and energy I had in my 30s. I didn't get smart and drop out of the rat race until my 40s, but even so, that was when I started really coming into my own and doing the things that have made my name. And I did it with only a little money in the bank, a spouse with very modest earning power, and a real knack for living very cheaply.

That said, looking at your examples: anyone who can blow $30M has problems that go way beyond FIRE--or anything else reasonable.

I have long lived in a region where the average family income has ranged over the past decade from $37-42K. It's a beautiful, culturally rich area full of creative people and opportunities to be immersed in unspoiled nature. You can buy a livable home for just under $200K and a nice home for $350k.

The kind of person who is frugal enough to save enough to live without a job for just a few years when they are young and who values having their time to themselves would love living here. Many do. People whose lives are built around impressing strangers with what they can buy, not so much. No one around here is impressed by what people buy. It just isn't the local culture. Thank goodness!

It all comes down to what you value.

Stormbringer
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Re: Retiring at 24 - Extreme FIRE is it possible?

Post by Stormbringer » Fri Dec 13, 2019 11:06 am

sjt wrote:
Fri Dec 13, 2019 10:58 am
It's also the case with many lottery winners, athletes, etc. Easy come, easy go - sounds like your two individuals happened upon money and blew through it.
Both sold their equity stake in a business.
"Compound interest is the most powerful force in the universe." - Albert Einstein

Stormbringer
Posts: 999
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Re: Retiring at 24 - Extreme FIRE is it possible?

Post by Stormbringer » Fri Dec 13, 2019 11:12 am

Scooter57 wrote:
Fri Dec 13, 2019 11:00 am
That said, looking at your examples: anyone who can blow $30M has problems that go way beyond FIRE--or anything else reasonable.
Yes, and he openly admits he has a spending problem. Interestingly, after blowing through his money he started a new business, and has made a substantial amount of it back again. Fortunately, he seems to have his spending a bit more under control this time around.
"Compound interest is the most powerful force in the universe." - Albert Einstein

smitcat
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Re: Retiring at 24 - Extreme FIRE is it possible?

Post by smitcat » Fri Dec 13, 2019 11:38 am

LiterallyIronic wrote:
Fri Dec 13, 2019 10:58 am
smitcat wrote:
Thu Dec 12, 2019 11:33 am
LiterallyIronic wrote:
Thu Dec 12, 2019 11:21 am
I'm under the impression that you can retire at any age if you have 25x your annual expenses saved up.
"I'm under the impression that you can retire at any age if you have 25x your annual expenses saved up."
25X is a general rule that might work for a typical 25-30 year retirement given you believe in back testing.
For longer time periods and/or a more detailed description of longer time frames suggest you read the earlyrtirementnow site.
Start with the safe withdrawal rate series here....
https://earlyretirementnow.com/safe-wit ... te-series/
Oof, that article series is way, way above my pay grade. Not only do I not understand what's it's talking about, I can't stay interested in reading more than a few words at a time, so my eyes just skip around the page (which also contributes to me not understanding it, because I can't even force myself to read the text in order). Blah.

I'll just stick with the simple life. Save up my 25x and retire whenever I get to that $600k. And if I run into problems, I'll just cut back my spending. Don't know what I'd do with $2,000 per month with a paid off house, anyway.
Sorry I could not help - it really is a good series.

randomguy
Posts: 9035
Joined: Wed Sep 17, 2014 9:00 am

Re: Retiring at 24 - Extreme FIRE is it possible?

Post by randomguy » Fri Dec 13, 2019 11:41 am

ohai wrote:
Fri Dec 13, 2019 12:41 am


$350k itself is actually not unreasonable if you live in some place like San Francisco or New York City. Let's say you get $250k after Federal and local taxes. Your rent is $5k to $7k a month, kids in school for $40k a year each - it adds up.

I don't think Sam is being really honest about why he is going back to work though. For example, he wrote a lot before about getting passive income from a real estate crowd funding company, which went belly up. Why has "$250k " not changed for several years? Is he growing his assets at all, or was this just the high point?

Staying in San Francisco, the city, also seems like an artificial constraint - more like an excuse - when there are great suburbs like Lafayette, Pleasanton, San Ramon, etc. which offer the same cultural profile as (upper middle class) San Francisco, are in the same area, and have great school systems (one of his complaints about San Francisco is that public school there sucks).
At 250k you are in the top 10% of income for the city. Those other 90% of people seem to get by:). The problem is when you hang out mainly with . that top 10%, their mean income is absurd (something like 700k) so it is easy to feel poor (i.e. the keeping up with the jones) and get a very distorted view of life (i.e. paying 40k for private school instead of sending your kids to the OK public schools). Take a look at https://www.financialsamurai.com/why-5- ... -a-family/. You can either go man those people are really struggling to make ends meet, or you can go man I could cut 30k/year off that budget and maintain the same lifestyle. It is real easy to think of luxuries as necessities when all your friends have them.

