Author Topic: The World Is Watching To See If COVID-19 Kills FIRE  (Read 9084 times)

LibrarianFuzz

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The World Is Watching To See If COVID-19 Kills FIRE
« on: June 01, 2020, 02:45:50 PM »
I've been seeing lots of headlines lately declaring that COVID-19 could/would/should be the death of FIRE.

"Did Coronavirus Destroy the FIRE Movement?"

"How One Early Retirement Has Been Affected by the Coronavirus."

"Can My Investments Survive a Crisis if I Retire Early?"

"The Coronavirus Crises Has Tested the Retire-Early Movement."

"Can Your FIRE Dreams Get Past the COVID-19 Impact?"

I sense a little bit of the crab-in-the-boiling pot thing going on. That maybe most people can't stand the FIRE movement, and would like to see a claw reach out and drag those escaping would-be early retirees back into the pot of boiling water with the rest of the population.

What do you think? Is the rest of the world looking to confirm their own expectations that FIRE really is too good to be true? 

Of course, bad news sells more than good news, right?

nereo

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Re: The World Is Watching To See If COVID-19 Kills FIRE
« Reply #1 on: June 01, 2020, 02:58:09 PM »
The FIRE movement has been a popular whipping boy since it gained enough attention to be picked up in mainstream media ‘fluff’ pieces.  There’s always a loud chorus of people claiming why it won’t work in the future, and they present their arguments as if they are the first to think of them and as if they’ve finally pierced the FIRE balloon.  Everything from “they can’t afford healthcare” to “they are just one emergency from being destitute” to “they aren’t really retired because OMG they earn a few $k here and there!!”.  This latest downturn is just the most recent iteration

Ironically, while I”m not FIRE I am counting my blessings that we have lived below our means, have amassed a sizable ‘stache, and are generally able to trouble-shoot most problems without paying other people.  These are all messages of this forum.  Even though I’ve been furloughed and we have a toddler we are still living comfortable lives amid an exploding volcano of luxurious excess.

So the FIRE movement has helped us for exactly this kind of financial and social uncertainty.  It’s made us more robust, not less.  Sure, it might take us another 2-3 years to hit our goal than what we were anticipating just 6 months ago, but I’m absolutely certain that we will be FI by the time we are in our early 40s, markets be dammed.

marty998

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Re: The World Is Watching To See If COVID-19 Kills FIRE
« Reply #2 on: June 01, 2020, 03:16:44 PM »
People with many years worth of expenses invested won’t really be worried if they lose their current income for a few months.

Sure the stash might take a temporary hit, but FIRE types are resourceful enough to be ok in the long term.

T-Money$

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Re: The World Is Watching To See If COVID-19 Kills FIRE
« Reply #3 on: June 01, 2020, 03:56:54 PM »
It did both for me.

It will likely delay FIRE by 2-3 years, however it also forced me to be more resilient, to rely even less on the fragility of others.

I noticed myself doing riskier non FIRE things, like trying to play the stock market.  I did well, however I blew $11k of my cash reserve by being too greedy.  I'll recoup that, but it will never happen again.

COVID-19 also made me reassess and reaffirm why I'm doing FIRE in the first place.  So I can have the freedom to not deal with the wordly bullsh*t if I don't want to.  I'm not there yet, but damn after the last few months of wackadoodle I'm excited to be there someday.   

martyconlonontherun

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Re: The World Is Watching To See If COVID-19 Kills FIRE
« Reply #4 on: June 01, 2020, 04:07:06 PM »
1. The title of the article makes it sound like we were foolish for trying to be fire. I'm in 10x the better spot now instead of those wondering if they will have trouble paying their mortgage 5 months from now.
2. Being on furlough and forced to stay home makes me realize I'm happiest having the freedom to do yard work, going on a socially distant walk with friends, etc. All the other "necessities" of the american economy are BS and you don't really need them at the expense of being overworked.

HPstache

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Re: The World Is Watching To See If COVID-19 Kills FIRE
« Reply #5 on: June 01, 2020, 04:13:37 PM »
If they're going to watch to see if something extinguishes FIRE... they should probably wait and watch for a better example.

ixtap

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Re: The World Is Watching To See If COVID-19 Kills FIRE
« Reply #6 on: June 01, 2020, 04:31:08 PM »
We have plenty of our own posters running around like Chicken Little, what do you expect from outsiders?

It has so far been a pretty mild blip in the stock market, but I am concerned for the economy. However, I always expected a downturn to happen at some point. I have even said it would be nice if it happened before we walk away from the paycheck.

But I certainly don't understand why an economy problem would make anyone walk away from frugality!

Bloop Bloop

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Re: The World Is Watching To See If COVID-19 Kills FIRE
« Reply #7 on: June 01, 2020, 04:41:49 PM »
I am pretty worried about inflation (from printing money) and higher taxes (from all the stimulus - most of it quite unnecessary) having a marked effect on disposable incomes. But that won't "kill" FIRE, but just make it a bit harder.

I think FIRE is actually easier to achieve in times of austerity, with low taxes, low inflation and low interest rates...hopefully Covid doesn't rock the boat too much in terms of changing that successful formula.

imadandylion

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Re: The World Is Watching To See If COVID-19 Kills FIRE
« Reply #8 on: June 01, 2020, 04:51:03 PM »
It doesn't really matter what's in the headlines since you're on your own path, but it's a shame when people write articles like that because it may possibly discourage any highly impressionable people from otherwise considering the possibility of pursuing such a lifestyle. Plus, as you've probably suspected, they're just writing to write. Lots of articles don't have any substance to them whether it's about FIRE or not. Most people want to be first-class journalists but aren't. So this is what they come out with.

marty998

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Re: The World Is Watching To See If COVID-19 Kills FIRE
« Reply #9 on: June 01, 2020, 05:00:12 PM »
I am pretty worried about inflation (from printing money) and higher taxes (from all the stimulus - most of it quite unnecessary) having a marked effect on disposable incomes. But that won't "kill" FIRE, but just make it a bit harder.

