FIRE [financial independence/retire early]

Non-investing personal finance issues including insurance, credit, real estate, taxes, employment and legal issues such as trusts and wills
22twain
Posts: 1217
Joined: Thu May 10, 2012 5:42 pm

Re: FIRE [financial independence/retire early]

Post by 22twain » Sat Dec 02, 2017 8:53 am

Tycoon wrote:
Sat Dec 02, 2017 8:37 am
The state owns a liquor store? Which state is this?
I bet it's Pennsylvania or Utah, where liquor stores are owned by the state. In North Carolina, they're owned by local ABC boards. In some other states, their operators are contracted by the state.

https://en.wikipedia.org/wiki/Alcoholic ... trol_state

randomguy
Posts: 5335
Joined: Wed Sep 17, 2014 9:00 am

Re: FIRE [financial independence/retire early]

Post by randomguy » Sat Dec 02, 2017 9:03 am

CnC wrote:
Sat Dec 02, 2017 8:21 am


Well I'm not hear to argue, :oops: but the 4% rule worked for the 1966 retiree. Despite record inflation.
https://investingforaliving.us/2013/09/ ... t-on-1966/

I am just pointing out that every research paper I have read shows that 4% is extreamly safe if you are willing to go back to work if needed within the first 5 years. If you guys disagree, feel free to that's what's beautiful about America.


As far as my field, it is EXTREMELY common for nearly everyone to retire at 55 and go get a job in the private sector making substantially more a year or two later. It is often a running joke that city and state engineers wait until we retire before we make the big bucks.

Perhaps the same is not true for business cubicle work. But, in my profession someone in their 40-50's with 25+ years of experience is infinitely more desirable than a kid out of college.
If the 4% rule worked or failed for 1966 is pretty dependant on your exact methodology (i.e. use government or corporate bonds, what term, incorporated any fees, took the money out at the start of the year or end,....). It doesn't really matter. The question is if you retired in 1966, when would you have gone back to work? If you waited til things got really sketchy, you are talking 8 or so years since you retired.

The people in your field are NOT retiring at 55. They are switching jobs.:) Again maybe you are in a field where you can retire at 40, sit on your ass for 3-10 years and then get a job at the same pay at the drop of the that even when unemployment is north of 10% and everyone is tightening their belts (i.e. it isn't common for the markets to be tanking and the economy to be roaring).

Again we are are talking about maybe the bottom 5-20% or so of outcomes (i.e. even if the 4% rule works you might not be able to handle the stress of watching your saving drop in half and having to take out 10% of the value to pay for your living expenses). How much to worry about them gets to be a very personal choice.

Bigbonds
Posts: 94
Joined: Wed Jun 07, 2017 11:51 am

Re: FIRE [financial independence/retire early]

Post by Bigbonds » Sat Dec 02, 2017 9:11 am

pennywise wrote:
Sat Dec 02, 2017 8:47 am
HoosierJim wrote:
Fri Dec 01, 2017 7:13 am


Here's a health plan in Pittsburgh - Married couple both 55 with income of approx $23k - Monthly premium is $4.62 - yes - I put the decimal point in the right place.



Image
However I believe this also proves another point made by several in this conversation. For a couple earning $23K, an out of pocket maximum of $10,000 is close to half their yearly income. A chronic illness, an accident, an age-related health condition....and suddenly they are living on $13,000 per year or need to come up with a sum that for this income level may be impossibly high.



So yes health care cost is indeed the elephant in the room at every income level.
Just because someone’s MAGI is 23k doesn’t mean that’s what they are actually living on. It’s extremely easy to have a MAGI that low and be living on 2 or 3x that amount annually. I am still shocked at how few bogleheads know about income manipulation and how easy it is to game the ACA.



This isn’t a silver plan either, I’m thinking the person buying this insurance may be uneducated about the benefits of the silver plan and far as cost sharing subsidies and limiting out of pocket. I think they might be assuming that just because it says it’s a “gold plan” it’s better, it’s not.

CnC
Posts: 340
Joined: Thu May 11, 2017 12:41 pm

Re: FIRE [financial independence/retire early]

Post by CnC » Sat Dec 02, 2017 9:16 am

randomguy wrote:
Sat Dec 02, 2017 9:03 am
CnC wrote:
Sat Dec 02, 2017 8:21 am


Well I'm not hear to argue, :oops: but the 4% rule worked for the 1966 retiree. Despite record inflation.
https://investingforaliving.us/2013/09/ ... t-on-1966/

I am just pointing out that every research paper I have read shows that 4% is extreamly safe if you are willing to go back to work if needed within the first 5 years. If you guys disagree, feel free to that's what's beautiful about America.


As far as my field, it is EXTREMELY common for nearly everyone to retire at 55 and go get a job in the private sector making substantially more a year or two later. It is often a running joke that city and state engineers wait until we retire before we make the big bucks.

Perhaps the same is not true for business cubicle work. But, in my profession someone in their 40-50's with 25+ years of experience is infinitely more desirable than a kid out of college.
If the 4% rule worked or failed for 1966 is pretty dependant on your exact methodology (i.e. use government or corporate bonds, what term, incorporated any fees, took the money out at the start of the year or end,....). It doesn't really matter. The question is if you retired in 1966, when would you have gone back to work? If you waited til things got really sketchy, you are talking 8 or so years since you retired.

The people in your field are NOT retiring at 55. They are switching jobs.:) Again maybe you are in a field where you can retire at 40, sit on your ass for 3-10 years and then get a job at the same pay at the drop of the that even when unemployment is north of 10% and everyone is tightening their belts (i.e. it isn't common for the markets to be tanking and the economy to be roaring).

Again we are are talking about maybe the bottom 5-20% or so of outcomes (i.e. even if the 4% rule works you might not be able to handle the stress of watching your saving drop in half and having to take out 10% of the value to pay for your living expenses). How much to worry about them gets to be a very personal choice.
Glad we are back to more pleasant debates. I call it retired because they get a retirement party, are receiving a pension and they typically take 1-2 years off and only work for 1-5 more years. If you call it switching jobs I can't really argue. It just is not like any job switch I know of.

And thus far that's the beauty of my field, government spending lags 3-5 years behind the markets because money is budgeted 5-10 years out. So when the economy tanks you can start with a company doing govt work. Thus far in my working life typically once the govt work slows down the commercial work has begun taking off. And no, I would start looking for work if I ever got much over 6% CRWD

Bigbonds
Posts: 94
Joined: Wed Jun 07, 2017 11:51 am

Re: FIRE [financial independence/retire early]

Post by Bigbonds » Sat Dec 02, 2017 9:27 am

I always find these topics on here so amusing. In my head it’s like picturing a bunch of 50 year olds standing around on an air field debating for 5 hours about if they should sky dive or not, the beifits, the risk, watching people younger than them walk by, get in the plane and saying stuff like “they don’t know the reality of the situation”. Then the younger people walk back by the older people still debating and they say stuff like “they got lucky this time, but next they will die for sure.”