Those suburbs are great. They are also 40-60 mins away in normal conditions. That is enough to disrupt social circles and routines. But yes at a high level the idea he has to move to the middle of nowhere where he would be more of a racial minority to save money is absurd.

From how I read his blog over the years, I think Sam has always been pretty dependent on working to make ends meet. Maybe blogging isn't as profitable as it was a couple years back. Or he is as burned out of doing it now as he was working his previous job. If you were FI in 2012, you should have a huge margin of saftey by now. If you switched jobs, it would be easy to still not be FI.

ohai
Posts: 1327
Joined: Wed Dec 27, 2017 2:10 pm

Re: Retiring at 24 - Extreme FIRE is it possible?

Post by ohai » Fri Dec 13, 2019 11:44 am

wrongfunds wrote:
Fri Dec 13, 2019 9:06 am
BH forum seems to have definite antipathy towards the FIRE crowd in general. BH don't like FIRE individual who assume $30K as annual expenses and BH don't like $350K as annual expense either. They both are equally maligned.

Seems pretty ironic to me.
$350k is actually what people make in those places though. If, for instance, your job requires you to work in New York City, then that is what you're going to spend to have a comfortable standard of living by other areas' standards.

Of course, in retirement, it might not make sense, since you won't be geographically constrained to that degree.

smitcat
Posts: 5896
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Re: Retiring at 24 - Extreme FIRE is it possible?

Post by smitcat » Fri Dec 13, 2019 11:50 am

ohai wrote:
Fri Dec 13, 2019 11:44 am
wrongfunds wrote:
Fri Dec 13, 2019 9:06 am
BH forum seems to have definite antipathy towards the FIRE crowd in general. BH don't like FIRE individual who assume $30K as annual expenses and BH don't like $350K as annual expense either. They both are equally maligned.

Seems pretty ironic to me.
$350k is actually what people make in those places though. If, for instance, your job requires you to work in New York City, then that is what you're going to spend to have a comfortable standard of living by other areas' standards.

Of course, in retirement, it might not make sense, since you won't be geographically constrained to that degree.
"If, for instance, your job requires you to work in New York City, then that is what you're going to spend to have a comfortable standard of living by other areas' standards."
We know dozens of folks that work in NY city and make half that or less - most do commute but a few live in the city.

smitcat
Posts: 5896
Joined: Mon Nov 07, 2016 10:51 am

Re: Retiring at 24 - Extreme FIRE is it possible?

Post by smitcat » Fri Dec 13, 2019 11:53 am

smitcat wrote:
Fri Dec 13, 2019 11:50 am
ohai wrote:
Fri Dec 13, 2019 11:44 am
wrongfunds wrote:
Fri Dec 13, 2019 9:06 am
BH forum seems to have definite antipathy towards the FIRE crowd in general. BH don't like FIRE individual who assume $30K as annual expenses and BH don't like $350K as annual expense either. They both are equally maligned.

Seems pretty ironic to me.
$350k is actually what people make in those places though. If, for instance, your job requires you to work in New York City, then that is what you're going to spend to have a comfortable standard of living by other areas' standards.

Of course, in retirement, it might not make sense, since you won't be geographically constrained to that degree.
"If, for instance, your job requires you to work in New York City, then that is what you're going to spend to have a comfortable standard of living by other areas' standards."
We know dozens of folks that work in NY city and make half that or less - most do commute but a few live in the city.

There are also a number of sites that can provide data for salaries in NY city ….
https://smartasset.com/retirement/average-salary-in-nyc

ohai
Posts: 1327
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Re: Retiring at 24 - Extreme FIRE is it possible?

Post by ohai » Fri Dec 13, 2019 11:55 am

randomguy wrote:
Fri Dec 13, 2019 11:41 am
ohai wrote:
Fri Dec 13, 2019 12:41 am


$350k itself is actually not unreasonable if you live in some place like San Francisco or New York City. Let's say you get $250k after Federal and local taxes. Your rent is $5k to $7k a month, kids in school for $40k a year each - it adds up.

I don't think Sam is being really honest about why he is going back to work though. For example, he wrote a lot before about getting passive income from a real estate crowd funding company, which went belly up. Why has "$250k " not changed for several years? Is he growing his assets at all, or was this just the high point?

