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"Financial Independence, Retire Early" is the VanillaJS of life strategies: you can do everything you want as long as you ignore the chorus of Twitter thought-l

"Financial Independence, Retire Early" is the VanillaJS of life strategies: you can do everything you want as long as you ignore the chorus of Twitter thought-leaders insisting that it'll never be enough.

ramesh31 3y ago
It's still complete luck at this point with no social safety net. FIRE assumes you will never have a single traumatic event set you back during the course of a 20 year career. Great for anyone who's banking on never being injured, sick, disabled, pregnant, having to care for someone, or being significantly unemployed ever.
- csande17 3y ago
  The whole point of FIRE is that you are planning on being significantly unemployed, a lot sooner than most people. Even fairly early into that 20-year career, you'll have an emergency fund that can get you through a lot of otherwise-pretty-dire situations. Never hurts to get injury and disability insurance, too.
- _yb2s 3y ago
  I was trying to do FIRE as a student making only about ~10k a year, and managed to save most of my income despite having a low income by just living really really cheaply for over a decade. By the end of my PhD program I had saved up ~100k when most people would have been that much in debt. Then I had a kid, and couldn't find/afford childcare. So I ended up using my 'FIRE' savings to pay for childcare for several years, essentially using it all up. I was paying about 100% of my take home salary on childcare for two years straight, and able to make it through. Basically the safety net I acquired worked awesome! I didn't get to keep my retirement savings like planned, but I was able to keep doing a low paying postdoc despite needing expensive childcare, which let me keep a low paying postdoc I would have otherwise had to quit... which ultimately led to a high paying and stable career where I've rebuilt my savings after all. Basically, having lots of savings a la FIRE is (1) possible even on an extremely low poverty income- you just need to make hard choices like shared living situations, no car (or a very old car you maintain yourself), home cook all meals from cheap ingredients, etc. and (2) it gives you a safety next with flexibility and options for the type of unforeseen events you are talking about. Having a massive financial safety net is great, even if you end up not being able to use it to retire early, as I was not. It's all about priorities... on almost any income level, you can ruthlessly cut un-needed expenses, and build a safety net/retirement. The poorer you are, the more likely you are to need this for some non-retirement financial emergency, which is all the more reason to do it, because those type of things are even more important than early retirement.
deathanatos 3y ago
"FIRE" is a "life strategy" like telling someone "have a money tree in your backyard" is a life strategy. Employers are loathe to give raises. Employers are loathe to even inflation adjust one's current pay. Putting in more work == no reward. Even the strat of "job hop as fast as recruiters permit" chalks up only the most modest of gains, and certainly nowhere near FIRE territory unless you're lucky.
- csande17 3y ago
  The other half of the equation is the amount you're spending. At least in tech, FIRE means finding a way to earn a San Francisco salary without paying for a San Francisco lifestyle, such that you're saving more than one year's expenses per year you work. It is surprisingly doable, particularly if you can land a remote job and then move somewhere cheap. (Doable for us software developers, anyway.)
  - deathanatos 3y ago
    > At least in tech, FIRE means finding a way to earn a San Francisco salary without paying for a San Francisco lifestyle > if you can land a remote job and then move somewhere cheap. (Doable for us software developers, anyway.) Employers call this a "geographic adjustment", and will happily "geographically adjust" you as soon as you move. From their point of view: why should they pay you SF salary when you don't have SF costs?
- _yb2s 3y ago
  Quite a few people on here are making this same basic comment, and it seems to come from a misunderstanding of the 'FIRE' concept. It is not based on making a lot of money, but by living below your means, such that you can invest a large fraction of your income. A key part of the concept is that it can be done even with a very modest income. Look at the Mr. Money Mustache blog (https://www.mrmoneymustache.com/ https://www.mrmoneymustache.com/) for example.
ramijames 3y ago
Sorry to put it this way, but FIRE is some serious bullshit. Most of us barely make ends meet. We bust ass and do everything right. Financial independence is a pipe dream. Retiring EVER is likely off the table entirely at all.
- csande17 3y ago
  I'm not as familiar with the names of these things as I ought to be, but isn't FIRE basically the philosophy your post described? "Doing everything right" involves taking on a lot of expensive responsibilities: outrageous student loans, a big mortgage, dependents. But you can just... say no, to many of those things, and stick your money in an index fund instead.
  - ramijames 3y ago
    Would have been a great thing to be taught in school 25 years ago.
  - deathanatos 3y ago
    No, FIRE as I see it propositioned requires wealth to begin with. See the Wikipedia page: https://en.wikipedia.org/wiki/FIRE_movement https://en.wikipedia.org/wiki/FIRE_movement — note, for example, the high savings rates. Start with the highest bracket: 75%. If you're spending anywhere near the "affordable limit" of 30% on rent (and AIUI, many people find this tough), it should be trivially obvious that a savings rate of 75% is impossible. (Note that the 30% bar is usually in terms of gross, whereas I presume the amounts listed in the Wikipedia article are in terms of take-home … since otherwise 75% is getting pretty close to tautologically impossible, as it's approaching 100% of one's net income, then.) And we're only counting rent! Add in utilities, a car (+all the stuff with that such as insurance, gas, maintenance, tax), health insurance, expenses not covered by health insurance b/c this is America, food … and yeah. You're not getting a 75% savings rate. We've not even left the bottom two tiers of Maslow's hierarchy here. This is all on the Wikipedia page, too. ("Some critics allege that the FIRE movement 'is only for the rich', pointing to the difficulties of achieving the high savings rates needed for FIRE on a low income."; though I quibble with "low" in that statement.)