There are a ton of parallels between skydiving and early retirement. Is it risky to retire with 25x your expenses, sure. Is jumping out of plane with a parachute risky, sure. If it works out right are both incredibly fun, you bet. In the end if you think you are really going to change anybody’s mind on doing either you’re delusional but I suppose there are worse ways people here could be wasting their time like watching tv. There is no right or wrong answer and mostly people are just trying to make themselves feel better about the choices they have made.

randomguy
Posts: 5335
Joined: Wed Sep 17, 2014 9:00 am

Re: FIRE [financial independence/retire early]

Post by randomguy » Sat Dec 02, 2017 11:05 am

And when something bad happens the young people go what a tragic accident while the old people go that was an expected outcome. If the 4% rule was remotely as safe as sky diving nobody would debate it.😁

manita
Posts: 3
Joined: Sat Dec 02, 2017 10:43 am

Re: FIRE [financial independence/retire early]

Post by manita » Sat Dec 02, 2017 11:09 am

There's lots of great discussion and analysis in the FIRE community about how the 4% "rule" isn't so much a rule as a starting place for one to evaluate one's own circumstances. A site I really like for SWR analyses is Early Retirement Now, which is run by a PHD economist.

HoosierJim
Posts: 424
Joined: Wed Mar 24, 2010 7:11 pm

Re: FIRE [financial independence/retire early]

Post by HoosierJim » Sat Dec 02, 2017 11:50 am

pennywise wrote:
Sat Dec 02, 2017 8:47 am
[.... out of pocket maximum of $10,000 is close to half their yearly income.
You could also pony up $48/month and get the silver plan with deductible assistance and limit the out of pocket to $2000



Image

bhsince87
Posts: 1528
Joined: Thu Oct 03, 2013 1:08 pm

Re: FIRE [financial independence/retire early]

Post by bhsince87 » Sat Dec 02, 2017 11:56 am

22twain wrote:
Sat Dec 02, 2017 8:53 am
Tycoon wrote:
Sat Dec 02, 2017 8:37 am
The state owns a liquor store? Which state is this?
I bet it's Pennsylvania or Utah, where liquor stores are owned by the state. In North Carolina, they're owned by local ABC boards. In some other states, their operators are contracted by the state.

https://en.wikipedia.org/wiki/Alcoholic ... trol_state
Yes, PA.
BH87

552BB
Posts: 153
Joined: Wed Mar 31, 2010 9:15 pm

Re: FIRE [financial independence/retire early]

Post by 552BB » Sat Dec 02, 2017 12:04 pm

Good morning BH,


randomguy wrote:
Sat Dec 02, 2017 11:05 am
And when something bad happens the young people go what a tragic accident while the old people go that was an expected outcome. If the 4% rule was remotely as safe as sky diving nobody would debate it.😁


Now that is funny.

I like Bigbonds comments too.



The comments made about FI and RE being two different things is a point. For this thread, they are related, but different.

There is a great study posted at madfientist (sorry, I don't know how to post a link) that talks about the 4% rule. It is very well done.

Their basic conclusion is that 4% is a perfectly good number. If you want to retire early, go to a lower number like maybe 3%, If you like working and continue into later retirement, you could use a higher number closer to 5%.

They really studied the issue and use a lot of different variables to study the different outcomes.

For Bogleheads, I think the 4% rule works well. They even talk about the effects of costs on the different outcomes.

Very well done.



:sharebeer

TheNightsToCome
Posts: 190
Joined: Fri Jun 30, 2017 11:48 pm

Re: FIRE [financial independence/retire early]

Post by TheNightsToCome » Sat Dec 02, 2017 12:08 pm

CnC wrote:
Sat Dec 02, 2017 8:21 am
randomguy wrote:
Sat Dec 02, 2017 7:38 am
sailaway wrote:
Fri Dec 01, 2017 7:35 pm
CnC wrote:
Fri Dec 01, 2017 4:37 pm
randomguy wrote:
Fri Dec 01, 2017 11:07 am


You are denying reality. A college grad is not remotely the same things as a 45-50 year old person who hasn't worked in their field for 5 years.
Why is it that if people disagree with others on the internet they love to say things like you are denying reality! Rather than they simply disagree.

A college grad is no where near as desired as a highly skilled 45 year old who has not been working for 1-2 years in my field.

Also, who would wait through 5 years of bad returns before they started looking for a job?


Don't worry about people who invested wisely and retired in 2000 prior to the bubble bust. Stock would be worth over 2x what they had in 2000. Dow is up 106% from 2000-2017 that's an average of 6% growth per year not including dividends. Assuming 60/40 split at retirement I don't see any issues.


Each of us have our own view on safety but I won't claim that anyone who doesn't agree with me is missing some grand reality boat.
You don't have to wait through five years of poor returns. You can retire happily for four years, then freak out during a long, aggressive bear market and then boom, you have five years without experience.
To be specific when would you have gone back to work if you retired in 1966. Returns weren't great but they also weren't horrible up until 1973. They you had a bad year but it wasn't really bad. And then you had another really bad one. So you are 9 years in before the fact you are in real trouble is obvious.

People taking 5 years off mid career is actually pretty normal for a lot of woman. Studies have shown those woman have a real hard time getting jobs. In times of low employment getting a job isn't a big deal. Employers lower standards to get someone. In tough times they start going, lets hire the college kid for half as much and spend the same amount of time training them up to speed. Maybe your field is special. Maybe it isn't. Hopefully you never need to find out.
Well I'm not hear to argue, :oops: but the 4% rule worked for the 1966 retiree. Despite record inflation.
https://investingforaliving.us/2013/09/ ... t-on-1966/

I am just pointing out that every research paper I have read shows that 4% is extreamly safe. And it goes from safe no bullet proof if you are willing to go back to work if needed within the first 5 years. If you guys disagree, feel free to that's what's beautiful about America.


As far as my field, it is EXTREMELY common for nearly everyone to retire at 55 and go get a job in the private sector making substantially more a year or two later. It is often a running joke that city and state engineers wait until we retire before we make the big bucks.

Perhaps the same is not true for business cubicle work. But, in my profession someone in their 40-50's with 25+ years of experience is infinitely more desirable than a kid out of college.
"I am just pointing out that every research paper I have read shows that 4% is extreamly safe."

Not that safe. From Pfau: https://retirementresearcher.com/intern ... wal-rates/

"In this new column, I focus on 50/50 portfolios of stocks and bonds using financial market data for 20 developed market countries since 1900. In the past, I have investigated this question assuming hypothetical investors in each country invested only in their local assets. Now, I also consider retirees in each country holding 50/50 globally diversified portfolios with returns calculated in terms of their local currency. These individuals do not hedge currency risk. Now we can see the impact of global diversification on withdrawal rate outcomes over rolling 30-year retirement periods.

Here are some key results:

For 50/50 portfolios invested domestically, across the 20 countries the historical success rate for the 4% rule was only 65.7%

With globally diversified 50/50 portfolios, the global historical success rate for the 4% rule increased to 78.3%. For US investors, the global portfolio supported a success rate of 80.9%.

Across the 20 countries, global portfolios supported higher withdrawal rates than domestic portfolios in 66.4% of cases. In the US, the split was even with global portfolios outperforming domestic portfolios precisely 50% of the time."