Staying in San Francisco, the city, also seems like an artificial constraint - more like an excuse - when there are great suburbs like Lafayette, Pleasanton, San Ramon, etc. which offer the same cultural profile as (upper middle class) San Francisco, are in the same area, and have great school systems (one of his complaints about San Francisco is that public school there sucks).
At 250k you are in the top 10% of income for the city. Those other 90% of people seem to get by:). The problem is when you hang out mainly with . that top 10%, their mean income is absurd (something like 700k) so it is easy to feel poor (i.e. the keeping up with the jones) and get a very distorted view of life (i.e. paying 40k for private school instead of sending your kids to the OK public schools). Take a look at https://www.financialsamurai.com/why-5- ... -a-family/. You can either go man those people are really struggling to make ends meet, or you can go man I could cut 30k/year off that budget and maintain the same lifestyle. It is real easy to think of luxuries as necessities when all your friends have them.

Those suburbs are great. They are also 40-60 mins away in normal conditions. That is enough to disrupt social circles and routines. But yes at a high level the idea he has to move to the middle of nowhere where he would be more of a racial minority to save money is absurd.

From how I read his blog over the years, I think Sam has always been pretty dependent on working to make ends meet. Maybe blogging isn't as profitable as it was a couple years back. Or he is as burned out of doing it now as he was working his previous job. If you were FI in 2012, you should have a huge margin of saftey by now. If you switched jobs, it would be easy to still not be FI.
Yes, there are some things you insist on paying more for that normal people don't. School is the best example - I know a lot of people who pay $50k for their kids' private elementary school. Public school is "average", but "bad" for top 1% people.

With that being said, other costs are unavoidable by location. If you are paying $7k to house your family of 4 in a 2br apartment, then your view on extravagant cost might change.

Commute cost would be irrelevant to Financial Samurai Sam if he didn't work in a 9-5 job. His excuse for insisting on San Francisco was culture and diversity, but he could easily go to those great suburbs, since he doesn't suffer a commute.

From reading his blog, I was always skeptical that his passive income was based on a reliable withdrawal rate on his assets. Most likely, he was in the $3 million range at retirement. This would probably never have been enough anyway.

TheOscarGuy
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Re: Retiring at 24 - Extreme FIRE is it possible?

Post by TheOscarGuy » Fri Dec 13, 2019 11:58 am

wolf359 wrote:
Thu Dec 12, 2019 2:10 pm
TheOscarGuy wrote:
Thu Dec 12, 2019 1:50 pm
elderwise wrote:
Wed Dec 11, 2019 10:56 am
How realistic is retiring at 24?

https://www.thesun.co.uk/news/10517743/ ... starbucks/

To make this a topic of discussion, and actionable I have some questions

- Is 760 K enough to retire with 50+ years to live
- Raising 2 kids and wife is also retired, how about if you suddenly have more kids? 8-)
- Just don't get how you can save 100% of your salary.Does this have to do with deferring income when you have RE passive income, but he also had a day job?

Reading about his personal situation, It also seems he got lucky buying RE through the run up and cashed out and exited RE
I wonder how much current long bull market has to do with stories like these. It seems very scary to me, but each his own I guess.
There is a reverse ageism bias around the word "retirement." There are many people who think that only old people can use the term "retired."

At 24, someone in this situation is making a living without a job. Maybe it's early retirement, semi-retired, pretirement, or even a lifestyle business. There's something to learn from it to apply to your own situation. The kid the article is about calls himself retired for the shock value, so he can sell his blog and consult early retirement to his tenants. Getting to the situation of financial independence where you don't have to rely on a traditional job is the real trick here. However, I think he's locking himself into an income level that is too low (too close to poverty level.) Why not build in some slack?
We get in trouble when we use words with different meaning. If he is using retirement for shock value as you say, maybe he isn't retired to begin with. You can call it what you will I guess, but you also need to be up for criticism stemming from someone using actual meaning of the word. In my mind retirement means I am not going to rely on making a single dime working to support myself.
My original comment was what I felt about the whole situation. You need to be more conservative if you are actually going to "retire" at the end of such a long bull market. I did not even know the age of this person until you brought it up!

randomguy
Posts: 9035
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Re: Retiring at 24 - Extreme FIRE is it possible?

Post by randomguy » Fri Dec 13, 2019 1:38 pm

ohai wrote:
Fri Dec 13, 2019 11:44 am
wrongfunds wrote:
Fri Dec 13, 2019 9:06 am
BH forum seems to have definite antipathy towards the FIRE crowd in general. BH don't like FIRE individual who assume $30K as annual expenses and BH don't like $350K as annual expense either. They both are equally maligned.

Seems pretty ironic to me.
$350k is actually what people make in those places though. If, for instance, your job requires you to work in New York City, then that is what you're going to spend to have a comfortable standard of living by other areas' standards.

