If we can do it, anyone can?

[38Chevy454]

Three rules that will always be valid:
1. LBYM
2. Pay Yourself First
3. Learn compounding

May seem oversimplified, and for many it means moving to a lower COL to make the numbers work better. It takes patience, hard work, and perseverance to reach that end goal. However that goal *is* achievable as OP stated.

I only partially agree that the genetic lottery is an important factor. Sure it comes into play with a bad medical illness. However, if anyone values education and stays way from destructive influences, it is possible to overcome bad luck being born into poverty. Being in US or other developed country for sure is required, but the world is getting smaller and information is more available to make a plan and improve where you started life.

 

[JRon]

Yes, the opportunity to retire early for people is there today. It requires hard work, good choices, and a great attitude. Is it easier for some compared to others? Absolutely, but still available to most.

 

[gayl]

Three rules that will always be valid:
1. LBYM
2. Pay Yourself First
3. Learn compounding

+1000%!! Well said

 

[sengsational]

We know that there were ups and downs in the economy from my HS graduation until now, and we presume ups and downs for those that just graduated. The trajectory for the economy was generally up for me. Presuming that same general trajectory for those that just graduated, then I don't see why it would be any more difficult to FIRE. True, some things are harder, more expensive, etc, but there are things that are easier, cheaper, etc. The starting point is huge, obviously, but the OP question isn't about that (or if it is, I'm not going to address it). Presuming a similar start in life, and a similar economy, it would seem that FIRE is as accessable as ever. The fly in the ointment is if one believes "this time it's different" WRT where the benefits of society land. I'm presuming a strong middle class.

 

[Time2]

Why single out young people?

Because that's what I'm reading about. How hard it is for young people today.

How many people your age, who earned as much as you, have ER'd? Or even saved enough for a comfortable retirement? We are a rare breed and will probably always be. I for one, am grateful that I was lucky to have the opportunities & mind-set to do this.

Yes, I agree, we are rare birds. I still wonder if the economic situation has changed making it so much harder now, or, am I just reading writing from complainers.

 

[brett]

Totally agree. We saved for years to be able to send our kids through four-year universities and get them out with no debt. The cost is outrageous and we didn’t want them to be saddled with huge student loans as they complete their education and start out their careers and families.

We started nearly four decades ago without secondary and post graduate debt and felt the kids deserved that same start.

Ditto. Now we are doing the same for each of our young grandchildren. Plus they will get amounts off the top from our respective estates for edu.

Who knows what the costs of education will be in 15-20 years. This is a gift for both our children who will hopefully not have this burden, and of course for our grandchildren should they wish to take advantage of it.

Both our children had no student debt. We want the same for our grandchildren.

We do not believe that we can judge the future based on our past experiences.

 

[Gumby]

That is the point. And the reason to remember that the silent evidence is out there. A lot of it, IMO.

I feel that you and I have been talking past each other.

Of course, if your luck is bad enough, you won't succeed. And you probably wouldn't be posting here. That is hardly an earth shattering revelation. But good or bad luck has always been a factor. It is just as likely that I would have been hit by a bus and paralyzed 45 years ago as it is that a young person trying to follow my path would be hit by a bus today.

The question is not whether luck of the draw at birth or exogenous factors such as illness, accident , war etc. were or were not a factor in my success. Yes, I have been lucky. If you read any of my posts in the past, you will see that I have acknowledged that time and time again.

Rather, the question is whether it is more difficult for a young person today to follow the same path I did. Or is there something about modern life -- costs of education, job availability, housing expense, etc. -- that makes it impossible?

I submit that it is still possible. As I mentioned earlier, the same educational and job opportunities that were available to me remain available and would put one in the same relative economic position. My house has appreciated at just about the rate of inflation since I bought it 29 years ago. (Some other things are now cheaper than when I was young - like electronics, food and clothing, and mortgages.) So, assuming that a young person today did the same things I did (and didn't get hit by the metaphoric bus) then they could arrive at the same endpoint.

Will it be easy for that young person? Not a bit. In fact, it will be tremendously difficult. But it was equally difficult for me.

And if I had remained a burger flipper at McDonalds (my first job) then I would never have retired, just as a burger flipper at McDonalds is not going to retire today.

