Was doing the math and correct me if am wrong.
We have 125 MILLION households in the US currently and if everyone wanted to be in FIRE mode then, each of them needs to have saved 25x their annual expense by the time they hit their 50s.
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If we say $50K is average annual expense then we need 156.25 TRILLION dollars saved which is impractical.
US economy is only 19T so what am I missing?
You're missing errors of classification. Others have pointed this out in different words. Just to be clear, 19 trillion is dollars of Gross Domestic Product in one year, effectively national income. It's an income amount. The 156 trillion you calculated is savings. That's an asset amount. Different category.
FIRE usually occurs by individuals choosing a lower spending rate than typical consumers, then investing the difference until investment income covers the lower spend. If everyone in America did this, spending would be lower than $50,000 per year, but everyone would be safe and happy with their lower income. Supposing a savings rate of 50% that roughly matches your proposal, presumably income would be about half of today, but work careers would be about 17 years instead of 35. I take that to mean that yes, there is enough money to do this.
Obviously if everyone did it, some details of earning patterns, spending patterns and possibly asset prices might change. The general fact remains that if we spent about half as much as most people do, we could work about half as much and still have enough money.
US economy is only 19T so what am I missing?
1. We just don't have that kind of currency printed so how will households save?
2. Does this mean some families will perpetually be in poverty eating ramen noodles?
3. Does this mean some of us will practically have to work until we die?
Perhaps, we need to dial down expectations of FIRE mode ?
1. As noted by others, the issue isn't about printing money. Households will save like Mustachians if they decide to spend half their income and invest the rest.
2. Some families are already in poverty eating ramen noodles. Mustachianism doesn't require an increase in that though.
3. Mustachian masses do not require anyone to work until they die. A few individuals die in their 30s but that happens anyway.
No, we do not need to dial down expactations of FIRE mode.
PS. By the way, the government creates money more or less at will, using several methods. The money supply shrinks and expends based on economic conditions and government policy. Relative to changes of the size you propose, money supply can roughly be assumed to grow or shrink as needed. It is not a primary barrier.
My description in the paragraph above is obviously a simplification, and some arguments can be made for or against it. But I think it's a fair summary. If any actual economists wish to opine, I will probably defer. Certainly I will stipulate that specifics of a change this size cannot be definitively known in advance. But thinking "there's not enough currency" - you asked for that to be the thread topic, yet I think it's an incorrect premise. Hopefully it's OK that I viewed the deeper question as "Could the economy sustain itself and support the people if everyone tried to be Mustachian".
