5 ms·

FIRE movement is largely a result of crazy high salaries and a booming stock market, it wont last forever.

by zz865 5y ago

californical 5y ago
Some will probably bail out of FI when the market slows/crashes in the short term, but some will definitely stick with it! People have been doing the same thing for 50 years, there’s just a community aspect with a name now.
gitfan86 5y ago
high salaries and booming stock market are the result of an increased standard of living due to technological advances. If you looked at the standard of living of a middle class person in 1975 it would be worse than someone making $15/hour today on average. More and more people are not interested in spending 50+ hours a week in bullshit jobs to just be able to buy a Mercedes and join a golf club. A lot of us are perfectly happy driving Toyotas.
saran2win 5y ago
You can FIRE with any salary range with thoughtful spending (save before you spend) and common-sense investing (buy-and-hold, cash generating assets). Though the recent stock market opens up many opportunities for FIRE, it is an age-old proven way to retire or do-your-own-thing rather living paycheck-to-paycheck
- dQw4w9WgXcQ 5y ago
  Good point, let's all FIRE tomorrow and see what happens. That age-old "work to collectively add value to the economy" thing really gets old after awhile.
  - seattle_spring 5y ago
    The only people who could FIRE are those that have saved enough to live on the interest. That definitely doesn't describe "us all," not even close. Also... I hate the power your username has over my mind. It's never going to give me up
  - zz865 5y ago
    Yeah its almost a new aristocracy where people have fun while everyone else works.
    - tonyedgecombe 5y ago
      The funny thing is most working people will look at the spending levels required to achieve FIRE and decide they don't want to make the sacrifice. They are in a prison of their own making. Of course it's easy to see how they arrived in this situation. There is a constant stream of propaganda telling us we need to spend in order to become successful. Without that SUV you aren't a good parent, without the big house you can't be a good partner, without the expensive holidays you must be a loser. Thank Bernays[1] for all of this. Not many people can resist that and take a different path which is why we don't need to worry about "what if everybody does it". [1] https://en.wikipedia.org/wiki/Edward_Bernays https://en.wikipedia.org/wiki/Edward_Bernays
- lotsofpulp 5y ago
  I do not see how this is possible for the bottom few income deciles considering healthcare costs. Definitely not possible for many more income deciles if you have children and still want to protect against healthcare costs.
  - TheSmiddy 5y ago
    Healthcare is easily solved by letting go of the requirement to live in the United States and living almost anywhere else.
    - black_13 5y ago
      Yes that works for all the newly born. We can launch the them into space.
  - sgerenser 5y ago
    Healthcare costs are dirt cheap if you make between 133 and 200% of the FPL. Look into ACA subsidies and “enhanced cost sharing.”
nine_zeros 5y ago
Even if the growth doesn't last forever, many people are beyond reasonable thresholds. Having made their money, people are downsizing in innovative ways - leaving America for 6 months for a cheaper country, relocating to a lcol place or even casually experimenting with starting another business. Short of a multi year recession, most FIREed folks will survive. You don't need to get another job when you can just downsize your expenses in bad years.
maerF0x0 5y ago
> FIRE movement is largely a result of crazy high salaries and a booming stock market, it wont last forever. Productivity per employer has gone up a lot, ideally everyone would be earning more, but at least some are. FIRE doesn't require a booming stock market to work... It simply requires places to put capital that return annually (ideally perpetually). For example buying solar panels is a form of capital sink that has a practical return annually, or sinking money into a home or insulation. At some point someone's savings + annual "income" will be enough to survive on.
- shukantpal 5y ago
  No. Let’s say everyone in the world is relying on savings + investment income for living (the end goal of the FIRE movement?). Then who will produce food (no one is doing any labor)? FIRE is possible for everyone only when full automation is developed.
  - californical 5y ago
    That’s definitely and decidedly not the end-goal. Most people don’t retire entirely, they just switch to work that’s more interesting to them, on their own terms. Maybe fewer hours. But I’ve never heard anyone proposing that nobody should ever work again — you still need to work for long enough to build up a big portfolio. Maybe you can choose to just work 20 hr weeks for your entire 40-yr career… or 60 hour weeks for 15 years, then retire early. But the idea is that if people could consume much less, then we could build a better economy that supports everyone needing to work less in a lifetime.
    - maerF0x0 5y ago
      additionally there is always a new generation of non retired people who can do the non-automated tasks (in return for their FIRE money)
  - xur17 5y ago
    People that FIRE are still working - they're just compressing their working years vs higher income vs lower spending. Everyone is "producing food", just for a shorter portion of their life than normal.
anonporridge 5y ago
The original FIRE movement was all about living frugally, fighting lifestyle inflation and western hyper consumption, and saving like mad in order to invest early and take advantage of long term compounding. It's become perverted in recent years by high salaried hyper consumers who have started idealizing "fatFIRE", which is really only achievable by a small group of people.
- zz865 5y ago
  > and take advantage of long term compounding. Yeah that is what I mean, what happens when the stock market drops 75% over 25 years? Not much compounding happening. https://finance.yahoo.com/quote/%5EN225?p=%5EN225 https://finance.yahoo.com/quote/%5EN225?p=%5EN225
  - anonporridge 5y ago
    That index is up over 25 years. You'd be even better off if you were buying during the bear periods. AND you're not including dividend reinvestment. A quick check here, https://www.portfoliovisualizer.com/backtest-portfolio https://www.portfoliovisualizer.com/backtest-portfolio, with JPXN between 2002-2021 investing a static amount monthly and reinvesting dividends suggests you would have doubled your money over the period. Bad compared to US growth to be sure. You're right that Japan is a great example of how this strategy doesn't work as well for people locked in to stagnating economies.
    - chii 5y ago
      > You're right that Japan is a great example of how this strategy doesn't work as well for people locked in to stagnating economies. that's why you don't invest in a single region. A globally diversified portfolio (which, to be fair, is more difficult to achieve for people in some nations that's not the west) is what's required to get the market returns.
    - zz865 5y ago
      Yeah I meant 1989 to 2012. FTSE10 is flat from 1999 to 2021 as well.

