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Early-Retirement Update

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Re: Early-Retirement Update

#51

Post by sokoloff »

cashewchoo wrote: post #45
xwdv wrote: post #37

Earlier quoted context omitted.

950k isn’t a bad stash but he’s a fool limiting himself to 4% withdrawals and a paltry $30k a year. He should build an aggressive stock portfolio of growth companies with about 60% IV each while he’s still young and going back to work is a good emergency fallback, but for primary income he could just sell OTM options against his stocks and be making about $2k to $3k a week fairly conservatively with little risk of as…

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 OTM covered calls is not a trade that's going to blow up your account. The worst case is that you suffer a drawdown in your account (which is a risk of all investing). The second worst case is that you miss a massive, short-term rally.

Re: Early-Retirement Update

#52

Post by didibus »

It's nice to see someone's honest thoughts. Though I can't help but find the person a little judgemental of their prior partner, or people who don't mind working. I also feel like they must have had a strange group of friends, 30k is the US median income, but it seems they only had friends making way more and also somehow being money obsessed.

I do like the conclusion though, we're social animals, and the issue with early retirement is that you're the only one with free time during work hours. They were lucky to have a partner to share their time with, but in my humble opinion, it isn't healthy for a relationship to depend on a single person that heavily. The lack of time spent with others means this one person is all you have to distract yourself, and I think that puts stress on a relationship.

I've never tried FI and early retirement, it's never really been something I've found appealing. That said, I've heard some takes on FI where they say it isn't so much that you'd stop working, but that you no longer depend on work. That means once you have financial freedom from work, you're free to see work as a hobby, and be much pickier about what work you do, where you work, how you allow yourself to be treated at work, etc. Since you know you can walk out at any time, since work isn't something you depend on. It gives you the big end of the stick in negotiating with employers, and that in itself is freeing. I think if I were to do FI, that's the type of FI I'd be interested in personally.

Re: Early-Retirement Update

#53

Post by renewiltord »

Pandabob wrote: post #24

He mentions MRIs costing 2-3k€ a pop. That seems really expensive. I’m guessing this is US? Doesn’t competition push down the price of these operations? We’ve got private clinics in Finland offering MRIs from ~230€ without any subsidies (AFAIK).

The US imposes limits of practitioners to keep income high.

Re: Early-Retirement Update

#54

Post by lutorm »

boplicity wrote: post #22

In my early twenties, I had a business mostly on autopilot that let me work maybe an hour a day. I mostly spent my time writing poetry, hiking, making friends, etc. It was great. It was not sustainable, but it was perfect for a twenty something exploring the joys and freedoms of youth. Now, I work much harder, have kids, and responsibilities. That being said, I know the work I do is meaningful, and serves many people…

Except "retirement" simply means "not having to work to survive". It doesn't mean doing nothing, it means having the freedom to choose to do things that are meaningful to you.

Re: Early-Retirement Update

#55

Post by corry »

Kudos to people who go FIRE without state-provided healthcare - from a "typical brainwashed Canadian" POV you're one health mishap / one ambulance-ride's worth of unexpected medical costs to kill the entire dream.

Also - no kids - huge variable for FIRE obviously, but perhaps less obviously ALSO a huge variable for life's purpose.

Something I've seen in my friend and family group is that a lot of couples hit a point where the answer to the "what's the point of all this?" is to create a family. Sorry if that sounded crushingly heteronormative - but this also includes gay folks in our life.

Not suggesting that everyone should have kids, or that the childfree people are somehow bad, or even that it's not a rational choice to go childfree. All good to those thinking that way.

But. If your conclusion is that love and connection is what life is all about (assume Maslow's lower levels are covered), then having children is possibly the magical thing missing. Not necessarily for everyone. But it's a game-changer for many of us and provides some incredible direction and purpose (as well as very low low's and constant anxieties).

Having children also can change your priorities in how you spend your own life. For me personally, I'd want my children to see me working hard at something; having adventures; building things; changing things for the better. All of that can happen inside the typical FIRE life. But as he points out, your life gradually disconnects from things if you're truly independent and separate. And unless your wealth is large enough that your children will also be FIRE, you really want them to learn from you in how to navigate "the typical world" of jobs, managing finances, etc.

Re: Early-Retirement Update

#56

Post by vkou »

DoreenMichele wrote: post #17

In the US at least, this would work very differently if we had better healthcare for our citizens. Sudden health expenses is one of the things that went wrong in his life that derailed his plans.

It really wouldn't. The biggest impact to his finances was not his health costs, it was the separation from his partner.

It's a lot cheaper for two people to live together, than it is for two people to live apart.

Either way, FIRE on a million dollars, even in a lower-COL state is... A bit optimistic, because of short-term market fluctuations having the potential to coincide with surprise expenses.

Re: Early-Retirement Update

#57

Post by TheMagicHorsey »

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 dad.

Re: Early-Retirement Update

#58

Post by leetcrew »

mypalmike wrote: post #28
jacquesm wrote: post #12

Earlier quoted context omitted.

Especially not in the USA when the least of a health issue can eat up your savings in a couple of short months unless you have extremely good health coverage, which only the rich (who don't actually need it ...) have.

It's not perfect, but maximum annual out-of-pocket for an individual ACA plan is $8550, plus premiums. If that's your entire savings, you were certainly not FI.

I think the author is going to require expensive care on a yearly basis for the rest of their life. if you can't absorb $8550 one time, yeah you're definitely not FI. but if you end up maxing out your out-of-pocket every year until you die, that is really going to mess with a $30k/yr spending target.

Re: Early-Retirement Update

#59

Post by bityard »

varispeed wrote: post #23

This is something I cannot understand. Why would you want to retire so early? I think that would impact my mental health negatively. I just love to work and I couldn't care less about FI. I mean it's nice to have money, but this will sound cliche it will not buy you happiness. However, it is certainly better to cry in a luxury apartment than under a bridge to your dog.

My situation, as someone attempting financial independence: I don't mind work, what I mind is someone else telling me what I have to work on and when it needs to be done. FI will put the ball in my court. Once I have enough passive income to cover my family's living expenses, _I_ get to choose what I work on, even if it makes little to no money. But of course I will sometimes choose to work on things that will generate significant chunks of money.

Re: Early-Retirement Update

#60

Post by regularfry »

hogFeast wrote: post #19
sidlls wrote: post #9

I always get a kick out of people who think they’re financially independent with such a small stash. Outside some regions with relatively extreme living conditions (e.g. undeveloped and underdeveloped countries), the amount he retired with was never going to be enough to sustain even minor shocks and last the rest of his life. He had a minor shock (breakup) and a major shock (health condition) and realized this error…

I used to work in financial services. I wasn't client-facing but because I had experience with financial modelling so I got roped into these discussions...in my experience, everyone gets this wrong. Advisers get it less wrong but I have still seen comical errors from people who should know better. But most people significantly overstate future returns (particularly now), they significantly understate the effect that…

It's not "doing nothing" it's "choosing to do nothing for anyone else", which is very different.
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