ramesh31 3y ago

It's still complete luck at this point with no social safety net. FIRE assumes you will never have a single traumatic event set you back during the course of a 20 year career. Great for anyone who's banking on never being injured, sick, disabled, pregnant, having to care for someone, or being significantly unemployed ever.

csande17 3y ago
The whole point of FIRE is that you are planning on being significantly unemployed, a lot sooner than most people. Even fairly early into that 20-year career, you'll have an emergency fund that can get you through a lot of otherwise-pretty-dire situations. Never hurts to get injury and disability insurance, too.
_yb2s 3y ago
I was trying to do FIRE as a student making only about ~10k a year, and managed to save most of my income despite having a low income by just living really really cheaply for over a decade. By the end of my PhD program I had saved up ~100k when most people would have been that much in debt. Then I had a kid, and couldn't find/afford childcare. So I ended up using my 'FIRE' savings to pay for childcare for several years, essentially using it all up. I was paying about 100% of my take home salary on childcare for two years straight, and able to make it through. Basically the safety net I acquired worked awesome! I didn't get to keep my retirement savings like planned, but I was able to keep doing a low paying postdoc despite needing expensive childcare, which let me keep a low paying postdoc I would have otherwise had to quit... which ultimately led to a high paying and stable career where I've rebuilt my savings after all. Basically, having lots of savings a la FIRE is (1) possible even on an extremely low poverty income- you just need to make hard choices like shared living situations, no car (or a very old car you maintain yourself), home cook all meals from cheap ingredients, etc. and (2) it gives you a safety next with flexibility and options for the type of unforeseen events you are talking about. Having a massive financial safety net is great, even if you end up not being able to use it to retire early, as I was not. It's all about priorities... on almost any income level, you can ruthlessly cut un-needed expenses, and build a safety net/retirement. The poorer you are, the more likely you are to need this for some non-retirement financial emergency, which is all the more reason to do it, because those type of things are even more important than early retirement.

deathanatos 3y ago

"FIRE" is a "life strategy" like telling someone "have a money tree in your backyard" is a life strategy. Employers are loathe to give raises. Employers are loathe to even inflation adjust one's current pay. Putting in more work == no reward. Even the strat of "job hop as fast as recruiters permit" chalks up only the most modest of gains, and certainly nowhere near FIRE territory unless you're lucky.

csande17 3y ago
The other half of the equation is the amount you're spending. At least in tech, FIRE means finding a way to earn a San Francisco salary without paying for a San Francisco lifestyle, such that you're saving more than one year's expenses per year you work. It is surprisingly doable, particularly if you can land a remote job and then move somewhere cheap. (Doable for us software developers, anyway.)
- deathanatos 3y ago
  > At least in tech, FIRE means finding a way to earn a San Francisco salary without paying for a San Francisco lifestyle > if you can land a remote job and then move somewhere cheap. (Doable for us software developers, anyway.) Employers call this a "geographic adjustment", and will happily "geographically adjust" you as soon as you move. From their point of view: why should they pay you SF salary when you don't have SF costs?
_yb2s 3y ago
Quite a few people on here are making this same basic comment, and it seems to come from a misunderstanding of the 'FIRE' concept. It is not based on making a lot of money, but by living below your means, such that you can invest a large fraction of your income. A key part of the concept is that it can be done even with a very modest income. Look at the Mr. Money Mustache blog (https://www.mrmoneymustache.com/ https://www.mrmoneymustache.com/) for example.

ramijames 3y ago

Sorry to put it this way, but FIRE is some serious bullshit. Most of us barely make ends meet. We bust ass and do everything right. Financial independence is a pipe dream. Retiring EVER is likely off the table entirely at all.

csande17 3y ago
I'm not as familiar with the names of these things as I ought to be, but isn't FIRE basically the philosophy your post described? "Doing everything right" involves taking on a lot of expensive responsibilities: outrageous student loans, a big mortgage, dependents. But you can just... say no, to many of those things, and stick your money in an index fund instead.
- ramijames 3y ago
  Would have been a great thing to be taught in school 25 years ago.
- deathanatos 3y ago
  No, FIRE as I see it propositioned requires wealth to begin with. See the Wikipedia page: https://en.wikipedia.org/wiki/FIRE_movement https://en.wikipedia.org/wiki/FIRE_movement — note, for example, the high savings rates. Start with the highest bracket: 75%. If you're spending anywhere near the "affordable limit" of 30% on rent (and AIUI, many people find this tough), it should be trivially obvious that a savings rate of 75% is impossible. (Note that the 30% bar is usually in terms of gross, whereas I presume the amounts listed in the Wikipedia article are in terms of take-home … since otherwise 75% is getting pretty close to tautologically impossible, as it's approaching 100% of one's net income, then.) And we're only counting rent! Add in utilities, a car (+all the stuff with that such as insurance, gas, maintenance, tax), health insurance, expenses not covered by health insurance b/c this is America, food … and yeah. You're not getting a 75% savings rate. We've not even left the bottom two tiers of Maslow's hierarchy here. This is all on the Wikipedia page, too. ("Some critics allege that the FIRE movement 'is only for the rich', pointing to the difficulties of achieving the high savings rates needed for FIRE on a low income."; though I quibble with "low" in that statement.)