The Truth About FIRE - Is Early Retirement Actually Possible?
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- Опубліковано 17 гру 2020
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Mentioned UA-camr videos:
- Nate O'Brien: • How To Retire At Age 3...
- Ryan Scribner: • How To Retire At 30 Li...
- Our Rich Journey: • HOW WE RETIRED AT 39 |...
- Andrei Jikh: • Start at 20, Retire by...
- Graham Stephan: • How To Retire by 30 Ye...
You've probably heard about the "FIRE Movement," but is early retirement possible? We discuss the concept (and its drawbacks) in today's video.
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Host/Editor: Richard Coffin
Producer: Craig Lord
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This channel is for education purposes only and is not affiliated with any financial institution, although Richard does work as an employee for an investment manager. Richard Coffin is not registered to provide investment advice and as such does not provide recommendations on The Plain Bagel - those looking for investment advice should seek out a registered professional. Richard is not responsible for investment actions taken by viewers.
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From my experience, those who've achieved the ability to retire early are often doing something they'd rather not retire from.
It did not right. I am asking real estate investment Apts or commercial property.
Grind until I die
I'm actually hoping to follow the fire model as I want to be an author but not rely on my books to fund my life. Since I want to bet big on being a successful author I feel that pursuing a fire strategy is like reducing my long term risk.
People investing early in the biggest Bull Market in history are retiring early? No shit.
Lets see who can do the same in the coming bear market.
Retirees who struggle to meet their basic needs are the ones who could not accumulate enough money during their active years to meet their needs. Retirement choices determine a lot of things. My Husband and I both spent same number of years in the civil service, she invested through a wealth manager and myself through the 401k. We both still earning after our retirement.
The increasing prices have impacted my plan to retire at 62, work part-time, and save for the future. I'm concerned about whether those who navigated the 2008 financial crisis had an easier time than I am currently experiencing. The combination of stock market volatility and a decrease in income is causing anxiety about whether I'll have sufficient funds for retirement.
This is precisely why I like having a portfolio coach guide my day-to-day market decisions: with their extensive knowledge of going long and short at the same time, using risk for its asymmetrical upside and laying it off as a hedge against the inevitable downward turns, their skillset makes it nearly impossible for them to underperform. I've been utilizing a portfolio coach for more than two years, and I've made over $800,000.
Thats quite Impressive! can you share more info?
Credits to 'Carol Vivian Constable' she has a web presence, so you can simply
She appears to be well-educated and well-read. I ran a Google search for her name and came across her website; thank you for sharing.
I just turned 27. I've been doing a lot of calculating and found that I'm on track to retire by the time I'm 32. Unfortunately, I have to die before I turn 33 for this plan to work.
you had me in the first half :D
@@pouya5625 the meme
That would be FIDE - financial independence die early
I didn't understand the second half can anyone explain?
@Project Aesthetics he’s saying that if he retired at 32, he would only have enough money to last one year. Therefore, if he wants this money to last his “entire retirement” he would have to die by age 33.
My dad is a billionaire and I FIRE since I was born. Hope this tip helps.
It certainly doesn't. You will never need financial help...
@@Guerrero_DJ It's a joke.
@@hanshintermann1551 It tried to be a joke, not funny though
@@Guerrero_DJ I thought it was funny
Why didn’t they teach this in school? You should write a book or something
At my previous job we had a guy that won the lotto, and it was a big one. But he is also quite frugal, looking for discounts, etc. So he would make it last.
But he still worked. All this change allowed him to do is work on his terms.
He worked until 2pm, and rarely on a Friday.
He was a fairly senior programmer, which definitely helped motivate keeping him on.
But his is an example of what I really see in financial freedom. Not to stop working, but to work under your own conditions
Exactly! Tho the video is quite good, one thing I don't really agree with is: FIRE is for the ones who doesn't like what they do for a living. No, it's simply untrue! I'm doing what I'm loving, and will continue to do so when I'm FI, but in my own pace... enjoying life, as it has a lot to show believe it or not. :)
Well said! I'm about 20 years away from retirement and I fully expect to have some part time work during retirement. But the kind of work I do at that time will be something I enjoy.
@@hunorportik5618 That’s a lucky situation. I’m sick and tired of my job. I’m paid OK (something in six figs) but I hate sitting inside windowless rooms all day and having to deal with bullshit from idiots day in and day out. I only do this so I can save as much as I can and hopefully not do it sometime later. When I am FI, I’ll find something to do, but it sure won’t be this shit.
@@aluisious excuse me, but if you don't mind,what kind of job is this that pays well, includes a lot of idiots and you hate so much?
Get skilled enough and thats the case anywhere
Semi early retirement, where you work part time after aggressive saving makes more sense.
That’s my plan
that's actually the point of FIRE from what i've seen. It's about having the CHOICE to do what you want to and not have that panic in your stomach 24/7. Working part time because you want to is a whole lot different than working because you have to out of survival. it's better to grind it all out while you're young, live on nothing, delay gratifcation (which is the real reason they give excuses for being against it) and not have that worry or stress for the rest of your life.
I'm glad theres an alternative to the standard "hoping" that I seem to see as so many peoples retirement plans
who's gonna hire you at that age? this is the question.
@@globalmuffin2 If you have money, why would you be more stressed?
Retiring even in twenties is pretty simple. You just need a rich grandma.
Just be incredibly smart and write s bestseller
just go through hell like prison or something and write an autobiography. I recommend prison. Free food, security guards everywhere, socialize, and more.
A rich grandma and as few relatives as possible getting a cut.
how much do they cost?
@@archstanton3931 I got 6 half brothers and sisters lol
I was FIRE oriented for a decade but have changed my mind to it's not worth it. With the amount of sacrifices, you're delaying living life to the fullest-my 20s are gone now and all I have is a fat stack of cash but the feeling I never really lived. I wish I had traveled more, lived in different cities, went out, and tried more things, and progressed more in my hobbies. Now I'm in my 30s with no friends and no significant other (and it only gets harder to meet people as you get older). Then there are the points mentioned in the video-you still have to be frugal after retiring and many people still work. I'm tired of living for the future and am now trying to balance it out and catch up on 'living life'
As someone who has kids I'll confirm that if you want to see the world then it's best be done in your 20's before you have kids. Expenses rise with the family and family vacation is way more expensive than traveling with a partner or just alone. The freedom of 20's is short lived. Kids can not be postponed forever.
Well done. I hope you enjoy your time.
25 right now and this is my exact fear about wasting my 20s
You're not alone with those problems. But most of the people with those problems are also broke, and would love to have that stack of cash you've accumulated. Seeking FIRE is probably not the root cause of your problems.
Jesus Christ dude, you're falling sheep to all the consumerist propaganda and bullshit society is selling you. You are in a far better position with that cash than most other 30-something year olds. The human mind always wants to find something wrong in one's life.
@@K1989L Nobody who is even slightly rational is having kids in their 20s.
I think the big thing is peace of mind. at one point I was making ~$20k then I started my own handyman busyness and spent the same amount and had $60k in savings at the end of the year it was the first time I ever felt financially stable. Not having money is a million times more stressful than not spending money.
I think you understand the idea of having the basics is best because almost everything cost!!!!
This comment needs way more likes, especially the last sentence.
👍
FI is everyone needs to strive towards, but RE is optional.
True. I like my job. I don't want to retire early, but I surely want to live a comfortable life.
That's my view on it. I'm more focused on the FI part so that I can stop being so dependent on my 9-5. What if I want to do X project but it's not the most well paying? What if I want to take 3 months to go travel? The FI part in FIRE allows me to do that without needing to worry about whether I can pay rent/mortgage next month. The biggest advantage the wealthy have is choice IMO and while FI doesn't put you nearly on their level, it certainly opens up the choice between "what jobs do I take" and "when do I take them" without putting your financial survival in jeopardy.
Well said! Have a cookie :)
Very well said! Go FI everyone!
