How did you FIRE?

[almost there]

Lots of nuke plant over time / for 30 years...
As in 72-84 hr weeks. Family of 4 with one income.
Paid the house off at 39. Saved like a maniac.
Maxed out 401k and ROTH accounts. But never did all that well in the market.
Bought a rental in 2011 at the bottom.
Paid it off in 2013 with my severance.

 

[dunkelblau]

My case is over three decades in engineering. Spending aversion for most material things, esp status symbols are cringe to me, but a lifelong shopaholic for penny stocks (taxable only; tax-deferred all in index funds). Portfolio hit 33x annual spend in my mid to late 30s but kept working full time the past two decades originally due to shifting goalposts but lately because I have nothing better to do mostly from the constraints imposed by family caregiving obligations. IMO best part of FI is how it let me decline offers to enter management, although keeping just the fun part of work has delayed my RE.

If you're interested in more samples and more details, here's some data that seems realistic to me:
source: esimoney 300 millionaire interviews (each a detailed Q&A essay)
net worth: median 2.4M USD / average 3.3M USD
household income: median 240k USD / average 345k USD
main income: 280/300 worked a job/career
side income: over half into real estate
annual spend: median 90k USD / average 111k USD

 

[pugmom]

Many years ago, reading "The Millionaire Next Door" helped me quite a bit. I am pretty sure others also give a nod to it.

 

[doneat54]

While being a doctor or a lawyer can make it easier, some of them spend money as fast as they make it - and won’t FIRE. The formula is the same whether your career pays modestly or a bunch - those who think you have to make a lot of money to FIRE don’t “get it.” You MUST make it a habit to spend less than you make over the long term to reach FI and FIRE if you choose - period.

To retire early, you have to make enough money to guarantee a decent living after retirement. This has to be done early. The process is simple:

1. Earn more money.
2. Spend wisely.
3. Save and invest wisely.

Most people don’t do any of the three, and then wonder how others FIRE. You can FIRE with only 2 & 3, 1 can make it easier but it’s not necessarily required.

The more you spend below your means, the sooner you can achieve FI, and then ER is an option.

FIRE myths:

• You have to have a high paying career.
• You have to be an investing wizard.
• You have to win the lottery, or inherit a large amount.
• You have to live like a pauper.
• You have to have a generous pension (beyond SS), but that can certainly help.

ALL FALSE. It does require planning and discipline that most people don’t seem to have.

VERY well said. Most people comment that they are at the mercy of their retirement account/age. And if they are late in their careers, it is probably too late to do anything about it.

 

[nobody]

Fired at 47. Engineer, no wife or kids. I worked a lot as in 70-80 hour weeks was the norm. I have always lived on closer to the poverty level then my income. My first and only brand new truck, well shes 17 years old now, running strong and in the garage. I'm living on 25k a year and I really should learn to spend money and enjoy it.

 

[almost there]

Many years ago, reading "The Millionaire Next Door" helped me quite a bit. I am pretty sure others also give a nod to it.

Same

 

[harllee]

A book that positively influenced my retirement journey was "Your Money or Your Life" by Vicki Robin. The book was updated in 2018, I highly recommend.

 

[Magus]

A common theme seems to be to marry a like minded spouse and many of us do not have children. Children can be wonderful but they are very expensive and can derail early retirement.

IMO kids are very similar to most things in life, they can be very expensive if you make it so, but do not have to be. Parents that want to send their kids to private schools, pay for private lessons/tutoring, elite training for sports, and provide 100% of college - kids are expensive.

Doing the "Pareto rule" with kids IMO - focusing on the key 20% - get them in a good public school, work with your kids yourself on their education, and encourage good "middle class" and "upper class" behaviors around knowledge, work ethic and self-reliance - gets you 80% of the way with kids - and the rest they have to largely learn on their own IMO through experience.

Most of the stuff beyond the basics for kids has a very low return on investment (private school being the lowest returns by far of the big ticket items) and sometimes even negative return on investment IMO. Add to that kids also come with significant tax breaks for most and its not too hard to be fairly neutral on expenses with kids in a typical middle class setting.

Some of the other items that add cost to having kids - larger home, etc - actually doesn't impact your retirement ability - as your larger home you pay down more principal each month and you gain 3%-4% appreciation on average annually to sell (ie buying a $200k or a $400k home doesn't impact your NW that much in the long run, if anything the larger, more expensive one when you have kids helps your NW when you can downsize in retirement).

