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I’m surprised at the legs this thread has. FIRE is more just a simple popular acronym name than anything else. People have ALWAYS retired early, based on the same criteria and means. It’s not like every other person you meet is young & retired. My parents retired in the early 50s, and they were horrible money managers! If I had chosen their basis for early retirement, I could have gone out at 50 myself! The only real difference is they had reasonably priced HC options right up to Medicare age vs today, and ended up settling for doing less with less.
A lot of the recent FIRE crowd has been made possible by the ACA keeping their health care cost under control by mixing pre tax and post tax accounts to manage their MAGI and stay under the subsidy threshold.
I also think the disappearance of pensions in many fields has played a role, as the golden handcuffs are no longer there and people are more personally invested in their retirement planning
The FIRE movement is truly based on millineals with high salaries to begin with.
BUT.....it does inspire a lesser degree of fire among some others.
No it's not. The youngest Boomers were born in 1964 and are 54 going on 55. By any rational standard, retiring at age 55 is early retirement. You're 10 years from qualifying for Medicare. Unless you're one of the few with public sector jobs or those rare union/corporate jobs with health benefits, you have to splice together health care for a decade. You have penalties on IRA/401(k) distributions to think about if that's where much of your money is stashed. You have to figure out the 35 work years you're going to use for Social Security and you probably don't have 35 good earnings years yet.
I had a "Geoff never works again" scenario contingency plan at age 55 that looked a lot like what is now called lean FIRE. In my opinion, it's financially irresponsible not to consider what happens if today is your last work day ever no matter your age.
Yes, it's become a popular acronym and catch-phrase, in our "meme"-filled world. But there's a useful underlying concept: we neither ascetically reject the world, not entrap ourselves in materialistic pursuit, but instead, employ the best of both. This means trying to earn good money, but to avoid spending it... investing the difference. The idea is to use a relatively normal and unexceptional career-path, to nevertheless accumulate substantial money, and to do so perhaps by midlife, rather than after 40 or 50 years of workforce participation.
The emphasis on the "retired" part is unfortunate. Of course it's silly to "retire" at 35 or whatnot. But it's certainly not silly to make a radical career change, or to otherwise revise a life that's been front-loaded with hard work and good investment.
Traditionally, we flail-around in our youth, "discovering ourselves". Then, later, we "settle down". And only later do we start saving and investing. It's a trend that, I think, was popularized in the 1960s... carefree and impecunious youth, followed by a staid but tense early-middle-age... and then comfort attained only later in life.
The reverse mentality is to stay focused in high school, go to a prestigious college on scholarship, land a good first-job, but continue living like a college kid... and so, accumulating decent money already by 30 or 35. Self-discovery is back-loaded, instead of front-loaded. The 20-year-old studies electrical engineering. Then, at 40, he realizes that he really loves poetry and oil-painting, and has a thing for bird-watching, and maybe golf. That roll-up-your-sleeves energy gets harnessed while we're still young, so that at 40 or 45, we can start coasting, de-emphasizing work, just when the average American finally starts getting serious about saving and investing.
In sum, FIRE really just means to eat the main-course before indulging in desert.
Interesting article in Kiplinger on this. Gotta wish them the best of luck don't we?
Plans like these are oversimplified and are based on calculations like "I'm living on $20k a year now, I can retire on $1M! / I can retire by 35!"
1. They never actually retire. They just change careers. They are not retiring ON their portfolio.
2. Those that do, go broke and re-enter the workforce, masking it as a "higher calling" or "opportunity that couldn't be passed up".
3. I love what I do, and it is not unheard of for my coworkers to work beyond the 30 year milestone despite qualifying for a pension. Our union president will have 50 years this year, and the highest tenured guy in my particular work center has 38 years. Why do people want to leave steady income and group benefits?
No it's not. The youngest Boomers were born in 1964 and are 54 going on 55. By any rational standard, retiring at age 55 is early retirement. You're 10 years from qualifying for Medicare. Unless you're one of the few with public sector jobs or those rare union/corporate jobs with health benefits, you have to splice together health care for a decade. You have penalties on IRA/401(k) distributions to think about if that's where much of your money is stashed. You have to figure out the 35 work years you're going to use for Social Security and you probably don't have 35 good earnings years yet.
I wish I’d realized sooner how easy most of these obstacles to retirement really were. Learning about FIRE and things like SEPP and Roth Conversions and Ladders, and about bend points and diving into my SS earnings, really accelerated my RE timetable.
When I was 20 I formed a vision where someday in my future I wanted to live in an off-grid cabin in the woods somewhere, where I would raise livestock and be able to hunt and fish on my land.
This was in 1980, and when I told my vision to my girlfriend she left me.
At the time, I was a crewman on a sub, and we were doing 3 1/2 month deployments, twice a year. On my off-crew periods I had 3 months to meet a girl and get to dating her before my next deployment. Every off-crew meant a new girlfriend, because no girlfriend was ever willing to wait 3 1/2 months to see you again.