Of course, in retirement, it might not make sense, since you won't be geographically constrained to that degree.
350k is what some people make. The other 90% seem to get by on a lot less:) There is nothing wrong with choosing to spend more. Just don't pretend that it is necessary, That is a result of living in a bubble where all your friends make 350k so you think that level of spending is normal. It comes across as out of touch.

wrongfunds
Posts: 2309
Joined: Tue Dec 21, 2010 3:55 pm

Re: Retiring at 24 - Extreme FIRE is it possible?

Post by wrongfunds » Fri Dec 13, 2019 2:43 pm

What is *your* definition of normal? Is it something that *you* are accustomed to?

Median for the country? State? County? Zipcode? Block?

Don't you see how "normal" does imply a value judgement?

ohai
Posts: 1327
Joined: Wed Dec 27, 2017 2:10 pm

Re: Retiring at 24 - Extreme FIRE is it possible?

Post by ohai » Fri Dec 13, 2019 2:53 pm

randomguy wrote:
Fri Dec 13, 2019 1:38 pm
ohai wrote:
Fri Dec 13, 2019 11:44 am
wrongfunds wrote:
Fri Dec 13, 2019 9:06 am
BH forum seems to have definite antipathy towards the FIRE crowd in general. BH don't like FIRE individual who assume $30K as annual expenses and BH don't like $350K as annual expense either. They both are equally maligned.

Seems pretty ironic to me.
$350k is actually what people make in those places though. If, for instance, your job requires you to work in New York City, then that is what you're going to spend to have a comfortable standard of living by other areas' standards.

Of course, in retirement, it might not make sense, since you won't be geographically constrained to that degree.
350k is what some people make. The other 90% seem to get by on a lot less:) There is nothing wrong with choosing to spend more. Just don't pretend that it is necessary, That is a result of living in a bubble where all your friends make 350k so you think that level of spending is normal. It comes across as out of touch.
Ok, put it this way then. If you are the sort of person who has the choice to make $350k (and live that lifestyle), is it "normal" to choose to do it? To many people, it is even like an obligation - the best schools for kids, for example, is probably a primary motivation.

smitcat
Posts: 5896
Joined: Mon Nov 07, 2016 10:51 am

Re: Retiring at 24 - Extreme FIRE is it possible?

Post by smitcat » Fri Dec 13, 2019 3:01 pm

ohai wrote:
Fri Dec 13, 2019 2:53 pm
randomguy wrote:
Fri Dec 13, 2019 1:38 pm
ohai wrote:
Fri Dec 13, 2019 11:44 am
wrongfunds wrote:
Fri Dec 13, 2019 9:06 am
BH forum seems to have definite antipathy towards the FIRE crowd in general. BH don't like FIRE individual who assume $30K as annual expenses and BH don't like $350K as annual expense either. They both are equally maligned.

Seems pretty ironic to me.
$350k is actually what people make in those places though. If, for instance, your job requires you to work in New York City, then that is what you're going to spend to have a comfortable standard of living by other areas' standards.

Of course, in retirement, it might not make sense, since you won't be geographically constrained to that degree.
350k is what some people make. The other 90% seem to get by on a lot less:) There is nothing wrong with choosing to spend more. Just don't pretend that it is necessary, That is a result of living in a bubble where all your friends make 350k so you think that level of spending is normal. It comes across as out of touch.
Ok, put it this way then. If you are the sort of person who has the choice to make $350k (and live that lifestyle), is it "normal" to choose to do it? To many people, it is even like an obligation - the best schools for kids, for example, is probably a primary motivation.
"To many people, it is even like an obligation - the best schools for kids, for example, is probably a primary motivation."
Keeping to the facts most folks in NY city make far less and take their lids schools seriously but commuting from areas where school are very good.
The NY City schools ratings compared to almost all adjoining areas within commuting distance is very easy to look up.

EnjoyIt
Posts: 4181
Joined: Sun Dec 29, 2013 8:06 pm

Re: Retiring at 24 - Extreme FIRE is it possible?

Post by EnjoyIt » Fri Dec 13, 2019 3:51 pm

LiterallyIronic wrote:
Fri Dec 13, 2019 10:58 am
smitcat wrote:
Thu Dec 12, 2019 11:33 am
LiterallyIronic wrote:
Thu Dec 12, 2019 11:21 am
I'm under the impression that you can retire at any age if you have 25x your annual expenses saved up.
"I'm under the impression that you can retire at any age if you have 25x your annual expenses saved up."
25X is a general rule that might work for a typical 25-30 year retirement given you believe in back testing.
For longer time periods and/or a more detailed description of longer time frames suggest you read the earlyrtirementnow site.
Start with the safe withdrawal rate series here....
https://earlyretirementnow.com/safe-wit ... te-series/
Oof, that article series is way, way above my pay grade. Not only do I not understand what's it's talking about, I can't stay interested in reading more than a few words at a time, so my eyes just skip around the page (which also contributes to me not understanding it, because I can't even force myself to read the text in order). Blah.

