Author Topic: Frustration with misunderstanding  (Read 9737 times)

Fire2025

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Frustration with misunderstanding
« on: July 11, 2017, 10:10:41 AM »
So I belong to the ChooseFI facebook page and someone linked this article:

http://awealthofcommonsense.com/2017/07/some-thoughts-on-the-extreme-early-retirement-movement/

A lot of the first comments where about the first point, that we seem to all hate our jobs. But my issue is not with the misunderstanding that we all hate our jobs. it's that 4 of his 7 bullet points are wrong.

Health insurance- health care costs, effects every single person still breathing, not just someone on the path to FIRE

You miss out on a huge chunk of social security - Social Security gains slow a lot after a short period of time and many, but the most extreme retirees, are getting a very good % of their SS

Your money has to last you a very long time

Most of your funds need to be in taxable accounts - Just straight up wrong.

Expenses tend to rise as you age - Study after study has shown that people spend less as they age not more.

Investment management becomes much more important - Everyone who I read, who retired with stock portfolios, are very passive investors. 

Sequence of return risk can be massive - true, but hyperbolic

And don't even get me started with the "not living a balanced life" YOLO crap. 

This combination of simplification and misinformation is really frustrating to me.  I don't care if no one wants to do this, but if you want to talk about something, you should learn about it, not fear monger about it.  You can still say it's not for me.  But it's not a zero sum game; one is good and one is bad.

Am I off the rails on this one?????

WildJager

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Re: Frustration with misunderstanding
« Reply #1 on: July 11, 2017, 11:54:44 AM »
A lot of people make the assumption that having a large savings rate is too hard because you have to sacrifice enjoying life now.  However, I never hear anyone counter that with the fact that those who are in debt to buy what they want now are paying the difference in interest.  If most people lived debt free (waited until they could afford those things they want) they'd be well on their way to becoming FI just by never paying interest. 

The second key to this whole thing is focus on what is really important to you, rather than desiring things thoughtlessly.  Many who accomplish this thought process come to realize, "Hey, I don't really need as much as I thought.  True happiness for me comes from X, Y, and Z."  That pushes the savings rate even higher.

Suddenly, you're well on your way to being FI in an "extreme" manner.  Once you don't have to work, the question to retire early presents itself.  Some do, some don't, and that's ok.  It's having the option to choose that matters.  I think a lot of people watching us from the outside, just as this author did, look at FIRE backwards.  Instead of designing your life in such a way that allows you to have more doors open to you, they assume we're depriving ourselves to dive headlong into the only door we can fathom anymore.  For most people in this community, I'd say that's just not true.

The rest of the article is just quibbling.  If you're worried about your money lasting through retirement, just don't thread the needle.  Aim for a lower WR that will allow your investment returns to grow leaps and bounds beyond what your spending needs are.  Maybe you then retire at 45 instead of 35.  So what?  You're still leagues above everyone else.  Most people are in a much riskier situation by spending more than they earn and never confront the concern of, "What if I get laid off tomorrow?"

Cassie

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Re: Frustration with misunderstanding
« Reply #2 on: July 11, 2017, 12:28:12 PM »
When I read the article I took it more of as he feels that it is not right for him and put out some reasons why.   Since semi-retiring 5 years ago we have found that we are spending much more on travel and entertainment because we have the time and are not so tired anymore.  Yes we spend less on clothes, driving, etc. Also because we are older we are spending more on healthcare. I did know  a few people in their 40's that retired and by 60 were sorry because they had to be on such a tight budget and had grown sick of it. I think it can be hard to project out how much you will want to spend 20-30 years in the future.  I also think balance is key because if you totally deprive yourself and then die you never lived to see retirement. However, most people spend all their $ so probably not a worry for many people. So many of those type of articles are hater articles but this did not seem to be to me.

WildJager

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Re: Frustration with misunderstanding
« Reply #3 on: July 11, 2017, 01:23:05 PM »
I did know  a few people in their 40's that retired and by 60 were sorry because they had to be on such a tight budget and had grown sick of it. I think it can be hard to project out how much you will want to spend 20-30 years in the future.

Do you have any idea of round abouts how much they retired on / how they invested?

Cassie

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Re: Frustration with misunderstanding
« Reply #4 on: July 11, 2017, 02:22:46 PM »
Actually I don't because they were not that close to us.

ender

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Re: Frustration with misunderstanding
« Reply #5 on: July 11, 2017, 02:43:12 PM »
One major advantage of retiring earlier is you can actually adjust your life if you realize your spending habits/desires change in retirement.

You can't as easily change that if you retire at 60.

TheAnonOne

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Re: Frustration with misunderstanding
« Reply #6 on: July 11, 2017, 02:51:44 PM »
The common man will never be a MMMer. It's way easier to just throw together 7 reasons why it won't work and move on rather than actually change the way you live.

