Is your friend in the UK? The lower your expenses and the older you get, the more of the heavy lifting the State Pension can do (or equivalent elsewhere). If you retire at SP age, you only need the gap between your full SP and spending x 25; if you retire two years before SP age, you need two full years of spending (probably in cash) plus the gap x 25; even five years before SP, you only need 5 years of spending (plus inflation) and the gap x 25. Plus, you can put more of that saving in a workplace or personal pension and receive a 25+% bonus due to tax.
The gap between SP and spending is lower the less you spend, so cutting expenses now can make a huge difference to how final retirement feels.
Even if you rely fully on pensions and don't save into an ISA, you could retire a full TEN YEARS earlier than the SP age, and they'll probably be your healthiest years of retirement.
FIRE is great, but you don't have to fully FIRE to get many of the benefits. Based on the people on this board, those with lower incomes are often better and more creative at cutting costs than people with higher incomes.
Finally, in the UK, the tax treatment of a lower income landlord is far more favourable than a higher income landlord. A BTL with a mortgage allows you to leverage growth (or decline) in the housing market, and someone on a lower income might have more time to do more of the management and repairs herself, reducing management fees.
This is a poll I started awhile back for folks who are below median family income to track their FI progress.
As you'll see a number of them are doing just fine.
https://forum.mrmoneymustache.com/throw-down-the-gauntlet/race-to-100-fi-(only-if-below-median-household-income!!!)/ (https://forum.mrmoneymustache.com/throw-down-the-gauntlet/race-to-100-fi-(only-if-below-median-household-income!!!)/)
This is a poll I started awhile back for folks who are below median family income to track their FI progress.
As you'll see a number of them are doing just fine.
https://forum.mrmoneymustache.com/throw-down-the-gauntlet/race-to-100-fi-(only-if-below-median-household-income!!!)/ (https://forum.mrmoneymustache.com/throw-down-the-gauntlet/race-to-100-fi-(only-if-below-median-household-income!!!)/)
Thanks I saw it but you are using the median, which is actually fine for most of the case.
But low income is different and much harder. When you earn £1500/month its hard to save. And saving hard for 25 years is fairly tough I think. If when I was considering FIRE I'd be imagining it'd take me this long I'd probably think to just do like everyone and contribute a bit more for my retirement and wouldn't call this early retirement.
After our discussions, my friend wanted to do some rental instead as it makes more sense and feel like it gives higher chance to FIRE from making a business than doing the long game we're all doing.
This is a poll I started awhile back for folks who are below median family income to track their FI progress.
As you'll see a number of them are doing just fine.
https://forum.mrmoneymustache.com/throw-down-the-gauntlet/race-to-100-fi-(only-if-below-median-household-income!!!)/ (https://forum.mrmoneymustache.com/throw-down-the-gauntlet/race-to-100-fi-(only-if-below-median-household-income!!!)/)
Thanks I saw it but you are using the median, which is actually fine for most of the case.
But low income is different and much harder. When you earn £1500/month its hard to save. And saving hard for 25 years is fairly tough I think. If when I was considering FIRE I'd be imagining it'd take me this long I'd probably think to just do like everyone and contribute a bit more for my retirement and wouldn't call this early retirement.
After our discussions, my friend wanted to do some rental instead as it makes more sense and feel like it gives higher chance to FIRE from making a business than doing the long game we're all doing.
I'm not on the thread above, but I earn less than £1500 a month. It is tougher to save but you can do it. If I maintained my current lifestyle and earned £1500 a month I would be somewhere between 25% and 33% savings rate and I am currently renting a small house to myself in a middle class area (admittedly in the north rather than the south), *and* I have a car.
If you can increase income with something like a rental or a business and you have the skills for that, it is a good idea, of course. But if someone doesn't feel like they have the skills to get to a higher income level, it can be done on a lower income.
Is your friend in the UK? The lower your expenses and the older you get, the more of the heavy lifting the State Pension can do (or equivalent elsewhere). If you retire at SP age, you only need the gap between your full SP and spending x 25; if you retire two years before SP age, you need two full years of spending (probably in cash) plus the gap x 25; even five years before SP, you only need 5 years of spending (plus inflation) and the gap x 25. Plus, you can put more of that saving in a workplace or personal pension and receive a 25+% bonus due to tax.
This is a poll I started awhile back for folks who are below median family income to track their FI progress.
As you'll see a number of them are doing just fine.
https://forum.mrmoneymustache.com/throw-down-the-gauntlet/race-to-100-fi-(only-if-below-median-household-income!!!)/ (https://forum.mrmoneymustache.com/throw-down-the-gauntlet/race-to-100-fi-(only-if-below-median-household-income!!!)/)
Thanks I saw it but you are using the median, which is actually fine for most of the case.
But low income is different and much harder. When you earn £1500/month its hard to save. And saving hard for 25 years is fairly tough I think. If when I was considering FIRE I'd be imagining it'd take me this long I'd probably think to just do like everyone and contribute a bit more for my retirement and wouldn't call this early retirement.
After our discussions, my friend wanted to do some rental instead as it makes more sense and feel like it gives higher chance to FIRE from making a business than doing the long game we're all doing.
Thanks for your answer guys. But just to be clear, FIRE means financial independent, retire early.
