How to explain FIRE concept to novice?

[helloyou]

Hello,

I have a couple of friends who are working day to day on small income job. And they save little money in their bank accounts for years....

I tell tem it's all wrong and they gonna get killed by inflation... except that their financial knowledge is so low that they don't even know what inflation is.

I'd like to share some easy link or page for them to read and get an understanding of what is FIRE.

I know there is MoneyMustache blog post (https://www.mrmoneymustache.com/2012/01/13/the-shockingly-simple-math-behind-early-retirement/) but it's long and difficult to apprehend for someone without financial knowledge.

Is there something I could share, that would be easy to get for complete novice?

Some sort of easy to get infographic would be great. Does that exist?

Thank you

[ericrugiero]

That's a challenge.  You can't force someone to be interested in FIRE. 

Are they interested in finances?  If not, you could put out a couple feelers to see if they bite.  If they don't act interested then you are wasting your time.
 
Are they uneducated on financial concepts or are the not very smart?  Someone who is smart but uneducated could pick it up pretty quickly.  The concept is pretty simple (invest enough money to create a residual income you can live off the rest of your life) while the techniques get a little more involved.  But, I've met a few people in my life who I don't think could ever grasp how it works.  If they can't grasp it then you could still guide them but the sacrifices to save enough for FIRE are going to be a tough sell if they can't understand where it leads and why. 

[ctuser1]

I start from the concept of "freedom". That gets the crux of the concept across quickly.

Note: I have been able to reasonably "explain" the concept, but never been able to "convert" anyone who was not already considering it.

[FlytilFIRE]

If they're readers, you might suggest Your Money or Your Life by Vicki Robbins. Not about investing, per se, but invaluable in explaining how money works, and how to relate it to the value of your life.

It's one of the great classics on money, FIRE, and life.

[helloyou]

That's a challenge.  You can't force someone to be interested in FIRE. 

Are they interested in finances?  If not, you could put out a couple feelers to see if they bite.  If they don't act interested then you are wasting your time.
 
Are they uneducated on financial concepts or are the not very smart?  Someone who is smart but uneducated could pick it up pretty quickly.  The concept is pretty simple (invest enough money to create a residual income you can live off the rest of your life) while the techniques get a little more involved.  But, I've met a few people in my life who I don't think could ever grasp how it works.  If they can't grasp it then you could still guide them but the sacrifices to save enough for FIRE are going to be a tough sell if they can't understand where it leads and why.

No interest in finance apart from the typical saving to buy a house or for rainy days...

But it's understandable because they are from poor background and do low pay job. I'd like to help them see further than saving few quids there and there, leaving it in the bank account ad infinitum...

[helloyou]

I start from the concept of "freedom". That gets the crux of the concept across quickly.

Note: I have been able to reasonably "explain" the concept, but never been able to "convert" anyone who was not already considering it.

The concept in itself is easy to explain. However it immediately sounds both like a lifetime pain to live like a rabbit AND as scam as well.

They don't believe you can be FI.

So the immediate conclusion is that it's either too good to be true, or ending up having a life full of frustration.

I'd like something simple to kill both these immediate assumptions in a simple and quick fashion. Because as soon as they have these stereotype, they won't dig into long blog post with theory into it.

[helloyou]

If they're readers, you might suggest Your Money or Your Life by Vicki Robbins. Not about investing, per se, but invaluable in explaining how money works, and how to relate it to the value of your life.

It's one of the great classics on money, FIRE, and life.

Yeah but no lol. They aren't. If they were, they'd already know the concept

[K_in_the_kitchen]

I don't talk about FIRE with people much, but when I do I explain it as us wanting our work to benefit ourselves and wanting to be able to choose to work or not.  I talk about how debt and unnecessary spending make other people rich while keeping us impoverished, and I talk about saving and investing as putting us on the path to FI.  It's really a question of who your dollars work for.  At this point we've reached FI, and interestingly, if people know about it they do have questions about how we did it.

