FIRE and friends

[Milton]

Quote:

Originally Posted by michelle Not all people who lack the savings to retire early did so without a plan. For some, that is their exact plan. Make lots of money, and live like a king for their entire lives instead of a pauper.

Fair enough, except that negative contingencies beyond our control (e.g. health issues, job loss) do sometimes happen. While FIRE is not necessarily desireable, FI certainly is.

Quote:

Originally Posted by Keim I look across the street every day at my neighbor, and good friend, with the large house, etc. Big hat, no cattle. His house is underwater, he has too much debt, and no savings. Finances are a constant stress on his marriage and life. A few weeks ago the subject of retirement came up. He commented that he didn't think retirement was realistic anymore. "I plan to work until SS kicks in, or they bury me. Probably both." 34 and he has given up.

Wow.

[michelle]

Quote:

Originally Posted by FUEGO Where do you work? Big law firm? Investment banking? Corporate executive? Silicon Valley with stock option millionaires? Sounds like a rewarding and lucrative field if so many have reached financial independence yet continue to work.

Not really. Many threads on this forum would dispute that statement. If you live modestly, *enough* is not necessarily decamillions. It's what you spend, not what you make...haven't I heard that somewhere here before?

Your statement still assumes that all people don't want to work a minute longer than they have to. I don't think that's true for all, and may not even be true for most. This is a self-selected biased group. Is it possible we could be a minority?

[plex]

Just about anyone can FIRE, if they live modestly enough, and don't keep making one huge mistake after another. The amount of money required for the bare essentials in life, from what I have discovered, is extremely low. Very early retirement does seem to additionally require a higher than average income.

I also think it is a given to most/all forum members that most people are not interested or haven't thought about early retirement. Personally, I have seen this among highly educated co-workers in their 20-30s, most are very unreceptive, some are neutral (non-hostile), one or two very financially savvy individuals are interested. That is the primary reason those seeking early retirement are fairly certain that more often than not, people will not be receptive to their choice. While some people are satisfied with stopping at, "well, early retirement isn't anything I would be interested in," many others go beyond that and think, "and this guy/girl shouldn't be doing it either, that's crazy! I need to put some sense into them".

[FUEGO]

Quote:

Originally Posted by michelle Not really. Many threads on this forum would dispute that statement. If you live modestly, *enough* is not necessarily decamillions. It's what you spend, not what you make...haven't I heard that somewhere here before? Your statement still assumes that all people don't want to work a minute longer than they have to. I don't think that's true for all, and may not even be true for most. This is a self-selected biased group. Is it possible we could be a minority?

Michelle, with all due respect, most people just aren't that wealthy. I'm not talking about anecdotal evidence, just talking about current national trends. Median wealth of those in their 50's is somewhere in the very low six figure range if I recall correctly. Median income is probably in the $50-60k a year range. National data also suggest that the savings rate is rather low (also illustrated by the fact that after decades of earning the median salary, the median person has "only" accumulated wealth barely into the six figures).

So the median person at that age range has roughly enough to "live in their current lifestyle" (that being spending almost all they make) for a few years roughly speaking. By and large the great majority of working people are not financially independent. I'm just curious what field you are in where you are surrounded by extreme outliers (like us at this forum) who are financially independent but choose to continue working (for whatever reason)? I'm not saying these people don't exist, just curious where they are because I don't see many of them.

The only place I have seen lots of people working into their 70's and 80's (basically dying in the saddle) is big law firms. And whether any of these elderly partners at these law firms are actually financially independent - who knows? They may spend 97% of their income every year like most folks! Just because they drive a high end german car and live in a huge house in a ritzy neighborhood suggests very little about their wealth or financial independence.

I don't think I am implying that EVERYONE wants to keep working regardless of financial independence. I would wager that 51% or more folks would publicly state that they want to keep working. Privately, the large majority are probably dissatisfied with the work-a-day life in many respects, even though it may be rewarding in some other respects. I recall a CNN poll (clearly non-scientific) in which three quarters of working respondents said they thought of quitting at least once a day.