I think FIRE is actually easier to achieve in times of austerity, with low taxes, low inflation and low interest rates...hopefully Covid doesn't rock the boat too much in terms of changing that successful formula.

Easy to say its unnecessary when you haven’t lost your job and your entire industry isn’t shut down.

Imagine a world where everyone is a lawyer. How poor we would all be.

Don’t begrudge help to others in times of need. All you seem to do is complain that you might have to pay a couple of % more in tax for the next few years. Six hundred thousand people lost their livelihoods in order to keep others in the community healthy. They have no disposable income. You got to keep yours by virtue of your profession.

« Last Edit: June 01, 2020, 05:02:43 PM by marty998 »

Bloop Bloop

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Re: The World Is Watching To See If COVID-19 Kills FIRE
« Reply #10 on: June 01, 2020, 05:05:56 PM »
A lot of the help was unnecessary, like paying workers who aren't independent (e.g. young casuals) $1,600 a fortnight on a non-means tested basis. That was ridiculous. Or like paying double dole ($1100 a fortnight) to people without requiring the usual, sensible assets/income test or waiting period. That's also ridiculous.

I have no issues with paying welfare to people on the poverty line. I arc up when we are subsidising the lifestyles of those who are not struggling.

The tax increase is going to be potentially very big. And it will last for more than the next few years.

marty998

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Re: The World Is Watching To See If COVID-19 Kills FIRE
« Reply #11 on: June 01, 2020, 05:29:45 PM »
Yes well if all the sensible tests were imposed many people would not start receiving assistance until 2021. Of course there’s no way you’d support hiring all the extra public servants to review all the claims in detail and process them to the level required... because that would cost more tax dollars.

Make your peace with it and move on. Railing against it at this point isn’t going to change it.

I’m mean really... what are you going to do? Vote Labor? Pauline Hanson?

Think about why a very dry economically conservative government has implemented the biggest welfare program in history. Really think about it.

Imagine those patient queues at Centrelink back in March turning violent.

Only then will you understand.

Zikoris

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Re: The World Is Watching To See If COVID-19 Kills FIRE
« Reply #12 on: June 01, 2020, 08:26:56 PM »
The funny thing is, people who are the original brand of FIRE, like ERE-level, are actually kicking ass right now, and are WAY better off than everyone else in this sort of situation. That's because we:
  • Focus on maintaining good health in general
  • Have ridiculously low spending even in normal times, with many of us spending even less now
  • Have tons of DIY and self-reliance skills already, and have the tools/supplies at hand to support that
  • Have well-stocked kitchens and households already and know how to cook from cheap base ingredients
  • Are very flexible and adaptable in general
  • And of course, have a huge cushion of assets to fall back on
So it always seems weird to me when the media acts like we're the ones getting screwed right now, when it's more like we're some of the only ones not getting screwed right now.

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Re: The World Is Watching To See If COVID-19 Kills FIRE
« Reply #13 on: June 01, 2020, 10:27:56 PM »
A lot of the help was unnecessary, like paying workers who aren't independent (e.g. young casuals) $1,600 a fortnight on a non-means tested basis. That was ridiculous. Or like paying double dole ($1100 a fortnight) to people without requiring the usual, sensible assets/income test or waiting period. That's also ridiculous.

I have no issues with paying welfare to people on the poverty line. I arc up when we are subsidising the lifestyles of those who are not struggling.

The tax increase is going to be potentially very big. And it will last for more than the next few years.
Wasn't means tested? Sure it was. Filing single you couldn't get a check with an AGI over 75K. That is a quick and easy means test. The Feds wanted to get money to people quickly (ha), and an income limit required no paperwork. 

The way people spend money and live check to check, $75K 'aint a lot. Many of the people surveyed indicated it wouldn't help at all.

But back to the OP's comment, specifically that "most people can't stand the FIRE movement": I'd venture a guess that most people have no idea it even exists.

No, the world is not watching.

Missy B

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Re: The World Is Watching To See If COVID-19 Kills FIRE
« Reply #14 on: June 01, 2020, 11:38:02 PM »
1. The title of the article makes it sound like we were foolish for trying to be fire. I'm in 10x the better spot now instead of those wondering if they will have trouble paying their mortgage 5 months from now.
2. Being on furlough and forced to stay home makes me realize I'm happiest having the freedom to do yard work, going on a socially distant walk with friends, etc. All the other "necessities" of the american economy are BS and you don't really need them at the expense of being overworked.

This. Frankly, being forced to stop work for two months only renewed my appetite and made me give skinny FIRE much more serious consideration. And I very much like my job. But two months with almost no time pressure has been precious.

Dicey

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Re: The World Is Watching To See If COVID-19 Kills FIRE
« Reply #15 on: June 02, 2020, 04:18:29 AM »
@facepalm, bloop bloop is not in the US.

pigpen

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Re: The World Is Watching To See If COVID-19 Kills FIRE
« Reply #16 on: June 02, 2020, 06:09:54 AM »
The question I always want to ask after reading this type of piece is how the author suggests someone should act instead. If the foolishly risky path is to spend below my means, save for the future, improve and diversify my skills, and take care of my body, and the wise, conservative path is to spend almost all my paycheck every month on a house with 3 or 4 totally unused rooms; daily $6/75-fat-gram cups of lard-latte; and a Peloton bike to work off said lard lattes so I can look like what my Men's Fitness or Cosmo cover tells me I should look like, then I'll take the foolishly risky path every time.