One time, when I was telling a truckstop waitress about my vision for the future, she responded by saying that she could see dedicating herself to achieving that vision as our shared goal. We got married on this day, 12 December in 1981. Our marriage has been primarily a business partnership.
In 1983, I got out of the Navy and we both started attending college fulltime. I got a job digging tunnels by hand, and my Dw worked as a truckstop waitress. At home, we raised goats and made cheese. We soon came to the realization that we would never be able to support ourselves by milking goats.
In 1985, we found a property for sale that had three separate houses on it. My wife convinced a bank to give us a 'first-time' homeowners zero-down mortgage, with my mother co-signed the mortgage.
We moved into one house and we rented out the other two houses. I was shocked that our first mortgage payment came after we had collected the first months rent. The rent income from two houses was just a bit more than the mortgage, insurance and taxes.
We were both earning minimum-wage and none of our salaries was going to housing.
In 1987 we graduated, and we agreed that the only way we could see that we could afford to live in the woods, would first require that I get a pension.
So I re-enlisted and we were transferred to Scottland, where I was stationed on a repair ship repairing subs. I found a building next to the pier that was for sale, it is a five-plex. One side of it is a single-family home with an attached apartment, the other side had a shared kitchen and bath along with three apartments. It had been a B&B for many years. Scottish banks were in competition to do business with us 'wealthy' Americans, so I had no problem getting a mortgage to buy that property. We lived on one side and we rented the apartments to other American sailors. Every month as we collected the rent, our tenants were always griping about the ever-changing exchange-rates [I wrote the leases that they had to pay with British Pounds] Our rental income was more than the mortgage payment, and I never had to exchange any of my salary paychecks for Pounds.
My Dw bought a catering business where she hired four other Navy wives, they focused exclusively on feeding Division parties. Commonly on a Friday morning some division would decide that they wanted to have a party that night. So they would call a pub to reserve a backroom, and they needed a caterer who could feed 40-men with 2 hours notice. She made a killing doing that.
In 1990, we were transferred back stateside, this time to Connecticut. Where we did it again, we bought a Tri-plex. A year into that property, my Dw saw a newspaper article that the city qualified for HUD grants to bring residences up to code, we got a HUD 'loan' that paid to replace all the heating furnaces. HUD required that we make payments on the loan for five years, and then if we still owned the building after ten years HUD would forgive the rest of the loan amount.
In 1993, I reported to a sub down in Charleston SC, after 6 months on it, we did a change-of-homeport to Bremerton Washington. So we bought a Four-plex in Bremerton.
In 1997, we were transferred to Naples Italy, where I worked as an MP. It took us over a year to sell that Bremerton property. We consolidated our holdings to just the Connecticut Tri-Plex.
In 2001, the US Navy put me on pension and we returned stateside, to Connecticut. The property manager that we had contracted with, had not kept up on maintenance on the property. It took me a couple of years to get that building back up to code once again [roof shingles and wiring]. I finished that tasking in 2004.
In 2005 we bought 150-acres of woodlot in rural Maine, and I began building a farmhouse. We finally achieved the goal that we had agreed to focus on back in 1981.
Now that our children have flown the coop, we did some more shopping and we bought a mixed-use commercial / residential building that had been vacant for many years. We leased one store-front to a church that focuses on street ministry and feeds the hungry. We have one store-front leased to a small print shop, and a third store-front with a tattoo artist. And eleven apartments that are slowly getting up to code.
Folks, there are more than a few under 40 couples in some of our major high cost of living areas with combined incomes in excess of 400k plus. In some cases they are selective who they marry to make sure their financial future plans aren't compromised.
There can be a burn out that goes with it especially if they decide to have kids.
Folks, there are more than a few under 40 couples in some of our major high cost of living areas with combined incomes in excess of 400k plus. In some cases they are selective who they marry to make sure their financial future plans aren't compromised.
There can be a burn out that goes with it especially if they decide to have kids.
Especially in the aforementioned areas where daycare can cost $40,000/year/child.
Especially in the aforementioned areas where daycare can cost $40,000/year/child.
Not that high but expensive. I have grand kids and their parents make a ton but child care isn't that expensive and they go to fancy named and new early academies. Yup gotta have a high flying word in their name.
In 1985, we found a property for sale that had three separate houses on it. My wife convinced a bank to give us a 'first-time' homeowners zero-down mortgage, with my mother co-signed the mortgage.
We moved into one house and we rented out the other two houses. I was shocked that our first mortgage payment came after we had collected the first months rent. The rent income from two houses was just a bit more than the mortgage, insurance and taxes.
We were both earning minimum-wage and none of our salaries was going to housing.
I love all of the history, but this first example shows how to achieve the dream -- so many people don't want to believe it, but it is certainly possible to live in a net-zero housing cost reality. It's even better if you can get a capital gain from it when you sell the income property into a bullish market.
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