Currently I'm reading Studs Terkel's book "Working". This is anecdotal evidence, but lots of it. Probably enough to form a sufficient sample size if one were to compile all the anecdotes. The recurring theme I'm seeing is that the great majority of people are dissatisfied with their jobs for a number of reasons. Boredom, asshole bosses, bureaucracy, stress, danger, physical exhaustion, personal values conflicting with corporate mission, etc. The rare few were some creative types or non-profit types that really enjoyed what they are doing and the business executive/business owner types that seemed to be extreme type A's that LOVED being busy and needed all the time.

Michelle, I'm just curious where you have encountered all these people that don't spend much and save enough to be FI yet keep working. I know it isn't that hard to do it, as evidenced by all of us here that succeed quite well. Just never seen a big concentration of people that are FI yet keep clocking in every day.

[FIREd]

Quote:

Originally Posted by FUEGO So the median person at that age range has roughly enough to "live in their current lifestyle" (that being spending almost all they make) for a few years roughly speaking. By and large the great majority of working people are not financially independent.

Study: Americans' economic insecurity rises over 25 years - Jul. 21, 2010

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Meanwhile, a survey cited by Hacker found that 48% of Americans said last year they only had enough resources to carry them for two months before experiencing any economic hardship.

I understand that ER is not for everyone. But let's face it, the vast majority of people are so far from FI that ER is not an option anyways. So I hope, for their sake, that the vast majority of people like their job (I doubt it).

[FUEGO]

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Originally Posted by FIREdreamer Study: Americans' economic insecurity rises over 25 years - Jul. 21, 2010 I understand that ER is not for everyone. But let's face it, the vast majority of people are so far from FI that ER is not an option anyways. So I hope, for their sake, that the vast majority of people like their job (I doubt it).

I was giving Michelle the benefit of the doubt and looking at the highest income and wealth group of households which is IIRC those in the 50-59 age range. That was what median household I was referring to. Of course I'm going off memory, and I can't locate the BLS or census data where I saw these stats.

Do the vast majority of people like their job? No. I would say that of the people I know, I estimate maybe 5-10% (pure conjecture) would continue working if a sudden large windfall landed in their lap (large enough to subjectively secure their financial independence). Maybe that's more a sign of how I spend my social energies getting to know people than it is of the general national opinion. In other words, those superstars who LOVE working and cannot get enough of corporate drudgery don't tend to have a lot in common with me, therefore I don't voluntarily nurture that social relationship.

[haha]

I lived in a small community and when people asked/poked me that I should still be working, I just told them that as soon as they were contributing at all to my upkeep they could speak up. Until then, myob.

Though I sometimes made up some bs, because if you were not on welfare or disability and didn't sem to be working another default was dope conduit of some sort. And I did not want any midnight swat teams at my door. The one thing no one thought was that a young family man still in his 40s could conceivably not need or want a job.

Ha

[michelle]

Quote:

