"Early Retirement Extreme" forum

[flintnational]

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Originally Posted by candrew along with access to drinking water......

You have to sacrifice if you want to FIRE! LBYM and all that kind of stuff.

ETA: You spendthrift you.

[CardsFan]

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Originally Posted by flintnational There are a few (minor) inconveniences associated with the Ethiopian FIRE plan. I suspect it is similar to firing in the mid-west!

WADR, Atlanta "ain't" that far from the midwest.

[flintnational]

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Originally Posted by CardsFan WADR, Atlanta "ain't" that far from the midwest.

Just trying to see if anyone is paying attention.

[CardsFan]

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Originally Posted by flintnational Just trying to see if anyone is paying attention.

Fair enough. I'm known to to poke the dog once in awhile to get a reaction.

[daylatedollarshort]

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Originally Posted by Elbata Just like The Bogleheads, ERE can expect to be ripped apart on this forum too. All Jacob ever did was post his thoughts and ideas. Just like Mr Money Mustache, probably 90% of the comments were negative. All they were both doing is giving a different way of looking at life.

I don't think it was the how little part that got most of the criticism for those two, it was mostly the numbers not adding up, leaving major expenses out of the budget, or making do what I say not I what I do kind of posts, since neither one of them are actually retired.

I'm all on board for the different way of looking at life part.

[retiredunder50]

Although I think the scenario provided seems too risky at first glance, it could possibly work out for them. From the income side, the income generated from $800K will likely result in a zero income tax burden. Refundable credits for the children will generate $4200 a year for the first 8 years or so (assuming tax law gets extended). Actually, the child credits could generate up to $6K off the tax bill if they do owe a few thousand. The income for 5 likely meets the federal poverty level and will qualify the family for free health insurance, school lunch, and other government assistance. Low income internet plans are about $10/month. When the kids are ready for college, the income reported on FAFSA would result in a very low EFC. If the no debt claim translates into owning their own house, they would have prop taxes, insurance, maintenance... which could be low depending on where they live and the condition/age of the home. If they were able to accumulate $800K at this early age with 3 kids (assuming it wasn't a result of inheritance, gifts, insurance payout,...), I would bet they have a pretty good handle on LBYM. Could they live on an approximate NET $35K/year with a few thousand dollars worth of additional government programs? It's possible, but I would recommend several more years of working to build up some safety margin. Also, that $800K was probably all in on the market this past decade. I doubt they could really handle a major correction/recession or 2 or 3 without having to return to work.

[jim584672]

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Originally Posted by retiredunder50 Although I think the scenario provided seems too risky at first glance, it could possibly work out for them. From the income side, the income generated from $800K will likely result in a zero income tax burden. Refundable credits for the children will generate $4200 a year for the first 8 years or so (assuming tax law gets extended). Actually, the child credits could generate up to $6K off the tax bill if they do owe a few thousand. The income for 5 likely meets the federal poverty level and will qualify the family for free health insurance, school lunch, and other government assistance. Low income internet plans are about $10/month. When the kids are ready for college, the income reported on FAFSA would result in a very low EFC. If the no debt claim translates into owning their own house, they would have prop taxes, insurance, maintenance... which could be low depending on where they live and the condition/age of the home. If they were able to accumulate $800K at this early age with 3 kids (assuming it wasn't a result of inheritance, gifts, insurance payout,...), I would bet they have a pretty good handle on LBYM. Could they live on an approximate NET $35K/year with a few thousand dollars worth of additional government programs? It's possible, but I would recommend several more years of working to build up some safety margin. Also, that $800K was probably all in on the market this past decade. I doubt they could really handle a major correction/recession or 2 or 3 without having to return to work.

EITC, doesn't that require earned income? Retired means no "earned" income.

[Mr. Tightwad]

Jacob (ERE) and Pete (MMM) both were able to speak to the common person...the common worker. Their message about leaving work at an early age was music to the ears (eyes?)...Pete has became wealthy from it (even after the divorce, hopefully he learned something). The desire to quit working is shared by many, and the two of them successfully tapped into it.

[Gumby]

MMM's shtick quickly wears thin.

[Calico]

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Originally Posted by daylatedollarshort I don't think it was the how little part that got most of the criticism for those two, it was mostly the numbers not adding up, leaving major expenses out of the budget, or and making do what I say not I what I do kind of posts, since neither one of them are actually retired. I'm all on board for the different way of looking at life part.

^^^^This.

[aaronc879]

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Originally Posted by Spock While it depends on his standard of living... (ex. a camper with shopping carts for portable storage), I myself could not retire with 800K, 3 kids, and only 32yo. I'm managing ~2x that amount at roughly the same ages as you are and I am just barely comfortable with it... and thats with a burn rate of only 33K/year.

Your kids will enjoy their large inheritance.

[retiredunder50]

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Originally Posted by jim584672 EITC, doesn't that require earned income? Retired means no "earned" income.

The EITC does require earned income but that is different from the child tax credit (CTC) that I was discussing. CTC works better if income is earned, however, if all the income only came from 1099R (pension, IRA,...) they still could have received up to the full $6K worth of CTC to reduce the tax bill if their retirement income was around $77K in 2018 (and less, for lower retirement income). Unfortunately, the refundable part does not go to them if they do not actually have earned income. My original post is in error as I mentioned the refundable part of the child tax credit and they are not entitled to that with retirement income only.

I just ran a quick what if scenario and saw that if the couple actually earned income (W2) $30K, they would be entitled to nearly a $9400 refund from the federal return and around $2K in the state of NJ! (That refund is a combo of EITC, & the additional CTC). A small chunk of CTC was applied to wipe out the roughly $600 tax bill due on the $30K income. Maybe a part time job is a solution while letting the $800K grow? Earn $30k, pay ~2K for SS/medicare, get $11,400 in refunds. NET nearly $40K.

