Author Topic: Hypothetical: What's the lowest FIRE number for a family?  (Read 6228 times)

wageslave23

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Hypothetical: What's the lowest FIRE number for a family?
« on: May 05, 2020, 09:55:18 PM »
Hypothetically,  what's the lowest FIRE number that you would be willing to live on with a family of four?  How would you do it ?  And what would your budget look like?

I'm thinking around 750k for me.  I'll post more details later when I have time.   Just think it's fun to think about, plus helps to recalibrate your frugality meter ;)

Bloop Bloop

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Re: Hypothetical: What's the lowest FIRE number for a family?
« Reply #1 on: May 05, 2020, 10:01:00 PM »
Here in Australia I think a family of four could survive very comfortably on $60k (not including housing costs) or $85k a year (including housing costs).

If we are to require frugality rather than comfort, that number is probably $40k not including housing, or $60k a year including housing.

At a 4% SWR, that would require $1.5m (AU) saved up, which his about $900k USD.

APowers

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Re: Hypothetical: What's the lowest FIRE number for a family?
« Reply #2 on: May 06, 2020, 07:28:44 AM »
<$600k for me, and that would feel more like luxury than poverty.

Our current household expenses for a family of four (two adults, two kids aged 8/9) are ~$2,200/mo, which is not so different, and that's with a pretty large (for us) mortgage (not to mention all the normal home maintenance that ownership entails vs renting).

If I wanted to live on less, it would look like one car (efficient, but likely driven like a clown car; e.g., an older used Prius driven 400-500mi/mo), bikes for everyone. Renting (or owning, if that's cheaper) a ~1,200sf 2br house/apartment, not eating out (but cooking delicious food at home), road trip every year for a couple/three weeks, having a reasonably large garden (likely plus chickens), going on lots of largely free adventures in a largely rural setting.

Budget would break down something like:

800 Rent
250 utilities
250 Food
100 gas/ins/repair
150 household misc
40 phone
40 internet
50 clothes/toiletries/medicine
40 birthday/school supplies
___

1720 Total/month

It'd be even less if we could find cheaper rent, or a place with utilities included. Plus, it seems that there is an irregular but constant stream of "found money" from various random sources (bank bonuses, credit card bonuses, selling stuff on craigslist, kids earning their own pocket money, selling chicken eggs to neighbours, etc.)

YttriumNitrate

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Re: Hypothetical: What's the lowest FIRE number for a family?
« Reply #3 on: May 06, 2020, 07:47:01 AM »
Probably around $400k with a paid off house and living in a state that doesn't means test SNAP (food stamps).

Monthly breakdown:

250 -- Property Taxes / Housing maintenance
150 -- Property / Health Insurance
100 -- Eating out / Booze / non-SNAP food
250 -- Utilities/Internet
150 -- School supplies / Fees / Fundraisers
100 -- Vehicles (gas/insurance/repairs)
350 -- Miscellaneous

APowers

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Re: Hypothetical: What's the lowest FIRE number for a family?
« Reply #4 on: May 06, 2020, 10:01:26 AM »
Probably around $400k with a paid off house and living in a state that doesn't means test SNAP (food stamps).

Monthly breakdown:

250 -- Property Taxes / Housing maintenance
150 -- Property / Health Insurance
100 -- Eating out / Booze / non-SNAP food
250 -- Utilities/Internet
150 -- School supplies / Fees / Fundraisers
100 -- Vehicles (gas/insurance/repairs)
350 -- Miscellaneous

We're allowed to have a paid-off house? That changes things, lol! (jk, I just put an assumed rent/own value so as to account for housing, even if it's "prepaid". A reasonable house in a LCOL shouldn't be a mortgage payment over $500/mo, all-in).

Also, I didn't think to assume SNAP usage.

penguintroopers

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Re: Hypothetical: What's the lowest FIRE number for a family?
« Reply #5 on: May 06, 2020, 12:04:43 PM »
Since our goal would be FIRE with a paid off mortgage, I'm assuming this hypothetical family has as well.

Further assumptions: 3 kids, 2 completely FIRED adults in our current MCOL (to slightly high) area

In Annualized Spending:

Housing
Utilities $2400
Internet: $480
Prop Insurance: $1000
Prop Taxes: $3600

Transportation
Gas: $600
Tolls: $100
Car Insurance: $1300
Maintenance + Replacement: $3600

Food
Groceries: $6000
Alcohol: $600
Eating out: $1200

Other
Subscriptions (Gym, Spotify, Hulu, Netflix, the like): $600
Gifts (Christmas, birthdays, etc): $1800
Personal Spending (including kid incidentals like clothes): $6000
Life Insurance: $480
Cell Phone Service: $1000
Travel: $10000
Health: $20000

Total: $60760

So x25 = ~$1.52M (+ paid off property ~$250k)

« Last Edit: May 06, 2020, 02:55:57 PM by penguintroopers »

YttriumNitrate

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Re: Hypothetical: What's the lowest FIRE number for a family?
« Reply #6 on: May 06, 2020, 12:27:25 PM »
We're allowed to have a paid-off house? That changes things, lol! (jk, I just put an assumed rent/own value so as to account for housing, even if it's "prepaid". A reasonable house in a LCOL shouldn't be a mortgage payment over $500/mo, all-in).
Also, I didn't think to assume SNAP usage.
I figure assuming a paid off house will make this thread more applicable across a wide area.

