Author Topic: What is the FIRE Movement? Could it be Hurting Our Economy?  (Read 3377 times)

EscapeVelocity2020

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Has this Sep 20, 2020 video been shared and discussed yet?  https://www.youtube.com/watch?v=AqSExy3HBm0

Some interesting points made and missed, but there are over a million followers for the channel and over 2400 comments, so I won't jump in with my bias right away.  Have a look, if you haven't seen it yet, (Pete is briefly shown, woohoo) and tell me what you thought...

bacchi

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Re: What is the FIRE Movement? Could it be Hurting Our Economy?
« Reply #1 on: May 17, 2021, 02:56:41 PM »
It seems fair enough.

Does the FIRE community really consider 3% to be the gold standard? Bogleheads likes 3%, if not lower, and Financial Sumo advocates 1% or something, but 4% (Trinity, Bengen, Kitces, etc.) seems to be the standard.

Something was off with the DCA explanation, too.

If more and more people started to FIRE, I expect corporations would adjust. They'd offer better work/life balance, more part-time, etc. We adjusted from 60+ hours/week in the 1800s to 40 now. There's no reason it can't be lower.

dandarc

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Re: What is the FIRE Movement? Could it be Hurting Our Economy?
« Reply #2 on: May 17, 2021, 03:44:23 PM »
Will watch video later - posting mainly to remind myself to do that.

@bacchi - Financial Samurai is not part of the FIRE community. Unless FIRE stands for "Fearful I'm not Rich Enough" now.

Metalcat

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Re: What is the FIRE Movement? Could it be Hurting Our Economy?
« Reply #3 on: May 17, 2021, 05:20:10 PM »
Ugh, I hate watching videos, and this one is 20 minutes long!

So, not even watching it, I'm still going to roll my eyes so hard that they almost fall back into my brain, because even here, in the Mustachian forums, most folks aren't looking to retire super young, and are pretty robust participants in the economy. So pearl clutching and hand wringing never seem like the appropriate response.

I'll believe there's an issue when I *ACTUALLY* see a substantial group of people *ACTUALLY* retiring really early and not on sums of money that generate huge spends in retirement, because I'm pretty sure someone who is spending 6 figures annually in retirement is propping up the economy more than typical folks who don't even make that much.

Instead, FIRE is just a popular boogeyman amongst the fear-mongering financial "journalists" looking for clicks.

dandarc

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Re: What is the FIRE Movement? Could it be Hurting Our Economy?
« Reply #4 on: May 17, 2021, 06:53:03 PM »
This is just a long format ad for acorns. Why waste anyone's time linking that here?

Vincent Gambini said it best "everything that guy just said is bullshit. Thank you"

Maybe not everything is bs, but there is quite a bit more bs than not.

EscapeVelocity2020

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Re: What is the FIRE Movement? Could it be Hurting Our Economy?
« Reply #5 on: May 18, 2021, 10:04:51 AM »
This is just a long format ad for acorns. Why waste anyone's time linking that here?

Vincent Gambini said it best "everything that guy just said is bullshit. Thank you"

Maybe not everything is bs, but there is quite a bit more bs than not.

You obviously have a strong opinion, but I disagree that it is a long format ad for Acorns.  The sponsorship is mentioned and then placed at the end of the video (which is when I hit stop, so had to go back and watch the video to understand your comment better).  But in no way is the video - 'here is a problem, here is how Acorns solves it', etc...

Sorry if I wasted your time personally, but mischaracterizing the video kills discussion.
« Last Edit: May 18, 2021, 10:14:23 AM by EscapeVelocity2020 »

Metalcat

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Re: What is the FIRE Movement? Could it be Hurting Our Economy?
« Reply #6 on: May 18, 2021, 10:11:38 AM »
This is just a long format ad for acorns. Why waste anyone's time linking that here?

Vincent Gambini said it best "everything that guy just said is bullshit. Thank you"

Maybe not everything is bs, but there is quite a bit more bs than not.

You obviously have a strong opinion, but I disagree that it is a long format ad for Acorns.  The sponsorship is mentioned at the end of the video (which is when I hit stop, so had to go back and watch the video to understand your comment).  But in no way is the video - 'here is a problem, here is how Acorns solves it', etc...

Sorry if I wasted your time personally, but mischaracterizing the video kills discussion.

If you summarize the points of the video that you find salient, you might get more useful conversation. I'm not going to watch it unless I know what's interesting about it in the first place.

dandarc

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Re: What is the FIRE Movement? Could it be Hurting Our Economy?
« Reply #7 on: May 18, 2021, 10:18:21 AM »
I'll 2nd what Malcat said - name one point made worth discussing.

20 minute video, fully 5 minutes of which at the end was an ad for Acorns. Entirety of the rest of it was clickbait drivel - barely scratching the surface and misrepresenting just about every concept mentioned. But it was a guy talking in a British accent over a bunch of stock photos, so we have to take it seriously I guess.
« Last Edit: May 18, 2021, 10:21:09 AM by dandarc »

EscapeVelocity2020

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Re: What is the FIRE Movement? Could it be Hurting Our Economy?
« Reply #8 on: May 18, 2021, 10:25:07 AM »
This is just a long format ad for acorns. Why waste anyone's time linking that here?

