7 ms·

Neighbors Are Retiring in Their 30s. Why Can't You?

54 points by guiambros 2y ago

helsinkiandrew 2y ago
https://archive.is/jIPLv https://archive.is/jIPLv
- ornornor 2y ago
  Thanks
black_13 2y ago
[dead]
ipnon 2y ago
It's interesting to me how the mainstream news organizations are supposed to be synthesizing a constant stream of the latest and most important information, and yet breaking news happens faster on social media and the think pieces, such as this one, are basically rehashes of Reddit comments from 10 years ago.
- nostromo 2y ago
  This is the NYT Magazine though. Longer pieces about less-important issues are common.
  - rokkitmensch 2y ago
    Absurdly long pieces about utterly irrelevant pieces are the norm from the Grey Lady these days. I remember my early research classes (~2001), when they were upheld by my teachers to be the creme de la creme of publications. My how times have changed.
  - benterix 2y ago
    Oh I literally suffer reading through these and trying to understand the conclusion... "When she strolled across her cozy room in her velveteen slippers, each step a deliberate promenade through a mosaic of chiaroscuro shadows..." - just get to the point already!!!
- JumpCrisscross 2y ago
  > basically rehashes of Reddit comments from 10 years ago Because those comments were the first time in human history this was discussed? Every medium curates and reproduces messages.
- eesmith 2y ago
  This is an evergreen topic which is a lot older than Reddit or FIRE. To give an example, the book "How to retire young" from 1989 at https://archive.org/details/isbn_9781556231537 https://archive.org/details/isbn_9781556231537 .
- bloqs 2y ago
  Couldnt have put it better myself, and most of the journalists are millenials now so frequently thats a real thing
ChuckMcM 2y ago
The article seriously downplays the role of luck here but it isn't wrong. If you live judiciously and save as much as you can by doing so, you reach a point where you can live judiciously without going into the office every day. The common thread is that just because you can buy something, or can qualify for a particular mortgage, doesn't mean you should if you're goal is to "retire" early. One of the engineers I worked at Sun with told me that once he had enough value in Sun stock he just decided it was enough. He never moved out of his "starter" house (small 3 bedroom) and always drove his budget/no-options economy car at least 100,000 miles. And his idea of a "great vacation" was camping in the Sierras. So it didn't take much for him to get there and in the middle of the dot com "boom" he sold all his stock, paid his taxes, paid off his house, and retired. The part the article doesn't talk about enough is the whole "why do you want to be rich?" question. People look at me funny when I ask them that, but as the article mentioned you can only take so many vacations, movies, what have you. People fail at retirement all the time, feeling like their life is being wasted now that they aren't "doing" anything. In my experience, unless you've got the ability to self-motivate to do something you are really interested in that helps you grow, you may find yourself wanting to go back to work. An interesting thing about going back to work though, if you don't need the job you can be really honest about how you see things and how much time you are willing to spend in the office. I have met a number of engineering managers who don't do well when the only tool in their toolbox is "If you don't, I'll fire you."[1] So many people have a very very complex relationship with money. Too many use it as a "score" to reinforce their own self image. When it becomes apparent to me that someone is in that mindset, if I'm in a place to do so I ask them if someone who won the PowerBall lottery is better than they are because they would be richer. Most can see how non-nonsensical that is, but it helps to step back and remind yourself that net worth has exactly zero relationship to how good a person you are. [1] If you're one of those managers reach out, I can coach you to becoming a better manager and charge reasonable rates to do so.
- 48864w6ui 2y ago
  > use it as a "score" Sounds like achiever/explorer/killer/socializer?
- khazhoux 2y ago
nostromo 2y ago
> [she] retired at 49 with $1.3 million in savings. That doesn't not seem like nearly enough. How does she afford health insurance? I would be terrified that after a prolonged downturn you'd be left with nothing. And Social Security in the US pays less the less you work.
- wskinner 2y ago
  "Enough" is a function of how much you have and how much you need. 25x annual spend is a common heuristic for the required net worth before you can safely retire. And the older you are, the less margin of safety you need. 4% of $1.3 million is $52k, which is enough to live quite comfortably in many places.
  - al_borland 2y ago
    A bad year or two in the market early in retirement can really change that calculation if they aren’t accounting for sequence-of-returns risk.
    - wskinner 2y ago
      The 4% rule of thumb is intended to include sequence-of-returns risk. See e.g. https://firecalc.com/ https://firecalc.com/, a tool commonly used to aid these decisions.
- foogazi 2y ago
  > I would be terrified that after a prolonged downturn you'd be left with nothing. In the long run we are all dead > And Social Security in the US pays less the less you work. Aren't there diminishing returns with Social Security ? so at some cutoff you are NOT getting more regardless of how much more you work
  - r0ckarong 2y ago
    > In the long run we are all dead Arguably, being left alive with nothing is worse than dead.
gnicholas 2y ago
> recommended employing your children starting from the age they are able to do household chores, which offers a double benefit of reducing a parent’s taxable income while building an investment-accruing tax shelter for the 7-year-old In case anyone was wondering, you cannot reduce your taxable income by paying your child to clean your house (I am a former tax lawyer). Could you pay your teenager to work for your company, and reduce the corporate income? Yes, subject to child labor laws — and you still have to pay payroll and income taxes. Alternatively, you and your spouse can just straight up give your kid $36,000 per year as a gift (with no deduction, but also no income/payroll tax burden). Having a 7-year-old on the payroll seems like a great way to get audited.