SNAP benefits can be huge, in my state a family of four can get $646 a month. Assuming the 25x annual expenses rule of thumb, that drops the FIRE number by almost $200k.

slappy

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Re: Hypothetical: What's the lowest FIRE number for a family?
« Reply #7 on: May 06, 2020, 12:31:20 PM »
If you are getting SNAP, are you really FIREd? Something doesn't seem right there.

skp

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Re: Hypothetical: What's the lowest FIRE number for a family?
« Reply #8 on: May 06, 2020, 12:34:18 PM »
If you are expecting to get SNAP benefits, it seems to me that  the lowest FIRE number could not be more than 200% of the poverty level-  $52,400  (corrected- a lot more than the first number) I got on a quick google search.  You would have to be eligible for SNAP.
« Last Edit: May 06, 2020, 01:09:17 PM by skp »

Jack0Life

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Re: Hypothetical: What's the lowest FIRE number for a family?
« Reply #9 on: May 06, 2020, 12:44:41 PM »
If you are getting SNAP, are you really FIREd? Something doesn't seem right there.

It doesn't seem right.
After all FIRE means Financially Independent.
If you expect to receive SNAP, are you really FI ??

APowers

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Re: Hypothetical: What's the lowest FIRE number for a family?
« Reply #10 on: May 06, 2020, 01:07:19 PM »
If you are getting SNAP, are you really FIREd? Something doesn't seem right there.

It doesn't seem right.
After all FIRE means Financially Independent.
If you expect to receive SNAP, are you really FI ??

Hm. I think this likely deserves its own thread "How much government assistance can you receive and still be considered FIRE?". For instance, the unlikely event that there comes to exist a UBI of $12k/year, that could enable a frugal family of four to easily "retire" from paid work. Does that mean they're FIRE or not? If you accept medicaid, are you truly FIRE?

It would appear that there is a ginormous amount of nuance and varying perspectives to take on that question.

joe189man

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Re: Hypothetical: What's the lowest FIRE number for a family?
« Reply #11 on: May 06, 2020, 01:24:57 PM »
it still boggles my mind that mustachians can live on so little money,
i would want 2 million (minimum, preferably closer to 2.4 million ) in retirement accounts and a paid off home

Wolfpack Mustachian

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Re: Hypothetical: What's the lowest FIRE number for a family?
« Reply #12 on: May 06, 2020, 01:35:20 PM »
it still boggles my mind that mustachians can live on so little money,
i would want 2 million (minimum, preferably closer to 2.4 million ) in retirement accounts and a paid off home

Where you live is a big indicator. Also how big your family is. If it's just you, in a MCOL place or less, 2-2.4 million is extremely high for this group. If it's you, your spouse, 3 young kids, living in San Francisco, that changes quite a bit - although plenty here have lived off of less with families in HCOL cities.

thesis

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Re: Hypothetical: What's the lowest FIRE number for a family?
« Reply #13 on: May 06, 2020, 01:37:10 PM »
$900k --> $3k/month (USD)

I think I could do this with a paid off house. With kids it would be good to have extra money for the variable expenses, additional doctor's visits, school supplies, etc. I'd probably feel happier with the $1.2 million, but oh well. Or better, $900k + part time job. Helps to get out of the house :D

APowers

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Re: Hypothetical: What's the lowest FIRE number for a family?
« Reply #14 on: May 06, 2020, 01:51:38 PM »
it still boggles my mind that mustachians can live on so little money,
i would want 2 million (minimum, preferably closer to 2.4 million ) in retirement accounts and a paid off home

It boggles MY mind that mustachians can live on so *much* money. A $2million stash is ~$80k/yr or well over $6500/month; that's about triple my current spending, which I consider to be full of luxury and unnecessary nice things. I generally just assume that y'all are living in mansions near the beach, sending your kids to daycare, go to lunch with CEOs while you wear your tailored suits to your high-powered jobs, lol!
« Last Edit: May 06, 2020, 02:10:50 PM by APowers »

nereo

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Re: Hypothetical: What's the lowest FIRE number for a family?
« Reply #15 on: May 06, 2020, 02:09:26 PM »
it still boggles my mind that mustachians can live on so little money,
i would want 2 million (minimum, preferably closer to 2.4 million ) in retirement accounts and a paid off home

It boggles MY mind that mustachians can live on so *much* money. A $2million stash is ~$80k/yr or well over $6500/month; that's nearly triple my current spending, which I consider to be full of luxury and unnecessary nice things. I generally just assume that y'all are living in mansions near the beach, sending your kids to daycare, go to lunch with CEOs while you wear your tailored suits to your high-powered jobs, lol!

