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Financial Independence / Retire Early

Old 08-10-2020, 05:20 PM
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Originally Posted by rickair7777 View Post
Word of caution about FIRE...

It only works if the vast majority of people DON'T do it.
I don't think that is going to be a risk for the average American.

Remember that most can't even handle a $400 crisis.
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Old 08-12-2020, 09:22 PM
  #12  
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Originally Posted by rickair7777 View Post
Word of caution about FIRE...

It only works if the vast majority of people DON'T do it. The more people who expect to live off of savings/investments, the fewer folks who are actually available to produce goods and services... then you get inflation, which over time nullifies your FIRE war-chest.

If everybody on your block has $10M (except Joe who has $15M), but nobody wants to work, the neighbor's kid gets to name his price to mow your lawn... he might charge $5K. And Joe will pay it, he can afford to. Everybody else has to mow their own lawn, unless they want to get in a bidding war with Joe.

If FIRE catches on big, most of you will have to come out of "retirement" at some point. Unless you're Joe.

The only reason seniors can retire is because there's normally a lot of younger folks to provide goods and services (although that's actually problematic in some societies today). Also society is sympathetic to them being old and infirm.
Oh OK Rick. Make sure world population all donít become financially independent.........check!
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Old 08-13-2020, 10:41 AM
  #13  
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Originally Posted by rickair7777 View Post
Word of caution about FIRE...

It only works if the vast majority of people DON'T do it. The more people who expect to live off of savings/investments, the fewer folks who are actually available to produce goods and services... then you get inflation, which over time nullifies your FIRE war-chest.

If everybody on your block has $10M (except Joe who has $15M), but nobody wants to work, the neighbor's kid gets to name his price to mow your lawn... he might charge $5K. And Joe will pay it, he can afford to. Everybody else has to mow their own lawn, unless they want to get in a bidding war with Joe.

If FIRE catches on big, most of you will have to come out of "retirement" at some point. Unless you're Joe.

The only reason seniors can retire is because there's normally a lot of younger folks to provide goods and services (although that's actually problematic in some societies today). Also society is sympathetic to them being old and infirm.
The "if everyone does it" strike is a fair criticism. Also, just because returns to capital have been better than labor over the last 30 or so years doesn't mean it will keep up (which I think is motivating those who are interested in this sort of stuff to some extent).

To your point on demographics, it sure looks like the US is set to experience a European/Asian style demographic crunch if millennial birth rates keep up at depressed levels, and I think this 2nd (or 3rd, depending on how old the millennial in question is) big recession has sealed the deal on kids for a lot of folks my age. Especially those among us with biological clocks. But then again, what guy wants to have kids after their late 30s anyway? Cashing my first social security check while I'm listening to "I hate you dad, you don't understand me" doesn't appeal to me much. I mean it still doesn't appeal to me in my late forties and early fifties, but that would have sealed the deal if I hadn't have had kids by then.

I'm personally more interested in the "FI" part of FI/RE. In fact, I'd argue having the nest egg I do now, insufficient as it is for RE, is what allowed me to feel comfortable getting back in after landing on my @$$ in 2009. In that sense, flying jets is the "retirement job".
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Old 08-13-2020, 10:50 AM
  #14  
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Originally Posted by SonicFlyer View Post
I don't think that is going to be a risk for the average American.

Remember that most can't even handle a $400 crisis.
Yeah the problem with the cult of consumerism is that there's always a faster car, larger house, or bigger boat. And that's just the suckerhole for the guys that have it made. When are they coming out with the next iPhone again?
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Old 08-13-2020, 11:24 AM
  #15  
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Originally Posted by BrazilBusDriver View Post
The "if everyone does it" strike is a fair criticism. Also, just because returns to capital have been better than labor over the last 30 or so years doesn't mean it will keep up (which I think is motivating those who are interested in this sort of stuff to some extent).

