Nice FIRE Net Worth Blog 2005-2015

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Nathan Drake
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Re: Nice FIRE Net Worth Blog 2005-2015

Post by Nathan Drake »

Marseille07 wrote: Sat Jul 31, 2021 12:34 pm
anon_investor wrote: Sat Jul 31, 2021 12:25 pm That is the question, does:

60x Lean FIRE = 33x BH FIRE

OR

60x Lean FIRE < 33x BH FIRE

I think that makes a big difference.
I don't think so. Say 40K = Lean and 80K = Regular, we see that we're talking about 60x vs 66x essentially.

Conceptually though, LeanFIRE doesn't make sense so multiplying 60x also doesn't make sense (why 60x anyway, is another unanswered question).
I wouldn’t say my true FI number with a safety margin is 2x LeanFI though

It’s probably closer to 25-50% higher.

But the future spending could dramatically change over your life, it’s not some static thing. Life throws you curveballs
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fortunefavored
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Re: Nice FIRE Net Worth Blog 2005-2015

Post by fortunefavored »

Normchad wrote: Sat Jul 31, 2021 10:00 am If I tried to forecast at 35 what my life would be like at 50, I would have been very wrong. And that’s only looking 15 tpyears into the future. It gets more out of whack the further out in time you go…..

I’m sure some of them will be successful. But I fear most of them won’t.
Interestingly, as I approach 50, my life is pretty much exactly what I expected at 35. But I am rigorous, plan oriented person who always executes on the plan. It is a defining character trait. :)

I think one common Bogleheads (not you specifically, but generally) misunderstanding is how any people hate working and what ends they are willing to go to to avoid it. Most Bogleheads seem to enjoy and/or tolerate working as a fair exchange of money for time.

If you move that principle up, many FIRE people will figure out a way to be "successful" despite some bumps along the way. I have loathed working from the very first day I punched a time clock for minimum wage right up to making $500K+/year. Some people are just not cut out for that world. But it is the only one on offer when/until you can make the numbers work to your satisfaction.
Marseille07
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Re: Nice FIRE Net Worth Blog 2005-2015

Post by Marseille07 »

Nathan Drake wrote: Sat Jul 31, 2021 12:39 pm I wouldn’t say my true FI number with a safety margin is 2x LeanFI though

It’s probably closer to 25-50% higher.

But the future spending could dramatically change over your life, it’s not some static thing. Life throws you curveballs
Yes, it's actually extremely important to keep the WR low so your portfolio keeps growing. I know lots of posters quickly jump on you to say you're trying to take $ to the grave, but this is absurd - if life throws you curveballs, you might just need the money you have piled up.
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Re: Nice FIRE Net Worth Blog 2005-2015

Post by 59Gibson »

anon_investor wrote: Sat Jul 31, 2021 12:25 pm
Marseille07 wrote: Sat Jul 31, 2021 12:21 pm
anon_investor wrote: Sat Jul 31, 2021 12:17 pm
Marseille07 wrote: Sat Jul 31, 2021 12:14 pm
anon_investor wrote: Sat Jul 31, 2021 12:08 pm How does 60x lean FIRE compared to expenses to meet current lifestyle? I am aiming for 33x expenses to maintain current life style (which is 20% higher than my current expenses to account for increased medical insurance costs).
I don't see the point of calculating 60x LeanFIRE. Just include enough discretionary spending, and 33x that. It's nonsensical to NOT include discretionary, call it Lean and 60x it.
That is what I am asking Nathan Drake. I am not sure what the spread is between lean FIRE and BH FIRE.
It's possible the resulting numbers might be similar, this is more about the thinking process we want to get right.
That is the question, does:

60x Lean FIRE = 33x BH FIRE

OR

60x Lean FIRE < 33x BH FIRE

I think that makes a big difference.
It's difficult to assess what Lean truly is, probably diff from person to person. I see/hear of people online living in tents, vans, school buses, on other people's sofas. I suppose if one can be content on very very little- FI can be obtained fairly quickly. I simply plan on an average of what I spent for the last few years including a good amount of discretionary. What else can I go by? if I don't have plans to increase or decrease spending dramatically. BHers will say ..but but what if this happens and this happens and this doesn't happen. I think it's smart to stress test w/ increased spending and or poor mkt performance but there is a limit to the usefulness, otherwise it just becomes a race to the bottom planning for Armageddon. People continuing to trade huge chunks of their time for money they don't need for "just in case".
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illumination
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Re: Nice FIRE Net Worth Blog 2005-2015

Post by illumination »

I honestly hope these people do well, but I really think FIRE type strategies are not a positive development. They are overly optimistic about what the future looks like (probably because we've had an insane bull market for the last 12 years)

I just know people that had WAY more than the FIRE types usually tout when they are convinced they have enough (with say a large windfall like selling a business) retired early, and they still came up short. Where I feel bad is its VERY difficult to jump back in the workforce with a long absence and make the sort of salary you did before (or even get hired at all in a much lower role) So if you miscalculate and life throws you some curve balls, you're really in a world of hurt if you're like 55 and been out of the workforce for 10 years.
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Re: Nice FIRE Net Worth Blog 2005-2015

Post by Nathan Drake »

illumination wrote: Sat Jul 31, 2021 12:57 pm I honestly hope these people do well, but I really think FIRE type strategies are not a positive development. They are overly optimistic about what the future looks like (probably because we've had an insane bull market for the last 12 years)

I just know people that had WAY more than the FIRE types usually tout when they are convinced they have enough (with say a large windfall like selling a business) retired early, and they still came up short. Where I feel bad is its VERY difficult to jump back in the workforce with a long absence and make the sort of salary you did before (or even get hired at all in a much lower role) So if you miscalculate and life throws you some curve balls, you're really in a world of hurt if you're like 55 and been out of the workforce for 10 years.
I would say they are a positive development. The only way you get to FI is by having a significant savings rate, something completely lacking in our consumer driven economy.

Regardless of how lofty the expectations are, the long-term harm is mild in comparison to the alternative where you're living paycheck to paycheck with zero safety net.

The people you mention (large windfalls) isn't surprising. If you don't know the mechanics of how to get to FI through slow and steady progress, then having a lottory ticket show up in your lap suddenly won't allow you to come to grasps with the concept any better. The person that managed to slowly accumulate 1M with $30K living expenses is better positioned to know the risks than someone who got a $5M windfall and was never used to managing much of a budget to begin with.
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Marseille07
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Re: Nice FIRE Net Worth Blog 2005-2015

Post by Marseille07 »

Nathan Drake wrote: Sat Jul 31, 2021 1:03 pm The people you mention (large windfalls) isn't surprising. If you don't know the mechanics of how to get to FI through slow and steady progress, then having a lottory ticket show up in your lap suddenly won't allow you to come to grasps with the concept any better. The person that managed to slowly accumulate 1M with $30K living expenses is better positioned to know the risks than someone who got a $5M windfall and was never used to managing much of a budget to begin with.
My saving rate is decently high, but I didn't read books or anything. Did you read JL Collins or some books along those lines?
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Re: Nice FIRE Net Worth Blog 2005-2015

Post by Normchad »

fortunefavored wrote: Sat Jul 31, 2021 12:41 pm
Normchad wrote: Sat Jul 31, 2021 10:00 am If I tried to forecast at 35 what my life would be like at 50, I would have been very wrong. And that’s only looking 15 tpyears into the future. It gets more out of whack the further out in time you go…..