I, too, am surprised at the number of posters who claim to be 'mustachian' and have FI numebrs so high.  Just another indication of how far this forum has strayed from its roots. 
FWIW, $2.4MM yields $100k/year @4% (prob. why Joe chose that particular number).  That level of **spending** would rank in the top quartile of spending in the US.  With no mortage or rent payments, and favorable tax treatment from LTCG/retirement accounts we're looking at ~$7,600/mo in spending.

joe189man

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Re: Hypothetical: What's the lowest FIRE number for a family?
« Reply #16 on: May 06, 2020, 02:20:53 PM »
there is variation in the 4% rule, maybe you owe taxes which zaps spending power (i assume some taxes owed), i also assume constant, inflation adjusted spending (so spending goes up every year 2% (+/-). i assumed $1k a month for health insurance. i also looked for a dollar amount that wont run out ever in my expected lifetime. i do live in a higher cost of living area. All that said, i could be way more frugal and mustachian. I didnt meant to kick the bee hive

nereo

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Re: Hypothetical: What's the lowest FIRE number for a family?
« Reply #17 on: May 06, 2020, 02:24:58 PM »
there is variation in the 4% rule, maybe you owe taxes which zaps spending power (i assume some taxes owed), i also assume constant, inflation adjusted spending (so spending goes up every year 2% (+/-). i assumed $1k a month for health insurance. i also looked for a dollar amount that wont run out ever in my expected lifetime. i do live in a higher cost of living area. All that said, i could be way more frugal and mustachian. I didnt meant to kick the bee hive

Using the 4% rule accounts for increases via inflation.  In my example above I accounted for taxes.
I understand that everyone has their own comfort level... i just know that Pete gets more than a little frustrated when people give these very high numebrs as "the lowest FIRE number [they could use] for a family".

Mr. Green

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Re: Hypothetical: What's the lowest FIRE number for a family?
« Reply #18 on: May 06, 2020, 02:27:07 PM »
Too many variables. If you live on a homestead that is paid for you could get by on practically nothing. Just depends how far down the "self-sufficient" rabbit hole you want to go, but I'd guess you could take it down to 200k or less.

BPA

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Re: Hypothetical: What's the lowest FIRE number for a family?
« Reply #19 on: May 06, 2020, 02:28:46 PM »
it still boggles my mind that mustachians can live on so little money,
i would want 2 million (minimum, preferably closer to 2.4 million ) in retirement accounts and a paid off home

It boggles MY mind that mustachians can live on so *much* money. A $2million stash is ~$80k/yr or well over $6500/month; that's nearly triple my current spending, which I consider to be full of luxury and unnecessary nice things. I generally just assume that y'all are living in mansions near the beach, sending your kids to daycare, go to lunch with CEOs while you wear your tailored suits to your high-powered jobs, lol!

I, too, am surprised at the number of posters who claim to be 'mustachian' and have FI numebrs so high.  Just another indication of how far this forum has strayed from its roots. 
FWIW, $2.4MM yields $100k/year @4% (prob. why Joe chose that particular number).  That level of **spending** would rank in the top quartile of spending in the US.  With no mortage or rent payments, and favorable tax treatment from LTCG/retirement accounts we're looking at ~$7,600/mo in spending.

I agree! I retired with a net worth of about $450k as a single mom and still had one kid at home. Sold the house and bought in a LCOL area and didn't look back. I live a positively luxurious lifestyle, in my opinion. I have everything I need and don't want for much.

Wolfpack Mustachian

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Re: Hypothetical: What's the lowest FIRE number for a family?
« Reply #20 on: May 06, 2020, 02:42:53 PM »
there is variation in the 4% rule, maybe you owe taxes which zaps spending power (i assume some taxes owed), i also assume constant, inflation adjusted spending (so spending goes up every year 2% (+/-). i assumed $1k a month for health insurance. i also looked for a dollar amount that wont run out ever in my expected lifetime. i do live in a higher cost of living area. All that said, i could be way more frugal and mustachian. I didnt meant to kick the bee hive

Using the 4% rule accounts for increases via inflation.  In my example above I accounted for taxes.
I understand that everyone has their own comfort level... i just know that Pete gets more than a little frustrated when people give these very high numebrs as "the lowest FIRE number [they could use] for a family".

Yeah, the issue is, if a number like that stands without comment, people that google the question or come onto MMM specifically looking for maybe "What's the lowest FIRE number" :-) might see 2-2.4 million with a paid off house and think, hmmm, I'm pretty conservative. I need at least that much to retire. When, in point of fact, you don't need nearly that much to retire and still live in significant comfort and luxury.

slappy

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Re: Hypothetical: What's the lowest FIRE number for a family?
« Reply #21 on: May 06, 2020, 04:56:45 PM »
If you are getting SNAP, are you really FIREd? Something doesn't seem right there.

It doesn't seem right.
After all FIRE means Financially Independent.
If you expect to receive SNAP, are you really FI ??

Hm. I think this likely deserves its own thread "How much government assistance can you receive and still be considered FIRE?". For instance, the unlikely event that there comes to exist a UBI of $12k/year, that could enable a frugal family of four to easily "retire" from paid work. Does that mean they're FIRE or not? If you accept medicaid, are you truly FIRE?

It would appear that there is a ginormous amount of nuance and varying perspectives to take on that question.