I don’t want to retire and I don’t get what the big deal is with retiring early. I will probably never retire but I will be FI very early
The most important part of FIRE is "FI" as in "Financial Independence". Saving up a nest egg so that you COULD live on it indefinitely is a powerful concept because it gives you options. It means that though you might have a job, you don't have to constantly stress about what would happen if you were to get laid off, etc. Retirement from your career isn't always your choice. Often it is not. Having options is a very good thing.
Exactly. If you can get your absolutely necessary expenditure paid off by dividends/intrests from your nest egg, then you can focus much more on something which you enjoy doing and that can go a long way in creating even more wealth. Its the "retire early" part which people focus on, but its really the "FI" part which is more important.
I totally agree with you. Economy is fluctuating, Industries have good times and bad times. Eg Oil sector was very lucrative few years back and now people are suffering without jobs. In some industries age is a big factor. It is always good to save as soon as possible and as through as possible. This gives you a lot of mental peace. A person I know had good job in oil company, I reminded him to save while he has good salary, but he didn't paid attention and was telling I love to work so I am planning to work till 65. Sometimes we are thrown to a very narcisistic situation overnight and want to escape before getting insane. FI helps in all these situations. We should teach our kids when they enter to workforce
Having a solid nest egg is your "Fuck you" and "Fuck this" fund.
Any time you feel like you feel like saying that at work, you know you have the option to actually go ahead with it.
That's really powerful, because your employer has zero leverage on you.
I'm following most Fire-methods, but I have no plans to retire early. For me, the appealing part is having the financial power and freedom to be able to do things I otherwise could not do. Take a year off, work part time, try new things, quit my job i my new boss is an ass, and so on. It has also helped teaching me a lot about myself, and what I value, which is great.
Exactly this. I'm all for FI, but couldn't care less about RE.
That’s just working regularly is it not😅
@@torrepetersen4279A lot of people are stuck in a job they don't like because it's the only way (or at least most viable) to pay their bills. Surely you don't think most people can take a year off or work part time without significant financial hardship?
This. I value achieving some sort of financial independence far more than retiring early. It means more options, in terms of time, type of work, taking time off etc.
I so wish I had learned this early in life. I’m now 61, on disability, and no savings. Scared to pieces about the future because of health issues costing so much.
Becoming a millionaire through a Roth IRA or a 401(k) involves different strategies for maximizing profits. A Roth IRA offers tax-free withdrawals in retirement, which can be advantageous if you expect to be in a higher tax bracket later in life. On the other hand, a 401(k) provides tax-deferred growth and potential employer contributions, boosting your savings. The optimal choice depends on factors like your current and future tax situation, employer match, and investment options. Consulting a financial advisor can help tailor a strategy that aligns with your financial goals and circumstances.
Prioritizing effective personal finance management holds greater significance than the sheer amount saved, irrespective of income source. Consulting a certified financial advisor can offer tailored strategies to optimize financial results by reducing expenses and enhancing income, regardless of whether it's earned through employment or investments.
I agree totally. My external retirement assets, which I recently retired from at the age of sixty, are around one million two hundred fifty thousand dollars. Having paid off all of my debt and allocating a small portion of my retirement fund to the value of my portfolio over the previous three years, I understand the significance of a financial counsellor. You cannot ignore them, but you must do your homework carefully in order to choose a reliable fiduciary advisor.
@@PhilipDunk This aligns perfectly with my desire to organize my finances prior to retirement. Could you provide me with access to your advisor?
@@PhilipDunk Thanks a lot for this recommendation. I just looked her up, and I have sent her an email. I hope she gets back to me soon.
Oh man I didn't even know about the term FIRE and I've been investing 60% of my salary yearly
I just reached financial independence after saving 80% of my income for 7 years. So I can confirm that it is possible. But I am also single with no kids and have the ability to really lean into the minimalist lifestyle. Even though technically my passive income exceeds my expenses, I think it would be foolish to completely just stop working now. I plan on just transitioning to work I’m more passionate about. If I’m able to produce a good income from it - that'l be a bonus.
Ay congrats that’s awesome to hear! May I ask generally where your passive income comes from?
@@CheepsAhoy69 yes. My passive income is from rental properties.
@@ted8232 smart moves man, all the best to ya!
@@CheepsAhoy69 thank you! And to you as well!
Wow that is actual goals, congratulation dude
As someone who is chasing FIRE (I set aside 60-70% of my salary) I agree with you for the most part. But one thing left unmentioned is that ANY early retirement is considered FIRE. I don’t want to retire until the age of 55 and that’s still FIRE.
I’m worried that people only see the extreme side of the FIRE movement and forget about the communities aim to promote saving money and living intentionally. The Financial Independence is often the main focus for most, the retirement comes second.
This This This!!!!! My age group isn’t supposed to retire till 67. I’m set to retire around 52 if I want.
Well said. We FIRE'EES need to spread this concept, that there's no one path to FIRE or to FI
This is a great point!
@@engmecfleck I won't make it until i am about 50, because I started college slightly late. I got no debt a car and a camper I keep on my family's land. I got one year left and by the time i turn 26 i should be starting work. Luckily i have been extremely poor for my entire adult life living off less then 5-7k a year with my camper situation covering rent and my income potential is about 80-90k a year right out of school. I plan on starting off with saving 50% of my income so i can still enjoy my remaining 20's. By the time i turn 30 though i should be able to increase my spending while saving more through pay raises and expenses being paid. I am lucky enough to be joining an industry where you can go overseas and get paid even more money while living on a base with all the other workers. I plan to do the same thing my grandpa did and go work inside of qatar, UAE, Saudi Arabia, Southeast asia, or south america.
I just think people against fire don’t want to look at how they waste their money on dumb stuff and then cope with the fact they need to stay as a wage slave rather than be honest with themselves that they have been sucked into a situation that is not actually benefiting them to obtain some kind of real freedom. These people convincing themselves that being a wage slave is good is pure coping strategy. Unless people are running their own businesses and being their own boss, then outside of that they are true slaves in every sense of the word with a boss and a diktat of overlords telling them whether they are doing a good job or not, which whether you are or are not can be irrelevant. FIRE made me look at this objectively and made me realise how stupid I have been and I wish I had not doing such dumb stuff in my 20s that frankly now was worthless and meaningless- the kind of 20s people think are “living it up”
My first boss was in his mid 60s and two years into retirement when he decided to buy a burger joint, and while it stressed him out a ton at times it got him out of the house and i think he secretly enjoyed being somewhat of a mentor to a bunch of highschool aged kids
Sounds like my Uncle. He worked for a brokerage firm, went from mail room to partner (albeit he retired about 25 years ago). He tried to fish, golf and then started a few businesses including a deli. He worked his ass off but loved it.
FIRE is definitely something I’m trying to achieve. Partly to actually retire but partly to protect myself in the event I lose my job, which is a constant threat.
My reaction anytime I hear a youtuber say "I retired early" (including some of the notable ones mentioned in this video) is "No you didn't, you switched careers to be a professional youtuber". They're all making money off their videos and many of them are also trying to sell courses. That's perfectly fine but just be honest. They didn't retire. They just switched careers so they don't have a normal 9-5 day job anymore. To me, being "retired" means you can survive indefinitely on your investments alone and I doubt many "early retirees" are in that situation, especially if they experience another long bear market like we did in the early 2000s. I have no doubt it's possible to retire early, and I plan on it myself, but I doubt the younger ones who've never experienced a bear market will truly be able to stay retired forever.
Good catch-“buy my book that tells you how to become rich”
Exactly... the people you see promoting it make their money from making UA-cam videos so In essence they still are working
I don't think you understand the point of the FIRE movement. It's to be free of needing to work for money. The human race is built to work, whether that's making UA-cam videos or raising a garden or anything in between.
And bear market really doesn't matter. If you look at it, over time the stock market goes up and to the left. The 4% rule is based off from many many years of study and is a worst case scenario.