 

[aleabo]

I came to US at age 36 in 1995. Penniless, no English, no suitable profession or education for US.
For 3 years I worked odd jobs ($7-8.50) per hour. Lived by the way in San Francisco - not the cheaper city even then. Yes, I couldn't afford anything - no dining out, vacations, decent shoes (payless who remember). Food on sale only. Had to borrow money to study, even to buy computer. Worked at night - study at day. Worked at day - study at night. 3 f### years (actually 3 years and 3 months) until I finally land a job in very large and famous software company.
And I'm not the genius (my wife said opposite :-( ). So, if I was able to make it, everybody should be able to.

 

[brett]

Not everyone has the same amount of common sense, basic personal financial savvy, the same ambition, the same desire for knowledge, the same ability to recognize opportunity, work ethic, or indeed the same desire to leave their current situation in order to make a change in their circumstances.

I suspect that many on this forum have all or a very high combination of these attributes in their character.

 

[Badger]

Three rules that will always be valid:
1. LBYM
2. Pay Yourself First
3. Learn compounding

May seem oversimplified, and for many it means moving to a lower COL to make the numbers work better. It takes patience, hard work, and perseverance to reach that end goal. However that goal *is* achievable as OP stated.

Then there is #4. Understand the difference between Need and Want.
Take care of the real "needs" then take the "wants" and save/invest it. Understand the pitfalls of instant gratification.


Cheers!

 

[mystang52]

Three rules that will always be valid:
1. LBYM
2. Pay Yourself First
3. Learn compounding

Then there is #4. Understand the difference between Need and Want.
Take care of the real "needs" then take the "wants" and save/invest it. Understand the pitfalls of instant gratification.

It really is that simple. There was a thread, a while back, about offering unsolicited financial advice. I mentioned my futile attempts, before I gave up and stopped entirely, to get my staff to consider very modest payroll deduction savings. Staff that earned a LOT less than I did buying lunch every day vs brown-bagging, then taking payday loans, etc. Conversely, my neighbor was a modest-income blue collar worker who ER'd, because he followed LBYM.

 

[street]

I came to US at age 36 in 1995. Penniless, no English, no suitable profession or education for US.
For 3 years I worked odd jobs ($7-8.50) per hour. Lived by the way in San Francisco - not the cheaper city even then. Yes, I couldn't afford anything - no dining out, vacations, decent shoes (payless who remember). Food on sale only. Had to borrow money to study, even to buy computer. Worked at night - study at day. Worked at day - study at night. 3 f### years (actually 3 years and 3 months) until I finally land a job in very large and famous software company.
And I'm not the genius (my wife said opposite :-( ). So, if I was able to make it, everybody should be able to.

There you go, and I commend for your achievements, Sir. It's there for anyone who wants to get there. No one says, it is easy and luck has something to do with being successful. I also am a believer that we make our own luck with choices and the way we set ourselves up for success. We can call it what we want but luck/opportunity is what happens with where we want to go.

There are millions of stories similar to yours and a lot of folks here including me life wasn't an easy street starting out. I beleive we willed ourselves to where we are at today.

 

[gayl]

Food on sale only.

My food bill still averages under $50 week and I eat well

 

[Mr._Graybeard]

I tend to read a sense of moral superiority in these threads.

 

[Time2]

Ditto. Now we are doing the same for each of our young grandchildren. Plus they will get amounts off the top from our respective estates for edu.

Who knows what the costs of education will be in 15-20 years. This is a gift for both our children who will hopefully not have this burden, and of course for our grandchildren should they wish to take advantage of it.

Both our children had no student debt. We want the same for our grandchildren.

We do not believe that we can judge the future based on our past experiences.

I'm looking at the cost of my son's University of South Florida costs and it doesn't seem that outrageous. Less that $6k a year. For $24k* he has a has a chemistry degree. My daughter worked a few years after graduation then decided she wanted to be a dentist. That's a different story, tuition only is $60k+ each year. They both have no debt.



* that's not the way it really went, but it could for someone else.
He started as a Gator, did good first year, had some issues second year and dropped out, took a year off and decided it was something he wanted to do. Went back to a community college got his 2 years done, then transferred to the 4 year and got his degree.

 

[street]

I tend to read a sense of moral superiority in these threads.

Interesting! Can you explain, moral superiority and the feeling that you sense?

Just curious and interesting observation.