[helloyou]

I don't talk about FIRE with people much, but when I do I explain it as us wanting our work to benefit ourselves and wanting to be able to choose to work or not.  I talk about how debt and unnecessary spending make other people rich while keeping us impoverished, and I talk about saving and investing as putting us on the path to FI.  It's really a question of who your dollars work for.  At this point we've reached FI, and interestingly, if people know about it they do have questions about how we did it.

Yes that's my case as well. I usually don't bother explaining. Especially for high earner high spender type of person. I know that's the type of lifestyle they like and they're happy with it.


But some of my friends I see them with shitty jobs and wanting to escape this. They may try various scam such as pyramidal marketing schemes hoping to get rich quick. And keep their little savings from years of work into a bank account... I heard from time to time some have significant saving to buy a house. This is cash sitting in a bank account for many years being eated by inflation....
All of these makes me so cringy when they can just apply simple concepts that can significantly improve their future lifestyle.

So for these friends, I'm trying to help. I see them digging themself into a hole thinking it's the way life has to be, without knowing they can escape from it.

Maybe it's too much. I think I almost converted 1 of them. But it takes time.

[MoneyTree]

Can i be frank for a moment? You've posted a few times here around the same theme: your friends don't understand FIRE and they cant see how it is possible / they are not willing to make the changes necessary to pursue it. Every time people give you some suggestions, you then shoot them down, giving your friends' excuses.

If someone isn't even willing to read a medium length blog post that lays it out for them, I don't they have the fortitude necessary to pursue FIRE. I'd suggest you stop trying to convince your friends about FIRE and just live your life pursuing it yourself. If some of them want to take the initiative to ask you and actually listen to what you have to say, then great. In that case, I'd share one basic concept with them, and then let them ask for more if they wish.

If not, then don't waste your time converting them if they aren't ready to listen. You'll just come across as holier-than-thou.

You cannot force help onto those who don't want it.

[helloyou]

Can i be frank for a moment? You've posted a few times here around the same theme: your friends don't understand FIRE and they cant see how it is possible / they are not willing to make the changes necessary to pursue it. Every time people give you some suggestions, you then shoot them down, giving your friends' excuses.

If someone isn't even willing to read a medium length blog post that lays it out for them, I don't they have the fortitude necessary to pursue FIRE. I'd suggest you stop trying to convince your friends about FIRE and just live your life pursuing it yourself. If some of them want to take the initiative to ask you and actually listen to what you have to say, then great. In that case, I'd share one basic concept with them, and then let them ask for more if they wish.

If not, then don't waste your time converting them if they aren't ready to listen. You'll just come across as holier-than-thou.

You cannot force help onto those who don't want it.

Yes I absolutely agree with you. And I'm not forcing.

I'm just asking if there are any existing content that would explain better than me, or some of the blog post which are quite wordy and needing to think hard to follow up.

[ixtap]

I don't talk about FIRE, I talk about priorities and what we have done to meet our priority of cruising full time.

If anyone asks for details, I might point them to FIRE. So far, the only one who didn't either tell me my priorities are messed up or how I should be investing basically said "Yeah, I am working on FIRE to pursue my snowboarding more." No one at all has ever asked what we do with the money we don't spend.

For the folks you are talking about, I don't see that FIRE is the place to start. Perhaps talk to them about a Roth IRA.

[rocketpj]

I have had some low level conversations with coworkers who express interest in getting control of their finances.  Usually it starts with some expressed frustration with their credit card etc.

I generally avoid lecturing or even referring them anywhere.  I typically start with the concept of the debt snowball, which has appealed to a couple of them.  If they express more interest I talk a little about personal finance blogs in general, and if they are still interested I tend to send them to a couple of the more entry level ones (i.e. Get Rich Slowly).

People will either get the bug for it or they won't.  I can't force it and won't waste my time trying (aside from my kids).

[4tify]

What about Playing with FIRE documentary? It’s an easy watch and covers all the core concepts.

