The Money Mustache Community
General Discussion => Welcome and General Discussion => Topic started by: Monkey Uncle on November 30, 2018, 03:32:30 AM
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http://www.msn.com/en-us/money/retirement/these-people-left-their-jobs-behind-to-retire-early-%e2%80%94-then-life-got-in-the-way-here%e2%80%99s-how-they-coped-with-fire-plans-gone-wrong/ar-BBQftZW?li=BBnbfcL (http://www.msn.com/en-us/money/retirement/these-people-left-their-jobs-behind-to-retire-early-%e2%80%94-then-life-got-in-the-way-here%e2%80%99s-how-they-coped-with-fire-plans-gone-wrong/ar-BBQftZW?li=BBnbfcL)
Another FIRE-hating article. Seems like there's a new one every week now.
News flash: if you plan poorly, start out with a stash that is half the size that you calculated you would need, and/or invest a chunk of your net worth in unsecure speculative junk, FIRE probably isn't going to work out for you.
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News flash: if you plan poorly, start out with a stash that is half the size that you calculated you would need, and/or invest a chunk of your net worth in unsecure speculative junk, FIRE probably isn't going to work out for you.
I'll add: If your backup plan is moving back in with your parents, maybe you haven't planned well enough.
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Fear! Doom! Caution!
Then at the end:
Advice for those considering ‘FIRE’
No matter what age you’re planning to retire, spend time beforehand imagining what you want your life to look like, Norris of SoFi said. That will help you “assign a price tag to your retirement goal,” she said.
And if you save too little, it doesn’t have to be a disaster.
You may be able to re-enter the workforce. You may have to reduce your spending as much as you can. Homeowners might have to consider a reverse mortgage, which means converting part of your home equity to cash.
Just consider the unknowns that could come up, including market volatility, long-term care needs and any changes in the tax code that could come up, Norris said.
And if you’re like Merz, you can take it in stride.
I get that it's an easy article to write that will generate a number of guaranteed hits, but why...why does every one of these miss the point? Heck, the author actually touched on it a few times, and with some simple narrative rearrangement, it could have been an article about a few success stories and a few "we tried, failed, but are better for it" pieces.
None of the quoted regret their decisions....
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I can't see any harm in taking a huge risk in your 20s, with a small chance that you end up with the lifestyle you covet. Ending up living with your parents again is no worse than never having left in the first place.
It's a very different thing to the considered FIRE of a more mature person.
Otherwise, the article featured some people with varying degrees of bad luck and bad planning. Hey ho, them's the breaks.
In my life, I would still rather take the risk and accept the chance of failure than sit around too scared and paralysed by 'what if..?'s to take any action. It took me until I was 50 to have been in the same job/school, house and relationship/relationship status for 5 consecutive years. Some of the changes were predictable (going to a different school at various ages), some self-inflicted (becoming self-employed, moving business premises) and some were unplanned (divorce). The best I have managed is 8 years of stability in all three... and having semi-retired with full FIRE next year, I won't beat my record until I'm 62 (if all goes well..!)
I don't think that I'm unusual; in fact, my career choice aged 7 turned out to be my career til this day. Risk and change is good!
(edit: clarity and a spelling)
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Another FIRE-hating article. Seems like there's a new one every week now.
Seems like there’s a thread like every week to talk about it, too. If people are worried about articles like this giving them second thoughts on FIRE, they probably shouldn’t.
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I spotted this story yesterday, and it reeks of an author fishing for the most pathetic examples to prove a point.
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I'm a fan of these cautionary tales. I'm on the record as thinking that there are a good number of people out there "doing it wrong". Maybe even some in this community.
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It's unfortunate the author did such a superficial review of multiple people rather than probing more into their individual circumstances. For example, why did the person with just $60,000 in non-401(k) assets think it would be a good idea to retire in their 20s?
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Another FIRE-hating article. Seems like there's a new one every week now.
Seems like there’s a thread like every week to talk about it, too. If people are worried about articles like this giving them second thoughts on FIRE, they probably shouldn’t.
I'm not worried. I just like piling on. ;)
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Ending up living with your parents again is no worse than never having left in the first place.
Tell that to the parents. Yikes.
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Most of the people didn’t have enough to retire so it was just dumb.
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Most of the people didn’t have enough to retire so it was just dumb.
Exactly. Who can retire in their 20s with no more than $200,000 total assets? That was a disaster just waiting to happen.
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Millennials screwing up early retirement, not surprising.
Disclaimer: GenX poster
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Safe to say you can find success and failure in anything, any business etc.. Bottom line she said she didnt regret it and learned from it. The Couple where she died of Cancer there plan worked out, its sad what happened but they planned and everyone can go back and say it should of done this , this or this. Was a pretty weak article and somehow all these articles now are including Suzie Ormans ridiculous statements. Like anything it comes down to preparing best you can and calculating the risk. No matter when you retire even at what "Social society" might seem acceptable there is risk.
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I like how the author throws in at the end that you might have to take out a reverse mortgage to tap your home equity. Oh ok /s.
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I like how the author throws in at the end that you might have to take out a reverse mortgage to tap your home equity. Oh ok /s.
Or a HEL(OC).
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I'm a fan of these cautionary tales. I'm on the record as thinking that there are a good number of people out there "doing it wrong". Maybe even some in this community.
Would you mind elaborating on that? I may be one of those people -_-
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I guess I dont understand what went wrong in the initial story.
"The rental property was too complicated to manage from far away." (So sell it and buy one closer...or sell it and invest the proceeds in another way?)
She found that she hated freelancing. (So the problem with FIRE is you might hate your job that you need for income? Huh?)
