5 ms·

Those numbers are pretty optimistic for expenses if you live somewhere expensive, ever plan to get into a long term relationship and/or have kids, or ever plan

Those numbers are pretty optimistic for expenses if you live somewhere expensive, ever plan to get into a long term relationship and/or have kids, or ever plan to make a down payment on a house. I think your tax calculation is way low too, but haven't done the math.

flowerlad 5y ago
Who needs to spend more than $5000 per month, not including mortgage?
- rwilson4 5y ago
  People with kids. My daughter's preschool is more expensive than my college was!
  - JKCalhoun 5y ago
    Wait until your nest is empty.
- showerst 5y ago
  You don't start out with a mortgage, unless have some unusual circumstances.
- deleted 5y ago
  [deleted]
- mikedouglas 5y ago
  Who has a mortgage without interest payments?
  - robertlagrant 5y ago
    I think in the US the interest is deductible.
    - lotsofpulp 5y ago
      A very small portion of people in the US benefit from the mortgage interest tax deduction ever since the standard deduction was greatly increased. You have to itemize (forego the standard deduction) in order to take advantage, and only 13% of tax filers itemize on their taxes in the US.
    - deleted 5y ago
      [deleted]
- colinmhayes 5y ago
  No one needs to do anything, but most families living in silicon valley are probably spending more than 5k a month. 8% is also probably too high. S&P historical returns are 7%, plus 15% tax.
bloaf 5y ago
If you do a little algebra and make some simple assumptions, it turns out that "years of work required for retirement" is a function of your savings ratio only, that is savings/take-home pay. https://www.mrmoneymustache.com/2012/01/13/the-shockingly-simple-math-behind-early-retirement/ https://www.mrmoneymustache.com/2012/01/13/the-shockingly-si...
- showerst 5y ago
  I like MMR, but like many people in that genre these over-simplified calculations only really work for a very narrow set of circumstances. What happens if you want to buy a condo in a competitive market that requires a 200k downpayment? Or have a medium-sized wedding? Or have two kids in day-care? I understand that the FIRE response would be that you don't _have_ to buy into all that stuff, but saying that it's just a little algebra and some simple assumptions is fantasy unless you want to live like a single 24 year old your whole life.
  - tejohnso 5y ago
    > unless you want to live like a single 24 year old your whole life. Controlling expenses and living a humble life style is pretty much the opposite of living like a single 24 year old. At least for me and most of the single 24 year olds I knew back then. It takes wisdom and maturity to realize that you don't need all that stuff. And if you can find a partner with the same outlook, you can certainly avoid spending tens of thousands on a wedding, or buying a condo in a competitive market. And there should be no need for day care if you're retired.
    - showerst 5y ago
      > It takes wisdom and maturity to realize that you don't need all that stuff This is _exactly_ what I take issue with. Look, "live below your means and be thoughtful about what spending will make you happier" is great advice. So is "plan for a future where you don't have to work". "Get a high paying remote job from a young age with no student loans, move somewhere cheap, actually find a partner there, don't dare find someone that makes teacher or non-professional salary or has health problems or student loans, wait until you're retired at 38 to have children, don't dare have kids with health problems or special needs, and lecture everyone else about how easy it is." is perhaps not the wise and mature advice you think it is. I'm just the right age (37) to have grown up alongside the FIRE thing. I have a number of friends who tried it, some of them to the point of being smarmy about it. 100% of them hit late twenties and realized that the combo of "making a high income while having very low expenses" involves significant trade-offs, and is super hard to keep up. All of my friends eventually abandoned it, but I don't think that's the rule. Describing FIRE as easy and saying that anyone who fails to do it is somehow less wise or immature is nonsense peddled by a bunch of people who retired early by writing "how to get retire early" blogs.
ryandrake 5y ago
The salary numbers are very optimistic, too. A small number of tech workers at a small number of FAANG companies in a small number of locations, will be making $250K from the start or even average that much throughout their careers. I know, I know, everyone on HN makes $400K and drives a Ferarri, but that's very optimistic number for most people. EDIT: Also: house should not be included in your net worth for the purposes of calculating retirement draw-down, unless you plan to liquidate your home equity to live on.

