4 or 6 more years, which one for FIRE?

[MrThatsDifferent]

Short intro: I discovered MMM about 2 years ago afters a lifetime of total ignorance about finances. I was in deep CC debt, but with a great job, great pay. I debt snowballed myself out of that mess and 18 months ago started structuring my finances to make FIRE possible as quickly as possible. At the time I was in a relationship.

I worked out that by 2022 I could be FIREd, assuming I stick to my plans and the money continues to grow in the market. I was aiming for $35-40k a year spend, which is plenty as I want to travel the world and experience what I can when I get to my 50s.

But lately, now that I’m single again, I feel less pressure to escape (I think the travel the world was more about escaping the relationship than anything else). I actually am in my dream job, making incredible money with all the autonomy and influence a person could want in a job. It can be stressful and intense but it’s not soul-destroying, and there are lots of perks that come at the executive level. So now I’m thinking I could work until early 2025 and the FIRE with probably $60k/yr from 4% drawn. This would give me cushion and help if my country’s currency is below the US dollar.

My hesitation is, I’m not super Mustachian but I do get the philosophy.  I don’t need $60k a year, I don’t need to spend that. Is it wasteful and useless to have far more money than you need? Should I be quitting a great job just to be more free, when in reality, I’m pretty free. Sure, I have to go to work but I also get to do whatever I want with my life. I have a list of things I want to do when I’m FIREd that I could easily do now.

Current plan, get to the 4 year mark and reassess. Any other thoughts?

[PDXTabs]

My hesitation is, I’m not super Mustachian but I do get the philosophy.  I don’t need $60k a year, I don’t need to spend that. Is it wasteful and useless to have far more money than you need?

Can you think of any charities that you would be happy to will the money to one day? There's nothing wrong with working until you could pull $60K and pulling $40K instead, if that is what you want to do.

[MrThatsDifferent]

My hesitation is, I’m not super Mustachian but I do get the philosophy.  I don’t need $60k a year, I don’t need to spend that. Is it wasteful and useless to have far more money than you need?

Can you think of any charities that you would be happy to will the money to one day? There's nothing wrong with working until you could pull $60K and pulling $40K instead, if that is what you want to do.

Sure, of course. Although I could see me more wanting to hold that for my family. My other concern would be lifestyle inflation and me getting a big head and thinking I’m rich now and start being careless. I gotta protect me from me.

[jlcnuke]

Ultimately, we all work because we've decided our current ability to spend without work isn't enjoyable enough to not be bothered with working. When that equation shifts to an even balance, that's when we must decide what we want more, freedom from work or more money. How we feel about that question can change overnight, but if recommend sleeping on it before pulling the trigger when you first reach it, just in case it was a bad day or something.

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[Gremlin]

A lot can change in four years (or six).  You might get a really shitty boss or a really awesome one.  You might get a great career opportunity that you can't pass up.  You might meet the person of your dreams who changes your world.  Life might throw you a curveball.  Why do you need to firm up a decision now? 

It sounds like either plan has you doing what you're doing for a while.  I've always been of the opinion that you need a Plan B (and Plan C, etc) and that you should reassess every few months - even if it's to reconfirm that your Plan A is the right one.

For you, Plans A and B follow pretty similar trajectories for the time being, so keep on keeping on and be prepared to call it when the time comes.  Spend the time determining what's going to sway the decision one way or the other at the time.

[EnjoyIt]

May I add that having a slightly bigger stache as compared to your spend increases the chance of your money to continue to grow over the next few decades of retirement.  That money can be used for what may be some lifestyle creep as well as a safety net for something unpredictable.  If life is good while you are working, then why stop what is good.  Who knows, maybe in 4 years you will find an opportunity to work part time and get the best of both worlds.  Keep on keeping on and re-evaluaute your situation in 4 years.  As Gremlin put it "A lot can change in four years."

[whywork]

My hesitation is, I’m not super Mustachian but I do get the philosophy.  I don’t need $60k a year, I don’t need to spend that. Is it wasteful and useless to have far more money than you need?

