I think its stupid. Retirement is boring, youll end working anyway just to have something to do. Id rather have an enjoyable job and lots of sparetime now that im young rather than slave away my youth so that I can retire early.
I don't think it is stupid. Retirement in this sense doesn't mean "sit at home and do nothing all day" - it just means getting out of the rat race and stop working for money at the job one hates. Once the financial pressure is gone, we can work on things that actually matter to us and those that we enjoy.
I do get your point about slaving away the youth though.
>youll end working anyway just to have something to do
I'd never work if I didn't have to pay bills. Spending my limited time on earth doing something for someone else's benefit on someone else's schedule makes me miserable. No such thing as an "enjoyable job". If there was, there would be someone willing to do it for free.
I've had a year of NEET life during college, and it was the best time of my life by far.
Retirement is not a factor of your age but your financial state.
It's stupid to think my country will be able to pay me pension - I'm skeptic about the current system will survive another 40-50 year and pay me back what I need to live comfortably.
So FIRE is just a sane provision for the future. The "early" part is different for everybody. If I can retire at 50 instead of 65 its early enough for me.
How would you know? You seem to have a warped view of retirement in the first place. FIRE is more so to get out of the rat race, not to stop doing anything and everything you're interested it once you stop working.
I'm on board and actively pursing FIRE. I'm not sure if I'll actually choose to retire when I hit the magic number (~20x your yearly expenses), but it does provide me with a sense of satisfaction and stability.
I think a lot of the FIRE community over evangelizes the "RE" portion of FIRE, but that may just be a reflection of the high stress/high pay types of jobs that many FIRE pursuers find themselves in.
From my perspective it's not so much about the "retire early" but rather about the "financial independence" part. Even if you don't intend to retire early approaches like FIRE are extremely useful for establishing or restoring financial sanity.
If you think about it it's really not (or at least it shouldn't be) all that novel an idea: Consistently spend less than you earn.
It's just that industrial societies at large have become used to a rampant consumerism that favours spending more than you earn.
More traditional retirement plans also disproportionately benefit banks and insurance companies.
I'm actively pursuing FIRE. On pace to reach it in 2023. I think every software developer who wants to write code their whole career must actively be trying to reach FIRE by age 50. Ageism is rampant in this industry.
If you want to be a manager or founder or whatever I think you can work past 50 but FIRE is still worth pursuing.
And if you love working on projects that matter to YOU there is nothing better than achieving Financial Independence.
You are so right about ageism. I am in my mid-forties and I am already feeling it. I have been rejected from positions because of my age. The feedback most of the time: I am not a good cultural fit.
I do not get lured by Pool table, office BBQs, bowling nights etc. I just want to write good software.
I see lots of people saying they do this on the blind app but i've never met anyone yet who seems to actually be getting there. best way to get wealth as a software engineer is working consistently at high paying jobs, save your money and invest it, don't try for riches at startups.
I think some of FIRE's basic mental models provide a useful perspective to help make some decisions, but like many things in life, it's not great to focus on one perspective myopically, to the exclusion of everything else.
While accumulating and investing savings it is reasonably useful to keep in mind your savings ratio:
savings_ratio := (income - expenses) / income
If you choose to focus on growing investments, make decisions to maximise the savings ratio, subject to other constraints. You can try to reduce expenses, or increase income. Or both. Sometimes you can find win-win decisions that increase your savings ratio while also giving you some other benefit (e.g. start riding a bicycle to work instead of commuting on public transport -- this saves money and can be more enjoyable, provided conditions for cycling aren't too foul and you live close enough).
Focusing on maximising savings ratio assumes that your expenses while saving will be similar to your expenses once retired. This may or may not be true -- for example, maybe you have high-paying work in a higher cost of living area, but you can move to a lower cost of living area when you no longer need a reliable day job.
Once retired, we want our investment income to cover our expected expenses:
We can calculate our progress by the ratio cash_flow_in / -cash_flow_out .
For example, let's plug some numbers in:
expected_annual_expenses_when_retired = -20,000 USD / yr
capital_invested = 200,000 USD
expected_nominal_return = 6% (say we're 100% invested in the US stock market)
inflation = 2%
effective_tax_rate = 5% (complete guess, i don't live in the US)
All that said, real life is unpredicable and complicated, it might be good to leave a bit of margin in there to handle unpredictable events such as stock market crashes, large one-off expenses to repair a house, contingency for emergency medical expenses, etc. It's arguably not a great idea to be 100% invested in stocks at the moment, let alone US stocks.
[+] [-] glun|6 years ago|reply
[+] [-] justaguyhere|6 years ago|reply
I do get your point about slaving away the youth though.