I mean, would I be better off right now if I hadn't saved a bunch of money and instead was living paycheck to paycheck with the fear that maybe my job and my industry aren't as black-swan-proof as I once thought they were? In my position, it's mostly irrelevant whether I correctly estimated my future investment returns down to the hundredth decimal place for cFIREsim or whether the 4% rule holds up over the next 35 years. Through working really hard to save and invest money -- and in a way, I should add, that has given me or my spouse very little sense of deprivation at all -- we're in a much, much stronger, more flexible position than we would have been otherwise. So maybe I'll have to get a part-time job 9 years from now to handle an unexpected market downturn. Wow, wouldn't I feel stupid!?

Playing with Fire UK

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Re: The World Is Watching To See If COVID-19 Kills FIRE
« Reply #17 on: June 02, 2020, 07:03:26 AM »
The question I always want to ask after reading this type of piece is how the author suggests someone should act instead. If the foolishly risky path is to spend below my means, save for the future, improve and diversify my skills, and take care of my body, and the wise, conservative path is to spend almost all my paycheck every month on a house with 3 or 4 totally unused rooms; daily $6/75-fat-gram cups of lard-latte; and a Peloton bike to work off said lard lattes so I can look like what my Men's Fitness or Cosmo cover tells me I should look like, then I'll take the foolishly risky path every time.

I mean, would I be better off right now if I hadn't saved a bunch of money and instead was living paycheck to paycheck with the fear that maybe my job and my industry aren't as black-swan-proof as I once thought they were? In my position, it's mostly irrelevant whether I correctly estimated my future investment returns down to the hundredth decimal place for cFIREsim or whether the 4% rule holds up over the next 35 years. Through working really hard to save and invest money -- and in a way, I should add, that has given me or my spouse very little sense of deprivation at all -- we're in a much, much stronger, more flexible position than we would have been otherwise. So maybe I'll have to get a part-time job 9 years from now to handle an unexpected market downturn. Wow, wouldn't I feel stupid!?

Well said.

Retire-Canada

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Re: The World Is Watching To See If COVID-19 Kills FIRE
« Reply #18 on: June 02, 2020, 07:19:37 AM »
What do you think?

I haven't seen one headline about COVID & FIRE so it's not on my mind at all. I just FIRE last week so it doesn't seem like COVID & FIRE are incompatible at least for some of us. Personally I would stop reading junk news and save your brain from processing garbage.

Maenad

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Re: The World Is Watching To See If COVID-19 Kills FIRE
« Reply #19 on: June 02, 2020, 10:16:08 AM »
I think part of this coverage stems from the fact that MMM and other FIRE bloggers really only got popular after the market crash in 2008-9, so there's a perception that FIREees are all younger investors who have never experienced a nasty market drop and/or recession. There are plenty of us, however, who've seen crashes all the way back to 1987 (like Jim Collins).

And yeah, knocking people off their pedestals has often been a favorite pastime for people, unfortunately. There's a reason the Germans coined the term "schadenfreude".

nereo

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Re: The World Is Watching To See If COVID-19 Kills FIRE
« Reply #20 on: June 02, 2020, 10:30:12 AM »
I think part of this coverage stems from the fact that MMM and other FIRE bloggers really only got popular after the market crash in 2008-9, so there's a perception that FIREees are all younger investors who have never experienced a nasty market drop and/or recession. There are plenty of us, however, who've seen crashes all the way back to 1987 (like Jim Collins).

And yeah, knocking people off their pedestals has often been a favorite pastime for people, unfortunately. There's a reason the Germans coined the term "schadenfreude".

Just nitpicking, but MMM posted his first blog post in 2011 after hitting FI/RE about a year earlier. This forum did not come about until a year later, and had only a few hundred members until it was highlighted in some major news stories (e.g. WaPo) a year after that.  Many of the other major bloggers started around the same time... simply because that's what blogging really took off.  This is the first recession this community/forum has dealt with since its inception.

Interestingly, many of the early members of this forum had retired years before MMM and simply found this as a nice community to discuss their FIRE lives.  As the community has grown and changed many of these posters have moved on and/or don't spend much time here anymore (::sniff, sniff::)

frugalnacho

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Re: The World Is Watching To See If COVID-19 Kills FIRE
« Reply #21 on: June 02, 2020, 10:46:31 AM »
@facepalm, bloop bloop is not in the US.

I'm not convinced bloop bloop is on planet earth.

It did both for me.

It will likely delay FIRE by 2-3 years, however it also forced me to be more resilient, to rely even less on the fragility of others.

I noticed myself doing riskier non FIRE things, like trying to play the stock market.  I did well, however I blew $11k of my cash reserve by being too greedy.  I'll recoup that, but it will never happen again.

COVID-19 also made me reassess and reaffirm why I'm doing FIRE in the first place.  So I can have the freedom to not deal with the wordly bullsh*t if I don't want to.  I'm not there yet, but damn after the last few months of wackadoodle I'm excited to be there someday.   

What? How did it delay FIRE by 2-3 years?