I’m sure some of them will be successful. But I fear most of them won’t.
Interestingly, as I approach 50, my life is pretty much exactly what I expected at 35. But I am rigorous, plan oriented person who always executes on the plan. It is a defining character trait. :)

I think one common Bogleheads (not you specifically, but generally) misunderstanding is how any people hate working and what ends they are willing to go to to avoid it. Most Bogleheads seem to enjoy and/or tolerate working as a fair exchange of money for time.

If you move that principle up, many FIRE people will figure out a way to be "successful" despite some bumps along the way. I have loathed working from the very first day I punched a time clock for minimum wage right up to making $500K+/year. Some people are just not cut out for that world. But it is the only one on offer when/until you can make the numbers work to your satisfaction.
You make a lot of great points in your post. For me, my life at 50 is orders of magnitude more successful than I ever imagined it would be.

I don’t hate work the way that you do. But I don’t love it either. I have no problem with the idea of “doing nothing”. But I don’t hate it. Im certain now that I am FI, but I continue to work. And I honestly don’t understand why I am doing it….

And you are right, a lot of people like to work, and others just loathe it. I think this board skews towards very successful people, and I think it’s hard to be that successful if you hate working. So there is probably a strong bias here to people that like/love working, or can’t imagine not working. (See the thread where a fellow doesn’t want to go back to the office, and there is a bonus coming in 4 months that is insignificant to his projected 1.5% WR. Most posters tell him to go get that bonus….).

My uncle worked his entire career for the phone company. I remember him being the most unpleasant, miserable, SOB on the earth. Always grumpy and pessimistic. He eventually retired, and I noticed a few years later how much he changed, in a really positive way. That was a formative experience for me, to realize that all those years, I wasn’t seeing the real person. I was seeing the effects of decades of toiling at a job at he hated.

In this blog, in some ways he failed. He failed to understand what life would throw at him, and he failed to accurately predict his expenses. To me, those are failures. On the other hand though, he spent many years away from work, at a young age, which is what he wanted. It might be that overall, his life still turned out better for it, even though it didn’t go as planned.
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Re: Nice FIRE Net Worth Blog 2005-2015

Post by OohLaLa »

I think the ways to avoid what blindsided the blogger is to:
-Never FIRE when it is only possible with joint finances. This eliminates one type of risk entirely, albeit it will probably delay the plans somewhat. You should be able to RE as a single person, especially if you are dating or married to a person that pulls all their self-worth from an assessment of what random people (neighbors, acquaintances, work colleagues) potentially think of them (basically, keeping up with the Joneses). FIRE, especially Lean, is completely incompatible with the mentality of people like his ex.

-Avoid LeanFIRE, unless you are ready to relocate (potentially multiple times) to whatever state/ country allows for significantly lower costs. The main danger with LeanFIRE is that it leaves almost no room for error. There is no buffer there in case anything goes significantly wrong, as you are already living at a frugal level. With a looser type of FIRE, you can always cut some expenses when things get rough, and still keep your head above water.

-Consider any medical procedures with close scrutiny, researching needs just as you would with other expenses. What caught my attention in the blogger's story was that he was convinced to get MRI scans every handful of months, to re-assess his situation. I recall some comments, from a person with the same disease as him, that this was completely exaggerated and seemed like him getting fleeced. If he has to dish out a few K, needlessly, every few months, that is a heavy burden on his finances.
----------

It's always interesting to read Bogleheads posts on the concept of FIRE because this community leans towards very different assumptions.

One of them is that people who RE have a risk of wandering aimlessly and being depressed due to lack of purpose. What I've seen in most FIRE circles is people who have a lot of interests and planned projects lined up (if they are not already engaged in them). We should be warning every single person nearing retirement about this, not just FIRE folks. If you don't know what to do with yourself once you punch out at work, then you are at risk of developing depression once you lose that forced framework.

Another is the clash between many FIREes' "anti-consumerism", as well as "anti-corporatism", and many people's relative normalization and acceptance of these. Many FIREes are against consumption for the sole intent of "keeping up" or to assuage some sense of inadequacy. As for the corporatist side, what I've usually seen is that FIREes do not associate happiness with high-end office jobs, as in their personal cases they do not provide them the sense of purpose that so many talk about. There is a sense of irony that the ones who can FIRE very early, and have a higher chance of long-term success, are precisely people with high-end jobs. For themselves, they see these as necessary evils and an effective means of escape. There are some vocal ones who go off on extreme rants against the whole Capitalist system but I did not see many of those.

There are all sorts of folks on Bogleheads.org, but it's easy to see that there is a tilt. Successful careers in prestigious domains are lauded, to the point where preparations are made for high-end education of their children in HCOL areas, in order to increase their odds of attaining successful careers for them as well. Approach to personal finances and investment are usually much more safe, with more cushion before even entertaining the idea of retirement. Often, BHs will suggest for people to "work a few more years". I've noticed that BHs can be frugal (no extreme purchases like Lambos), but they tend to have high expenses: favoring costlier areas with better services, allowing for luxury travel etc.

I'm basing myself on posts that I've seen on both sides, but it's easy to see that BHs and FIREes face a clash of ideas. It's interesting to look at it from both PoVs.
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Re: Nice FIRE Net Worth Blog 2005-2015

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MoonOrb wrote: Sat Jul 31, 2021 11:45 am
White Coat Investor wrote: Fri Jul 30, 2021 8:58 pm I think in coming years the downsides of very early retirement/not working may become more evident. I suspect we underestimate them currently.
+1

I also feel like we don't have a lot of information about this and it will be interesting to see more information about this emerge in coming years.

My view is there are significant differences among these broad "FIRE" scenarios:

1. Retiring at, say, age 55+ (or so) but before more "traditional" (?) retirement ages like 65.
2. Achieving financial independence at a very early age and making dramatic changes to work, but still continuing to work--changing careers, going part-time, moving to consulting that is done off/on, opening one's own business, etc.
3. Achieving financial independence at an early age, say 35-50, and just not working at all after that.