I imagine the response would be overwhelmingly against using government assistance and calling yourself FIRE. The I stands for independent, after all. You can't be independent due to a dependency on government assistance. It just doesn't make sense.

nereo

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Re: Hypothetical: What's the lowest FIRE number for a family?
« Reply #22 on: May 06, 2020, 05:06:29 PM »
If you are getting SNAP, are you really FIREd? Something doesn't seem right there.

It doesn't seem right.
After all FIRE means Financially Independent.
If you expect to receive SNAP, are you really FI ??

Hm. I think this likely deserves its own thread "How much government assistance can you receive and still be considered FIRE?". For instance, the unlikely event that there comes to exist a UBI of $12k/year, that could enable a frugal family of four to easily "retire" from paid work. Does that mean they're FIRE or not? If you accept medicaid, are you truly FIRE?

It would appear that there is a ginormous amount of nuance and varying perspectives to take on that question.

I imagine the response would be overwhelmingly against using government assistance and calling yourself FIRE. The I stands for independent, after all. You can't be independent due to a dependency on government assistance. It just doesn't make sense.

What about SS?  What about using the ACA or Medicaid/Medicare?

Cassie

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Re: Hypothetical: What's the lowest FIRE number for a family?
« Reply #23 on: May 06, 2020, 05:45:38 PM »
SS and Medicare are earned. Using the ACA is fine also. Medicaid is for poor people and I don’t think it’s ethical for fire people to use but it’s legal.

nereo

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Re: Hypothetical: What's the lowest FIRE number for a family?
« Reply #24 on: May 06, 2020, 06:03:22 PM »
My point is, there is a very noisy debate over what entitlements a citizen is “entitled” to, and what they would just be “taking advantage of the system”.  Many presume SS benefits are rightfully theirs because they “paid into the system”. But low wage, long lived individuals get far more than they paid in while high earners with heart conditions rarely do. Many other programs have only an income/age threshold. Many early retirees have counted on subsidized/low cost ACA insurance and have calculated their assets to qualify. Depending on whether you are for or against doing that you might say it’s it abusing the system or what the law intended.

Likewise all of these benefits are paid for with taxes, and all developed nations give some level of support to its residents (some far more than others). Few if any here are truly “independent” in the sense that they receive no benefit from governments, and by design there will always be some that get more and some that give more.   Very few “can” truly afford to live sans societal support

matchewed

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Re: Hypothetical: What's the lowest FIRE number for a family?
« Reply #25 on: May 07, 2020, 06:45:02 AM »
Regarding the original post, I think 600k is a reasonable scenario with some flexibility built in, opportunities for side income...etc.

I don't have a family but if I did I'm sure I'd spend less in some areas and more in others. Our goal right now as DINKs is 650k with some rental income supplementing things. I also retain the right to do whatever I want and if that means earning some money occasionally...gravy.

Fishindude

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Re: Hypothetical: What's the lowest FIRE number for a family?
« Reply #26 on: May 07, 2020, 07:27:38 AM »
I see some holes in the plan.  OP Doesn't mention their ages, but with kids still at home I'm surmising pretty young, so you re looking at a very long period of FIRE.
If you quit work what are you going to do about healthcare coverage?   Sure, you might have been getting by the last couple years on a budget under $30k, but what happens down the road when you run into a big ticket expense item; replace car, new roof or furnace, a major medical claim, kids education, etc.?

At that age, with only $600k accumulated, I think somebody is going to need to remain working at least until the kids are out and off the dole or until SS kicks in.   


nereo

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Re: Hypothetical: What's the lowest FIRE number for a family?
« Reply #27 on: May 07, 2020, 07:51:43 AM »
In response to the ‘budget under $30k’ criticisms - I don’t understand the skepticism for why that couldn’t work.  We’ve never spent in excess of $30k/year (never earned enough after savings and taxes), and over 100MM people live this way every year in the United States.   Globally it would put you among the wealthiest 10% of humans.  Granted, it’s not feasible in HCOL areas where housing expenses might exceed $24k/year, but in much of the country it’s pretty close to the norm.  It’s certainly not out of line in my neck of the woods.   In any event it’s quite a bit higher than the official poverty line here in the US.

ETA: clarity
« Last Edit: May 07, 2020, 08:04:14 AM by nereo »

YttriumNitrate

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Re: Hypothetical: What's the lowest FIRE number for a family?
« Reply #28 on: May 07, 2020, 07:58:08 AM »
If you are expecting to get SNAP benefits, it seems to me that  the lowest FIRE number could not be more than 200% of the poverty level-  $52,400  (corrected- a lot more than the first number) I got on a quick google search.  You would have to be eligible for SNAP.

For SNAP, some states have asset tests while all states have an income test. In those states with just income tests, you could use things like rental real estate to provide income while showing a loss on paper to maintain eligibility. Selectively taking capital gains could also be done to maintain eligibility.   