Laura33

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Re: The World Is Watching To See If COVID-19 Kills FIRE
« Reply #22 on: June 02, 2020, 11:16:08 AM »
The question I always want to ask after reading this type of piece is how the author suggests someone should act instead. If the foolishly risky path is to spend below my means, save for the future, improve and diversify my skills, and take care of my body, and the wise, conservative path is to spend almost all my paycheck every month on a house with 3 or 4 totally unused rooms; daily $6/75-fat-gram cups of lard-latte; and a Peloton bike to work off said lard lattes so I can look like what my Men's Fitness or Cosmo cover tells me I should look like, then I'll take the foolishly risky path every time.

I mean, would I be better off right now if I hadn't saved a bunch of money and instead was living paycheck to paycheck with the fear that maybe my job and my industry aren't as black-swan-proof as I once thought they were? In my position, it's mostly irrelevant whether I correctly estimated my future investment returns down to the hundredth decimal place for cFIREsim or whether the 4% rule holds up over the next 35 years. Through working really hard to save and invest money -- and in a way, I should add, that has given me or my spouse very little sense of deprivation at all -- we're in a much, much stronger, more flexible position than we would have been otherwise. So maybe I'll have to get a part-time job 9 years from now to handle an unexpected market downturn. Wow, wouldn't I feel stupid!?

I think where people get confused writing these stories is the distinction between people who are on the path to FIRE and those who have already FIREd.  On the path there?  We are better off than anyone else, because as you and others have pointed out, we have more savings, lower COL, and a lifestyle that has trained us to believe we have the skills/knowledge to manage a whole bunch of shit that life might throw at us. 

OTOH, if you're counting on $40K/yr, you're 35 years old, you just hit $1M, you have very little slop in your budget, and the market suddenly drops 20-30% right after you've FIREd, you're at risk.  The few times in which the 4% rule fails all involve large market drops shortly after retirement, so it's reasonable to wonder how people who based their plans on rosy projections are faring.  And journalists are out there interviewing people to find That Guy who retired with no safety net and now has to go back to work.  Why?  Confirmation bias:  everyone is afraid to take a risk like that, because it seems so out of the mainstream; the crisis that everyone feared has now hit; ergo, people want to read about how That Guy now has to go back to work, because it confirms that they were right not to follow that path.

Of course, what they're missing given their surface-level understanding is that it isn't about saving the bare-minimum you need to scrape by assuming everything goes right.  Every good FIRE plan has a bunch of built-in safety mechanisms, from budgeting a variety of luxuries that can be cut, to planned part-time or periodic work on passion projects, to having the skills to reduce expenses by DIYing pretty much everything you need, to planning for a lower SWR, to keeping a bond/CD ladder to ride out the storm, etc. etc. etc.  But a story about someone who planned to FIRE, FIREd, was caught in a giant economic meltdown, and stayed FIREd and happy isn't exactly exciting enough to attract attention, and it doesn't reassure the masses that they've made the right decision.

nereo

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Re: The World Is Watching To See If COVID-19 Kills FIRE
« Reply #23 on: June 02, 2020, 11:24:20 AM »


What? How did it delay FIRE by 2-3 years?

Not the one you were asking, but it's put a wrinkle in our plans because i) I am currently furloughed, and ii) our STate budget has put on an emergency freeze on pay-scale adjustments, affecting my spouse.  It's pretty difficult to estimate exactly what that will mean to us, but it's most likely going to reduce our savings by $10-15k this year and likely by a similar amount each year for the next couple of years.

Bloop Bloop

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Re: The World Is Watching To See If COVID-19 Kills FIRE
« Reply #24 on: June 02, 2020, 06:22:48 PM »
It's not going to interest anyone to write an article about a smart, privileged couple who FIREd at 45 because they both have high paying jobs and good financial habits, and their children didn't require expensive tuition. No one cares about that shit and no one wants to read that article and feel shit about their own finances. Plus it's boring because they're just living an normal lifestyle anyway instead of the opulent lifestyle they could have had, had they chosen to work to 60. So you will only ever read fat fire stories that stoke envy, or lean fire/aborted fire stories so that people will feel better about their own finances.

ixtap

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Re: The World Is Watching To See If COVID-19 Kills FIRE
« Reply #25 on: June 02, 2020, 06:28:47 PM »
It's not going to interest anyone to write an article about a smart, privileged couple who FIREd at 45 because they both have high paying jobs and good financial habits, and their children didn't require expensive tuition. No one cares about that shit and no one wants to read that article and feel shit about their own finances. Plus it's boring because they're just living an normal lifestyle anyway instead of the opulent lifestyle they could have had, had they chosen to work to 60. So you will only ever read fat fire stories that stoke envy, or lean fire/aborted fire stories so that people will feel better about their own finances.

My favorite are the ones that go

"Jane determined that she needed $900k, but she got bored and FIRED with $250k. It didn't work."

"Jack thought he could cut back from his current spending of $50k to a retirement spending of $12k. It didn't work."

"Samurai got bored and wanted to live an upper class lifestyle, so he went back to work. FIRE is stupid."

nereo

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Re: The World Is Watching To See If COVID-19 Kills FIRE
« Reply #26 on: June 02, 2020, 07:15:26 PM »

"Samurai got bored and wanted to live an upper class lifestyle, so he went back to work. FIRE is stupid."

Snort.

frugalnacho

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Re: The World Is Watching To See If COVID-19 Kills FIRE
« Reply #27 on: June 03, 2020, 07:18:37 AM »


What? How did it delay FIRE by 2-3 years?