If by the time you are FI you are pretty much close to retirement age this is not FIRE. Its just retirement.
And yeah people can increase revenu over the years... but could also earn less. It all depends on the lifestyle and decision. I have many friends on minimum wage and working in shops or bar and they've had low wages for years. They may be educated and have done the wrong study (tourism / sociology / etc.) and never managed to get a job that worth what they studied.
I even have 1 friend who has been earning minimum wage for 7 years and he studied to be veterinarian, has the degree and speak 5 language. But because he is from abroad the degree wasn't recognise and had to be assistant pharmacist. The pay for this job is about £8-9/h. And its not they don't try to earn more. But circumstance are preventing it.
So you can always plan to earn less later but really you don't know what life will throw you!!
I mean lets do the simple math. Let say you are 35 and start investing. By the time you could potentially be FI in 25 years you'd be 60. Its pretty much retirement age. Maybe you can plan a bit to get advantage of the gov pension and share a few years?
But really that's not FIRE. That's pretty much retirement at close to retirement age!!
And by the way, by saying there are load of people in the same situation, I'd be really keen to see story of people who are like my friends working maybe in a pub / shop on close to minimum age being at over 70% reach towars fire. I didn't see any story like that here
helloyou - I still struggle to see what is so bad about the 35 year old scenario. They’ve lost approx 15 years without saving a penny yet they are still able to have a secure retirement at least 8 years before State Pension age. That’s a massive success! We are also assuming they never increase their income here.The OP's friend has 10k saved.
But being a complainypants in a minimum wage job isn't going to get you to FIRE.Ninja edit mine. You can be the hardest working grocery store cashier in the world, you're still going to have a harder time than a mediocre office worker who half asses his paper pushing duties. Earning potential is only loosely related to what people call "merit", and securing the most valuable niches in a labor market is a skill that often hasn't got that much to do with formal studies. Case in point: OP's friend who did advanced and presumably competitive studies in a foreign country but now works for £9/hour.HardSmart and focused work will.
I tend to perceive the thinking here is upside down and back to front. When you say "So is FIRE not possible for low earning people? The only way she could reach FIRE before very old age would be to increase revenue?" doesn't seem to stack up. You've just given an example where someone earning a low wage could achieve FIRE in their 40's. That's amazing!
25 years may seem like a long time but it is significantly better than 40. That's an extra 15 years of freedom! If someone starts later then yes of course they will be older when they FIRE but that isn't the fault of the principles around how FIRE works, that's just because they had a very low savings rate for a period of years beforehand.
FIRE isn't the only goal here. Along the path they have the security of a robust emergency fund. They have the ability to quit a job if a new boss or the culture turns it toxic. They have the ability to take a year off and go travelling. They will hit a point where they realise their over 65 life is fully funded, and the peace of mind that brings etc. There are valuable milestones to the FIRE approach that significantly improve wellbeing long before full FIRE is achieved.
Of course increasing income reduces the time but yay for 35% savings rates and all the good stuff that they bring!
Monthly earning: £1400If someone has the organisational skills and self-discipline to save more than one-third of her low income for 25 years, I would expect she will not have a low income for all 25 of those years. That's a woman who has her shit together, and she may not ever be rich, but she will do better over time.
Monthly expense: £900
Monthly saving: £500 [...]
So is FIRE not possible for low earning people? The only way she could reach FIRE before very old age would be to increase revenue?
Thanks for your answer guys. But just to be clear, FIRE means financial independent, retire early.
If by the time you are FI you are pretty much close to retirement age this is not FIRE. Its just retirement.
And yeah people can increase revenu over the years... but could also earn less. It all depends on the lifestyle and decision. I have many friends on minimum wage and working in shops or bar and they've had low wages for years. They may be educated and have done the wrong study (tourism / sociology / etc.) and never managed to get a job that worth what they studied.
I even have 1 friend who has been earning minimum wage for 7 years and he studied to be veterinarian, has the degree and speak 5 language. But because he is from abroad the degree wasn't recognise and had to be assistant pharmacist. The pay for this job is about £8-9/h. And its not they don't try to earn more. But circumstance are preventing it.
So you can always plan to earn less later but really you don't know what life will throw you!!
I mean lets do the simple math. Let say you are 35 and start investing. By the time you could potentially be FI in 25 years you'd be 60. Its pretty much retirement age. Maybe you can plan a bit to get advantage of the gov pension and share a few years?
But really that's not FIRE. That's pretty much retirement at close to retirement age!!
And by the way, by saying there are load of people in the same situation, I'd be really keen to see story of people who are like my friends working maybe in a pub / shop on close to minimum age being at over 70% reach towars fire. I didn't see any story like that here
I'm not sure what you're looking for here, but yes, if a person dicks around working in shops for minimum wage and not saving any money until they're 35, they don't get to retire at 40. Life choices have consequences. If you want to retire at 40, you either have to start young, or start late but earn more money (or make some really unorthodox lifestyle changes). There's no magic bullet.
If you want some examples, me and my partner are probably a fairly good one - when we started working towards FIRE in our mid 20s he made minimum wage working in a grocery store, and I made slightly over that working in a warehouse. He eventually got a job as a typist that paid a little more, and then an administrative assistant that paid a little more, and then he started his own business as an editor. I found a job as an office assistant, then a better office assistant job that paid more, and then a receptionist. We kept our expenses low throughout and didn't make excuses. Now we're 31 and 33 and have about 500K in investments, despite zero high paying jobs. We made step by step plans and followed them to the letter.