EDIT: Uh oh. I just realized I suggested having a rental property which would involve some work. Cue the Internet Retirement Police. Now this thread will devolve into a debate over the meaning of both FI and RE ... ugh.
« Last Edit: May 07, 2020, 08:13:00 AM by YttriumNitrate »

LoanShark

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Re: Hypothetical: What's the lowest FIRE number for a family?
« Reply #29 on: May 07, 2020, 08:05:55 AM »
it still boggles my mind that mustachians can live on so little money,
i would want 2 million (minimum, preferably closer to 2.4 million ) in retirement accounts and a paid off home

It boggles MY mind that mustachians can live on so *much* money. A $2million stash is ~$80k/yr or well over $6500/month; that's nearly triple my current spending, which I consider to be full of luxury and unnecessary nice things. I generally just assume that y'all are living in mansions near the beach, sending your kids to daycare, go to lunch with CEOs while you wear your tailored suits to your high-powered jobs, lol!

I, too, am surprised at the number of posters who claim to be 'mustachian' and have FI numebrs so high.  Just another indication of how far this forum has strayed from its roots. 
FWIW, $2.4MM yields $100k/year @4% (prob. why Joe chose that particular number).  That level of **spending** would rank in the top quartile of spending in the US.  With no mortage or rent payments, and favorable tax treatment from LTCG/retirement accounts we're looking at ~$7,600/mo in spending.

And the other side of that coin is people claiming to be "FI" while contemplating taking government assistance and leeching off the system I suppose.
« Last Edit: May 07, 2020, 10:00:32 AM by LoanShark »

Fishindude

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Re: Hypothetical: What's the lowest FIRE number for a family?
« Reply #30 on: May 07, 2020, 08:19:56 AM »
And the other side of that coin is people claiming to be "FI" while contemplating taking government assistance and leaehing off the system I suppose.

Yep, that is not the FIRED lifestyle.   That's going from working and contributing, to freeloading.

LoanShark

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Re: Hypothetical: What's the lowest FIRE number for a family?
« Reply #31 on: May 07, 2020, 09:03:46 AM »
And the other side of that coin is people claiming to be "FI" while contemplating taking government assistance and leaehing off the system I suppose.

Yep, that is not the FIRED lifestyle.   That's going from working and contributing, to freeloading.

I think we have a new acronym...we have Lean FIRE, Fat FIRE and now "Fake" FIRE! LMFAO!!!

YttriumNitrate

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Re: Hypothetical: What's the lowest FIRE number for a family?
« Reply #32 on: May 07, 2020, 09:20:10 AM »
I think we have a new acronym...we have Lean FIRE, Fat FIRE and now "Fake" FIRE! LMFAO!!!

The new acronym should be "LAB FIRE" with LAB standing for Legally Available Benefits.

mizzourah2006

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Re: Hypothetical: What's the lowest FIRE number for a family?
« Reply #33 on: May 07, 2020, 09:20:19 AM »
Like the lowest you could survive on or the lowest I'd be comfortable on? Also, is my home paid off? Do I already have money put away for college for them? If we didn't have a mortgage and daycare expenses we could live fairly comfortably on $750k for a family of 4 (i.e. $30k/yr post tax), but it wouldn't involve much travel or many frills. I don't think I'd want to FIRE with that lifestyle though.
« Last Edit: May 07, 2020, 09:24:56 AM by mizzourah2006 »

LoanShark

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Re: Hypothetical: What's the lowest FIRE number for a family?
« Reply #34 on: May 07, 2020, 09:21:35 AM »
I think we have a new acronym...we have Lean FIRE, Fat FIRE and now "Fake" FIRE! LMFAO!!!

The new acronym should be "LAB FIRE" with LAB standing for Legally Available Benefits.
Just because you can, doesn’t mean you should.

nereo

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Re: Hypothetical: What's the lowest FIRE number for a family?
« Reply #35 on: May 07, 2020, 09:22:02 AM »
it still boggles my mind that mustachians can live on so little money,
i would want 2 million (minimum, preferably closer to 2.4 million ) in retirement accounts and a paid off home

It boggles MY mind that mustachians can live on so *much* money. A $2million stash is ~$80k/yr or well over $6500/month; that's nearly triple my current spending, which I consider to be full of luxury and unnecessary nice things. I generally just assume that y'all are living in mansions near the beach, sending your kids to daycare, go to lunch with CEOs while you wear your tailored suits to your high-powered jobs, lol!

I, too, am surprised at the number of posters who claim to be 'mustachian' and have FI numebrs so high.  Just another indication of how far this forum has strayed from its roots. 
FWIW, $2.4MM yields $100k/year @4% (prob. why Joe chose that particular number).  That level of **spending** would rank in the top quartile of spending in the US.  With no mortage or rent payments, and favorable tax treatment from LTCG/retirement accounts we're looking at ~$7,600/mo in spending.

And the other side of that coin is people claiming to be "FI" while contemplating taking government assistance and leaehing off the system I suppose.

One of the most common criticisms of FIRE is that all early retirees are ‘leaching off the system’.  This is particularly true in a system such as the US that has favorable treatment of LTCG, a very progressive SS calculation and a myriad of ways to avoid paying sales tax on many common items. 

It’s no uncommon to hear of FIREees who pay little/no income taxes for decades, utilize all that a developed society has to offer and still plan on taking SS. 

