Fire

bostonerimus

itwasntme001 wrote: »

But that latest thing turns out to be many latest things and you will end up missing out as you can not afford it according to your spending rules. These "things" could end up making all the difference and the dividing line between the poor (you) and middle class (them).

This is a really just an expression of a “keeping up with the Joneses” attitude. FIRE is inherently going against that and is far more about deciding what makes you happy and arranging your finances to achieve that.

pafpcg

itwasntme001 wrote: »

..... Look how much more goods and services we can enjoy now compared to back then. Flights, TV, internet, computers, mobile phones, restaurants, clubs, outdoor adventure sports, fragrances, clothes and the list is endless. ....... Do you really think you will be able to afford these new goods and services if you retire early? Perhaps but it is certainly not certain and you have no idea what these new things will cost and how popular you they will be. Do not assume these things will not be needed. When your peers are out buying these new things, it will quite possibly be the dividing line between the middle class (them) and the poor (you).

The list of examples* you quote have all become much more "popular" simply because they are now relatively cheap. When, in a decade or so, "Product X" becomes so popular that it's regarded as an essential, it too will be cheap and within the budget of all the early-retirees. (The poorest retirees will always be those who have made minimal provision for retirement.)

* If you're implying that the products in your list of examples are today's necessities, then there's even more that I disagree with you about!

itwasntme001

coyrls wrote: »

What you’re saying in a rather convoluted way is that if wage growth significantly exceeds inflation, then your standard of living could drop in comparison to those in work. That would be a risk that anyone on fixed income linked to inflation would take and is not specific to early retirement or drawdown. In fact since 2008 those on a fixed income linked to inflation have seen their standard of living improve relative to those in work.

We have seen real yields fall and cost of many goods fall at the same time. How do you know this will continue to be the case? You could very well have inflation rise a lot (at least your own inflation) whilst incomes from investments rise not nearly as much. Over a long period of time (such is the case with early retirees aka FIRE) this could have devastating consequences to ones quality of life compared to those who continued to work and benefit from rising wages.

itwasntme001

bostonerimus wrote: »

This is a really just an expression of a “keeping up with the Jones” attitude. FIRE is inherently going against that and is far more about deciding what makes you happy and arranging your finances to achieve that.

Sure it is, however would the same FIRE people really think like that a few decades from now when a new goods or services comes out that is a must have? Attitudes change and when the early retiree sees that they can not afford something that has gained a lot of popularity, they will probably feel like a mug quitting work so early.

Paul_Herring

Look - we get it, you don't like FIRE.

But neither do all these straw men you keep throwing at it.

itwasntme001

pafpcg wrote: »

The list of examples* you quote have all become much more "popular" simply because they are now relatively cheap. When, in a decade or so, "Product X" becomes so popular that it's regarded as an essential, it too will be cheap and within the budget of all the early-retirees. (The poorest retirees will always be those who have made minimal provision for retirement.)

* If you're implying that the products in your list of examples are today's necessities, then there's even more that I disagree with you about!

Sure but you do not know whether the next new thing will eventually be cheap, maybe it comes out as already "cheap" - to those who work as their wages would have risen, whilst the retiree only has their investments which may not have risen enough for the retiree to spend on the new thing.

itwasntme001

Paul_Herring wrote: »

Look - we get it, you don't like FIRE.

But neither do all these straw men you keep throwing at it.

I do like FIRE. I am just pointing out a risk. A risk that is clearly not given a single thought by anyone. We have been too used to stagnant wages and low inflation. When power comes back to labour from capital, that is when the FIRE may need to worry.

coyrls

itwasntme001 wrote: »

A risk that is clearly not given a single thought by anyone.

If you are now talking about income not matching inflation, that risk is endlessly discussed and analysed. How can you possibly say "that is clearly not given a single thought by anyone"? Why do you think people would be so naive?

JoeEngland

itwasntme001 wrote: »

Sure it is, however would the same FIRE people really think like that a few decades from now when a new goods or services comes out that is a must have? Attitudes change and when the early retiree sees that they can not afford something that has gained a lot of popularity, they will probably feel like a mug quitting work so early.

I can't imagine anything like that making me wish I hadn't given up work this week at 53 even if I could have carried on working full-time.

itwasntme001

coyrls wrote: »

If you are now talking about income not matching inflation, that risk is endlessly discussed and analysed. How can you possibly say "that is clearly not given a single thought by anyone"? Why do you think people would be so naive?

But this inflation number does not include everything one may want to purchase. Its just an sample of products which may and will very likely be very different for your true inflation number especially over a long period of time. One obvious example is if a FIRE couple decided to have kids and give them private school education, something they assumed would never happen. That is just one obvious example but there can and will be many others as the decades go by and new goods and services are available.