It's situations that most resemble that latter one that I would view as maybe not as desirable as they seem. Situations that more resemble (1) and (2) I can imagine being really fulfilling for the vast majority of people. I can see lots of people really struggling in one way or another with situations like (3).
That's exactly my concern. I'm 46. We've been FI now for at least 3 or 4 years, all while earning more each year than we ever earned prior to being FI. We spend a little more. We give a lot more. We'll leave more for our kids, our favorite charities and probably the tax man.

Why are we still working? Not 100% sure, but my wife basically just went back to work (part-time for our company) 4 or 5 years ago after 12 years of being a stay at home mom. I don't think it's the money we're still working for since we've given away in the last few years as much as we needed to retire in the first place.

There's something about work though that matters in our lives. I'm not sure I understand it completely, but I think the story of this very honest blogger at least partially explains it well.
But peers — people my age that are still working that I’ve been friends with for decades. That situation is another matter entirely. I find this year that I am losing a sense of intimacy with some of them. They work a lot — I do not. We are starting to lose some common interests and activities that helped to create our friendships in the first place. Some of the threads that bound us together for 20 plus years were perhaps unravelling.

Not going to lie. These developments bothered me. The first couple of years it didn’t seem to matter, the differences in our lives. Here in the third year, they do. I speculate that initially they viewed my change of lifestyle as temporary, but after a while, it stuck — they realized that I would not be working again and I am therefore, ahem, officially and forever different. (This is no temporary thing.) I feel sure that some of them also felt that they were, you know, continuing to move and shake and improve their lives whereas, from their perspective, I’d sort of given up — my life appeared to be a static thing, unchanging, and therefore pretty fucking boring.

I should point out that this (the growing feeling of disconnection) wasn’t true of all of my friends. With some of them I felt as close as ever. For example with my three best friends there have been very few changes to our relationship dynamics. They are the kind of people that don’t care whether or not you have recently updated your kitchen, if you catch my drift. But virtually everyone else — my more casual, normal-type friends — these are the people that I have more trouble relating to as time passes.

At any rate, I didn’t realize that this happened to so many people: Once they have been established in their careers for a decade or more, they 1) feel secure in their job 2) have accumulated some money and 3) feel compelled to start spending. And once everyone in your peer group is spending more money — well, then everyone is looking over their shoulder at everyone else’s spending and this is really how the whole Keeping Up game begins. This tendency overtook even people I would not have suspected to be vulnerable to the treadmill — one of my old friends from college for example, who grew up poor and didn’t spend much back in the day, now has a summer home in New Hampshire and a 4000 sq foot McMansion and all the trimmings. There is no going back. It’s strange to watch your own friends change their spending and living patterns right in front of your eyes as you get older. It fills in some of the blanks that you had when you were younger, looking up at the older generation, wondering how people and families turned into what they were.

Also throughout this year, my partner and I perhaps felt less close to one another. She was restless and according to my journal entries for the year I suspected she was growing depressed but trying to hide it from me. Late in the year, I confronted her on my observations and she didn’t deny it — she was having trouble with the new lifestyle. She also indicated that maybe she wanted to go back to work. This year we are mostly doing well, particularly in the first half. But there is a gradual and ominous shift to something else, something not so great, and we can both feel it.
This, more than anything else, explains why I am still working. Add in that I feel obligated to support my employees, I feel a need to make good on the time I spent learning medicine, I want to contribute something to the world, and I like being able to give a lot to charity and spend on whatever I like without even thinking about it and that's pretty much all of it.
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Re: Nice FIRE Net Worth Blog 2005-2015

Post by White Coat Investor »

RedDog wrote: Sat Jul 31, 2021 8:53 am
White Coat Investor wrote: Fri Jul 30, 2021 9:19 pm
frugalecon wrote: Fri Jul 30, 2021 9:06 pm
White Coat Investor wrote: Fri Jul 30, 2021 8:58 pm I think in coming years the downsides of very early retirement/not working may become more evident. I suspect we underestimate them currently.
Hey WCI, I don’t wear the white coat, but I still enjoy listening to your podcast from time to time, depending on the topic. To me it seems like you really have found a terrific balance of different activities in your life. A lot of play (some of a reasonably physically challenging kind, so there is true challenge), some activities that bring in money, and some that are really a vocation. (It seems like WCI falls into that category.) Your mix seems more appealing than traditional retirement.
Yea, I'm a little scared to drop all paid work, but not for financial reasons. It does make balance a struggle though.
Greater freedom requires greater self discipline. Truths are often ironic.
Lots of truth there. We all think we want freedom, but the truth is that a lot of us want more structure than freedom and are happier for it. I'd rather have a menu with three things on it than that monstrosity at The Cheesecake Factory.
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Re: Nice FIRE Net Worth Blog 2005-2015

Post by White Coat Investor »

Somethingwitty92912 wrote: Sat Jul 31, 2021 8:16 am
White Coat Investor wrote: Fri Jul 30, 2021 8:58 pm I think in coming years the downsides of very early retirement/not working may become more evident. I suspect we underestimate them currently.
Please elaborate?
See above.
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Re: Nice FIRE Net Worth Blog 2005-2015

Post by White Coat Investor »

Mr.BB wrote: Sat Jul 31, 2021 6:19 am
White Coat Investor wrote: Fri Jul 30, 2021 8:58 pm I think in coming years the downsides of very early retirement/not working may become more evident. I suspect we underestimate them currently.
+1
I think this is very true. I work with some very successful people who are in their 70's-90's. They work full and part time at their jobs, they love what they do, and are very successful and healthy (aside from the normal aging health issues).
So hard for so many of us to work on our own terms though. About 15 hours a week, 2-3 weeks a month is perfect for me I think. That means I can only do one of my two jobs though and I can't decide which to drop.
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Re: Nice FIRE Net Worth Blog 2005-2015

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EddyB wrote: Sat Jul 31, 2021 6:02 am
White Coat Investor wrote: Fri Jul 30, 2021 8:58 pm I think in coming years the downsides of very early retirement/not working may become more evident. I suspect we underestimate them currently.
On the other hand, I think lots of people have underestimated the downside of dying before they reach retirement, and I don’t see that changing. They can’t express their regret, though….

Given the uncertainties for any one person, I think the careful consideration I see on Boglheads is important, but there’s a point where it becomes something like fear, or paralysis.
Yes, probably so. Both on the financial and non-financial side. I'm pretty sure my dad regrets working as long as he did as his health problems started right as he was retiring and he has more money than he needs.
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Re: Nice FIRE Net Worth Blog 2005-2015

Post by illumination »

Nathan Drake wrote: Sat Jul 31, 2021 1:03 pm
illumination wrote: Sat Jul 31, 2021 12:57 pm I honestly hope these people do well, but I really think FIRE type strategies are not a positive development. They are overly optimistic about what the future looks like (probably because we've had an insane bull market for the last 12 years)

I just know people that had WAY more than the FIRE types usually tout when they are convinced they have enough (with say a large windfall like selling a business) retired early, and they still came up short. Where I feel bad is its VERY difficult to jump back in the workforce with a long absence and make the sort of salary you did before (or even get hired at all in a much lower role) So if you miscalculate and life throws you some curve balls, you're really in a world of hurt if you're like 55 and been out of the workforce for 10 years.
I would say they are a positive development. The only way you get to FI is by having a significant savings rate, something completely lacking in our consumer driven economy.