- bombcar 2y ago
  The main goal with the “hire children” discussions I’ve seen is to lodge taxable income to the child so you can start investment/retirement accounts. But there are other ways to do the same thing.
  - meowfly 2y ago
    Yeah. I've always heard this as: make your child a board member and then have them put their money in a Roth. No idea if that's an easy path to an audit
  - gnicholas 2y ago
    One problem with this is that we have no idea what the tax code will look like in 50+ years, when the kid is pulling money out. It’s quite possible that Roth accounts (which are funded with post tax contributions) will no longer be tax free for withdrawals, for example. I could easily see this being walked back for high-income folks, as a way to pay off the enormous debt we are currently incurring.
    - bombcar 2y ago
      That's one of the things that people do plan for - by not allocating all resources to a Roth, for example. You can never predict all future tax changes, but you can be more flexible by having multiple different "stacks" that you can utilize when you want.
gnicholas 2y ago
> Since there is an upper limit to money’s effect on joy — studies have shown that global happiness tops out at income levels of about $75,000 a year — chasing infinite wealth may be psychologically futile. A few years ago I saw that this figure was admitted to be an understatement for folks who live in coastal cities. This was also before COVID-era inflation hit. I'd think in the SF area, the number would be closer to triple this, or possibly higher.
- rokkitmensch 2y ago
  And doesn't quite cover us folks stuck with a single income.
rokkitmensch 2y ago
Don't have kids! Easy, done.
- gnicholas 2y ago
  This surely helps. Until your kids are 5 or so, you don't know if you'll have huge birth-related medical bills, unexpected disabilities/chronic illnesses, or special needs that require moving to an expensive school district. And even assuming everything is good on that front, you're still looking at $300-400k in college tuition (in 2024 dollars) if you let your kids pick any school. You can tell them that you can only afford a community college or inexpensive public school, but how many parents would feel comfortable doing that after retiring at a very young age? I guess you can bundle the message with a reminder that the reason you were around a ton when they were growing up was because you FIRE'd, but given how oppositional teens can be, I'd expect that this would cause resentment in a lot of cases.
  - dmichulke 2y ago
    > at $300-400k in college tuition I always wonder why it doesn't make sense to just have them learn German or French and then have them study in continental Europe. Living standard is the same, tuition cost is mostly non-existent and living abroad, if just for a year, will make you a better person. Total cost for a bachelor + master is maybe 5 years with a cost of 1.5k per month maximum (this is considered rich for students), so you're at 18k per year or 90k total. Educational arbitrage.
    - HDThoreaun 2y ago
      I had a few friends in high school go to French and English schools. Seemed to work out pretty well generally, although one had a hard time finding a job. Ended up getting a PhD from an ivy though
    - JumpCrisscross 2y ago
      > learn German or French and then have them study in continental Europe. Living standard is the same If you’re in a position to do this, the median European living standard is a huge step down. (You’ll also need to do extra work to make up for the network degradation.)
hi-v-rocknroll 2y ago
I heard s/Neighbors/grandparent's neighbors' kids/ from age 19 onwards, such as independent corporate tax accountants and startup neighbor. It was expected that I should've been a billionaire by 31 or otherwise I was a disappointment and failure. Anyone can readily hazard a guess how well that worked out. In the end: money doesn't buy life, imagination, happiness, prestige, or satisfaction, but it buys some freedom. While you'll never get meaningfully rich working for someone else, it is far steadier (usually) but it doesn't include a retirement plan anymore. And, current wages are insufficient to create the same standard of living as previous generations (example: I would need $400k TC to live where my grandparents lived).
nunez 2y ago
I'm wondering if dude is still clearing $250k/month with that police scanner app. He reminds me of this user on /r/fatFIRE (a variant of this movement many of us here would better identify with) named /u/rajuapps who claims to have achieved $100M in net worth by starting with pumping out apps on the App Store. I believe it; I really like his Tesla Remote app! Many folks struck serious gold in the early days of App Stores; I wish I tried my hand at it. (I was trying my hand at building a "things to do" startup during this time; didn't pan out, but I learned a lot.) Anyway; honestly, I feel unbelievably lucky to work jobs that I really like AND have the flexibility to change jobs when I start to dislike it. It's no surprise that FIRE is so popular. So many people work jobs that suck. SO. MANY. PEOPLE. Many people also have no idea what they want to do when they "grow up." Saving enough money to figure that question out OR to take a break from the grind until they're ready to do what they really want to do is a fantastic goal.
- edyc5 2y ago
  it is /u/regoapps, and yes he is the creator of the tesla remote app
- paulpauper 2y ago
  His story is so luck dependent even by FIRE standards. he may as well joined uber in 2010 too or been an early investor or early founder in some other start-up. FIRE is more about being an employee and investing/saving than creating a start-up. Although anyone can do the FIRE lifestyle.

