FIRE Starters (Financial Independence, Retire Early)

grass is always greener, when you dont have to mow it... but i do spent allot of time chopping them.

 

The concept of "outside work" implies that work is something you have to do.

For some of us there is very little "work" (activity for money that must be done on a timeline or task basis), so outside work is at least 90% of the time.

Independence from thinking will I get paid or not.
Today i can play Doom if I please, go for a swim in my pool, go out for lunch, then a little siesta followed by another coffee, hire a boat on the harbour for a few hours for Tues when there's not much riff raff. Buy/sell some equities in a little portfolio. Rant on a forum...

Maybe for others it's get up at 7am, catch a train for 1hr and spend most of the day in a cubicle, then 1hr train back home for 6pm dinner. And if you don't the bank takes your house and the wife takes half of the rest.

 

More like the bank takes the house and your wife takes the rest

 

Agree, for most that is correct, if they want to maintain their current lifestyle.

Sounds like bliss.

I think we can both acknowledge that this probably describes the majority of people. I believe the nuance in what Nick Magiulli saying is this; work doesn't need to mean the 9-5 cubicle drudgery (i.e. if you're FI why bother), but in his world view, some form of work (e.g. entrepreneurship, a passion career, employment for charitable causes etc.) is still important after one has reached FI.

I think that is a crock of ****.

Do what makes you happy so long as it's not to the detriment of others.

 

Many other reasons people continue to work.

For some people, the more they have, the more afraid they are of losing it all. And that’s why they keep working.

For others, they want to build generational wealth and want to grow their wealth into nine figures and more.

And there are people who simply enjoy what they do.

Each to their own.

 

I don't think Dave is still a member here?

 

Has a obsessed former client who was into FIRE. His wife left him and took half and then he had no house either. Start again. Sometimes one persons obsession and plan is another persons crazy. FIRE with two incomes and asset growth is very different to a single person.

Many on social media are also talking heads. Content at any value so they get hits that are paid. They become worshipped idols to others and can do harm when they are considered a financial guru - who isnt qualified. And other may be OK. You need to sort out the good v bad

 

Presenter: "So can do what you want and don't worry about money"
Dave: "Yeah"
While counting and ruminating over every dollar he spends as $10 is not a "trivial amount".

The ex's half could be someone elses FIRE ticket.
Myabe that's how Dave did it.

 

He got burned.

 

To successfully fire one will need 2 separate plans. First making sure you actually can retire at 60/65 years old. Making sure you have plans in place and a projected amount & income you are happy when you are 60/65. Second step is making sure you have enough investment/ income/ capital for you to retire from the day until you reach retirement age when you can access your super. Meaning if you retire at 55 , you will have enough income/ funds that will last you until you are 60. That’s 5 years worth of income.
And the 4% rule- basically meaning you can safely withdraw 4% each year from your retirement account without depleting it.

 

but keep in mind that with super you will need to start withdrawing ever increasing amounts each year - 4% pa going up to 15% at 90 years of age from memory. Doesn't necessarily mean you have to use it all though.

 

Aiming to not reduce the starting balance could mean working years longer than required.

A sensible arc of depletion across your estimated life expectancy underpinned by a partial/full pension and a flexible spending range will allow for a much earlier retirement.

 

Also 4% isn't a universal thing; time horizon matters. For those planning 50+ years of FIRE, a 3.5% SWR (ish), with higher allocation to equities seems more sensible from my reading thus far. Dynamic spending bands around your SWR (based on you preferred market valuation metric e.g. a 10y SMA or some other model like yale endowment/vanguard dynamic spend method) will also help squeeze more juice from the portfolio (and also help you 'spend to zero' if that is preferred).

 

In my view, FIRE involves similar aspects to goals that are or should be so for everyone.
1 Income exceeds normal expenditure.
2 A cash reserve of at least several months when working and a lot bigger when not.
3 Diverse independent income sources, preferably passive.
4 No personal debt of substance.
5 Investment debt payments well covered by income.
6 Own the PPOR.

It may be that cashflow can be managed until superannuation can be used to pay down debt. Being thrifty early and ongoing has meant that my savings compound very nicely, allowing me to purchase more investments that have increased income. This income is now being used for significant expenditure. As I progressed on the asset acquisition journey it became easier and more successful.

 

What I do like about the FIRE concept, and it's not new, is that early retirement is considered before 40 and 5 yrs before pension age.
In my 20s the plan was to "retire" at 40yo.
It was doable then and still is doable now.
Specially for people with highly paid or markateble skills earning 200k+ and ppl in the construction industry.
For others a few years in the mining industry will do it.

It's def easier to party and travel in the 20s, and much harder to work in the 50s.

 

Not partying in my twenties saved a lot. In my fifties an office-type job was quite okay, even if the boss was insane. I was self-employed then.