Vincent Gambini said it best "everything that guy just said is bullshit. Thank you"

Maybe not everything is bs, but there is quite a bit more bs than not.

You obviously have a strong opinion, but I disagree that it is a long format ad for Acorns.  The sponsorship is mentioned at the end of the video (which is when I hit stop, so had to go back and watch the video to understand your comment).  But in no way is the video - 'here is a problem, here is how Acorns solves it', etc...

Sorry if I wasted your time personally, but mischaracterizing the video kills discussion.

If you summarize the points of the video that you find salient, you might get more useful conversation. I'm not going to watch it unless I know what's interesting about it in the first place.

A couple of things I liked about it - it is a good, quick summary including things like why 8% average return only results in 3 - 4% actual inflation adjusted spending, that there are different levels of FIRE (fat / lean), and that someone earning 100k/yr can get to FI faster than someone earning $500k/yr depending on the lifestyle choices they make.  There was a lot of ground covered in an engaging way.  I'm always looking for good educational materials that work for the masses.

There's also a thought provoking bit at the end that FIRE could be a sustainable social order if the transition to a low-labor workforce is handled correctly.  Basically, investing in more automation (something we talk about here), could allow for more leisure without sacrificing productivity.  The video uses the example of a FIRE practitioner using their savings to buy a farm, equipment, raw materials, and something like a 3D printer and CNC machine to then become fully self sufficient and not need to work for others for the rest of their existence...  but implemented on a societal scale with more efficiencies.
« Last Edit: May 18, 2021, 10:29:28 AM by EscapeVelocity2020 »

dandarc

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Re: What is the FIRE Movement? Could it be Hurting Our Economy?
« Reply #9 on: May 18, 2021, 10:38:42 AM »
See - that's a part that actually misrepresents significantly what is going on. I didn't hear one clear mention of sequence of return risk, which is the actual reason for a lower withdrawal rate than market return. That information was presented in a way that certainly leaves the impression of an "8% almost like clockwork" market return, which is not at all what is happening. I believe it was actually enumerated in a way that I think further confuses more than it clarifies - take 3% out, leave 3% for inflation, 1% for taxes, 1% for something I'm not remembering (maybe this is a the nod to volatility). Also did not mention the high probability of massive surplus.

The section on post-everyone-FIREs struck me as extremely pessimistic to the point of discounting entirely the very possibility of a relatively happy transition that you found interesting. Plus there's the whole "we're talking about something that ain't never going to happen" that goes unsaid throughout the entire video.

The section on dollar-cost-averaging was absolutely terrible, aside from stating the obvious "might help you develop better habits".

Frankly it was far too much being covered in the time allotted, and pretty well everything was done poorly. Then just when they start talking about stuff that might possibly become interesting, it shifts to a long infomercial for an app. Really not much value to this video, but I can see why it would appeal to a wide audience of people simply looking for entertainment and not any real help or information.

Paper Chaser

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Re: What is the FIRE Movement? Could it be Hurting Our Economy?
« Reply #10 on: May 18, 2021, 11:24:26 AM »
I'm not likely to watch the video, but when the title includes the words "What is the FIRE movement?" I'm not expecting much more than a cursory overview. If they cover the basics in a way that an average person heretofore unaware of FIRE can understand then I think they've done what they mostly set out to do. I'm pursuing FIRE, and discussing SoRR bores the hell out of me, so I can understand not wanting to weigh down a talk intended to introduce the general concept to newbs.

bill1827

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Re: What is the FIRE Movement? Could it be Hurting Our Economy?
« Reply #11 on: May 27, 2021, 09:24:04 AM »
But it was a guy talking in a British accent over a bunch of stock photos,

Point of information: it was a strine accent!

Seemed unexceptionable to me; a simplified description with no important errors, and he did make the point (often glossed over) that FIRE is not actually attainable by a significant proportion of the population - they don't have enough money to save.

Bloop Bloop Reloaded

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Re: What is the FIRE Movement? Could it be Hurting Our Economy?
« Reply #12 on: May 27, 2021, 10:49:24 PM »
I don't think FIRE has big enough of an impact to hurt the economy, but if it did, I would see that as a good thing.

The economy is already too big and too based on mindless consumption. A bit of contraction would be a necessary pill to swallow in many ways. Many people could use a reminder that there is more to life than spending and buying things.

poxpower

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Re: What is the FIRE Movement? Could it be Hurting Our Economy?
« Reply #13 on: May 28, 2021, 11:45:49 AM »
He mostly just explains the movement ( pretty well ) and then concludes that it wouldn't hurt the economy long-term.

I'd argue it wouldn't hurt it short term either. I've watched a few of his videos and in general he has a pretty mainstream take on economics so how he thinks about it is as a collective, if he says "it would hurt the economy" he's talking about some ill-defined "social wellbeing" measure where the total happiness of everyone on earth goes up or down or something like that.