Retiring in your fifties *is* an early retirement compared to retiring at pension age, in any case. Sure, people who are more mainstream do that more, but the ones who are able to retire in their 50s without FIRE principles are normally people who were not earning low incomes. So for someone on a low income to retire in their 40s (if they start young) or 50s (starting a bit later) still gives them a huge amount of time, compared to working until 65 or even 70.
Plus, even if you don't actually retire early, even getting to the point where you have one year's expenses built up puts you in a miles better position than someone earning the same low income but saving maybe £200 here or there. If you need to pay a large bill or something important breaks you can use those savings to just fix it, whereas most low income earners who follow mainstream finance thinking would end up having to go into debt for that, or else barely be able to pay it. Don't compare the results to what a medium or high income earner achieves with FIRE principles, but to what someone with your low income achieves without FIRE principles.
It *does* make FIRE easier and faster to earn more money, but I don't think we should assume that everyone is capable of earning a higher amount of money. Reskilling is great but there are other factors involved sometimes - e.g. myself being disabled, I can't work full time. I'm earning more than minimum wage per hour for each hour I do, in some cases twice as much as minimum wage, in part due to skills I have. But due to the part time hours I earn less than £15,000 at the moment, and someone earning minimum wage for 40 hours a week, full time, if they're over 21, would earn based on the figures I just looked up at least £17,000 for the current figure. Some people also just aren't as quick at learning things. People can be encouraged to find out how to earn more, but it shouldn't be the start or the entirety of advice offered.
I see your point guys toward working your ass off to increase income and that skill are transferable and that people can earn more but it's not always the case.
Most of my friends are expats. And I have very few making the average wage. They either are in the right industry (IT) and make above average, or they are in the wrong industry (travel, social science, chemistry, etc.) and are stuck to low paying wage due to competition and only few of them make average income (i don t even talk about good wage)
And I'm happy to share what they do, maybe you guys could have idea of how they could increase their earning. I'll only share example of friends who've been doing similar low page wage for at least 5 years AND have been talking to earn more and change career for years:
1. My veterinarian friend who could only find at best assistance pharmacist job at £8-9/h. He looked around for a while and couldn't find anything. After 7 years trying in the UK he left and planning to take a training to become nurse which would at least give average wage. But really... this is not optimal.
2. Another one working in a sale position selling carpet. Earning minimum wage + commission. Still fairly low wage. Studied travelling and is looking at her next career for a LONG time. Hasn't found it yet.
3. Friends who studied chemistry and worked for some time in the field in brasil until decided to move to london. Have been doing small office job and shop job all paying around £8/h and never managed to get a job paying more.
I have more and more stories. In reality a majority of my friends are low income earner... unless they work in IT or finance.
I see them struggling to get a better wage job and regularly complaining about it and as well applying for job.
Maybe its that hard because I live in london and rent is for many of them around 50% of their income. And that's just by having a room which cost about £600/month. That's a lot for someone working in a shop earning £1200/month. Then transport is about £120/month. So if you just add up living cost + travel there isn't much left to be saved.
I actually have a story of one of my friend who studied administration and couldn't find anything (good) in london. So she ended up working in a bakery shop in central london. But because she didn't want to live too far from work she took a SHARED ROOM to be able to get to work under 30min. Can you imagine? Sharing your room with someone just in order to be close to work and making minimum wage?
It was so hard for her that after years of living like that when she finally found a job as a receptionist (which isn't really paid more) it was a blessing for her and since then she grab on this job and make sure she stays in there.
So its not that they don't want or that they're lazy, but life circumstance prevent them to 'ascend' toward a better career.
Of course, there are always some of these odd job like deliveroo cycle where they could earn a bit more (maybe £10-12/h?) but none of them want to do that as this is neither a long term career and its also quite physical/dangerous....
So open for ideas if its so easy to increase earnings I could tell my friends if its so easy!
In my experience as a nurse, many people who seem to be stuck in dead end low wage jobs despite education or experience are depressed. This prevents them from seeing clearly, making a plan and executing it and having the energy and hustle to make it happen. Encourage them to get help, seek counseling, make some lifestyle adjustments or whatever is needed to start feeling better.
So open for ideas if its so easy to increase earnings I could tell my friends if its so easy!
The UK is one of the most defeatist places I've ever lived (for a summer internship, later was married to a Brit for a decade). The class system, the anti-immigrant rhetoric, the snobbishness. It's hard on the psyche and can make it difficult to remain positive or see a way out of one's situation.You know it never truly hit me how much cynicism there is in the UK until I left, especially among the overeducated but underemployed. They give the French a run for their money, who are the reigning world champions of confusing sarcasm for wit.
The UK is one of the most defeatist places I've ever lived (for a summer internship, later was married to a Brit for a decade). The class system, the anti-immigrant rhetoric, the snobbishness. It's hard on the psyche and can make it difficult to remain positive or see a way out of one's situation.You know it never truly hit me how much cynicism there is in the UK until I left, especially among the overeducated but underemployed. They give the French a run for their money, who are the reigning world champions of confusing sarcasm for wit.
