3 ms·

Then you'll be in a safer position than the vast majority of people, and it pushes back your date. If this happens, that worldwide there's no growth for the ne

• dragonwriter 8y ago
  Alternatively: FIRE path: I deferred enjoyment but now my significant savings are wiped out in the economic collapse. Non-FIRE path: I enjoyed my life, and my insignificant savings are wiped out in the economic collapse. (Aside from economic collapses, there's is a similar potential that comes in the form of unexpected early death.)
  • IanCal 8y ago
    But your savings would not be "wiped out". They'd just be lower. You're making a big divide between the two paths though which really should not exist. If you are not enjoying your life, the fire plans won't work for you because they'll leave you with the same money to live on in retirement. There's a reason the common advice is to build the life you want then save for it. > Aside from economic collapses, there's is a similar potential that comes in the form of unexpected early death.) Which is unlikely but: 1. Retiring early gives me a greater chance of not working until I die. 2. If I die and am living with no spare savings and at the upper end of what I earn, my wife and son will struggle more without me. With significant savings they'll be financially secure. To be a bit shorter, my favourite response to "but what if I die young" is "but what if you don't?". Really, sacrificing income where your utility curve plateaus means you're giving up not much now for more later. And the realistic worst cases are mitigated significantly by having savings or investments. I'd rather risk not having some stuff I don't really care about now and dying at 40, than risk dying at 70 still working but with a few more trinkets around me.
    • dragonwriter 8y ago
      > But your savings would not be "wiped out" Having savings wiped out is a thing that actually happens in sufficiently significant economic collapses and FIRE is not proof against it. > Really, sacrificing income where your utility curve plateaus Empirically, the point at which utility derived from additional income becomes insignificant is vastly beyond the income level most people will ever reach. It's even beyond the point most tech workers will be able to reach, and even moreso what they will reach before any point where retirement would be “early”.
      • IanCal 8y ago
        > Having savings wiped out is a thing that actually happens in sufficiently significant economic collapses and FIRE is not proof against it. Can you point me to where this happened for a well diversified portfolio? Even the great depression on one index (dow jones) didn't see things drop to 0. There's nothing stopping you running out of money by spending it when things crash, no, but having more makes it less likely. And we can look at historical crashes and see if your savings would have lasted if withdrawn at certain rates. Having more savings makes it more likely you can weather significant economic collapses. That's surely not in dispute. > Empirically, the point at which utility derived from additional income becomes insignificant is vastly beyond the income level most people will ever reach Perhaps it's my fault for being overly precise though I thought the followup clarified the point. It's not about your utility curve going completely flat, but it will drop off significantly at some point. As your utility curve drops off, you're sacrificing less and less now for future gains. > and even moreso what they will reach before any point where retirement would be “early”. I really don't like the idea of having some cutoff for "early" retirement when it comes to planning. Most people need to plan for retirement at some age. It's all a trade, and there's risk obviously, but personally (and the reason to talk of utility curves is that it is personal) what I'm giving up now pales in comparison to what I'm likely to get in the future. In the worst cases I'm in a better position or provided for my family, and the cost to me now in terms of utility is low (though not 0).