Originally Posted by FUEGO Michelle, with all due respect, most people just aren't that wealthy. I'm not talking about anecdotal evidence, just talking about current national trends. Median wealth of those in their 50's is somewhere in the very low six figure range if I recall correctly. Median income is probably in the $50-60k a year range. National data also suggest that the savings rate is rather low (also illustrated by the fact that after decades of earning the median salary, the median person has "only" accumulated wealth barely into the six figures). So the median person at that age range has roughly enough to "live in their current lifestyle" (that being spending almost all they make) for a few years roughly speaking. By and large the great majority of working people are not financially independent. I'm just curious what field you are in where you are surrounded by extreme outliers (like us at this forum) who are financially independent but choose to continue working (for whatever reason)? I'm not saying these people don't exist, just curious where they are because I don't see many of them. The only place I have seen lots of people working into their 70's and 80's (basically dying in the saddle) is big law firms. And whether any of these elderly partners at these law firms are actually financially independent - who knows? They may spend 97% of their income every year like most folks! Just because they drive a high end german car and live in a huge house in a ritzy neighborhood suggests very little about their wealth or financial independence. I don't think I am implying that EVERYONE wants to keep working regardless of financial independence. I would wager that 51% or more folks would publicly state that they want to keep working. Privately, the large majority are probably dissatisfied with the work-a-day life in many respects, even though it may be rewarding in some other respects. I recall a CNN poll (clearly non-scientific) in which three quarters of working respondents said they thought of quitting at least once a day. Currently I'm reading Studs Terkel's book "Working". This is anecdotal evidence, but lots of it. Probably enough to form a sufficient sample size if one were to compile all the anecdotes. The recurring theme I'm seeing is that the great majority of people are dissatisfied with their jobs for a number of reasons. Boredom, asshole bosses, bureaucracy, stress, danger, physical exhaustion, personal values conflicting with corporate mission, etc. The rare few were some creative types or non-profit types that really enjoyed what they are doing and the business executive/business owner types that seemed to be extreme type A's that LOVED being busy and needed all the time. Michelle, I'm just curious where you have encountered all these people that don't spend much and save enough to be FI yet keep working. I know it isn't that hard to do it, as evidenced by all of us here that succeed quite well. Just never seen a big concentration of people that are FI yet keep clocking in every day.

Sure, but median stats take all comers. Of course most people just get by and will always get by because they earn at or below the median. But then again, many of these people don't even have internet access let alone the reading and writing skills/aptitude/interest to have an engaging and interesting debate on the early retirement forum. Most of us are professionals. So my comments about choosing early retirement aren't referring to the hardworking blue collar folk who are living on low wages since I doubt that makes up a large cohort of the friends that we are worried about telling that we have retired early (although I do have a number of blue collar friends from way back, but they are long past being jealous of anything regarding my career or lifestyle).

I'm talking about people just like us that don't want to retire for a number of reasons outlined above. Sure they are probably in the top half if not quartile of wage earners, but still there are a lot of people at that level of income, and not all want to retire the minute they are able, and others may not all want to live extremely below their means to retire early. So I can envision many of my coworkers hearing news that I am retiring someday stifling a yawn before they say "Have fun, we'll miss you". Then they won't give another thought or two for the rest of their lives.

I'm with all of you on this board. I think there is value in FI even if not FIRE, but still the option of FIRE is valuable in itself....to me. Not everyone sees it that way or wants to live that way. One person's pleasure is another's pain.

What about me? Well, I work in health care, and yes, fulltime healthcare professionals, on average, make decent money using your choice of median income as a benchmark (which FWIW includes a large percentage of part timers, stay at home parents, people unemployed for part of the year etc).

[Onward]

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Originally Posted by FUEGO I would wager that 51% or more folks would publicly state that they want to keep working. Privately, the large majority are probably dissatisfied with the work-a-day life

"The mass of men lead lives of quiet desperation." IMO, you can't trust anything that we Americans say about our well being. It's too clouded by our cultural taboos against appearing weak. What we report and what we feel are worlds apart, I believe. I read articles that say things like "45% of employees are dissatisfied at work" and just shake my head at the blind optimism of it.

Since your friends are likely to be more like you than unlike you, I'd guess the friends of early retirees have a greater-than-average chance of wanting to retire early, too.

I do know that all three of my closest friends would give anything, anything within reason, to be able to give the business world the finger and still support their families. One is a banker, one is a lawyer, and one is a business owner. I've spent the last ten yrs watching their jobs, and the demands of modern "life" in general, kill them before their time. They're not bookworms or rebels and so don't know that FIRE is realistic. They're just good-hearted guys caught in a nasty machine.

