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Question for the folks with a modest income
Old 02-19-2015, 03:12 PM   #1
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Question for the folks with a modest income

I see a lot of information/advice floating around from the high income folks. I am interested in finding out what it takes to FIRE, for those that don't work for megacorp. If you're making less than $100k:

What is your income?

How much are you saving?

What age do you plan to be FIRE?

What are some of your other plans to achieve the goal of FIRE?

If you already managed FIRE, how did you get there?

Any other advice?

Thanks for your input!
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Old 02-19-2015, 03:35 PM   #2
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My favorite is this one. He kind of dropped off after a while but the numbers sound true so if a pizza delivery driver can do it anyone can. Pizza delivery driver aiming at FIRE in a few more years

Your questions are hard to answer without more context of what is "modest income"? $40k/year? $70k? And what are expenses expected to be? Some are quite happy on $25k/year income, others plan on many times that.

I'm a bit of an anachronism in that I retired under a pension plan that they stopped offering in the 1980's. A pension plan like that is very rare now outside of the military. I retired at age 52 from a public safety job where early retirement is normal. While I did stumble into an easy low-stress job later for five years, it was optional and when things went south there I quit, as per plan. We saved most of the "unplanned-for" money from that and as a result are putting off taking SS until next year at FRA of 66 instead of taking it at 62.

Also as with many people here a big part of being able to retire was zero debt. We have more discretionary income than some retired relatives with higher incomes but with debt payments to make. We're quite comfortable but won't be taking any luxury round-the-world cruises either.
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Old 02-19-2015, 04:05 PM   #3
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Surely more than you'll wanna know, but here's a link to how I got here...
Sharing 23 years of Frugal Retirement

Good luck...
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Old 02-19-2015, 04:06 PM   #4
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What is your income?
Under 100K for two people.

How much are you saving?
Last time I calculated, it was ~55% savings rate.

What age do you plan to be FIRE?
Now (42) for me, end of year (41 for husband).

What are some of your other plans to achieve the goal of FIRE?
Already there, but we've always tracked spending, DIY if possible (I love to cook, garden, and we do our own yard work for instance), don't give a crap about buying the latest anything (bargain shop for things that are needed), and the both of us tend to be homebodies that don't need to go out and spend to be perfectly happy.

If you already managed FIRE, how did you get there?
Was on track to FIRE at 50, but my dad died and made us instantly FI. Took a few years to figure out the investing/RE side of things. At our savings rate, we still would have been early retirees but my inheritance was very humbling and greatly appreciated.

Any other advice?
Can't stress this enough - track your spending. If you don't know exactly what is going out, how are you going to know how much you really need in retirement?

FIRE is a two-prong approach - it's about your savings rate and your spending rate, and the more you can up the save and lower the spend, the faster you'll hit your number.


Learn basic investing and don't rely on an adviser to hold your hand. Basic index investing is easy to learn and do well in, along with giving you decent returns.

And don't get caught up in the latest car, biggest house, fanciest electronics, consumer-driven culture. It's a sure way to gut your ability to FIRE if you're a modest earner. And that stuff isn't worth the freedom from a J-O-B anyway in my opinion.

You might also check out the MMM site as well - he touches on a spend rate that is less than the conventionally expected in FIRE (but not as low as EarlyRetirementExtreme - they REALLY cut the spend rate down to the bone!).
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Old 02-19-2015, 04:11 PM   #5
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Quote:
Originally Posted by Henman004 View Post
I see a lot of information/advice floating around from the high income folks. I am interested in finding out what it takes to FIRE, for those that don't work for megacorp. If you're making less than $100k:

What is your income?

How much are you saving?

What age do you plan to be FIRE?

What are some of your other plans to achieve the goal of FIRE?

If you already managed FIRE, how did you get there?

Any other advice?

Thanks for your input!
You go first.
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Old 02-19-2015, 09:58 PM   #6
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Quote:
Originally Posted by Henman004 View Post
I see a lot of information/advice floating around from the high income folks. I am interested in finding out what it takes to FIRE, for those that don't work for megacorp. If you're making less than $100k:

What is your income?

How much are you saving?

What age do you plan to be FIRE?

What are some of your other plans to achieve the goal of FIRE?

If you already managed FIRE, how did you get there?