When I first landed in the US south it took me a while to adjust to everyone being so overtly friendly. I mean, Americans smile as you walk past them in the street, who does that?!
I think there's a general social pressure to not be seen as naive, and it breeds skepticism and a negative outlook. In Russia it's even more extreme, where smiling for no good reason is associated with being a simpleton, so it seems like they never smile in public.The UK is one of the most defeatist places I've ever lived (for a summer internship, later was married to a Brit for a decade). The class system, the anti-immigrant rhetoric, the snobbishness. It's hard on the psyche and can make it difficult to remain positive or see a way out of one's situation.You know it never truly hit me how much cynicism there is in the UK until I left, especially among the overeducated but underemployed. They give the French a run for their money, who are the reigning world champions of confusing sarcasm for wit.
When I first landed in the US south it took me a while to adjust to everyone being so overtly friendly. I mean, Americans smile as you walk past them in the street, who does that?!
Isn't that just how we Europeans are? I've spent quite a lot of time in the UK and people there don't seem more cynical than in the Netherlands, Belgium or France or other European countries. It's funny that the #1 complaint we have about Americans is that they are so friendly, we complain about how fake that all is. I have always liked working with Americans exactly because of that - why be unfriendly for no reason? I actually like the politeness of the Brits too. In my country people will try to run you over with their bike if you don't cross the street fast enough and then shout at you after it happens. I love that Brits say excuse me and are politely cynical. Only in the northern countries I've encountered Europeans who trust their government and society and have a positive world view.
@Zikoris I just told my friend in chemistry about your suggestion to do some math tutoring and she said it wouldn't work because she's not qualified and she hasn't done that for a while. She wants ultimately to ascend to a higher paying job and want to start working in data analyse to move into business consultant later on.
However, for now, she needs a job to pay for her rent and would take anything. She applies everywhere and send CV every day. Even asking me for recommendations. I don't think motivation is lacking here, it's really the lack of opportunity. However it's true we're in the middle of a pandemy and a lot of my friends are jobless at the moment.
That’s the whole point though- you can’t have it both ways. You choose to get off that 10 hour shift and go relax instead of pursuing FIRE. RE takes extra effort and sacrifice. You can’t expect RE and not be willing to sacrifice for it.
I was working 2x-3x restaurant and landscaping jobs before I went to college - 80-100 hrs/wk. Then I worked full time after class while in school. I tripled up jobs in the summer. When I got my first engineering job I worked late into the night to prove myself. I studied for my professional license after work and on weekends for months.
I once dreamed of going to college so I could afford to only have one job. I lived in my car and was on food stamps for a while. I got by because of good people who took me on and kept me going. Today I live better than I ever dreamed and will retire by 40 and can easily save 60-70% of my income.
It is possible. But not if you get off your 10hr shift and go relax and enjoy life. You have to be willing to do the things your peers don’t want to do. It’s not easy to skip party after party, skip game after game, skip dinner & chores to study. Disappear into multiple jobs and lose sleep for months on end until you just can’t take it anymore. It’s a strain on every relationship and the very health of your body and mind. For me though, that’s what it took to get out, but I got out. My friends back home are still getting off work and going to relax and enjoy life.
I don’t even think of it as RE - for me, I just think of it as squeezing 40 years of working into 20 years.
So I got it all wrong. It can be done in 25 years. But it's still terribly long.
So is FIRE not possible for low earning people? The only way she could reach FIRE before very old age would be to increase revenue?
That’s the whole point though- you can’t have it both ways. You choose to get off that 10 hour shift and go relax instead of pursuing FIRE. RE takes extra effort and sacrifice. You can’t expect RE and not be willing to sacrifice for it.
I was working 2x-3x restaurant and landscaping jobs before I went to college - 80-100 hrs/wk. Then I worked full time after class while in school. I tripled up jobs in the summer. When I got my first engineering job I worked late into the night to prove myself. I studied for my professional license after work and on weekends for months.
I once dreamed of going to college so I could afford to only have one job. I lived in my car and was on food stamps for a while. I got by because of good people who took me on and kept me going. Today I live better than I ever dreamed and will retire by 40 and can easily save 60-70% of my income.
It is possible. But not if you get off your 10hr shift and go relax and enjoy life. You have to be willing to do the things your peers don’t want to do. It’s not easy to skip party after party, skip game after game, skip dinner & chores to study. Disappear into multiple jobs and lose sleep for months on end until you just can’t take it anymore. It’s a strain on every relationship and the very health of your body and mind. For me though, that’s what it took to get out, but I got out. My friends back home are still getting off work and going to relax and enjoy life.
I don’t even think of it as RE - for me, I just think of it as squeezing 40 years of working into 20 years.
Well, technically you can do FIRE without most of that stuff. We're on track for FIRE somewhere around 35 and have never done any of that (work crazy hours, bust our butts, sacrifice, etc). I work a 40 hour week and my boyfriend works about 20-ish. We also easily save 60-70% of our income, but are able to relax and travel a lot as well. So there's definitely such thing as SlackerFIRE, for people who like to take it easy instead of doing the whole work hard thing.