I feel like the frugal FIRE people always overlook the value of a consistent employment history too. You are permanently damaging your ability to go back into the workforce for most careers. If there is a prolonged bear market and you want to work some to offset, you no longer have the option to just easily opt back in to the workforce, at least not in your old career. For most professions, you are no longer employable. Nobody is going to hire some dude who has a 4 year employment gap because they tried to "retire" in their 30s.
@@aroff595 says who? you talking outta your ass
Retirement for me is when I stopped "chasing money".
excuse me sir, you have spelled 'Lamborghini' wrong
@@joesphanlu3369 :D
If that's the case then I've been "retired" since I was 13 years old.
I FI'd out a few years ago and quit my job. I started a business so I'd have something productive to do. After 6 months of bliss, the stock market crashed. This is the nightmare scenario you mentioned. I didn't want to tap my capital while it was down, so I was suddenly depending on my business income. Turns out, I love being self-employed. I hated being an employee at a big company. Now I use the investments as a safety net to keep my new self-employed lifestyle going 😊
I like the FIRE movement - mostly because it inspired me to be a lot more intentional about my finances.
That's really what FI is about. Not spending on things that don't matter to you. If you like vacations, you can absolutely tailor your budget to keep them for example, but you might cut back on other things you don't really care about, e.g. driving an older car for longer.
Great video! I think there are many interesting ideas from the FIRE movement, and early retirement is probably the least interesting part. This approach seems to help people focus on what actually makes them happy rather than conspicuous consumption and impressing their friends. One of the benefits of having significant savings is that you can focus on long them goals, and take risks that would not make sense for someone in a more financially precarious position. Being able to focus on the long term is usually good for your career, as it allows a more fearless approach. It doesn't surprise me that a lot of the people who set FIRE as a goal, instead continue working, as they are usually industrious people, and not really predisposed to sitting around or relaxing too much.
Keep up the good work with these videos. I always look forward to seeing a new one in my notifications.
Holy shit... Patrick you literally look like the real life version of the guy in the StoNks meme.
I'm sorry, I'm not trying to be mean but that is just hilarious.
You'll find most people who have achieved FIRE focus on the FI part, and minimize the RE part. Most people listening to their message however focus on the RE part, and minimize the FI part. Sitting on your couch all day gets old really quickly, and many studies have shown that people don't have much of a lifespan after retirement if they don't have something engaging to keep them going. The important part of FIRE isn't the freedom to do nothing, it's the freedom to do anything. Financial Independence allows you to follow your passions. Nothing says you can't make money from that, but the key is that you can afford not to.
Love this video, also love Patrick Boyles youtube channel. Down to earth, realistic, and informative. Like Plain Bagel.
Haha, I read this in your voice Patrick. :)
The issue is that people keep on bringing FIRE movement from money perspective. Just save up, save up and you will become a millionaire at 30s. It is a complete lie and does a lot of damage for FIRE movement reputation.
FIRE by 30 is incredibly optimistic unless you have a very well paid job, but doing it by 45 or 50 is quite reasonable for many, and already a lot earlier than 65.
Also, it goes without saying - don't trust anyone selling you a course, ever. You can learn all you need to know about personal finances with a few books, and that won't cost you much.
This is true, but I'd suggest just reading one or two, they all say more or less the same things.
It can happen faster than you think. When I was 22, I thought 40 or 45 might be feasible. A few years later, with some frugality muscles built up, maybe 35 was an option. And now at age 32, I passed my minimal FI number about a year ago, and this is my first year where I'll (barely) have a six figure income. Now I'm in "one more year syndrome" mode until the mortgage is gone and I have enough stuff lined up to keep me busy if I retire.
@@ordinaryhuman5645 Okay, but most people don't have anywhere close to a six figure income.
@@MattRoszak I didn't either, 10 years ago. Or five years ago. Only in recent years after a job change and a few promotions did I get close. Most people will have income that fluctuates over their lifetime, and there's a lot they can do to bump it up to that level.
And if they do only get halfway to $100,000 in income for whatever reason, then they can still aim for FI by 35 or 40, or 45 if they're patient and taking it easy.
@@ordinaryhuman5645 the long stock market bull run certainly helped
I pursue a ‘mild’ version of FIRE (preparing to retire by my late 40s), and have found it pretty useful in preparing for my future and focusing on what really matters today. Some of the more extreme version of it are crazy though (a miserable 20s is something I think so many will regret), and paying for courses is crazy when there is all the guidance you could want out there for free.
True man. It’s fine if you wanna bust your ass and work 90 hours week and save 80% of your income for a year or two. But doing that during all of your 20s just feels like selling your soul. Sounds so miserable.
imo the biggest problem with 'working hard throughout your 20s' is that a lot of people would still not have nearly enough to retire (if they are making minimum wage)
The idea of busting your ass for 5-10 years and retire comfortably while you are still young is only realistic in a select few proffesions.
Yeah, you don't really need any courses for it: just save what you can and put it in a sensible mix of investments. Keep going untill you reach a point where yearly returns are high enough to quit your job.
(There's a few more things to consider such as future inflation, but nothing that requires watching weeks worth of videos)
If you truly understand FIRE, you shouldn't need to pay for a course. Personally, I think the "mild" version is the way most actually achieve FIRE outside of Tech. Even in Tech, unless you make it into FAANG, early 40s is usually the goal.
IDK if I would call my life "miserable" but I do save +80% of my income and am in my 20's, thus I match the "hardcore" lifestyle of FIRE.
I live at home with my parents and am saving up to afford a very large down payment, if not outright cash purchase of my own home. My parents are willing to allow this and I am far from "miserable". I enjoy saving and not making pointless decisions that are financially poor just because it's what everyone else is doing.
Could I "move out and provide for myself like an adult"? Sure, I could do that and would get by. But why am I doing that? So people don't call me mean names? Because I have an ego that cares what people think?
Personally if this is the right thing to do is not even debatable for me. It's logical as hell to build a foundation before I jump into a world built on always needing to work for the next debt payment. I want to enter on my terms, not on the terms and opinions of others.
Acquiring a stock is easy, but buying the right stock without a time-tested strategy is incredibly hard. Hence what are the best stocks to buy now or put on a watchlist? I’ve been trying to grow my portfolio of $160K for some time now, but my major challenge is not knowing the best entry and exit strategies. I would greatly appreciate any suggestions.
Invest in index funds with your monthly savings and don't touch it until you need it.
I became an on paper millionaire at 31. That was 19 years ago and still working. One million isn’t enough to live an opulent lifestyle, the clip of those douche bags misleading folks and touting the common ease of becoming a millionaire is outlandish. Thank you for your thoughtfulness, and well researched knowledge, it’s so refreshing.
Did your paper net worth increase throughout (barring the great recession)? I.e. do you have multiple (paper) millions now? Surely a few million is enough to stick in index funds and live off of.
A million dollars is enough to live off if you live in the right area. If you're in California, forget about it. The couple from "Our Rich Journey" moved to Portugal where their 1 million is worth more and healthcare is inexpensive.
@@coleb9410 Great point. Putting a million in the S&P 500 should have produced a huge return over all these years.
Of course, you have to live really frugal, I desire frugal/minimalist living i don't need material possessions
No probably not opulent but that's not what FIRE is about. Me and my husband do fire because of the freedom it provides. Our expenses are $1500/mo. God willing in 10 years our house will be payed off, my husband would have finished his passion degree without debt and we'll have 500k+ in the bank. That's not enough to live forever but it's enough for both of us to pursue our dreams without the fear of failure. When you only have to buy food suddenly you can do anything.
This is an awkward video to watch at age 30.
You still can (and should) start, aim for 40-50
@@ianvancoblijn8677 that’s actually what I’m doing. I read the book Financial Freedom in the summer and have been saving at a decent clip (I think I’m around 20-25% this year). Looking for ways to increase this coming year and consolidate some of my accounts as I am slowly educating myself about stocks and finance (Ive been pretty spread out since I am still learning).