[clifp]

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Originally Posted by FIREdreamer Yes, I think Sabbatical is going to be a transitional label. After a few years, I will probably feel more comfortable calling myself semi-retired or even retired.

It has taken my 10 years to go from being on extended sabbatical to semi-retired, to mostly retired. Finally this last trip, when people asked what I did my first instinct was to say retired, without qualifiers.

[FUEGO]

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Originally Posted by Onward "The mass of men lead lives of quiet desperation." IMO, you can't trust anything that we Americans say about our well being. It's too clouded by our cultural taboos against appearing weak. What we report and what we feel are worlds apart, I believe. I read articles that say things like "45% of employees are dissatisfied at work" and just shake my head at the blind optimism of it.

A lot of people, myself included, will espouse the culturally accepted "work is good" mantra. It's safe. You aren't really taking a controversial position. Then you get to discussing it, and you realize your conversation partners don't really like THEIR jobs, or most aspects of them (other than their paycheck). There may be some redeeming qualities, but by and large their job and their boss can go take a flying leap because the negatives far outweigh the positives.

You take away the necessity of a monthly paycheck from the equation for FI folks, and the BS side of work quickly outweighs all the positives (social interaction, demonstrating excellence at something, being part of a team, producing a valuable product or service, etc).

[Milton]

Quote:

Originally Posted by FUEGO The recurring theme I'm seeing is that the great majority of people are dissatisfied with their jobs for a number of reasons. Boredom, asshole bosses, bureaucracy, stress, danger, physical exhaustion, personal values conflicting with corporate mission, etc.

I would also add: lack of personal time (to travel, look after family, socialize with friends, pursue hobbies, etc.).

Many (most?) North Americans do not use all of their putative vacation time, and I suspect that this is typically not by choice ... we all know that someone else who can easily be hired to take our place if we don't "go the extra mile".

Quote:

Originally Posted by FUEGO You take away the necessity of a monthly paycheck from the equation for FI folks, and the BS side of work quickly outweighs all the positives (social interaction, demonstrating excellence at something, being part of a team, producing a valuable product or service, etc).

I am not sure that I agree with you there. For many people, the BS side of work is often not all that bad. What is more significant - tragically so - is that the positives you list are almost completely lacking.

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Originally Posted by Onward I do know that all three of my closest friends would give anything, anything within reason, to be able to give the business world the finger and still support their families. One is a banker, one is a lawyer, and one is a business owner. I've spent the last ten yrs watching their jobs, and the demands of modern "life" in general, kill them before their time. They're not bookworms or rebels and so don't know that FIRE is realistic. They're just good-hearted guys caught in a nasty machine.

I don't mean to be judgmental, but FIRE is not rocket science.

LBYM. Invest regularly but not aggressively. Let compounding do its magic. Marry someone who shares your goals, and work hard at the relationship so that divorce does not occur. Have only one or two children, or none at all. Don't buy more housing than you can afford, and pay off the mortgage quickly. Etc.

It's all pretty much intuitive common sense, and as should be obvious to anyone who genuinely dislikes the rat race.

Assuming that your friends are reasonably intelligent - which seems plausible, given their respective occupations - they should be able to figure this out. Perhaps they have. In the words of "Wizard" in the movie Taxi Driver:

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I've been a cabbie for thirteen years. Ten years at night. I still don't own my own cab. You know why? Because I don't want to. That must be what I want. To be on the night shift drivin' somebody else's cab. You understand?

[liveitup]

I'm 42 and just tell folks that I'm taking an extended sabbatical(it's been 4 years).I usually get a positive response,but once in awhile.....

Several days ago,I had a cry in my beer construction worker ask me what did all day long,I told him whatever in the **** I wanted to!

He then said"It's been 4 years,don't you ever get bored"? I said no,but even if I did,I'll take boredom over bull **** any day!He hasn't spoken to me since......

Oh well,life goes on.