Regardless of how lofty the expectations are, the long-term harm is mild in comparison to the alternative where you're living paycheck to paycheck with zero safety net.

The people you mention (large windfalls) isn't surprising. If you don't know the mechanics of how to get to FI through slow and steady progress, then having a lottory ticket show up in your lap suddenly won't allow you to come to grasps with the concept any better. The person that managed to slowly accumulate 1M with $30K living expenses is better positioned to know the risks than someone who got a $5M windfall and was never used to managing much of a budget to begin with.
I DO think it's a positive for people to save for tomorrow and making smarter financial decisions. Too many people seem to live hand to mouth (obviously not everyone has a choice, but I see many that have options and YOLO) So hopefully that balances out.

The problem is, the significant savings rate where they live that way is for a short time period, and much of the "surplus" was created with the backdrop of an insane bull market that I don't believe is sustainable. The "hard" road is still in front of them. Also, the projections that are made just seem overly rosy. If say inflation picks up at even a historically small to moderate amount, it really is going to hit these people hard. A salary is a much better hedge against inflation.

I just know a lot of people that felt like they had retirement largely figured out, weren't insane spenders, and had the backdrop of a really great stock market and still came up short by getting out early. It sounds a lot like the person cited in this FIRE article. They aren't homeless or anything, but it's not what they planned.

We're never going to see hard data regarding what happens to people that embrace this lifestyle and much of it is a matter of opinion, but I have a feeling it only works out "well" for a small percent or those that really cashed out early with a big number.
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Re: Nice FIRE Net Worth Blog 2005-2015

Post by zaboomafoozarg »

climber2020 wrote: Sat Jul 31, 2021 8:47 amWhat are some suggestions to avoid a situation like the author's
1. Save way more than you think you need - over the years, my FIRE target has gone up from 25x to 100x expenses
2. Probably don't get married
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Re: Nice FIRE Net Worth Blog 2005-2015

Post by Nathan Drake »

Marseille07 wrote: Sat Jul 31, 2021 1:24 pm
Nathan Drake wrote: Sat Jul 31, 2021 1:03 pm The people you mention (large windfalls) isn't surprising. If you don't know the mechanics of how to get to FI through slow and steady progress, then having a lottory ticket show up in your lap suddenly won't allow you to come to grasps with the concept any better. The person that managed to slowly accumulate 1M with $30K living expenses is better positioned to know the risks than someone who got a $5M windfall and was never used to managing much of a budget to begin with.
My saving rate is decently high, but I didn't read books or anything. Did you read JL Collins or some books along those lines?
No books but the first thing I read was Mr Money Mustache’s shockingly simple Math to early retirement
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Re: Nice FIRE Net Worth Blog 2005-2015

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Nathan Drake wrote: Sat Jul 31, 2021 2:55 pm
Marseille07 wrote: Sat Jul 31, 2021 1:24 pm
Nathan Drake wrote: Sat Jul 31, 2021 1:03 pm The people you mention (large windfalls) isn't surprising. If you don't know the mechanics of how to get to FI through slow and steady progress, then having a lottory ticket show up in your lap suddenly won't allow you to come to grasps with the concept any better. The person that managed to slowly accumulate 1M with $30K living expenses is better positioned to know the risks than someone who got a $5M windfall and was never used to managing much of a budget to begin with.
My saving rate is decently high, but I didn't read books or anything. Did you read JL Collins or some books along those lines?
No books but the first thing I read was Mr Money Mustache’s shockingly simple Math to early retirement
Thanks. I need to check this out :beer
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Re: Nice FIRE Net Worth Blog 2005-2015

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zaboomafoozarg wrote: Sat Jul 31, 2021 1:56 pm
climber2020 wrote: Sat Jul 31, 2021 8:47 amWhat are some suggestions to avoid a situation like the author's
1. Save way more than you think you need - over the years, my FIRE target has gone up from 25x to 100x expenses
2. Probably don't get married
?

My FIRE target also went up, but it wasn't 100 X expenses. It was 25 X larger expenses! What are you reading that you think a 1% withdrawal rate is anything but massive overkill? If you're really that worried about some future market scenario, why not annuitize more or invest more in TIPS etc?
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Re: Nice FIRE Net Worth Blog 2005-2015

Post by reln »

White Coat Investor wrote: Fri Jul 30, 2021 8:58 pm I think in coming years the downsides of very early retirement/not working may become more evident. I suspect we underestimate them currently.
100% agree.
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Re: Nice FIRE Net Worth Blog 2005-2015

Post by reln »

White Coat Investor wrote: Sat Jul 31, 2021 3:05 pm
zaboomafoozarg wrote: Sat Jul 31, 2021 1:56 pm
climber2020 wrote: Sat Jul 31, 2021 8:47 amWhat are some suggestions to avoid a situation like the author's
1. Save way more than you think you need - over the years, my FIRE target has gone up from 25x to 100x expenses
2. Probably don't get married
?

My FIRE target also went up, but it wasn't 100 X expenses. It was 25 X larger expenses! What are you reading that you think a 1% withdrawal rate is anything but massive overkill? If you're really that worried about some future market scenario, why not annuitize more or invest more in TIPS etc?
Also consider non financial risks.
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Re: Nice FIRE Net Worth Blog 2005-2015

Post by Zeno »

zaboomafoozarg wrote: Sat Jul 31, 2021 1:56 pm
climber2020 wrote: Sat Jul 31, 2021 8:47 amWhat are some suggestions to avoid a situation like the author's
1. Save way more than you think you need - over the years, my FIRE target has gone up from 25x to 100x expenses
2. Probably don't get married
How much do you spend a year, and what is your age?

I’m 57 and at 47x which, thanks to this forum, I have concluded is wildly conservative

And I am married, which was the best decision of my life; it also was the best financial decision of my life

If I spent $100 a year, I could understand 100x, maybe. I think many folks here are around $80K, so that means your target might be $8M

Awaiting more details from you

I need to go back to Jacob/ERE to see what his X is
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Re: Nice FIRE Net Worth Blog 2005-2015

Post by Carousel »

Normchad wrote: Sat Jul 31, 2021 1:28 pm And you are right, a lot of people like to work, and others just loathe it. I think this board skews towards very successful people, and I think it’s hard to be that successful if you hate working. So there is probably a strong bias here to people that like/love working, or can’t imagine not working...
Agreed. Also, many well paying jobs have much better working conditions/more autonomy than lower paying jobs, so they are easier to entertain spending decades at.