Cassie

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Re: Frustration with misunderstanding
« Reply #7 on: July 11, 2017, 02:53:36 PM »
By the time they realized they were not happy in late 50's  their skills were too rusty and outdated.  I am not against early retirement but think it should be thought through fully because people's desires change as they age sometimes.  While their friends were traveling, eating out, etc they had to stay home and just exist.   

Fire2025

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Re: Frustration with misunderstanding
« Reply #8 on: July 11, 2017, 04:19:00 PM »
By the time they realized they were not happy in late 50's  their skills were too rusty and outdated.  I am not against early retirement but think it should be thought through fully because people's desires change as they age sometimes.  While their friends were traveling, eating out, etc they had to stay home and just exist.

But I wonder; why do you need your old job back? 

I always think, if I need a little more, I can work one day a week at a Starbucks or as an usher at a theater and make a couple hundred a month to play on.  If they can "stay home and exist", then they could each work one day a week, so they could play, right?  Of am I missing something important? 

Cassie

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Re: Frustration with misunderstanding
« Reply #9 on: July 11, 2017, 04:45:11 PM »
They were both professionals that did not want to do a survival job but I hear what you are saying and would never be too good to do any kind of work because that is the way I was raised. I don't know all the details because I was not that close to them. Most of my close friends have retired between 54-60. WE semi-retired by choice 5 years ago at 58 and 53. I am not saying that people should not retire young. Just throwing out some food for thought.

Fire2025

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Re: Frustration with misunderstanding
« Reply #10 on: July 11, 2017, 06:03:42 PM »
The common man will never be a MMMer. It's way easier to just throw together 7 reasons why it won't work and move on rather than actually change the way you live.

I agree and I'm really cool with others telling me it's not for them..But I don't like the tone that says, your wrong and we're right.  And I'm using logic and you're not.  Why does it have to be one OR the other.  I feel the same way about most lifestyle choices.  Have kids don't have kids - one is not better or worse.  Like the same sex like the other sex - same same.  Eat meat don't eat meat, sugar, gluten........ as long as you aren't eating puppy hearts it's all good. 

Why the fear mongering?  Do you thinks it's because the movement is dominated by younger people and the establishment is just screaming a metaphorical  "Stay off my damn lawn you pesky kids!!!!!"

simmias

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Re: Frustration with misunderstanding
« Reply #11 on: July 11, 2017, 06:47:36 PM »
Wait, we don't all hate our jobs?

semiretired31

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Re: Frustration with misunderstanding
« Reply #12 on: July 11, 2017, 08:32:00 PM »
Wait, we don't all hate our jobs?

Heh. The author got one right...

RedmondStash

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Re: Frustration with misunderstanding
« Reply #13 on: July 11, 2017, 11:13:11 PM »
Why the fear mongering?

Clickbait. Those article writers are hustling to make a living, possibly so they too can FI. Drama and conflict make for more alluring stories.

I remember reading that lots of financial planners who sell products for their brokerage house have their own investments in low-cost index funds. The face you put on professionally may not reflect your personal views.

gerardc

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Re: Frustration with misunderstanding
« Reply #14 on: July 12, 2017, 01:06:18 AM »
They were both professionals that did not want to do a survival job but I hear what you are saying and would never be too good to do any kind of work because that is the way I was raised. I don't know all the details because I was not that close to them. Most of my close friends have retired between 54-60. WE semi-retired by choice 5 years ago at 58 and 53. I am not saying that people should not retire young. Just throwing out some food for thought.

That's a fair warning but your friends situation sounds fishy to me... if you retire at 40, you don't suddenly wake up at 60 and realize that you have too little money. What happened during the 20 years between 40-60? Did they enjoy their time or just slowly drifted away? My thinking is that if you sense your finances tightening up and not having enough for activities, you'd realize plenty in advance, unless you're in serious denial.

WildJager

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Re: Frustration with misunderstanding
« Reply #15 on: July 12, 2017, 08:32:42 AM »
They were both professionals that did not want to do a survival job but I hear what you are saying and would never be too good to do any kind of work because that is the way I was raised. I don't know all the details because I was not that close to them. Most of my close friends have retired between 54-60. WE semi-retired by choice 5 years ago at 58 and 53. I am not saying that people should not retire young. Just throwing out some food for thought.

That's a fair warning but your friends situation sounds fishy to me... if you retire at 40, you don't suddenly wake up at 60 and realize that you have too little money. What happened during the 20 years between 40-60? Did they enjoy their time or just slowly drifted away? My thinking is that if you sense your finances tightening up and not having enough for activities, you'd realize plenty in advance, unless you're in serious denial.