 

[Walt34]

I have to agree with Gumby on this one, that "it can still be done" although to be sure the opportunities and the challenges are different. As noted the union jobs with four years to top of pay scale are long gone. (I'd never heard of them when I was 18.) And I'll grant that the opportunities for someone born black, female, and in Bangladesh are different for someone born white, male, and in the affluent suburbs of D.C. as I was. I'll be quick to note though, that we were not affluent, at least not by D.C. standards. My father was an electrician employed by the local electric utility, and when the youngest of three children was in Middle School my mother worked as a secretary. But it did give me access to what was regarded as one of the better public school systems in the country and heavily subsidized community college. And in spite of my early laziness I managed to leverage that into a good career with a pension (which is no longer offered but they do offer a 457 plan with subsidy).

But I maintain that the opportunities are still there. Only Gumby has mentioned military service as a path to upward mobility. I got an education in that when we moved to West Virginia. In the D.C. area while military service is not actually frowned upon for high school graduates, it was not encouraged, at least not in 1968 when I graduated. In case some don't remember there was that issue in Vietnam going on at the time. But here in WV, military service is much more highly regarded as a path to "bootstrap" oneself out of the poverty that is so widespread. And I'd submit that path still exists. It worked for two of my nieces and their husbands.

Also local is a community college that besides offering the normal fare of a CC, they also offer certification programs in robotics maintenance, accounting, computer certifications, and others. All of these can lead to jobs that pay enough to bootstrap oneself into being self-supporting and being able to afford continuing education. One unique curriculum they offer is for utility linemen. While they don't quite guarantee that FirstEnergy (local utility) will hire you out of school, the company does actively seek those graduates. And in case you're not aware, just about every electrical utility in the country is screaming for those folks. That is not a 9 to 5 job but it sure does pay enough to support yourself and then some.

So - the job market is different. Well, it was different for my parents than it was for me too. And so it is different now. But it is far from hopeless.

 

[gayl]

I'm looking at the cost of my son's University of South Florida costs and it doesn't seem that outrageous. Less that $6k a year. For $24k* he has a has a chemistry degree. My daughter worked a few years after graduation then decided she wanted to be a dentist. That's a different story, tuition only is $60k+ each year. They both have no debt.



* that's not the way it really went, but it could for someone else.
He started as a Gator, did good first year, had some issues second year and dropped out, took a year off and decided it was something he wanted to do. Went back to a community college got his 2 years done, then transferred to the 4 year and got his degree.

You forgot housing (unless he lives at home). 20k total per year for GS. Graduated May 2020. Still owes ~7500. That's around seven thousand five hundred. Had to work his butt off but worked hard

 

[Time2]

You forgot housing (unless he lives at home). 20k total per year for GS. Graduated May 2020. Still owes ~7500. That's around seven thousand five hundred. Had to work his butt off but worked hard

Ya, I didn't forget, I had it in there, and took it out. His one bedroom ran $1000 a month. He also worked P.T. while going to school.

 

[Mr._Graybeard]

Interesting! Can you explain, moral superiority and the feeling that you sense?

Just curious and interesting observation.

Sure, these threads appear every two-three weeks. The tone is generally self-congratulatory.

Bring on the Four Yorkshiremen!

 

[street]

Thanks. I see your view and opinion.

 

[SecondCor521]

The birth lottery was out of my control but I agree I did very well - born American, male, cis, to a professional and a SAHM who both had college degrees and stayed married and provided well for their three kids.

The luck factor, for those things that are truly luck, I also consider out of my control. I've done well on balance here. I was not conscripted into any wars. I have not been hit with any severe health issues. I had a private stock pay off pretty well one time. On the other side of the coin, I went through a divorce - not by my choice, which is why I list it in the "luck" category - and had two children die in utero, and have struggled with MDD most of my adult life.

What's left is decisions I made. I've made a few bad ones, but most of them have been good ones. I got two degrees that were in demand (engineering and business), did good work for good companies, and made smart saving and investing decisions.

I think having good guidance is really important. I've seen the impact good guidance has had on my decisions - mostly by my parents but also by my sisters and some mentors I've had. I've also tried to give good guidance to my three young adult offspring. Occasionally I meet young people who haven't had what I consider to be good guidance or haven't been provided for, and even if they're capable and intelligent and hardworking and so forth, they'll have a harder time than my kids just because they'll unwittingly make suboptimal decisions.