APowers

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Re: Hypothetical: What's the lowest FIRE number for a family?
« Reply #36 on: May 07, 2020, 09:45:31 AM »
I see some holes in the plan.  OP Doesn't mention their ages, but with kids still at home I'm surmising pretty young, so you re looking at a very long period of FIRE.
If you quit work what are you going to do about healthcare coverage?   Sure, you might have been getting by the last couple years on a budget under $30k, but what happens down the road when you run into a big ticket expense item; replace car, new roof or furnace, a major medical claim, kids education, etc.?

At that age, with only $600k accumulated, I think somebody is going to need to remain working at least until the kids are out and off the dole or until SS kicks in.

I'm not OP, but with two grade-school aged kids, I'm 31.

With regard to healthcare coverage, I have either had insurance through my job (unionized grocery clerk, pre-Obamacare), or through the ACA exchange, or through Medicaid. When our income has been a bit high, we would buy from the exchange, for which we would invariably get subsidies making it well below $100/month, and then when our income dipped lower, they essentially told us "you get medicaid" and it's been free. Would I like to pay my own way? Yes. But with the current jacked up health care/insurance system/scam, it simply doesn't work that way on a low income. It's not like I begged and connived to get on medicaid even though I'm not financially desperate; I'm just low income and get lumped into that bucket. I wish it was different and better and normal health insurance was reasonably priced, but I don't see that changing anytime soon, and I don't think I can affect it one way or another.

With regard to "What about the big ticket items? What will you do then?" Well, I'll do the same as I've done before: find a way to procure it less expensively, and/or trade some of my (now abundant) time for a lower dollar-cost. For instance, when it's time to purchase a new (to me) car, I'll save for it (or use my e-fund), and once I've got the new one, I'll sell the old one on the used market to recoup the cost. I have found that by intentionally buy at the bottom of the depreciation curve, the net purchase cost tends to be minimal (new purchase minus sale proceeds from old vehicle). New roof/furnace/windows/etc. can be planned for in advance, materials can be found at a discount when there isn't a time-crunch, and it can be done with my own labour (or, if I'm renting, it needn't be planned for at all). Etc., etc. Not sure what "kids education" is supposed to be as a big ticket expense in my budget. School supplies, even through high school aren't *that* exorbitant-- maybe $100-150/yr each. Maybe you assume that one must pay for their adult children's university education? I don't view that as necessary-- there are grants and scholarships available, and many jobs which will pay enough to cover college costs if my child really wants to attend (e.g., work for a few years in the trades, while saving up for tuition).
« Last Edit: May 07, 2020, 10:17:51 AM by APowers »

LoanShark

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Re: Hypothetical: What's the lowest FIRE number for a family?
« Reply #37 on: May 07, 2020, 09:59:29 AM »
it still boggles my mind that mustachians can live on so little money,
i would want 2 million (minimum, preferably closer to 2.4 million ) in retirement accounts and a paid off home

It boggles MY mind that mustachians can live on so *much* money. A $2million stash is ~$80k/yr or well over $6500/month; that's nearly triple my current spending, which I consider to be full of luxury and unnecessary nice things. I generally just assume that y'all are living in mansions near the beach, sending your kids to daycare, go to lunch with CEOs while you wear your tailored suits to your high-powered jobs, lol!

I, too, am surprised at the number of posters who claim to be 'mustachian' and have FI numebrs so high.  Just another indication of how far this forum has strayed from its roots. 
FWIW, $2.4MM yields $100k/year @4% (prob. why Joe chose that particular number).  That level of **spending** would rank in the top quartile of spending in the US.  With no mortage or rent payments, and favorable tax treatment from LTCG/retirement accounts we're looking at ~$7,600/mo in spending.

And the other side of that coin is people claiming to be "FI" while contemplating taking government assistance and leaehing off the system I suppose.

One of the most common criticisms of FIRE is that all early retirees are ‘leaching off the system’.  This is particularly true in a system such as the US that has favorable treatment of LTCG, a very progressive SS calculation and a myriad of ways to avoid paying sales tax on many common items. 

It’s no uncommon to hear of FIREees who pay little/no income taxes for decades, utilize all that a developed society has to offer and still plan on taking SS.

I don't agree with that logic - you work, make money and consume less than you make, saving and investing the rest. You've been taxed on that money once. Now, in retirement, you withdraw that money and are either taxed on it at your current income level if it's 401K money or based on capital gains.

Not sure avoid paying sales tax. You've also contributed to SS and Medicare throughout your career, so I don't see anything wrong with taking those benefits once you're eligible.

Don't agree with the concept of "qualifying" for SNAP and taking it in FIRE though. That's freeloading / gaming the system and adding to the problem.

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Re: Hypothetical: What's the lowest FIRE number for a family?
« Reply #38 on: May 07, 2020, 10:08:17 AM »
it still boggles my mind that mustachians can live on so little money,
i would want 2 million (minimum, preferably closer to 2.4 million ) in retirement accounts and a paid off home

It boggles MY mind that mustachians can live on so *much* money. A $2million stash is ~$80k/yr or well over $6500/month; that's about triple my current spending, which I consider to be full of luxury and unnecessary nice things. I generally just assume that y'all are living in mansions near the beach, sending your kids to daycare, go to lunch with CEOs while you wear your tailored suits to your high-powered jobs, lol!
You are half right?