54 points by guiambros 2y ago

helsinkiandrew 2y ago

https://archive.is/jIPLv https://archive.is/jIPLv

ornornor 2y ago
Thanks

black_13 2y ago

[dead]

ipnon 2y ago

It's interesting to me how the mainstream news organizations are supposed to be synthesizing a constant stream of the latest and most important information, and yet breaking news happens faster on social media and the think pieces, such as this one, are basically rehashes of Reddit comments from 10 years ago.

nostromo 2y ago
This is the NYT Magazine though. Longer pieces about less-important issues are common.
- rokkitmensch 2y ago
  Absurdly long pieces about utterly irrelevant pieces are the norm from the Grey Lady these days. I remember my early research classes (~2001), when they were upheld by my teachers to be the creme de la creme of publications. My how times have changed.
- benterix 2y ago
  Oh I literally suffer reading through these and trying to understand the conclusion... "When she strolled across her cozy room in her velveteen slippers, each step a deliberate promenade through a mosaic of chiaroscuro shadows..." - just get to the point already!!!
JumpCrisscross 2y ago
> basically rehashes of Reddit comments from 10 years ago Because those comments were the first time in human history this was discussed? Every medium curates and reproduces messages.
eesmith 2y ago
This is an evergreen topic which is a lot older than Reddit or FIRE. To give an example, the book "How to retire young" from 1989 at https://archive.org/details/isbn_9781556231537 https://archive.org/details/isbn_9781556231537 .
bloqs 2y ago
Couldnt have put it better myself, and most of the journalists are millenials now so frequently thats a real thing