The SWR for the US since 1900 was 3.67% (rather than 4%): https://www.advisorperspectives.com/art ... awal-rates

User avatar
Tycoon
Posts: 1168
Joined: Wed Mar 28, 2012 7:06 pm

Re: FIRE [financial independence/retire early]

Post by Tycoon » Sat Dec 02, 2017 1:06 pm

bhsince87 wrote:
Sat Dec 02, 2017 11:56 am
22twain wrote:
Sat Dec 02, 2017 8:53 am
Tycoon wrote:
Sat Dec 02, 2017 8:37 am
The state owns a liquor store? Which state is this?
I bet it's Pennsylvania or Utah, where liquor stores are owned by the state. In North Carolina, they're owned by local ABC boards. In some other states, their operators are contracted by the state.

https://en.wikipedia.org/wiki/Alcoholic ... trol_state
Yes, PA.
Thanks, I've learned something new.
...I might be just beginning | I might be near the end. Enya | | C'est la vie

randomguy
Posts: 5335
Joined: Wed Sep 17, 2014 9:00 am

Re: FIRE [financial independence/retire early]

Post by randomguy » Sat Dec 02, 2017 3:22 pm

TheNightsToCome wrote:
Sat Dec 02, 2017 12:08 pm


"I am just pointing out that every research paper I have read shows that 4% is extreamly safe."

Not that safe. From Pfau: https://retirementresearcher.com/intern ... wal-rates/

"In this new column, I focus on 50/50 portfolios of stocks and bonds using financial market data for 20 developed market countries since 1900. In the past, I have investigated this question assuming hypothetical investors in each country invested only in their local assets. Now, I also consider retirees in each country holding 50/50 globally diversified portfolios with returns calculated in terms of their local currency. These individuals do not hedge currency risk. Now we can see the impact of global diversification on withdrawal rate outcomes over rolling 30-year retirement periods.

Here are some key results:

For 50/50 portfolios invested domestically, across the 20 countries the historical success rate for the 4% rule was only 65.7%

With globally diversified 50/50 portfolios, the global historical success rate for the 4% rule increased to 78.3%. For US investors, the global portfolio supported a success rate of 80.9%.

Across the 20 countries, global portfolios supported higher withdrawal rates than domestic portfolios in 66.4% of cases. In the US, the split was even with global portfolios outperforming domestic portfolios precisely 50% of the time."


The SWR for the US since 1900 was 3.67% (rather than 4%): https://www.advisorperspectives.com/art ... awal-rates
1) nobody thinks investing 100% in their home country is a sane strategy. Well other than Jack Bogle:)

2) 50/50 is probably too conservative from every study I have read. 60/40 or 70/30 tends to be the sweet spot and gets you another .1-.2% return. And yes I know that holding that much equity might give you an ulcer (and yeah I know ulcers aren't caused by stress).

3) His getting 91% for the US versus the 95% from other studies (i know some that go back to 1910.) makes me wonder what is different about his methodology. "Domestic Bonds" for example is a bit vague in terms of are we talking government treasuries only and what the average duration is. It seems like a minor quible but the small difference in performance (I think it is like .5% or so) is enough to really change the results. And what stocks you hold (S&P500 versus TSM) also gives you minor differences.

In the end we are looking for accuracy that doesn't matter. If the 4% rule never failed over the last 100 years, it doesn't mean the next 100 year SWR might not be 3.5%. Who knows how slow developed world population growth, random wars, revolutions, technological advancements and so on will change market returns. You make a guess and hope things work out.

I wonder how much of the antiFIre is more about the income level than chances of failure. I would feel very comfortable retiring tomorrow with a 50 year time frame and a 4% SWR. Why? Because I know I could cut my expenses from a bit over 160k/year to ~60k/year without making any sacrifices (helps that ~40k of that 160k goes to state and federal taxes and that saving of 15k in health insurance costs) that I would miss. Cutting another 20k could be done but I would miss those things:). The idea of cutting from 30k/year to say 15k/year is outside of most people's expectations on how they want to live even if it is only for a couple of years. And the same thing for jobs. Do you want to quit a job paying 100/hr and risk having to drive an Uber for 10 bucks?

CnC
Posts: 340
Joined: Thu May 11, 2017 12:41 pm

Re: FIRE [financial independence/retire early]

Post by CnC » Sun Dec 03, 2017 9:50 am

TheNightsToCome wrote:
Sat Dec 02, 2017 12:08 pm
CnC wrote:
Sat Dec 02, 2017 8:21 am
randomguy wrote:
Sat Dec 02, 2017 7:38 am
sailaway wrote:
Fri Dec 01, 2017 7:35 pm
CnC wrote:
Fri Dec 01, 2017 4:37 pm


Why is it that if people disagree with others on the internet they love to say things like you are denying reality! Rather than they simply disagree.

A college grad is no where near as desired as a highly skilled 45 year old who has not been working for 1-2 years in my field.

Also, who would wait through 5 years of bad returns before they started looking for a job?


Don't worry about people who invested wisely and retired in 2000 prior to the bubble bust. Stock would be worth over 2x what they had in 2000. Dow is up 106% from 2000-2017 that's an average of 6% growth per year not including dividends. Assuming 60/40 split at retirement I don't see any issues.


Each of us have our own view on safety but I won't claim that anyone who doesn't agree with me is missing some grand reality boat.
You don't have to wait through five years of poor returns. You can retire happily for four years, then freak out during a long, aggressive bear market and then boom, you have five years without experience.
To be specific when would you have gone back to work if you retired in 1966. Returns weren't great but they also weren't horrible up until 1973. They you had a bad year but it wasn't really bad. And then you had another really bad one. So you are 9 years in before the fact you are in real trouble is obvious.

People taking 5 years off mid career is actually pretty normal for a lot of woman. Studies have shown those woman have a real hard time getting jobs. In times of low employment getting a job isn't a big deal. Employers lower standards to get someone. In tough times they start going, lets hire the college kid for half as much and spend the same amount of time training them up to speed. Maybe your field is special. Maybe it isn't. Hopefully you never need to find out.
Well I'm not hear to argue, :oops: but the 4% rule worked for the 1966 retiree. Despite record inflation.
https://investingforaliving.us/2013/09/ ... t-on-1966/

I am just pointing out that every research paper I have read shows that 4% is extreamly safe. And it goes from safe no bullet proof if you are willing to go back to work if needed within the first 5 years. If you guys disagree, feel free to that's what's beautiful about America.


As far as my field, it is EXTREMELY common for nearly everyone to retire at 55 and go get a job in the private sector making substantially more a year or two later. It is often a running joke that city and state engineers wait until we retire before we make the big bucks.

Perhaps the same is not true for business cubicle work. But, in my profession someone in their 40-50's with 25+ years of experience is infinitely more desirable than a kid out of college.
"I am just pointing out that every research paper I have read shows that 4% is extreamly safe."

Not that safe. From Pfau: https://retirementresearcher.com/intern ... wal-rates/

"In this new column, I focus on 50/50 portfolios of stocks and bonds using financial market data for 20 developed market countries since 1900. In the past, I have investigated this question assuming hypothetical investors in each country invested only in their local assets. Now, I also consider retirees in each country holding 50/50 globally diversified portfolios with returns calculated in terms of their local currency. These individuals do not hedge currency risk. Now we can see the impact of global diversification on withdrawal rate outcomes over rolling 30-year retirement periods.

Here are some key results:

For 50/50 portfolios invested domestically, across the 20 countries the historical success rate for the 4% rule was only 65.7%

With globally diversified 50/50 portfolios, the global historical success rate for the 4% rule increased to 78.3%. For US investors, the global portfolio supported a success rate of 80.9%.

Across the 20 countries, global portfolios supported higher withdrawal rates than domestic portfolios in 66.4% of cases. In the US, the split was even with global portfolios outperforming domestic portfolios precisely 50% of the time."


The SWR for the US since 1900 was 3.67% (rather than 4%): https://www.advisorperspectives.com/art ... awal-rates
I will clarify for an American 4% is extremely safe. I'm sure many other less stable nations would require a much safer amount.