Just trying to illustrate that it isn’t always easy for everyone, it’s not all slackerFIRE. You read these forums and it’s easy to say everyone has a high paying job, everyone is smart, everyone comes from money, everyone had help, etc. then look at your own life and think you have none of that.
If you had bad grades in high school, barely graduated, work minimum wage, and come from a poor family in a depressed area - it can still be done. Don’t be a victim of your circumstances, that is the message.
I see your point guys toward working your ass off to increase income and that skill are transferable and that people can earn more but it's not always the case.
Most of my friends are expats. SO WHAT?
SNIP
I'll only share example of friends who've been doing similar low page wage for at least 5 years AND have been talking to earn more and change career for years: THERE IS YOUR KEY PROBLEM - TALKING BUT NO ACTION IN OVER 5 YEARS???
1. My veterinarian friend who could only find at best assistance pharmacist job at £8-9/h. He looked around for a while and couldn't find anything. After 7 years trying in the UK he left and planning to take a training to become nurse which would at least give average wage. But really... this is not optimal.
FORGET OPTIMAL - YOU WANT IMPROVEMENT THEN YOU MOVE ON TO THE NEXT STEP - NURSES WITH CERTAIN CERTIFICATIONS EARN CONSIDERABLY MORE. WTH DID HE WAIT 7 YEARS IN THE FIRST PLACE?
SNIP
Maybe its that hard because I live in london and rent is for many of them around 50% of their income. And that's just by having a room which cost about £600/month. That's a lot for someone working in a shop earning £1200/month. Then transport is about £120/month. So if you just add up living cost + travel there isn't much left to be saved.
- ONE LADY IN NY MADE PASTA AT HOME WHEN IT BECAME UNAVAILABLE IN THE STORES AND PEOPLE PICKED IT UP AT HER DOORSTEP IN THE CITY. SHE IS NOW RUNNING A SUCCESSFUL SMALL BUSINESS VIA FACEBOOK OF ALL THINGS.
I actually have a story of one of my friend who studied administration and couldn't find anything (good) in london. So she ended up working in a bakery shop in central london. But because she didn't want to live too far from work she took a SHARED ROOM to be able to get to work under 30min. Can you imagine? Sharing your room with someone just in order to be close to work and making minimum wage?
YES, I CAN - I WOULD CALL IT A SMART MOVE - OPTIMIZING HOUSING AND TRANSPORTATION COSTS. BUT I DON'T UNDERSTAND WHY SHE WAS UNABLE TO TURN THIS INTO A TRUE ADVANTAGE FOR HER - HOME IN 30 MIN GIVES YOU TIME TO STUDY OR DO A LITTLE SIDE GIG!
It was so hard for her that after years of living like that when she finally found a job as a receptionist (which isn't really paid more) it was a blessing for her and since then she grab on this job and make sure she stays in there. I DO UNDERSTAND THAT IT IS DIFFICULT BUT THIS ALSO TELLS ME THAT SHE GAVE UP. I'VE ACTUALLY PARLAYED A RECEPTIONIST JOB INTO AN ACCOUNTING JOB THROUGH NETWORKING - IT IS THE PERFECT OPPORTUNITY TO MEET AND TALK WITH PEOPLE:). YOUR PERSONAL LINKED-IN:).
So its not that they don't want or that they're lazy, but life circumstance prevent them to 'ascend' toward a better career.
CIRCUMSTANCES PRESENT "TEMPORARY" OBSTACLES - NOTHING MORE - YOU FIGURE OUT A WAY AROUND.
NOBODY 'ASCENDS' :) - YOU TAKE BABY STEPS AND MAY HAVE TO SACRIFICE TO MAKE IT HAPPEN. REMEMBER THIS IS NOT FOREVER.
Of course, there are always some of these odd job like deliveroo cycle where they could earn a bit more (maybe £10-12/h?) but none of them want to do that as this is neither a long term career and its also quite physical/dangerous....
I WAS A MYSTERY SHOPPER FOR A FEW YEARS - I GOT FREE HAIRCUTS, FREE FOOD, TICKETS, GASOLINE, CLOTHING, AND EXTRA INCOME. ODD JOBS ARE WHAT YOU MAKE OF THEM JUST LIKE LOW WAGE JOBS. I LIKED MYSTERY SHOPS BECAUSE I WAS INDEPENDENT I COULD ACCEPT OR REFUSE ANY JOB AND PLAN MY OWN ROUTE ON THE WAY HOME FROM WORK OR WHILE RUNNING ERRANDS.
So open for ideas if its so easy to increase earnings I could tell my friends if its so easy! - NOTHING WORTH HAVING IS EASY TO COME BY!
EVERY TEN - FIFTY DOLLARS YOU PUT AWAY COUNTS!
@Zikoris I just told my friend in chemistry about your suggestion to do some math tutoring and she said it wouldn't work because she's not qualified and she hasn't done that for a while. She wants ultimately to ascend to a higher paying job and want to start working in data analyse to move into business consultant later on.
However, for now, she needs a job to pay for her rent and would take anything. She applies everywhere and send CV every day. Even asking me for recommendations. I don't think motivation is lacking here, it's really the lack of opportunity. However it's true we're in the middle of a pandemy and a lot of my friends are jobless at the moment.
Also, for many of you who give me encouragement to try saving, I'd just clarify that I'm not a low-income earner. I'm actually close to being FIRE but for most of my friends it's like talking alien language.