ChuckMcM 2y ago

The article seriously downplays the role of luck here but it isn't wrong. If you live judiciously and save as much as you can by doing so, you reach a point where you can live judiciously without going into the office every day. The common thread is that just because you can buy something, or can qualify for a particular mortgage, doesn't mean you should if you're goal is to "retire" early. One of the engineers I worked at Sun with told me that once he had enough value in Sun stock he just decided it was enough. He never moved out of his "starter" house (small 3 bedroom) and always drove his budget/no-options economy car at least 100,000 miles. And his idea of a "great vacation" was camping in the Sierras. So it didn't take much for him to get there and in the middle of the dot com "boom" he sold all his stock, paid his taxes, paid off his house, and retired. The part the article doesn't talk about enough is the whole "why do you want to be rich?" question. People look at me funny when I ask them that, but as the article mentioned you can only take so many vacations, movies, what have you. People fail at retirement all the time, feeling like their life is being wasted now that they aren't "doing" anything. In my experience, unless you've got the ability to self-motivate to do something you are really interested in that helps you grow, you may find yourself wanting to go back to work. An interesting thing about going back to work though, if you don't need the job you can be really honest about how you see things and how much time you are willing to spend in the office. I have met a number of engineering managers who don't do well when the only tool in their toolbox is "If you don't, I'll fire you."[1] So many people have a very very complex relationship with money. Too many use it as a "score" to reinforce their own self image. When it becomes apparent to me that someone is in that mindset, if I'm in a place to do so I ask them if someone who won the PowerBall lottery is better than they are because they would be richer. Most can see how non-nonsensical that is, but it helps to step back and remind yourself that net worth has exactly zero relationship to how good a person you are. [1] If you're one of those managers reach out, I can coach you to becoming a better manager and charge reasonable rates to do so.

48864w6ui 2y ago
> use it as a "score" Sounds like achiever/explorer/killer/socializer?
khazhoux 2y ago

nostromo 2y ago

> [she] retired at 49 with $1.3 million in savings. That doesn't not seem like nearly enough. How does she afford health insurance? I would be terrified that after a prolonged downturn you'd be left with nothing. And Social Security in the US pays less the less you work.

wskinner 2y ago
"Enough" is a function of how much you have and how much you need. 25x annual spend is a common heuristic for the required net worth before you can safely retire. And the older you are, the less margin of safety you need. 4% of $1.3 million is $52k, which is enough to live quite comfortably in many places.
- al_borland 2y ago
  A bad year or two in the market early in retirement can really change that calculation if they aren’t accounting for sequence-of-returns risk.
  - wskinner 2y ago
    The 4% rule of thumb is intended to include sequence-of-returns risk. See e.g. https://firecalc.com/ https://firecalc.com/, a tool commonly used to aid these decisions.
foogazi 2y ago
> I would be terrified that after a prolonged downturn you'd be left with nothing. In the long run we are all dead > And Social Security in the US pays less the less you work. Aren't there diminishing returns with Social Security ? so at some cutoff you are NOT getting more regardless of how much more you work
- r0ckarong 2y ago
  > In the long run we are all dead Arguably, being left alive with nothing is worse than dead.

gnicholas 2y ago

> recommended employing your children starting from the age they are able to do household chores, which offers a double benefit of reducing a parent’s taxable income while building an investment-accruing tax shelter for the 7-year-old In case anyone was wondering, you cannot reduce your taxable income by paying your child to clean your house (I am a former tax lawyer). Could you pay your teenager to work for your company, and reduce the corporate income? Yes, subject to child labor laws — and you still have to pay payroll and income taxes. Alternatively, you and your spouse can just straight up give your kid $36,000 per year as a gift (with no deduction, but also no income/payroll tax burden). Having a 7-year-old on the payroll seems like a great way to get audited.

bombcar 2y ago
The main goal with the “hire children” discussions I’ve seen is to lodge taxable income to the child so you can start investment/retirement accounts. But there are other ways to do the same thing.
- meowfly 2y ago
  Yeah. I've always heard this as: make your child a board member and then have them put their money in a Roth. No idea if that's an easy path to an audit
- gnicholas 2y ago
  One problem with this is that we have no idea what the tax code will look like in 50+ years, when the kid is pulling money out. It’s quite possible that Roth accounts (which are funded with post tax contributions) will no longer be tax free for withdrawals, for example. I could easily see this being walked back for high-income folks, as a way to pay off the enormous debt we are currently incurring.
  - bombcar 2y ago
    That's one of the things that people do plan for - by not allocating all resources to a Roth, for example. You can never predict all future tax changes, but you can be more flexible by having multiple different "stacks" that you can utilize when you want.