I think for my three kids there are pluses and minuses:

+ Not as much risk of war. My Dad served during Vietnam, I might have been chosen for Afghanistan/Iraq, but my kids are probably less at risk.

+ Hopefully less risk of divorce. Although one can never say, I hope I can guide them to avoid the mistakes their mother and I made that ended up in us getting a divorce.

+ Investing is easier, cheaper and better. I had to mail checks and do stuff by paper and phone with UTMAs and traditional IRAs at a cost of 0.18%. They have access to Roth IRAs and 529s and online transfers with 0.04% costs and anytime web access.

+ Resources are better. I had the advantage of parents who were well off. My kids have the advantage of parents and a grandparent who are well off.

+/- Cost of college is a push. My Dad paid for my bachelor's degree and gave me my leftover college fund and did the same for my two sisters. I'm doing the same for my three kids.

- Housing seems less affordable all things considered. Our first house mortgage was about 2x my then annual salary, and there were no bidding wars. Currently my oldest is looking at a home mortgage that is about 5x his annual salary and he'll probably have to deal with bidding wars. Our first interest rate was 7.5%, and his first interest rate will be 3%ish. He will have the advantage also of a first time homebuyer account which gives him about a 7% discount on his down payment funds each year.

Overall I think they'll be able to succeed as well as I did because overall they're starting off in the same generally advantaged spot as I did and have the same general skills and abilities I did, and the environmental factors are as good or perhaps a bit better than I had. But they might have hard luck, and they also might make bad decisions along the way.

 

[Amethyst]

College expenses are worse these days. Even state schools are expensive. Young people can try different things to avoid big student loans (such as commuting to a state school close to home and living with parents, if possible).

Also, there is the threat of climate change, which could make some choices of occupation and some places to live obsolete. And the threat of more pandemics. I truly believe a Pandora's box has been opened on that front.

Other than that (how was the play, Mrs. Lincoln?), the challenges are not wildly different. One needs to take a hard look at the local job economy, and decide whether moving elsewhere will get you farther (a difficult choice I had to make 40+ years ago).

Housing has never been cheap in my lifetime. Prices were being driven up weekly in the mid-1980's, and a 13% mortgage was considered normal. But mortgages nowadays are cheap.

I get around---the internet. I read many young people saying it is different now. College expenses are to high, houses cost to much, the economy is different, wages are stagnant. Basically I find lots of excuses why the younger generation can't get ahead. It makes me wonder how much of it is true.
My experience, we were middleclass, as I have said here too many times, our average inflation adjusted income was $71k over 37 years. (inflation adjusted means, the $18k we earned in 1981 was adjusted to just above $50k to cipher into the average.) That is slightly above the median US income. But we weren't high income earners. This makes me think yes, If we can do it. The above numbers were in 2018 when we closed the business, so $71k is closer to $78k.
I understand we are a small percentage and most people don't save like many ER readers did. But, if a young couple earns near $80k can they do what we did over 30+ years, or, are things really different?

 

[jollystomper]

It is very difficult to compare different eras because people are people, and how each reacts to a certain set of circumstances are different. I have learned to put myself in other people's shoes to try to get a full understanding without generalizations. For some today, it is easier. For some today, it is harder. Every generation thinks the following generation(s) has a lot of things easier, and every generation thinks the preceding generation(s) messed a lot of things up.

Part of the consideration is who is around you? Who is there to encourage and challenge you to know and develop your skills, to do your best with those skills, to make you aware of and expose you to opportunities, to help move you towards them, and when you fail along the way, help you figure out why you failed and how you can learn from it? And... if you were exposed to these type of people, did you choose to listen? Those 2 circumstances can be a bigger factor than what generation or country or ethnicity you were born into.

 

[yhoomajor]

Food, Clothing and Shelter - these are the three things that a human really needs. Most Every thing else is a want.

We chase accumulating more electronic bits($) because we are monkey at our core. I want to have this because I see other monkey chasing it.

In my mind, someone working a low-stress, low paying job who doesn't compare himself to others is way ahead of us other monkeys chasing electronic bits.

People in Bhutan are/were happy people. They don't even have $ or 2 saved. But once they saw other countries on TV, they wanted to chase the same thing as well. And misery will spread there as well.

Simpler life is happier life. We are only making it complicated, day by day!