Because, let's face it you could have infinite money in 1920's Germany or modern Venezuela and your portfolio would fail.

I stand by my statement.

Da5id
Posts: 1863
Joined: Fri Feb 26, 2016 8:20 am

Re: FIRE [financial independence/retire early]

Post by Da5id » Mon Dec 04, 2017 9:00 am

CnC wrote:
Sun Dec 03, 2017 9:50 am
I will clarify for an American 4% is extremely safe. I'm sure many other less stable nations would require a much safer amount.
I think the better wording than "is extremely safe" would be "historically was quite safe". The 4% study was a bit flawed in that success was reached by hitting $0 on the day you die. Most people are less than content to see their assets dwindle alarmingly without any assurance of not outliving them. Of course, the 4% SWR isn't a real spending plan.

Whether the 4% "rule" projects into the future for US investors is unknowable. It is a fine starting point and target, and in practice more than most will ever save, but the near religious confidence placed in 4% strikes me as wishful thinking. And your logic isn't awesome. Japan hasn't had disasters or lack of stability since its market peaked in 1989 and Japan was considered the wonder of the developed world. No wars, no governments overthrown, etc. But things didn't work out well for the domestic investor there...

flyingaway
Posts: 1638
Joined: Fri Jan 17, 2014 10:19 am

Re: FIRE [financial independence/retire early]

Post by flyingaway » Mon Dec 04, 2017 9:57 am

Da5id wrote:
Mon Dec 04, 2017 9:00 am
CnC wrote:
Sun Dec 03, 2017 9:50 am
I will clarify for an American 4% is extremely safe. I'm sure many other less stable nations would require a much safer amount.
I think the better wording than "is extremely safe" would be "historically was quite safe". The 4% study was a bit flawed in that success was reached by hitting $0 on the day you die. Most people are less than content to see their assets dwindle alarmingly without any assurance of not outliving them. Of course, the 4% SWR isn't a real spending plan.

Whether the 4% "rule" projects into the future for US investors is unknowable. It is a fine starting point and target, and in practice more than most will ever save, but the near religious confidence placed in 4% strikes me as wishful thinking. And your logic isn't awesome. Japan hasn't had disasters or lack of stability since its market peaked in 1989 and Japan was considered the wonder of the developed world. No wars, no governments overthrown, etc. But things didn't work out well for the domestic investor there...
When you need a number for planning purpose, the 4% rule is much better than, e.g., 10 times of your final year salary.

Da5id
Posts: 1863
Joined: Fri Feb 26, 2016 8:20 am

Re: FIRE [financial independence/retire early]

Post by Da5id » Mon Dec 04, 2017 10:10 am

flyingaway wrote:
Mon Dec 04, 2017 9:57 am
Da5id wrote:
Mon Dec 04, 2017 9:00 am
CnC wrote:
Sun Dec 03, 2017 9:50 am
I will clarify for an American 4% is extremely safe. I'm sure many other less stable nations would require a much safer amount.
I think the better wording than "is extremely safe" would be "historically was quite safe". The 4% study was a bit flawed in that success was reached by hitting $0 on the day you die. Most people are less than content to see their assets dwindle alarmingly without any assurance of not outliving them. Of course, the 4% SWR isn't a real spending plan.

Whether the 4% "rule" projects into the future for US investors is unknowable. It is a fine starting point and target, and in practice more than most will ever save, but the near religious confidence placed in 4% strikes me as wishful thinking. And your logic isn't awesome. Japan hasn't had disasters or lack of stability since its market peaked in 1989 and Japan was considered the wonder of the developed world. No wars, no governments overthrown, etc. But things didn't work out well for the domestic investor there...
When you need a number for planning purpose, the 4% rule is much better than, e.g., 10 times of your final year salary.
I agree with that. I'm more of a general fan of 3-3.5% for people who are temperamentally conservative like me, and have gone lower than that for myself, but sure 4% is better than 10x final salary.

flyingaway
Posts: 1638
Joined: Fri Jan 17, 2014 10:19 am

Re: FIRE [financial independence/retire early]

Post by flyingaway » Mon Dec 04, 2017 10:12 am

Da5id wrote:
Mon Dec 04, 2017 10:10 am
flyingaway wrote:
Mon Dec 04, 2017 9:57 am
Da5id wrote:
Mon Dec 04, 2017 9:00 am
CnC wrote:
Sun Dec 03, 2017 9:50 am
I will clarify for an American 4% is extremely safe. I'm sure many other less stable nations would require a much safer amount.
I think the better wording than "is extremely safe" would be "historically was quite safe". The 4% study was a bit flawed in that success was reached by hitting $0 on the day you die. Most people are less than content to see their assets dwindle alarmingly without any assurance of not outliving them. Of course, the 4% SWR isn't a real spending plan.

Whether the 4% "rule" projects into the future for US investors is unknowable. It is a fine starting point and target, and in practice more than most will ever save, but the near religious confidence placed in 4% strikes me as wishful thinking. And your logic isn't awesome. Japan hasn't had disasters or lack of stability since its market peaked in 1989 and Japan was considered the wonder of the developed world. No wars, no governments overthrown, etc. But things didn't work out well for the domestic investor there...
When you need a number for planning purpose, the 4% rule is much better than, e.g., 10 times of your final year salary.
I agree with that. I'm more of a general fan of 3-3.5% for people who are temperamentally conservative like me, and have gone lower than that for myself, but sure 4% is better than 10x final salary.
I guess what you actually meant is to work for a few more years. I think that is prudent, and that is what I intend to do.

CnC
Posts: 340
Joined: Thu May 11, 2017 12:41 pm

Re: FIRE [financial independence/retire early]

Post by CnC » Mon Dec 04, 2017 10:24 am

Da5id wrote:
Mon Dec 04, 2017 9:00 am
CnC wrote:
Sun Dec 03, 2017 9:50 am
I will clarify for an American 4% is extremely safe. I'm sure many other less stable nations would require a much safer amount.
I think the better wording than "is extremely safe" would be "historically was quite safe". The 4% study was a bit flawed in that success was reached by hitting $0 on the day you die. Most people are less than content to see their assets dwindle alarmingly without any assurance of not outliving them. Of course, the 4% SWR isn't a real spending plan.

Whether the 4% "rule" projects into the future for US investors is unknowable. It is a fine starting point and target, and in practice more than most will ever save, but the near religious confidence placed in 4% strikes me as wishful thinking. And your logic isn't awesome. Japan hasn't had disasters or lack of stability since its market peaked in 1989 and Japan was considered the wonder of the developed world. No wars, no governments overthrown, etc. But things didn't work out well for the domestic investor there...

I feel like I'm going in circles here. The 4% rule is great rock solid wonderful all hail 4%. There, did that satisfy your "near religious confidence"?

I said it has worked virtually in every senerio in American history it is even more solid if You are willing to adjust your spending or go back to work!!!!! no clue how people keep managing to not read or understandthat part.

The other more dangerous part is you and nearly every other poster is chasing unicorns over rainbows to find the magical pot of gold that is 100% certainty. 100% certainty does not exist.

95% safe vs 96% safe vs 97% safe vs 99% safe is all very well meaningless when you have a 43% chance of dying in the next 30 years.

Each person to them selves, but if you are age 50 at 25x expenses and at 95% confidence ratio of your plan lasting 30 years but you do not think 25x is enough you want 50x instead which will require 10 additional years.