Not the one you were asking, but it's put a wrinkle in our plans because i) I am currently furloughed, and ii) our STate budget has put on an emergency freeze on pay-scale adjustments, affecting my spouse.  It's pretty difficult to estimate exactly what that will mean to us, but it's most likely going to reduce our savings by $10-15k this year and likely by a similar amount each year for the next couple of years.

That still seems unlikely to delay you 2-3 years, even if you don't adapt or change courses and just ride this out in your current careers. 

nereo

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Re: The World Is Watching To See If COVID-19 Kills FIRE
« Reply #28 on: June 03, 2020, 07:38:12 AM »


What? How did it delay FIRE by 2-3 years?

Not the one you were asking, but it's put a wrinkle in our plans because i) I am currently furloughed, and ii) our STate budget has put on an emergency freeze on pay-scale adjustments, affecting my spouse.  It's pretty difficult to estimate exactly what that will mean to us, but it's most likely going to reduce our savings by $10-15k this year and likely by a similar amount each year for the next couple of years.

That still seems unlikely to delay you 2-3 years, even if you don't adapt or change courses and just ride this out in your current careers.

?!  how long would you estimate the delay to be?  'Cause I've spent some time modeling various scenarios, and the median timeframe keeps landing in that window.

des999

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Re: The World Is Watching To See If COVID-19 Kills FIRE
« Reply #29 on: June 03, 2020, 07:42:57 AM »
The funny thing is, people who are the original brand of FIRE, like ERE-level, are actually kicking ass right now, and are WAY better off than everyone else in this sort of situation. That's because we:
  • Focus on maintaining good health in general
  • Have ridiculously low spending even in normal times, with many of us spending even less now
  • Have tons of DIY and self-reliance skills already, and have the tools/supplies at hand to support that
  • Have well-stocked kitchens and households already and know how to cook from cheap base ingredients
  • Are very flexible and adaptable in general
  • And of course, have a huge cushion of assets to fall back on
So it always seems weird to me when the media acts like we're the ones getting screwed right now, when it's more like we're some of the only ones not getting screwed right now.

Exactly this.  I almost feel guilty that I am in such a good position (thanks to this forum).  Regardless if I ever fully FIRE, I'm so thankful that I could take many years off right now from work and be fine.  That is a luxury very few have.   

frugalnacho

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Re: The World Is Watching To See If COVID-19 Kills FIRE
« Reply #30 on: June 03, 2020, 08:14:14 AM »


What? How did it delay FIRE by 2-3 years?

Not the one you were asking, but it's put a wrinkle in our plans because i) I am currently furloughed, and ii) our STate budget has put on an emergency freeze on pay-scale adjustments, affecting my spouse.  It's pretty difficult to estimate exactly what that will mean to us, but it's most likely going to reduce our savings by $10-15k this year and likely by a similar amount each year for the next couple of years.

That still seems unlikely to delay you 2-3 years, even if you don't adapt or change courses and just ride this out in your current careers.

?!  how long would you estimate the delay to be?  'Cause I've spent some time modeling various scenarios, and the median timeframe keeps landing in that window.

I have no idea, it would depend on a ton of factors.  Will the market keep marching up despite all the grim news? Or will it recrash and remain low for the next couple of years? Will you remain furloughed for 2-3 years? If so, will you change careers?

You know your own finances better than anyone, so maybe it's an accurate assessment, it just seems a bit pessimistic to me.  Every time something bad pops up on my path to FIRE I think to myself "this is bad, this is going to delay me substantially" but then my networth keeps marching up relentlessly anyway.

nereo

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Re: The World Is Watching To See If COVID-19 Kills FIRE
« Reply #31 on: June 03, 2020, 08:33:11 AM »


What? How did it delay FIRE by 2-3 years?

Not the one you were asking, but it's put a wrinkle in our plans because i) I am currently furloughed, and ii) our STate budget has put on an emergency freeze on pay-scale adjustments, affecting my spouse.  It's pretty difficult to estimate exactly what that will mean to us, but it's most likely going to reduce our savings by $10-15k this year and likely by a similar amount each year for the next couple of years.

That still seems unlikely to delay you 2-3 years, even if you don't adapt or change courses and just ride this out in your current careers.

?!  how long would you estimate the delay to be?  'Cause I've spent some time modeling various scenarios, and the median timeframe keeps landing in that window.

I have no idea, it would depend on a ton of factors.  Will the market keep marching up despite all the grim news? Or will it recrash and remain low for the next couple of years? Will you remain furloughed for 2-3 years? If so, will you change careers?

You know your own finances better than anyone, so maybe it's an accurate assessment, it just seems a bit pessimistic to me.  Every time something bad pops up on my path to FIRE I think to myself "this is bad, this is going to delay me substantially" but then my networth keeps marching up relentlessly anyway.

I hope it isn't as bad as we are anticipating.  Time will tell I guess.  For us, the big change is the freezing of pay-step raises for my spouse, and they were literally in hte process of union bartering when Covid hit, and based on union rules it was almost certain to go into effect....until the emergency freeze.  If the 'great recession' is any guidepost this freeze could last for 3 budget cycles (years). She's on the second year of a 5 year contract with almost iron-clad job secuity and great benefits even with the lackluster pay, so leaving her job probably won't happen.  I'm searching ofr new employment as I'm furloughed, but whatever I find could pay $10k less, could be $10k more... who knows.  I'm betting it will be less just given the huge number of unemployed all competing for jobs right now.  Each month I go without employment is a month we're not saving as we had hoped.

