Author Topic: These people left their jobs behind to retire early — then life got in the way.  (Read 6879 times)

AlexMar

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Most of the people didn’t have enough to retire so it was just dumb.

Exactly.  Who can retire in their 20s with no more than $200,000 total assets?  That was a disaster just waiting to happen.

And you are being generous.  Almost all of those assets were retirement/401k which you wouldn't touch until you are 60.  She retired in her 20's with about $25,000.  Lol.

Nicholas Carter

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Nick you should look into state universities for teaching opportunities. Also some colleges pay a lot more for online classes because the funding source is different. I teach one class each of the 3 semesters and make 22k/year.
You mean that you teach one, three hour section per week? Or you mean you teach multiple sections of the same class per week?
In my situation, I have struggled due to my weak academic performance in college (I became ill the senior year of my undergraduate degree, and required almost a year of medical care). I am routinely out competed for full time positions by people who did better in school, and the third semester of the year classes are only taught by full time faculty, never part time. Which means that part time at one school really means "about 500 hours per year".

mathlete

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I'm a fan of these cautionary tales. I'm on the record as thinking that there are a good number of people out there "doing it wrong". Maybe even some in this community.

Would you mind elaborating on that? I may be one of those people -_-

Sorry, I'm just now seeing this. I'll do my best.

1.) Most people's lives don't map 1 to 1 to those of the most successful FIRE bloggers. There is a limited demand for lifestyle porn on the internet and you shouldn't bank on blog income. Basic stuff. People understand this in the abstract. But most of the bloggers are also probably type-A go getters who can't help but to make money.

Honesty is necessary. Honesty about whether or not you're that kind of person, or say, someone who clicks around on the internet at the office a few hours a day instead of putting in tangible work towards the next big raise. I'm personally not a go-getter on the level of MMM or even some of the more forums famous faces around here. So I factor that in.

Also, a blogger's spending (even if they're being 100% honest and transparent) probably doesn't capture the tangible and intangible benefits of being a web celebrity or thought-leader.

2.) "Income doesn't matter; only spending" doesn't scale to the lowest levels. You have an inelastic demand for things like food, shelter, and life-saving medicine. You can make a concerted choice to live on $10 of coffee a year instead of $1000 of coffee a year. You can't as easily elect to pay $1,000 for world-class cancer treatment instead of $100,000.

People have their plans for medical, and that's all well and good. But a healthy bit of observation shows that the majority party in the United States is trying to defund and destroy public health programs at every level. Or that a wave of nativism in other desirable countries has actual and would-be political leaders championing the tightening of immigration. Maybe that's not a problem if you're retiring well into the seven figures. Potential lean-FIRE expats may be less desirable though. They could find themselves searching for a social safety net that is willing to catch them.. I truly don't know where we're heading over the next few years.

3.) You at 30 is not you at 40, 50, 60, so on.

People change. I'm young, tough, strong, and healthy. I can deal with considerable amounts of bullshit. But stuff happens. A buddy of my tore his ACL playing basketball. He's 29, healthy, active, and recovering as well as can be expected. But that's a risk factor for early-onset arthritis. Will it stop him from leading an active an fulfilling life? Probably not. But it could turn what would be 15 miles a day walking around a new city into half that with a few $30 Uber rides. Back problems can cause you to upgrade from slumming it in hostels, to a hotel with a reliably suitable mattress.

Attitudes change too. You may love the grind now. But eventually it wears on you. That's why it's called the grind. My parents/are boomers. As are their siblings and friends. They spend lavishly on entertainment and comfort in their 60s. Decades ago, they were anti-consumerist hippies who subsisted on cheap pot and free love.

That covers most of it I think.

Cassie

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Nick, I teach one 3 credit class online each semester.  You also need a master’s degree as the minimum to teach. I mentioned that because you only talked about your undergrad degree.
« Last Edit: December 06, 2018, 10:22:01 AM by Cassie »

4alpacas

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I guess I dont understand what went wrong in the initial story.

"The rental property was too complicated to manage from far away." (So sell it and buy one closer...or sell it and invest the proceeds in another way?)

She found that she hated freelancing. (So the problem with FIRE is you might hate your job that you need for income?  Huh?)

Because of some technicalities, she wasn’t able to access her pension yet. (She expected to draw a pension that pays any significant amount for any significant period after retiring at the age of 27? Really?)

There were fewer bites than expected on her Etsy projects. (So the problem with FIRE is your business might not be profitable?  Huh?)

And she and her boyfriend broke up. (So living off a boyfriend is considered being FI?, as I assume anyone just needing to share expenses can get a roommate. Heck, I'd think the 'backup plan' of living off your parents is probably a better one)

I guess I dont understand the next story.