I'll just stick with the simple life. Save up my 25x and retire whenever I get to that $600k. And if I run into problems, I'll just cut back my spending. Don't know what I'd do with $2,000 per month with a paid off house, anyway.
I’m honestly amazed how someone can feel safe with $2k/month. Don’t get me wrong, I am impressed and not being judgmental. It would leave me with so little leeway if things do go as planned I would have a hard time trusting it and be able to live stress free.

I can see how it’s possible. Own a house in a low or no property tax state. House that is energy efficient so low utility costs. Free healthcare under the ACA. The rest is just food, cloths and entertainment.
A time to EVALUATE your jitters. | https://www.bogleheads.org/forum/viewtopic.php?f=10&t=79939&start=400#p5275418

stoptothink
Posts: 7865
Joined: Fri Dec 31, 2010 9:53 am

Re: Retiring at 24 - Extreme FIRE is it possible?

Post by stoptothink » Fri Dec 13, 2019 3:54 pm

EnjoyIt wrote:
Fri Dec 13, 2019 3:51 pm
LiterallyIronic wrote:
Fri Dec 13, 2019 10:58 am
smitcat wrote:
Thu Dec 12, 2019 11:33 am
LiterallyIronic wrote:
Thu Dec 12, 2019 11:21 am
I'm under the impression that you can retire at any age if you have 25x your annual expenses saved up.
"I'm under the impression that you can retire at any age if you have 25x your annual expenses saved up."
25X is a general rule that might work for a typical 25-30 year retirement given you believe in back testing.
For longer time periods and/or a more detailed description of longer time frames suggest you read the earlyrtirementnow site.
Start with the safe withdrawal rate series here....
https://earlyretirementnow.com/safe-wit ... te-series/
Oof, that article series is way, way above my pay grade. Not only do I not understand what's it's talking about, I can't stay interested in reading more than a few words at a time, so my eyes just skip around the page (which also contributes to me not understanding it, because I can't even force myself to read the text in order). Blah.

I'll just stick with the simple life. Save up my 25x and retire whenever I get to that $600k. And if I run into problems, I'll just cut back my spending. Don't know what I'd do with $2,000 per month with a paid off house, anyway.
I’m honestly amazed how someone can feel safe with $2k/month. Don’t get me wrong, I am impressed and not being judgmental. It would leave me with so little leeway if things do go as planned I would have a hard time trusting it and be able to live stress free.

I can see how it’s possible. Own a house in a low or no property tax state. House that is energy efficient so low utility costs. Free healthcare under the ACA. The rest is just food, cloths and entertainment.
Healthcare is the biggest question mark. Other than that, if you eliminated our mortgage and current reoccuring bills that will be gone in a year (wife's tuition and daycare), our family of 4 is <$2k/month on all other spending and our life is fantastic.

ohai
Posts: 1327
Joined: Wed Dec 27, 2017 2:10 pm

Re: Retiring at 24 - Extreme FIRE is it possible?

Post by ohai » Fri Dec 13, 2019 3:55 pm

smitcat wrote:
Fri Dec 13, 2019 3:01 pm
ohai wrote:
Fri Dec 13, 2019 2:53 pm
randomguy wrote:
Fri Dec 13, 2019 1:38 pm
ohai wrote:
Fri Dec 13, 2019 11:44 am
wrongfunds wrote:
Fri Dec 13, 2019 9:06 am
BH forum seems to have definite antipathy towards the FIRE crowd in general. BH don't like FIRE individual who assume $30K as annual expenses and BH don't like $350K as annual expense either. They both are equally maligned.

Seems pretty ironic to me.
$350k is actually what people make in those places though. If, for instance, your job requires you to work in New York City, then that is what you're going to spend to have a comfortable standard of living by other areas' standards.