Retire By Forty (blogger) has something interesting to say on how the FI personality (get ahead at work) is not the same as the RE personality, which he describes as a Lone Wolf mentality:

"Lone wolf mentality – To succeed at work, you need to be a team player. It’s not good to go against the grain at the office. However, I think the lone wolf mentality makes early retirement easier. You are self-sufficient and don’t depend on others to survive. A lone wolf doesn’t need acceptance from society. They can go it alone. Society expects us to work until 65. Your friends and family members won’t understand why you want to retire early. If you seek approval from other people, then early retirement probably isn’t for you."
https://retireby40.org/do-you-have-the- ... s-to-fire/

I think there is a lot of truth in this.
Last edited by Carousel on Tue Jan 11, 2022 8:52 am, edited 1 time in total.
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gobel
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Re: Nice FIRE Net Worth Blog 2005-2015

Post by gobel »

White Coat Investor wrote: Sat Jul 31, 2021 3:05 pm
zaboomafoozarg wrote: Sat Jul 31, 2021 1:56 pm
climber2020 wrote: Sat Jul 31, 2021 8:47 amWhat are some suggestions to avoid a situation like the author's
1. Save way more than you think you need - over the years, my FIRE target has gone up from 25x to 100x expenses
2. Probably don't get married
?

My FIRE target also went up, but it wasn't 100 X expenses. It was 25 X larger expenses! What are you reading that you think a 1% withdrawal rate is anything but massive overkill? If you're really that worried about some future market scenario, why not annuitize more or invest more in TIPS etc?
I think the point is that future expenses are unknowable, so any X is irrelevant. That's the problem with firecalc, etc. They may backtest and monte carlo return simulations to give people a warm and fuzzy, but don't fully estimate all possible life changes. E.g. divorce - 33%, health issue - 10%, new spouse - 20%, have to financially take care of elderly relative - 15%, longterm inflation - ??. Any of these would cause a spike or change in your required withdrawals.

btw it's interesting that this blogger might have known the solution the whole time, but didn't act on it: monetize his blog. He's an excellent writer and easy to read. Instead of ghosting his blog for 5 years, he could have satisfied his writing passion, shown his wife that he's still ambitious and had goals (imo that is partly what caused the relationship problem), brought in additional income, provided more travel opportunities/fun, etc.

Also, it seems like he didn't just have a financial awakening, but a complete life awakening. Before he split everything with his wife 50-50. His blogs hardly mentioned her half of the expenses or how the partnership provided benefits. Now he's done a complete 180 and with his new partner is signing up to being the main breadwinner and planning a future as a couple and single family unit. I guess this is probably much more to do with the failed relationship and health issue, than with the mathematics of his FIRE model.
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Re: Nice FIRE Net Worth Blog 2005-2015

Post by climber2020 »

zaboomafoozarg wrote: Sat Jul 31, 2021 1:56 pm
climber2020 wrote: Sat Jul 31, 2021 8:47 amWhat are some suggestions to avoid a situation like the author's
1. Save way more than you think you need - over the years, my FIRE target has gone up from 25x to 100x expenses
There's risk with this too. I don't want to work too long, get some random illness at age 55 while I'm still working full time, and die the following year having wasted all that time at the office when I could have been enjoying myself. There is a massive time difference between 25x and 100x.
zaboomafoozarg wrote: Sat Jul 31, 2021 1:56 pm 2. Probably don't get married
I agree this is a big unknown and perhaps the biggest potential complication for most people. I dated my spouse for the better part of a decade before tying the knot with the hopes of being as sure as possible that we have the same goals, but in the end there's always some risk.
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Re: Nice FIRE Net Worth Blog 2005-2015

Post by Marseille07 »

Poster geehardusvos was targeting for 1.8~2M before 40, 3.5% SWR and 85-90% in equities. This puts them at around 65K/year. I don't think it's a crazy idea, provided they can cut spending during the downturns.
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Re: Nice FIRE Net Worth Blog 2005-2015

Post by KlangFool »

Carousel wrote: Sat Jul 31, 2021 3:39 pm
Retire By Forty (blogger) has something interesting to say on how the FI personality (get ahead at work) is not the same as the RE personality, which he describes as a Lone Wolf mentality:

"Lone wolf mentality – To succeed at work, you need to be a team player. It’s not good to go against the grain at the office. However, I think the lone wolf mentality makes early retirement easier. You are self-sufficient and don’t depend on others to survive. A lone wolf doesn’t need acceptance from society. They can go it alone. Society expects us to work until 65. Your friends and family members won’t understand why you want to retire early. If you seek approval from other people, then early retirement probably isn’t for you."
https://retireby40.org/do-you-have-the- ... s-to-fire/

I think there is a lot of truth in this.

Finally, I have some friends & family who live on low incomes with anxiety/depression issues that are aggravated by standard work environments. The ordinary range of social interactions is hard for them, so the work/retirement tradeoff is different.
Carousel,

This is because the norm here is to save less than 5% of your gross income. What if your group/culture is to save 30+% of your gross income instead? Many of your friends and family are early retired or semi-retired?

My older brother and older sister early retired at 49 years old. They have enough friends and family that early retired or semi-retired to form their own tour group to travel.

You do not have to be a "Lone Wolf". You just have to find your own pack of wolves.

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Re: Nice FIRE Net Worth Blog 2005-2015

Post by yoga »

So for someone who spends 80k and wants to retire at 40, what would the early retirement skeptics consider a safe nest egg?
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Re: Nice FIRE Net Worth Blog 2005-2015

Post by Normchad »

yoga wrote: Sat Jul 31, 2021 4:33 pm So for someone who spends 80k and wants to retire at 40, what would the early retirement skeptics consider a safe nest egg?
I’d say $3M.
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Re: Nice FIRE Net Worth Blog 2005-2015

Post by Nathan Drake »

Carousel wrote: Sat Jul 31, 2021 3:39 pm
Normchad wrote: Sat Jul 31, 2021 1:28 pm And you are right, a lot of people like to work, and others just loathe it. I think this board skews towards very successful people, and I think it’s hard to be that successful if you hate working. So there is probably a strong bias here to people that like/love working, or can’t imagine not working...
Agreed. Also, many well paying jobs have much better working conditions/more autonomy than lower paying jobs, so they are easier to entertain spending decades at.
Not sure I particularly agree with this. "Better working conditions" as in, not physically intensive, sure.

But many high paying jobs come with a significant amount of stress, hours, and uncertainty of sustainability. Just with investing there's seldom a free lunch with things like this (significant upfront debt and years of schooling to achieve that income, very unfavorable work/life balance, etc).