Any other advice?

Thanks for your input!
The only advice I have is if you do not offer any information about yourself regarding the questions you are asking others do not expect much response. You have to give to get .
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Old 02-19-2015, 10:53 PM   #7
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For the most aggressive FIRE advice on a low income, see Jacob's Early Retirement Extreme Blog: Early Retirement Extreme: — a combination of simple living, anticonsumerism, DIY ethics, self-reliance, and applied capitalism

I couldn't do it, but the approach seems valid, notwithstanding his decision to go back into the market as a hedge fund quant.
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Old 02-19-2015, 11:14 PM   #8
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I didn't have any number in mind to FIRE.
I knew that I wanted to at least retire, and my work would leave me with various months of unemployment, as it was not steady and I never knew if I would get another.

So I saved as much as I could, sometimes it was hard, once I put a huge % of my pay into the company 401K probably close to 60% as I knew I would not be there long and might not be able to get into another 401K for the rest of the year.

So my advice is MAX your savings, never carry debt (except possibly a mortgage on a small house), invest in the stock market and never sell when it drops, learn to cook so you don't have to go to restaurants all the time, drive your car for minimum 12 years, learn to fix things so you can and don't have to pay repair bills.
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Old 02-19-2015, 11:22 PM   #9
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There are some good books out there on the topic - the classic Your Money or Your Life, Retire on Less Than You Think - Fred Brock, Retirement on a Budget - John Howells and of course, the ever popular Possum Living: How to Live Well Without a Job and Almost No Money (just kidding about the last one, but it is kind of a cult classic).
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Old 02-20-2015, 06:32 AM   #10
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I have BOTH editions of Possum Living, the old and the new, lol!


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Old 02-20-2015, 07:30 AM   #11
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We're retired, and found our way there by saving as much as possible. This savings was made possible by maximizing 401k contributions, building an after tax portfolio, and generating some $ from real estate investments.

There are two keys to getting there - minimize spending and maximize income.

Track expenses and cut expenses to the bare essentials whenever possible.

Make as much $ as possible, working overtime and extra jobs

And save, save, save. And do it over a long period of time - 30 years or more. However long it takes to get there.
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Old 02-20-2015, 07:38 AM   #12
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We found having accounts that we could draw from before age 59.5 were helpful.
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Old 02-20-2015, 08:50 AM   #13
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Hope you don't mind if I don't answer your questions in detail Henman004, but my income was what I would term modest, being in the range of 30-50K for most of my working life, though it was in the 20's at first - and closer to low 30's much of the time.

I didn't have a definite plan, other than to save what I could via IRA's and 401K's. At some point in my 30's I got more serious about it, and began putting more away (though it was never anywhere near the 40-50% of income some of our extreme savers here have achieved). I bought a house to live in when both interest rates and house prices in my area were low. A few years later, after a boom in prices, I sold, and used the money to buy 3 houses, which I rented out while reverting to renting an apartment to live in for myself. Then, as luck would have it, I sold all 3 houses at the peak of the local housing market in ~2005.

To aid my frugal endeavors, in 2002 I sold my car and bought a bicycle. To date, I am still using a bicycle as my sole form of transport - at the age of 51, an age where most self-respecting people would have their own vehicle. Thank goodness I am not in my 20's and trying to impress the girls

In retirement, I continue to live below my means. The fact that it doesn't take much to make, and keep me happy, helps a lot. I am like the proverbial pig in poop.

I didn't provide any more detail in my tale, as everyone's circumstances are different. Likewise, everyone is different in terms of how they plan for retirement. Some have their future laid out for them in a spreadsheet. Others, like myself, merely look for opportunities to maximize savings and minimize expenses, and trust their built-in sense of whatever-it-is to guide them
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Old 02-20-2015, 09:25 AM   #14
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I “retired” (for lack of a better word) two months ago; I’m 53, was planning to FIRE at 56--but my job was wiping me out, plain & simple. I worked in the IT dept for a big healthcare company, been there 15 years. 5-6 years ago our company began expanding, my workload doubled almost overnight and all my requests for support went ignored. Finally this past September I told them if I didn’t have help by December, I was leaving. (I think my manager and team-lead thought I was bluffing.) Nope.