They "FIRE'd" with half of what they thought they needed?  (Did the cut their expenses in half or just say what the heck?)
Losing 3% of their investments thru the crypto hack destroyed them?  (Pretty sure I lost 3% of my investments Thanksgiving week...and that was just market fluctuations)

For the Liz story all I can think is thank goodness they were planning for FIRE...losing one income would destroy most families financially.  They were probably already living off of just one.  Or is this just a "reaching FIRE may be tougher than you initially think and you may have to adapt and it may take longer" story, which sounds right........

For the losing your partner story...Heck, isnt not needing eitehr parents' income the best place to be for when this happens?  Or is this just a "reaching FIRE may be tougher than you initially think and you may have to adapt and it may take longer" story, which sounds right........

alright, tired of reading this article now

Wow don't spare any punches. Now I know why people don't share more of the bad stuff online. But yeah basically you're right - I took the leap to Coast Find sooner than I should've and I couldn't make it work. It's shitty but sometimes one has to learn lessons the hard way. Don't worry, I'm going back to work and will stay there until I amass more than enough for FIRE
@fierymillennials I appreciate your openness with your struggles.  After reading your comments here and in the article, I started listening to your podcast and reading your blog.  Good luck with the next phase of your life.  Don't let the grouchy posters on a message board get you down. 

sol

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Without 40 quarters these super early retirees will not qualify for Medicare Part A or Social Security.  Also I think a safer SWR should be lower than 4% due to the number of years involved.

40 quarter is only ten years of paychecks.  My paychecks started when I was 16.  Even someone who retires at 30 years old probably has enough.

If you read the 4% SWR thread on this very forum, you will find the charts that show the 30 year time horizon success rates are just barely worse than the 40 year rates, which are basically identical to the 50 and 60 year rates.  After some duration it just doesn't matter anymore, because the only possible failure scenarios are catastrophically bad sequence of return risk realizations right after your retirement date.  Basically, if you survive the first few years of retirement without a major crash, you're golden.  And even if you do get hit with a major crash right off the bat, you typically need to continue robotically withdrawing inflation-adjusted amounts of your depleted portfolio long enough to hit a second major crash 15 or 20 years later in order to actually fail with a 4% SWR.  It's still possible, you just have be pretty stupid for a really long time.

In reality, people who lose 40% or more of their portfolio the year after they retire typically don't withdraw more money the next year without finding more income.  They either go back to work right away while their skills are still relevant, just to be extra safe, or they choose to stay retired but spend less.  Some of them do neither, and that still usually works out okay if they just wait long enough.

Remember that even with a 40% correction in year one of your retirement, a 4% inflation-adjusted SWR should still last you roughly 25 years unless the market never recovers after that 40% drop (which has never happened).  That still qualifies as a "failure" of the 4% rule because it's less than a 30 year timeline, but 25 years is still a loooong time to work out a new plan.  I'm pretty sure I could find a way to make a few bucks if I had 25 years to prepare.  It didn't even take me that long to start earning money after I was born a totally useless baby. 

I'm not surprised the article that started this discussion was able to find people who "failed" at early retirement, because there will always be people who jump into it without first internalizing the body of knowledge that this forum provides.   FIREing on a 9% SWR might work out okay for you, but probably won't.  FIREing on a 6% SWR should work out roughly half of the time, so half of those folks would need to either earn more or spend less later in their lives.

Much Fishing to Do

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I guess I dont understand what went wrong in the initial story.

"The rental property was too complicated to manage from far away." (So sell it and buy one closer...or sell it and invest the proceeds in another way?)

She found that she hated freelancing. (So the problem with FIRE is you might hate your job that you need for income?  Huh?)

Because of some technicalities, she wasn’t able to access her pension yet. (She expected to draw a pension that pays any significant amount for any significant period after retiring at the age of 27? Really?)

There were fewer bites than expected on her Etsy projects. (So the problem with FIRE is your business might not be profitable?  Huh?)

And she and her boyfriend broke up. (So living off a boyfriend is considered being FI?, as I assume anyone just needing to share expenses can get a roommate. Heck, I'd think the 'backup plan' of living off your parents is probably a better one)

I guess I dont understand the next story.

They "FIRE'd" with half of what they thought they needed?  (Did the cut their expenses in half or just say what the heck?)
Losing 3% of their investments thru the crypto hack destroyed them?  (Pretty sure I lost 3% of my investments Thanksgiving week...and that was just market fluctuations)

For the Liz story all I can think is thank goodness they were planning for FIRE...losing one income would destroy most families financially.  They were probably already living off of just one.  Or is this just a "reaching FIRE may be tougher than you initially think and you may have to adapt and it may take longer" story, which sounds right........