Of course, in retirement, it might not make sense, since you won't be geographically constrained to that degree.
350k is what some people make. The other 90% seem to get by on a lot less:) There is nothing wrong with choosing to spend more. Just don't pretend that it is necessary, That is a result of living in a bubble where all your friends make 350k so you think that level of spending is normal. It comes across as out of touch.
Ok, put it this way then. If you are the sort of person who has the choice to make $350k (and live that lifestyle), is it "normal" to choose to do it? To many people, it is even like an obligation - the best schools for kids, for example, is probably a primary motivation.
"To many people, it is even like an obligation - the best schools for kids, for example, is probably a primary motivation."
Keeping to the facts most folks in NY city make far less and take their lids schools seriously but commuting from areas where school are very good.
The NY City schools ratings compared to almost all adjoining areas within commuting distance is very easy to look up.
Sure, but in the end, there is still an extremely positive correlation between income, test scores, college rates, and college ranking of kids. That money is paying for something.

"Most people take school seriously": unquantifiable. Who knows who is doing what and commuting where. Rich kids = better grades, better college, better future. That is the statistical fact.

smitcat
Posts: 5896
Joined: Mon Nov 07, 2016 10:51 am

Re: Retiring at 24 - Extreme FIRE is it possible?

Post by smitcat » Fri Dec 13, 2019 4:02 pm

ohai wrote:
Fri Dec 13, 2019 3:55 pm
smitcat wrote:
Fri Dec 13, 2019 3:01 pm
ohai wrote:
Fri Dec 13, 2019 2:53 pm
randomguy wrote:
Fri Dec 13, 2019 1:38 pm
ohai wrote:
Fri Dec 13, 2019 11:44 am


$350k is actually what people make in those places though. If, for instance, your job requires you to work in New York City, then that is what you're going to spend to have a comfortable standard of living by other areas' standards.

Of course, in retirement, it might not make sense, since you won't be geographically constrained to that degree.
350k is what some people make. The other 90% seem to get by on a lot less:) There is nothing wrong with choosing to spend more. Just don't pretend that it is necessary, That is a result of living in a bubble where all your friends make 350k so you think that level of spending is normal. It comes across as out of touch.
Ok, put it this way then. If you are the sort of person who has the choice to make $350k (and live that lifestyle), is it "normal" to choose to do it? To many people, it is even like an obligation - the best schools for kids, for example, is probably a primary motivation.
"To many people, it is even like an obligation - the best schools for kids, for example, is probably a primary motivation."
Keeping to the facts most folks in NY city make far less and take their lids schools seriously but commuting from areas where school are very good.
The NY City schools ratings compared to almost all adjoining areas within commuting distance is very easy to look up.
Sure, but in the end, there is still an extremely positive correlation between income, test scores, college rates, and college ranking of kids. That money is paying for something.

"Most people take school seriously": unquantifiable. Who knows who is doing what and commuting where. Rich kids = better grades, better college, better future. That is the statistical fact.

"Sure, but in the end, there is still an extremely positive correlation between income, test scores, college rates, and college ranking of kids. That money is paying for something.
"Most people take school seriously": unquantifiable. Who knows who is doing what and commuting where. Rich kids = better grades, better college, better future. That is the statistical fact."

I was just adding some facts to the NY City post on salary and schools - average salaries are not near $350K, actually less than a 1/4 of that.
A huge number of folks commute to NY City for their jobs and therefore the schools their kids attend are not City schools.

LiterallyIronic
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Re: Retiring at 24 - Extreme FIRE is it possible?

Post by LiterallyIronic » Fri Dec 13, 2019 5:12 pm

EnjoyIt wrote:
Fri Dec 13, 2019 3:51 pm
LiterallyIronic wrote:
Fri Dec 13, 2019 10:58 am
smitcat wrote:
Thu Dec 12, 2019 11:33 am
LiterallyIronic wrote:
Thu Dec 12, 2019 11:21 am
I'm under the impression that you can retire at any age if you have 25x your annual expenses saved up.
"I'm under the impression that you can retire at any age if you have 25x your annual expenses saved up."
25X is a general rule that might work for a typical 25-30 year retirement given you believe in back testing.
For longer time periods and/or a more detailed description of longer time frames suggest you read the earlyrtirementnow site.
Start with the safe withdrawal rate series here....
https://earlyretirementnow.com/safe-wit ... te-series/
Oof, that article series is way, way above my pay grade. Not only do I not understand what's it's talking about, I can't stay interested in reading more than a few words at a time, so my eyes just skip around the page (which also contributes to me not understanding it, because I can't even force myself to read the text in order). Blah.

I'll just stick with the simple life. Save up my 25x and retire whenever I get to that $600k. And if I run into problems, I'll just cut back my spending. Don't know what I'd do with $2,000 per month with a paid off house, anyway.
I’m honestly amazed how someone can feel safe with $2k/month. Don’t get me wrong, I am impressed and not being judgmental. It would leave me with so little leeway if things do go as planned I would have a hard time trusting it and be able to live stress free.