You have a 5% chance of dying before you retire completely negating the benefit from your saving at all. Because even at 100x your spending you can't reach 100% confidence ratio. Thus you are back below 95%

Da5id
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Re: FIRE [financial independence/retire early]

Post by Da5id » Mon Dec 04, 2017 10:41 am

CnC wrote:
Mon Dec 04, 2017 10:24 am
Da5id wrote:
Mon Dec 04, 2017 9:00 am
CnC wrote:
Sun Dec 03, 2017 9:50 am
I will clarify for an American 4% is extremely safe. I'm sure many other less stable nations would require a much safer amount.
I think the better wording than "is extremely safe" would be "historically was quite safe". The 4% study was a bit flawed in that success was reached by hitting $0 on the day you die. Most people are less than content to see their assets dwindle alarmingly without any assurance of not outliving them. Of course, the 4% SWR isn't a real spending plan.

Whether the 4% "rule" projects into the future for US investors is unknowable. It is a fine starting point and target, and in practice more than most will ever save, but the near religious confidence placed in 4% strikes me as wishful thinking. And your logic isn't awesome. Japan hasn't had disasters or lack of stability since its market peaked in 1989 and Japan was considered the wonder of the developed world. No wars, no governments overthrown, etc. But things didn't work out well for the domestic investor there...

I feel like I'm going in circles here. The 4% rule is great rock solid wonderful all hail 4%. There, did that satisfy your "near religious confidence"?

I said it has worked virtually in every senerio in American history it is even more solid if You are willing to adjust your spending or go back to work!!!!! no clue how people keep managing to not read or understandthat part.

The other more dangerous part is you and nearly every other poster is chasing unicorns over rainbows to find the magical pot of gold that is 100% certainty. 100% certainty does not exist.

95% safe vs 96% safe vs 97% safe vs 99% safe is all very well meaningless when you have a 43% chance of dying in the next 30 years.

Each person to them selves, but if you are age 50 at 25x expenses and at 95% confidence ratio of your plan lasting 30 years but you do not think 25x is enough you want 50x instead which will require 10 additional years.

You have a 5% chance of dying before you retire completely negating the benefit from your saving at all. Because even at 100x your spending you can't reach 100% confidence ratio. Thus you are back below 95%
I'm 50 and currently have assets to put me at 2.5% SWR or lower if home equity and future home downsize that seems likely counts. Not counting social security. May well retire next year, could very clearly retire "safely" now. No rainbows or unicorns needed for me. I'm not advocating, personally, 100x anything. Or 50x. For people with my temperament and beliefs, ~33x is a fine target, and it shouldn't take another 10 years to get there from 25x. If you need to use hyperbole to argue (100x? 50x? Nobody actually seriously advocates those I think), it suggests your main point is not very strong. IMHO of course.

I also think you are proposing something that is, IMHO, a bit risky even for 4% devotees. If you are "50" and at "25x expenses", unless you somehow know you will die at 80 why are you possibly citing the 30 year SWR numbers? If you are a healthy 50 year old couple, the chances of one of you surviving to > 80 is really quite high. Or one of you making it to >90 for that matter. And at 50 you may face some significant health insurance challenges in the gap to medicare resulting in unexpectedly high costs.

I do in fact agree with you that working "too long" is significant risk to be balanced against financial "security". I think if one enjoys ones work, keeping going a few extra years to hit 33x is my personal advice. If one hates work, or is OK going back to work (perhaps in a lower paying job), and/or is temperamentally OK watching their portfolio dwindle alarming in some scenarios confident in the knowledge that in the past it always worked out in the US and holding the belief that this will replicate in the future, great. Retire at 25x. We each get to choose which risks we take and how we balance the competing alternatives.

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Re: FIRE [financial independence/retire early]

Post by CnC » Mon Dec 04, 2017 1:09 pm

Da5id wrote:
Mon Dec 04, 2017 10:41 am
[

I'm 50 and currently have assets to put me at 2.5% SWR or lower if home equity and future home downsize that seems likely counts. Not counting social security. May well retire next year, could very clearly retire "safely" now. No rainbows or unicorns needed for me. I'm not advocating, personally, 100x anything. Or 50x. For people with my temperament and beliefs, ~33x is a fine target, and it shouldn't take another 10 years to get there from 25x. If you need to use hyperbole to argue (100x? 50x? Nobody actually seriously advocates those I think), it suggests your main point is not very strong. IMHO of course.

I also think you are proposing something that is, IMHO, a bit risky even for 4% devotees. If you are "50" and at "25x expenses", unless you somehow know you will die at 80 why are you possibly citing the 30 year SWR numbers? If you are a healthy 50 year old couple, the chances of one of you surviving to > 80 is really quite high. Or one of you making it to >90 for that matter. And at 50 you may face some significant health insurance challenges in the gap to medicare resulting in unexpectedly high costs.

I do in fact agree with you that working "too long" is significant risk to be balanced against financial "security". I think if one enjoys ones work, keeping going a few extra years to hit 33x is my personal advice. If one hates work, or is OK going back to work (perhaps in a lower paying job), and/or is temperamentally OK watching their portfolio dwindle alarming in some scenarios confident in the knowledge that in the past it always worked out in the US and holding the belief that this will replicate in the future, great. Retire at 25x. We each get to choose which risks we take and how we balance the competing alternatives.

"If you need to use hyperbole to argue (100x? 50x? Nobody actually seriously advocates those I think)"

You can't accuse me of hyperbole if you yourself are sitting at close to my over the top numbers. Saying 50x as an outlier when the person I am talking to is at 40x is not really far fetched.

By the way congratulations, that's truly a monumental achievement.

I just feel it is much more dangerous to tell young investers you need an outrageous amount of money before you can consider retirement than it is to tell them they only need a reasonable amount that has a very small chance of running out.

Because the human mind is designed to adapt to reasonable goals and if you tell a 30 year old he will need 5.5 million to retire (40x) vs 3.5 million (25x) the chances of him saying well screw it im never going to retire anyway is much greater than the chances of him running out of money.

I consider dying without getting to enjoy retirement a much more terrifying prospect than being 85+ and living in a state run facility after my mental and physical faculties have left me.

Each to their own, some people consider early death a "o well I'm dead so so regrets" zero cost option. I do not so that's probably why we differ.

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Re: FIRE [financial independence/retire early]

Post by Da5id » Mon Dec 04, 2017 1:28 pm

CnC wrote:
Mon Dec 04, 2017 1:09 pm
You can't accuse me of hyperbole if you yourself are sitting at close to my over the top numbers. Saying 50x as an outlier when the person I am talking to is at 40x is not really far fetched.
But there is a difference with retiring with 100x, or 50x, or 40x, and advocating for it. I don't see your point in the slightest, as I've never advocated for 40 or 50x. It wasn't even my personal target, it just has worked out that way.

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Re: FIRE [financial independence/retire early]

Post by marcopolo » Mon Dec 04, 2017 3:31 pm

CnC wrote:
Mon Dec 04, 2017 1:09 pm

Because the human mind is designed to adapt to reasonable goals and if you tell a 30 year old he will need 5.5 million to retire (40x) vs 3.5 million (25x) the chances of him saying well screw it im never going to retire anyway is much greater than the chances of him running out of money.
I largely agree with your line of thought. But, if that 30 year old is inclined to throw up their hands and give up, I am not convinced that presenting them with a target of $5.5M is going to be perceived as much different than a target of $3.5M. For most 30 year olds, i would think both of those numbers probably seem equally (un)reasonable, depending on their circumstances/outlook.
Once in a while you get shown the light, in the strangest of places if you look at it right.

