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"They saved a sizable portion of their income over the next five years and drastically reduced expenses, until their net worth was around $1.2 million. " Every
by rhexs 8y ago
"They saved a sizable portion of their income over the next five years and drastically reduced expenses, until their net worth was around $1.2 million. "
Every millennial retires early story always has a unique anecdote like this. How exactly do you save $1.2 million over five years on 110K a year? Did he already have 800K in the bank before learning about early retirement? Is his wife a highly paid executive or doctor?
"Because his wife currently works, they have yet to draw on those accounts."
Some important information is missing here.
Also, while I don't think FIRE is impossible or unattainable, lean FIRE practitioners are gonna get walloped in the gut when we hit a nasty bear market after a decade of markets pushed higher by crazy monetary policy.
- cheez 8y agoI have two kids, and when I'm not in court with the ex for stupid reasons, my costs of living are about $75K in a very expensive city. It's completely doable, given the huge bull run on the indexes of the last decade.
- tspike 8y agoStock price and home appreciation probably had a lot to do with it, but that does seem like a very short time horizon.
- rhexs 8y agoGood point. Over that period, you probably could cash out on a house in Boulder and make a pretty easy 500K+ if you were lucky enough to purchase before the great weed deluge.
- astura 8y agoThen you'd have to move to Missouri to actually be able to spend any of that $500k. You couldn't "cash out" and simultaneously stay in Boulder, unless you moved from a four bedroom to an efficiency.
- muzz 8y agoLikely. Luck of good timing presented as clever frugality.
- analog31 8y agoI'm not sure that home appreciation helps, because you have to live in a home, and if you sell one home, you have to buy another. Or rent. But rents should track home prices. The way I figure it, home ownership helps because once you own a home, you can't be priced out of the housing market any more.
- acdha 8y agoIt helps if you can go from a very expensive market to a much cheaper one. The catch is that most people aren’t actually ready to give up their friends, put their kids into financially struggling schools, etc. and lower cost is easy to overshoot when e.g. it turns out that the new place should have had higher taxes to pay for necessary infrastructure. As with most of these stories, there’s something there but it’s usually heavily cherry-picked to get the eye catching effects.
- randomdata 8y agoYou many need to buy/rent another, but it can be in a lower cost market. Nothing says it has to be the house next door.
- amptorn 8y agoHe's just a stay-at-home parent. It's a completely conventional thing. Let me go ask my Mom how she "retired" at 25 and lived off her savings (and also Dad's wages).
- danieltillett 8y agoThe socially acceptable way to be a stay-at-home dad. I am not a failed breadwinner, I am retired and spending more time with my kids.
- GuiA 8y agoAdd up how much a nanny, preschool, etc. costs and compare it to a non upper tech salary, and you will quickly realize that stay at home parent != failed breadwinner. Especially when you’re starting to account for more than one kid.
- danieltillett 8y agoI am not suggesting that being a stay-at-home parent doesn't make sense, just that the "I am retired" is just cover for a man who is the stay-at-home parent. While it shouldn't be this way, unfortunately many see a stay-at-home dad as a failed breadwinner.
- smhost 8y agoMany people don't see it that way. People are generally understanding of changing circumstances and don't hold others to antiquated notions of masculinity.
- danieltillett 8y agoI don't disagree, but many don't and that is where the need for cover comes in.
- ryan-allen 8y ago
- fucking_tragedy 8y agoThis reminds me of that article about an early thirty something who paid-off a quarter million in student debt in X years[1]. Her parents bought her a condo, she got a job at her mother's non-profit and she lived with a second-income earning partner. The message was that if she could do it, anyone could do it. [1] https://www.businessinsider.com/how-ebony-horton-paid-off-220000-worth-of-student-loans-in-3-years-2017-3 https://www.businessinsider.com/how-ebony-horton-paid-off-22...
- klipt 8y agoAnyone[1]! [1] Who comes from wealth, marries wealth, and benefits from nepotism.
- ada1981 8y agoLife and the economy is very much a lottery. You get a ticket by signaling you spread memes that support the lottery economy. If you question the lottery or don’t spread its memes, you loose your ticket. <notice the soon to follow critique of this comment from folks hoping to keep their ticket!>
- madmax108 8y agoI read this comment and then the name of the HN commentor who posted it, and chuckled to myself! :)
- scottlegrand2 8y agoHouse appreciation and FAANG stocks would do the trick methinks. I hope he's diversified by now into some sort of reasonable mixture of stocks and bonds for the long run. 20 years ago I used to call this the "Live in California" investment plan where you buy a house and make a California salary. The trouble is that you need to cash out and move somewhere else someday to make this work. Then deep learning happened and everybody who understands backpropagation saw their salaries double or more so I'm still here hoping to win the lightning round or at least sticking around long enough so that when I retire my relatively modest lifestyle won't change much other than location.
- DoreenMichele 8y agoSkimming the article: His income was $110k. Hers seems to not be listed, but they plan to live on $40k and her work means they aren't yet dipping into savings, so presumably she makes at least $40k. Their net worth was $1.2 million, not their savings. For most Americans, equity in their house constitutes at least half of their net worth and in some places house appreciation is incredibly rapid tight now, like $100 per hour. They seem to have come up with a few talking points while not genuinely digging into the details. Okay, people want their privacy and yadda, but it winds up being kind of a case of how to lie with statistics. I'm cool with the FIRE movement existing. But articles like this are more like inspiration than a guide book. I get it: Actually doing this requires a lot more detailed information than a single article can give you. That's fine. But I basically agree that this approach is a bit misleading and I'm not crazy about it.
- manigandham 8y agoYes, that's the biggest sign: net worth. People seem to always confuse that with having liquid cash in the bank because it sounds nice, but it's rarely true and most people would have decent a net worth if they've accumulated a mortgage in a upward market.
- astura 8y agoMost of these "retire early" stories you'll hear in the media the person actually has a signifiant income stream. Blogging, landlording, Etsy shop, book sales, speaking fees, spousal support, part time job, whatever. It's kinda weird. Just like the "self made" stories that always include significant outside support, such as large gifts, huge interest free loans from family, or large inheritances. It's just how the media works. >Did he already have 800K in the bank before learning about early retirement? They probably already had significant assets considering his income and the fact they were dual income.
- danieltillett 8y agoThat is because those that actually retire early have no need for publicity. I know lots of people who have really retired in their 40s and surprising none of them have a need to be in the news.