[Amethyst]

Sounds as if he uses social networks to try to make w*rk-related or w*rk-useful contacts. I am not suggesting your friend doesn't like you for yourself, only that most people your age are diligently "networking."

However, one thing I hate most about w*rk is the way people pretend to like you, until they figure out whether you can do them any "good" or not. If not - you're history! They have no time for you any more.

Amethyst

Quote:

Originally Posted by FIREdreamer Alright, I replied to my friend and told him I was about to take a sabbatical. He shot back a few questions: 1) what will you do all day? 2) when will you go back to work, and in what industry?

[fisherman]

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Originally Posted by Amethyst However, one thing I hate most about w*rk is the way people pretend to like you, until they figure out whether you can do them any "good" or not. If not - you're history! They have no time for you any more. Amethyst

+1

[Katsmeow]

So much that is interesting in this thread...

Quote:

Not all people who lack the savings to retire early did so without a plan. For some, that is their exact plan. Make lots of money, and live like a king for their entire lives instead of a pauper.

I am the odd duck for this forum. The person who didn't LBYM for most of my life. My parents were very LBYM and I rebelled against it in a big way. I was fortunate made a deliberate choice to select a high paying profession. I knew that I wasn't saving money. And when I go back to that time, I remember thinking that I could save money later. I also had the idea that while I was young I wanted to have X or Y and that later when I was old I wouldn't want those things and would happily live on less. And, frankly, it sort of worked out that way. Many of those things that I just had to have in my 20s and 30s I have no interest in now in my 50s. I don't recommend my approach but that is how I thought then.

Quote:

I'm talking about people just like us that don't want to retire for a number of reasons outlined above. Sure they are probably in the top half if not quartile of wage earners, but still there are a lot of people at that level of income, and not all want to retire the minute they are able, and others may not all want to live extremely below their means to retire early.

I know quite a few people that I think could retire. There are various reasons why they don't but one thing is that many really over-estimate what is needed to be able to retire. I was talking to a peer a few years ago who really felt that $5 million was needed to retire. I think that until recently I totally overestimated what was necessary. Once I really became aware of and researched what you need to retire I firmly came down in the camp of those willing to reduce lifestyle to be able to retire sooner. As mentioned above I spent all that money when I was young and now I'm very willing to give up a lot of things to retire sooner (not all that soon -- I'm in my mid-50s). But I think that many that I know don't envision that as all. They have a high income lifestyle and don't envision not having any of that. That is, they don't envision their life without that kind of lifestyle. If they thought that they could retire if they could live on, say, $80,000 a year they would find that totally inadequate.

Quote:

I don't mean to be judgmental, but FIRE is not rocket science. LBYM. Invest regularly but not aggressively. Let compounding do its magic. Marry someone who shares your goals, and work hard at the relationship so that divorce does not occur. Have only one or two children, or none at all. Don't buy more housing than you can afford, and pay off the mortgage quickly. Etc. It's all pretty much intuitive common sense, and as should be obvious to anyone who genuinely dislikes the rat race. Assuming that your friends are reasonably intelligent - which seems plausible, given their respective occupations - they should be able to figure this out.

People keep telling me that I'm very intelligent. And yet I didn't figure this out. When I was younger it never occured to me that retiring early was a possibility. I had in mind that you worked until your were 65. Period. There might be an exception for someone exceptionally wealthy. But I never thought that retiring early was an option. At the same time, like many young people, I didn't look ahead. Retirement was boring and something to think about when old (yes I was very immature but I wasn't stupid). I think that if I had really thought it was a real option then it might have been a goal. But I didn't see it as an option. My family is very LBYM yet no one really retired all that early. And, they didn't spend money after retirement either. So that didn't give me a concept of saving money so I could retire early and enjoy life.

[flyfishnevada]

Even though I'm getting in late, I'll jump in. I met a former co-worker in the store today. He has 10 years to get his pension, but will still be in his early 50's. He, like most of my former coworkers, gets it. Most of them will RE in one form or another. No judging, just a little envy.