@@andrewdussault2315 that's good to hear man, it's a journey of patience but a good one, keep it going
Even worse at 40. Granted I've already saved a lot by now.
Yeah, I'm 27 years old and find that working "Hard" hasn't exactly paid off and i only have myself to blame for not educating myself to become financially literate. However it is not too late and the same goes for you stranger, fear not! You can do this !
Early retirement is also very doable through the military. The standard retirement is after 20 years, which can be as early as 37 years old. I retired at 9 years, 27 years old.
Financial Independence Recreational Employment. This is my goal. I was 44 when I decided this was for me, and I hope to achieve it at age 47. Almost there in age ... A ways to go in dollars. Downsizing your life is very difficult, too. We accumulate so much unnecessary stuff, and liquidating is both challenging, and less valuable than not wasting resources in the first place!
Great comment. Well said.
I retired 19 years ago at 45 before there was much of an internet. I had no idea what I was doing, had no plan. I worked as a software engineer and hadn't saved much but had brought a house paying a mortgage but that does put away a little. I worked almost always in startup but never had a big payday, They were just fun. But I got to cash out of one for $100k and instead of looking for my next job I decided to work on my own app to see if I could start my own business. I'm a very good engineer and a sucky suck business person. I ended up just enjoying writing code and got into fish ponds and gardening. Became obsessed. I looked at my cash and decided to just have fun with ponds and gardening and go back to work when the money ran out. 3 years later...whoa, the cash lasted 3 years with a $2200/mo mortgage? I was very surprised. If I didn't have the mortgage it seemed like I could live forever I did pickup a little cash along the way building ponds for others, invented a pond cleaning tool that I made and sold, but not a huge amount. I wasn't even trying to save money. I was just so into the ponds and gardens I didn't have time to spend money. That's when I realized I had retired. I didn't even tell my wife because back then it was hard to describe. Today I could just say FIRE.
So I sold that house in San Jose and got $400k profit tax free. Moved to Phoenix AZ. I've bought 3 home here over 15 years. I buy fixers, fix them up (another hobby I like) and when I want to move I sell them. Made $60k, $0k, $200k all tax free. The $0 was I got caught with 2 houses in the 2008 crash and one I had to rent so kind of hard to computer the actual profit but I think I broke even. Profit aside that's $0 rent or mortgage paid in 15 years. That's about saving $180k in rent/mortgage. All these 4% videos kind of skip around home ownership. To me it's key. In 15 years my net on house has been +$260k.
As stated in the video, yeah when you retire young you have a lot of time. I wasn't interested in just partying everyday. That gets old. And who are you going to party with? Everyone is at work or has to go to work tomorrow. That's a big issue I don't hear people talk about. You better be good with yourself. I created a rule...whatever hobby I get into has to be no or almost no cost and must have the potential to earn money. Having skills that could be turned into cash imo is way more security than even a pile of cash. I had software, gardening/ponds and I had some construction skills which I improved by fixing up mine homes.
My expenses over the past 15 years has been consistently in the $7000-9000 range. I get that seems low and the way I live most people wouldn't consider. I do live in a pretty nice area but it's been years since I ate out, went to a movie. I have dated a few times for short periods and spending goes up then, but not too much. It's been kind of like a game of "what can I do without?" I love it. And now I'm able to get SS which would be $2100/mo but I don't need it so I haven't taken it yet.
So imo the question of when you can retire is not about how big a pile of cash you have. That's actually silly. If you have enough money to last you a month, a few months, a year, what's the harm in retiring for that time? That gives you the freedom to see what you can shake loose doing something you love. It's work when you have a deadline, a rent to make and $0 in the bank. That's the stress of a job. The dynamic changes completely when you have time. You can take some risk. Try out some ideas. Just don't spend money. Spending money is a trap. If you want to start a business don't start by buying office supplies...that's the trap. You know how to buy office supplies. It's fun. It seems like you're in business. Instead get right to the thing. Figure out how to do it for nothing. If you can't toss that and think of something else.
15 years may past before you realize you retired 15 years ago.
Wow, I know your comment is a year old, but I love your story and the way you told it. Great levelheaded advice all the way around. Good job!!
Nice story! Congrats!
Super interesting take. Gave me some food for thought. Thanks!
Maybe take out your social security and give some money to charity. I read that whole comment you wrote and the theme of your story was “me me me”. Depending on your hygiene habits, personal style, and the state of your belongings, it sounds like you might be a low level miser.
Not planning to retire until at least my 50's, but there are a lot of extra benefits to the flexibility having a nest egg gives. Once I realized I could live for years without working, or touching my retirement savings, my quality of life improved at my job because I felt more free to push back on management and pursue more of the type of work I enjoy. If I got fired, it actually wouldn't be that big a deal. That makes all the difference in job enjoyment for me.
I was laid off 2 years ago. Because I had a sizeable nest egg saved up, and because I didn't really like that job, my first feeling wasn't anger, or fear, or sadness. My first feeling when I was told I was laid off was relief. I've been a happier person ever since. I haven't stopped working, I just switched to a more rewarding career and fewer hours per week. I make half as much money, but I'm much happier, and my nest egg allows me to do that (technically I have enough to stop working and live off of for the rest of my life, though it wouldn't be generous)
I'd rather live a semi retired life with that balance between working the career I love and yet having more time to do other things I like. A balanced lifestyle is key.
I became financially independent by 34. But I love working, and have continued to do so. That said having the option to live/work on you own terms is very empowering
I don't see myself retiring early. But I'm trying to save tons of money now so that one day I can wake up and work whatever job I want and not care how much it pays.
Exactly
Thats still FIRE for most people!
love this
Same here! Get after it!
Yes - that to me defines retirement.
Best thing to learn from FIRE movement: Most people tend to spend more as they earn more. You start your real career after graduating from tertiary study so you move out of shared accommodation and rent your own place. You get a few promotions so you get a new car and trade in that thing you learned to drive in currently being held together with tape. These are quite reasonable but then we don't tend to stop increases in lifestyle spending after the really urgent stuff has been catered for. Our friends go on overseas vacations so we start doing that too. Your sibling gets an amazing entertainment system for their living room so you do too. If you are able to avoid this kind of ramp up of spending as you start really earning, it will make a huge difference by the time you're 40.
Glad you made this video. I looked into the "scam" fire movement years ago and quickly found out 90% of the storys went something like this. "I paid off 150k debt in 8months and retired in 10 years, me and my wife both made 200K-300K a year". Well no shit you where able to do it. If me and my wife made that kind of cash, I could do it in 3-4 years. Try and do this on a 40-50k salary that most people make. Unless you want to live the hobo/ mountain man or a self sufficient farm lifestyle it ain't going to happen.
I've found a lot of these people are actually wealthy people who were simply overspending to begin with. "We downsized, moved into a smaller house, and turned in our large BMW for a used Honda. We saved a ton of money." What a shock.
No one claims that living on 40-50k salary is feasible to FIRE. You actually have to start a side hustle, or even multiple, or start a business. I love how the FIRE skeptics dismiss all the discipline involved in the movement. Even on an above average salary!
Sounds like you mis-interpreted this video because you were biased against the idea. He clearly says in the video that it is possible for the average joe. And I know it is possible because I'm an average joe and I did it with only 40k like in your hypothetical example. Just want to tell you it's not a scam, but hey you do you, it's not like I'm getting paid to convert people to an actual scam.
"Hobo mountain man" made me laugh lol. Seriously considering it sometimes, whenever I get depressed, about becoming a hobo mountain man and quitting this rat race..
except, I'm a woman. And I'd probably go missing before i build my first fire
@@supreme5580 Strongly disagree with you because I did it with that amount.
The question is DO YOU HAVE THE WILL TO FOLLOW THRIGHT WITH IT. Most people these days just no will power and just bail.