My very small 2BR/1BA no garage house near the beach comes with a $3500/ month mortgage and annual tax bill of about $9000.

I did have childcare, and still have summer camps for my children, especially the 7 yo.

I do occasionally have lunch with the CEO.  I mean, it's a small company and I have known the founders (one is my immediate boss) for decades.

But I wear jeans and sneakers to work, well, I did anyway.  Now I work at home in leggings and tshirts.

We could move to either where I grew up (rural, no jobs) or where my husband grew up (rural, better job opportunities), and by a house the same size as ours for about 1/7 the price (low $100s).  Then we could retire.

mm1970

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Re: Hypothetical: What's the lowest FIRE number for a family?
« Reply #39 on: May 07, 2020, 10:13:16 AM »
Quote
I'm not OP, but with two grade-school aged kids, I'm 31.

With regard to healthcare coverage, I have either had insurance through my job (unionized grocery clerk, pre-Obamacare), or through the ACA exchange, or through Medicaid. When our income has been a bit high, we would buy from the exchange, for which we would invariably get subsidies making it well below $100/month, and then when our income dipped lower, they essentially told us "you get medicaid" and it's been free. Would I like to pay my own way? Yes. But with the current jacked up health care/insurance system/scam, it simply doesn't work that way on a low income. It's not like I begged and connived to get on medicaid even though I'm not financially desperate; I'm just low income and get lumped into that bucket. I wish it was different and better and normal health insurance was reasonably priced, but I don't see that changing anytime soon, and I don't think I can affect it one way or another.
This is entirely different.

That's why I'm more of a fan of national health care - whether or not you get care shouldn't be tied to having the "right" job.

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Re: Hypothetical: What's the lowest FIRE number for a family?
« Reply #40 on: May 07, 2020, 10:16:30 AM »
If you are getting SNAP, are you really FIREd? Something doesn't seem right there.

 What do mean," Something doesn't seem right there"?
  You don't think families with enough assets that they can live on just the growth,
should be receiving welfare from the rest of the 51% of hardworking people that pay taxes?
 I think you are on to something!
 Call your congress person, put a stop the this bullcrap.
 There are people in need here and we have a bunch of rich freeloaders milking the system.
 Have I made myself clear?
 

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Re: Hypothetical: What's the lowest FIRE number for a family?
« Reply #41 on: May 07, 2020, 10:23:22 AM »
What about SS?  What about using the ACA or Medicaid/Medicare?

I'll quibble about SS, I paid taxes all my life into SS.
I agree on the ACA, it's welfare.
Medicare, Also paid into that my whole life. And it's not free when you start taking it.
Mine is $145 per month, plus the cost of plan D and plan G.

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Re: Hypothetical: What's the lowest FIRE number for a family?
« Reply #42 on: May 07, 2020, 10:33:06 AM »
If you are getting SNAP, are you really FIREd? Something doesn't seem right there.

It doesn't seem right.
After all FIRE means Financially Independent.
If you expect to receive SNAP, are you really FI ??

Hm. I think this likely deserves its own thread "How much government assistance can you receive and still be considered FIRE?". For instance, the unlikely event that there comes to exist a UBI of $12k/year, that could enable a frugal family of four to easily "retire" from paid work. Does that mean they're FIRE or not? If you accept medicaid, are you truly FIRE?

It would appear that there is a ginormous amount of nuance and varying perspectives to take on that question.

I imagine the response would be overwhelmingly against using government assistance and calling yourself FIRE. The I stands for independent, after all. You can't be independent due to a dependency on government assistance. It just doesn't make sense.

What about SS?  What about using the ACA or Medicaid/Medicare?


There are two types of entitlements, contributory and noncontributory.

A recipient of contributory entitlements is eligible to receive them because he or she has paid into the program  that  funds them.

SS and Medicare are contributory entitlements.

Eligibility to receive noncontributory entitlements does not  require the recipient to pay into the program that funds them  to be eligible to receive them.

 A single criterion, usually low income, is often the eligibility requirement one must meet   to receive noncontributory entitlements.

SNAP, Medicaid, and other "welfare benefits" are noncontributory entitlements.

« Last Edit: May 07, 2020, 10:53:24 AM by John Galt incarnate! »

joe189man

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Re: Hypothetical: What's the lowest FIRE number for a family?
« Reply #43 on: May 07, 2020, 11:05:37 AM »
there is variation in the 4% rule, maybe you owe taxes which zaps spending power (i assume some taxes owed), i also assume constant, inflation adjusted spending (so spending goes up every year 2% (+/-). i assumed $1k a month for health insurance. i also looked for a dollar amount that wont run out ever in my expected lifetime. i do live in a higher cost of living area. All that said, i could be way more frugal and mustachian. I didnt meant to kick the bee hive

Using the 4% rule accounts for increases via inflation.  In my example above I accounted for taxes.
I understand that everyone has their own comfort level... i just know that Pete gets more than a little frustrated when people give these very high numebrs as "the lowest FIRE number [they could use] for a family".

i have some fluff in the analysis/FI numbers and am working to tone it down, but also i want a Fat Fire, with travel and fun, could (OP said could) a family live on less, absolutely they have and do, i wouldn't feel comfortable today living where we live on less than 2-2.4 mil.



