6 ms·

The points about choosing index funds and putting 100% in stocks are good tips for most people (at least those who are financially secure enough to know they wo

The points about choosing index funds and putting 100% in stocks are good tips for most people (at least those who are financially secure enough to know they won't be force to sell during a downturn). But the particulars about living on 18K in Seattle and starting retirement after only 3-5 years of making six figures are probably not generalizable unless you retire to a very cheap foreign country or live with your parents.

lhorie 5y ago
I'm actually curious about how the math is supposed to work out in the long term. When I first started renting in Toronto, I was paying something to the tune of $400/mo in rent. I had calculated that at a >$700/mo burn rate, even a relatively modest 200k piggy bank w/ a 6~7% ROI would be able to carry me had I decided to go full-on FIRE. But fast forward two decades, that's not what rent there costs anymore. Sharing a crappy 2 bedroom there nowadays would set you back at least $1000/mo. Everything else has similarly doubled in price. So to make the math work out, the principal would have had to have grown at least as much, but if you're drawing out your investment gains, it won't really grow nearly as much as it needs to in order to keep up, would it? For someone retiring in their 30s, the savings need to survive at least a few more doublings of CoL. And this is just cold math, ignoring the human factor. In the US, there's also the question of health insurance (deductibles alone for a chronic condition can take a big chunk out of a 18k/yr budget). Also, something I think young people don't fully appreciate is that people change as they age. Sometimes that means desires to pursue more costly activities, or starting to want certain types of material things. Maybe you want a dog after all. I've read about a few cases of FIRE relationships souring precisely because of this. The "move to a foreign country" thing is also something I'm curious about. It gets thrown around as a sort of ultimate magical spell to save money, but at least in my experience (I have dual citizenship and a US green card), it's not exactly straightforward to permanently immigrate to another country, especially if you're not working. Language barrier can also be an issue, especially if you left all your social circles behind (again, from first-hand experience)
auslegung 5y ago
> living on 18K in Seattle ... are probably not generalizable Probably not, but spending less than you make, and sometimes far less, is one of the best ways to "make more money". If one is able to cut expenses by a few hundred dollars a month (I know that's completely impossible for plenty of people), that adds up. In fact, $300 invested monthly for 30 years at 10% interest is... 651,396.33. I think one of the takeaways from this article is to see where you can cut your spending, and do that. But before doing that, have an inspiring goal that makes it easy (or at least much easier) to do. Simply "spending less" isn't motivating for most people. However, retiring when I turn 50 might be.

lhorie 5y ago

I'm actually curious about how the math is supposed to work out in the long term. When I first started renting in Toronto, I was paying something to the tune of $400/mo in rent. I had calculated that at a >$700/mo burn rate, even a relatively modest 200k piggy bank w/ a 6~7% ROI would be able to carry me had I decided to go full-on FIRE. But fast forward two decades, that's not what rent there costs anymore. Sharing a crappy 2 bedroom there nowadays would set you back at least $1000/mo. Everything else has similarly doubled in price. So to make the math work out, the principal would have had to have grown at least as much, but if you're drawing out your investment gains, it won't really grow nearly as much as it needs to in order to keep up, would it? For someone retiring in their 30s, the savings need to survive at least a few more doublings of CoL. And this is just cold math, ignoring the human factor. In the US, there's also the question of health insurance (deductibles alone for a chronic condition can take a big chunk out of a 18k/yr budget). Also, something I think young people don't fully appreciate is that people change as they age. Sometimes that means desires to pursue more costly activities, or starting to want certain types of material things. Maybe you want a dog after all. I've read about a few cases of FIRE relationships souring precisely because of this. The "move to a foreign country" thing is also something I'm curious about. It gets thrown around as a sort of ultimate magical spell to save money, but at least in my experience (I have dual citizenship and a US green card), it's not exactly straightforward to permanently immigrate to another country, especially if you're not working. Language barrier can also be an issue, especially if you left all your social circles behind (again, from first-hand experience)

auslegung 5y ago

> living on 18K in Seattle ... are probably not generalizable Probably not, but spending less than you make, and sometimes far less, is one of the best ways to "make more money". If one is able to cut expenses by a few hundred dollars a month (I know that's completely impossible for plenty of people), that adds up. In fact, $300 invested monthly for 30 years at 10% interest is... 651,396.33. I think one of the takeaways from this article is to see where you can cut your spending, and do that. But before doing that, have an inspiring goal that makes it easy (or at least much easier) to do. Simply "spending less" isn't motivating for most people. However, retiring when I turn 50 might be.