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Re: FIRE [financial independence/retire early]

Post by CnC » Mon Dec 04, 2017 3:39 pm

marcopolo wrote:
Mon Dec 04, 2017 3:31 pm
CnC wrote:
Mon Dec 04, 2017 1:09 pm

Because the human mind is designed to adapt to reasonable goals and if you tell a 30 year old he will need 5.5 million to retire (40x) vs 3.5 million (25x) the chances of him saying well screw it im never going to retire anyway is much greater than the chances of him running out of money.
I largely agree with your line of thought. But, if that 30 year old is inclined to throw up their hands and give up, I am not convinced that presenting them with a target of $5.5M is going to be perceived as much different than a target of $3.5M. For most 30 year olds, i would think both of those numbers probably seem equally (un)reasonable, depending on their circumstances/outlook.
Well :mrgreen: since I am a 30ish year old I can assure you that the whole concept that I have a reasonable shot at hitting 3.5 million by 50 and being able to retire in 18 years is a huge wind in my sails and it really helps me enjoy seeing a huge chunk of every paycheck disapear into investments every month vs looking at the numbers and saying wow retirement at 60 sure I will be comfortable, but despite making sacrifices I'm only retiring a bit earlier than average.

It would really really put a damper on my excitement of retirement goals and I certainly wouldn't be posting here.

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Re: FIRE [financial independence/retire early]

Post by marcopolo » Mon Dec 04, 2017 3:53 pm

CnC wrote:
Mon Dec 04, 2017 3:39 pm
marcopolo wrote:
Mon Dec 04, 2017 3:31 pm
CnC wrote:
Mon Dec 04, 2017 1:09 pm

Because the human mind is designed to adapt to reasonable goals and if you tell a 30 year old he will need 5.5 million to retire (40x) vs 3.5 million (25x) the chances of him saying well screw it im never going to retire anyway is much greater than the chances of him running out of money.
I largely agree with your line of thought. But, if that 30 year old is inclined to throw up their hands and give up, I am not convinced that presenting them with a target of $5.5M is going to be perceived as much different than a target of $3.5M. For most 30 year olds, i would think both of those numbers probably seem equally (un)reasonable, depending on their circumstances/outlook.
Well :mrgreen: since I am a 30ish year old I can assure you that the whole concept that I have a reasonable shot at hitting 3.5 million by 50 and being able to retire in 18 years is a huge wind in my sails and it really helps me enjoy seeing a huge chunk of every paycheck disapear into investments every month vs looking at the numbers and saying wow retirement at 60 sure I will be comfortable, but despite making sacrifices I'm only retiring a bit earlier than average.

It would really really put a damper on my excitement of retirement goals and I certainly wouldn't be posting here.
Fair enough, I completely understand your thinking. You are fortunate to be able to see $3.5M as a reasonable target by age 50. I would posit that most 30 year olds don't feel that way. But, what you describe in this post regarding the larger target number is a far cry from "screw it im never going to retire anyway". That was my point, you are the type that is not inclined to throw your hands up and quit, so you wouldn't do that for either number. Someone who is inclined to just say "forget it" would likewise, probably do so for either number.

FWIW, I am 50, and am at about halfway between those two numbers. Glad i got past the first one, and really glad i don't feel the need to hit the second, as I am now planning to retire in a couple of months. When i was 30, neither of those numbers were even in my consciousness. You are way ahead of the curve compared to most.

Best of luck
:sharebeer
Once in a while you get shown the light, in the strangest of places if you look at it right.

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Re: FIRE [financial independence/retire early]

Post by randomguy » Mon Dec 04, 2017 4:11 pm

CnC wrote:
Mon Dec 04, 2017 10:24 am


I feel like I'm going in circles here. The 4% rule is great rock solid wonderful all hail 4%. There, did that satisfy your "near religious confidence"?

I said it has worked virtually in every senerio in American history it is even more solid if You are willing to adjust your spending or go back to work!!!!! no clue how people keep managing to not read or understandthat part.

The other more dangerous part is you and nearly every other poster is chasing unicorns over rainbows to find the magical pot of gold that is 100% certainty. 100% certainty does not exist.

95% safe vs 96% safe vs 97% safe vs 99% safe is all very well meaningless when you have a 43% chance of dying in the next 30 years.

Each person to them selves, but if you are age 50 at 25x expenses and at 95% confidence ratio of your plan lasting 30 years but you do not think 25x is enough you want 50x instead which will require 10 additional years.

You have a 5% chance of dying before you retire completely negating the benefit from your saving at all. Because even at 100x your spending you can't reach 100% confidence ratio. Thus you are back below 95%
Risk of dying depends on your age. The 35 year old does not have a 43% chance of dying in the next 30 years. The 55 year old one probably does. As you age it is pretty obvious that the value of time goes up over the value of money. For a 35 year old who can work 4 more years and go from a 4% to a 2.5% SWR, waiting is something to think about. A 75 year old on the other hand should have retired 10 years ago (assuming money is why they work).

Here is a question to think about. Why not retire at a 5% SWR. It too is perfectly safe if you are willing to go back to work. Why work the extra years to get to 4%. Heck what about a 7% SWR that has a 82.4% SWR over 45 years (your portfolio is 80% SV, 20% LT right?:))

Part of the issue is that it seems like there are tons of people who hate their job and their #1 goal is to quit. For those people taking on risk makes sense. A lot of people don't share that view and get enjoyment out of work. And before you think I am making stuff up, think about how many people you know volunteer to work for free. Work can provide a lot more meaning to someones life than things like travel and recreational activities.

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Re: FIRE [financial independence/retire early]

Post by Elsebet » Mon Dec 04, 2017 5:32 pm

I have a high savings rate not because I necessarily want to retire early but because I will likely be forced to retire early. I have seen older folks gently (or aggressively) pushed out of the megacorps I've worked for many times and I'm only 41. I very much expect to have employment issues around age 55 so I save to minimize the impact of that.

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Re: FIRE [financial independence/retire early]

Post by bhsince87 » Mon Dec 04, 2017 5:40 pm

Elsebet wrote:
Mon Dec 04, 2017 5:32 pm
I have a high savings rate not because I necessarily want to retire early but because I will likely be forced to retire early. I have seen older folks gently (or aggressively) pushed out of the megacorps I've worked for many times and I'm only 41. I very much expect to have employment issues around age 55 so I save to minimize the impact of that.
That's one reason I started saving and investing aggressively so long ago.

But now that I am 52, I must admit, the ability to walk away at any time by my own decision is pretty darn sweet!
BH87

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Re: FIRE [financial independence/retire early]

Post by msj16 » Mon Dec 04, 2017 7:07 pm

CnC wrote:
Mon Dec 04, 2017 10:24 am
Da5id wrote:
Mon Dec 04, 2017 9:00 am
CnC wrote:
Sun Dec 03, 2017 9:50 am
I will clarify for an American 4% is extremely safe. I'm sure many other less stable nations would require a much safer amount.
I think the better wording than "is extremely safe" would be "historically was quite safe". The 4% study was a bit flawed in that success was reached by hitting $0 on the day you die. Most people are less than content to see their assets dwindle alarmingly without any assurance of not outliving them. Of course, the 4% SWR isn't a real spending plan.

