14 Comments

1. Funny about that crypto comment. But, looking at the people at the conference, it seemed pretty heavy on already retired people or close to retirement. I saw a lot of white hair, LOL. I’m not surprised that they don’t get the FIRE concept because they are likely already past it, and likely not applicable. I’d be curious how full the “accumulator” sessions were. When I talk to younger people about Bogleheads and point them to the forum, they tell me it feels sort of like a bunch of old stodgy boomers who are already rich. I can see how they might feel that way. I heard Rick say something in one of his intros about trying to get more younger people into Bogleheads for the “future”…an increased focus on FIRE might help.

   1. Wade,

      I would estimate the accumulators were 20-25% to 75-80% pre-retirees and retirees. I hope to help point a younger audience their way, as there is a lot to be gained from the wisdom of that group.

      Best,
      Chris

2. Get a “good education”. Check (not sure whats wrong with that_

   Get a “good (i.e. high paying) job.” Check. Ditto

   Be a good consumer, buying the biggest house and nicest car you can afford (defined by the largest amount someone will lend you). Check

   Pay your taxes (income, property, sales, etc.) Check. Are you advocating otherwise?

   Try to save a little so you can eventually, hopefully, retire in your 60’s or 70’s. Check and Check. (Actually saved a lot).

   Then you can stop working so hard and enjoy your life. Check. (But also enjoyed my life before..)

   Hire a financial advisor to help you navigate this path. Check. (Actually only in retirement and not limited to investments but holistic planning and reasonable, fee based..)

   So I pretty much followed this, according to you, “bullshit” pathway. I actually think there are some good principles in the FIRE world. Good thing there is no bullshit there.

   1. Bob,

      One of my favorite parts of this blog is the interaction with readers. Particularly those with whom I can respectfully disagree with while exposing alternative viewpoints that others can learn from. However, I feel like you are really reaching here and using my words out of context.

      Good education, you left out the the at any price part. Lots wrong with that. Ask any of the hundreds of thousands of people in our country handcuffed by student loan debt.

      High paying job. Nothing is wrong with that at all. Just the assumption that high paying leads to the next step of high spending and that translates to happiness, but when they go together they trap people when that high paying job and the expensive purchases that go with it don’t lead to happiness as anticipated.

      You absolutely should pay the taxes you owe. But again the standard path traps people in being unable to do simple tax planning and saving and investing in ways that produce income in more tax friendly ways (investments) and instead keeps people reliant on earned income (less tax friendly) for most of their lives.

      Re saving, saving a lot is the FIRE way. And I am not anti-financial advice. For crying out loud I just completed my CFP. But to assume that during accumulation that everyone needs to have an advisor? The fees that most charge is opaque (being generous) and detrimental rather than helpful to the wealth building process.

      And finally, I am certainly not anti-retirement and enjoying your life. Read the header of the blog. The whole point is to give people control over their money, empowering to work as much or little and on whatever projects they want.

      Best,
      Chris

      1. Rob is not taking your words out of context. He’s literally quoting you. You literally wrote that it’s “bullshit!” to “pay your taxes.” What you’ve written is irresponsible and suggests people break the law. A good article will explain how people can minimize their tax obligations within the law. A poorly-written article will make sweeping generalizations (“bullshit!”) and suggest people do something criminal, like tax evasion.

         1. EBG,

            OK, since at least two people took me to mean that you should literally not pay your taxes, I will admit on review that I wrote that sentence poorly. That is not what I meant. So I will edit that sentence which I rarely do unless there is a clear error in the content.

            For full disclosure, I changed what I originally published as “Pay your taxes (income, property, sales, etc.) to “Pay the high taxes (income, property, sales, etc.) that come with this lifestyle.” That part is clearly true. Those that spend most of what they earn can not take advantage of simple tax advantaged saving, remain reliant on highly taxed earned income rather than lower taxed investment income, pay high property taxes, sales taxes, etc.

            I hope that clarifies my position.