What may be different is that if you have the temperament to put up with those aspects, or they in no way bother you, then sure you will continue to work.

I don't think it's any surprise that many in the FIRE movement tend to be the stereotypical STEM field worker.
20% VOO | 20% VXUS | 20% AVUV | 20% AVDV | 20% AVES
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Re: Nice FIRE Net Worth Blog 2005-2015

Post by yoga »

Normchad wrote: Sat Jul 31, 2021 4:35 pm
yoga wrote: Sat Jul 31, 2021 4:33 pm So for someone who spends 80k and wants to retire at 40, what would the early retirement skeptics consider a safe nest egg?
I’d say $3M.
I'm surprised, I was thinking 4M
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Re: Nice FIRE Net Worth Blog 2005-2015

Post by Normchad »

yoga wrote: Sat Jul 31, 2021 4:39 pm
Normchad wrote: Sat Jul 31, 2021 4:35 pm
yoga wrote: Sat Jul 31, 2021 4:33 pm So for someone who spends 80k and wants to retire at 40, what would the early retirement skeptics consider a safe nest egg?
I’d say $3M.
I'm surprised, I was thinking 4M
I was thinking of the following SWR table, which has numbers for retirements longer than 30 years. Based on this, I would personally be comfortable at 3% for 50 years of retirement. Withdrawing 80K from a 3M portfolio is a freckle below 3%.

Image
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Re: Nice FIRE Net Worth Blog 2005-2015

Post by surfstar »

'tis better to have FIRE'd and lost, than to never have FIRE'd at all
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Re: Nice FIRE Net Worth Blog 2005-2015

Post by skime »

btr wrote: Sat Sep 29, 2018 6:46 pm Interesting read on an IT Professional's goal to reach FI. Just skip to the last page of each year to see the year-end summary.

https://livingafi.com/2014/06/13/the-jo ... -year-1/7/

It looks like he started with $40k@90/10, and ended up $900k@70/30.

I hope it's ok to post this, as I think it gives some motivation to stay-the-course.
Unless you get to a withdrawal rate sub 2%, you're kidding yourself. Too much can go wrong over that length of time. You need a serious margin of error....and you can't get divorced:)
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Re: Nice FIRE Net Worth Blog 2005-2015

Post by Carousel »

surfstar wrote: Sat Jul 31, 2021 4:52 pm 'tis better to have FIRE'd and lost, than to never have FIRE'd at all
Yeah. I didn't see his story as one of failure, either. He spent the last four healthy years of his life doing exactly what he wanted to do. Big win.
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Re: Nice FIRE Net Worth Blog 2005-2015

Post by BruinBones »

Normchad wrote: Sat Jul 31, 2021 10:00 am
I think these people just don’t know enough about the likely events life will throw at them. They retire extremely early, so they won’t have much SS credits….

Like this guy in the article, they can’t realistically forecast their future spending. And they can’t anticipate how their needs and wants will change over time. And there is divorce possibility. And likely health stuff. And unpredictable health expenses, but always going up.

If I tried to forecast at 35 what my life would be like at 50, I would have been very wrong. And that’s only looking 15 tpyears into the future. It gets more out of whack the further out in time you go…..

I’m sure some of them will be successful. But I fear most of them won’t.
Agree.
So a thirty-something year old decides to retire early then finds out that things don’t go the way he scripted them.
Welcome to real life.
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Re: Nice FIRE Net Worth Blog 2005-2015

Post by MarkRoulo »

yoga wrote: Sat Jul 31, 2021 4:33 pm So for someone who spends 80k and wants to retire at 40, what would the early retirement skeptics consider a safe nest egg?
Schwab wants about $2.3M to write an SPIA for $6,500/month (inflation UNADJUSTED) for two forty year olds.

Maybe save/invest an additional $1M - $1.5M and buy another SPIA with half of that at age 55 and a third one with the other half at age 75?

You still run the risk of higher inflation than you expected, but $80K/year should allow for some cushion ... $80K/year is more (originally "less" ... this was a typo) than the average US household income.
Last edited by MarkRoulo on Sat Jul 31, 2021 6:24 pm, edited 1 time in total.
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Re: Nice FIRE Net Worth Blog 2005-2015

Post by yoga »

MarkRoulo wrote: Sat Jul 31, 2021 6:09 pm
yoga wrote: Sat Jul 31, 2021 4:33 pm So for someone who spends 80k and wants to retire at 40, what would the early retirement skeptics consider a safe nest egg?
Schwab wants about $2.3M to write an SPIA for $6,500/month (inflation UNADJUSTED) for two forty year olds.

Maybe save/invest an additional $1M - $1.5M and buy another SPIA with half of that at age 55 and a third one with the other half at age 75?

You still run the risk of higher inflation than you expected, but $80K/year should allow for some cushion ... $80K/year is less than the average US household income.
You're getting close to my 2% WR there...
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Re: Nice FIRE Net Worth Blog 2005-2015

Post by MarkRoulo »

yoga wrote: Sat Jul 31, 2021 6:19 pm
MarkRoulo wrote: Sat Jul 31, 2021 6:09 pm
yoga wrote: Sat Jul 31, 2021 4:33 pm So for someone who spends 80k and wants to retire at 40, what would the early retirement skeptics consider a safe nest egg?
Schwab wants about $2.3M to write an SPIA for $6,500/month (inflation UNADJUSTED) for two forty year olds.

Maybe save/invest an additional $1M - $1.5M and buy another SPIA with half of that at age 55 and a third one with the other half at age 75?

You still run the risk of higher inflation than you expected, but $80K/year should allow for some cushion ... $80K/year is less than the average US household income.
You're getting close to my 2% WR there...
Yeah. Without adjusting for inflation I'm getting around a 3.3% payout. Adjusting for inflation (via the withheld assets) drops that.

And 3.3%/year isn't going to happen with bonds alone in the current environment, so this suggests that Schwab is already dedicating SOME of the investment to stocks.

Bonds yielding less than inflation is not an ideal environment into which to retire (which doesn't really matter; you play the hand your are dealt; but this is not an idea retirement hand ... alternately, the pile of assets to invest is higher than it would be if bond yields were still in the 6% range ...)
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Re: Nice FIRE Net Worth Blog 2005-2015

Post by almostretired1965 »

That was a fascinating read; I couldn't stop until I had finished every last entry. Turned out FIRE was not happily ever after, but he's not the first person to have his/her plan derailed by relationship problems and bad health. Even after his travails, I think he is still better off than 90% of his peers and will be able to recover. In a way, the fact that he executed the plan so early meant that when things went sideways, he was still young enough to get back in the game.