I assumed (asked for clarification, but Cassie didn't know them well so I can only go off of assumptions) that they didn't have the investment knowledge to know how to forecast their nest egg properly.  $1M (for example) seems like a lot for most people, but if it's not invested properly and you're not using a sustainable withdrawal rate, you can chew through that pretty quick.  Same thing with lottery winners who didn't know how to manage money in the first place.  Often times they end up bankrupt because they haven't acquired the skills to understand sustainability. 

A Definite Beta Guy

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Re: Frustration with misunderstanding
« Reply #16 on: July 12, 2017, 09:12:27 AM »
Wait, we don't all hate our jobs?

If I wanted to be here, they wouldn't have to pay me to be here.

LastJob convinced me to get on the FI train ASAP. Plus, just because something is nice NOW, doesn't mean it won't change in the next 10 years. Like, this whole open office craze. That's expanding. Who the fuck decided Open Office is a good idea? My job could be eating steaks and drinking beer and I still would hate it in a open office.

ender

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Re: Frustration with misunderstanding
« Reply #17 on: July 12, 2017, 09:20:28 AM »
Wait, we don't all hate our jobs?

If I wanted to be here, they wouldn't have to pay me to be here.

LastJob convinced me to get on the FI train ASAP. Plus, just because something is nice NOW, doesn't mean it won't change in the next 10 years. Like, this whole open office craze. That's expanding. Who the fuck decided Open Office is a good idea? My job could be eating steaks and drinking beer and I still would hate it in a open office.

Yep, people like me - I like my job.

However, there's no guarantee I will like it for the next 10-15 years (or however long FI takes).

The irony is the closer to FI you are, the more likely you are to just do what you want at work and not care about consequences, thus making you more like your job..

FINate

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Re: Frustration with misunderstanding
« Reply #18 on: July 12, 2017, 09:42:45 AM »
Why the fear mongering?

Clickbait. Those article writers are hustling to make a living, possibly so they too can FI. Drama and conflict make for more alluring stories.

I remember reading that lots of financial planners who sell products for their brokerage house have their own investments in low-cost index funds. The face you put on professionally may not reflect your personal views.

That, and I think some fear mongering is an immune response from the establishment. The author is a CFA, his livelihood is predicated on selling his money "managing" services. A bunch of people intentionally living simple, low stress lives, with the the time and confidence to build and manage their own wealth via passive investing is bad for business.

A similar thing happens in the financial media, with lots of FUD around index funds and especially Target Date Funds (they seem particularly worried about these).

Gunny

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Re: Frustration with misunderstanding
« Reply #19 on: July 13, 2017, 08:47:20 AM »
By the time they realized they were not happy in late 50's  their skills were too rusty and outdated.  I am not against early retirement but think it should be thought through fully because people's desires change as they age sometimes.  While their friends were traveling, eating out, etc they had to stay home and just exist.

But I wonder; why do you need your old job back? 

I always think, if I need a little more, I can work one day a week at a Starbucks or as an usher at a theater and make a couple hundred a month to play on.  If they can "stay home and exist", then they could each work one day a week, so they could play, right?  Of am I missing something important?
And if you've retired fairly early and have spend a decade or 3 doing all kinds of ER dream stuff then just staying home and existing might be pretty darn nice!

Look at someone like Arebelspy. If the next 3 decades look similar to his current ER by the time he's 60 he'll probably be very satisfied hanging around the homestead vusiting with future 30 year old BabySpy and SpyGrandbabies and will not feel he's missing out on anything. When you spend 1, 2 or 3 DECADES doing all the things you dreamed of doing (and probably thing you didn't even think of) you probably will care less about having a higher income in older age to do more expensive fun stuff. Well that's how I think it'll go anyways. Otherwise count me in as the Walmart Greeter to earn a few extra bucks. And happy to do that (although I'd rather do a cool seasonal job once in my 60s). I figure by the time Im 65 I have amost 25 years in ER so well worth the trade off. Plus if I do want to go back to work to earn some fun money, I figure the minimum wage will probably be higher than I earned at my job when I quit working ;-)

Spartana, I know we aren't exactly close friends, but from what I gather from your posts, I don't see the need to become a Walmart Geeter in your future.   Although it speaks volumes about your ethics that you would be proud to do so.  😉

jim555

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Re: Frustration with misunderstanding
« Reply #20 on: July 13, 2017, 08:57:35 AM »
Walmart is putting in self-checkout machines now, so I doubt if most menial jobs will even exist in the future.

Fire2025

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Re: Frustration with misunderstanding
« Reply #21 on: July 13, 2017, 09:19:05 AM »
Walmart is putting in self-checkout machines now, so I doubt if most menial jobs will even exist in the future.

I have my eye on the part-time job at Starbucks that offers healthcare and education credits, 5:00AM - 10:00AM shift.  No robot there yet.

jim555

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Re: Frustration with misunderstanding
« Reply #22 on: July 13, 2017, 09:51:59 AM »
Walmart is putting in self-checkout machines now, so I doubt if most menial jobs will even exist in the future.