[Bloop Bloop]

This is like asking how do I explain to smokers that they should stop smoking.

They already know. They just don't care.

That is your friends right there. If they had any interest, they would have expressed it initially.

[MrThatsDifferent]

Can i be frank for a moment? You've posted a few times here around the same theme: your friends don't understand FIRE and they cant see how it is possible / they are not willing to make the changes necessary to pursue it. Every time people give you some suggestions, you then shoot them down, giving your friends' excuses.

If someone isn't even willing to read a medium length blog post that lays it out for them, I don't they have the fortitude necessary to pursue FIRE. I'd suggest you stop trying to convince your friends about FIRE and just live your life pursuing it yourself. If some of them want to take the initiative to ask you and actually listen to what you have to say, then great. In that case, I'd share one basic concept with them, and then let them ask for more if they wish.

If not, then don't waste your time converting them if they aren't ready to listen. You'll just come across as holier-than-thou.

You cannot force help onto those who don't want it.

+1

There’s absolutely nothing to difficult to comprehend about the article that OP cited. Nor is there anything that you can give them that’s shorter. If your friends aren’t motivated to read that, be inspired and read more than there isn’t much more you can do. Just give it to them and see what happens. Adults need to make adult decisions for themselves, there’s little value in you making all these decisions for them when they have to live with the choices.

[helloyou]

I agree with your point that we should force anyone in. And I'm not trying to force either.

I just look for material that could help to explain. As simple as that. The blog posts are not the easiest to get in.


I keep thinking about my case, I've been a saver almost all my life because I had no financial knowledge, and no one to teach me. Also load of people telling me stock is dangerous and not to touch it.

Only in the last couple of years I started investing instead of savings.


I wish I knew what I know now... and maybe I sometime wrongly assume it might be the same for other. But I think not for all. One of my friend is starting to understand the value of it.

@Bloop Bloop I don't think we can compare to stopping smoking. The reason is that smoker knows how to stop but don't have the motivation. In my case, I didn't know what was investing, didn't know that stock are actually companies that we buy, I just didn't know how to invest! So a fair comparison is against smoker who didn't know it's possible to stop smoking!

[Roots&Wings]

Meeting people where they are is key. If the "novice" is someone living paycheck to paycheck who spends all their income, then things like Dave Ramsay and YNAB might resonate with them, while MMM might be completely foreign (and is more advanced optimization).

See ERE Wheaton Levels of Personal Finance:


And suggested reading:

[ctuser1]

I start from the concept of "freedom". That gets the crux of the concept across quickly.

Note: I have been able to reasonably "explain" the concept, but never been able to "convert" anyone who was not already considering it.

The concept in itself is easy to explain. However it immediately sounds both like a lifetime pain to live like a rabbit AND as scam as well.

They don't believe you can be FI.

So the immediate conclusion is that it's either too good to be true, or ending up having a life full of frustration.

I'd like something simple to kill both these immediate assumptions in a simple and quick fashion. Because as soon as they have these stereotype, they won't dig into long blog post with theory into it.

Step 1: Start from a different topic.

"Do you know how a minimum wage earner can be a millionnaire in 40 years"?
  "Well, he could invest $100 per month in SP500 for 40 years. That's how!!"

A lot of disbelief will follow!! You need to break through that first. It is the reality!! So you have an upper hand here as long as the other person cares for data and logic at all.

-----------------------------------
Step 1.5: Explain the concept of exponential growth. Don't go mathematical, most people won't understand it. Rather, explain it like "a facet of reality that our stone age brain doesn't understand" - perhaps!!

-----------------------------------
Step 2: This has to be at least a month or two (maybe longer, maybe shorter for someone able to grasp the mathematical concept) AFTER the initial shock of exponential growth wears off and the idea that such a thing exists become a part of the existing worldview of the person listening to it.
NOW - the concept of FIRE will sound reasonable, when coupled with the idea that practical and reasonable exponential processes can lead to non-intuitive sums of money over a reasonable time-frame.