Because of some technicalities, she wasn’t able to access her pension yet. (She expected to draw a pension that pays any significant amount for any significant period after retiring at the age of 27? Really?)
There were fewer bites than expected on her Etsy projects. (So the problem with FIRE is your business might not be profitable? Huh?)
And she and her boyfriend broke up. (So living off a boyfriend is considered being FI?, as I assume anyone just needing to share expenses can get a roommate. Heck, I'd think the 'backup plan' of living off your parents is probably a better one)
I guess I dont understand the next story.
They "FIRE'd" with half of what they thought they needed? (Did the cut their expenses in half or just say what the heck?)
Losing 3% of their investments thru the crypto hack destroyed them? (Pretty sure I lost 3% of my investments Thanksgiving week...and that was just market fluctuations)
For the Liz story all I can think is thank goodness they were planning for FIRE...losing one income would destroy most families financially. They were probably already living off of just one. Or is this just a "reaching FIRE may be tougher than you initially think and you may have to adapt and it may take longer" story, which sounds right........
For the losing your partner story...Heck, isnt not needing eitehr parents' income the best place to be for when this happens? Or is this just a "reaching FIRE may be tougher than you initially think and you may have to adapt and it may take longer" story, which sounds right........
alright, tired of reading this article now
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I guess I dont understand what went wrong in the initial story.
"The rental property was too complicated to manage from far away." (So sell it and buy one closer...or sell it and invest the proceeds in another way?)
Or pay a management company ~7% to deal with the hassles. You should have enough cash flow margin to cover it.
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Ugh. I remember stumbling onto the first person's blog during the first couple months after she quit her job. In no shape or form was she ever FIRE or even "barista" FIRE. Her rental was a POS D class multifamily with lots of expensive deferred maintenance that she managed herself. Then she took in tenants without doing any credit or reference check so, of course, they had to be evicted after a short period of time. Her non-retirement funds were in the five figures.
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What lazy reporting. Those were not case studies of FIRE. They had 2 stories out of 6 I think that would even fall under FIRE and neither of those followed any of the rules. Both examples under saved and under invested. The second somewhat on point example, the couple who had their crypto money stolen under saved and haven’t been ruined, they just are pissed at losing that money. What an odd article. The author could have contacted actual FIRE people and found ones who had to deal with death, divorce and any number of shit things happen to see how people actually cope. Or do some articles about people who work their whole lives, retire when they’re supposed to and have nothing to show or have to deal with life getting in the way. Stupid article.
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I guess the thing that ticks me off the most about this article is the implication that the "FIRE community" is somehow encouraging 20-somethings with a couple hundred grand to quit their jobs and call themselves retired, or encouraging 30-somethings to retire on a 7% withdrawal rate. It's just extremely sloppy journalism. If the author had paid any attention at all to forums like this one, it would have been clear that nothing could be further from the truth. Maybe MMM should sue for libel and give the proceeds to the unfortunate subjects of the article.
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Here's the response from the first person featured in the story. Sounds like she's not too pleased with the lazy MarketWatch reporting either.
https://www.fierymillennials.com/decisions-decisions/ (https://www.fierymillennials.com/decisions-decisions/)
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It's funny how they only pick the people that failed but never the ones who succeed. Everyone thinks that in FIRE you are going to lay around, sleep in, and wait for checks. I'm not FIRE and neither is my wife. I don't have a date on the wall or a magic number that I am striving to reach. We do however save more money each year than all of our friends combined and spend less money than the rest. These authors make it sound like FIRE is saving $1000 and living in a card board box is our goal LOL. I no longer work 9-5 for a company. I own five properties and three are paid off cash. The others are financed so low on a fixed rate that I'd be a fool to pay them off early. I own all of my vehicles. I grow a garden for healthy delicious vegetables and fruits and I could care less about Applebee's or any other chain. We have a growing passive income that shelter's my wife's job so that she can work with no pressure or fear in the event her employer wants to change terms. I work harder now than I ever did when I had a 9-5. I actually love doing it because I get to keep all of my work. I still do jobs for others when I want to. I don't have to take the next job or be low bid because the man is knocking on my door trying to collect money. That to me is the real power of MMM and this lifestyle. This author needs to go put another vacation on a charge card and go lease a new BMW. Wash that all down with a $250 bottle of wine and a $7 cup of coffee and then cry poor me when the company lets him or her go at age 55. Their version of fire is when everything burns down due to piss poor planning!
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Article summary: A couple people took a break from work and for various life reasons went back to work.
This happens all the time whether people are pursuing FIRE or not. It's really not even news worthy.
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Article summary: A couple people took a break from work and for various life reasons went back to work.
This happens all the time whether people are pursuing FIRE or not. It's really not even news worthy.
I think the reason it was considered newsworthy by the authors is that the people it was written about claimed to be FI and also RE not just on a sabbatical or doing p/t work to supplement their not-enough-to-be-FI investment income. Several had FIRE blogs too or lived non-mainstream lives. If the people hadn't called themselves FIRE I doubt the media would write about them.
Where's the IRP when you need them? ;)
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It's funny how they only pick the people that failed but never the ones who succeed.
I don't think that is even close to truth, in the last few months MMM has been on the PBS Newshour, and the FIRE movement has been generally positively portrayed in the NY TImes, BBC and WSJ.
I'd say that's far more important than click bait article on MSN.
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Most of the people didn’t have enough to retire so it was just dumb.
Exactly. Who can retire in their 20s with no more than $200,000 total assets? That was a disaster just waiting to happen.
Anyone can!
You just have to be willing to end your life when the money runs out . . . and most people are WAAAYYY to complainy pants to follow through.
