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Early-Retirement Update

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Re: Early-Retirement Update

#201

Post by labcomputer »

psychiatrist24 wrote: post #149
jacquesm wrote: post #14

Earlier quoted context omitted.

But: he's still giving investment advice and he still doesn't realize just how lucky he got.

You mean MMM or the author here? How do you know he "got lucky", since he doesn't mention how he got his nest egg? (Yes in a wider sense lucky to be born smart enough for a good job, in a country with good jobs and so on, but that applies to many people). Maybe he took those FI blogs seriously and dedicated himself to reaching that goal, and he did. And then people who never tried say "he got lucky".

> Maybe he took those FI blogs seriously and dedicated himself to reaching that goal, and he did. And then people who never tried say "he got lucky".

My problem with most of the advice from FI and FIRE blogosphere is that it essentially boils down to "be the 1% (where you live) and live frugally". It's not wrong, per se, but it isn't actionable advice for 99% of the population[1].

In particular, while anyone could be MMM, not everyone can be MMM: There simply aren't enough people who read financial advice blogs to support a significant population of such bloggers living in rural LCOL-ville. Even if there were, someone has to stock the shelves at Walmart. Shelf-stockers simply don't earn enough to retire early, unless shelf-stocker wages rise to a level that makes blog-FIRE unsustainable.

It's sort of like asking why everyone doesn't buy a rental and become landlord. Who rents the apartment then? Or do all the landlords rent apartments from each other?

[1] Perhaps it isn't a 99/1 split. Maybe it's 90/10. But it sure isn't 50/50.

Re: Early-Retirement Update

#202

Post by hogFeast »

bhelkey wrote: post #147
hogFeast wrote: post #87

Earlier quoted context omitted.

From what I can see, that doesn't look too good. There are likely issues with the data, which is not easily solvable given that complete databases are expensive. And there are likely issues with the modelling, it looks like the model is just scenario analysis. This is better than a misspecified parametric model (most advisers don't do scenario analysis either, so it is definitely valuable...although requires market k…

> There are likely issues with the data, which is not easily solvable given that complete databases are expensive. >> cFIREsim uses historical stock/bond/gold/inflation data from 1871 to present[1] I am not an expert here buy my impress is that this data is publicly available. What data is this model missing? [1] cfiresim.com/about/

It isn't, it is expensive and time-consuming to collect this data, and the edge is huge (I know a fund manager who has been spending several million a year for the best part of a decade collecting historical financial statement data). Also, a lot of the large databases are known to be inaccurate (for example, CRSP). I think the best long-term data is Credit Suisse DSM and Global Financial Data (I can't attest to the accuracy of the latter but have heard it is good).

The website says it is using Schiller's data...so the model is missing almost everything. Stock markets have existed in multiple countries for centuries, using one country makes no sense. It also looks like the bond data is totally wrong (prices rather than total returns).

Re: Early-Retirement Update

#203

Post by pdimitar »

Sileni wrote: post #91
jpdaigle wrote: post #76

Earlier quoted context omitted.

> Even worse when your romantic partner has different goals in life, as happened here. What stings (as I can't help but empathize with the author's feelings) in reading this blog is that it sounds like they were very aligned five years ago, but she discovered a gradual growing miscontent only once they tried the early-retiree life. Not sure if there's a possible fix there, other than trying to compromise (only one of…

As many people learned last year, it's easy to gloss over the parts of someone you don't like when you're both actively working towards a goal. When you start spending too much time together, it's easy to have the relationship die from a thousand cuts.

I would add "...if you weren't a good match in the first place". Your statement kind of tries to make itself universal.

I absolutely will never subscribe to the BS notion of "couples love each other more when they don't spend much time together".

I'm with my wife for 7 years now and I already worked remotely by the time we met. Our relationship is actually getting better with time.

So what you say mostly applies to people who are, let's call them, good roommates, not two people loving each other.

Re: Early-Retirement Update

#204

Post by silicon2401 »

dimmke wrote: post #102
PragmaticPulp wrote: post #68

I had to quit reading any FIRE (financial independence, early retirement) blogs because they were full of people headed down this same path: Extreme frugality, bare minimum savings, assuming their lifestyle would never change and nothing would ever go wrong. Retiring at 30 sounds great, but no one's life goes exactly to plan for next the 30-40 years until traditional retirement age. People change, expectations evolve…

I've had friends with trust funds, who just seem to dither around in life. "Making music" they never release. Picking up little "pass the time" jobs. And these are people that aren't living "leanFIRE" It seems like such a nihilistic way to live. You're just floating along the stream of life. Things worked out for you, but you have no further passion or inclination to improve the world? No problems you could set yours…

> "Making music" they never release. Picking up little "pass the time" jobs. And these are people that aren't living "leanFIRE"

> It seems like such a nihilistic way to live. You're just floating along the stream of life. Things worked out for you, but you have no further passion or inclination to improve the world? No problems you could set yourself to solving?

You seem to assume or take for granted that releasing music for an external purpose, improving the world, solving problems, etc have inherent value. I would 100% disagree with that. I don't think there's any greater objective value to raising orphans than there is to playing video games for the rest of your life. If somebody wants to make music and never release it, then they should have the freedom to do so. Your comment is on par with criticizing people for living meaninglessly just for not having children, when not everybody values or enjoys having children.

> complete leisure time 100% of the time or picking up arbitrary hobbies.