Of course it needs motivation and dedication to really want to make money. However most want to do a job they like. They do not want to work just for money. Many are happy working as waiter. And for most when I tell them to go into better paying and easy to find roles such as IT, recruiter, sales, etc. it's usually not what they imagine themself doing. They don't see themself able to do it, and they don't see themself happy if they were to do it, especially they have to put extra effort to get to it.
I think most of my friends just want to enjoy life after work. After a 10h shift in the restaurant, the last thing they want is to do another job or study something else. They want to meet friends and relax. On the weekend they'll go to parties or visit the country. They have plans and don't see the value to work hard most of your life in order to benefit from it when you're old.
I think that's why most people looking for FIRE are high-income earners. Because we already earn more naturally and it's easy for us to save. We don't have to work 2 jobs + weekend in order to save more. We don't have to worry about our next paycheck to pay our rent, we wouldn't have to take a job at any cost if we're jobless, we don't have to make extra sacrifices in order to save money. And we still have time for leisure, time for us, including our evening and weekends off while saving at high rate. But not them.
So I get why I'm talking alien language to them, and why they just see me as a greedy person just thinking about money. They just want to have a happy life and can't imagine themself working day and night to get this extra cash to invest in a very distant future.
So I get why I'm talking alien language to them, and why they just see me as a greedy person just thinking about money. They just want to have a happy life and can't imagine themself working day and night to get this extra cash to invest in a very distant future.
Can I just state the obvious that if a person earns a low income that can only cover their essential expenses, and the person is unable or unwilling to change, they can't FIRE?
The big if is, will the person change? Most people start in minimum wage jobs.QuoteSo I get why I'm talking alien language to them, and why they just see me as a greedy person just thinking about money. They just want to have a happy life and can't imagine themself working day and night to get this extra cash to invest in a very distant future.
This is the biggest issue. They can't see it. They don't want to see it. So, why try until they want to change? Change happens from within. Perhaps your friends are the happy fisherman from the story about the MBA and the Mexican fisherman?
Can I just state the obvious that if a person earns a low income that can only cover their essential expenses, and the person is unable or unwilling to change, they can't FIRE?
The big if is, will the person change? Most people start in minimum wage jobs.QuoteSo I get why I'm talking alien language to them, and why they just see me as a greedy person just thinking about money. They just want to have a happy life and can't imagine themself working day and night to get this extra cash to invest in a very distant future.
This is the biggest issue. They can't see it. They don't want to see it. So, why try until they want to change? Change happens from within. Perhaps your friends are the happy fisherman from the story about the MBA and the Mexican fisherman?
I see your point guys toward working your ass off to increase income and that skill are transferable and that people can earn more but it's not always the case.
Most of my friends are expats. And I have very few making the average wage. They either are in the right industry (IT) and make above average, or they are in the wrong industry (travel, social science, chemistry, etc.) and are stuck to low paying wage due to competition and only few of them make average income (i don t even talk about good wage)
And I'm happy to share what they do, maybe you guys could have idea of how they could increase their earning. I'll only share example of friends who've been doing similar low page wage for at least 5 years AND have been talking to earn more and change career for years:
1. My veterinarian friend who could only find at best assistance pharmacist job at £8-9/h. He looked around for a while and couldn't find anything. After 7 years trying in the UK he left and planning to take a training to become nurse which would at least give average wage. But really... this is not optimal.
2. Another one working in a sale position selling carpet. Earning minimum wage + commission. Still fairly low wage. Studied travelling and is looking at her next career for a LONG time. Hasn't found it yet.
3. Friends who studied chemistry and worked for some time in the field in brasil until decided to move to london. Have been doing small office job and shop job all paying around £8/h and never managed to get a job paying more.
I have more and more stories. In reality a majority of my friends are low income earner... unless they work in IT or finance.
I see them struggling to get a better wage job and regularly complaining about it and as well applying for job.
Maybe its that hard because I live in london and rent is for many of them around 50% of their income. And that's just by having a room which cost about £600/month. That's a lot for someone working in a shop earning £1200/month. Then transport is about £120/month. So if you just add up living cost + travel there isn't much left to be saved.
I actually have a story of one of my friend who studied administration and couldn't find anything (good) in london. So she ended up working in a bakery shop in central london. But because she didn't want to live too far from work she took a SHARED ROOM to be able to get to work under 30min. Can you imagine? Sharing your room with someone just in order to be close to work and making minimum wage?
It was so hard for her that after years of living like that when she finally found a job as a receptionist (which isn't really paid more) it was a blessing for her and since then she grab on this job and make sure she stays in there.
So its not that they don't want or that they're lazy, but life circumstance prevent them to 'ascend' toward a better career.
Of course, there are always some of these odd job like deliveroo cycle where they could earn a bit more (maybe £10-12/h?) but none of them want to do that as this is neither a long term career and its also quite physical/dangerous....
So open for ideas if its so easy to increase earnings I could tell my friends if its so easy!
Get out of the UK (after the pandemic ends). Move to a low cost of living country.