I probably am overly pessimistic right now - 3 months of furlough and numerous rejections from jobs I feel I'm overqualified for will do that to a person. FWIW my most recent rejection letter stated there was over 120 qualified applicants for the one position.


clarkfan1979

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Re: The World Is Watching To See If COVID-19 Kills FIRE
« Reply #32 on: June 03, 2020, 08:55:21 AM »
The FIRE movement has been a popular whipping boy since it gained enough attention to be picked up in mainstream media ‘fluff’ pieces.  There’s always a loud chorus of people claiming why it won’t work in the future, and they present their arguments as if they are the first to think of them and as if they’ve finally pierced the FIRE balloon.  Everything from “they can’t afford healthcare” to “they are just one emergency from being destitute” to “they aren’t really retired because OMG they earn a few $k here and there!!”.  This latest downturn is just the most recent iteration

Ironically, while I”m not FIRE I am counting my blessings that we have lived below our means, have amassed a sizable ‘stache, and are generally able to trouble-shoot most problems without paying other people.  These are all messages of this forum.  Even though I’ve been furloughed and we have a toddler we are still living comfortable lives amid an exploding volcano of luxurious excess.

So the FIRE movement has helped us for exactly this kind of financial and social uncertainty.  It’s made us more robust, not less.  Sure, it might take us another 2-3 years to hit our goal than what we were anticipating just 6 months ago, but I’m absolutely certain that we will be FI by the time we are in our early 40s, markets be dammed.

I agree that COVID-19 has justified the importance of saving money. However, I'm sure others can come up with creative ways to put a negative spin on it.

Cranky

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Re: The World Is Watching To See If COVID-19 Kills FIRE
« Reply #33 on: June 03, 2020, 10:02:09 AM »
I think most people aren’t really interested in FIRE because they would like to spen more money, not less.

And since we now have definitive proof that staying home for 2 months, cooking at home and not buying too much junk that we don’t need causes the economy to collapse, I’m pretty sure that there isn’t going to be a major outbreak of frugality.

ericrugiero

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Re: The World Is Watching To See If COVID-19 Kills FIRE
« Reply #34 on: June 03, 2020, 01:59:26 PM »
I think where people get confused writing these stories is the distinction between people who are on the path to FIRE and those who have already FIREd.  On the path there?  We are better off than anyone else, because as you and others have pointed out, we have more savings, lower COL, and a lifestyle that has trained us to believe we have the skills/knowledge to manage a whole bunch of shit that life might throw at us. 

OTOH, if you're counting on $40K/yr, you're 35 years old, you just hit $1M, you have very little slop in your budget, and the market suddenly drops 20-30% right after you've FIREd, you're at risk.  The few times in which the 4% rule fails all involve large market drops shortly after retirement, so it's reasonable to wonder how people who based their plans on rosy projections are faring.  And journalists are out there interviewing people to find That Guy who retired with no safety net and now has to go back to work.  Why?  Confirmation bias:  everyone is afraid to take a risk like that, because it seems so out of the mainstream; the crisis that everyone feared has now hit; ergo, people want to read about how That Guy now has to go back to work, because it confirms that they were right not to follow that path.

Of course, what they're missing given their surface-level understanding is that it isn't about saving the bare-minimum you need to scrape by assuming everything goes right.  Every good FIRE plan has a bunch of built-in safety mechanisms, from budgeting a variety of luxuries that can be cut, to planned part-time or periodic work on passion projects, to having the skills to reduce expenses by DIYing pretty much everything you need, to planning for a lower SWR, to keeping a bond/CD ladder to ride out the storm, etc. etc. etc.  But a story about someone who planned to FIRE, FIREd, was caught in a giant economic meltdown, and stayed FIREd and happy isn't exactly exciting enough to attract attention, and it doesn't reassure the masses that they've made the right decision.

This is true, but even the ones who are already FIRE'd and don't have the built in safety mechanisms are still much better off than many people.  Suppose they didn't plan well and now the 4% doesn't work out for a 30+ year retirement.  They still probably have 10+ years before actually running out of money.  They could easily wait out the recession and then pick up a part time job to make up the difference. 

That's a big difference from "Mr keep up with the Joneses" who is mortgaged to the hilt with two car loans, student loans, credit card debt, etc and just lost his job.  Instead of having 10+ years he probably has a 3-4 months before things start to be foreclosed on or repossessed. 

slappy

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Re: The World Is Watching To See If COVID-19 Kills FIRE
« Reply #35 on: June 03, 2020, 02:33:22 PM »
I don't know, I don't think the world really cares about FIRE. I see the stupid headlines, but I really don't think they matter one way or the other.

Buffaloski Boris

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Re: The World Is Watching To See If COVID-19 Kills FIRE
« Reply #36 on: June 03, 2020, 02:34:58 PM »
The financial media is always looking for stories where there aren’t any. Personally, I believe that a lot of FIRE is fashionable right now. But part of it’ll endure even after FIRE  stops being fashionable.

I gotta ask: how is someone who is spending less in pursuit of FIRE now worse off than they’d be if they were in full consumer sucker mode? The mere fact that they reduced spending is going to put them in better shape than those who are living a hand to mouth existence.

Much Fishing to Do

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Re: The World Is Watching To See If COVID-19 Kills FIRE
« Reply #37 on: June 03, 2020, 02:43:05 PM »
I mean, as everyone from the Financial Samuri to Suze Ormand says, no normal middle class life can be had on less then $200k/year and at least $5 million in liquid assets. Otherwise we are all going fail at FIRE.