My salary was 58K (no overtime pay and I was working 20-25 hours a week on top of my regular working hours). When I left I had 23K in checking, 61K in savings, 240K in taxable investments (all Vanguard index funds, Total Stock Market, Mid-Cap, Small Cap Growth, European Index). I have 227K in my 401K (Vanguard Wellington), and a cash balance plan of 33K which I’m rolling into my 401K. So as of this writing, roughly 580K in assets, zero debt.


It may not sound like a lot to some of the other members on here, but to be honest I’m surprised I have even this much accumulated. I began saving in earnest for a home in the late 90s until it finally dawned on me I was doing just fine without one. I took the bulk of my savings and put it into those 4 index funds. I’m single with no kids, live in a small but nice apartment, and according to Mint.com I’ve yet to spend over 21K a year. I’ve always lived frugally, but I never felt like I was—I guess I just enjoy the smaller things in life.


To be honest, if I hadn’t discovered Mr. Money Moustache a couple years ago, and Obamacare didn’t come along, I never would’ve dreamed of leaving the workforce early—and probably just worked myself into an early grave. I’ve played with Firecalc, my numbers look pretty good (if I include social security in a few years) but I still worry on occasion that I could wind up on the street. All I know is—the last 2 months have been such a freeing experience, the thought of going back to of work gives me a stomachache. So for the time being, I’m going to continue on this new path, take my chances.
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Old 02-20-2015, 10:00 AM   #15
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Its nice to read that it is possible to have a retirement with less than several million dollars saved.

Thanks to those that have shared here.
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Old 02-20-2015, 10:22 AM   #16
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Originally Posted by FrankiesGirl View Post

Any other advice?
Can't stress this enough - track your spending. If you don't know exactly what is going out, how are you going to know how much you really need in retirement?

FIRE is a two-prong approach - it's about your savings rate and your spending rate, and the more you can up the save and lower the spend, the faster you'll hit your number.


Learn basic investing and don't rely on an adviser to hold your hand. Basic index investing is easy to learn and do well in, along with giving you decent returns.

And don't get caught up in the latest car, biggest house, fanciest electronics, consumer-driven culture. It's a sure way to gut your ability to FIRE if you're a modest earner.
Pearls of wisdom ! Great post.
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Old 02-20-2015, 10:25 AM   #17
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I have BOTH editions of Possum Living, the old and the new, lol!
So should I take the "just kidding" part off my book list? I have never read it- I just thought the title was funny. I guess since you have two editions you found it a good read?
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Old 02-20-2015, 10:47 AM   #18
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Pearls of wisdom ! Great post.
+1

Wife and I are no longer in the <$100K group, but we were for most of our working lives.

FI is not rocket science. Just like when dieting, the equation is simple: burn more calories, consume fewer. For FI: save lots, spend little.
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Old 02-20-2015, 11:29 AM   #19
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So should I take the "just kidding" part off my book list? I have never read it- I just thought the title was funny. I guess since you have two editions you found it a good read?
Well, it is still a bit horrifying to read, unless you've always had a desire to know how to skin rabbits. But actually, it was fairly interesting in a 70s homesteading kinda way, and I enjoyed looking up more about "Dolly" and how she turned out as an adult.

When we were paying off debt and doing MAJOR LBYM years ago, we had a couple of photos of possums posted on our refrigerator as reminders to do our own "possum living" so I guess it is more of a reminder to me than most folks.
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Old 02-20-2015, 12:53 PM   #20
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Thank you all for the great responses/advice! I apologize for taking a while to write back. Living in the UK, without access to this site at work, and horrible cell phone coverage everywhere, it is hard to keep up.

I really needed some inspiration. I have been saving up for retirement for over 10 years, and I am approaching $200k in total assests. I feel like I am doing pretty good, but there's always room for improvement.

Income is right around $50k

I put away $17k per year between in a taxable account and 2 Roth IRAs (one for my wife). I am being promoted this year, and have about 2 years left on some student loans. I'd like to gradually bump my savings up to $22k.

I have 8 years left until I retire from active duty, and I'll be 38.

I don't expect to be FIRE by that time, so I'll probably start a real estate and/or graphic design and marketing business with my wife.

I just started to really track my spending this year, and I think it'll be an eye opener.

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