Two options:
-Teach English (either offline or online or both) - easier but pays less
-Teach at a private international school - harder but pays more
I'd also think about either a dog walking or pet sitting business for the vet. I would think having a background like that would be really good and let you charge more premium rates, particularly for sitting - a lot of sitters are not comfortable with providing medical care like, say, insulin injections, so people with pets that need specialized care often pay a lot more.
I actually might start pet-sitting myself post-retirement, because I just love animals so much and want to cuddle all the cats.
@24andfrugal yes my veterinatian friend is from romania. And over there the average wage for this job is less than the minimum wage in uk.
Surely the cost of living must be lower, no?
So for him, it makes sense to move here to earn more and have a better future. Even if it's a minimum wage it would be better than what he could get there.
Why did he go into a field that would pay so little in his home country and even less somewhere else?
There aren't any cross certifications. The medical field is very protectionist (i'd say the same in the USA btw) and he would have to do again the whole study to be able to work legitimately here. If it wasn't the case, I think the protected professions in the medical and legal field would be full of ex-pats!
FWIW, there are a lot of foreign born doctors in the US.
So he didn't feel it worth it to spend 4+ years to graduate again and that makes absolutely sense.
Also, my friends move to London to find a job mostly because its easier to find here (load of gig jobs) and outside its not as simple.
In London, you can just walk around from pub to pub and get a job that way. Most opportunities are here!
I don't know if I would call a minimum wage pub job an "opportunity". What your friends need is a career.
And when you earn minimum wage, it doesn't make much difference to work in London or outside. Renting a room would eat half of your wage in both case. And being further away will also cost you more in transport
Uk is usually the most logical destination for most European ex-pats because the language is already known and salary either higher or equivalent to their home country. Its less true now with the pound so low but 10 years ago we had all countries coming in.
I thought they were non-English speakers and hence could not tutor English?
In a lot of countries there is no concept of pre-med and then a grueling competition for the privilege of paying 200k to go to medical school. People become doctors because that's what they decided they wanted to do when they were 18, and it was basically the same price as getting a history degree. I certainly didn't have a good grasp on labor markets when I was 18, did you?@24andfrugal yes my veterinatian friend is from romania. And over there the average wage for this job is less than the minimum wage in uk.
Surely the cost of living must be lower, no?
So for him, it makes sense to move here to earn more and have a better future. Even if it's a minimum wage it would be better than what he could get there.
Why did he go into a field that would pay so little in his home country and even less somewhere else?
There aren't any cross certifications. The medical field is very protectionist (i'd say the same in the USA btw) and he would have to do again the whole study to be able to work legitimately here. If it wasn't the case, I think the protected professions in the medical and legal field would be full of ex-pats!
FWIW, there are a lot of foreign born doctors in the US.
So he didn't feel it worth it to spend 4+ years to graduate again and that makes absolutely sense.
Also, my friends move to London to find a job mostly because its easier to find here (load of gig jobs) and outside its not as simple.
In London, you can just walk around from pub to pub and get a job that way. Most opportunities are here!
I don't know if I would call a minimum wage pub job an "opportunity". What your friends need is a career.
And when you earn minimum wage, it doesn't make much difference to work in London or outside. Renting a room would eat half of your wage in both case. And being further away will also cost you more in transport
Uk is usually the most logical destination for most European ex-pats because the language is already known and salary either higher or equivalent to their home country. Its less true now with the pound so low but 10 years ago we had all countries coming in.
I thought they were non-English speakers and hence could not tutor English?
Something isn't adding up here. Your friend has a specialized degree in a medical field that makes pennies in his home country and isn't useful anywhere else. How does this work? And why did he do this?
"Walking into a pub and getting a job" is not a career strategy, especially when those jobs pay minimum wage and the price of those "opportunities" is living in an incredibly expensive city. Before covid I'm sure waitressing jobs were a dime a dozen in LA but that doesn't mean that's the best use of one's human capital.
At any rate it sounds like your friends' attitudes and lifestyles are incompatible with FI, and it's a good deal harder to achieve in the EU than the US / Asia. So you may want to avoid getting too deeply into the topic.
At any rate it sounds like your friends' attitudes and lifestyles are incompatible with FI, and it's a good deal harder to achieve in the EU than the US / Asia. So you may want to avoid getting too deeply into the topic.
Why is it a good deal harder to FI in Europe than other countries?
At any rate it sounds like your friends' attitudes and lifestyles are incompatible with FI, and it's a good deal harder to achieve in the EU than the US / Asia. So you may want to avoid getting too deeply into the topic.
Why is it a good deal harder to FI in Europe than other countries?
Europe tends to be more difficult because
1) salaries tend to be lower than in the US or expat package-types in Asia (I'm always shocked when I read UK salaries)
2) tax burden tends to be higher on the kinds of salaries conducive to FI
I'm not the best person to ask about Europe - I've only studied/interned there. @Paul der Krake or @UnleashHell or many others on the forum may have more concrete illustrations of this.
Salaries may be slightly lower (often location dependent within Europe) but there is so much more to it that that.At any rate it sounds like your friends' attitudes and lifestyles are incompatible with FI, and it's a good deal harder to achieve in the EU than the US / Asia. So you may want to avoid getting too deeply into the topic.
Why is it a good deal harder to FI in Europe than other countries?