My plan is to retire at around 45-50 with a good portfolio and then work part time with something less stressful or more season based and then taking the rest of the time off for own projects and hobbies. I feel like this idea of retiring in your 30s but not having any plan on what to actually do with all that free time could possibly leave you miserable. Aim to find a work in a field where you can say you really really enjoy going to work everyday.
I think this was a pretty fair and honest assessment, which is not normally the treatment the FIRE community gets. Thanks Richard!
for a person that has lived both in a 1st world country(the US) and a 3rd world country .. where you were born defininitely makes a huuuge difference in being able to pursue FIRE
In third world countries, inflation could be a surprise down the road.
@@GeraldDeBelen could be mitigated to a great extent if you homestead
Where u were born And where u retire.
I think that's easier to workaround thanks to the internet. There's many jobs that can be done anywhere and there's more and more companies each year willing to look for talent worldwide while still wanting to pay a premium for it. What at first glance could be a disadvantage, if approached correctly could be a HUGE opportunity. If you can earn a salary in US, invest that salary back into a US dollar priced asset like an index fund and keep living as if you had a normal job, you can get your savings rate to an insane percentage due to cost of living. I know not everyone will be able to do it though, but for the people who really want to pursue that goal, i think they should have less of a problem trying to get a remote international job and acquiring the necessary skills and actually have a benefit pursuing FIRE.
@@cliftt This part is huge. If you can earn your money in a high paying jurisdiction, and then retire in a low cost of living one, you have it made.
One aspect that many ignore is that the lifestyle you get yourself used to in your late 20s and 30s is the lifestyle that carries on through your 40s and 50s - more or less depending on changes in your financial and health posture. Practically this means that if you compare the prices on food staples and calculate the pennies saved here or there, you may be turning yourself into an Ebenezer Scrugge without even noticing. Be mindful what your financial plans can do to your spiritual well being is what I'm saying. Minimalism and frugality can be a hair away from being a stingy penny grabber.
Man, i really enjoy how fair and humble you are, keep up the good work!
Once you reach retirement, the goal is not to stop working. But to work at a job that you enjoy so much that you would do it for free. In other words, you are working because you enjoy it, not because you need it in order to survive.
Many people give up on FIRE once they decide they want kids. Some parents do achieve FIRE, but in most cases they had really, really high incomes, or they received significant financial support from their parents, which most don't acknowledge in their FIRE videos/blogs.
Child education is hella expensive, and increase in sky rocket number every year. Maybe it's different in each country, but it's true where I live.
That’s true. But that’s only because they aren’t willing to give up their living circumstances. Buy a small home in the Midwest or north, send kids to public school, and figure out a way to use govt grants and benefits to your advantage.
Nail on the head! Kids and marriage are FIRE killers unfortunately (unless you have a physician/doctor/SW Dev salary).
I retired early 19 years ago, 64 now. Never had kids. Kids were an issue for me because when I was young I lived in a small town and a married guy there lost his kids in divorce and killed himself. Kids just seemed like a threat to me. As luck would have it now at 64 I'm getting ready to move from the US to the Philippines when things open up. There many young women are happy to marry old foreign men and most want kids. So in this weird world I now feel safe with having kids. I'll have the time I'd want to actually spend time with them (my Dad was always working). I have the resources they will need. I have a lot I can teach them. Filipina/White mix babies are beautiful and well thought of in the Philippines. I'm old enough now that if I lost my kids in divorce in 10 years I'd be 75 so a bullet through my head wouldn't be that big a deal.
Imo a person can retire early and have kids, but in the right location and at the right time. Easy for a man. A woman would be more complex. Based on my experience retiring early is early hard on a marriage.Most working couples only spend a few hours a week together and that is often a debate over where to eat. 24/7 is a lot of time. I didn't tell my wife at the time and she kept her job (all her money, low pay) so that helped keep her out of my hair most days.
I'm married, I have a daughter, and depending on your definition, I've achieved FIRE. Now "early" is my early 40s, not my early 30s, and I chose to switch careers to something more rewarding and with fewer hours per week (and paying half as much) rather than just live on my nest egg (though technically I could, it just wouldn't be generous).
I wouldn't say I had a "really high" income, I made decent money at my previous job (as a tradesman), but not the 6 figures or more of many FIRE proponents.
I also wouldn't say I received significant financial support from my parents. They did cover my education (2 years trade school, not university), and an inheritance did cover a portion of the downpayment on my house, but I didn't live with them beyond age 21, (and I paid them rent after I graduated until I moved out).
Even more importantly, I wouldn't say I've really sacrificed to get here. I have a reasonably sized 3 bedroom house in a decent sized city, we buy whatever food we want to eat, eat out on occasion (though admittedly not that often), I buy various tech toys, our daughter has far more toys than she knows what to do with, and we keep her busy with extracurricular activities, we take vacations, and I even splurged on a nice car. Saving is mostly about priorities, I don't spend on meaningless stuff, and I do research what I buy. I'm happy to buy used things often, I also do a lot of stuff myself when it comes to home repairs, keeping appliances running, etc.
All depends on your definition, but FIRE is definitely achievable, even for those married with kids.
You are the kind of finance nerd no one asked for, but a lot of people really need. Thank you for that. Really like your videos
My only comment to those on UA-cam talking about FIRE - more power to you and for a few channels, they really helped break down the great black box mystery that is investing in a way I could understand. There are 2 observations that I hold in reserve each time I see a video by the proponents of FIRE:
#1 They aren't _really_ retired, they just aren't working a 40 hour traditional work week commuting back and forth to suburbia. It's like Tim Ferris - he works incredibly hard for someone that wrote a book about only working 4 hours a week. The same for these UA-camrs - they still have to stay on top of their income streams _AND_ they are making UA-cam videos which.... is _work_ because if their channel gets enough views - they make money. One of the real estate guru's openly states UA-cam is where he focuses most of his time, not his real estate holdings. Why is that? because UA-cam makes him money now and helps him build a brand he will likely be able to trade on as influencer in 10 years.
#2 For me, the math of every person working a 8-5 M-F traditional job quitting after their small business takes off just doesn't work. If every person in a capitalist society could actually do that... then it would have been done a couple of centuries ago. I am all about having multiple streams of income and even trying to develop a business that will help you make money from a hobby or something... it is just unrealistic to think that *_every person_* that pursues this will actually be successful enough to quit their primary job. The math just isn't there.
That said, if your goal is financial freedom and YOLO - then I think FIRE is doable as long as you are in it to live a comfortable life on a budget not a wealthy frivolous one. I also suspect that some of those content creators live more humbly than they portray. But that portrayal is just good business.
Take the videos as inspiration most definitely but also with a grain of salt. I can promise the truly "rolling in it" wealthy people don't do UA-cam videos except as PR with the guidance of a social media publicist. Think of it like this, Warren Buffett could make many millions by actually writing a book.... yet he never has. His writings have been published and he has loads of biographers - but he hasn't built a 'brand' around self-promotion because he really doesn't have to.
As someone who lives in Appalachia, I know from experience that my relatives who live in NYC or Los Angeles could very easily buy a house here and still have hundreds of thousands of dollars left over. The dividend payment from IBM would put them in the $40K a year range, whereas the average income here is $25k a year.
LA and California are severely mismanaged.
Affordable housing is nonexistent either because of "environmental conerns" or "the community doesnt like it"
Its funny as hell how these people live in third world favelas like Cali and see nothing wrong with it.
As someone who retired recently at 31, here are some more downsides:
- Donating to charity becomes difficult if you run a tight retirement budget.
- You cannot contribute to an IRA without earned income.
- People who are frugal to a fault suck.
- If you manage to still have any friends, they're all still working.
- It's easy to lose discipline when watching UA-cam all day is a viable option.
- It's easy to despise yourself and fall into depression unless you find a goal to work towards.
- It may be hard to come to terms with not contributing value to society for certain periods of time.
- I'm always thinking of what-if scenarios now that my career development has ground to a halt and it'd be hard to pick it up again in 10+ years.
