Fire

Zola.

You are right - time moves on regardless if you save or not, thats why everyone should save.... if we are lucky, we will be old one day!

Part of FIRE is asking you to really think about the value of things.

Audaxer

Zola. wrote: »

I love the theory and the movement. Everyone in on it together, lots of support and good ideas. As long as you are sensible, don't deprive yourself too much, you cant really lose if you are patient and don't do anything daft.

Whats the worst that can happen? You cant retire as early as hoped, but have a stash of money set aside and will be in a strong position to choose what to do with your life.

If you are relying wholly on investments, probably the worst thing that can happen is you retire early, and just after retiring there is a bad equity crash that takes several years to recover.

Terron

fred246 wrote: »

When I retired my wife hadn't worked for the last 22 years. I was amazed at the number of women who said things like "your wife won't be happy". It's as though men are supposed to carry on and on year after year while their wives go shopping and lunch out spending his earnings. Or maybe they just thought "I couldn't cope being with Fred all day".

When my Dad was forced to retire at 60 (due to ill health) my Mum became very upset with him interferring with everything she was doing. It got easier when he started playing golf three times a week instead of just on Sundays.

nyc_451

I occasionally read FIRE blogs/forums for inspiration, however, I no longer believe I can achieve an early retirement.

My income is low and it will probably remain at the current level unless I get a qualification or improve my employability in some other way. I pay all the bills on my own, and I denied myself a lot just to get on a housing ladder. If I wanted to retire early, I'd have to continue with my current lifestyle for another 20-25 years and then retire to the same frugal lifestyle, just older and less able to take up hobbies that interest me...erm no thanks.

I do put some money aside for retirement but it's not a lot. I aim to have my home paid off, have a spare room for occasional lodger and work part time until I feel like retiring. That will probably be in my 60s.

PS I've spoken to a few over 60s about retiring early and to my surprise, this idea was very foreign to them, even though they could afford it and their jobs aren't meaningful... :huh:

Anonymous101

Audaxer wrote: »

If you are relying wholly on investments, probably the worst thing that can happen is you retire early, and just after retiring there is a bad equity crash that takes several years to recover.

Exactly. There are lots of articles about this subject. Monevator has written a very good one and Early Retirement Now has written several himself.

There’s numerous steps I’d plan on taking prior to retiring which would mitigate that risk.
- Eliminating any large reoccurring expenses such as mortgages and car payments
- Holding several years expenses in cash
- Be flexible with expenses in the event of a downturn
- Be open to the possibility of earning money

Zola.

I agree with the FI part more than the RE to be honest. Getting FI lets you choose if RE is right for you after all...

Obviously, not being FI removes the element of choice.

itwasntme001

Aren't we forgetting one big risk that the FIRE community face? With hardly much wage growth for 20 or so years it is hard to miss. But isn't the risk of wages rising significantly going to be a problem for the FIRE community? They have FIRE'd so they will not benefit from rising wages. They would have been out of work for a considerable period so would be very difficult to get back into work (at least at similar wages to peers). Meanwhile their peers who are in work will be seeing wages rise feeding into higher inflation. This may not necessarily translate into higher stock market in real terms which means the SWR they had assumed is no long "safe" given the many decades left to fund their retirement.


Thoughts?

bostonerimus

itwasntme001 wrote: »

Aren't we forgetting one big risk that the FIRE community face? With hardly much wage growth for 20 or so years it is hard to miss. But isn't the risk of wages rising significantly going to be a problem for the FIRE community? They have FIRE'd so they will not benefit from rising wages. They would have been out of work for a considerable period so would be very difficult to get back into work (at least at similar wages to peers). Meanwhile their peers who are in work will be seeing wages rise feeding into higher inflation. This may not necessarily translate into higher stock market in real terms which means the SWR they had assumed is no long "safe" given the many decades left to fund their retirement.


Thoughts?

Any retirement plan must include inflation. I use 3%, but have stress tested at 6%. If we get hyperinflation then we are all in the same sinking boat.

itwasntme001

bostonerimus wrote: »

Any retirement plan must include inflation. I use 3%, but have stress tested at 6%. If we get hyperinflation then we are all in the same sinking boat.

Yes but the problem is the inflation numbers may not truly reflect living costs/ standard of living. Say there were a new bunch of goods and services to enjoy. The early retiree's peers would be able to enjoy this as their wages have gone up significantly, whereas the early retiree is left watching the pennies/pounds as he has only a set amount to spend each year (the SWR). The risk is if the inflation numbers do not capture the new goods and services adequately. I imagine the early retiree would be regretting their decision watching his peers roll in the wages and having a much better quality of life (even taking into account the time spent working).

Paul_Herring

whereas the early retiree is left watching the pennies/pounds as he has only a set amount to spend each year (the SWR).

Are you presuming the retiree's SWR accurately matches the purported retiree's expenses in year 0, and can thus have no leeway whatsoever going forward?

The SWR is a guideline/concept, not a strict rule (especially given there are so many articles around arguing about what number that SWR should be depending on whatever set of circumstances the authors are deciding to cherry-pick for their outpourings.)