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They became millionaires and retired at 31. They think you can do the same


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6 minutes ago, Riedquat said:

Retiring at 31 may be hell to many but I would guess that the same total work (and income) achieved by working much longer but part time would be good for many.

Lots of variations on the theme and some HPC'ers have done similar.  I've heard of Lean FIRE (very limited discretionary spending), Fat FIRE (lots of opportunities to try things that cost in FIRE), Coast FIRE (your part time example) and Barista FIRE (work in a lower paid but less stressful / less bullsh*t environment allowing freedom for other things).

I think I just did good old vanilla FIRE which is enough to never work again which means work (paid or otherwise) is 100% optional. 

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17 minutes ago, wish I could afford one said:

I've carried out a lot of risk analysis in my time both for work/job and for FIRE.  People stopping spending everything they earn has never featured in that analysis.  I'd predict I have a better chance of winning the lotto (and I don't buy tickets) than I do of my FIRE failing because everybody decided to pursue FIRE.  Other black swan events, yes, but everyone pursuing very early retirement, no.

FIRE for me is not about everyone doing it as we all make our life choices and have to live with them.  It's about me trying it and then along the way I've blogged about it and written a book not to tell everybody to do it but just to show people what other options they have vs what's rammed down our necks daily in our consumerist world.

That assumes that it's within reach for most people, which I don't believe since it requires a certain level of education, experience and life circumstances.

On the flip side, if everybody decided that consumerism was no longer their raison d'etre, then it's likely that a large percentage of the population would be happy to work only for the essentials and could enjoy the benefits of a lifestyle that has more meaning than just consuming/owning a big house and a nice car etc.

This seems unlikely in the developed economies for the simple reason that the cost of living is elevated just enough to require them to "work for a living" and ensure that it's almost impossible to accumulate enough wealth to break free of the system - i.e. live rent/mortgage free and have minimal energy/transportation costs - aside from a lucky few.

It seems almost a property of the mass indoctrination into consumerism that is mostly responsible for maintaining the status quo - including keeping the cost of housing so high that it really excludes FIRE as an option for more than just a determined few.

Edited by Pindar
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36 minutes ago, tomandlu said:

Nice - however, the notion that everyone could do this is surely wrong? In theory, yes, you can delay spending, but in practice the world economy would collapse if everyone over 30 retired with a suitable nest egg, surely? The process of saving all that dosh would collapse one end, while the demographics would collapse the other.

Well, yes and no.  I don't think that everyone could FIRE in quite the way its presented here, with a 21st Western century lifestyle.

But think how VASTLY superior productivity is today with all the technology we have compared to say, the 1950s.  We could easily afford to provide everyone with a 1950s lifestyle indefinitely and everyone working to age 45 (say) instead of 65 if we wanted to.

As others have said though, in practice people don't seem to want that.  They want the cars, the gadgets, the holidays, and yes the tat - and they seem resigned to work to age 70+ to pay for it all.

The other key point is house prices of course, and the fact that if everyone retired at age 40 they would be much lower because there wouldn't be the money to pay the huge mortgages that currently exist.

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1 minute ago, Pindar said:

That assumes that it's within reach for most people, which I don't believe since it requires a certain level of education, experience and life circumstances.

On the flip side, if everybody decided that consumerism was no longer their raison d'etre, then it's likely that a large percentage of the population would be happy to work only for the essentials and could enjoy the benefits of a lifestyle that has more meaning than just consuming/owning a big house and a nice car etc.

This seems unlikely in the developed economies for the simple reason that the cost of living is elevated just enough to require them to "work for a living" and ensure that's it's almost impossible to accumulate enough wealth to break free of the system - i.e. live rent/mortgage free and have minimal energy/transportation costs - aside from a lucky few.

It seems almost a property of the mass indoctrination into consumerism that is mostly responsible for maintaining the status quo - including keeping the cost of housing so high that it really excludes FIRE as an option for more than just a determined few.

Of course it's not possible for everybody but I think it's possible for far more people than know about it.  I also think that some people act like victims and self sabotage themselves further reducing the group who will FIRE.  I could have so easy said it's not possible in 2007.

Then for those it isn't it's still a valid lifestyle choice IMHO.  Somebody who maybe won't FIRE but who followed the principles and say then found themselves with £10k in savings rather than -£10k is surely still better off.  Ok GDP isn't better off but as an individual they are and that's what's important them.  So the FIRE principles are still valid even if people don't do the RE bit.

I agree with you that the FIRE crowd will for the foreseeable future be nothing more than a minority but I'm not sure it's the 'cost of livings' fault.  That's a bit victim mode for me and it's putting the blame on something else rather than yourself.  House prices is a nice example.  Rather than how much house do I need and where/how can I get it being the question most people say how much house can I afford.  It's one of the reasons we have the house price problem we do.