I live in a small town about an hour from my old office. Lots of ranchers, cowboys, manual laborers, a few like me though. They don't get it. My wife and I have gotten everything from anger, to disbelief. I'm not taking care of my family, how can she put up with me, how will we make ends meet. Pensions and retirement are foreign to most of them. Still, most are very family oriented and we throw out the taking six months off to figure stuff out and spending lots of time with my sons routine. Not untrue. They nod and tell us boys need their dad during their teenage years (not knowing I'm barely more mature than my boys).

I do worry about my friends. How will I relate? "How's it going?" "Well, work sucks, my boss is an idiot and I just lost out on a promotion, you?" "Caught a twenty inch trout last week!" I mean, they have their world and I have mine now. I'm sure some will remain friends, but the nature of that friendship may change. I will make new friends who share my experiences. Some old friends will just go away. Sad, but a fact of life. It's one thing when a friend is planning to retire in a few years and winding down, but it's another talking to a guy starting his 3rd career who has no plans.

So, how do I handle it? I have a version for just about every group. I tell them the truth, but not always all the truth. I tell them what they want or need to hear. If they want to hear I will take a job in six months with a consultant, so be it. I might. If they want to hear, I'm having the time of my life, I tell them that. I am. If they, think I'm failing/a loser/irresponsible, I sheepishly tell them its temporary. It might be and what do I care what they think.

I do what I want to do, always have. Lots of people disapprove. So what? If I have to shade the truth to avoid lectures, talking to's and stern glances, whatever. It's not because I am ashamed. It's more that I just have a different version of what's important in life than a lot of folks and I am not interested in hearing about theirs.

When I get a genuine question or concern, not just some busybody passing judgment out of habit, I tell them the truth. I tell them why I am retired, why I love it (three weeks in!!) and how I am able to do it. If they are interested, I will tell them my plans. Some still shake their head and shrug their shoulders, but in my experience a lot of those folks are looking for permission to think about or talk about ER. Some are inwardly envious and secretly rooting for you because if you can do it, maybe they can.

Either way, never be ashamed. You worked hard to get to FIRE. It's your life and you should live it they way you want. If fibbing a little makes it easier to deal with the ignorant people out their, go ahead. Just don't let it bug you or get you down. It takes a lot of courage and self reliance to FIRE. Enjoy.

Whew!

[rescueme]

Quote:

Originally Posted by FUEGO A lot of people, myself included, will espouse the culturally accepted "work is good" mantra.

I've never been good ...

[Stevewc]

After reading flyfishnevada's response, I got to thinking about the way I've handled people asking about my ER.
It really does depend on who it is and why they are asking.
I've even used the economy and my situation to bargain for better prices on things I need.
I mean, if people think you have so much money that you don't need to work (in some cases) they will raise prices on you, so you have to handle every situation differently.
If I'm doing some bargaining over work I need done or something I'm purchasing.
I might say, I'm not working right now, need to watch my nickels and dimes pretty closely.
I remember old timers using the line " I'm on a fixed income " which always meant SS. I'm sure in most cases they were telling the complete truth.
But lines like that can pay off and be very helpful in retirement.
Got to play the game you know.
Sometimes that means playing both ends against the middle
Steve

[MBAustin]

I am a newbie here. After several years of massive Megacorp job frustration, I am working through the final financial details to see if RE in October makes sense. I am 99% sure it will be OK financially even though we are putting 2 kids through college - we have always LBYM (just figuring out the acronyms here).

The biggest thing holding me back is what to say to my friends who are still w*rking at jobs they feel trapped in, or even worse, those who lost their jobs in this recession, are still out of w*rk, and are financially struggling because of their lack of savings in the past. Definitely some puritan guilt issues.

Thanks for all of the thoughts here, very helpful!