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How many people here have accounted for the possibility of divorce (or if single, getting married in the future and then divorced) in their FIRE plans? Would you be able to cope with the loss of at least 50% of your NW and still maintain your planned withdrawal rate?
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I like how the author throws in at the end that you might have to take out a reverse mortgage to tap your home equity. Oh ok /s.
And that's assuming you can make your current 40 year long early retirement at 20 on $60k last until you're old enough to even get a reverse mortgage (which I think you can't do until 62). I think selling a house and downsizing or moving to a LCOL area are great ways to get RE faster and younger but most in this article aren't in positions to do that. Retiring at 62 and depending on a HELOC or reverse mortgage and SS doesn't really count as FI or even RE imho.
62 is early - In the U.S. for most workers now, the full retirement age is 67 for full SS benefits. SS is a legitimate benefit just like a pension, and a reverse mortgage is just another way to tap into your equity. Heck, some people don't even have their own homes, so I don't take anything away from those who do that might want to tap into that equity when they are older.
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How many people here have accounted for the possibility of divorce (or if single, getting married in the future and then divorced) in their FIRE plans? Would you be able to cope with the loss of at least 50% of your NW and still maintain your planned withdrawal rate?
I'm single, but if I got married and divorced, I would not lose any of my net worth. Also, my SWR will be based only on the stash component of my NW.
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How many people here have accounted for the possibility of divorce (or if single, getting married in the future and then divorced) in their FIRE plans? Would you be able to cope with the loss of at least 50% of your NW and still maintain your planned withdrawal rate?
I'm single, but if I got married and divorced, I would not lose any of my net worth. Also, my SWR will be based only on the stash component of my NW.
^+1
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How many people here have accounted for the possibility of divorce (or if single, getting married in the future and then divorced) in their FIRE plans? Would you be able to cope with the loss of at least 50% of your NW and still maintain your planned withdrawal rate?
I think if you’re onboard with the basic tenets of mustachianism, self-reliance, low expenses, anti-consumer, save and invest, with a decent job—you’d be able to recover from most setbacks in 3-6 years max. If you plan really well then maybe no impact.
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I guess I dont understand what went wrong in the initial story.
"The rental property was too complicated to manage from far away." (So sell it and buy one closer...or sell it and invest the proceeds in another way?)
She found that she hated freelancing. (So the problem with FIRE is you might hate your job that you need for income? Huh?)
Because of some technicalities, she wasn’t able to access her pension yet. (She expected to draw a pension that pays any significant amount for any significant period after retiring at the age of 27? Really?)
There were fewer bites than expected on her Etsy projects. (So the problem with FIRE is your business might not be profitable? Huh?)
And she and her boyfriend broke up. (So living off a boyfriend is considered being FI?, as I assume anyone just needing to share expenses can get a roommate. Heck, I'd think the 'backup plan' of living off your parents is probably a better one)
I guess I dont understand the next story.
They "FIRE'd" with half of what they thought they needed? (Did the cut their expenses in half or just say what the heck?)
Losing 3% of their investments thru the crypto hack destroyed them? (Pretty sure I lost 3% of my investments Thanksgiving week...and that was just market fluctuations)
For the Liz story all I can think is thank goodness they were planning for FIRE...losing one income would destroy most families financially. They were probably already living off of just one. Or is this just a "reaching FIRE may be tougher than you initially think and you may have to adapt and it may take longer" story, which sounds right........
For the losing your partner story...Heck, isnt not needing eitehr parents' income the best place to be for when this happens? Or is this just a "reaching FIRE may be tougher than you initially think and you may have to adapt and it may take longer" story, which sounds right........
alright, tired of reading this article now
Wow don't spare any punches. Now I know why people don't share more of the bad stuff online. But yeah basically you're right - I took the leap to Coast Find sooner than I should've and I couldn't make it work. It's shitty but sometimes one has to learn lessons the hard way. Don't worry, I'm going back to work and will stay there until I amass more than enough for FIRE
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Bottom line: the people highlighted in the article made bad decisions and didn't have realistic plans. Wanting to be FIRE doesn't mean you are FIRE. To draw any conclusions about FIRE in general except to use this as a cautionary tale about using math and developing plans based on reality is ridiculous.
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How many people here have accounted for the possibility of divorce (or if single, getting married in the future and then divorced) in their FIRE plans? Would you be able to cope with the loss of at least 50% of your NW and still maintain your planned withdrawal rate?
Oh, I've done these calculations many, many times . . .
Pretty confident I'd be just fine, especially if I'm willing (and I am) to move somewhere with a LCOL -- particularly somewhere out of the country.
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The worst (or best?) part of the article is the video that accompanies it.
At the 00:53 mark, the on-screen advice is
"Eat a home"
Not "Eat at home" -- that would be too easy. Really challenge yourself. Eat the entire home!
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I divorced on the cusp of our planned FIRE in our late 30s and we both were fine. Had kept our investments separate and both earned the same amount so just left with what we brought in and no kids or alimony. He chose to continue working (main reason for the divorce since he wanted to continue his military career far beyond 20 years) and I FIREd asap. I won't get legally married again or combine finances so assume any relationship won't impact my finances or FIRE status at all. Other than reducing expenses by shared living.
You can choose to keep separate investments, choose not to get married, choose a mate who is already FI, choose somebody who will accept a prenup agreement, but every one of those choices is going to limit your pool of potential partners. Is FI more important than the choice of a partner?
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Exactly. Who can retire in their 20s with no more than $200,000 total assets? That was a disaster just waiting to happen.
She found that she hated freelancing. (So the problem with FIRE is you might hate your job that you need for income? Huh?)
There were fewer bites than expected on her Etsy projects. (So the problem with FIRE is your business might not be profitable? Huh?)