 

[cyber888]

I've given notice to FIRE next year when I turn 59. I'm in the No. 1 group - Professional. My wife never worked, but we saved and we travelled too - so we're not ultra-savers to scrimp on travel.

No pension, so I'm planning to get a lifetime annuity, so that SS + lifetime annuity income will cover all our basic expenses (home expenses, utilities, food, maintenance, healthcare, taxes). So, any withdrawal from our retirement account will mostly cover our discretionary yearly travel.

I would say, my income in retirement would be about the same as my income at work (less contributions to social security and medicare). So, not Fat Fire and not Lean Fire, just a normal FIRE.

 

[Alan]

We did it the traditional way through professional engineering careers. We married while at university both studying electrical and electronic engineering, and have been a like-minded team ever since. My wife put her career on old for a number of years while we had young children and while she was on a non working visa accompanying me when we moved to the USA as part of my job.

 

[athena53]

Another thought I had as I spent most of this morning mowing my lawn and cleaning the house: very little hired help. Sure, I had people installing replacement windows and replacing my garage door spring yesterday, but I clean my own house and mow my own lawn. I can't imagine what that's saved over the years.

Kids: ah, DS ended up being a bit expensive. I did the "right" thing and stayed in the same (expensive) school district after the divorce but he was falling through the cracks. We were in NNJ and I ended up sending him to NY Military Academy for HS. That cost me about $48K for four years and he graduated almost 20 years ago. Well worth it- he straightened up, got off the couch and started taking martial arts and running cross-country. Both he and I are convinced the well-regarded public HS would have been disastrous-he wasn't in the top 20% academically (even though he had the smarts) nor was he engaging in criminal behavior and I think he would have been ignored.

And my 3 grandchildren and my wonderful DIL? Priceless.

 

[wannabefire]

Also part of the #1 crowd here. We are not FIREd yet. Well, maybe FI...

DW and I feel extremely fortunate in that our parents paid for our college, Finance degrees (state schools, no graduate degrees). So no college debt.

We have been been good savers and contributing to 401ks since our mid 20s and maxing out since early 30s. Steady saving and LBYM is key. NOT keeping up with the Jones' or buying the biggest house you can afford are a big deal (lifestyle creep). We managed to not have debt, other than the mortgage, which is paid off now

I can't say that we only drive old cars or that we don't like nice things. But we keep it moderate.

With the market correction over this year, I'm glad that we are still working and dollar cost averaging into the market too. So that RE part of the FIRE can come in the next couple of years!

 

[scrabbler1]

A common theme seems to be to marry a like minded spouse and many of us do not have children. Children can be wonderful but they are very expensive and can derail early retirement.

Being CF (childfree) pretty much derailed any chance of my getting married, which is fine, as I have no interest in that anyway. It was hard enough finding women to date while I was in my 20s and 30s; once my CF stance became more definite, dating prospects mostly disappeared, along with any chance of getting married. I do have a ladyfriend now (I met her when I was 40) and she has a daughter and 3 grandkids, all of whom live far away and I have very rarely met and play no role in their everyday lives.

If I had kids, all my expenses compared to now would at least double, making ER (at 45) impossible. Housing, food, medical costs, to name a few. I can't imagine for one second how having kids would not be expensive.

 

[racy]

What I did, since you asked:
1. Stayed in college although it was hard.
2. Married & stayed married although it's hard sometimes. Waited 8 yrs to have kids.
3. Showed up to work every day that I wasn't deathly ill, management in megacorp.
4. Paid myself first with automatic investments in 401k.
5. Stayed the course even though it seemed hard sometimes.
6. Lived below our means. Never paid credit card interest.
7. Retired after 37 years. Waiting till 70 (this yr) to collect Social Security.

 

[wdberry62]

Would agree with all of these posts and echo what I think are the three most important things that allowed me to FIRE:

1) Live beneath your means - this takes a focus on the end goal and thick skin and resistance to peer pressure. 99% of people in the world have already spent their next raise or bonus by the time it shows up in their paycheck. Use that bump to increase your savings/investments.
2) Avoid debt like the plague. Outside of a mortgage, do everything in your power to avoid debt. If you can't pay cash for it, you can't afford it.
3) Have a plan. Track your progress, set a savings goal, have a budget and learn to use all of the great tools available via this forum and others (e.g. FRP - Flexible Retirement Planner, Firecalc, etc.)