[+] [-] Aozora7|6 years ago|reply
I'd never work if I didn't have to pay bills. Spending my limited time on earth doing something for someone else's benefit on someone else's schedule makes me miserable. No such thing as an "enjoyable job". If there was, there would be someone willing to do it for free.
I've had a year of NEET life during college, and it was the best time of my life by far.
[+] [-] croo|6 years ago|reply
It's stupid to think my country will be able to pay me pension - I'm skeptic about the current system will survive another 40-50 year and pay me back what I need to live comfortably.
So FIRE is just a sane provision for the future. The "early" part is different for everybody. If I can retire at 50 instead of 65 its early enough for me.
[+] [-] vram11|6 years ago|reply
Hobbies, dude. Tons of interesting hobbies, available for the doing, many requiring little to no financial outlay.
And with some fields like programming, you can even do the same work post-retirement, just for fun or to teach others.
[+] [-] kojeovo|6 years ago|reply
> now that im young
How would you know? You seem to have a warped view of retirement in the first place. FIRE is more so to get out of the rat race, not to stop doing anything and everything you're interested it once you stop working.
[+] [-] airbreather|6 years ago|reply
Well, a bit flippant, but still that is the other side of the coin.
[+] [-] gubsz|6 years ago|reply
I'm on board and actively pursing FIRE. I'm not sure if I'll actually choose to retire when I hit the magic number (~20x your yearly expenses), but it does provide me with a sense of satisfaction and stability.
I think a lot of the FIRE community over evangelizes the "RE" portion of FIRE, but that may just be a reflection of the high stress/high pay types of jobs that many FIRE pursuers find themselves in.
[+] [-] BjoernKW|6 years ago|reply
From my perspective it's not so much about the "retire early" but rather about the "financial independence" part. Even if you don't intend to retire early approaches like FIRE are extremely useful for establishing or restoring financial sanity.
If you think about it it's really not (or at least it shouldn't be) all that novel an idea: Consistently spend less than you earn.
It's just that industrial societies at large have become used to a rampant consumerism that favours spending more than you earn.
More traditional retirement plans also disproportionately benefit banks and insurance companies.
[+] [-] baccredited|6 years ago|reply
If you want to be a manager or founder or whatever I think you can work past 50 but FIRE is still worth pursuing.
And if you love working on projects that matter to YOU there is nothing better than achieving Financial Independence.
[+] [-] devlife|6 years ago|reply
I do not get lured by Pool table, office BBQs, bowling nights etc. I just want to write good software.
[+] [-] miguelrochefort|6 years ago|reply
For the rest of us, I don't think we'll ever retire.
[+] [-] RikNieu|6 years ago|reply
However, the amounts of income you need to be able generate to truely get there seems to be... ambitious.
[+] [-] NotSammyHagar|6 years ago|reply
[+] [-] rurban|6 years ago|reply
[+] [-] marketgod|6 years ago|reply
[+] [-] return1|6 years ago|reply
[+] [-] counterpig|6 years ago|reply
[+] [-] chatmasta|6 years ago|reply
[+] [-] potta_coffee|6 years ago|reply
[+] [-] dredmorbius|6 years ago|reply
https://en.wikipedia.org/wiki/FIRE_economy
[+] [-] shoo|6 years ago|reply
While accumulating and investing savings it is reasonably useful to keep in mind your savings ratio:
If you choose to focus on growing investments, make decisions to maximise the savings ratio, subject to other constraints. You can try to reduce expenses, or increase income. Or both. Sometimes you can find win-win decisions that increase your savings ratio while also giving you some other benefit (e.g. start riding a bicycle to work instead of commuting on public transport -- this saves money and can be more enjoyable, provided conditions for cycling aren't too foul and you live close enough).Focusing on maximising savings ratio assumes that your expenses while saving will be similar to your expenses once retired. This may or may not be true -- for example, maybe you have high-paying work in a higher cost of living area, but you can move to a lower cost of living area when you no longer need a reliable day job.
Once retired, we want our investment income to cover our expected expenses:
We can calculate our progress by the ratio cash_flow_in / -cash_flow_out .For example, let's plug some numbers in:
So In this example, our progress to covering our expected annual retirement expenses with net real investment returns is 7600 / 20000 = 38% .There are calculators to estimate the time until retirement. Here's a simple one: https://networthify.com/calculator/earlyretirement?income=70...
All that said, real life is unpredicable and complicated, it might be good to leave a bit of margin in there to handle unpredictable events such as stock market crashes, large one-off expenses to repair a house, contingency for emergency medical expenses, etc. It's arguably not a great idea to be 100% invested in stocks at the moment, let alone US stocks.
Potentially useful resources: