Dave Ramsey/FIRE article

[jrhampt]

In case no one has posted this one yet:

https://www.msn.com/en-us/money/personalfinance/the-fire-movement-burned-down-dave-ramsey-gives-harsh-reality-check-to-seattle-dad-with-3-jobs-2m-net-worth-and-no-life-here-s-why-he-says-the-retire-early-approach-is-unsustainable/ar-BB1ozEpt?ocid=hpmsn&cvid=f020097264ba403fbf084449f1a0724f&ei=22

[nereo]

I’ll save everyone the trouble of listening to the whole thing

The caller grossly misunderstood the dual concepts of “FIRE” and “Enough”. He maximized earnings by overworking and is now burnt out, yet fearful of cutting back despite having more than enough to do a coast-FIRE (if not quit altogether)

True to form, Dave Ramsey continues to shit on the FIRE community by deliberately warping its ethos. It’s the ultimate straw man approach: he says FIRE is all about extreme scrimping while overworking (it’s not) and then he explains why that’s a terrible way to live.

Both are saying this is about FIRE, when it’s not.

FWIW the caller clearly has been on the wrong side of the work-life balance for some time, and IMO Dave’s recommendation that he needs to quit one or more of his jobs is correct. It sounds like his rental income more than covers living expenses at this point.

[uniwelder]

Thanks for doing the hard part, Nereo!  I started reading the article and then quickly dropped off when it started sounding absurd.

[iris lily]

Now Ramit Sethi has jumped on the anti-FIRE bandwagon.

He has a couple of points worth considering, one being: ultra frugality leads to inability to spend money appropriately when it is time to spend the money. He likens spending to dating— it is a skill to learn.

I take his point ‘ tho it is not a strong point.

And then, in the last part of this video, he outlines strategy to get to FIRE. Hah, ok Ramit.

https://m.youtube.com/watch?v=_IYhLppT0Ik&pp=QAFIAQ%3D%3D

[MustacheAndaHalf]

Now Ramit Sethi has jumped on the anti-FIRE bandwagon.

He has a couple of points worth considering, one being: ultra frugality leads to inability to spend money appropriately when it is time to spend the money. He likens spending to dating— it is a skill to learn.

I take his point ‘ tho it is not a strong point.

And then, in the last part of this video, he outlines strategy to get to FIRE. Hah, ok Ramit.

https://m.youtube.com/watch?v=_IYhLppT0Ik&pp=QAFIAQ%3D%3D

What is your evidence he "has jumped on the anti-FIRE bandwagon"?

He wants the viewer to decide if FIRE can be part of "your rich life" (see his books).  He mentions 3 good things about FIRE before covering 3 problems.  He includes reduced spending as an approach, and personally he went with the FI half of FIRE.  I think it's better to include people who are open to FIRE as allies with overlapping agreement and disagreement.

I think he describes FIRE accurately, which is better than most articles on the topic.  People who aim for FIRE have a behavior of frugal spending, and he claims that behavior does not stop when a magical number is reached - he provides examples of it in the video.  I think he's right, that trying to mix frugality and spending might be healthier.

His "rich life" idea, to oversimplify it, cuts spending dramatically on things someone does not care about, and spends far more on things someone cares about.  There's room for overlap between partial frugality and FIRE, so I don't view his video or approach as anti-FIRE.

[nereo]

His "rich life" idea, to oversimplify it, cuts spending dramatically on things someone does not care about, and spends far more on things someone cares about. 

To me that sounds a lot like what Pete has been advocating for since the beginning. Cut out all the stuff that doesn’t really add value and suddenly you s got a fire hose of cash and can spend a lot more on things that matter, plus of course becoming FI.

[iris lily]

Now Ramit Sethi has jumped on the anti-FIRE bandwagon.

He has a couple of points worth considering, one being: ultra frugality leads to inability to spend money appropriately when it is time to spend the money. He likens spending to dating— it is a skill to learn.

I take his point ‘ tho it is not a strong point.

And then, in the last part of this video, he outlines strategy to get to FIRE. Hah, ok Ramit.

https://m.youtube.com/watch?v=_IYhLppT0Ik&pp=QAFIAQ%3D%3D

What is your evidence he "has jumped on the anti-FIRE bandwagon"?

The title of this video is “The Problem with FIRE.”

And he lays out a problem or two.

If you don’t consider this anti-FIRE, ok.

Dave Ramsey also speaks against FIRE yet pretty much preaches a FIRE path. Anti-FIRE/not anti-FIRE, you choose.

[Telecaster]

Now Ramit Sethi has jumped on the anti-FIRE bandwagon.

He had three criticism of FIRE (paraphrased)

1.   Money doesn't make you happy.

100% true.   However, that is true in general, not to FIRE specifically.  So a straw man when applied to FIRE.

2.  FIRE folk don't know how to spend money.

I'd say this is partially true.    We've discussed this a number of times in the past.  People maintain the same frugal habits in retirement that got them to FIRE in the first place.   Then after a 10 year bull market they are sitting on a big pile of money that they don't really know how to spend.

3.  FIRE folk are afraid of facepunches--but this is changing.

I'd say this is true too.   This board used to be way more focused on the extreme frugality side of thing.  That's changed a lot in recent years.

My comment on Ramit:   For some reason in popular culture, is it fashionable to shit on FIRE, and I felt like he was piggy backing on that sentiment a little bit based on the title, but then pointedly did not shit on FIRE in the video.   The main thing though, is that none of his concepts are at all new to regular members of the community.   All of this stuff has been talked about in great detail.  He's just repackaging it in his own brand.  Which I am 100% fine with.   But the concepts did have a bit of a feel of like when people pop in and say "You're naive if you think the 4% can't fail!"   Yeah, no shit.  Everyone knows that.   Been hashed out in excruciating detail*    So the video was fine for a general audience, but really didn't land for me.   


*Fun FIRE fact:   On the old Morningstar forums there was a poster named Hocus would hijack every thread and turn it into a discussion of limitations of the 4% rule.  The regulars got so sick of discussing problems with the 4% rule that they started their own forum where they could ban Hocus and put the discussion to bed.  The name of the new forum was Bogleheads. 

[lhamo]

*Fun FIRE fact:   On the old Morningstar forums there was a poster named Hocus would hijack every thread and turn it into a discussion of limitations of the 4% rule.  The regulars got so sick of discussing problems with the 4% rule that they started their own forum where they could ban Hocus and put the discussion to bed.  The name of the new forum was Bogleheads.

I didn't know that part of the Hocus legend.  They were also all over the earlyretirement.org forums for a time -- mostly before I got there so didn't see too much of it in real time, but reference pop up among old-timers there from time to time. 

[MustacheAndaHalf]

Now Ramit Sethi has jumped on the anti-FIRE bandwagon.

He has a couple of points worth considering, one being: ultra frugality leads to inability to spend money appropriately when it is time to spend the money. He likens spending to dating— it is a skill to learn.

I take his point ‘ tho it is not a strong point.

And then, in the last part of this video, he outlines strategy to get to FIRE. Hah, ok Ramit.

https://m.youtube.com/watch?v=_IYhLppT0Ik&pp=QAFIAQ%3D%3D

What is your evidence he "has jumped on the anti-FIRE bandwagon"?

The title of this video is “The Problem with FIRE.”

And he lays out a problem or two.

If you don’t consider this anti-FIRE, ok.

Dave Ramsey also speaks against FIRE yet pretty much preaches a FIRE path. Anti-FIRE/not anti-FIRE, you choose.

Someone mentioning one problem with FIRE is anti-FIRE?  That strikes me as an extreme view that everyone who doesn't 100% agree is the enemy.

[MustacheAndaHalf]

Now Ramit Sethi has jumped on the anti-FIRE bandwagon.

He had three criticism of FIRE (paraphrased)

1.   Money doesn't make you happy.

100% true.   However, that is true in general, not to FIRE specifically.  So a straw man when applied to FIRE.

You quoted yourself, agreed with yourself, and then called that a "straw man" argument - ironically, you're correct - you have created a straw man, by not quoting the video at all.

1. "FIRE movement is often obsessed with a number"
"... and everything revolves around that.  A lot of members of the FIRE movement exhibit classic  signs of stress, anxiety, even depression thinking that hitting some mythical number in their spreadsheet will suddenly make them happy."

Notice the lack of the word "money" in Ramit's description, which is central to your misquoting him.  You're putting words in his mouth.  He talks of people who are obsessed "with a number" "in their spreadsheet", which leads to "signs of stress, anxiety and even depression".

The first example he shows in that video is a couple with $14 million net worth who is anxious about their number.  This is not the general case of someone worrying about money, but rather a decamillionaire obsessed with their retirement number.  And that is one of many examples he has seen "over his 20 year career" as he also states in the video.

[Telecaster]

You quoted yourself, agreed with yourself, and then called that a "straw man" argument - ironically, you're correct - you have created a straw man, by not quoting the video at all.

1. "FIRE movement is often obsessed with a number"
"... and everything revolves around that.  A lot of members of the FIRE movement exhibit classic  signs of stress, anxiety, even depression thinking that hitting some mythical number in their spreadsheet will suddenly make them happy."

Notice the lack of the word "money" in Ramit's description, which is central to your misquoting him.  You're putting words in his mouth.  He talks of people who are obsessed "with a number" "in their spreadsheet", which leads to "signs of stress, anxiety and even depression"

Sorry man.  When he said "number" I mistakenly thought he meant "number of dollars needed to retire."   In fact, he was talking about some unrelated concept that has nothing to do with money.    Thanks for the clarification.   

[oldtoyota]

His "rich life" idea, to oversimplify it, cuts spending dramatically on things someone does not care about, and spends far more on things someone cares about. 

To me that sounds a lot like what Pete has been advocating for since the beginning. Cut out all the stuff that doesn’t really add value and suddenly you s got a fire hose of cash and can spend a lot more on things that matter, plus of course becoming FI.

And, before Pete, it's what the LBYM (living beneath your means) people said. The idea holds true over time, as we can see!

[MustacheAndaHalf]

His "rich life" idea, to oversimplify it, cuts spending dramatically on things someone does not care about, and spends far more on things someone cares about. 

To me that sounds a lot like what Pete has been advocating for since the beginning. Cut out all the stuff that doesn’t really add value and suddenly you s got a fire hose of cash and can spend a lot more on things that matter, plus of course becoming FI.

And, before Pete, it's what the LBYM (living beneath your means) people said. The idea holds true over time, as we can see!

As I understand it, Ramit Sethi argues for spending 10x more on the area that you love.  So if you spent $500 on music, you might have a goal to spend $5,000 on music, instead.  I've never heard of extravagant spending in any FIRE or "live within your means" approach, before Mr Sethi.  He also advocated cutting other costs ruthlessly, but the extravagant spending on something you really love seemed unique to me.

[BlueHouse]

Bring on the hate!  They can hate on it all they want.  The molasses-retirement crowd can keep on working and feeding the economy as long as they want.  They keep paying high taxes, maybe it will make my retirement easier.  And as long as they're paying into SS, maybe that will be there for me too! 
And what's the problem with dying with a pile of money?   Seems like a lot of people benefit from generational wealth.  If it happens to me after I live my life comfortably, I won't be mad about it. 

I'm just gonna keep laughing all the way to my beach chair! 

[GuitarStv]

2.  FIRE folk don't know how to spend money.

I'd say this is partially true.    We've discussed this a number of times in the past.  People maintain the same frugal habits in retirement that got them to FIRE in the first place.   Then after a 10 year bull market they are sitting on a big pile of money that they don't really know how to spend.

I think that this point presupposes a need to spend money.  If someone maintains the same frugal habits in retirement that got them to FIRE and their wealth keeps amassing . . . so what?  There's zero negative that I'm seeing being described here.  They can continue following the same frugal habits that make them happy.  If they're miserable and unhappy because of their frugal habits then that's a problem . . . but it would have been a problem before having a big pile of money or doing the whole FIRE thing.

[erp]

His "rich life" idea, to oversimplify it, cuts spending dramatically on things someone does not care about, and spends far more on things someone cares about. 

To me that sounds a lot like what Pete has been advocating for since the beginning. Cut out all the stuff that doesn’t really add value and suddenly you s got a fire hose of cash and can spend a lot more on things that matter, plus of course becoming FI.

And, before Pete, it's what the LBYM (living beneath your means) people said. The idea holds true over time, as we can see!

As I understand it, Ramit Sethi argues for spending 10x more on the area that you love.  So if you spent $500 on music, you might have a goal to spend $5,000 on music, instead.  I've never heard of extravagant spending in any FIRE or "live within your means" approach, before Mr Sethi.  He also advocated cutting other costs ruthlessly, but the extravagant spending on something you really love seemed unique to me.

That's a pretty unique take!

I can see the merit in not worrying about things which are both high value and expensive in the one or two areas (ie. in the world where you're spending $5000 on music, maybe you go to a concert or buy an overpriced beer ... I have a hard time imagining that this leads to a 10x increase in spending, but the idea that you might spend a lot on concert tickets without worrying about it makes a ton of sense to me).

When you're aggressively saving, it might make sense to not go to a concert because it's expensive. But if that concert is going to be amazing, once you're FI you should consider going. If the concert isn't fun or you'd rather go camping for a month, do that instead. Of course, I don't especially like concerts, so I wouldn't spend like this.

I like the idea of becoming relatively price insensitive in one or two categories which really matter to you. For example, I spend borderline frivolously on board games - if something looks cool or comes recommended then I will buy it without worrying. It doesn't cost me more than $1000/yr; but if I were scraping by then I'd borrow these games, or live without. Being FI means that I can not worry about the relatively minor expense, and it meaningfully improves my quality of life. Plus, it supports my local community, it gives me many social opportunities, and it's fun.

[GuitarStv]

If the concert's really important to you, go.  There's no point retiring early if it requires years of misery to get there.  It's a marathon not a sprint, and living in misery to try to get there a few years early doesn't make any kind of sense to me.