Be a mustachian till you come closer to FIRE. Then if you feel like, continue to work and say you have OMY syndrome. Keep upping your stache as long as you want to. All of these (mustachian etc..) are just things to help you. Use them as you want, don't be bound by them

[MrThatsDifferent]

Thanks everyone!

[Retire-Canada]

You are not going to ever get that time back and you likely have no idea what life will really be like post-FIRE so it's hard to evaluate the opportunity cost of FIREing when you are running on the hamster wheel of life.

A dream job is one you'd do for free. If it's not something you love so much you'd do it for free start to consider what else you can do with your life.

Pulling the trigger on FIRE is hard. Very hard and the human mind is a cunning animal. It will do all sorts of things to mitigate the fear of change...like justifying why working OMY and then OMY and then OMY makes sense even though you have loads of money and most likely your portfolio will keep growing even as you are living off of it.

If you are shooting for a $35K - $40K spend at 4%WR and want to accrue an extra safety margin ok. Shoot for $45K, but put a hard limit on that and get out with your life. That's 29% more than your lower target. Part of the FIRE process is being able to mentally compute and accept the concept of "enough" and detach yourself from the wage slavery teat.

[MrThatsDifferent]

You are not going to ever get that time back and you likely have no idea what life will really be like post-FIRE so it's hard to evaluate the opportunity cost of FIREing when you are running on the hamster wheel of life.

A dream job is one you'd do for free. If it's not something you love so much you'd do it for free start to consider what else you can do with your life.

Pulling the trigger on FIRE is hard. Very hard and the human mind is a cunning animal. It will do all sorts of things to mitigate the fear of change...like justifying why working OMY and then OMY and then OMY makes sense even though you have loads of money and most likely your portfolio will keep growing even as you are living off of it.

If you are shooting for a $35K - $40K spend at 4%WR and want to accrue an extra safety margin ok. Shoot for $45K, but put a hard limit on that and get out with your life. That's 29% more than your lower target. Part of the FIRE process is being able to mentally compute and accept the concept of "enough" and detach yourself from the wage slavery teat.

Thanks Retire, great insight. This is what I’ve been wrestling with. The big unknown for me is the strength of the Aussie dollar in 4+ years. If I want to live in Europe and the dollar is weak, I might need more of my Aussie stash to keep the budget I want.

[Retire-Canada]

The big unknown for me is the strength of the Aussie dollar in 4+ years. If I want to live in Europe and the dollar is weak, I might need more of my Aussie stash to keep the budget I want.

That's not a problem. Presumably you are holding a high % of international investments given Aus' economy is relatively small. Even if those investments are in Aus dollars the underlying securities are valued in Euros, USD, etc... and will maintain their spending power if the Aus dollar goes to shit. You don't need to work extra to mitigate this risk you just need to diversify, which you should be doing anyways.

[MrThatsDifferent]

The big unknown for me is the strength of the Aussie dollar in 4+ years. If I want to live in Europe and the dollar is weak, I might need more of my Aussie stash to keep the budget I want.

That's not a problem. Presumably you are holding a high % of international investments given Aus' economy is relatively small. Even if those investments are in Aus dollars the underlying securities are valued in Euros, USD, etc... and will maintain their spending power if the Aus dollar goes to shit. You don't need to work extra to mitigate this risk you just need to diversify, which you should be doing anyways.

Ok, never thought about it like that. Thanks!

[Lan Mandragoran]

I'd just work till I could be FIRE if I want to then see how it goes. Maybe go part time or something?

[whywork]

You are not going to ever get that time back and you likely have no idea what life will really be like post-FIRE so it's hard to evaluate the opportunity cost of FIREing when you are running on the hamster wheel of life.

A dream job is one you'd do for free. If it's not something you love so much you'd do it for free start to consider what else you can do with your life.

Pulling the trigger on FIRE is hard. Very hard and the human mind is a cunning animal. It will do all sorts of things to mitigate the fear of change...like justifying why working OMY and then OMY and then OMY makes sense even though you have loads of money and most likely your portfolio will keep growing even as you are living off of it.