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22 minutes ago, Riedquat said:

Retiring at 31 may be hell to many but I would guess that the same total work (and income) achieved by working much longer but part time would be good for many.

Yes, not all work is quality work, not all work pays quality money....not all quality work pays  money......time is money, how do people want to spend their time working, doing what...who owns their time?;)

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6 minutes ago, scottbeard said:

Well, yes and no.  I don't think that everyone could FIRE in quite the way its presented here, with a 21st Western century lifestyle.

But think how VASTLY superior productivity is today with all the technology we have compared to say, the 1950s.  We could easily afford to provide everyone with a 1950s lifestyle indefinitely and everyone working to age 45 (say) instead of 65 if we wanted to.

As others have said though, in practice people don't seem to want that.  They want the cars, the gadgets, the holidays, and yes the tat - and they seem resigned to work to age 70+ to pay for it all.

The other key point is house prices of course, and the fact that if everyone retired at age 40 they would be much lower because there wouldn't be the money to pay the huge mortgages that currently exist.

Agree with you and that productivity is available to all to varying degrees.  As you say most just choose not to grab it.  We live in a pseudo capitalist society and within that I see two types of capital - Human Capital and Financial Capital.  In a world with too many people than are need to provide for the world all the productivity gains are captured by the Financial Capital.  Our job if we want FIRE is to convert Human Capital into Financial Capital as fast as possible.

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4 minutes ago, winkie said:

Yes, not all work is quality work, not all work pays quality money....not all quality work pays  money......time is money, how do people want to spend their time working, doing what...who owns their time?;)

I call that a job.  For me work is something that brings meaning or purpose.  I'm still yet to find it but now have the financial backing to go looking for it.  The big benefit of FIRE.

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49 minutes ago, winkie said:

Agree, that is why we all have a part to play, and thankfully we don't all want the same things.....retiring at 31 would be like hell to many, so many have said the day they give up working is the day they die.;)

No. It's the day you start living.

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34 minutes ago, scottbeard said:

As others have said though, in practice people don't seem to want that.  They want the cars, the gadgets, the holidays, and yes the tat - and they seem resigned to work to age 70+ to pay for it all.

Easy to chuck the accusation around that people are keeping themselves chained to their desks with spending on luxuries, not sure the numbers actually stack up though. Most people need a car to get to work - they might be able to buy a cheaper one rather than an expensive one but it is a cost of doing business. Commute by train or bus, pay for that too. Holidays, to be honest I can't really comment as I have never tried to make a 2 week fly and flop holiday happen for a family. Maybe a couple of k? Okay, an expensive luxury, but life-changingly so?

I suspect that the thing keeping people chained to their desks is the big ticket items - buy/rent a house, save for a pension, pay council tax+utilities+groceries+basic clothing out of current income. Multiply all of that up if you dare to behave like every other living creature and reproduce.

Edited by Dorkins
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Car/train/bus/walk to work - yep I had to do that although in FIRE that's a cost that goes away

Holidays - yep had some of those.  A holiday could be camping locally for very little money through to 2 weeks in the Burj Dubai hotel.

Buy/rent a house - yep had to do that.  How much home brings value to you.  I know I lived in a far smaller home than all of my colleagues and they struggled to understand what was going on.  'Tight' was the word they used...

Save for a pension - that's not a cost, that's a way to transition human capital to financial capital.  Did plenty of this.

Pay council tax - yep did that.  Cost is partly linked to how much home brings you value.

Utilities - yep did that.  Again how much do you want to pay.  Change providers regularly, be thoughtful with what energy you use...

Groceries - yep did that.  Now largely a vegan diet, addicted to peppermint tea vs alcohol and love a yellow sticker.

Basic clothing - admit haven't done much of that.  My previous consumerist life left me with plenty of clothing.

I agree that most of them are essential but the amount spent on each category can vary widely...

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1 hour ago, wish I could afford one said:

Basic clothing - admit haven't done much of that.  My previous consumerist life left me with plenty of clothing.

 

Never been a big consumptionist....far too much waste from consumerists/consumptionists  for many people to want for anything.....hand-me-downs for little or nothing v things not as good but sold as better for a quite a lot?;)

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2 hours ago, sexton said:

No. It's the day you start living.

Agree, as long as you feel have sufficient to live on.....some have always had little, they have learned to live very well on little....what they haven't got in money they have got in love.....and they know how to use their time productively.;)

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24 minutes ago, PeanutButter said:

I feel there's a decent amount of overlap with minimalism and FIRE. 

I think the same thing. I've watched more "Tiny House" videos on yt than I care to mention and yes, for an average person who can live like that it's a viable option. There's also a story I read some time ago about a man who moved his life into  camper van and stocked up on enough non perishable consumables to last a lifetime. He then only really needed enough money to feed himself and he calculated he could do that quite comfortably.