I imagine that for many millennials, their vision of "retirement" looks like mine:
- I work at a job I honestly hate, because it pays quadruple my old salary.
- In 2017, my half of my households spending was about 14,000 USD.
- The job I've had that I liked best is part-time college lecturer and private tutor, but that job only paid about 11,000 USD.
So my "early retirement" is getting up enough savings (about 200k, funny enough) to bring in about 8,000 a year, then go back to my low paying but highly satisfying job in academic instruction. Ideally I'd start my own accredited tutoring company and provide home-school instruction to my many nieces and nephews, but dependent on how much my family needs/can afford those services, it might not be something I can do without supplementing my income.
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Nick you should look into state universities for teaching opportunities. Also some colleges pay a lot more for online classes because the funding source is different. I teach one class each of the 3 semesters and make 22k/year.
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Without 40 quarters these super early retirees will not qualify for Medicare Part A or Social Security. Also I think a safer SWR should be lower than 4% due to the number of years involved.
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Most of the people didn’t have enough to retire so it was just dumb.
Exactly. Who can retire in their 20s with no more than $200,000 total assets? That was a disaster just waiting to happen.
And you are being generous. Almost all of those assets were retirement/401k which you wouldn't touch until you are 60. She retired in her 20's with about $25,000. Lol.
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Nick you should look into state universities for teaching opportunities. Also some colleges pay a lot more for online classes because the funding source is different. I teach one class each of the 3 semesters and make 22k/year.
You mean that you teach one, three hour section per week? Or you mean you teach multiple sections of the same class per week?
In my situation, I have struggled due to my weak academic performance in college (I became ill the senior year of my undergraduate degree, and required almost a year of medical care). I am routinely out competed for full time positions by people who did better in school, and the third semester of the year classes are only taught by full time faculty, never part time. Which means that part time at one school really means "about 500 hours per year".
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I'm a fan of these cautionary tales. I'm on the record as thinking that there are a good number of people out there "doing it wrong". Maybe even some in this community.
Would you mind elaborating on that? I may be one of those people -_-
Sorry, I'm just now seeing this. I'll do my best.
1.) Most people's lives don't map 1 to 1 to those of the most successful FIRE bloggers. There is a limited demand for lifestyle porn on the internet and you shouldn't bank on blog income. Basic stuff. People understand this in the abstract. But most of the bloggers are also probably type-A go getters who can't help but to make money.
Honesty is necessary. Honesty about whether or not you're that kind of person, or say, someone who clicks around on the internet at the office a few hours a day instead of putting in tangible work towards the next big raise. I'm personally not a go-getter on the level of MMM or even some of the more forums famous faces around here. So I factor that in.
Also, a blogger's spending (even if they're being 100% honest and transparent) probably doesn't capture the tangible and intangible benefits of being a web celebrity or thought-leader.
2.) "Income doesn't matter; only spending" doesn't scale to the lowest levels. You have an inelastic demand for things like food, shelter, and life-saving medicine. You can make a concerted choice to live on $10 of coffee a year instead of $1000 of coffee a year. You can't as easily elect to pay $1,000 for world-class cancer treatment instead of $100,000.
People have their plans for medical, and that's all well and good. But a healthy bit of observation shows that the majority party in the United States is trying to defund and destroy public health programs at every level. Or that a wave of nativism in other desirable countries has actual and would-be political leaders championing the tightening of immigration. Maybe that's not a problem if you're retiring well into the seven figures. Potential lean-FIRE expats may be less desirable though. They could find themselves searching for a social safety net that is willing to catch them.. I truly don't know where we're heading over the next few years.
3.) You at 30 is not you at 40, 50, 60, so on.
People change. I'm young, tough, strong, and healthy. I can deal with considerable amounts of bullshit. But stuff happens. A buddy of my tore his ACL playing basketball. He's 29, healthy, active, and recovering as well as can be expected. But that's a risk factor for early-onset arthritis. Will it stop him from leading an active an fulfilling life? Probably not. But it could turn what would be 15 miles a day walking around a new city into half that with a few $30 Uber rides. Back problems can cause you to upgrade from slumming it in hostels, to a hotel with a reliably suitable mattress.
Attitudes change too. You may love the grind now. But eventually it wears on you. That's why it's called the grind. My parents/are boomers. As are their siblings and friends. They spend lavishly on entertainment and comfort in their 60s. Decades ago, they were anti-consumerist hippies who subsisted on cheap pot and free love.
That covers most of it I think.
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Nick, I teach one 3 credit class online each semester. You also need a master’s degree as the minimum to teach. I mentioned that because you only talked about your undergrad degree.
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I guess I dont understand what went wrong in the initial story.
"The rental property was too complicated to manage from far away." (So sell it and buy one closer...or sell it and invest the proceeds in another way?)
She found that she hated freelancing. (So the problem with FIRE is you might hate your job that you need for income? Huh?)
Because of some technicalities, she wasn’t able to access her pension yet. (She expected to draw a pension that pays any significant amount for any significant period after retiring at the age of 27? Really?)
There were fewer bites than expected on her Etsy projects. (So the problem with FIRE is your business might not be profitable? Huh?)
And she and her boyfriend broke up. (So living off a boyfriend is considered being FI?, as I assume anyone just needing to share expenses can get a roommate. Heck, I'd think the 'backup plan' of living off your parents is probably a better one)
I guess I dont understand the next story.
They "FIRE'd" with half of what they thought they needed? (Did the cut their expenses in half or just say what the heck?)