Note: It isn't easy!! I had to drag DW kicking and screaming and protesting to this worldview where exponential growth can lead to freedom, and she did have the capacity to understand the mathematical concept!!   

[Laura33]

Honestly, if they can't grasp the basic chart in the Shockingly Simple Math post, then I got nothing.  If they're reasonably competent adult humans, then they have the capability to understand that chart.  They simply don't have the motivation or desire to do so.  Let it be.  You're just annoying the pig.

[Zikoris]

I think the reality is that there are people who don't have the mental capacity to understand fairly complex, abstract concepts like FIRE. The only way someone like that could FIRE was if someone else, like their spouse, designed a foolproof plan that they could follow despite not understanding it.

If you think they might be borderline, and could understand if you really simplified it, my dad once demonstrated a really basic but intuitive method that works for less intelligent people. "If you save half your income, for every year you work, you have enough money for one year of not working," and scale up from there, making sure they're getting it at each level before you move on. If someone thinks living on half is shitty, hopefully you have your own awesome lifestyle to point to for a counterpoint - I point out our frequent overseas travel, hobbies, and stuff like that. Unless your lifestyle does suck, in which case I can't help you there.

[MrThatsDifferent]

Meeting people where they are is key. If the "novice" is someone living paycheck to paycheck who spends all their income, then things like Dave Ramsay and YNAB might resonate with them, while MMM might be completely foreign (and is more advanced optimization).

See ERE Wheaton Levels of Personal Finance:


And suggested reading:

Love this! Thank you for sharing!

[slappy]

Can i be frank for a moment? You've posted a few times here around the same theme: your friends don't understand FIRE and they cant see how it is possible / they are not willing to make the changes necessary to pursue it. Every time people give you some suggestions, you then shoot them down, giving your friends' excuses.

If someone isn't even willing to read a medium length blog post that lays it out for them, I don't they have the fortitude necessary to pursue FIRE. I'd suggest you stop trying to convince your friends about FIRE and just live your life pursuing it yourself. If some of them want to take the initiative to ask you and actually listen to what you have to say, then great. In that case, I'd share one basic concept with them, and then let them ask for more if they wish.

If not, then don't waste your time converting them if they aren't ready to listen. You'll just come across as holier-than-thou.

You cannot force help onto those who don't want it.

+1

[GreenToTheCore]

If you think they might be borderline, and could understand if you really simplified it, my dad once demonstrated a really basic but intuitive method that works for less intelligent people. "If you save half your income, for every year you work, you have enough money for one year of not working," and scale up from there, making sure they're getting it at each level before you move on. If someone thinks living on half is shitty, hopefully you have your own awesome lifestyle to point to for a counterpoint - I point out our frequent overseas travel, hobbies, and stuff like that. Unless your lifestyle does suck, in which case I can't help you there.

I dig it. It would be easy to alter into a tangible demonstration for the visual learner types.

[kite]

There is a God and you are not Him.  You are thus absolved from ever having to be Lord & Savior to anyone.  The inverse is also true. If there is no god, you obviously aren’t him either. 
Got it?  Keep that in the forefront of your mind.  You are not God.  You don’t have all the answers. And since you don’t have all the answers, don’t take it upon yourself to sort out the lives of your friends who haven’t seen the light and experienced salvation.
This holds for all matters spiritual, financial and physical health too!  Especially diet & fitness.  Show people by your example, but don’t tell them what they should do or should read or should anything.  Don’t.  Don’t try.  You life will be infinitely happier if you stop appointing yourself the educator/rescuer of all those rubes.  Just keep on with the positive changes you’ve made in your life and let your example speak louder than any lecture ever could.   