FIRE movement is largely a result of crazy high salaries and a booming stock market, it wont last forever.

by zz865 5y ago

FIRE movement is largely a result of crazy high salaries and a booming stock market, it wont last forever.

Some will probably bail out of FI when the market slows/crashes in the short term, but some will definitely stick with it! People have been doing the same thing for 50 years, there’s just a community aspect with a name now.

gitfan86 5y ago

high salaries and booming stock market are the result of an increased standard of living due to technological advances. If you looked at the standard of living of a middle class person in 1975 it would be worse than someone making $15/hour today on average. More and more people are not interested in spending 50+ hours a week in bullshit jobs to just be able to buy a Mercedes and join a golf club. A lot of us are perfectly happy driving Toyotas.

saran2win 5y ago

You can FIRE with any salary range with thoughtful spending (save before you spend) and common-sense investing (buy-and-hold, cash generating assets). Though the recent stock market opens up many opportunities for FIRE, it is an age-old proven way to retire or do-your-own-thing rather living paycheck-to-paycheck

dQw4w9WgXcQ 5y ago
Good point, let's all FIRE tomorrow and see what happens. That age-old "work to collectively add value to the economy" thing really gets old after awhile.
- seattle_spring 5y ago
  The only people who could FIRE are those that have saved enough to live on the interest. That definitely doesn't describe "us all," not even close. Also... I hate the power your username has over my mind. It's never going to give me up
- zz865 5y ago
  Yeah its almost a new aristocracy where people have fun while everyone else works.
  - tonyedgecombe 5y ago
    The funny thing is most working people will look at the spending levels required to achieve FIRE and decide they don't want to make the sacrifice. They are in a prison of their own making. Of course it's easy to see how they arrived in this situation. There is a constant stream of propaganda telling us we need to spend in order to become successful. Without that SUV you aren't a good parent, without the big house you can't be a good partner, without the expensive holidays you must be a loser. Thank Bernays[1] for all of this. Not many people can resist that and take a different path which is why we don't need to worry about "what if everybody does it". [1] https://en.wikipedia.org/wiki/Edward_Bernays https://en.wikipedia.org/wiki/Edward_Bernays
lotsofpulp 5y ago
I do not see how this is possible for the bottom few income deciles considering healthcare costs. Definitely not possible for many more income deciles if you have children and still want to protect against healthcare costs.
- TheSmiddy 5y ago
  Healthcare is easily solved by letting go of the requirement to live in the United States and living almost anywhere else.
  - black_13 5y ago
    Yes that works for all the newly born. We can launch the them into space.
- sgerenser 5y ago
  Healthcare costs are dirt cheap if you make between 133 and 200% of the FPL. Look into ACA subsidies and “enhanced cost sharing.”