Losing 3% of their investments thru the crypto hack destroyed them? (Pretty sure I lost 3% of my investments Thanksgiving week...and that was just market fluctuations)
For the Liz story all I can think is thank goodness they were planning for FIRE...losing one income would destroy most families financially. They were probably already living off of just one. Or is this just a "reaching FIRE may be tougher than you initially think and you may have to adapt and it may take longer" story, which sounds right........
For the losing your partner story...Heck, isnt not needing eitehr parents' income the best place to be for when this happens? Or is this just a "reaching FIRE may be tougher than you initially think and you may have to adapt and it may take longer" story, which sounds right........
alright, tired of reading this article now
Wow don't spare any punches. Now I know why people don't share more of the bad stuff online. But yeah basically you're right - I took the leap to Coast Find sooner than I should've and I couldn't make it work. It's shitty but sometimes one has to learn lessons the hard way. Don't worry, I'm going back to work and will stay there until I amass more than enough for FIRE
@fierymillennials I appreciate your openness with your struggles. After reading your comments here and in the article, I started listening to your podcast and reading your blog. Good luck with the next phase of your life. Don't let the grouchy posters on a message board get you down.
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Without 40 quarters these super early retirees will not qualify for Medicare Part A or Social Security. Also I think a safer SWR should be lower than 4% due to the number of years involved.
40 quarter is only ten years of paychecks. My paychecks started when I was 16. Even someone who retires at 30 years old probably has enough.
If you read the 4% SWR thread on this very forum, you will find the charts that show the 30 year time horizon success rates are just barely worse than the 40 year rates, which are basically identical to the 50 and 60 year rates. After some duration it just doesn't matter anymore, because the only possible failure scenarios are catastrophically bad sequence of return risk realizations right after your retirement date. Basically, if you survive the first few years of retirement without a major crash, you're golden. And even if you do get hit with a major crash right off the bat, you typically need to continue robotically withdrawing inflation-adjusted amounts of your depleted portfolio long enough to hit a second major crash 15 or 20 years later in order to actually fail with a 4% SWR. It's still possible, you just have be pretty stupid for a really long time.
In reality, people who lose 40% or more of their portfolio the year after they retire typically don't withdraw more money the next year without finding more income. They either go back to work right away while their skills are still relevant, just to be extra safe, or they choose to stay retired but spend less. Some of them do neither, and that still usually works out okay if they just wait long enough.
Remember that even with a 40% correction in year one of your retirement, a 4% inflation-adjusted SWR should still last you roughly 25 years unless the market never recovers after that 40% drop (which has never happened). That still qualifies as a "failure" of the 4% rule because it's less than a 30 year timeline, but 25 years is still a loooong time to work out a new plan. I'm pretty sure I could find a way to make a few bucks if I had 25 years to prepare. It didn't even take me that long to start earning money after I was born a totally useless baby.
I'm not surprised the article that started this discussion was able to find people who "failed" at early retirement, because there will always be people who jump into it without first internalizing the body of knowledge that this forum provides. FIREing on a 9% SWR might work out okay for you, but probably won't. FIREing on a 6% SWR should work out roughly half of the time, so half of those folks would need to either earn more or spend less later in their lives.
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I guess I dont understand what went wrong in the initial story.
"The rental property was too complicated to manage from far away." (So sell it and buy one closer...or sell it and invest the proceeds in another way?)
She found that she hated freelancing. (So the problem with FIRE is you might hate your job that you need for income? Huh?)
Because of some technicalities, she wasn’t able to access her pension yet. (She expected to draw a pension that pays any significant amount for any significant period after retiring at the age of 27? Really?)
There were fewer bites than expected on her Etsy projects. (So the problem with FIRE is your business might not be profitable? Huh?)
And she and her boyfriend broke up. (So living off a boyfriend is considered being FI?, as I assume anyone just needing to share expenses can get a roommate. Heck, I'd think the 'backup plan' of living off your parents is probably a better one)
I guess I dont understand the next story.
They "FIRE'd" with half of what they thought they needed? (Did the cut their expenses in half or just say what the heck?)
Losing 3% of their investments thru the crypto hack destroyed them? (Pretty sure I lost 3% of my investments Thanksgiving week...and that was just market fluctuations)
For the Liz story all I can think is thank goodness they were planning for FIRE...losing one income would destroy most families financially. They were probably already living off of just one. Or is this just a "reaching FIRE may be tougher than you initially think and you may have to adapt and it may take longer" story, which sounds right........
For the losing your partner story...Heck, isnt not needing eitehr parents' income the best place to be for when this happens? Or is this just a "reaching FIRE may be tougher than you initially think and you may have to adapt and it may take longer" story, which sounds right........
alright, tired of reading this article now
Wow don't spare any punches. Now I know why people don't share more of the bad stuff online. But yeah basically you're right - I took the leap to Coast Find sooner than I should've and I couldn't make it work. It's shitty but sometimes one has to learn lessons the hard way. Don't worry, I'm going back to work and will stay there until I amass more than enough for FIRE
Hey, sorry if that sounded like I was attacking any of these folks...the intent was purely to attack the author's conclusion that these are instances of real FIRE failure, but I may not even be interpreting FIRE correctly. E.g. you are saying you failed at Coast Fire but doesn't Coast Fire just mean saving a lot of money early on and then downshifting or the like? (I admit I don't really know) So if you did save a ton of money very early on and at some point did downshift I'm not really even sure how you could have failed, wish I would have done both in my 20s...
I wouldn't even try to say there are no legit FIRE failure stories out there that could point out problems with the concept...the article just didn't seem to have any of those to me.
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I'm highly disturbed about the Suze Orman idea that 5 million is a good retirement number. What kind of an alternate universe is she living in?
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I'm highly disturbed about the Suze Orman idea that 5 million is a good retirement number. What kind of an alternate universe is she living in?