Whether the 4% "rule" projects into the future for US investors is unknowable. It is a fine starting point and target, and in practice more than most will ever save, but the near religious confidence placed in 4% strikes me as wishful thinking. And your logic isn't awesome. Japan hasn't had disasters or lack of stability since its market peaked in 1989 and Japan was considered the wonder of the developed world. No wars, no governments overthrown, etc. But things didn't work out well for the domestic investor there...

I feel like I'm going in circles here. The 4% rule is great rock solid wonderful all hail 4%. There, did that satisfy your "near religious confidence"?

I said it has worked virtually in every senerio in American history it is even more solid if You are willing to adjust your spending or go back to work!!!!! no clue how people keep managing to not read or understandthat part.

The other more dangerous part is you and nearly every other poster is chasing unicorns over rainbows to find the magical pot of gold that is 100% certainty. 100% certainty does not exist.

95% safe vs 96% safe vs 97% safe vs 99% safe is all very well meaningless when you have a 43% chance of dying in the next 30 years.

Each person to them selves, but if you are age 50 at 25x expenses and at 95% confidence ratio of your plan lasting 30 years but you do not think 25x is enough you want 50x instead which will require 10 additional years.

You have a 5% chance of dying before you retire completely negating the benefit from your saving at all. Because even at 100x your spending you can't reach 100% confidence ratio. Thus you are back below 95%
I really appreciated this perspective. Sometimes people lose the forest for the trees.

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Re: FIRE [financial independence/retire early]

Post by The Wizard » Mon Dec 04, 2017 7:24 pm

22twain wrote:
Sat Dec 02, 2017 8:53 am
Tycoon wrote:
Sat Dec 02, 2017 8:37 am
The state owns a liquor store? Which state is this?
I bet it's Pennsylvania or Utah, where liquor stores are owned by the state. In North Carolina, they're owned by local ABC boards. In some other states, their operators are contracted by the state.

https://en.wikipedia.org/wiki/Alcoholic ... trol_state
New Hampshire is an even better bet...
Attempted new signature...

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Re: FIRE [financial independence/retire early]

Post by jadd806 » Mon Dec 04, 2017 8:58 pm

CnC wrote:
Fri Dec 01, 2017 10:38 am
Also retiring in 07/08 passed the fire test. That down turn was not enough to fail the 4% rule. If you retired in 07 and kept blindly withdrawing 4% by now you would be free and clear.
Wow, so you have market data through the year 2037? Things might look good for those who retired in 2007, but to say that they are now "free and clear" is quite a hyperbole.

Edit: Nevermind, I now see that you're a troll from Reddit's /r/financialindependence forum. I thought your name seemed familiar.

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Re: FIRE [financial independence/retire early]

Post by CnC » Tue Dec 05, 2017 9:16 am

jadd806 wrote:
Mon Dec 04, 2017 8:58 pm
CnC wrote:
Fri Dec 01, 2017 10:38 am
Also retiring in 07/08 passed the fire test. That down turn was not enough to fail the 4% rule. If you retired in 07 and kept blindly withdrawing 4% by now you would be free and clear.
Wow, so you have market data through the year 2037? Things might look good for those who retired in 2007, but to say that they are now "free and clear" is quite a hyperbole.

Edit: Nevermind, I now see that you're a troll from Reddit's /r/financialindependence forum. I thought your name seemed familiar.
Ok I'll bite please direct me to any link in Reddit that I have posted? I always love it when people claim to know something about me that I do not.

I say people are free and clear because they are doing much better than any of the previous close calls. But someone like you who spouts off lies and accusations with no backup at all probably is no interested in doing any research that may shake their own fragile world view.

Here is some actual research vs your snarky meaningless comments.

https://www.kitces.com/blog/how-has-the ... al-crisis/

Of course they are not 100% safe and just like I SAID earlier 100% safety is a myth that doesn't exist.

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Re: FIRE [financial independence/retire early]

Post by BW1985 » Tue Dec 05, 2017 4:22 pm

I don't understand the name calling and animosity. If you believe in the 4% rule, use it. And if you don't, then don't use it. :sharebeer
"Squirrels figured out how to save eons ago. They buried acorns. Some, they dug up, for food. Others, they let to sprout, in new oak trees. We could learn from squirrels." -john94549

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Re: FIRE [financial independence/retire early]

Post by 552BB » Thu Dec 14, 2017 1:10 pm

Good morning BH,



Hello BW1985.


BW1985 wrote:
Tue Dec 05, 2017 4:22 pm
I don't understand the name calling and animosity. If you believe in the 4% rule, use it. And if you don't, then don't use it. :sharebeer


I agree with you.



I just got back from Puerto Vallarta Mexico.

I had a wonderful vacation.

When I am down there hanging out on the beach, or visiting with family, I take both a mental and physical vacation.

I generally don't get on the internet or watch too much TV.



Taking a mental break is a very good idea.



Re-reading some of the snarky posts that you reference, I'd say some here need to take a break.

Get a divorce from your computer screen, brew a hot cup of coffee, and go outside and notice the sunset, and the sunrise, and everything in between.



As to the OP, mark39, and the original question, I believe that you have had some great answers.

To me, the 4% rule was meant to be all inclusive to cover all expences. And it is a general rule.

Adjust that number up or down as you wish to get your desired output.



For me and my future planning, I will adjust that number to 3% for no other reason than I like to be conservative.



That works for me.



:sharebeer

tj
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Re: FIRE [financial independence/retire early]

Post by tj » Thu Dec 14, 2017 5:59 pm

It's certainly possible - even easy - to live on less than $30K a year in many areas.
You know, I honestly think I can live off half that if I curb my restaurant habits and don't travel abroad frequently. I don't have a mortgage because I paid cash...so the most expensive monthly cost is...uhh,food? After that, it's probably the HOA fees. It's all about spending priorities. In a decade, maybe health insurance is the highest line item, but if that's the case, I have to imagine my investments will inflate in value along with the increased costs of insurance....or a decade from now there could be a medicare type program for everybody. I'm not going to make life choices based on what might or might not happen.

I can entertain myself with spending very little $$$. I can spend nothing on TV and get tons of channels or I can spend an extra $30/mo for all the channels I would want. With music, a subscription to a streaming service is in the single digits per month. I can enjoy the outdoors for free. I used to think it was extreme, but now that I live that life, it's my normal.

Aside from all that, though, is the reality, that I'm not going to be spending down my assets with zero income coming in other than mutual fund dividends for the next 30 years. I've actually pursued auto and home insurance. What I like about working on commission with a fat savings accounts is I cna literally do this part time and I'll be ok. If I'm covering my costs and making some $$, Cool beans.

My problem with the 9-5 isn't the requirement of performing labor for compensation, it's that I have to do it for 40 hours each week every week less a few vacations days. There are so many other ways to make $$$ and maybe they are more risky in the long term, but I'm ok with that.

I don't call myself retired or financially independent, i'm just a willing unemployed guy whose taking it easy and taking some risks. If I get married and have kids, I would have to radically change my plans, but I'm living the life that I have been dealt today with plenty of investments built up for a very later tomorrow.

If I can't take some risks, nobody can.

My goal for 2018 is basically to earn enough profit from entrepreneurship and side gigs to cover my expenses. If I do that every year, I don't tap the portfolio. The whole point is that I can generate income spending less time to do it. The hourly rate is much higher, it's just not necessarily as scaleable.