Yeah, the article I saw recently re: all this was from Financial Samuri...

https://www.cnbc.com/2020/04/30/42-year-old-retiree-lost-600000-coronavirus-second-guessing-early-retirement.html

and I have to admit I was confused the whole time reading (someone who has a portfolio that is 20% equities, and that 20% has lost 30% of its value, is now looking for work??).  I guess I was less confused when I realized the spending number I was reading was quarterly and not annual, but still didn't exactly follow how their financial plan was so surprised by a single downturn in the economy given it seems like we have one worse than this every ten years for as long as I've been alive.

ixtap

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Re: The World Is Watching To See If COVID-19 Kills FIRE
« Reply #38 on: June 03, 2020, 02:55:27 PM »
I mean, as everyone from the Financial Samuri to Suze Ormand says, no normal middle class life can be had on less then $200k/year and at least $5 million in liquid assets. Otherwise we are all going fail at FIRE.

Yeah, the article I saw recently re: all this was from Financial Samuri...

https://www.cnbc.com/2020/04/30/42-year-old-retiree-lost-600000-coronavirus-second-guessing-early-retirement.html

and I have to admit I was confused the whole time reading (someone who has a portfolio that is 20% equities, and that 20% has lost 30% of its value, is now looking for work??).  I guess I was less confused when I realized the spending number I was reading was quarterly and not annual, but still didn't exactly follow how their financial plan was so surprised by a single downturn in the economy given it seems like we have one worse than this every ten years for as long as I've been alive.

This is just Sam drumming up more clicks - he had already rethought FIRE (and says so) this is making him rethink his re-entry. And I fell for the clickbait. They had to hire a night doula?!

Much Fishing to Do

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Re: The World Is Watching To See If COVID-19 Kills FIRE
« Reply #39 on: June 03, 2020, 03:15:34 PM »
I mean, as everyone from the Financial Samuri to Suze Ormand says, no normal middle class life can be had on less then $200k/year and at least $5 million in liquid assets. Otherwise we are all going fail at FIRE.

Yeah, the article I saw recently re: all this was from Financial Samuri...

https://www.cnbc.com/2020/04/30/42-year-old-retiree-lost-600000-coronavirus-second-guessing-early-retirement.html

and I have to admit I was confused the whole time reading (someone who has a portfolio that is 20% equities, and that 20% has lost 30% of its value, is now looking for work??).  I guess I was less confused when I realized the spending number I was reading was quarterly and not annual, but still didn't exactly follow how their financial plan was so surprised by a single downturn in the economy given it seems like we have one worse than this every ten years for as long as I've been alive.

This is just Sam drumming up more clicks - he had already rethought FIRE (and says so) this is making him rethink his re-entry. And I fell for the clickbait. They had to hire a night doula?!

Heh, yeah, I guess the fact I had to look up what a doula was confirms I'm not in his league....

Buffaloski Boris

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Re: The World Is Watching To See If COVID-19 Kills FIRE
« Reply #40 on: June 03, 2020, 04:35:46 PM »
I mean, as everyone from the Financial Samuri to Suze Ormand says, no normal middle class life can be had on less then $200k/year and at least $5 million in liquid assets. Otherwise we are all going fail at FIRE.

Yeah, the article I saw recently re: all this was from Financial Samuri...

https://www.cnbc.com/2020/04/30/42-year-old-retiree-lost-600000-coronavirus-second-guessing-early-retirement.html

and I have to admit I was confused the whole time reading (someone who has a portfolio that is 20% equities, and that 20% has lost 30% of its value, is now looking for work??).  I guess I was less confused when I realized the spending number I was reading was quarterly and not annual, but still didn't exactly follow how their financial plan was so surprised by a single downturn in the economy given it seems like we have one worse than this every ten years for as long as I've been alive.

This is just Sam drumming up more clicks - he had already rethought FIRE (and says so) this is making him rethink his re-entry. And I fell for the clickbait. They had to hire a night doula?!

Heh, yeah, I guess the fact I had to look up what a doula was confirms I'm not in his league....

OK. I give. What in the world is a night doula?  Also, is Sam’s article worth a read? Sometimes his stuff is worth the time. Sometimes not.

ixtap

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Re: The World Is Watching To See If COVID-19 Kills FIRE
« Reply #41 on: June 03, 2020, 05:11:10 PM »
I mean, as everyone from the Financial Samuri to Suze Ormand says, no normal middle class life can be had on less then $200k/year and at least $5 million in liquid assets. Otherwise we are all going fail at FIRE.

Yeah, the article I saw recently re: all this was from Financial Samuri...

https://www.cnbc.com/2020/04/30/42-year-old-retiree-lost-600000-coronavirus-second-guessing-early-retirement.html

and I have to admit I was confused the whole time reading (someone who has a portfolio that is 20% equities, and that 20% has lost 30% of its value, is now looking for work??).  I guess I was less confused when I realized the spending number I was reading was quarterly and not annual, but still didn't exactly follow how their financial plan was so surprised by a single downturn in the economy given it seems like we have one worse than this every ten years for as long as I've been alive.

This is just Sam drumming up more clicks - he had already rethought FIRE (and says so) this is making him rethink his re-entry. And I fell for the clickbait. They had to hire a night doula?!

Heh, yeah, I guess the fact I had to look up what a doula was confirms I'm not in his league....

OK. I give. What in the world is a night doula?  Also, is Sam’s article worth a read? Sometimes his stuff is worth the time. Sometimes not.

A night doula is anything from a nursing coach for those midnight feedings to a nanny on night duty. Or in their case, an extra person in the mix during a pandemic?! Maybe they had been expecting a grandparent to help out?