nine_zeros 5y ago

Even if the growth doesn't last forever, many people are beyond reasonable thresholds. Having made their money, people are downsizing in innovative ways - leaving America for 6 months for a cheaper country, relocating to a lcol place or even casually experimenting with starting another business. Short of a multi year recession, most FIREed folks will survive. You don't need to get another job when you can just downsize your expenses in bad years.

maerF0x0 5y ago

> FIRE movement is largely a result of crazy high salaries and a booming stock market, it wont last forever. Productivity per employer has gone up a lot, ideally everyone would be earning more, but at least some are. FIRE doesn't require a booming stock market to work... It simply requires places to put capital that return annually (ideally perpetually). For example buying solar panels is a form of capital sink that has a practical return annually, or sinking money into a home or insulation. At some point someone's savings + annual "income" will be enough to survive on.

shukantpal 5y ago
No. Let’s say everyone in the world is relying on savings + investment income for living (the end goal of the FIRE movement?). Then who will produce food (no one is doing any labor)? FIRE is possible for everyone only when full automation is developed.
- californical 5y ago
  That’s definitely and decidedly not the end-goal. Most people don’t retire entirely, they just switch to work that’s more interesting to them, on their own terms. Maybe fewer hours. But I’ve never heard anyone proposing that nobody should ever work again — you still need to work for long enough to build up a big portfolio. Maybe you can choose to just work 20 hr weeks for your entire 40-yr career… or 60 hour weeks for 15 years, then retire early. But the idea is that if people could consume much less, then we could build a better economy that supports everyone needing to work less in a lifetime.
  - maerF0x0 5y ago
    additionally there is always a new generation of non retired people who can do the non-automated tasks (in return for their FIRE money)
- xur17 5y ago
  People that FIRE are still working - they're just compressing their working years vs higher income vs lower spending. Everyone is "producing food", just for a shorter portion of their life than normal.

anonporridge 5y ago

The original FIRE movement was all about living frugally, fighting lifestyle inflation and western hyper consumption, and saving like mad in order to invest early and take advantage of long term compounding. It's become perverted in recent years by high salaried hyper consumers who have started idealizing "fatFIRE", which is really only achievable by a small group of people.

zz865 5y ago
> and take advantage of long term compounding. Yeah that is what I mean, what happens when the stock market drops 75% over 25 years? Not much compounding happening. https://finance.yahoo.com/quote/%5EN225?p=%5EN225 https://finance.yahoo.com/quote/%5EN225?p=%5EN225
- anonporridge 5y ago
  That index is up over 25 years. You'd be even better off if you were buying during the bear periods. AND you're not including dividend reinvestment. A quick check here, https://www.portfoliovisualizer.com/backtest-portfolio https://www.portfoliovisualizer.com/backtest-portfolio, with JPXN between 2002-2021 investing a static amount monthly and reinvesting dividends suggests you would have doubled your money over the period. Bad compared to US growth to be sure. You're right that Japan is a great example of how this strategy doesn't work as well for people locked in to stagnating economies.
  - chii 5y ago
    > You're right that Japan is a great example of how this strategy doesn't work as well for people locked in to stagnating economies. that's why you don't invest in a single region. A globally diversified portfolio (which, to be fair, is more difficult to achieve for people in some nations that's not the west) is what's required to get the market returns.
  - zz865 5y ago
    Yeah I meant 1989 to 2012. FTSE10 is flat from 1999 to 2021 as well.