If you are shooting for a $35K - $40K spend at 4%WR and want to accrue an extra safety margin ok. Shoot for $45K, but put a hard limit on that and get out with your life. That's 29% more than your lower target. Part of the FIRE process is being able to mentally compute and accept the concept of "enough" and detach yourself from the wage slavery teat.

Very well put. As I posted in an another thread, they say first million is hardest. You work through several years of low wages and not knowing about FIRE to get to that 1st million and then some more to reach FIRE. Now your stash continues to grow pretty quick with each year of additional working. If you have spent 15-20 years for the FIRE number, accumulating one more million might take only a few years and those are golden years where you are increasing your networth greatly. Quitting then might seem like a bad idea. Why not work for 3 more years and leave with a much higher networth.

For example for my case, in 4 years I will reach 1.4M (assuming a strong market). That's a decent FIRE number for family. But for the next few years my stash grows like this

1st OMY: 1.7M
2nd OMY: 2M
3rd OMY: 2.3M
4th OMY: 2.7M
5th OMY: 3M

At 2.3M plus I will have lot more in returns and can retire much more comfortably. Infact any of these numbers (1.7M to 3M) is much more comfortable. While I had to struggle through 20 years of working life for the first 1.4M, just 4 more years is doubling that. I can pass this as inheritance to my kids and help them through their tough working years. If I don't have any kids and if the money is really going to go waste then yes it makes sense to not to waste those years. But otherwise staying put a little extra is like reaping gold.

[Retire-Canada]

It's useful to revisit Maizeman's chart once in a while to put the opportunity costs into perspective. The one nice thing about working another 5yrs is not only will you have more money in FIRE you are going to die a lot sooner after you FIRE so you won't need the money as long. That's a benefit right? ;-)

Putting $1.4M into cFIREsim for a 50yr retirement the median ending value is $5M in today's dollars and that's after your withdrawals. So in most cases your portfolio will keep growing as you life off it. Allowing for a sweet inheritance and/or charitable giving.

[whywork]

True, 1.4M could be enough even for passing on inheritance if you live frugally.

The question though is not about a specific FIRE number but the pros and cons of working a few more years post FIRE vs stopping right there. And we have both pros and cons for that as we both mentioned.

I don't think there is any strict answer to this. Each person has to decide at that point based on how they feel about the pros and cons

[RyanAtTanagra]

While I had to struggle through 20 years of working life for the first 1.4M, just 4 more years is doubling that.

I find it funny that someone who chose the name whywork is arguing for OMY ;-)

Your logic means you should always keep working.  When you get to 2.8M you'll say 'man, it took me 24 years to get to 2.8M, but with only a few more years I can double that', then when you get to 5.6M...

That's the whole point of stopping when you hit 'enough'.  Otherwise you'll never stop, because the stash growth always speeds up.  The exponential curve keeps getting steeper.

[MrThatsDifferent]

Retire Canada, I’m going to keep coming back to you as my sanity check. You’re right, you’re not getting those years back. Seeing Whywork go through the mental exercise of adding more years for more money with no real goal except inheritance, when, most likely you’ll die with money left over is a wake up call about my own foolish thinking. I also realize that what I wanted to do was give myself an excuse to be looser with my money now, again for no reason. You’ve given me the face punch I needed without even meaning to swing. Thank you. I get it and you’re right. You only get one life and it’s over quicker than anyone generally wants. So 4 years it is or sooner if I hit my targets.

[Retire-Canada]

So 4 years it is or sooner if I hit my targets.

Awesome! I'm rooting for you. :-)

[ixtap]

We have decided that we don't want to lock ourselves into our current lifestyle. We are building up a reserve beyond the minimum to keep our options open.

[Gremlin]

So 4 years it is or sooner if I hit my targets.