Someone mentioned that it would be hard to get a $60/hr job. I never had a $60/hr job in the first place. It sounds to me that the The $60/hr career are just another form of golden handcuffs. The highest i was paid was roughly $35/hr. I guess going from $35/hr to $15 hr in an apocalyptic scenario just isn't as much of a big deal.

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Re: FIRE [financial independence/retire early]

Post by White Coat Investor » Thu Dec 14, 2017 6:47 pm

randomguy wrote:
Tue Nov 28, 2017 8:14 pm
mark39 wrote:
Tue Nov 28, 2017 6:59 pm
lostdog wrote:
Tue Nov 28, 2017 5:52 pm
A ton of blogs on FI now because of the 10 year bull run. They rarely talk about health insurance. When the bear market hits I wonder how many of those blogs will stick around.
I wonder the same thing.
I think it is more the blog market will saturate. MMM makes serious bank (300k+). RootOfGood is making an OK amount (50-100k if memory serves). And so on down the chain. The people at the bottom hoping to fund their retirement they way the top guys have done are going to have a rough road. They might start finding the work they put in isn't worth it.
First time I've heard of a FIRE blog bubble.
1) Invest you must 2) Time is your friend 3) Impulse is your enemy | 4) Basic arithmetic works 5) Stick to simplicity 6) Stay the course

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Re: FIRE [financial independence/retire early]

Post by PhysicianOnFIRE » Thu Dec 14, 2017 10:29 pm

I discovered Bogleheads at least a couple years before I became aware of the FIRE concept.

Bogleheads helped me get my finances in order. FIRE blogs helped me take a look at the bigger picture of what that money could mean for me and my family. I used to focus on earning and accumulating as much as I could. Once I realized I was FI, I relaxed on the extra work I was doing (locums work on my vacation time, etc...).

Now, I'm working part-time in the twelfth year of my anesthesia career. I found great value from both the Bogleheads and various FIRE blogs.

I agree that healthcare is an expense that needs to be factored in. It's going to be one of the bigger line items in our retirement budget and one of the biggest unknowns. But there are lots of unknowns. We're preparing by overshooting the 25x target by a healthy margin and expecting health care to be 25% of our overall expenses once I no longer have an employer subsidizing our insurance.

As far as the blogs go, those that are poor facsimiles of the leaders are not going to gain much traction and won't make much money (if that's their goal). Some are in it to be part of the community, share their unique angle, and find a tribe of people with similar values and goals. Some have found a niche that wasn't yet filled, like FIRE for the high-income professional, and have plans to be around for awhile. :wink:

:beer
-PoF

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Re: FIRE [financial independence/retire early]

Post by 552BB » Fri Dec 15, 2017 7:54 am

Good morning BH,



Early morning here on the west coast.


PhysicianOnFIRE wrote:
Thu Dec 14, 2017 10:29 pm
I discovered Bogleheads at least a couple years before I became aware of the FIRE concept.

Bogleheads helped me get my finances in order. FIRE blogs helped me take a look at the bigger picture of what that money could mean for me and my family. I used to focus on earning and accumulating as much as I could. Once I realized I was FI, I relaxed on the extra work I was doing (locums work on my vacation time, etc...).

Now, I'm working part-time in the twelfth year of my anesthesia career. I found great value from both the Bogleheads and various FIRE blogs.

I agree that healthcare is an expense that needs to be factored in. It's going to be one of the bigger line items in our retirement budget and one of the biggest unknowns. But there are lots of unknowns. We're preparing by overshooting the 25x target by a healthy margin and expecting health care to be 25% of our overall expenses once I no longer have an employer subsidizing our insurance.

As far as the blogs go, those that are poor facsimiles of the leaders are not going to gain much traction and won't make much money (if that's their goal). Some are in it to be part of the community, share their unique angle, and find a tribe of people with similar values and goals. Some have found a niche that wasn't yet filled, like FIRE for the high-income professional, and have plans to be around for awhile. :wink:

:beer
-PoF


Hello PoF.

I have your sight on my computer and I visit it often. I like it. I wish you success. It is one of my favorites.

I too am in a high income profession(airline pilot), and have thought about doing something similar.

What are your thoughts on that idea.

PM me if you wish.



Thanks.



:sharebeer

Da5id
Posts: 1863
Joined: Fri Feb 26, 2016 8:20 am

Re: FIRE [financial independence/retire early]

Post by Da5id » Fri Dec 15, 2017 8:35 am

White Coat Investor wrote:
Thu Dec 14, 2017 6:47 pm
First time I've heard of a FIRE blog bubble.
Heck, we might be experiencing a bubble bubble.

User avatar
PhysicianOnFIRE
Posts: 363
Joined: Fri Jan 08, 2016 3:46 pm
Location: Up North
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Re: FIRE [financial independence/retire early]

Post by PhysicianOnFIRE » Sun Dec 24, 2017 11:44 am

552BB wrote:
Fri Dec 15, 2017 7:54 am
Good morning BH,

Early morning here on the west coast.
PhysicianOnFIRE wrote:
Thu Dec 14, 2017 10:29 pm
I discovered Bogleheads at least a couple years before I became aware of the FIRE concept.

Bogleheads helped me get my finances in order. FIRE blogs helped me take a look at the bigger picture of what that money could mean for me and my family. I used to focus on earning and accumulating as much as I could. Once I realized I was FI, I relaxed on the extra work I was doing (locums work on my vacation time, etc...).

Now, I'm working part-time in the twelfth year of my anesthesia career. I found great value from both the Bogleheads and various FIRE blogs.

I agree that healthcare is an expense that needs to be factored in. It's going to be one of the bigger line items in our retirement budget and one of the biggest unknowns. But there are lots of unknowns. We're preparing by overshooting the 25x target by a healthy margin and expecting health care to be 25% of our overall expenses once I no longer have an employer subsidizing our insurance.

As far as the blogs go, those that are poor facsimiles of the leaders are not going to gain much traction and won't make much money (if that's their goal). Some are in it to be part of the community, share their unique angle, and find a tribe of people with similar values and goals. Some have found a niche that wasn't yet filled, like FIRE for the high-income professional, and have plans to be around for awhile. :wink:

:beer
-PoF
Hello PoF.

I have your sight on my computer and I visit it often. I like it. I wish you success. It is one of my favorites.

I too am in a high income profession(airline pilot), and have thought about doing something similar.

What are your thoughts on that idea.

PM me if you wish.

Thanks.

:sharebeer
Like cryptocurrencies, there's no limit on how many FIRE blogs can be created. I think there's enough interest in the topic of FI and RE to have different niches. A pilot is a high income career that obviously requires a lot of travel. Many businessmen could also relate -- they may not be pilots, but they're frequent passengers on your plane.

Someone may have beat you to it, though, unless this is you.

:beer
-PoF

Lynette
Posts: 1568
Joined: Sun Jul 27, 2014 9:47 am

Re: FIRE [financial independence/retire early]

Post by Lynette » Sun Dec 24, 2017 12:20 pm

I worked till 73 as I was scared of health-care costs in old age. My job was OK and I was able to travel extensively. What amazes me in all of these discussions, is that the focus seems to be on getting health care until 65 when one will be entitled for the magical program called Medicare. For starters one has to have at least 10 years of SS earnings. If one retires at 30, this is unlikely. Also these guys do not take into account that health care costs for the +65 are also skyrocketing. Problems with funding medicare will no doubt have the same stresses as pre-65.

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