a painful unwinding of the FIRE movement

It gets better or worse depending on your sense of humor. :D

And finally, the saddest letter of them all: E is for Expire. “After a long life of working because you had to, not because you wanted to, reluctant DIRE followers will look back on their lives with regret,” Dogen wrote. “They will curse the day they ever heard about FIRE because otherwise they would never have taken the leap of faith at the top of the market and fallen splat on their faces.”
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The article is laughable, but it wouldn't totally surprise me if there are some members in our forum in their early 30's who've saved $200k and who are currently being shocked that markets go down and not just up.
 
My young DIL was complaining that her 401k was “ not even making 5%”. I have no idea who manages it. I didn’t know there were any guarantees with the market either.....
 
Seems we often discuss true FI vs "FI In Name Only".

IMO, those who are really FI aren't going to be derailed by a Bear Market or Recession; if you are, maybe you need to reassess your definition of FI.
 
Is this the same guy who was writing this 2 years ago, when the S&P500 was 7% lower than it is today?

One of my biggest concerns about early retirement was running out of money. What if there was another massive correction in the stock market? What if my rental properties went vacant for an extended period of time? What if Financial Samurai died? What if I accrued unexpected medical expenses? What if I underestimated how much I needed to be happy? Such worrisome thoughts can paralyze even the best of us.

Whether you decide to retire in your 60s or in your 30s, I’m here to say the fear of running out of money in retirement is overblown. The media, money managers, and government officials, most of whom are still working, have fear mongered the general population long enough!

As someone who left the working world in 2012 at the age of 34, let me explain why your retirement life will probably be just fine.
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FIREd said:
Is this the same guy who was writing this 2 years ago, when the S&P500 was 7% lower than it is today?
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This guy is a fool. He was on the wrong foot from the very beginning.

This was reposted a couple days ago, but was first published back at the end of September.

https://www.marketwatch.com/story/t...retirement-that-no-one-talks-about-2018-09-26

Yes, FIRE'd in San Francisco with $200,000/year in passive income.

Finally, I dived deep into my writing on Financial Samurai. Writing has always been my most cathartic way to deal with any uncertainty or problems I might have. For example, now that I have a son, I’ve been worried about whether our roughly $200,000 a year in passive income is enough to support a family of three if he doesn’t win the San Francisco public school lottery system. It’s taken almost 20 years for me to generate this passive income level, and it still doesn’t seem like enough.

Given this worry, I did a deep dive budget analysis for a family earning $300,000 a year, and it sure seems like we need to earn $100,000 more to maintain our quality of life in San Francisco. Alternatively, we can always move to a lower cost area of the country or world.
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I keep seeing all these statistics about the majority of retirement age people being in debt, with very little savings, and having to live on SS with maybe a small pension. So where will all this money come from that the DIRE children will inherit? Seems to me that this concept will only affect an extremely small part of the population. The rest are out of luck if they don't prepare for themselves.


Cheers!
 
Having retired in his 30s with $200k a year of passive income I doubt that he's going to get much sympathy.
 
I try not to read too much of this garbage. Part of the problem is that most of the journalists who write this stuff don't even have a clue about finance and market history. Sure some folks who retired very early will have regrets if they had a plan based on the market going up 9% / year in a straight line. Others, like many of the members among us on this ER forum, have a solid plan that can tolerate big down drafts in equities from time to time.
 
tdv2 said:
I try not to read too much of this garbage. Part of the problem is that most of the journalists who write this stuff don't even have a clue about finance and market history. Sure some folks who retired very early will have regrets if they had a plan based on the market going up 9% / year in a straight line. Others, like many of the members among us on this ER forum, have a solid plan that can tolerate big down drafts in equities from time to time.
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Had a buddy who planned on a 12% YoY return. He was very disappointed YoY. I don't know where people get these numbers.

He's still retired, but has come down to earth.
 
Crappy article, but I suspect there are a lot of people who've had romantic, math-light FIRE aspirations that will get knocked out of the goal by this downturn. They didn't have a real plan but saw biggish numbers building. Now they will have smaller numbers and bail.

Others, however, will wind up doing the math and really get their FIRE act together.

People talk about "capitulation" drops in the stock market and the committed buyers cause a rally. Wouldn't surprise me to see the FIRE movement go through the same thing over the next 12 months.
 
I thought the same thing; it's all part of the poor journalism that others have commented on.

It's true that a good portion of the people I know over age 60 (ourselves and relatives excepted), well enough to know their circumstance, has inherited a good deal of money, or expects to. It's interesting watching them on FB, trying to adjust to their new circumstances (re-doing kitchens, and taking kids on cruises, seem to be the main ways). But I'll bet others are looking at very little, once the ALFs and nursing homes have drained the parents dry.