I have my eye on the part-time job at Starbucks that offers healthcare and education credits, 5:00AM - 10:00AM shift.  No robot there yet.
Yet.  The bots will be better than humans.

Cassie

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Re: Frustration with misunderstanding
« Reply #23 on: July 13, 2017, 12:25:03 PM »
From what i remember about them is that the amount that they would have to live on each month was adequate when they retired but not 20 years later. They were just acquaintances so many missing pieces.  Now they they are old enough for SS maybe their situation has changed. Anyways knew 2 couples that ended up sorry but neither of them close to us. I retired at 58 and people asked why I retired so young. Now at 63 I teach one college class online because I love it and people ask when I will fully retire. Never I say! Or as long as I love doing it.

GrumpyPenguin

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Re: Frustration with misunderstanding
« Reply #24 on: July 13, 2017, 12:39:51 PM »
I do think this is mostly fear mongering click bait. 

If I saw that in 20 years I might run out of money... maybe I could be a part time dog walker. I like dogs.

Cassie

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Re: Frustration with misunderstanding
« Reply #25 on: July 13, 2017, 02:17:24 PM »
I think that many that retire young have enough hobbies and interests to fill their time.  Also if you are young and see things going south you have time to go back to work.  I have always been a big planner so I tend to worry about the future and some people don't worry as much. Some people work too long and then die and never get to retire which is really sad. I have had 3 good friends die between 59-67.  I think each person has to decide what is best for themselves. Spartana, you have done really well with early retirement and it appears you are in good financial shape too.  I don't see that changing:))  At this point in time the big unknown for many early retirees is the whole health care debacle.  I think once that gets sorted out then people can be more confident in their budgets for this item.

mm1970

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Re: Frustration with misunderstanding
« Reply #26 on: July 13, 2017, 03:24:46 PM »
By the time they realized they were not happy in late 50's  their skills were too rusty and outdated.  I am not against early retirement but think it should be thought through fully because people's desires change as they age sometimes.  While their friends were traveling, eating out, etc they had to stay home and just exist.

But I wonder; why do you need your old job back? 

I always think, if I need a little more, I can work one day a week at a Starbucks or as an usher at a theater and make a couple hundred a month to play on.  If they can "stay home and exist", then they could each work one day a week, so they could play, right?  Of am I missing something important?
True.  But some people feel they have to? 

I don't know - my spouse's Aunt and Uncle retired and moved from the Northeast to AZ where their kids had moved.  They retired happily.

Then in their late 50's I think, they started working again.  Some of it due to boredom, and some due to the cost of health insurance.  By going back to work at a bank for a few days a week, the aunt could carry insurance.  Husband went back to coaching HS sports part time.  The problem with the bank job was that she was really good at it, and kept asking her to cover for the manager, then asked her to take a promotion...

My mom really should have gone back to work part time.  She worked in a bank, but had a crappy boss. Years after she quit, the little mom & pop grocery store 3 miles from home offered her a job as the cashier.  She turned it down because "what if I want to go on vacation to visit you?"  You take vacation.  "What if they don't let me?"  You quit?  She didn't need the money but needed the distraction.  Died from alcoholism.

chemistk

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Re: Frustration with misunderstanding
« Reply #27 on: July 14, 2017, 05:35:15 AM »
The common man will never be a MMMer. It's way easier to just throw together 7 reasons why it won't work and move on rather than actually change the way you live.

I agree and I'm really cool with others telling me it's not for them..But I don't like the tone that says, your wrong and we're right.  And I'm using logic and you're not.  Why does it have to be one OR the other.  I feel the same way about most lifestyle choices.  Have kids don't have kids - one is not better or worse.  Like the same sex like the other sex - same same.  Eat meat don't eat meat, sugar, gluten........ as long as you aren't eating puppy hearts it's all good. 

Why the fear mongering?  Do you thinks it's because the movement is dominated by younger people and the establishment is just screaming a metaphorical  "Stay off my damn lawn you pesky kids!!!!!"

I think this is what makes this lifestyle difficult, that it goes against the crowd, the average, the "norm". Nobody wants to be told that they were wrong, so they make the first move - like kids at a playground saying "he started it" when it was really they who started it.

A lot of people with this attitude, when they see themselves in a sinking ship, want to take you down with them too. Better we all suffer than have a few people end up living a happier life because they were willing to go against the crowd.

And to the second point, absolutely. The fear that your time is about to, or has, passed drives you to loathe the thing you will never have again - your youth and the chance to change the mistakes you now realize you made. Again, better to have everyone go down with your sinking ship than to see someone get out okay and be happy for them.

 

Wow, a phone plan for fifteen bucks!