- You can party a lot harder and create better memories in your 20's than in your 40's.
Also have to settle for a minimal life style and throw those dreams of a big house, nice car and vacations out the window for the rest of your life.
'If you manage to still have friends' 😄
Seems true, but who doesn't have problems? We all do, of different sorts and magnitude, retining early it's because you want to get rid of SOME problems, nobody said all! :D
"- You can party a lot harder and create better memories in your 20's than in your 40's.
"
Well, maybe... but at the end, the reason why people invest is because they expect better returns, isnt' it? Investing involves sacrifice, but as Jordan Peterson would say, sacrifice is the most meaningful thing to do, because nobody does it without knowing why. Maybe parties are a lot better in your 20's, but the concequences of them have to be paid at your 40's, and as debt does, be careful at how much you take because maybe you won't be able to handle it when payment comes, and you will lose all that you thought you had.
most jobs are superfluous though. You'd don't have to feel bad about "not contributing to society"
@@alexk1682 Lucky for me, I'm into ADV touring and I don't enjoy expensive destinations anyway. Dream bike is only $10K, and camping costs really little!
I began following Fire at 29, this was 6 years ago. I don't follow it as strictly as i should but I have been able to make vast improvements in my spending habits and it has definitely helped me a great deal. Even though I am 35 and still working but I am on tracking of retiring much much earlier than 65, I am hoping by my late 40's, I will be able to retire. Although I highly doubt I will.
Hey! Love the honest and pragmatic view on the FIRE movement. I totally agree and feel that the fundamental goal is to have the freedom to do what you want and ultimately spend your working hours on work that is strongly aligned with your values and something that at its core you enjoy doing. Love the videos man! New subscriber!
It also should be noted that for many people, their income may increase greatly as they get older. I'm in my early forties and I'm making triple what I made in my 20s and nearly double what I made in my 30s. Everyone is going to be different, but working an extra decade may enable a person who is barely capable of retiring while living frugally, be able to retire very comfortably and have a lot more lifestyle flexibility and financial security.
Well said and important point. Retiring at 35 "robs" you off your peak salary decade. A decade where you could still stash a lot while dialing your savings rate to a less frugal 50%.
Whereas at 52, I'm making less doing the same job. Literally less than 20 years ago and I'm better off than many. And the job is harder now. There's still labour shortages in the field too. I'm baffled as to how that works.. except that everyone must be fucked most of the way up the business chain! Everything costs more l living costs) too.
It should also be noted that cost of living is increasing with income. I earn way more than I did 5 years ago, but I also have to spend way more than I did then, thanks to both inflation and the passage of time. Unfortunately, that's something we must factor in
@@Zeldafan1ify inflation is not something you can mitigate. Although inflation of lifestyle is definitely possible too mitigate. I split my income in predefined percentages. That means, when I earn more my spending and saving increase; hence I am knowingly inflating my lifestyle. I could have maintained the same spendings and hence increased saving but choose not to. Controlling lifestyle inflation is FIRE 101.
@@Zeldafan1ify Most people seem to suppose that the math is done for the country you're living in which might be a reasonable assumption. But wouldn't that be more reasonable and actually achievable with less sacrifices to plan that for a retirement in another country with lower cost of living? Of course, knowing if you'll like to live there is an important question. Maybe I'm too dumb to get any of this but this seems like something feasible.
Great analysis. I love that you give the truth to people even if it’s something they may not want to hear. That’s how you really help people.
This is why I like your channel, you are honest and straightforward in your analysis. Please keep up the great work and I look forward to more of your content.
Well measured video describing FIRE. I love the idea of saving enough up to a point to where you can choose to work a job that you're much happier in.
I just turned 30 a week ago. I have no savings but at least I paid $24k in consumer debt in the last 12 months.. I spent my 20s, well , spending and did not have any sort of financial awareness. I think there are lots of factors that play a major role on whether FIRE could even be an option for you. I personally did not grow up in a financially oriented household and my upbringing was plagued with instability, my mom claimed bankruptcy a few years ago. I personally had to take student loans and then proceeded to make terrible financial decisions that got me into $35k of consumer debt throughout my 20's. Financial literacy is such an overlooked concept that can make or break you but it is never too late to start changing your habits, time will pass anyway ..
That intro was hard to listen to. Really tired of some of those youtubers selling retiring early... And still working with their income being advertising that they're... Retiring early
One of those guys in video is Andrei jikh. He's pretty popular in cardistry circles.
Lol I wouldn't take any financial advice from him. This is like asking some David Blaine or Criss Angel wannabe for financial advice.
Non of them to be honest..
They all still work - full time plus!
Your advice is invaluable, and you are offering it for free for us peons on UA-cam. Kudos to you my friend
I think a lot of the main population could greatly benefit by following some FIRE principles, especially given that such a large percentage of the population live paycheque to paycheque.
I have been following fire movement for a few years now and it has greatly changed my financial outlook. Even if I don’t retire early, I will have options!
There are secondary knockon effects to consider though. The only way I see FIRE working out for society is by aggressively leveraging automation for effectively everything, and that has it's own fair share of problems. On the flipside, you can't exactly run a flourishing economy off of people eating and sleeping either in the words of Henry Ford, which is the current system
"Business is the exchange of goods. Goods are bought only as they meet needs. Needs are filled only as they are felt. They make themselves felt largely in leisure hours. The man who worked fifteen and sixteen hours a day desired only a corner to be in and a hunk of food. He had no time to cultivate new needs. No industry could ever be built up by filling his needs, because he had none but the most primitive."
Smashed the like button, and subscribed. Enjoy your early retirement, Mr. Plain Bagel.
As a couple that is currently on the path to FIRE by the age of 40, this is an awesome video! People often skip over the possible negatives when attempting to promote an uncommon strategy. This was a great breakdown of the different points of view.
I love Our Rich Journey! They're one of my favorite channels and they're such a cool family.
I smashed that like button since you're reasonable and for you not having a flashy and (for lack of a better term) douchy personality that plagues the financial circles on UA-cam.
he's great. and cute too. and this is a truthful video.
Some of those people made a lot of money in the first place, having a good job, and then they moved to countries with lower cost of life, like Portugal, or tax havens.
What is holding you back to learn to code when there are companies that will teach you to code for free and then charge you later only when you're hired and then moving to Thailand bali and exploring etc like I plan to do? All personal will... I decided I wanted it and I went for it and I went from earning 13.50 an hour to an industry that pays 6 figures a year as someone from the ghetto every body with a bit of will can afford to do it too. Self limiting beliefs is what holds you back if you think otherwise.
If you're curious check out Lambda School great opportunity.
How’d you get through the coding process man? And I hear South Korea is a haven a step above Thailand/Bali. Malaysia, Poland. So many options.
@@firefluff1 I went through a coding bootcamp so things were guided and you were encouraged to explore a little and break things. It was tough but it was also doable. Yeah, South Korea is a really interesting country they have a lot going on. Probably the closest to western culture. But, that is the issue. It's expensive to live there compared to Thailand/Bali etc. For me the purpose of this kind of travel would be to live a high-quality life on a budget.
Coding bootcamp was Lambda?
Really good video! A lot of helpful info and knowledge
Great stuff mate! fully agree!
The problem for young, single, childless people considering this, is that you're assuming you're never having kids. If you start a family, it becomes way harder to budget or even predict your annual spending. What if your kid has a medical condition, or get accepted into an expensive university, or you have 3 kids. Your FIRE budget probably goes out the window
this is true but at a guess, id assume the people who are really dedicated to the retire early bit, are happy to either not have kids or accept that if they do, that the plan goes out the window. I know there are FIRE people with kids, but still.
I have three kids. I’m not retired but I’m investing in income that helps me boost my monthly paycheck. A virtual raise if you will. It will also help support my kids as well as my actual retirement. I’m still able to save aggressively, so I might make an early retirement in my mid 50s.