Friends and family will likely be the source of your greatest challenge - remember, "Don't take financial advice from broke people", even those closest to you.

 

[harllee]

Would agree with all of these posts and echo what I think are the three most important things that allowed me to FIRE:

1) Live beneath your means - this takes a focus on the end goal and thick skin and resistance to peer pressure. 99% of people in the world have already spent their next raise or bonus by the time it shows up in their paycheck. Use that bump to increase your savings/investments.
2) Avoid debt like the plague. Outside of a mortgage, do everything in your power to avoid debt. If you can't pay cash for it, you can't afford it.
3) Have a plan. Track your progress, set a savings goal, have a budget and learn to use all of the great tools available via this forum and others (e.g. FRP - Flexible Retirement Planner, Firecalc, etc.)

Friends and family will likely be the source of your greatest challenge - remember, "Don't take financial advice from broke people", even those closest to you.

"don't take advice from broke people"--a gem, I love it.

 

[ElizabethT]

1) Lived within our means for the first five years of our marriage, with a savings rate of 10% before taxes. And at the point, saving 10% was hard . . . our list of needs, forget about 'wants' was extensive. It was not a fun point in our lives and I for one felt very frustrated at how much we were saving. (I was in my early 20's and had not yet developed any self discipline )

2) Held our standard of living fairly steady once the promotions and raises began occurring, which meant from five years onward we lived increasingly below our means, bumping up our savings rate each time our income went up until it reached about 60%. Which was pretty much our savings rate for the last 10 years of our working life. Again, hard, because it is possible that one of us ( ) really wanted to move to a fancy and more expensive home at the beach, but the more disciplined one of us resisted, because doing so would have delayed our FIRE substantially. And then, ironically (or not?), we got there eventually anyway in FIRE, because of the combined impact of all of the above and below items. And which I also view as the positive impact of a certain amount of LBYM even once FIRE'd.

3) Allowed ourselves to blow 10% of our combined annual bonuses, then saved the remaining 90%. Toward the end of our careers, out bonuses were running about $200,000 annually combined, so that was a good chunk of change being added to our already-in-place 60% savings rate.

4) Some incredible good luck, when a company one of us had vesting stock in was sold, at which point the stock immediately became fully vested, rose in value dramatically, and was sold by us for a profit of about $1M. We used a portion of the gains to pay off our home, and slowly invested the remainder over the period of a year.

So really, other than item 4) above, which neither of us feels we can take specific credit for (sometimes you are just in the right place at the right time), it was a slow and steady 'race' of 30 years. Which, by the way, it seems many people don't really want to hear. They seem to want more of a magic bullet type of answer, which I don't think many of us have. The truth is that it's more likely to be a slow and steady 'slog' as boring as that is.

I am also increasingly humble about the good luck of simply being born with a certain amount of brain capacity, and a certain lack of mental instability. Within our respective families we can see that some are impacted by one or both of these through no fault of their own. So I am waaaaay less cocky about our financial achievements than I was back in the day. We can all pat ourselves on the back to a certain degree, but I do think we also need to acknowledge that a certain amount of luck was also involved, even if that luck was simply the amount of personal drive, ingenuity, or brain capacity that we were born with.

 

[Markola]

Here’s more or less how we did it:
1) Throughout your careers, every time you and your spouse get a COL bump, raise or higher salary, direct at least half of it to your work place savings plan*. **.
2) Put it all in stock index funds until your 50s, then make a bond index fund 30-50% of your portfolio.
3) Once those plans (and their matches) are maximized, top off your IRA savings.
4) At age 54/55, according to your birth month, quit and use the Rule of 55 to tap your workplace savings plan penalty-free until you’re free at 59.5.
5) Plan for a semi-retirement if the numbers don’t quite work out yet. We have been delighted to have some engagement and income a few hours per week, and it really helps the numbers.

*. Keep your housing costs low enough to allow you to save at work. Buy 3-year-old Japanese cars and keep them 10 years.

** Treat student loans and consumer debt as an emergency to be paid off ASAP, even while you’re saving at work, so you’re benefitting from compounding the savings early years.