I'm at the opposite end: I'm surprised how many people care about solving problems or things like that. I couldn't care less. If I were to win the lottery or something, I'd immediately erase my identity and go live in a castle/farm in a forest somewhere, making music I'll never release etc until I die, etc

Re: Early-Retirement Update

#205

Post by hw_tw_03_22 »

mathgladiator wrote: post #93

The sad thing was the status grind on his partner; that's unfortunate but all too common. It seems he ended up with a more compatible partner in the end, so I'm happy for him. I recently learned there is this term called "Sigma male" where status is not interesting. Now, I don't know if it is real or just some label, but I do know people that don't care. I personally don't care, but this is after testing the waters o…

>I've come to the realization that most of my ideas are going to be seen harshly from many technical people, and they will not be taken seriously at first.

No, I think your ideas on fatFIRE are right and should be copied by everyone who can.

Re: Early-Retirement Update

#206

Post by neogodless »

ricardobayes wrote: post #142
neogodless wrote: post #92

Earlier quoted context omitted.

> Extreme frugality Were you reading FIRE blogs or extreme frugality blogs? Or maybe I can just ask "how do you define extreme frugality?" (I think of myself as kind of frugal, and planning to have the choice to avoid compulsory paid work before I'm 50, but I also live in one of the most expensive areas of the United States outside of big cities / California, with somewhat regular trips to Disney World and other coun…

Well someone spending 30k in Massachusetts living in a rental is got to be living extremely frugally. Then the woman had enough of the pennypinching. I see this so often in my circle - all the missed eating out and having fun is ultimately spent on marriage counseling and divorce lawyers.

My understanding was that they had separate finances, and 30k/year was just his spending. My spouse and I spend less than $60k/year in a comparable cost-of-living area (COLA), including flights/hotels/entertainment and other nice things to have (home, some land, modern cars, monthly massage, etc.). It's really not "extreme frugality" in my point of view, but I suppose some might see it that way.

Re: Early-Retirement Update

#207

Post by PragmaticPulp »

pcglue wrote: post #184

2.8M nut, about 50/50 in regular/retirement accounts. I'm mid 40's, married with two pre-teen kids, annual expenses of $80K, live in HCOL area (Southern California). Would you FIRE in this situation? Would you take a year long hiatus? As much as I would like to FIRE, I can't/won't, even though the "numbers" say I probably could. But seriously considering a months to year long career break/sabbatical/hiatus, because I…

> because I'm extremely extremely burnt out

How often do you take real vacations?

Your scenario comes up a lot in FIRE forums: People lead unsustainably stressful work lives and think the only antidote is to quit. Then they decide they're not ready to quit, so they continue working the unsustainably demanding job.

The real solution is to work on refactoring your career. You need to teach yourself how to work sustainably, manage stress, and take vacations. Job won't allow it? Time to start looking for another job. Other jobs pay less? Doesn't matter, it's still more than you'd be paid if you burn out and have to quit to get relief.

Re: Gap years: You can find stories of people taking gap years and then diving right back into the workforce, but many of them are either from young people or people who have a network that can get them back into a job. If you're making a clean break and re-entering the workforce without job connections, it's going to be difficult in your 40s and 50s unless you have some very niche skills that are in demand. Hiring managers might be concerned that you're looking for a cushy semi-retirement job to keep you busy, and that you might simply retire again if the going gets tough. They'd rather hire someone whose career interests are more aligned with staying with the company. Keep this in mind with how you frame your gap year.

Re: Early-Retirement Update

#208

Post by greedo »

I have a high school friend who retired around 40. He came from a family of money, but worked in corporate IT sales for a large, well known vendor. We had lost touch with each other until 5 years ago when he reached out to me via FB and wanted to call. We spoke for a few hours about our lives, and I realized he was a lost soul.

He had a wife and children, and had been retired for over twenty years. His kids were now all grown and out of the house, and it seemed like he was asking "what should I do now." In contrast to him, my kids were in middle school, and retirement was 15 years away, at a much lower standard of living.

My friend had spent the last two decades traveling; he would travel to a country, live there for 3-6 months and immerse himself in it. His family would stay for a while, but then return to the States when school started, while he would remain. He seemed very curious about "normal" life which he seemed to have growing up. His father was in financial services, and he had a stay at home mom.

I envied my friend's financial independence, but nothing of his retirement life other than the opportunity to travel on a whim. Life without moorings is to be adrift, forever seeking the oxytocin rush of new things, and then being disappointed when it fades.

I haven't spoken to him since, though he randomly posts to FB; I hope he's found real happiness and acceptance in his wanderings.

Re: Early-Retirement Update

#209

Post by cashewchoo »

stocknoob wrote: post #73
cashewchoo wrote: post #45

Earlier quoted context omitted.

OTM options is one of those things where it works great until it doesn't and then when it doesn't it REALLY doesn't. This is almost literally how we ended up with the inverse volatility trade collapse in 2018. Look up "XIV blow up". Betting against volatility will * never* not be "picking up pennies in front of a steamroller". Retail investors should not touch options under any circumstances, anyway. They're hedging…

Selling cash-secured puts and covered calls is one of the safest things you can do. You take on less risk (and less reward).

Ah I missed that he was selling calls for stocks he owns. That makes it even less interesting IMO? The premiums on these options are small enough and now you're also capping upside on stocks you already own. And remember that black swan events happen once a month in finance, so I think people would be surprised how far OTM they need to go to actually get to a "minimal" risk of them being ITM.

Re: Early-Retirement Update

#210

Post by driverdan »

TheMagicHorsey wrote: post #57

I have "retired" from work several times in my life, starting in my mid twenties, and then again in my late thirties ... and most recently in my mid forties. Each time I return to work. But each time it was for different reasons. I most recently left "retirement" to start a company. I don't need more money, but work keeps me sharp. My father retired in his sixties and immediately declined. I don't want to be like my…

If you don't have any hobbies and just watch TV all day of course life will suck when you retire.

My dad has been retired for almost 20 years and is as sharp as ever. He spends most of his days making things in his shop.

I can't imagine living a life with nothing to look forward to outside of work.

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