flowerlad 5y ago

Who needs to spend more than $5000 per month, not including mortgage?

rwilson4 5y ago
People with kids. My daughter's preschool is more expensive than my college was!
- JKCalhoun 5y ago
  Wait until your nest is empty.
showerst 5y ago
You don't start out with a mortgage, unless have some unusual circumstances.
deleted 5y ago
[deleted]
mikedouglas 5y ago
Who has a mortgage without interest payments?
- robertlagrant 5y ago
  I think in the US the interest is deductible.
  - lotsofpulp 5y ago
    A very small portion of people in the US benefit from the mortgage interest tax deduction ever since the standard deduction was greatly increased. You have to itemize (forego the standard deduction) in order to take advantage, and only 13% of tax filers itemize on their taxes in the US.
  - deleted 5y ago
    [deleted]
colinmhayes 5y ago
No one needs to do anything, but most families living in silicon valley are probably spending more than 5k a month. 8% is also probably too high. S&P historical returns are 7%, plus 15% tax.

bloaf 5y ago

If you do a little algebra and make some simple assumptions, it turns out that "years of work required for retirement" is a function of your savings ratio only, that is savings/take-home pay. https://www.mrmoneymustache.com/2012/01/13/the-shockingly-simple-math-behind-early-retirement/ https://www.mrmoneymustache.com/2012/01/13/the-shockingly-si...

showerst 5y ago
I like MMR, but like many people in that genre these over-simplified calculations only really work for a very narrow set of circumstances. What happens if you want to buy a condo in a competitive market that requires a 200k downpayment? Or have a medium-sized wedding? Or have two kids in day-care? I understand that the FIRE response would be that you don't _have_ to buy into all that stuff, but saying that it's just a little algebra and some simple assumptions is fantasy unless you want to live like a single 24 year old your whole life.
- tejohnso 5y ago
  > unless you want to live like a single 24 year old your whole life. Controlling expenses and living a humble life style is pretty much the opposite of living like a single 24 year old. At least for me and most of the single 24 year olds I knew back then. It takes wisdom and maturity to realize that you don't need all that stuff. And if you can find a partner with the same outlook, you can certainly avoid spending tens of thousands on a wedding, or buying a condo in a competitive market. And there should be no need for day care if you're retired.
  - showerst 5y ago
    > It takes wisdom and maturity to realize that you don't need all that stuff This is _exactly_ what I take issue with. Look, "live below your means and be thoughtful about what spending will make you happier" is great advice. So is "plan for a future where you don't have to work". "Get a high paying remote job from a young age with no student loans, move somewhere cheap, actually find a partner there, don't dare find someone that makes teacher or non-professional salary or has health problems or student loans, wait until you're retired at 38 to have children, don't dare have kids with health problems or special needs, and lecture everyone else about how easy it is." is perhaps not the wise and mature advice you think it is. I'm just the right age (37) to have grown up alongside the FIRE thing. I have a number of friends who tried it, some of them to the point of being smarmy about it. 100% of them hit late twenties and realized that the combo of "making a high income while having very low expenses" involves significant trade-offs, and is super hard to keep up. All of my friends eventually abandoned it, but I don't think that's the rule. Describing FIRE as easy and saying that anyone who fails to do it is somehow less wise or immature is nonsense peddled by a bunch of people who retired early by writing "how to get retire early" blogs.

ryandrake 5y ago

The salary numbers are very optimistic, too. A small number of tech workers at a small number of FAANG companies in a small number of locations, will be making $250K from the start or even average that much throughout their careers. I know, I know, everyone on HN makes $400K and drives a Ferarri, but that's very optimistic number for most people. EDIT: Also: house should not be included in your net worth for the purposes of calculating retirement draw-down, unless you plan to liquidate your home equity to live on.