« Last Edit: May 07, 2020, 11:10:40 AM by joe189man »

nereo

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Re: Hypothetical: What's the lowest FIRE number for a family?
« Reply #44 on: May 07, 2020, 11:11:47 AM »
there is variation in the 4% rule, maybe you owe taxes which zaps spending power (i assume some taxes owed), i also assume constant, inflation adjusted spending (so spending goes up every year 2% (+/-). i assumed $1k a month for health insurance. i also looked for a dollar amount that wont run out ever in my expected lifetime. i do live in a higher cost of living area. All that said, i could be way more frugal and mustachian. I didnt meant to kick the bee hive

Using the 4% rule accounts for increases via inflation.  In my example above I accounted for taxes.
I understand that everyone has their own comfort level... i just know that Pete gets more than a little frustrated when people give these very high numebrs as "the lowest FIRE number [they could use] for a family".

i have some fluff in the analysis/FI numbers and am working to tone it down, but also i want a Fat Fire, with travel and fun, could (OP said could) a family live on less, absolutely the have and do, i wouldn't feel comfortable today living where we live on less than 2-2.4 mil.

I suppose we are reading the OP’s question quite differently.  You’ve interpreted it to be what you could comfortably live off of with your family in your area.  I’ve been reading it as what could a hypothetical family retire on (“lowest”), even if it requires moving and not “Fat-FIRE”.  As moving is an option and much of the country currently lives on <$3k/month I’m somewhere between $600-700k.

Neither of us is wrong - we just aren’t answering the same question.

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Re: Hypothetical: What's the lowest FIRE number for a family?
« Reply #45 on: May 07, 2020, 11:32:19 AM »
And the other side of that coin is people claiming to be "FI" while contemplating taking government assistance and leaehing off the system I suppose.

Yep, that is not the FIRED lifestyle.   That's going from working and contributing, to freeloading.

I think we have a new acronym...we have Lean FIRE, Fat FIRE and now "Fake" FIRE! LMFAO!!!

I like the term freeloading - call it what it is.

I suppose it is a matter of interpretation - for some FI means they've found a way to live well on their own resources and merit.

For others, FI means using all loopholes in the system, and anything they can contrive to qualify for without a second thought that they might be taking away much needed support from someone truly in need.
They claim and feel no shame - only smugness that they took advantage of the system "legally".

It is what it is and as the world has always been. The choice is yours.

SS and Medicare are contributory entitlements. I see no reason not to claim them, unless I were a one-percenter, then it would feel morally wrong.
I collect as a surviving spouse and already left my own SS in the pot for all to share.
As we all know Medicare Part B is not free - plus if you want better/full coverage you need to take out additional health insurance.

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Re: Hypothetical: What's the lowest FIRE number for a family?
« Reply #46 on: May 07, 2020, 11:38:25 AM »
I recently learned about a small town where the average income is $25k/year. I can't imagine things would cost very much in that town. I mean, you can really find some cheap properties in this country. So what if you're an hour away from a larger town? That's like two days' worth of commute time, if that, and if you're RE and no longer have a normal commute, that's a tiny chunk of your week (or month). I'm positive you can live in the US very cheaply, if you are willing. It's just most people aren't willing. "I can't leave San Francisco! My LIFE is here!" Okay, well, maybe an extra 10 years of work is worth it for you. I guess that's fine, but these forums are all about strategy. If you want to live cheap, you can, and that needs to be the takeaway.

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Re: Hypothetical: What's the lowest FIRE number for a family?
« Reply #47 on: May 07, 2020, 11:39:08 AM »
My last year of grad school, my non-tuition spending for the whole year was under $5000, so I know that I am capable of going very low if I need to (yes, that was with help from the taxpayers and a paid off house.)  I don't think I would even think about doing FIRE with less than $300,000 in liquid assets.  At a 4% withdrawal rate, that's $12,000 per year, which gives room for emergencies.

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Re: Hypothetical: What's the lowest FIRE number for a family?
« Reply #48 on: May 07, 2020, 11:42:48 AM »
Money was very tight when we were young and raising 3 kids. We worked longer to be able to travel and have fun in retirement. I know a few people that retired very modestly in their 40’s and in their 60’s are unhappy they cannot travel, etc. 

wageslave23

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Re: Hypothetical: What's the lowest FIRE number for a family?
« Reply #49 on: May 07, 2020, 11:54:29 AM »
As the OP, I wanted to clarify - of course there are a lot of variables, that's why I wanted to know what YOU would do.  And provide numbers and details.

I would buy a house for about $150k in TN or NC.


property taxes   100
utilities   250
food   600
fun   400
internet    50
misc   400
cell/gym   100
car(gas, insurance, repairs/sinking fund)   250
healthcare   500

Which comes out to about $30k/yr

So 30k X 25 = 750k + 150k house = 900k total networth needed to FIRE

I would then take about 100k of that number and invest in rental properties netting about 15% ROI which would knock my FIRE number down to $750k.  100k rentals, 150k personal house, 400k investments, 100k cushion.
« Last Edit: May 07, 2020, 12:00:22 PM by wageslave23 »