[Zikoris]

If you think they might be borderline, and could understand if you really simplified it, my dad once demonstrated a really basic but intuitive method that works for less intelligent people. "If you save half your income, for every year you work, you have enough money for one year of not working," and scale up from there, making sure they're getting it at each level before you move on. If someone thinks living on half is shitty, hopefully you have your own awesome lifestyle to point to for a counterpoint - I point out our frequent overseas travel, hobbies, and stuff like that. Unless your lifestyle does suck, in which case I can't help you there.

I dig it. It would be easy to alter into a tangible demonstration for the visual learner types.

I hadn't thought about it before, but you could totally do it with a stack of pennies or beans or something.

[GreenToTheCore]

If you think they might be borderline, and could understand if you really simplified it, my dad once demonstrated a really basic but intuitive method that works for less intelligent people. "If you save half your income, for every year you work, you have enough money for one year of not working," and scale up from there, making sure they're getting it at each level before you move on. If someone thinks living on half is shitty, hopefully you have your own awesome lifestyle to point to for a counterpoint - I point out our frequent overseas travel, hobbies, and stuff like that. Unless your lifestyle does suck, in which case I can't help you there.

I dig it. It would be easy to alter into a tangible demonstration for the visual learner types.

I hadn't thought about it before, but you could totally do it with a stack of pennies or beans or something.

Exactly. Silver dollars were always fun as a kid...would really hit home the weight/volume on money :)

[Retire-Canada]

Is there something I could share, that would be easy to get for complete novice?

No. You are wasting your time. Stop.

I have tried to pass on basic FIRE knowledge to a number of university educated upper middle class folks and gotten nowhere.

I think the only time you have any chance of success is when someone comes to you with a desire to learn about personal finance, but isn't sure where to start.

[BookLoverL]

That ERE table is one of my favourite things. The concept is based on one that people more than two levels away from each other may struggle to communicate with each other, so if you want to teach somebody you need to figure out what level they are at and then give them resources designed at getting them one level further on the table.

You don't need to jump straight into trying to sell the idea of FIRE to someone who, say, isn't saving anything at all. At that level, just selling them on the concept of having an emergency fund will make a big difference to their life.

[bacchi]

That ERE table is one of my favourite things. The concept is based on one that people more than two levels away from each other may struggle to communicate with each other, so if you want to teach somebody you need to figure out what level they are at and then give them resources designed at getting them one level further on the table.

I think I've seen a different one.

It's weird that the above table ends in the person working. Working vacations? Travel blogging? No way.

[BookLoverL]

Well, it doesn't really end up in working in the conventional sense. At level 8, there is no such thing as "work" in the sense someone lower down the table means it, because their life is so well integrated that everything they "work" at is something they want to do. And I think someone doing the "get paid in a different country" thing would probably not need to do all that many hours of work to cover an ERE level of expenditure.

[bacchi]

Well, it doesn't really end up in working in the conventional sense. At level 8, there is no such thing as "work" in the sense someone lower down the table means it, because their life is so well integrated that everything they "work" at is something they want to do. And I think someone doing the "get paid in a different country" thing would probably not need to do all that many hours of work to cover an ERE level of expenditure.

If you say so. :)

There's a difference between working for yourself -- like chopping wood and growing your own food and adding a porch to your place -- and working to build someone's room addition or travel blogging. I don't mind the former but I prefer to avoid the latter.

It's a very Puritanical view, isn't it? Where work is play and play is work and they flow into one another, always ensuring that there's an obligation to someone else who is waiting on some kind of monetary output.

[BookLoverL]

Well, it doesn't really end up in working in the conventional sense. At level 8, there is no such thing as "work" in the sense someone lower down the table means it, because their life is so well integrated that everything they "work" at is something they want to do. And I think someone doing the "get paid in a different country" thing would probably not need to do all that many hours of work to cover an ERE level of expenditure.

If you say so. :)

There's a difference between working for yourself -- like chopping wood and growing your own food and adding a porch to your place -- and working to build someone's room addition or travel blogging. I don't mind the former but I prefer to avoid the latter.

It's a very Puritanical view, isn't it? Where work is play and play is work and they flow into one another, always ensuring that there's an obligation to someone else who is waiting on some kind of monetary output.