Awesome! I'm rooting for you. :-)

MrThatsDifferent is an Aussie.  That phrase means something different here to what it does in Canada.  I’m sure the sentiment is appreciated though! :-)

[MrThatsDifferent]

So 4 years it is or sooner if I hit my targets.

Awesome! I'm rooting for you. :-)

MrThatsDifferent is an Aussie.  That phrase means something different here to what it does in Canada.  I’m sure the sentiment is appreciated though! :-)

Lol, I’m not actually an Aussie but I know what you mean.

[Retire-Canada]

MrThatsDifferent is an Aussie.  That phrase means something different here to what it does in Canada.  I’m sure the sentiment is appreciated though! :-)

I'm pulling for you? Hmmm...that could be just as bad depending on how you take it. ;-)

[Retire-Canada]

A LOT can happen in 4-6 years.

...snip...

So yeah, look at the math. Know what’s realistic, and then focus on getting the most out of your life regardless of what happens to your plans along the way.
My DH always says: “never let a good plan fuck up a great life”

All good points. Any FIRE plan that is supposed to span decades needs to have a flexible foundation. Both for how FIRE starts and how it progresses. You can't plan it all out in advance and you can't know what it will be like 100% once you retire. That said generating some sort of plan/vision is smart, but don't get too attached to it.

Where I see people go wrong with this ^^^ is they lock in on "flexibility" as being lots more money, which equals years more work. When you look at all the failure modes for FIRE running out of cash isn't the one that concerns me a ton. Formulate a reasonable budget. Save/invest a conservative amount [ie. 4%WR]. Be a tad flexible in your spending in response to market events and you'll be golden. On the other hand work too much sacrificing your physical or mental health or your primary relationships and you'll be a very rich miserable person who dies young or lives a long time feeling like life ripped them off.

You need to get to FIRE with money, but far more importantly you need to get there with your health, with solid personal relationships and with the mental framework to be able to be happy. Accumulating the money is the easy part if you are a white collar professional...it's the other items that will take a lot of attention, effort and commitment.  Assuming you'll reconnect with your SO, family and friends after FIRE having put them on the back burner for work is a dangerous assumption. The same goes for sacrificing your health at a stressful sedentary desk job and thinking you'll fix all the damage once you are retired. You might....but you might not get the chance as well.

All this to say be flexible and don't just focus on money. It's a tool that's useful to build a great life, but it's not the goal itself.

[MrThatsDifferent]

A LOT can happen in 4-6 years.

...snip...

So yeah, look at the math. Know what’s realistic, and then focus on getting the most out of your life regardless of what happens to your plans along the way.
My DH always says: “never let a good plan fuck up a great life”

All good points. Any FIRE plan that is supposed to span decades needs to have a flexible foundation. Both for how FIRE starts and how it progresses. You can't plan it all out in advance and you can't know what it will be like 100% once you retire. That said generating some sort of plan/vision is smart, but don't get too attached to it.

Where I see people go wrong with this ^^^ is they lock in on "flexibility" as being lots more money, which equals years more work. When you look at all the failure modes for FIRE running out of cash isn't the one that concerns me a ton. Formulate a reasonable budget. Save/invest a conservative amount [ie. 4%WR]. Be a tad flexible in your spending in response to market events and you'll be golden. On the other hand work too much sacrificing your physical or mental health or your primary relationships and you'll be a very rich miserable person who dies young or lives a long time feeling like life ripped them off.

You need to get to FIRE with money, but far more importantly you need to get there with your health, with solid personal relationships and with the mental framework to be able to be happy. Accumulating the money is the easy part if you are a white collar professional...it's the other items that will take a lot of attention, effort and commitment.  Assuming you'll reconnect with your SO, family and friends after FIRE having put them on the back burner for work is a dangerous assumption. The same goes for sacrificing your health at a stressful sedentary desk job and thinking you'll fix all the damage once you are retired. You might....but you might not get the chance as well.

All this to say be flexible and don't just focus on money. It's a tool that's useful to build a great life, but it's not the goal itself.

You my friend have just been nominated for a best of the forum. Brilliant!