The kind where she owns an island.
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To me cautionary tales are ok to me if the concern is that a 20-something will leave a 150k a year job to live on a tight budget for decades when they could have just saved a bit more of a cushion. I agree that these are not FIRE stories though. Leaving your IT job to chase a dream of podcasting and freelancing is trying to trade a job you don’t like for one you think you will like. She did not have enough saved to call it retirement. The couple left work to travel. Many people do that. They call it taking a break from work to travel not retiring. Are we so consumeristic in this country that we can’t just travel the country for six months if the funds are there to pay for it. They hated their jobs so prolly don’t care if they get them back.
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Without 40 quarters these super early retirees will not qualify for Medicare Part A or Social Security. Also I think a safer SWR should be lower than 4% due to the number of years involved.
For either one, keep an eye out for a major market correction. Pick up a part time job to supplement for a few years. Qualify for SS, and prevent portfolio failure.
Social Security hasn't used actual "quarters" (measured individual quarterly work periods) since 1978 - it's all based on earnings for the year. For each $1360 you earn in 2019 you get 1 credit, up to 4. So, earn $5440 anytime in 2019, you get 4 "quarters" of credits.
https://www.ssa.gov/oact/cola/QC.html
Occasional seasonal/part time or consulting work will get you over that hump pretty easily.
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I guess FIRE has "jumped the shark" is those are FIRE stories.
They make me think about my youth,carefree, lots of travel, have fun, live on very little , work as little as possible, ski, surf, play and then at some point realize that if you don't buckle down and make a little cash you'll be screwed. We just called it bumming/having fun.
Life was so much easier before everyone felt a need to "be someone" on the internet, FOR TOTAL STRANGERS nonetheless.....
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I guess FIRE has "jumped the shark" is those are FIRE stories.
They make me think about my youth,carefree, lots of travel, have fun, live on very little , work as little as possible, ski, surf, play and then at some point realize that if you don't buckle down and make a little cash you'll be screwed. We just called it bumming/having fun.
Life was so much easier before everyone felt a need to "be someone" on the internet, FOR TOTAL STRANGERS nonetheless.....
One of my colleagues used to live as a ski bum when he was young. He would work half a year only, to take the other half off, to go skiing with friends. But now he is married and has children and has found out that it is safer to have a job.
I am not sure what would be the best strategy. Start working late and have to work until normal retirement age. Or start working young and retire many years earlier. I guess there is really something to say for taking a couple of sabbaticals when you are young. But retiring before the official age is also good, as you get older, it is more and more difficult to tolerate the BS factors at work. I really mustn't think of working until 67...
On the other hand, my father died at the age of 50. He never got to enjoy his pension. In my mind, he should have deserved some years off in "freedom", if he had only known about the option to do so.
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I guess FIRE has "jumped the shark" is those are FIRE stories.
They make me think about my youth,carefree, lots of travel, have fun, live on very little , work as little as possible, ski, surf, play and then at some point realize that if you don't buckle down and make a little cash you'll be screwed. We just called it bumming/having fun.
Life was so much easier before everyone felt a need to "be someone" on the internet, FOR TOTAL STRANGERS nonetheless.....
One of my colleagues used to live as a ski bum when he was young. He would work half a year only, to take the other half off, to go skiing with friends. But now he is married and has children and has found out that it is safer to have a job.
I am not sure what would be the best strategy. Start working late and have to work until normal retirement age. Or start working young and retire many years earlier. I guess there is really something to say for taking a couple of sabbaticals when you are young. But retiring before the official age is also good, as you get older, it is more and more difficult to tolerate the BS factors at work. I really mustn't think of working until 67...
On the other hand, my father died at the age of 50. He never got to enjoy his pension. In my mind, he should have deserved some years off in "freedom", if he had only known about the option to do so.
I think it's possible to do both - be the ski bum early on and still retire "early". I did the corporate life for a couple years out of college then moved to a ski town with my then new husband. 13 years later after working half the year, we moved to the beach with our then 5 year old daughter after a life changing stroke of luck. After 18 months of fun at the beach, the 2008 crash made us realize we needed jobs. We took crappy jobs in 2009 to start, slashed expenses to the bone and lived on half our income. We'll retire in early 2020. I'll be 50, so not early by MMM standards, but early by regular standards.
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I guess I dont understand what went wrong in the initial story.
"The rental property was too complicated to manage from far away." (So sell it and buy one closer...or sell it and invest the proceeds in another way?)
She found that she hated freelancing. (So the problem with FIRE is you might hate your job that you need for income? Huh?)
Because of some technicalities, she wasn’t able to access her pension yet. (She expected to draw a pension that pays any significant amount for any significant period after retiring at the age of 27? Really?)
There were fewer bites than expected on her Etsy projects. (So the problem with FIRE is your business might not be profitable? Huh?)
And she and her boyfriend broke up. (So living off a boyfriend is considered being FI?, as I assume anyone just needing to share expenses can get a roommate. Heck, I'd think the 'backup plan' of living off your parents is probably a better one)
I guess I dont understand the next story.
They "FIRE'd" with half of what they thought they needed? (Did the cut their expenses in half or just say what the heck?)
Losing 3% of their investments thru the crypto hack destroyed them? (Pretty sure I lost 3% of my investments Thanksgiving week...and that was just market fluctuations)
For the Liz story all I can think is thank goodness they were planning for FIRE...losing one income would destroy most families financially. They were probably already living off of just one. Or is this just a "reaching FIRE may be tougher than you initially think and you may have to adapt and it may take longer" story, which sounds right........
For the losing your partner story...Heck, isnt not needing eitehr parents' income the best place to be for when this happens? Or is this just a "reaching FIRE may be tougher than you initially think and you may have to adapt and it may take longer" story, which sounds right........
alright, tired of reading this article now
Wow don't spare any punches. Now I know why people don't share more of the bad stuff online. But yeah basically you're right - I took the leap to Coast Find sooner than I should've and I couldn't make it work. It's shitty but sometimes one has to learn lessons the hard way. Don't worry, I'm going back to work and will stay there until I amass more than enough for FIRE
Hey, sorry if that sounded like I was attacking any of these folks...the intent was purely to attack the author's conclusion that these are instances of real FIRE failure, but I may not even be interpreting FIRE correctly. E.g. you are saying you failed at Coast Fire but doesn't Coast Fire just mean saving a lot of money early on and then downshifting or the like? (I admit I don't really know) So if you did save a ton of money very early on and at some point did downshift I'm not really even sure how you could have failed, wish I would have done both in my 20s...
I wouldn't even try to say there are no legit FIRE failure stories out there that could point out problems with the concept...the article just didn't seem to have any of those to me.
I mean, real FIRE failure is running out of money at age 70 right? But in this case, my original plan of CoastFI failed miserably. I didn't have enough cash reserves and life got in the way. I saved up $200k by 27 and thought I'd earn enough freelancing that I'd be able to coast on my savings until retirement age, but I was wrong. I'm 28 now and I'm back at work, saving up money for a lifestyle that doesn't require me to earn money on entreprenuerial endeavors!
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Nick, I teach one 3 credit class online each semester. You also need a master’s degree as the minimum to teach. I mentioned that because you only talked about your undergrad degree.
That is great adjunct pay! Do you mind if I ask what field you are in?
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I guess I dont understand what went wrong in the initial story.
"The rental property was too complicated to manage from far away." (So sell it and buy one closer...or sell it and invest the proceeds in another way?)
She found that she hated freelancing. (So the problem with FIRE is you might hate your job that you need for income? Huh?)
Because of some technicalities, she wasn’t able to access her pension yet. (She expected to draw a pension that pays any significant amount for any significant period after retiring at the age of 27? Really?)
There were fewer bites than expected on her Etsy projects. (So the problem with FIRE is your business might not be profitable? Huh?)
And she and her boyfriend broke up. (So living off a boyfriend is considered being FI?, as I assume anyone just needing to share expenses can get a roommate. Heck, I'd think the 'backup plan' of living off your parents is probably a better one)
Wow don't spare any punches. Now I know why people don't share more of the bad stuff online. But yeah basically you're right - I took the leap to Coast Find sooner than I should've and I couldn't make it work. It's shitty but sometimes one has to learn lessons the hard way. Don't worry, I'm going back to work and will stay there until I amass more than enough for FIRE
Don't beat yourself up about it. You made a great stab at it but RL has a way of wrecking even the best laid plans. I'm one of the long term FIREees around here, and probably one living on one of the lowest incomes, but I started out doing long sabbatticals before calling myself FIRE and realizing I could probably weather (and have) most things thrown my way and still remain RE and FI. Good luck!
@fierymillennials
I had to grin at the armchair quarterback response to your first FIRE attempt - yes, I also read the other article where you stated that actually, this was nothing more than a pre-fire attempt, not a full-blown RE.
I agree with Spartana that your plan was rather good and with luck on your side and a good life partner, it might just have worked. Even though personally I'd like to see $500K instead of the $200K with a year or two worth of cash/CDs/MM to fall back on, to give one room and time to maneuver in a worst-case scenario.
You diversified for various income streams, you have the guts to carry out a cross country move and you like your independence - that is a good combination which will propel you ahead.
You were young enough at 26 to start over again relatively easy based on your marketable skills - be very grateful for that!
You kept your $200K intact. Nothing lost there at all - never touch your principal unless there truly is no other way.
You didn't experience a death or a divorce and you didn't lose your stash nor did you suddenly acquire an illness that will affect the rest of your life.
You are one lucky lady.
Don't listen to the noise from other people, but do study where you went wrong and learn from it and keep on planning your escape to freedom:).
Build on your strengths and don't rely on others.
You never know whom you may have just helped to avoid a similar fate because they read your story and are now taking measures to lead to a successful outcome for themselves.
Yeah, well, the BF thing, sorry, but we don't have control over the feelings and actions of other people, only your own.
If you can't rely on him to help you out for even six months to a year until you are settled in, even when the two of you split - well then he's not worth a damn.
I found the comment about living off your boyfriend and calling it FI a hit below the belt - totally uncalled for. But it is the internet and sometimes we forget we are talking to or about real people. We don't know whether he was even in a position to help you or whether by deciding to break up and not support you in any way, he caused you a great deal of hardship or whatever the case may have been.
Just sayin'.
Besides, even MMM failed the first time around with his construction company and he had to change his plans - it's just life.
I've been in your shoes with my first attempt at FIRE in my early forties. It blew up in the worst way possible - long story. I ended up starting over in the US at fifty years of age with literally nothing but two suitcases. Downright scary:)
I'll be 70 this month, I have no need to work and I know I will not be running out of money before I die, life is good. If you had told me even ten years ago that I could afford to save all of my SS or spend it any way I like, I wouldn't have believed you - life is full of surprises.
So consider yourself lucky and be smarter and most of all a lot more diligent the next time around. Sol had some helpful input on that. I think it is all about the math first and reading J.L. Collins:)
Good luck with your new job and your next fire date!
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There are financial risks with FIRE, but it's interesting how nobody makes the comparison to the average worker who's going to keep at it until traditional retirement age. A lot of bad scenarios people point out would be worse if you were relying on a job instead of passive income. How do people financially survive a serious illness like cancer if they have a job and an average amount of savings?
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I think it's possible to do both - be the ski bum early on and still retire "early". I did the corporate life for a couple years out of college then moved to a ski town with my then new husband. 13 years later after working half the year, we moved to the beach with our then 5 year old daughter after a life changing stroke of luck. After 18 months of fun at the beach, the 2008 crash made us realize we needed jobs. We took crappy jobs in 2009 to start, slashed expenses to the bone and lived on half our income. We'll retire in early 2020. I'll be 50, so not early by MMM standards, but early by regular standards.
Sometimes I feel that I've been doing it i bit wrong. I am 45 and have always worked. Apart from a one time 3-month sabbatical in our late 30-ies. We obviously save it almost all up to work shorter at the end of our careers.
We have been on numerous hiking trips when young, but always limited to vacation days. I think I used to have more energy for such trips when I was younger than I have now. But maybe it is just long time working that makes everything seem a bit more hassle nowadays.
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There are financial risks with FIRE, but it's interesting how nobody makes the comparison to the average worker who's going to keep at it until traditional retirement age. A lot of bad scenarios people point out would be worse if you were relying on a job instead of passive income. How do people financially survive a serious illness like cancer if they have a job and an average amount of savings?
I come back to this over and over again when I see these absurd criticisms of FIRE, because it's not like the regular folks are more financially secure.
Show me all of these vast numbers of regular people retiring at 65+ who are in better shape financially than a 27 year old with 200K in savings who has all the time and flexibility in the world to adapt and pivot as needed.
These criticisms are beyond ridiculous because they presuppose that retiring early is a risk but that retiring at 65+ isn't. Meanwhile, the exact same risks exist for every single retiree out there.
What's completely insane is that most regular retirees save LESS than FIREes, they pay infinitely more in fees and tend to purchase expensive annuities, they don't actually have a carefully planned budget for emergencies, and they have much less flexibility to keep generating income than someone much younger.
That we're somehow supposed to be at more risk because we save aggressively and plan more carefully is the most ass-backwards notion out there.
I'm sorry, but a 27 year old with 200K who experiments with CoastFI because they have enough FU money to manage the risk, but can easily go back to work at 28, and still retire very early, is NOT a cautionary tale.
Becoming a doctor is a billion times more financially risky than what our 27 year old did and our society lauds becoming a doctor as a sure financial move.
Do you know how many seniors don't even have 200K saved???
On the day that we have people retiring at 65+ with huge nest eggs, solid budgets and plans, lower investing fees, and less risk than the FIRE community, THEN they can start coming at us with how we're taking more risks than the regular folks are.
Until then, it's useless to be comparing us to the debt-addled, financially illiterate masses whose retirement plans consist of "*shrug* I don't really know, my advisor at the bank keeps changing"
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*waves*
I'll be pulling the plug from work this summer, with a portfolio of only $400k and currently no side hustles........maybe y'all will see me in the next version of this article ;)
In all seriousness though, @Malkynn is spot on. At 25-40 years old you can reinvent yourself 10 times over and pick up a second or third career if things don't go as planned. I doubt you will look back on your time off and say "damn, I wish I just kept working."
If your expenses are low enough, even a minimum wage job 2-3 days a week can take a 5-7% WR down to 3-4%.
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Star, social work.
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I'm highly disturbed about the Suze Orman idea that 5 million is a good retirement number. What kind of an alternate universe is she living in?
The kind where she owns an island.
I think she is irrelevant to discussion of retirement topics for normal people b/c she quotes $5M as a minimum number and a number that most people will never approach. Or she needs to define which tax bracket she is speaking to. I think operating on the median American family income would blow her mind.
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Star, social work.
Hey - thanks for what you do! You deserve that kind of pay for sure.
Liberal Arts (which I also find incredibly valuable) definitely pays a lot less for online courses (between 1-3k in my experience) so I was super curious.
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It just depends on the college. This college pays poorly if you teach in person but online classes have a different funding source.
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On the day that we have people retiring at 65+ with huge nest eggs, solid budgets and plans, lower investing fees, and less risk than the FIRE community, THEN they can start coming at us with how we're taking more risks than the regular folks are.
Until then, it's useless to be comparing us to the debt-addled, financially illiterate masses whose retirement plans consist of "*shrug* I don't really know, my advisor at the bank keeps changing"
Preach it Malkynn!
Most of our friends are 50-70 yo current or former professionals, often dual income, all living anti-Mustachian upper-middle class lives in the US. Half of these friends are comfortable financially and are retired or will retire in within 5-10 years with hundreds of thousands if not millions invested somehow plus paid off homes.
Unfortunately, the other half has literally zero or even negative net worth, even when including their home. Despite fancy, often underwater homes, they are half a paycheck from disaster. Their only hope is to w*rk as long as possible so that social security is enough to cover their expenses and mortgage and car loan. I'm guessing Social security will cover only 50-70% of their current non-Mustachian spending. Why do I know so much about others' personal finances? Well, they often COMPLAIN to us about how tough it is to make a living despite having household incomes twice or even four times the average locally!
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Malkynn for president:)
Do you know how many seniors don't even have 200K saved???
What's worse, those seniors do not have the opportunity to slide easily back into the working world - even if they were physically fit to do so.
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Malkynn for president:)
...of what???!!!!
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As a counterpoint to the cautionary tales that started this thread, I offer my own retirement story. I retired with 25x my spending, and within six months a new job found me and offered me a 35% raise to work part time, and now I'm earning money that I truly don't need.
Life got in the way all right, in the exact opposite way. Life decided to throw extra unplanned money at me after I retired.