            Best,
            Chris

3. I pretty much followed the traditional retirement path until I was in my mid-50’s. At that time I was ready to retire but my finances were not. It took me about 10 years to turn everything around using the FIRE principles and retired at 66 but with a much better outlook.
   I advocate that anyone wanting to improve their retirement finances, early or late, gain an understanding of the FIRE principles as they will, more than any traditional approach, enable them to have the retirement they desire.
   My son discovered FI on his own and hasn’t worked regularly since he was 35, just a gig here and there to keep interested. Live frugally, live free, live.

   1. Thanks for sharing your experience Luda. I agree with your sentiments and I think it is helpful for others to see that this is possible for people getting a later start with saving and investing.

      Cheers!
      Chris

4. Great job of explaining the concepts in the video, you are a talented presenter, Chris. I think there is not too much difference in the Bogle head crowd and the FIRE crowd. Both have a life goal of financial independence. Both have a low fee, index fund, diversified investment mindset. I suspect in most cases they will find themselves able to retire earlier than they expected to, kind of accidentally having that FIRE opportunity because they lived a very FIRE lifestyle. But many of the Boomer and even Gen X crowd still might choose to keep working because it is the “normal” thing to do based on what they learned from their parents and friends. I never considered retiring early even though I had the investments to fund an earlier retirement, it just wasn’t a thing in my Boomer generation’s mindset. I did retire at 60, which is barely slightly early, and it was a great choice. But I wouldn’t have if I hadn’t already found you and many other personal finance bloggers and podcasters that expanded my thinking.

   1. Steveark,

      Thanks for the kind words. I agree that we need to change the mindset around retirement, and I don’t think it is enough to think we should all just retire earlier. For a lot of people, me included, I think the mindset is more of not allowing your entire life to revolve around work. Instead, the mindset may be to build some degree of financial independence which allows you to hop into and out of work in ways that fit in with the lifestyle you desire, rather than trying to fit your life into your work schedule.

      Cheers!
      Chris

5. You’re right about preaching to the choir, it can be much more gratifying to help those who have never considered there might be another (better) way. Those who need the message can be young or old, however. Like Linda indicated in her comment, I didn’t start saving for retirement until my 50s and used the FIRE principles to help me catch up. I will be retiring this year at 61. Not super early, but it would not have been possible at all if I hadn’t found FIRE and applied the principles.

   1. Thanks for sharing that experience BBSS. As I noted above, this message can help a lot of people who are late savers. However, I think it means hearing it from people like you who have actually done it than from me who talks about it conceptually.

      Cheers!
      Chris

6. Thanks for sharing. Regarding Vanguard data.

   Keep in mind that the median tenure of American workers has been less than five years for the past 5 decades. On average, and averages can be deceiving, American workers have had 12 different employers by the time they reach age 50. Further, almost half of Americans still working full time at age 62 have a different employer than they did at age 50.

   I used to think these data were wierd, wrong, improbable. Then I looked at my own past. By the time I reached age 50, I had 11 employers. Now, 20 years later, my number of employers has increased to 16 (excluding stints where I was doing independent consulting). Yes, I was working full time at age 62, and yes, I had a different employer than the one I had at age 50. My median period of employment with all of my employers was < 3 years.

   So, even though I had one employer for 25 years (not only same employer, but the same job for 25 years), if you looked at every one of my retirement plans, for all of my employers, all but 2 of them would have less than 5 years of accumulations.

   Also, consider that there are 100+MM 401k and other DC accounts, but 1 of every 5 accounts belongs to someone who is Term Vested or retired.

   All the data show that fewer older Americans (age 65+) live in poverty today – that the percentage has declined from 30+% to < 10% (and much, much less if you look beyond income, which is the metric used in the federal government definition). Andy Biggs presents interesting information on the financial status of older Americans.

   Best to you. Happy Holidays. Thanks, again, for sharing. I enjoyed your presentation. Jack

   1. Benefit Jack,

      You are likely right. Thanks for the insights and for keeping me honest.

      However, as I noted in the presentation, a large portion of the population has no employer sponsored plans at all so those with any plan are not necessarily representative of the population as a whole either. They are likely doing much better than that subsegment of the population that tends to have lower paying jobs and less generous benefits. So the truth of the actual numbers is not clear, but I think directionally I am correct in stating that many people under save and are heavily dependent on SS in their retirement years.

      Best,
      Chris

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