Money Mustache Fires Back at Suze Orman ($500K to retire vs $5 Million)

[cyber888]

Ok, so this is MMs answer to Suze Orman's you need at least $5 Million to FIRE They are on the opposite end of the FIRE spectrum

https://www.marketwatch.com/story/m...-movement-2018-10-05?siteid=yhoof2&yptr=yahoo

 

[Hermit]

 

[Fedup]

I don’t see the $500k anywhere in that article, do I need new glasses.

 

[cyber888]

No, but $500K is the acceptable number for Money Mustache and his crowd, if you have followed his blog and followers.

I don’t see the $500k anywhere in that article, do I need new glasses.

 

[Fedup]

No, but $500K is the acceptable number for Money Mustache and his crowd, if you have followed his blog and followers.

I remember my sister used to tell me back in year 2000, that with a house paid off, $500K is good enough to retire, at least that’s what the pundits were telling people. Now fast forward, it’s probably $2 million. Not for the Mr Mustachio crowd, but for the regular ER crowd.

 

[Floridatennisplayer]

She speaks in such broad generalities. Can’t stand it. Come on, the couple with annual expenses of $35K do not need $5 million dollars! They can easily get by on $500k in savings and SS.

 

[Fedup]

They don’t get SS yet, not this young anyway.

 

[bobandsherry]

I remember my sister used to tell me back in year 2000, that with a house paid off, $500K is good enough to retire, at least that’s what the pundits were telling people. Now fast forward, it’s probably $2 million. Not for the Mr Mustachio crowd, but for the regular ER crowd.

Not sure what having house paid off has to do with anything. Isn't it more about how much one spends in total annually?

 

[Fedup]

Not sure what having house paid off has to do with anything. Isn't it more about how much one spends in total annually?

Yeah, that’s true, but if SWR of 4% for $2 million is $80k, that’s pretty decent for a single person with a house paid off. Housing is usually the biggest expense.

 

[GravitySucks]

$2M?
Damn I gotta go find a job. Might as well work till I get Suzes' 5M.

 

[Fedup]

$2M?
Damn I gotta go find a job. Might as well work till I get Suzes' 5M.

You can do barista FIRE, I was thinking of medium FIRE, not fat FIRE.

 

[HI Bill]

Interesting read. I just don’t believe in the MMM philosophy that infers you need to work or lower your standard of living after ER. Like many here, once I RE, my spending will be double what it was in pre-retirement.

 

[Music Lover]

Not sure what having house paid off has to do with anything. Isn't it more about how much one spends in total annually?

A handy person with a paid off house could have lower monthly expenses than a renter. Plus they have the equity of the house and its appreciated value over the years.

 

[pj.mask]

The only way to retire with 500k is if you have subsidized health insurance.

 

[Dtail]

The only way to retire with 500k is if you have subsidized health insurance.

Or heavy pensions/SS combined with lighter spending.

 

[RetireBy90]

Used to like Ms Orman, but she has become tiresome for me. While I’m sure she and anyone in her business has seen many cases where retired ran into a problem and didn’t have as much left they had counted on, I have come to realize that even in retirement stuff happens and you have to adjust. Happens all through your working years so why would you expect that it will stop once you retire.

Having said that 5M should generate $200K in income. If your life style requires that, then that is your number. I personally would rather declare my financial independence with my paltry $1M retirement savings and live on my terms. It is all a trade off. Good thing I can make that choice and live with the results. FI and retire when you want!!! I should get a bumper sticker with that

 

[SnowBound]

She speaks in such broad generalities. Can’t stand it. Come on, the couple with annual expenses of $35K do not need $5 million dollars! They can easily get by on $500k in savings and SS.

OK, couple age 50 can survive with $35K. Fast forward 14 years, how much are health costs for a couple age 64?

 

[audreyh1]

Interesting read. I just don’t believe in the MMM philosophy that infers you need to work or lower your standard of living after ER. Like many here, once I RE, my spending will be double what it was in pre-retirement.

I think this is for folks who want to retire extremely early, and are willing to be extremely frugal to do so and live a frugal lifestyle all their lives. It’s an option.

Your money or your life was somewhat along those lines.

 

[Maenad]

Interesting read. I just don’t believe in the MMM philosophy that infers you need to work or lower your standard of living after ER. Like many here, once I RE, my spending will be double what it was in pre-retirement.

I've never caught an inference that you need to work or lower your standard of living, more that you should do something productive that you enjoy, and it will often end up netting you some income, which lowers your WR and is therefore a win-win.

MMM doesn't seem to think too highly of sitting around on a sandy beach drinking fruity drinks with umbrellas in them. I think there's some truth to that, in that if you actually retire in your 30s like he did, you have a lot more energy than folks in their 50s and less stress to bleed off. IMO, there's nothing wrong with wanting to spend your days sitting around watching the world go by if that's what makes you happy.

 

[Toocold]

In many ways FIRE is the embodiment of what Suze has been preaching - being mindful of your spending, putting yourself/people first, work on things that you are passionate about, etc. Had she done some research, she could have positioned herself well. Instead, her message looks old and tired.

 

[Rianne]

MMM is not entirely a new concept. I know he's been around awhile but I understand he's making a nice income on his blog and possibly some other outside sources. He preaches just as Suzy does. The living frugally concept came over with Europeans through Ellis Island. My grandparents, my DH grandparents. Frugal? How about raising your own chickens, pigs and vegetable garden. Grocery store? Not much. Clothes? Not much. And clothes were high quality and lasted decades, much like my clothes today. Houses were tiny. My mom grew up in a tiny house in the suburbs of Chicago. Six kids. One of them slept in the bathtub. She had a happy close family except my GF drank too much. My uncle traveled on box cars, all over the country as a young man. He hopped trains LOL. They all ended up FI in their later years. Figured out how to cut corners in every way. Crazy materialism came after WWII. The country was in a boom after the crash. We're just rethinking the "old" way of living.

 

[scrabbler1]

I retired 10 years ago (at age 45) and had $600k in my taxable account (and $230k in a rollover IRA), the only source of money to support me for ~15 years. Other than the trivial ACA subsidy (~$500 per year), my HI has not been subsidized, and I was paying full freight prior to 2014.

 

[Fedup]

It also depends on the location of residence too. May not be possible in some HCOL in California.

But I’m thinking every 7 years, the amount that you need tend to double.
So in 2000, you need $500k, in 2008, you need $1 million, in 2018, that might be $2 million. Plus retiring in a bull market like 2000 and 2008, the amount might be reduced after the crash. So if you retire now, it might be reduced in the future.

 

[USGrant1962]

But I’m thinking every 7 years, the amount that you need tend to double.
So in 2000, you need $500k, in 2008, you need $1 million, in 2018, that might be $2 million. Plus retiring in a bull market like 2000 and 2008, the amount might be reduced after the crash. So if you retire now, it might be reduced in the future.

In round numbers inflation has been 50% since 2000, so $500K is ~$750K, not $2 mil. Maybe a little higher for CPI-E but nowhere near doubling every 7 years.

 

[Fedup]

In round numbers inflation has been 50% since 2000, so $500K is ~$750K, not $2 mil. Maybe a little higher for CPI-E but nowhere near doubling every 7 years.

In theory yes, but I doubt if anybody here is brave enough to retire on that amount. That’s like $28k per year for ER.