I view it not so much as a cautionary tale but that it is important to maintain flexibility and be able to pivot when necessarily. Personally, I think he had a solid plan given his priorities and how things stood when the decision was made. Going through life always expecting the worst case scenario is no way to live. Stuff happens but I think he is far from a bad place .......
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Re: Nice FIRE Net Worth Blog 2005-2015

Post by climber2020 »

yoga wrote: Sat Jul 31, 2021 4:33 pm So for someone who spends 80k and wants to retire at 40, what would the early retirement skeptics consider a safe nest egg?
My own target is a 3.3 to 3.5% withdrawal rate, so for your example the number would be 2.4 million.

Having some flexibility makes the plan more likely to succeed; if 40k of the annual 80k is set aside for travel and fun money, then in the event of a market crash you can easily cut back expenses temporarily.
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Re: Nice FIRE Net Worth Blog 2005-2015

Post by fortunefavored »

climber2020 wrote: Sat Jul 31, 2021 7:32 pm
yoga wrote: Sat Jul 31, 2021 4:33 pm So for someone who spends 80k and wants to retire at 40, what would the early retirement skeptics consider a safe nest egg?
My own target is a 3.3 to 3.5% withdrawal rate, so for your example the number would be 2.4 million.

Having some flexibility makes the plan more likely to succeed; if 40k of the annual 80k is set aside for travel and fun money, then in the event of a market crash you can easily cut back expenses temporarily.
Arguing 3% or 4% isn't likely to be the cause of FIRE "failure" as those amounts (and BigERN's chart posted earlier) include those market crashes. What will cause failure will be massive life changing events.. so you need to be confident and/or account for them in some fashion. That is exactly what happened to Dr.Doom. It's the expenses, not the withdrawal rate that will blow things up.
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Re: Nice FIRE Net Worth Blog 2005-2015

Post by Normchad »

fortunefavored wrote: Sat Jul 31, 2021 7:45 pm
climber2020 wrote: Sat Jul 31, 2021 7:32 pm
yoga wrote: Sat Jul 31, 2021 4:33 pm So for someone who spends 80k and wants to retire at 40, what would the early retirement skeptics consider a safe nest egg?
My own target is a 3.3 to 3.5% withdrawal rate, so for your example the number would be 2.4 million.

Having some flexibility makes the plan more likely to succeed; if 40k of the annual 80k is set aside for travel and fun money, then in the event of a market crash you can easily cut back expenses temporarily.
Arguing 3% or 4% isn't likely to be the cause of FIRE "failure" as those amounts (and BigERN's chart posted earlier) include those market crashes. What will cause failure will be massive life changing events.. so you need to be confident and/or account for them in some fashion. That is exactly what happened to Dr.Doom. It's the expenses, not the withdrawal rate that will blow things up.
Yes indeed. Although I am certain I am FI now, I’m still hesitant to pull the plug. I am very confident I have looked at my portfolio, and WR studies, etc etc and everything is great there. I am far less confident in my ability to project and potentially control expenses 30 years from now. Just a silly example, I pay a lot of money for cable and cell phones now that I didn’t pay 30 years ago. It’s is totally worth it to me, but I would not have predicted that expense. How many more things like that, are there in my future?
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Re: Nice FIRE Net Worth Blog 2005-2015

Post by PicassoSparks »

“This plan will work perfectly so long as I have no major adverse life events” isn’t much of a plan.

I see FIRE people talking constantly about SWR which is insurance against market crashes, but I rarely see them talking about what forms of insurance they are putting in place against other adverse events. As this guy learned, the market is the least of your problems.

My wife and I are trying to take a much wider view of what resilience against shocks means for achieving financial independence and a wider view of the kinds of shocks we might need to weather. It includes thinking through various kinds of insurance products, obviously. But it also means thinking hard about how we are investing in our communities and networks of people and what kinds of communities we are cultivating and participating in.

We’re far from having things worked out, but hopefully our eyes are at least a little more open than the author’s were to what long term wellbeing means. The author seemed to think that he could more or less go it alone and that nothing would change about his social situation when his work situation changed. He learned that wasn’t true in some of the worst possible ways, losing many friends and having his central relationship collapse.

It seems to me like a lot of the FIRE people are coming up with answers to the wrong questions.
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Re: Nice FIRE Net Worth Blog 2005-2015

Post by TheNightsToCome »

fortunefavored wrote: Sat Jul 31, 2021 7:45 pm
climber2020 wrote: Sat Jul 31, 2021 7:32 pm
yoga wrote: Sat Jul 31, 2021 4:33 pm So for someone who spends 80k and wants to retire at 40, what would the early retirement skeptics consider a safe nest egg?
My own target is a 3.3 to 3.5% withdrawal rate, so for your example the number would be 2.4 million.

Having some flexibility makes the plan more likely to succeed; if 40k of the annual 80k is set aside for travel and fun money, then in the event of a market crash you can easily cut back expenses temporarily.
Arguing 3% or 4% isn't likely to be the cause of FIRE "failure" as those amounts (and BigERN's chart posted earlier) include those market crashes. What will cause failure will be massive life changing events.. so you need to be confident and/or account for them in some fashion. That is exactly what happened to Dr.Doom. It's the expenses, not the withdrawal rate that will blow things up.
The historical results in BigERN's chart would be somewhat reassuring if current stock and bond valuations were approximately equal to historical averages.

The current combination of high stock and bond market valuations is unprecedented, or nearly so. The historical record doesn't contain any data germane to current circumstances. If we had a 100-year history of data points similar to today, the safe withdrawal rates would undoubtedly be lower.

As it stands, using data from 1900-2015 (and assuming no fees), no country had a SWR of 4%, and 11 of 20 developed nations had SWRs < 3%:
https://retirementresearcher.com/4-rule ... und-world/
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Re: Nice FIRE Net Worth Blog 2005-2015

Post by fortunefavored »

TheNightsToCome wrote: Sat Jul 31, 2021 8:57 pm
fortunefavored wrote: Sat Jul 31, 2021 7:45 pm
climber2020 wrote: Sat Jul 31, 2021 7:32 pm
yoga wrote: Sat Jul 31, 2021 4:33 pm So for someone who spends 80k and wants to retire at 40, what would the early retirement skeptics consider a safe nest egg?
My own target is a 3.3 to 3.5% withdrawal rate, so for your example the number would be 2.4 million.

Having some flexibility makes the plan more likely to succeed; if 40k of the annual 80k is set aside for travel and fun money, then in the event of a market crash you can easily cut back expenses temporarily.
Arguing 3% or 4% isn't likely to be the cause of FIRE "failure" as those amounts (and BigERN's chart posted earlier) include those market crashes. What will cause failure will be massive life changing events.. so you need to be confident and/or account for them in some fashion. That is exactly what happened to Dr.Doom. It's the expenses, not the withdrawal rate that will blow things up.
The historical results in BigERN's chart would be somewhat reassuring if current stock and bond valuations were approximately equal to historical averages.