Neither me nor my husband like children. So we’re more than prepared for what it takes to retire in our late 30s or early 40s 😅👌
Telling my kids the same thing dad told me about university. He ain’t paying a single cent and it’s up to me to pay it all.
At least if you have a kid you will have enough money to pay for most things he needs. Also having a kid imply you're married wich should imply you have access to your wife's salary too. If that isn't the case then change wife asap.
This man just quoted every single channel that I subscribed, great video good sir! Like button was well deserved. Even if FIRE doesn't work for everyone, they're still saving at least some money rather than losing it on useless and unnecessary material, and/or equipment!
Man I love your approach on tackling all these popular UA-camrs!
Excellent overview; I clicked in worried that there'd be some clickbait alarmism, but this was fair, insightful, and accurate - especially about how the mindset can stand to benefit many/most people, but that there are no guarantees and circumstances may make it impossible for some people no matter how well they practice the tenets.
The point of early retirement isn't necessarily to go "I'm never working a job ever again."
It's to go "I will only ever work a job I want to work." (And to recontextualize the things most take for granted as an earned extravagance. Helps to build a sense of appreciation.)
And that mistake could be deadly. Going entirely without work is just going to lead to depression and early deaths. (You can actually track the retirement age and average age of death in first world countries.)
Most people don't actually know what to do with themselves once they don't need (or can't) work. The actively religious actually have a leg up in this regard, believing they've got a purpose to live for and promote. (Regardless of your's or my personal beliefs on the matter.)
So, in essence: Find the meaning of *your* life. Work towards that.
I totally agree with you. That is the only goal for me, work in whatsoever I desire and help other people.
As someone who has recently reached FIRE at age 33 I think you've hit the nail on the head. The journey is very personal. Although I don't have to work anymore for money, I find myself engaged in other labors of interest like blogging and mentoring. FIRE isn't about being able to spend more money on things. It’s about spending more time on the things that money can’t buy!
For anyone curious about how to reach financial freedom, here are some investments ideas that worked well for me over the last 10+ years.
-Use leverage when it makes sense to such as borrowing money for an appreciating asset or a lucrative degree.
-Look for opportunities in the real estate market. Over 90% of millionaires own their own homes. That's not a coincidence.
-Financial success depends more on the methods and principles than simply hard work. Good strategies create wealth. Great strategies produce even more wealth.
-Shadow financial experts and professionals who have a long track record of success. Study what they do. Look at how they think.
-Take advantage of market corrections to buy quality assets when others are selling, and hold when others are buying back in. Poor performance in the short run doesn't prevent great returns in the long run.
-Don't invest in anything that you cannot commit to for 7+ years.
thank you
If one of your suggestions is "leveraging debt" to get a degree, I can't take you seriously. While it may work for some, too many people are plagued by the burden of student loan debt that they just can't crawl out of. Giving such advice is incredibly misleading and possibly tone deaf to the millions that took such advice and are now crippled by debt.
@@kscott2655 Leveraging student loans to finance medical school is very different than taking out debt to pursue a major in Mayan archeology. Did you miss the part where I explicitly mentioned the education has to be lucrative?
@@Freedomthirtyfiveblog - No, I did not. However, even those in lucrative careers are suffering. It's bad advice. Get an education and a career if you want it, but I could never suggest student loans with a clear conscience as an actual sound financial strategy.
@@kscott2655 nah, if you become a medic you're pretty much on track to become rich unless you're dumb.
You're a splash of cold water and I can appreciate that. I too am pursuing FIRE, and get into work I enjoy that doesn't need to be in the 6 figs.
Graduating with a CS degree this December. I had a full ride scholarship, worked throughout college, and am currently doing freelance software engineering work. I have about $30k saved at the moment, but I'm hoping to have as much as $70k by the time I graduate. After graduating, I have a job lined up that'll have me earning $100k a year. A friend of mine also works at the same place, so we'll be living together to save on costs. My monthly expenses should only be around $1200. FIRE is tough, and most people aren't in a situation to do it, but I'm counting my blessings and hoping I can make it work. Great video!
Shots fired towards Andrei and Graham? Youre a brave man, it was honor serving with you soldier.
I kid, great video as always!
They aren't CPA's, they really are only good if you have absolutely no financial intelligence. Dave Ramsey is better than them, then The money guys show is better than Dave Ramsey.
Finance training is required after you reach a point in time where the money guys don't give you much more information anymore.
@@Lolatyou332 They literally start every financially-related video with "I am not a CPA".
@@ligidk yes, I know. I'm glad they do as their financial advice should be taken with a grain of salt.
A chipmunk and a douche? Yeah, great enemies.
I really like the idea of taking a job you love vs a job you NEED to make ends meet. Lots of pressure when every pay day counts and there is risk of you losing your job out of the blue.
Love this practical advice.
An elegant, balanced perspective on FIRE. I really appreciate that
I really like your videos because they help me be more realistic instead of dreaming of getting rich quick. Slow and steady is the way to go!
FIRE by creating a youtube channel called the plain bagel. A voice of reason. It's about finding something you love. Retiring is boring as well. It's the reason some retirees go back to teaching or giving speeches etc. They got bored watching the news all day
Reaching fire, or at least coast fire really changes a person. I did my full time job for 15 years, worked OT, showed up did the job knowing freedom will come someday. Once you taste freedom it changes you, and you never want to give it up. You will find how different you are from most people because priorities and lifestyles are so different. You will notice more how so many people are negative or depressed and have to find a way to cover it up.
Mostly I have noticed is I will not take crap from some boss. While I do want a part time job (20 hrs max, 15 would be ideal) I can no longer deal with hassle and have quit 2 part time jobs already, one of them after only 2 days. This I have never done before because conditioning from society about the virtues of work.
Did anybody else notice changes? Can you go back to a cage of work after tasting freedom?
I used to have 'what if this disaster happens' scenarios running in my mind. These disasters were not just financial, but societal, personal, political, existential etc. With financial independence, it is easier to let go off fear. You still have to do the psychological/spiritual process of letting the habbit of fear go, but that is much easier with a concrete financial reserve.
I'm 11 years into my career and still enjoy working every day. The thought of not having a full time job just sounds so boring and unfulfilling to me.
Because you are conditioned to be a slave.
@@hankson5002 maybe your job just sucks? I work with animals and wouldn't want fewer hours.
@@freakymrq you can do in your life other things except for work. What's unfulfilling about choosing what to do with your life? Choosing your goals instead of being told what they need to be? You can even do roughly the same things just without a boss. There is many more things in life outside of work.
Also there are people (for example with ADHD) who get so tiring working full time job that they can't really do anything else unless they're on vacation - in which case a part time job might help living "normal" life, too.
I'm 42 and retired. I've been dividend investing since the 2008 crisis and got to a point where I was making $4k/month in dividends. About a year ago, the company I was working for ran into financial troubles. I thought $4k/month wasn't enough if my company went belly up. Especially in a city like Vancouver. I started looking at ways to use my current holdings to make more money and stumbled on options trading. I tried it out for a month and tallied up nearly $30k in options income. 6 months later, my company did go under and I've been willingly unemployed since.
The problem now isn't money, it's finding something to do... I'm so bored that I'm considering go back to work... so FIRE... do it only if you have something else to do to keep you busy. The first few months were great, I got tons of rest after 25 years of working but now, I'm bored out of my mind... lol
I guess technically, I'm not retired. I'm an IT Manager turned Options Trader so it's more of a career change but what I do now takes about 2 hours week...
Really cool to read your comment, my dream would be to not fully "retire" but somehow work reduced hours and not the usual 40hrs per week (currently I work 45)
@@miguelpereira9859 One of the most useful things about my 20s was (unintentionally) alternating between full time work, part time work and college, part time work on different schedules, and not working and no college at all for months. I think everyone is different and finding out what makes you happiest and most fulfilled you're not going to be 100% sure of without some experimentation.