[Spock]

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Originally Posted by flintnational Based on the success of the Early Retirement Extreme Blog, I have started a forum titled "Ethiopian Early Retirement". The median family income in Ethiopia is $783 annually. Assuming an extra early retirement and a conservative WR of 3%, a person could retire with a nest egg of $26,100! I have also answered the long standing question, "Do I have enough to FIRE?". If you have more than $26K, yes you can FIRE! ETA: I am getting UNICEF ads in the margins of the forum. Serves me right!

I've always thought there's gotta be some place some where that I could take a modest sum and live maybe not like a king but "higher on the hog" without having to give up electricity and indoor plumbing.

[ckelly78z]

With only $800K, he has a long road ahead of him that will include health care for 5, college for 3, cars, insurance, clothes, food, school fees, trips, etc...

I'm on the fence about retiring at 62 with $800,000 and no debt, I can't imagine 30 extra years, and all the expensive years of raising 3 kids ahead of him. At 54, I am just now out of funding 2 kids.

[aaronc879]

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Originally Posted by ckelly78z With only $800K, he has a long road ahead of him that will include health care for 5, college for 3, cars, insurance, clothes, food, school fees, trips, etc... I'm on the fence about retiring at 62 with $800,000 and no debt, I can't imagine 30 extra years, and all the expensive years of raising 3 kids ahead of him. At 54, I am just now out of funding 2 kids.

Healthcare would be highly subsidized. Parents are not obligated to pay for college for their kids. Almost no one I went to highschool with had college paid for for them. Clothes can be mostly hand-me-downs and thrift store. School fees are very low and trips are mostly optional. Parents provide the basics and kids can get a job if they want extras.

[ER Eddie]

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Originally Posted by SoReadyToRetire Someone suggested in a reply to one of my threads that I check out the "Early Retirement Extreme" forum. On there, I found a 32 year old man, married, with 3 very young children, ages 9, 8, and 3, asking if he could retire NOW with $800K and no debt. The consensus was that he's ready now but should consider working "a little longer" to create a pad to cover the increased amount his kids will cost him as they grow up. YIKES!!! And here I am worrying about whether my DH and I are ready to retire at age 61/57 with about that amount! Either I'm way off base or he's in for a rough future. I think I'll stick to this forum, where people are either more reasonable or at least more skeptical.

Well, they are in a very different and more precarious position, retiring at age 32 with 3 very young children. He may be looking at another 60 years of life -- who knows what health care, to say nothing of the overall economy, does during that stretch of time -- and the 3 kids represent very large future expenditures, also to some degree unpredictable. So I can see why other people might raise some cautions.

You of course are in a very different position. One advantage of being older is that you don't have as much ground to cover, because you'll be turning your meat suit in for a refund sooner than he will -- you're not looking at six decades of unpredictable expenses or raising 3 young kids.

I don't visit ERE or MMM much, because the frugality ideas are old hat to me by now (I've been involved in simplicity/minimalism for 30 years), and my financial situation is such that I don't really need them, but I like what they're doing. They're giving some hope and ideas to people who want to retire early and don't have the materialistic needs that a lot of people do or big money careers. I don't adopt many of the ideas, but it's good to know they're there. Just hearing the stories helps me detach from a lot of the standard beliefs about what is required for a satisfying retirement or even a happy life. It's all very individual.

[Major Tom]

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Originally Posted by Gumby MMM's shtick quickly wears thin.

+1 - and Jacob's did for me, after a while. I had long had a slight problem with his approach, in that it felt overly academic and analytical. I sensed a whiff of inauthenticity in the way he presented his lifestyle. It felt as if he were merely performing a scientific experiment, as opposed to actually living the life. Yes, my sensitivities are a bit too finely tuned or, as my ex-fiancee would say, "I'm very picky when it comes to people", but it didn't come as a surprise when he announced that he was re-entering the world of work, as a highly-paid quant trader. Think of that - to go from making your own rake, to earning a big wad of money. Bit of a change eh?

I really like clever people, but also dislike emotional dishonesty - and I felt that there was a bit of that going on with both Pete and Jacob. Actually, a LOT of it going on with Pete, and a bit with Jacob.

[ExFlyBoy5]

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Originally Posted by Major Tom I really like clever people, but also dislike emotional dishonesty - and I felt that there was a bit of that going on with both Pete and Jacob. Actually, a LOT of it going on with Pete, and a bit with Jacob.

I think that's my biggest issue. They are both really, REALLY good at the "FI" part and not so good with the "RE." I think one of the latest posts that Jacob wrote, he mentioned that he has 120+ years of living expenses saved. He didn't say if this derived from his "extreme" ways, or how he is probably living now (in Chicago). I understand wanting a mental challenge...even an extreme one...but does that require employment to sow that seed? I can think of many, many ways to keep myself intellectually challenged without all the headaches that come from answering to an employer.

[NW-Bound]

Even Thoreau lived on Walden Pond for only 2 years. Then, same as Jacob, he declared "been there, done that", and moved on.

I have lived in my class C motorhome for 2-month treks, and am sure I can survive for longer. But if I do not have to live in it for years, I prefer not to.

[AnonEMouse]

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Originally Posted by flintnational Based on the success of the Early Retirement Extreme Blog, I have started a forum titled "Ethiopian Early Retirement".

I created a "Late Retirement Extreme" forum catering to those who plan to die at their desks and remain undiscovered for the longest times possible (got to keep those paychecks coming ya' know). It will include plans on how to mask the smell and some really cool Raspberry PI and Arduino projects to mimic life signs to fool your co-workers.

Only problem is we don't get feedback from successful members...



well, séances aside