To your point on demographics, it sure looks like the US is set to experience a European/Asian style demographic crunch if millennial birth rates keep up at depressed levels, and I think this 2nd (or 3rd, depending on how old the millennial in question is) big recession has sealed the deal on kids for a lot of folks my age. Especially those among us with biological clocks. But then again, what guy wants to have kids after their late 30s anyway? Cashing my first social security check while I'm listening to "I hate you dad, you don't understand me" doesn't appeal to me much. I mean it still doesn't appeal to me in my late forties and early fifties, but that would have sealed the deal if I hadn't have had kids by then.

I'm personally more interested in the "FI" part of FI/RE. In fact, I'd argue having the nest egg I do now, insufficient as it is for RE, is what allowed me to feel comfortable getting back in after landing on my @$$ in 2009. In that sense, flying jets is the "retirement job".
I think the demographic time bomb threatens a lot of folksí financial plans. What will the world look like when the labor force shrinks dramatically relative to the overall population? The law of supply and demand will definitely kick in. However, the relatively low labor force participation rate in the US will almost certainly rise as incentives increase and societyís patience for those on the sidelines wanes. This will also result in folks working longer before retirement. It should be a naturally self balancing equation, but outside forces could make the balancing more painful. Long story short, itís always a good idea to build your nest egg. Just donít stick your head in the sand over how forces outside your control can impact the plan.
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Old 08-17-2020, 02:19 PM
  #16  
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Originally Posted by BrazilBusDriver View Post
I'm personally more interested in the "FI" part of FI/RE. In fact, I'd argue having the nest egg I do now, insufficient as it is for RE, is what allowed me to feel comfortable getting back in after landing on my @$$ in 2009. In that sense, flying jets is the "retirement job".
Yes, lot to be said for that and I'm in that boat. Work is easier to stomach if you have a big safety net.
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Old 07-17-2021, 06:09 PM
  #17  
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Originally Posted by rickair7777 View Post
Yes, lot to be said for that and I'm in that boat. Work is easier to stomach if you have a big safety net.
Well put. People live beyond their means, carry too much paper on their house and cars, how do these people seek financial freedom?
I live cheap, modest home that I own, not some bank, and drive a five year old car that I paid cash for. I max out both Roth IRA, and 401K at work, and I have four income properties. What else can I do?
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Old 08-09-2021, 04:41 PM
  #18  
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My wife and I are working toward our fire number, and hope to be there in a few years. We both plan to continue working, but in different fields. I support power plants, so get phone calls all weekend after working the entire week. Traveling to support my customers doesn’t really count as work time.

An airline schedule as a pilot where I walk off the plane and can forget about work sounds great. I would even look forward to reading books while on reserve. I’m not wired to sit on the couch for the rest of my life, but would like more freedom to pursue other interests.
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Old 04-12-2022, 08:04 AM
  #19  
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Originally Posted by ramalama View Post
Oh OK Rick. Make sure world population all donít become financially independent.........check!
The idea that everybody, or even a large minority could be sustainably financially independent and not working is ludicrous.

With more people sitting on their butt, the ones who are working will simply enjoy a bidding war for their services... as always, the top 10% or so win the bidding and everybody else has to get off their arse and go back to work. You can monitor that in real-time: inflation and CPI numbers.


These retirees are living it right now...

https://www.newsnationnow.com/busine...ack-into-jobs/


Ony two ways to reliably FIRE...

Traditional retirement after age 60 with a big nest egg... the theory here is that you'll die before inflation outgrows your resources (SS and any other retirement systems help extend you). If you live much beyond age 90, you probably won't be active enough to need a lot of money. This isn't very "early" but better than walmart greeting at age 80.

2. Acquire a huuuuuuge nest egg at a very early age... the fundamental trick is to have a LOT more than most other like-minded individuals, so YOU can always win the bidding war. Especially if everybody else wants to retire early too. Probably need a trust fund or tech IPO to get there though.
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Old 07-29-2022, 06:17 AM
  #20  
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FIRE has always fascinated me, and I think it goes hand-in-hand with pilots since the financial independence part can help if a pilot is ever laid off or furloughed.
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