Well, I don't think it's really built on any obligation sort of mindset.

Over at the ERE forum, nobody's really quite sure what level 8 would look like because even someone like Jacob himself would only be at level 7 (personally I consider myself around 5 mindset-wise, but the practical side is lagging due to my disability). But the suggested examples people thought of over there might be that guy who lived in a cave being a hunter-gatherer and spent actually zero money for a number of years, or if you want a non-survivalist suggestion, they came up with Paul Erdös, the renowned mathematician, who literally spent his life moving between different mathematician's houses and eating their food while collaborating with them on mathematical papers. Maths was his passion and he co-authored 1500 mathematical papers in his lifetime, having successfully set his life up so that he didn't have to do anything else. https://en.wikipedia.org/wiki/Paul_Erd%C5%91s

[slappy]

Well, it doesn't really end up in working in the conventional sense. At level 8, there is no such thing as "work" in the sense someone lower down the table means it, because their life is so well integrated that everything they "work" at is something they want to do. And I think someone doing the "get paid in a different country" thing would probably not need to do all that many hours of work to cover an ERE level of expenditure.

If you say so. :)

There's a difference between working for yourself -- like chopping wood and growing your own food and adding a porch to your place -- and working to build someone's room addition or travel blogging. I don't mind the former but I prefer to avoid the latter.

It's a very Puritanical view, isn't it? Where work is play and play is work and they flow into one another, always ensuring that there's an obligation to someone else who is waiting on some kind of monetary output.

Well, I don't think it's really built on any obligation sort of mindset.

Over at the ERE forum, nobody's really quite sure what level 8 would look like because even someone like Jacob himself would only be at level 7 (personally I consider myself around 5 mindset-wise, but the practical side is lagging due to my disability). But the suggested examples people thought of over there might be that guy who lived in a cave being a hunter-gatherer and spent actually zero money for a number of years, or if you want a non-survivalist suggestion, they came up with Paul Erdös, the renowned mathematician, who literally spent his life moving between different mathematician's houses and eating their food while collaborating with them on mathematical papers. Maths was his passion and he co-authored 1500 mathematical papers in his lifetime, having successfully set his life up so that he didn't have to do anything else. https://en.wikipedia.org/wiki/Paul_Erd%C5%91s

That math guy sounds awesome!

[GreenToTheCore]

Well, it doesn't really end up in working in the conventional sense. At level 8, there is no such thing as "work" in the sense someone lower down the table means it, because their life is so well integrated that everything they "work" at is something they want to do. And I think someone doing the "get paid in a different country" thing would probably not need to do all that many hours of work to cover an ERE level of expenditure.

If you say so. :)

There's a difference between working for yourself -- like chopping wood and growing your own food and adding a porch to your place -- and working to build someone's room addition or travel blogging. I don't mind the former but I prefer to avoid the latter.

It's a very Puritanical view, isn't it? Where work is play and play is work and they flow into one another, always ensuring that there's an obligation to someone else who is waiting on some kind of monetary output.

Well, I don't think it's really built on any obligation sort of mindset.

Over at the ERE forum, nobody's really quite sure what level 8 would look like because even someone like Jacob himself would only be at level 7 (personally I consider myself around 5 mindset-wise, but the practical side is lagging due to my disability). But the suggested examples people thought of over there might be that guy who lived in a cave being a hunter-gatherer and spent actually zero money for a number of years, or if you want a non-survivalist suggestion, they came up with Paul Erdös, the renowned mathematician, who literally spent his life moving between different mathematician's houses and eating their food while collaborating with them on mathematical papers. Maths was his passion and he co-authored 1500 mathematical papers in his lifetime, having successfully set his life up so that he didn't have to do anything else. https://en.wikipedia.org/wiki/Paul_Erd%C5%91s

That math guy sounds awesome!

He is!

I had a professor who said his Erdös number was 2 :)
https://oakland.edu/enp/