Badger said:
So where will all this money come from that the DIRE children will inherit?


Cheers!
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Amethyst said:
I thought the same thing; it's all part of the poor journalism that others have commented on.

It's true that a good portion of the people I know over age 60 (ourselves and relatives excepted), well enough to know their circumstance, has inherited a good deal of money, or expects to. It's interesting watching them on FB, trying to adjust to their new circumstances (re-doing kitchens, and taking kids on cruises, seem to be the main ways). But I'll bet others are looking at very little, once the ALFs and nursing homes have drained the parents dry.
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The good news is that ultimately it's a closed system. Group A is screwed b/c mom and pop are buying nursing homes and remodels. That means the nursing home and remodel people are making a bundle and their kids will do quite well.

Circle of life!
 
This is where the FIRE movement among the younger folks will separate the dilettantes and Nervous Nellies from the serious players.

The dilettantes and Nellies will moan and groan and end up selling low as they descend into the clutches of the Bear.

The serious players will take a deep breath, calm down, go back to basics, and realize that to get the returns they will need to truly FIRE, they need down markets so they can buy low or at least buy lower.
 
According to city-data.com, median household income in 2016 in San Francisco was $103,801. If Financial Samurai can't figure out how to live well on double that amount without a great deal of angst, maybe giving out financial advice to others really isn't his true calling.
 
I read the article but it doesn't seem to apply to me or my kids (or even grandkids starting to invest as they attend college with minimal loans). Just another "the sky is falling" dribble.

It's not easy .... no one said it was. It involves decades (most likely 2) of thinking outside the box and living below your means. It involves covering your bases and building up wealth while minimizing expenses. Investing in more than one stream whether that includes property, stock market, staying in military / government.

Recognizing a fire sale and constantly CONSTANTLY sticking to a plan even when everyone else says the sky is falling

Maybe just maybe FIRE will be 55 or 60 but with consistent planning it won't be SSAs definition of FRA

On the previous link (see reply #7) the author wrote
2) You don’t need to save for retirement once you are retired.
What many retirees “forget” is that once they reach retirement, they no longer need to save for retirement. It’s not so much forgetting, but being so accustomed to saving for so many years that you just can’t stop! For example, if you’ve spent a lifetime maxing out your 401k, you’ve suddenly got $18,500 a year more in gross disposable income.

For the life of me, I cannot stop trying to save at least 50% of my after-tax income, while also contributing as much as possible to my Solo 401k even though I’m supposed to live it up more in retirement. After aggressively saving since your first paycheck, saving just becomes part of your DNA due to an unknown future.
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Such dribble!! I save to last out the bottoms without selling!
 
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I only have one friend that inherited money. I am glad that my mom enjoyed herself and spent her money traveling and doing what she wanted to.
 
Teacher Terry said:
I only have one friend that inherited money. I am glad that my mom enjoyed herself and spent her money traveling and doing what she wanted to.
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Agree, I've always told my Mom that my ideal would be for her to figure out how to spend her very last penny with her very last breath i.e. not to hold back in any of her enjoyment over any desire to leave an inheritance.
 
daylatedollarshort said:
According to city-data.com, median household income in 2016 in San Francisco was $103,801. If Financial Samurai can't figure out how to live well on double that amount without a great deal of angst, maybe giving out financial advice to others really isn't his true calling.
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+1

We live in the SF Bay Area (as do you I think) & I am continuously seeing examples of folks who live here that don’t get it; in many, many ways, they are the anomaly; financially, culturally, politically. Don’t misunderstand me, we moved back here for FIRE & love it. But, IMHO, when living here (or other super HCOL locations), one must be careful about developing a distorted sense of reality. Side story example: my friend who lives in a popular HCOL city in Marin County, and has for ~40 yrs, jokes that his town should be renamed “Brigadoon” because they are so divorced from the real world.

I didn’t care for the article but, did learn a new acronym: FIRE (Foolish Idealist Returns to Employer). :LOL:
 
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Plus ca change, etc.

At the worst point in the financial crisis, the pundits were saying that... well, maybe that 3 to 4% withdrawal rate isn't safe after all. Maybe it should be 1 to 2%. Umm... thanks, people. I'll just stash another $2 million in my retirement funds in the next few years.

I think the people who get hurt in these markets are the ones who MUST withdraw $X from the investments every year, even when $X is 9 or 10% of the investments. Those of us who kept the withdrawal rate low or can cut back can ride it out.
 
gayl said:
I also live in the SF Bay Area bit never made more than 5500m. It's possible even here
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It was possible when you could buy a house at an affordable price. If I had not bought my first house in San Jose in 1984, I would not be living in the Bay Area today. It takes two good incomes to afford anywhere closer in than Stockton now.
 
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