Author Topic: Charles Schwab on FIRE: "I think it is fantastic"  (Read 5848 times)

TVRodriguez

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Charles Schwab on FIRE: "I think it is fantastic"
« on: October 21, 2019, 02:21:11 PM »
Charles Schwab is no Suze Orman, apparently.

https://www.yahoo.com/finance/news/charles-schwab-is-a-fan-of-the-millennial-financial-independence-trend-150359540.html

Article:

Charles Schwab on millennial FIRE trend: Fantastic!
By Scott Gamm

Billionaire financial pioneer Charles Schwab, founder of The Charles Schwab Corporation (SCHW), applauds millennials who are saving more than half of their income to prepare for retirement.

“I think it is fantastic,” he said.

Over the past several years, a trend has emerged thanks to different blogs and books, advocating an extremely high savings rate - over 50% - in order to retire at age 35 instead of 65. Some who follow the movement don’t even plan to fully retire, but instead pursue a passion once they achieve a certain nest egg of savings. The movement even has its own catchphrase: FIRE — that is, financial independence, retire early.

“Millennials I think have been aware because they lived through some really difficult financial moments early in their childhood and now they’re taking over responsibility for their own personal savings,” Schwab said. “They don’t want to be where some parents ended up being who didn’t save adequately.”

Schwab is and author of the new book, “INVESTED: Changing Forever the Way Americans Invest.”

The other force fueling the financial independence movement is higher life expectancies.

“People know they’re going to live a lot longer than their parents or their grandparents, so they [got to] be prepared,” Schwab added.

Schwab acknowledged that challenges of attaining a sky-high savings rate.

“I don’t know how [millennials] do it, actually, because most of us, early on, don’t make that much income when we’re really young and how do you pay for your rent?” he noted.

With that, Schwab said the traditional financial advice of saving 10% of one’s income is a working number, but he praised a 15% or even 20% savings rate.

“What a great outcome,” he said, referring to the higher savings rate.

keepingmobens

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Re: Charles Schwab on FIRE: "I think it is fantastic"
« Reply #1 on: October 21, 2019, 02:46:36 PM »
I love their tagline: "Own your tomorrow." That's what the whole thing (investing, fire, living frugally, etc) is all about.

Phenix

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Re: Charles Schwab on FIRE: "I think it is fantastic"
« Reply #2 on: November 01, 2019, 08:37:10 AM »
“I don’t know how [millennials] do it, actually, because most of us, early on, don’t make that much income when we’re really young and how do you pay for your rent?” he noted.

I don't know about everyone else, but I found it much easier to save 50% of my income when I was single making $45k.  Fast forward 10 years, making $100k with a SAHM and 2 kids, I'm happy to be able to save 25-30% of my income.  It doesn't hurt that all of the money I put in in the early years has seen a lot of growth so it doesn't sting as bad having a lower savings rate.

marty998

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Re: Charles Schwab on FIRE: "I think it is fantastic"
« Reply #3 on: November 20, 2019, 01:34:31 PM »
“What a great outcome,” he said, referring to the higher savings rate.

No conflicts of interest there... if even 5% of millennials with their higher savings rates invest with CS, then that adds up to a whole lot of extra fees for Mr CS.

DadJokes

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Re: Charles Schwab on FIRE: "I think it is fantastic"
« Reply #4 on: November 20, 2019, 03:40:53 PM »
“I don’t know how [millennials] do it, actually, because most of us, early on, don’t make that much income when we’re really young and how do you pay for your rent?” he noted.

I don't know about everyone else, but I found it much easier to save 50% of my income when I was single making $45k.  Fast forward 10 years, making $100k with a SAHM and 2 kids, I'm happy to be able to save 25-30% of my income.  It doesn't hurt that all of the money I put in in the early years has seen a lot of growth so it doesn't sting as bad having a lower savings rate.

Ditto. When I was 18, my expenses were ~$12k per year.  I could live in an efficiency apartment less than a mile from work, eat cheap, and spend free time working more. If I made what I make now, I would have had a 75% savings rate, as opposed to my current 45% rate. On the other hand, it would have been a lower dollar amount saved annually, and I certainly wouldn't have wanted to be single and childless for the rest of my life.

TVRodriguez

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Re: Charles Schwab on FIRE: "I think it is fantastic"
« Reply #5 on: November 21, 2019, 08:48:28 AM »
“I don’t know how [millennials] do it, actually, because most of us, early on, don’t make that much income when we’re really young and how do you pay for your rent?” he noted.

I don't know about everyone else, but I found it much easier to save 50% of my income when I was single making $45k.  Fast forward 10 years, making $100k with a SAHM and 2 kids, I'm happy to be able to save 25-30% of my income.  It doesn't hurt that all of the money I put in in the early years has seen a lot of growth so it doesn't sting as bad having a lower savings rate.

Ditto. When I was 18, my expenses were ~$12k per year.  I could live in an efficiency apartment less than a mile from work, eat cheap, and spend free time working more. If I made what I make now, I would have had a 75% savings rate, as opposed to my current 45% rate. On the other hand, it would have been a lower dollar amount saved annually, and I certainly wouldn't have wanted to be single and childless for the rest of my life.

Same here, saved 50% when I was making $11,000/year.

But I'll go ahead and say that it was the house and kids that caused the greater leap of spending for us.  I spent way less before buying a house and before having kids (both single and married).  I mean, I'd rather have the both house and kids, but it's just the truth for us.  My biggest expense line each year is "Kids."  Best ROI, though!