gnicholas 2y ago

> Since there is an upper limit to money’s effect on joy — studies have shown that global happiness tops out at income levels of about $75,000 a year — chasing infinite wealth may be psychologically futile. A few years ago I saw that this figure was admitted to be an understatement for folks who live in coastal cities. This was also before COVID-era inflation hit. I'd think in the SF area, the number would be closer to triple this, or possibly higher.

rokkitmensch 2y ago
And doesn't quite cover us folks stuck with a single income.

rokkitmensch 2y ago

Don't have kids! Easy, done.

gnicholas 2y ago
This surely helps. Until your kids are 5 or so, you don't know if you'll have huge birth-related medical bills, unexpected disabilities/chronic illnesses, or special needs that require moving to an expensive school district. And even assuming everything is good on that front, you're still looking at $300-400k in college tuition (in 2024 dollars) if you let your kids pick any school. You can tell them that you can only afford a community college or inexpensive public school, but how many parents would feel comfortable doing that after retiring at a very young age? I guess you can bundle the message with a reminder that the reason you were around a ton when they were growing up was because you FIRE'd, but given how oppositional teens can be, I'd expect that this would cause resentment in a lot of cases.
- dmichulke 2y ago
  > at $300-400k in college tuition I always wonder why it doesn't make sense to just have them learn German or French and then have them study in continental Europe. Living standard is the same, tuition cost is mostly non-existent and living abroad, if just for a year, will make you a better person. Total cost for a bachelor + master is maybe 5 years with a cost of 1.5k per month maximum (this is considered rich for students), so you're at 18k per year or 90k total. Educational arbitrage.
  - HDThoreaun 2y ago
    I had a few friends in high school go to French and English schools. Seemed to work out pretty well generally, although one had a hard time finding a job. Ended up getting a PhD from an ivy though
  - JumpCrisscross 2y ago
    > learn German or French and then have them study in continental Europe. Living standard is the same If you’re in a position to do this, the median European living standard is a huge step down. (You’ll also need to do extra work to make up for the network degradation.)

hi-v-rocknroll 2y ago

I heard s/Neighbors/grandparent's neighbors' kids/ from age 19 onwards, such as independent corporate tax accountants and startup neighbor. It was expected that I should've been a billionaire by 31 or otherwise I was a disappointment and failure. Anyone can readily hazard a guess how well that worked out. In the end: money doesn't buy life, imagination, happiness, prestige, or satisfaction, but it buys some freedom. While you'll never get meaningfully rich working for someone else, it is far steadier (usually) but it doesn't include a retirement plan anymore. And, current wages are insufficient to create the same standard of living as previous generations (example: I would need $400k TC to live where my grandparents lived).

nunez 2y ago

I'm wondering if dude is still clearing $250k/month with that police scanner app. He reminds me of this user on /r/fatFIRE (a variant of this movement many of us here would better identify with) named /u/rajuapps who claims to have achieved $100M in net worth by starting with pumping out apps on the App Store. I believe it; I really like his Tesla Remote app! Many folks struck serious gold in the early days of App Stores; I wish I tried my hand at it. (I was trying my hand at building a "things to do" startup during this time; didn't pan out, but I learned a lot.) Anyway; honestly, I feel unbelievably lucky to work jobs that I really like AND have the flexibility to change jobs when I start to dislike it. It's no surprise that FIRE is so popular. So many people work jobs that suck. SO. MANY. PEOPLE. Many people also have no idea what they want to do when they "grow up." Saving enough money to figure that question out OR to take a break from the grind until they're ready to do what they really want to do is a fantastic goal.

edyc5 2y ago
it is /u/regoapps, and yes he is the creator of the tesla remote app
paulpauper 2y ago
His story is so luck dependent even by FIRE standards. he may as well joined uber in 2010 too or been an early investor or early founder in some other start-up. FIRE is more about being an employee and investing/saving than creating a start-up. Although anyone can do the FIRE lifestyle.