For the losing your partner story...Heck, isnt not needing eitehr parents' income the best place to be for when this happens?  Or is this just a "reaching FIRE may be tougher than you initially think and you may have to adapt and it may take longer" story, which sounds right........

alright, tired of reading this article now

Wow don't spare any punches. Now I know why people don't share more of the bad stuff online. But yeah basically you're right - I took the leap to Coast Find sooner than I should've and I couldn't make it work. It's shitty but sometimes one has to learn lessons the hard way. Don't worry, I'm going back to work and will stay there until I amass more than enough for FIRE

Hey, sorry if that sounded like I was attacking any of these folks...the intent was purely to attack the author's conclusion that these are instances of real FIRE failure, but I may not even be interpreting FIRE correctly.  E.g. you are saying you failed at Coast Fire but doesn't Coast Fire just mean saving a lot of money early on and then downshifting or the like? (I admit I don't really know)  So if you did save a ton of money very early on and at some point did downshift I'm not really even sure how you could have failed, wish I would have done both in my 20s...

I wouldn't even try to say there are no legit FIRE failure stories out there that could point out problems with the concept...the article just didn't seem to have any of those to me.

rob in cal

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  I'm highly disturbed about the Suze Orman idea that 5 million is a good retirement number.  What kind of an alternate universe is she living in?

terran

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  I'm highly disturbed about the Suze Orman idea that 5 million is a good retirement number.  What kind of an alternate universe is she living in?

The kind where she owns an island.

Rife

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To me cautionary tales are ok to me if the concern is that a 20-something will leave a 150k a year job to live on a tight budget for  decades when they could have just saved a bit more of a cushion. I agree that these are not FIRE stories though. Leaving your IT job to chase a dream of podcasting and freelancing is trying to trade a job you don’t like for one you think you will like. She did not have enough saved to call it retirement. The couple left work to travel. Many people do that. They call it taking a break from work to travel not retiring. Are we so consumeristic in this country that we can’t just travel the country for six months if the funds are there to pay for it. They hated their jobs so prolly don’t care if they get them back.

spartana

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To me cautionary tales are ok to me if the concern is that a 20-something will leave a 150k a year job to live on a tight budget for  decades when they could have just saved a bit more of a cushion. I agree that these are not FIRE stories though. Leaving your IT job to chase a dream of podcasting and freelancing is trying to trade a job you don’t like for one you think you will like. She did not have enough saved to call it retirement. The couple left work to travel. Many people do that. They call it taking a break from work to travel not retiring. Are we so consumeristic in this country that we can’t just travel the country for six months if the funds are there to pay for it. They hated their jobs so prolly don’t care if they get them back.
  Agreed. Part of the problem is that FIRE bloggers and many in the FIRE community now use other terms to mean the same as FI. Barista FIRE, Coast FIRE, mini serial FIREs, etc aren't the same as FI because the person is still dependent on a working income at some point in their lives,  or are dependent on someone else to support them even at a bare bones level. They probably wouldn't be able to ride out even a short term financial or personal set back let alone a major long term one. Which, as @sol pointed out above, most FI people can.

So while they might have enough invested before they quit their jobs to never have to save again and can coast to FIRE for a few decades on low income jobs or seasonal or part time jobs, they aren't yet FI and will be FDepenent until their investments grow much larger.
« Last Edit: December 07, 2018, 02:46:08 AM by spartana »

TomTX

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Without 40 quarters these super early retirees will not qualify for Medicare Part A or Social Security.  Also I think a safer SWR should be lower than 4% due to the number of years involved.

For either one, keep an eye out for a major market correction. Pick up a part time job to supplement for a few years. Qualify for SS, and prevent portfolio failure.

Social Security hasn't used actual "quarters" (measured individual quarterly work periods) since 1978 - it's all based on earnings for the year. For each $1360 you earn in 2019 you get 1 credit, up to 4. So, earn $5440 anytime in 2019, you get 4 "quarters" of credits.

https://www.ssa.gov/oact/cola/QC.html

Occasional seasonal/part time or consulting work will get you over that hump pretty easily.

powskier

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I guess FIRE has "jumped the shark" is those are FIRE stories.

They make me think about my youth,carefree, lots of travel, have fun, live on very little , work as little as possible, ski, surf, play and then at some point realize that if you don't buckle down and make a little cash you'll be screwed. We just called it bumming/having fun.

Life was so much easier before everyone felt a need to "be someone" on the internet, FOR TOTAL STRANGERS nonetheless.....