The Money Mustache Community

General Discussion => Welcome and General Discussion => Topic started by: CanuckExpat on October 25, 2016, 02:57:22 AM

Title: Interesting article with surprise FI / RE twist (and shoutout)
Post by: CanuckExpat on October 25, 2016, 02:57:22 AM
Succinct, well put together summary of a lot of things going on that people like to discuss:

The productivity paradox: why we're getting more innovation but less growth (http://www.vox.com/new-money/2016/10/24/13327014/productivity-paradox-innovation-growth)

Found via Reddit: Is Financial Independence getting easier every year? (https://www.reddit.com/r/financialindependence/comments/5950ug/is_financial_independence_getting_easier_every/)


There's a discussion, quite natural, of the possibility of early retirement, links out to MMM, but it's tangential to the main article. That bit is quite a realistic summary of possibility of FI / RE in mainstream press, "more people could do it, most people don't want to"

The changes in economic productivity across sectors and what that means is the bigger topic. I don't necessarily agree with all the authors predictions, but I'm also not one who thinks it's meaningful to make future predictions. Rather, it was the summary of the past and present that I found most interesting.
Title: Re: Interesting article with surprise FI / RE twist (and shoutout)
Post by: arebelspy on October 25, 2016, 03:28:21 AM
You should check out the "Mr. Money Mustache" blog.  He covered this exact topic in an article written by yours truly four years ago.  (Holy crap, has it been 4 years?!)

http://www.mrmoneymustache.com/2012/07/08/early-retirement-cant-work-or-id-have-heard-of-it-before/ (http://www.mrmoneymustache.com/2012/07/08/early-retirement-cant-work-or-id-have-heard-of-it-before/)

Interesting that at the end of the Vox article, he mentions MMM, so is aware of the blog, yet doesn't mention where he got the idea for the article (I mean, maybe he came up with that independently, but it seems more likely than not he just fleshed out the above ideas into a longer article, added some innovation stuff at the beginning and service stuff at the end).  ;)
Title: Re: Interesting article with surprise FI / RE twist (and shoutout)
Post by: financialfreedomsloth on October 25, 2016, 05:06:33 AM
Hey arebelspy,

We had a small discussion about this during the Belgian-dutch mustachian meet-up.
We think the flipping point was reached somewhere in the 1970’s to 1980’s (for our countries anyway). Reading the article, I see he also places it somewhere in that time frame.

I can still remember (and I am only 42) grandparents not having running warm water in the house. If saving 50% or more of your pay check would mean not having running hot water in the house I think the idea would lose a lot of it’s appeal to a lot of people. But luckily for us, technological advancements have made it so that even a more ‘basic’ living style still include almost all modern comforts.

Cars, washers, dryers, houses even. There are done. Finished. There are 0 features the manufactures can add that would push me to want a new one (except for cars to be self driving, whole other discussion and it will probably make cars a hell of a lot cheaper to use). Even the basic models of most of the stuff you use have too much features. Manufactures crammed them into, hoping they could get a sale out of you. Because the alternative is to compete on price. Which they do also. And to compete on price and still retain some profit margin they automate their production even further, driving the price even lower…
Technological innovation is going so fast now that this years budget model is the high end model of 3 years ago. Have you looked at the ultra HD televisions you can buy for 400 usd now? How are they ever going to get us to switch to 4K? why would you? The 300 – 400 USD basic models are already jam packed with features that you are never going to use. So even the new, exiting stuff is done after a few years, commoditized and then the price is driven lower and lower.

Basic living keeps getting more and more comfortable at a lower and lower price. The expensive stuff is mostly more useless feature and some bling bling (which, if you have a half decent taste, you do not even like). We are just a little bit quicker to catch on AND realize that once food, shelter and security are realized what is left is self-development. And for that you need time more than you need money so FIRE was born …
Title: Re: Interesting article with surprise FI / RE twist (and shoutout)
Post by: arebelspy on October 25, 2016, 06:36:28 AM
Totally agree.  :D

A Belgian-Dutch Mustachian meetup sounds fun!
Title: Re: Interesting article with surprise FI / RE twist (and shoutout)
Post by: fattest_foot on October 25, 2016, 08:18:08 AM
You should check out the "Mr. Money Mustache" blog.  He covered this exact topic in an article written by yours truly four years ago.  (Holy crap, has it been 4 years?!)

http://www.mrmoneymustache.com/2012/07/08/early-retirement-cant-work-or-id-have-heard-of-it-before/ (http://www.mrmoneymustache.com/2012/07/08/early-retirement-cant-work-or-id-have-heard-of-it-before/)