 

[pjigar]

FIRE is like staying fit. You already know how to stay fit, the trick is actually executing it. What you need to do for FIRE? Simple: Save until it hurts and then let go of the paddle a little bit, and invest.


As for us, we are close to FI (my gut tells me we are FI but with the new acreage expenses, it is hard to say conclusively). RE will come later. We are waiting for DD to graduate first.


We got here with only one income (mine) and work-at-home DW. We saved on average about 50% of net "earned income" over the last two decades. Controlled lifestyle inflation like a hawk. We still spend a lot on things that matter to us but not so much on material things like cars, gadgets, etc. I fix my own cars and house so that helps. DW cooks a lot at home and does lot of house work. Like someone said, we live life that does not look rich but we can spend a large sum of money on a drop of a hat if we want. I suppose the ability to spend is the reason we don't spend as much because we are not trying to match anyone's expectations or keeping up with the Joneses. We embraced the idea of differed gratification very early on: never bought anything on credit/loan except houses and the first new car. YMMV.

 

[jkern]

I guess my approach was traditional.

1) Career as an Engineer
2) Created a budget and standard of living that allowed me to be happy and save & invest
3) Accumulated wealth over a long period of time

An important aspect of my financial behavior, probably born with, was the desire to use money efficiently and not waste it. I hated wasting money on things that brought me no value or no pleasure.

 

[gayl]

I worked for a county and stayed until I:
1. Pd off mortgage
2. Maxed out 457k for 10 yrs
3. Converted low pension option to high pension option (best 22k check I ever wrote after paying an extra 2k month × 3 yrs)
4. Left when takehome = monthly pension check
5. Seasonal work elsewhere for 5 yrs & continued stuffing my Roth
I now live off my pension, save my SSA, and have no plans re: RMD

 

[986racer]

By far, the best advice is LBYM.

My mom somehow did it while making 40-50k per year and she now has multiple millions in her accounts. I still don’t know how it was mathematically possible.

Meanwhile, I was making an order of magnitude more in my late 20s and it took me almost a decade to break 1MM. That was primarily due to getting serious about the LBYM lifestyle

 

[ychuck46]

The Old Fashioned Way

Me: IT Sales
Wife: Social Svcs Worker

No mystery. We lived below our means, saved diligently, had no vices, and one of the most important reasons - we stayed married!

 

[big-papa]

- Got an EE degree and entered the semiconductor business upon graduation
- Lived below my means.
- When 401K's were introduced, 100% of each raise went into the 401K until I was fully maxing out
- Unless needed for something else, proceeds from all Stock Options, RSU's, Corporate Bonuses and ESPP were invested
- Married somebody in the same industry as myself. Both of us were maxing out our 401K's and we lived on only one salary for 10 years and saved 100% of the net of the other salary until kid came along and DW became a SAHM.
- Purchased a 5 year contract in the original TX tomorrow fund when kiddo was 1 year old. This fully pays for her tuition + fees. She also has a decent scholarship and is in a 4 year state college and will graduate this fall. This is costing us very little.
- Hold on to our cars till they are just about ready to fall apart. Daughter is driving my 2004 Honda now while she's in college.
- After working 22 years at one of my employers, I was layed off and received a significant severance package, which I fully invested.
- As we've gotten older, we've become more about "doing" and less about "having"

After 38.5 years of post-college work, I'm retiring in a matter of weeks and feel quite comfortable, even in a down market.

Cheers.

 

[NorthNola]

I wasn’t a great saver in my 20’s and 30’s but luckily my parents were. A couple of things contributed to my FIRE-ing at 58. Divorced early no kids and have shared a house with a sibling for 27 years who worked evenings and weekends and I had a 9-5 job which for many years was 50+ hours a week. So we rarely saw each other and both saved a lot by sharing exp. Also as others have said when we were told we could afford XXX for a house we spent XX. Company had an ESOP and when I hit exec level had stock options. Some inheritances and my investments got me to 1.7m and sibling to 500k. 10-12 year averages on cars, a lot of travel but not extravagant. Had a fabulous career and hit a point with a new boss that I knew wasn’t going to end well. Kind of always had 58 as a target so after 30 years of great bosses and awesome companies I thought I’m not going to end my career on this note. So I fired. Small part time job that’s very flexible with awesome health benefits that I’ll keep doing for 2 1/2 more years. Have great friends who love to travel so it didn’t make sense to wait.