Europe tends to be more difficult because
1) salaries tend to be lower than in the US or expat package-types in Asia (I'm always shocked when I read UK salaries)
2) tax burden tends to be higher on the kinds of salaries conducive to FI
I'm not the best person to ask about Europe - I've only studied/interned there. @Paul der Krake or @UnleashHell or many others on the forum may have more concrete illustrations of this.
At any rate it sounds like your friends' attitudes and lifestyles are incompatible with FI, and it's a good deal harder to achieve in the EU than the US / Asia. So you may want to avoid getting too deeply into the topic.
Why is it a good deal harder to FI in Europe than other countries?
Europe tends to be more difficult because
1) salaries tend to be lower than in the US or expat package-types in Asia (I'm always shocked when I read UK salaries)
2) tax burden tends to be higher on the kinds of salaries conducive to FI
I'm not the best person to ask about Europe - I've only studied/interned there. @Paul der Krake or @UnleashHell or many others on the forum may have more concrete illustrations of this.
It's interesting what you say because during my 10 years career I always wanted to work abroad, and the only country I managed to earn more than in London was in Switzerland. So still in Europe.
Some anecdotes:
- I've had contact with a recruiter to work in HK and they offered relocation payment + 3 months housing allowance but the salary would be lower than what I had. I almost took the job but decided not to take it because in HK they work long hours (10h/day) and I'd still earn less even with a 15% tax rate. The lower tax rate was their main selling point actually.
- I sometime have Dubai recruiters calling me for roles, and once I did the mistake to discuss job requirements for an hour until we start talking salary and found out I'd earn 30% less there than in London.
I've always told these recruiters it didn't make any sense for me to relocate and go through all this hassle to get a big pay cut. If I want to explore other countries, I may as well just work a bit longer here in London and take holiday to visit abroad!
So it might be due to the field but so far, the best rate have always been in london and that's why I've stayed here for so long!
Unfortunately numbers won't lie. I started my career at $19k/year-- 20 years ago. I make $55k/year now. That's still low-income, but enough that I can save each month. I might not be FIRE, but I hope to reduce to part-time work in the coming years. Having an extra couple of days off each week has some value too.
In a lot of countries there is no concept of pre-med and then a grueling competition for the privilege of paying 200k to go to medical school. People become doctors because that's what they decided they wanted to do when they were 18, and it was basically the same price as getting a history degree. I certainly didn't have a good grasp on labor markets when I was 18, did you?
Then reality hits, and they move for whatever reason(s).
In my industry, software, I have found that the people who think Europe is just as good as the US for comps are completely deluding themselves. They'll point to health care costs as an example of a big expense, not taking into account that it's almost entirely irrelevant to the usual FIRE crowd who get full benefits that are low or no cost to them. Even that does fail and they need to pay out of pocket for whatever reason, the expense is negligible in the grand scheme of things.
London is closer to the US than the rest of Europe, yes. But still considerably lower, even at the tippy top.In my industry, software, I have found that the people who think Europe is just as good as the US for comps are completely deluding themselves. They'll point to health care costs as an example of a big expense, not taking into account that it's almost entirely irrelevant to the usual FIRE crowd who get full benefits that are low or no cost to them. Even that does fail and they need to pay out of pocket for whatever reason, the expense is negligible in the grand scheme of things.
That is true if you compare against perm role. I'm also in the IT sector (as UX designer), and after some number years of experience most people become contractor/freelance. Day rate from software engineer can average £500-700/day and more if in finance sector or in managing role. These guy stay in these roles for years and are almost like full timer.
They end up with yearly salary in the £100-150k mark which I believe is very much inline with US salary?
Although this practice may end soon because the UK government see it as tax avoidance and is planning to increase tax rate to 50-60% to contractors. That may very much change the number of high skilled workers in the UK
London is closer to the US than the rest of Europe, yes. But still considerably lower, even at the tippy top.In my industry, software, I have found that the people who think Europe is just as good as the US for comps are completely deluding themselves. They'll point to health care costs as an example of a big expense, not taking into account that it's almost entirely irrelevant to the usual FIRE crowd who get full benefits that are low or no cost to them. Even that does fail and they need to pay out of pocket for whatever reason, the expense is negligible in the grand scheme of things.
That is true if you compare against perm role. I'm also in the IT sector (as UX designer), and after some number years of experience most people become contractor/freelance. Day rate from software engineer can average £500-700/day and more if in finance sector or in managing role. These guy stay in these roles for years and are almost like full timer.
They end up with yearly salary in the £100-150k mark which I believe is very much inline with US salary?
Although this practice may end soon because the UK government see it as tax avoidance and is planning to increase tax rate to 50-60% to contractors. That may very much change the number of high skilled workers in the UK
I'm a generalist software individual contributor with less than 10 years professional experience. Competitive tech roles on the west coast are paying anywhere from 200k to 400k for someone with my experience. In London I'd be looking at... maybe 120-150k (USD). In Paris or Berlin it'd be closer to 90-120k. Zürich would be more in line with the US.
Anyway, I didn't mean to derail this into a tech-centric discussion of wages, but it's representative of professional salaries across the board. Anyone with an in-demand profession should take a long hard look at how much money they're leaving on the table for vague benefits.
I always read how people say not spending is a sacrifice, but to me it has never felt that way. I guess because I grew up poor I don't know another way and it is normal for me.