The article just says that the pandemic has cut into their rental income and his plans to return to work, but they keep increasing their expenses, anyway.

nereo

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Re: The World Is Watching To See If COVID-19 Kills FIRE
« Reply #42 on: June 03, 2020, 05:42:38 PM »
I don’t really understand what happened with Sam but he went from a good financial blogger for the higher income set to someone that just writes rubbish trolling for clicks. Several of his more recent posts have been beyond terrible and factually awful.

As others have said he is just clickbait now. It’s sad really.

js82

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Re: The World Is Watching To See If COVID-19 Kills FIRE
« Reply #43 on: June 04, 2020, 06:02:54 AM »
OTOH, if you're counting on $40K/yr, you're 35 years old, you just hit $1M, you have very little slop in your budget, and the market suddenly drops 20-30% right after you've FIREd, you're at risk.  The few times in which the 4% rule fails all involve large market drops shortly after retirement, so it's reasonable to wonder how people who based their plans on rosy projections are faring.  And journalists are out there interviewing people to find That Guy who retired with no safety net and now has to go back to work.  Why?  Confirmation bias:  everyone is afraid to take a risk like that, because it seems so out of the mainstream; the crisis that everyone feared has now hit; ergo, people want to read about how That Guy now has to go back to work, because it confirms that they were right not to follow that path.

Of course, what they're missing given their surface-level understanding is that it isn't about saving the bare-minimum you need to scrape by assuming everything goes right.  Every good FIRE plan has a bunch of built-in safety mechanisms, from budgeting a variety of luxuries that can be cut, to planned part-time or periodic work on passion projects, to having the skills to reduce expenses by DIYing pretty much everything you need, to planning for a lower SWR, to keeping a bond/CD ladder to ride out the storm, etc. etc. etc.  But a story about someone who planned to FIRE, FIREd, was caught in a giant economic meltdown, and stayed FIREd and happy isn't exactly exciting enough to attract attention, and it doesn't reassure the masses that they've made the right decision.

This is how I see it.

Covid-19 won't kill FIRE, but it may either delay timelines or make people a bit more conservative in their FIRE projections going forward.  We'll see what real returns look like over the next 5-10 years, but it's unlikely they'll resemble those in the recent past.  And that's okay - it may just mean a few more years until FIRE is a realistic option for some of us.

But it does nothing to change the fact that being >50% of the way to FIRE is still empowering in that you're in a position of financial strength, even if your FIRE time horizon has moved.

MasterStache

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Re: The World Is Watching To See If COVID-19 Kills FIRE
« Reply #44 on: June 04, 2020, 06:16:47 AM »
Nahhh, nothing is going to kill FIRE. I highly doubt folks are now saying "hey I probably need to work 20 more years because of COVID." If anything the folks I have talked to are actually saving more because they see what happens when their income suddenly disappears. However, I can see it affecting some folks plans as to when they FIRE. My spouse will likely not see another pay raise for the next several years and they are probably going to make more cuts to her HSA. The hospital went from making millions to losing millions every day. Honestly, not a big deal to us.   

dignam

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Re: The World Is Watching To See If COVID-19 Kills FIRE
« Reply #45 on: June 04, 2020, 08:22:35 AM »
It's going to take more than COVID to kill FIRE. 

People who are pursuing FIRE are in a much better position to handle market downturns.  Because, by definition, they are living below their means and likely have a sizable EF.  The FIRE people who are most affected by COVID are those who are a few years away from FIRE.

Plina

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Re: The World Is Watching To See If COVID-19 Kills FIRE
« Reply #46 on: June 04, 2020, 11:56:24 AM »
Nahhh, nothing is going to kill FIRE. I highly doubt folks are now saying "hey I probably need to work 20 more years because of COVID." If anything the folks I have talked to are actually saving more because they see what happens when their income suddenly disappears. However, I can see it affecting some folks plans as to when they FIRE. My spouse will likely not see another pay raise for the next several years and they are probably going to make more cuts to her HSA. The hospital went from making millions to losing millions every day. Honestly, not a big deal to us.

Yeah, my saving rate has increased tremendously as I have been able to skip jobrelated expenses and travel. I miss the travel but I guess that with the current situation there will be no trips outside of the country this year so I will save a lot of money. Sure I have taken a hit in the portfolio but it is climbing back a lot faster than expected. I have also invested most of my savings during the downturn.

StarBright

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Re: The World Is Watching To See If COVID-19 Kills FIRE
« Reply #47 on: June 04, 2020, 12:07:00 PM »
I do think it might kill the RE part of FIRE for some people. It may for us, just depending on how things shake out in the next year.

But I do think you are always better off saving your pennies and living as frugally as it is comfortable to do.

Plina

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Re: The World Is Watching To See If COVID-19 Kills FIRE
« Reply #48 on: June 04, 2020, 12:27:41 PM »
I don’t really understand what happened with Sam but he went from a good financial blogger for the higher income set to someone that just writes rubbish trolling for clicks. Several of his more recent posts have been beyond terrible and factually awful.

As others have said he is just clickbait now. It’s sad really.

Maybe he sold his blog and someone else now writes the blog. That was what happened to getrichslowly a number years ago. After it was sold it turned to crap and after a year or so it was announced that JD had sold it.

mathlete

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Re: The World Is Watching To See If COVID-19 Kills FIRE
« Reply #49 on: June 04, 2020, 01:32:06 PM »
I would guess that anyone who thought they could lean FIRE or barista FIRE on $300K is pretty fucked right now.