The current combination of high stock and bond market valuations is unprecedented, or nearly so. The historical record doesn't contain any data germane to current circumstances. If we had a 100-year history of data points similar to today, the safe withdrawal rates would undoubtedly be lower.

As it stands, using data from 1900-2015 (and assuming no fees), no country had a SWR of 4%, and 11 of 20 developed nations had SWRs < 3%:
https://retirementresearcher.com/4-rule ... und-world/
I think the point still stands.. choose 2.5% if you like.. if you suddenly get divorced, need $10,000/month in medical care, adopt 5 kids... your plan is likely busted. Everyone has to decide what their risk profile is vs. working until they die, but it isn't SWR that will likely be the deciding factor. Cutting back from 3% to 2.5% is probably doable for most bogleheads (non-lean FIRE numbers) but increasing from 3% to 10% is probably doom.
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Re: Nice FIRE Net Worth Blog 2005-2015

Post by sailaway »

Normchad wrote: Sat Jul 31, 2021 7:49 pm
fortunefavored wrote: Sat Jul 31, 2021 7:45 pm
climber2020 wrote: Sat Jul 31, 2021 7:32 pm
yoga wrote: Sat Jul 31, 2021 4:33 pm So for someone who spends 80k and wants to retire at 40, what would the early retirement skeptics consider a safe nest egg?
My own target is a 3.3 to 3.5% withdrawal rate, so for your example the number would be 2.4 million.

Having some flexibility makes the plan more likely to succeed; if 40k of the annual 80k is set aside for travel and fun money, then in the event of a market crash you can easily cut back expenses temporarily.
Arguing 3% or 4% isn't likely to be the cause of FIRE "failure" as those amounts (and BigERN's chart posted earlier) include those market crashes. What will cause failure will be massive life changing events.. so you need to be confident and/or account for them in some fashion. That is exactly what happened to Dr.Doom. It's the expenses, not the withdrawal rate that will blow things up.
Yes indeed. Although I am certain I am FI now, I’m still hesitant to pull the plug. I am very confident I have looked at my portfolio, and WR studies, etc etc and everything is great there. I am far less confident in my ability to project and potentially control expenses 30 years from now. Just a silly example, I pay a lot of money for cable and cell phones now that I didn’t pay 30 years ago. It’s is totally worth it to me, but I would not have predicted that expense. How many more things like that, are there in my future?
My land line 30 years ago cost the same as my internet service now and I still had to pay a per minute fee for long distance calls, which often added up to my current cell phone bill.

We progressed from wanting to take a long sabbatical to finding the 4% rule to deciding that we trust the 4%, but we don't fully trust ourselves to be happy at 70 doing the same minimalist things we have done in our 40s. Our new number isn't quite 2x the original one, mostly because the original number included a $100k transition fund to change lifestyle and we don't need to double that. We also don't include SS in our calculations, since we have quite awhile to get through before we start drawing.

If life happens in a negative way, we will still be in a better position that someone who is depending on their salary at 50 and stressed about layoffs in the next recession.
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Re: Nice FIRE Net Worth Blog 2005-2015

Post by TheNightsToCome »

I quit my career at 42, not because I thought retirement was a good idea, but because the job was killing me. I didn't know anything about the Trinity study, but I knew I had to get out.

As it turns out, my average spending over the last 6 years has been about 3.19% of the inflation-adjusted value of my liquid investments when I "retired." I was single then, but I have supported my wife and 2 poodles for the last 6 years, so based on standard FIRE dogma, I was set for life, even without accounting for Social Security benefits.

That isn't how it felt. I worried about money for the first time in my life. It wasn't a pleasant way to live. Spending X when X is all you can afford is unlike spending X while earning 10X.

I returned to my original career after 13 years away, not primarily because of money, but it was an important factor. Fortunately, I've been able to negotiate a somewhat better lifestyle at this point.

Although I would have been much richer without the 13-year break, quitting was a great decision. I enjoyed those 13 years immensely. I trust the blogger feels the same way.
Random Poster
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Joined: Wed Feb 03, 2010 9:17 am

Re: Nice FIRE Net Worth Blog 2005-2015

Post by Random Poster »

TheNightsToCome wrote: Sat Jul 31, 2021 8:57 pm
The historical results in BigERN's chart would be somewhat reassuring if current stock and bond valuations were approximately equal to historical averages.

The current combination of high stock and bond market valuations is unprecedented, or nearly so. The historical record doesn't contain any data germane to current circumstances. If we had a 100-year history of data points similar to today, the safe withdrawal rates would undoubtedly be lower.

As it stands, using data from 1900-2015 (and assuming no fees), no country had a SWR of 4%, and 11 of 20 developed nations had SWRs < 3%:
https://retirementresearcher.com/4-rule ... und-world/
Okay, but….

Of the nations that had sub 2% SWR, at least 5 of them were largely destroyed during a world war (with 4 of them experiencing two world wars).

My takeaway from that I’d probably die in the war anyway, so I’m not sure that those countries’ results are particularly instructive.

For the record, I’m using a 2.5% maximum withdrawal rate with a roughly 50/50 allocation at age 44, but I’d like to get that down to 2% or even 1.85%.
TheNightsToCome
Posts: 955
Joined: Fri Jun 30, 2017 11:48 pm

Re: Nice FIRE Net Worth Blog 2005-2015

Post by TheNightsToCome »

Random Poster wrote: Sat Jul 31, 2021 9:23 pm
TheNightsToCome wrote: Sat Jul 31, 2021 8:57 pm
The historical results in BigERN's chart would be somewhat reassuring if current stock and bond valuations were approximately equal to historical averages.

The current combination of high stock and bond market valuations is unprecedented, or nearly so. The historical record doesn't contain any data germane to current circumstances. If we had a 100-year history of data points similar to today, the safe withdrawal rates would undoubtedly be lower.

As it stands, using data from 1900-2015 (and assuming no fees), no country had a SWR of 4%, and 11 of 20 developed nations had SWRs < 3%:
https://retirementresearcher.com/4-rule ... und-world/
Okay, but….

Of the nations that had sub 2% SWR, at least 5 of them were largely destroyed during a world war (with 4 of them experiencing two world wars).
There have been no wars in Japan since 1989 and GDP/capita growth was reasonably good, but the annualized total real return to the Nikkei between 12/89 and 3/21 (last data from dqydj.com) was -0.019%. The starting valuation was the chief contributor to that result.
https://dqydj.com/nikkei-return-calcula ... nvestment/

My point is only that one should place very little weight on US data since 1926 when deciding on a safe withdrawal rate today, yet most seem to think it accounts for every reasonable contingency.
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