I can see how it’s possible. Own a house in a low or no property tax state. House that is energy efficient so low utility costs. Free healthcare under the ACA. The rest is just food, cloths and entertainment.
Yeah, that about sums it up. With a house paid off at that point, that leaves, of course, the property tax plus homeowners insurance. That is at $126/month. At least, that's what going into escrow via my mortgage payment every month. Utility bills (electric, gas, water, sewer, trash, recycling, yard waste, Internet, and two cell phone lines) sits at roughly $275-$300 per month. Groceries for two adults and a toddler is about $225/month. So that's about $650 for those major things. Gasoline for the two cars is another heavy hitter, but that would go down without having to commute to/from work every day. Car insurance is $47/month for two drivers and two cars, but that would go down (theoretically) when putting fewer miles on the cars (unless it also goes up with age). But the point is that the necessities should be under $1000/month. For health insurance, I expect to have it free via ACA or Medicaid, due to having such low income, until qualifying for Medicare. Which should leave us plenty of excess for entertainment, clothes, auto repairs, etc. Hopefully we'll be fine. Fingers crossed.

ohai
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Re: Retiring at 24 - Extreme FIRE is it possible?

Post by ohai » Fri Dec 13, 2019 5:30 pm

smitcat wrote:
Fri Dec 13, 2019 4:02 pm
A huge number of folks commute to NY City for their jobs and therefore the schools their kids attend are not City schools.
I am not arguing with that. However, I don't see how this has much bearing on the argument that rich people put effort to earn more largely because they want to spend resources on education and advantages for their kids. The correlation between income and educational attainment shows that this spending likely produces results.

For what it's worth, there is a large variation in NY school quality. Up to elementary school levels, schools with high attainment tend to be in parts of the city with high incomes. At high school, there is some kind of test based admission system.

Among people who commute to work from outside the city, the richer people live in richer suburbs. Again, schools are a primary motivation for them choosing those expensive suburbs.

Keenobserver
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Re: Retiring at 24 - Extreme FIRE is it possible?

Post by Keenobserver » Fri Dec 13, 2019 6:09 pm

There are plenty of good public schools in NYC as there are plenty of bad ones. Really depends on neighborhood. My kids go to local public schools consistently rated 9/10. They just built a brand new building and I am perfectly happy with the school. I live in a nice middle class neighborhood.

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willthrill81
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Re: Retiring at 24 - Extreme FIRE is it possible?

Post by willthrill81 » Fri Dec 13, 2019 6:29 pm

wrongfunds wrote:
Fri Dec 13, 2019 2:43 pm
What is *your* definition of normal? Is it something that *you* are accustomed to?

Median for the country? State? County? Zipcode? Block?

Don't you see how "normal" does imply a value judgement?
Normal: "Conforming to a standard; usual, typical, or expected."

$350k household income is at the 97th percentile for the U.S.

The median household income for San Francisco is $110,816.

Being in the top 3% percent for the nation and earning more than triple the household income of one of the highest COL areas in the world can hardly be considered "usual, typical, or expected." That's my opinion, but I suspect that few disagree.

Again, if that's what Sam thinks he needs and he's willing to do what it takes to get there, that's his and his family's business.
“It's a dangerous business, Frodo, going out your door. You step onto the road, and if you don't keep your feet, there's no knowing where you might be swept off to.” J.R.R. Tolkien,The Lord of the Rings

3funder
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Re: Retiring at 24 - Extreme FIRE is it possible?

Post by 3funder » Sat Dec 14, 2019 1:05 pm

I know one thing: It wouldn't suit me.

Scooter57
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Re: Retiring at 24 - Extreme FIRE is it possible?

Post by Scooter57 » Sat Dec 14, 2019 2:09 pm

"Good schools" often turns out to have nothing to do with the education your kids will get. It often means schools filled with wealthy white kids and some tokens. Sending your kids to "Good"colleges leads to huge college debts or drained retirement funds, but if your kid chooses the wrong major they may still end up as a barrista. I saw a lot of my generation fall for that scam.

Give your kids life experiences that teach them to think. Send them to good enough public schools and state universities but only pay for college when they are old enough to know what they really want to do with their lives. A couple of years in the workforce before college really helps them use their college years more effectively. If they do well at State, they can get graduate school paid for somewhere really good. Doing something they love.

I live near several colleges, some very " good." Drunkenness and riot every weekend. Lots of rich kids at the good colleges driving their Mercedes etc, knowing that oligarch daddy will make sure they are taken care of. There are wonderful opportunities to learn at all these schools, especially the State U, but you can also graduate after taking lots of classes where you watch TV shows or collect grievances through history, or master Latin, and if daddy isn't well connected you end up flipping burgers. With the degree.