In my case, working like 3 days a week a reduced number of hours (4-6) with a few hobbies was what worked best for me. I think volunteering the same length of time would do it too, possibly even more so. Just something with committed times and somewhat of a schedule, plus a lot of time in-between. I wouldn't have thought that was the best, as I didn't look forward to work exactly, but that was what I found.
Lol, options day trading. Enjoy being an IT manager turned options trader turned IT manager with no savings!
ME as of January 1st 2021. $1.4 million at 55 with a 3% withdrawal rate. I could even easily live off $35k or less per year.
Grats!
you have military retiree health insurance?
You say that, but in 30 years $35k is about $70K then due to inflation.
Also, a lot of discussions happen without mentioning about housing, etc. Most of the time, the people that use lower numbers are assuming house is paid off, while people that use higher number are assuming it's not. It's a big factor.
Also, medical insurance will become more expensive over time, and your body naturally will have more problems... so bills will come
@@dailyrant4068 Yes agreed and I didn't mean to come off as braggadocious. My wife still works by her own choosing and currently has about $252k in her 401k so add that to my $1.4m. We are both on her health insurance. She said she will quit when she gets close to $400k. None of this includes our homes value of about $350k, 2 collector sports cars worth about $30k and a watch collection valued at 80k. Stocks including stock mutual funds are the best way to keep up with inflation as well as the SS small annual increases until they make changes. Look, there are more pitfalls and potential failures than what you mentioned but I'm just at a point where I am 56 in three months, currently facing possible prostate issues now with a high PSA and life is just to short to be in a office or cubicle for 40 + hours that you don't like. Being very conservative in the beginning on $35k seems most prudent and increase as needed.
Sounds awesome. Thought about this myself and chose the traditional route. My main concern is illness or disability more than age so having a large fund to offset those risks seems very prudent. I will say that I always dreamed of doing what I am doing when I was a kid and have absolutely no motivation to stop until I am forced to.
Agree. You also miss out on a lot of memories if you spend all your time focusing on retirement savings.
That last part. Forced to. I think part of FIRE is you can continue doing what you dream of without a boss or some profit motivation.
Solid vid! For me, it means that I have the ability to stop if I wanted. I enjoy working, but I want to be able to stop or quit if I don't enjoy it anymore! Something to fall back on :)
I love how honest you are about these kinds of things. You’re actually trying to help people invest successfully rather than trying to sell us something.
I went from living on disability to financially independent at 35. I never wanted to be rich. I just wanted to be *safe*. I'd guess that many of my classmates that graduated in '08 feel the same. I'm not retired yet. My retirement target is the median household income at 3%. Approximately 2M. I once read the advice 'build the life you want, and save for it. Trust me when I say that is a far better route than a life of extreme frugality.
This video does a great job of covering all the bases on FIRE. One thing that has aided many of the under 40 crowd to retire early has been an incredibly strong stock market and real estate market during the past decade. Even Covid did not stop these markets, which is hard to believe frankly. Markets can (and do) fall drastically and can stay depressed for 10 or 20 years straight. It has happened before (many times) and will happen again. I haven't seen a bull market like today since the late 90's. When that bull market of 20 yrs ago ended, the NASDAQ crashed 75% and you didn't get back to break even for 15 years. Anyone practicing FIRE at that time, was likely in a world of hurt. I watched my own account go from $80,000 to under $30,000 during that time. Side hustles are great during boom times, but they will be the 1st thing to go in a recession. FIRE is awesome in that it gets you saving at a high rate and planning for the future. I'm not knocking it. I remember being in my 30's and being able to go unemployed for 20 years due to practicing FIRE. That was a great feeling. Just be careful trying to look at a past data and extrapolate that into the future. There's no guarantee that will work.
Great plug to like your video 👍 awesome explanation
I pursue FIRE with a 55% Savings Rate. I'm going to hit my "Coast FI" number at 35, and "FIRE" number at 45.
Coast FI is the concept in which if you were to never invest any more money at all, by age 65 (traditional retirement) you will have hit your number anyway via portfolio growth, with no further input. So, at age 35 I am able to stop worrying about retirement in general. If I continue on FIRE, I will retire by 45, if I decide it isn't for me over the years then I will retire by 55 (20 years of portfolio growth from age 35). But, the key is to have that age window set in stone by age 35.
I smashed the like button - enjoy your early retirement you dashing youtube rockstar!
I'm looking to either early retirement or greatly reducing my work hours (I like my job enough to still want to work 10-15 hours a week), but the hardest thing to budget for in the USA is health insurance.
I love all of your videos!!! With that being said, are you going to do more of the cartoon 5 min videos, regardeless of what you do I'm completly watching all of them, keep up the great work. Your killing it!
Early retirement is less realistic than financial independence. FI is when you work on something you enjoy, even if it doesn't bring in lots of money.
No. Financial independence is when you don't have to work anymore.
@@bobfg3130 Different levels to FI - look up barista FIRE or coast FIRE if you haven't already. I would argue FI is more about having choice and financial security which obviously overlaps with not having to work quite a bit, but isn't exactly the same.
@@TheBookworm284
Not really. You're either financially independent or not. The "Barista FIRE" is not financial independence. As for coast FIRE, that's not financial independence. You should be financially independent by the time you retire. Why? Pension.
@@bobfg3130 If we go with your strict definition of FI - not having to work - then yes, Coast/Barista FIRE is not FI until retirement. However, my point is to broaden the definition to recognize that the overall independence one has increases the more money one has invested. Someone doing Coast/Barista FIRE clearly has far more independence than someone who is living paycheck to paycheck.
@@TheBookworm284
Yes. That's your point. It doesn't matter. They're not financial independence. To be financially independent you must have at least 7 million dollars in investments and savings.
I totally agree that FIRE might not be achievable to a lot of people, especially due the random large bills or unexpected unemployment that comes your way. But I think you make a lot of great points and that it's really the mind set that will help people achieve some level of financial independence. I think financial independence it really what people are after. As you said, most people still work even though they are "retired", but it's because they choose to work. Solid video. Like-71
I used to want to do the FIRE thing, and get retired early, but now I see things differently: I work a flexible-ish job with a great team of co-workers in a job that fulfills me. And I have time to do my hobbies like guitar lessons or horse riding. While I'm in this job, the only thing I'm saving for is buying a small piece of brownfield land (disused council land in the UK, cheaper than other types of land), clean it up and build a small house on it. Rest can go in investments, but honestly, I'll only be focusing on saving up for that debt-free house and hobbies in my free time of a flexible job. If you have a free roof over your head (the largest cut from your monthly income), then you can fund anything else (like groceries, etc) with a part time job.
Even better you could make a little backyard garden and pay less on groceries. I'm most likely gonna be working well past the early FIRE retirement age with this plan, though, but I'm fine since I actually like my job lol
You will change again, like everyone else.
Great points to consider!
My goal is to retire at 44-46 after retiring from the military at 41 and working for a few years with two income streams to cash flow my kids college expenses. At 28 I’m already debt free with about 40k in retirement savings. Fingers crossed!
Thanks for your very reasonable advice. I've been a soft-FIRE guy, saving a lot a year and somewhat resenting the rat race. But I'm realizing that I can do a few things to just enjoy my job better and just work to retire at a more reasonable age (around 50). Thanks again!
I was asked recently by a financial adviser of when I "plan" to retire, and I told her that probably I'll work as long as I'm able. It may not be the same industry (software engineering), but it would involve some mix of part-time employment and small business.
I retired when I was 19. I'm now declaring bankruptcy, my 3rd. I'm going back to work as a life coach.
Our goal is work optional by our early 40’s!
work optional! I like that. not as catchy as FIRE perhaps, but explains perfectly what fire is. nice
I like this one too. I'm 26 and I can't really predict my motivation to work 20 years from now, but I sure as hell want to not *have* to.
@@talknight2 if my motivation to work now is anything to go by, I think it's save to say it'll be pretty low at 40 😂
@@TomBedlammusic Well, that depends on what you do I guess.