If you check out the range and quality of some of the dehydrated food now available on "survivalist" sites, it's technically feasible for somebody to withdraw from paid employment or the requirement for an income on a lot less than a million. It all depends on the living conditions you're prepared to tolerate to achieve it.

Edited by Pindar
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32 minutes ago, PeanutButter said:

I feel there's a decent amount of overlap with minimalism and FIRE. 

It's not just minimalism - it's second order logic and numeracy - opportunity costs, inflation, physical depreciation, tax efficiency.

Your average consumerist doesn't understand the most basic elements, and will attack you if challenged.

Edited by Si1
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26 minutes ago, Si1 said:

It's not just minimalism - it's second order logic and numeracy - opportunity costs, inflation, physical depreciation, tax efficiency.

Your average consumerist doesn't understand the most basic elements, and will attack you if challenged.

As they do over many things :) 

I must admit I like the concept of dropping out of the capitalist lifestyle very much, particularly if it flummoxes committed consumers.

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53 minutes ago, PeanutButter said:

I feel there's a decent amount of overlap with minimalism and FIRE. 

A lot of it is down to WANTS and NEEDS....ego, self,..... impressing others, group collective thinking plays a large part......nobody can sell anything to someone that doesn't want or need it.....most stuff others try to sell to others are not that necessary or important in the big scheme of things......some fall for it, some believe in it, some continue buying into it. ;)

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6 hours ago, wish I could afford one said:

From a FIRE perspective kids are a cost that needs to be included in the numbers but at the same time FIRE gives so much more time to spend with kids.

I FIRE'd with £1.3M but I have planned on work being 100% optional.  Also need to eventually buy a home to live in with some of that.  In recent times that's grown to £1.4M and is currently spinning off £40k in dividends/interest.  Some of that is within a SIPP so not accessible for a few years yet.

100%.

We could probably pull £2.5-3m together between the house, savings and pension funds.

But then the kids cost at least £40k a year to send to school - perhaps I can save that if Mr Corbyn wins!

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16 minutes ago, Mikhail Liebenstein said:

100%.

We could probably pull £2.5-3m together between the house, savings and pension funds.

But then the kids cost at least £40k a year to send to school - perhaps I can save that if Mr Corbyn wins!

That cost is of course a choice.  It's also important to consider if planning for FIRE that you don't have that cost forever.  Some day they will leave school and someday they will leave the nest.

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6 hours ago, Pindar said:

I think £500k is a realistic figure for a singleton with no children. The question is really how attainable is it for somebody in the UK to save thousands of pounds per month?

It's there rate of investment return is far more important, I have managed to FIRE using www.fundsmith.co.uk, capital doubles in less than 4 years & doubles again.

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1 hour ago, PeanutButter said:

As they do over many things :) 

I must admit I like the concept of dropping out of the capitalist lifestyle very much, particularly if it flummoxes committed consumers.

It's actually quite liberating.  If you also reduce your possessions at the same time then you also take a very different view on life. All of a sudden you own your stuff rather than your stuff owning you.  For example, it then makes relocation either within the UK or elsewhere trivial.  Another example, you need far less home as you don't need to store all your stuff.

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39 minutes ago, wish I could afford one said:

It's actually quite liberating.  If you also reduce your possessions at the same time then you also take a very different view on life. All of a sudden you own your stuff rather than your stuff owning you.  For example, it then makes relocation either within the UK or elsewhere trivial.  Another example, you need far less home as you don't need to store all your stuff.

Liberating is a good word......I wonder how much stuff is held in storage that will never get used? I wonder how much some pay monthly that adds up over time to keep stuff in storage? I wonder if some know what they are  holding  in storage, know what they are actually paying for? I wonder if people ever get to see again or will ever use what they are holding in storage?.........could they sell it, then buy it all again when they need it??

 

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15 minutes ago, winkie said:

Liberating is a good word......I wonder how much stuff is held in storage that will never get used? I wonder how much some pay monthly that adds up over time to keep stuff in storage? I wonder if some know what they are  holding  in storage, know what they are actually paying for? I wonder if people ever get to see again or will ever use what they are holding in storage?.........could they sell it, then buy it all again when they need it??

 

Agreed.  It's actually quite amazing how little somebody actually needs in the way of stuff to live a good life.

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To become FIRE you must have to earn a huge salary. I am very frugal and earn a low salary because I enjoy my job. I imagine wanted to retire early is due to hating your job boring/stressful etc. If you have a creative job, relaxed later back working environment, friends with colleges etc it’s nice. It also makes free time more valuable as I feel I’ve earned it. There are losing rewarding jobs helping people, working with animals, being creative etc....

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