I have friends whose kids went to one local high school on the state's watchlist of failing schools who worked hard, did interesting things on their own, and got full freight scholarships to very good colleges and graduated without a load of debt.

I also know several of guys who didn't go to college and pull down $250k a year or more running their businesses. Also a woman author who tops bestseller lists who never went to college either but writes brilliantly.

Money is not the answer to helping your kids succeed

langlands
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Re: Retiring at 24 - Extreme FIRE is it possible?

Post by langlands » Sat Dec 14, 2019 3:37 pm

kadye wrote:
Fri Dec 13, 2019 9:53 am
wrongfunds wrote:
Fri Dec 13, 2019 9:06 am
BH forum seems to have definite antipathy towards the FIRE crowd in general. BH don't like FIRE individual who assume $30K as annual expenses and BH don't like $350K as annual expense either. They both are equally maligned.

Seems pretty ironic to me.
BH forum likes BH crowd, i.e. upper middle class (50 to 90 percentiles.)
Yep, I get the sense that the average Boglehead is frugal, disciplined, and very risk averse, and subconsciously thinks these are the right qualities to have. Thus, $30K is met with disapproval since it's too risky (what about unforeseen expenses or lifestyle creep?) and $350K is met with disapproval (and honestly a bit of sour grapes) because it's not frugal. Personally I think someone's utility function is his business and that this forum is at its best when discussing the technical intricacies of investing and financial issues.

Keenobserver
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Re: Retiring at 24 - Extreme FIRE is it possible?

Post by Keenobserver » Sat Dec 14, 2019 8:56 pm

I think any sane person would agree that someone who thinks he needs $350 k annualy to survive is elitist. I mean $350k annualy is quite well off anywhere in the world and noone " needs" that much money to survice. Shows what kind of a bubble some people are living in.

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willthrill81
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Re: Retiring at 24 - Extreme FIRE is it possible?

Post by willthrill81 » Sat Dec 14, 2019 10:15 pm

langlands wrote:
Sat Dec 14, 2019 3:37 pm
kadye wrote:
Fri Dec 13, 2019 9:53 am
wrongfunds wrote:
Fri Dec 13, 2019 9:06 am
BH forum seems to have definite antipathy towards the FIRE crowd in general. BH don't like FIRE individual who assume $30K as annual expenses and BH don't like $350K as annual expense either. They both are equally maligned.

Seems pretty ironic to me.
BH forum likes BH crowd, i.e. upper middle class (50 to 90 percentiles.)
Yep, I get the sense that the average Boglehead is frugal, disciplined, and very risk averse, and subconsciously thinks these are the right qualities to have. Thus, $30K is met with disapproval since it's too risky (what about unforeseen expenses or lifestyle creep?) and $350K is met with disapproval (and honestly a bit of sour grapes) because it's not frugal. Personally I think someone's utility function is his business and that this forum is at its best when discussing the technical intricacies of investing and financial issues.
There's a big gulf between living barely above the poverty line (though my wife and I lived for four years under the poverty line, and we were quite happy and content) and six times the median U.S. household income. That being said, I have no problem at all with someone wanting to spend either amount in retirement.

Where I do have an issue is when someone says that they need to spend a third of a million dollars a year in order to live comfortably. That's beyond snobbish.
“It's a dangerous business, Frodo, going out your door. You step onto the road, and if you don't keep your feet, there's no knowing where you might be swept off to.” J.R.R. Tolkien,The Lord of the Rings

ohai
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Re: Retiring at 24 - Extreme FIRE is it possible?

Post by ohai » Sat Dec 14, 2019 10:36 pm

I'm not saying that money guarantees better education and advantages, but it sure helps. If you had a choice to make $100k more, and that money could go to quantifiable better education for your kids - let's say a school with more teachers/student, better sports facilities, science, all kinds of activities, tutoring, and so on - wouldn't you choose to earn those extra resources?

I know a lot of schools in not-the-most affluent areas are considered good by national standards. However, there is always a better one. Some schools in the Bay Area send 10-20 kids a year to Stanford. That is a high standard - that is a better, limitless future for those kids. There are also always ways that will improve your kids' future that is often related to spending, or a demographic of higher spending.

I have a hard time as well with the notion of elitism based on some ultimately arbitrary spending level. You know, I grew up in a country with $10k median income. People in the US spend something like $50k to be considered adequate would have been beyond our imagination. If you are puzzled when someone in a different area or sub society of the country considers $350k to be normal, then imagine how you guys seemed to me when I was growing up in my dirty, poor part of the world. I never felt deprived as a kid, but I also never knew what your kids had that I did not.

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