Interesting that at the end of the Vox article, he mentions MMM, so is aware of the blog, yet doesn't mention where he got the idea for the article (I mean, maybe he came up with that independently, but it seems more likely than not he just fleshed out the above ideas into a longer article, added some innovation stuff at the beginning and service stuff at the end).  ;)

I really, really, like the comment to your article by G.E. Miller. "Since productivity went up 400% since 1950, theoretically, our standard of living should have done the same. And maybe it has. But the 40 hour work week is a remnant of yesteryear. Few people tend to think… “hmmm…. I could either a.) work 1/4 of the hours, or b.) work 1/4 of the years”. I’ll choose option b."

That really resonates well about what this whole FIRE thing is about, to me.
Title: Re: Interesting article with surprise FI / RE twist (and shoutout)
Post by: financialfreedomsloth on October 26, 2016, 12:50:24 AM
Totally agree.  :D

A Belgian-Dutch Mustachian meetup sounds fun!
It was! And although our circumstances are very different the general consensus was that with 20 years of working FIRE could be achieved here as well. There are 2 young guys who started really young (one still in military school even!) so we are all very curious to see if they can get there by 35!
Title: Re: Interesting article with surprise FI / RE twist (and shoutout)
Post by: CanuckExpat on October 26, 2016, 07:58:01 AM
You should check out the "Mr. Money Mustache" blog.  He covered this exact topic in an article written by yours truly four years ago.  (Holy crap, has it been 4 years?!)

http://www.mrmoneymustache.com/2012/07/08/early-retirement-cant-work-or-id-have-heard-of-it-before/ (http://www.mrmoneymustache.com/2012/07/08/early-retirement-cant-work-or-id-have-heard-of-it-before/)


Interesting blog you speak of...
I re-read that again, after four years I had probably forgot that I read it in the first place.

You are right, while the FI / RE was a side comment in the Vox article, you can expand it like in that blog to talk about what it means.

I think there is a little more to be said about if housing, education, medical, and childcare inflate to eat the rest of the budget, what that means for someone. That is why I found the mention of Baumol's cost disease interesting in the Vox article, because aside from housing, older economic thinking says that last three should have been getting cheaper, at least in wages, since they are low productivity (growth) industries.

An ideal world (for me, not the workers) would be where those costs also decrease along with consumable goods.
Title: Re: Interesting article with surprise FI / RE twist (and shoutout)
Post by: hoping2retire35 on October 26, 2016, 08:18:28 AM
The article mentioned how housing was a labor intensive industry. I really don't think this will be the case much longer. I think there will be a lot more mechanized building in the future.

Or (can't remember which one) as MMM said energy will(could?) become so cheap people will begin to live more in motorhomes or even in flying housing or space traveling houses; summer on Mars anyone?
Title: Re: Interesting article with surprise FI / RE twist (and shoutout)
Post by: financialfreedomsloth on October 27, 2016, 03:29:54 AM
The article mentioned how housing was a labor intensive industry. I really don't think this will be the case much longer. I think there will be a lot more mechanized building in the future.

Or (can't remember which one) as MMM said energy will(could?) become so cheap people will begin to live more in motorhomes or even in flying housing or space traveling houses; summer on Mars anyone?
It already is.

Renovations are still pretty labor intensive (as it actually is a ‘custom job’) but if you look at new developments being build. The work goes fast and they bring in a lot of machines! There is also a trend to build bigger and bigger parts of buildings in factories: weather conditions have no influence on build time and even more machines can be used. Especially for commercial buildings this is true. Very little is build on site, it is mostly build in factories, assembled on site.
The self driving car will probably also have an impact. Not only where we live (like the freeways lead to the creation of suburbs) but perhaps also how we live. On another forum one guy said he wanted a self driving RV and he would ‘live’ somewhere else each evening. Have groceries delivered at work. In the evening the self driving RV picks you up at work. While you shower and make dinner the RV will drive you anywhere you want (this can be 2 – 3 hours of driving distance): then spend a few hours at the beach or in the mountains. Go to sleep. While you sleep the RV drives you back to work. Next day repeat the process but with another destination! This would off course also imply cheap energy (for all the driving).

I live about 100km away from most of my friends; visiting them costs me 2 hours of driving time and around 15 euro in gas. If I can spend those two hours reading or watching a series on a tablet and the fuel cost would only be like 2 euro because of cheap energy I would meet up with them a lot more! I think at the very least self driving cars will make us a lot more nomadic and thus also have an impact on the way we build houses (no more garages for a starter!)