5 ms·

Lately I've been thinking about all of the "F.I.R.E." and "Boglehead" blogs and forums that have proliferated over the past 5-10 years. What percentage of those

by spking 7y ago

Lately I've been thinking about all of the "F.I.R.E." and "Boglehead" blogs and forums that have proliferated over the past 5-10 years. What percentage of those people are panicking over their plunging index funds vs. those who are ignoring the day-to-day chaos?

servercobra 7y ago
The reddit FIRE subreddit has been surprisingly calm. But I also expect the people really panicking aren't posting.
- twiceaday 7y ago
  I bet you its calm because only the calm investors frequent that site. It's too boring for everybody else.
dmoy 7y ago
Even before this thing, there were a number of fire blogs that weren't super honest about the realism of their numbers. I can only imagine that there's more who are facing a ride awakening right now. For someone just following a boglehead index whatever, it should just be business as usual. Treat it as any other crash. That is, do nothing except maybe rebalance stock/bond ratio to match once or twice a year.
- dbsights 7y ago
  Except stocks and bonds are correlated now. So that strategy just, doesn't work any more
  - dmoy 7y ago
    That's fine. They can be correlated, so long as the bond one doesn't move nearly as much. You can accomplish the same thing. "Being correlated" doesn't make it useless.
  - twiceaday 7y ago
    Except correlation is irrelevant to the strategy when one asset is an order of magnitude more volatile than the other.
mulm 7y ago
This is anecdotal but the few documentaries I’ve seen on the early retirement people have mainly been about living really cheap, learning useful craftsmanship skills for fixing/improving homes and growing/making a lot of their foods from the basic ingredients. I think those skills will actually be rather useful now. A lot of them seem to be living off the revenue that talking about and selling their books on F.I.R.E. rather than the actual investments.
maximente 7y ago
my takeaway from FIRE is that it's largely about getting your spending under control (easier to reduce spending by $50K than earn $50K post-tax) and then getting enough of a cushion to do something better for you personally or the world that might not pay as much as your old job. so some people that did nothing but sit on the beach after FIREing may be uneasy, but a lot of people transition into other fields that just aren't necessarily as lucrative.
- roenxi 7y ago
  > So some people that did nothing but sit on the beach after FIREing may be uneasy. They'll be fine; they've been enjoying sitting on the beach. More savings doesn't protect someone from a market collapse, it just exposes them further. A rational long term investor - assuming the stock market was going to stay like this forever - would have avoided saving any money for the last few years and would probably have been sitting on the beach enjoying themselves.
marvin 7y ago
Judging from the state of the /r/financialindependence subreddit, they're not panicking at all yet. Maybe if there's another 30% drop.
deleted 7y ago
[deleted]
seibelj 7y ago
I thought the ultimate goal was to have enough in guaranteed fixed income (annuities, CDs, whatever) that no matter what happens you cover expenses. But maybe that's too conservative, even for those guys.
- spking 7y ago
  I wonder how the calculus changes in 0% or negative interest rate environments.
- r-s 7y ago
  Generally the FIRE crowd stays heavy in equities and considers a 3-4% withdraw rate to be safe. Will this slow down a lot of early retirement plans? Almost certainly. However the market is not 0, lots of these people still have substantial amounts of money saved.
rubidium 7y ago
I follow boglehead strategy. I’m riding this down and will ride it up. It’s an interesting ride but I’m not going to try and time anything. Still investing 70/30 s&p and bonds every 2 weeks. I’ve got lots of time left though (age 35). Time will tell if it was the right call!
- deleted 7y ago
  [deleted]
- robodale 7y ago
  I'm right there with you (although I'm 46). I'm doing regular buys into S&P, a little bonds, and even a few blue chip + high dividend individual stocks that have been beat down by the crash. The money I already had in stocks and stock market funds...I'm leaving that alone. Those will come back over time, and I'll have all the extra that I bought during the crash and recovery at discounted prices.
- RickJWagner 7y ago
  Great strategy. I think Bogleheads is the single best resource for finances on the web.

by spking 7y ago

servercobra 7y ago

The reddit FIRE subreddit has been surprisingly calm. But I also expect the people really panicking aren't posting.

twiceaday 7y ago
I bet you its calm because only the calm investors frequent that site. It's too boring for everybody else.

dmoy 7y ago

Even before this thing, there were a number of fire blogs that weren't super honest about the realism of their numbers. I can only imagine that there's more who are facing a ride awakening right now. For someone just following a boglehead index whatever, it should just be business as usual. Treat it as any other crash. That is, do nothing except maybe rebalance stock/bond ratio to match once or twice a year.

dbsights 7y ago
Except stocks and bonds are correlated now. So that strategy just, doesn't work any more
- dmoy 7y ago
  That's fine. They can be correlated, so long as the bond one doesn't move nearly as much. You can accomplish the same thing. "Being correlated" doesn't make it useless.
- twiceaday 7y ago
  Except correlation is irrelevant to the strategy when one asset is an order of magnitude more volatile than the other.

mulm 7y ago

This is anecdotal but the few documentaries I’ve seen on the early retirement people have mainly been about living really cheap, learning useful craftsmanship skills for fixing/improving homes and growing/making a lot of their foods from the basic ingredients. I think those skills will actually be rather useful now. A lot of them seem to be living off the revenue that talking about and selling their books on F.I.R.E. rather than the actual investments.

maximente 7y ago

my takeaway from FIRE is that it's largely about getting your spending under control (easier to reduce spending by $50K than earn $50K post-tax) and then getting enough of a cushion to do something better for you personally or the world that might not pay as much as your old job. so some people that did nothing but sit on the beach after FIREing may be uneasy, but a lot of people transition into other fields that just aren't necessarily as lucrative.

roenxi 7y ago
> So some people that did nothing but sit on the beach after FIREing may be uneasy. They'll be fine; they've been enjoying sitting on the beach. More savings doesn't protect someone from a market collapse, it just exposes them further. A rational long term investor - assuming the stock market was going to stay like this forever - would have avoided saving any money for the last few years and would probably have been sitting on the beach enjoying themselves.

marvin 7y ago

Judging from the state of the /r/financialindependence subreddit, they're not panicking at all yet. Maybe if there's another 30% drop.

deleted 7y ago

[deleted]

seibelj 7y ago

I thought the ultimate goal was to have enough in guaranteed fixed income (annuities, CDs, whatever) that no matter what happens you cover expenses. But maybe that's too conservative, even for those guys.

spking 7y ago
I wonder how the calculus changes in 0% or negative interest rate environments.
r-s 7y ago
Generally the FIRE crowd stays heavy in equities and considers a 3-4% withdraw rate to be safe. Will this slow down a lot of early retirement plans? Almost certainly. However the market is not 0, lots of these people still have substantial amounts of money saved.

rubidium 7y ago

I follow boglehead strategy. I’m riding this down and will ride it up. It’s an interesting ride but I’m not going to try and time anything. Still investing 70/30 s&p and bonds every 2 weeks. I’ve got lots of time left though (age 35). Time will tell if it was the right call!

deleted 7y ago
[deleted]
robodale 7y ago
I'm right there with you (although I'm 46). I'm doing regular buys into S&P, a little bonds, and even a few blue chip + high dividend individual stocks that have been beat down by the crash. The money I already had in stocks and stock market funds...I'm leaving that alone. Those will come back over time, and I'll have all the extra that I bought during the crash and recovery at discounted prices.
RickJWagner 7y ago
Great strategy. I think Bogleheads is the single best resource for finances on the web.