Discuss: FIRE (a financial Independence/Retire Early) is mostly bullshit

Most of the people gunning for FIRE seem to be a bizarre combination of truly despising their job and willing to accept a shitty standard of living. The gurus and bloggers are laughable, aspiring to live on 40k in retirement and to do that making aggressive assumptions around safe withdrawal rates.

I legitimately don’t get it, especially when so much of they hype is driven by a massive run up in equities. I also don’t get the willingness to live with such a crappy standard of living, which also leads to little room for error. 

FatFIRE is the way, although it looks harder and harder to accomplish as inflation worsens. FIRE on it's own I would say is mostly bullshit, you need to have a sizeable 7-fig starting point to be able to execute properly and have a large enough cushion in place should economic risk come into play and wipe our parts of your portfolio.

That, or you relocate outside the US to where 30k-40k/yr lets you live like a king somewhere in Asia or LATAM. 

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As other commenters have said, if you don’t like the lifestyle, scale it up to FatFire, don’t criticize the idea of saving money, which is really all it is.

In the past, much of this saving was done at the firm level. You had defined benefit plans and retirees received pensions from their place of work. That idea and responsibility has now devolved from businesses and rests on the individual through defined contribution plans (401K, IRA, what have you). Then there’s a sliver of Social Security, but that’s generally not enough to live on except for LCOL areas. 

So people want to make their own pension for themselves and work fewer years. Power to them. Just make sure the withdrawal rate is reasonable. Equities markets have been strong for nearly 100 years. The Ibbotson Associates data is the gold standard and shows 10-12% nominal appreciation in equities, and we’re on the brink of great technological advancements in AI, agriculture, and medicine that are really exciting, so why not believe in fairly strong future growth?

If saving money so you don’t have to work your entire life doesn’t excite you, then that’s your prerogative, but it’s certainly a cool thing for the people who can afford to do it and take care of themselves.

My issue is explicitly with FIRE, not FatFIRE. Hence the mention of 40k. If someone can save 5+ MM and afford an upper middle class existence with a 4% SWR, the more power to them. It seems like most of the FIRE advocates have between 1-1.5MM saved up and have precious little ability to throttle back if needed. If your 5MM takes a whack, you can defer a new car, vacation, etc. and still be able to afford a comfortable existence. With the much smaller savings of FIRE there’s a lot less margin for error. More importantly with sequence of return risk, you may not know you’re screwed until your resume is incredibly stale.

The FIRE bloggers honestly remind me of real estate gurus. People certainly make fortunes in the space, but it’s almost never passive and with nothing down. They take a thin veneer of truth and shovel manure on top of it.

Yeah, I hope this will help explain the thinking a little more. It boils down to a few things:

1. Most people aren't all that ambitious and just want a reprieve from the rat race. They don't have to become Midas or anything, just live a middle class life and not have to work for "The Man."

2. Most of the people who are pursuing FIRE are of above-average intelligence and will be well positioned regardless of whether they take time off to retire or not. Even if they were forced to return to the workforce, they are smarter than most of their peers, so they'll come out on their own two feet.

3. Think about the circumstances under which these people would be ruined. Truly ruined. Unable to survive ruined. It takes a lot of things going wrong for someone with $1-2MM and no debt to starve in America. You can pretty much always move to Mississippi or some LCOL area and buy a double-wide or an RV and live on $1-1.5K a month. That's like 80 years worth of runway, so nobody's starving here. Most Americans have close to no money saved, and the average net worth (which is skewed by the right tail outliers) is like $300K. $1-2MM is no pittance, and starvation really isn't on the table, which it has been for most humans across history.

TLDR; We're talking about a population of above-average intelligence people who have saved an above-average amount of money who have a substantial amount of financial runway before facing any real financial hardship while living in one of the greatest states in the history of the human race, and they're doing all of it without having to work for people any more. That's a wildly blessed way to be. That's not particularly what I want or you want, but to see it as anything less than the stellar condition that it is vis-à-vis the human race for most of history is not rational or informed by proper context or data.

FIRE is most appealing to smart people who aren't highly motivated by status. You find a lot of people like this in STEM fields. I know software engineers who basically follow the FIRE strategy without even consciously intending to do so. They're content to drive used cars, wear cheap clothes, and live in modest houses or apartments even when they make good money.

Learning about FIRE, for these people, just makes them more intentional and deliberate about the behavior that they're already naturally inclined towards.

I disagree with the other posters here saying to "scale it up to fatFIRE".  Regular FIRE is at least somewhat interesting, it's an alternative lifestyle that is obtainable to a regular person.  fatFIRE on the other hand is just having tons of money, period.  I mean, if you can afford to live a life of luxury AND retire at 30, great!  But saying to just do FatFire is like telling a poor person to just have more money.  Not really genius advice.

In regards to FIRE itself, I don't see any problem with people who would prefer a lower standard of living over a job they hate.  It's their job and their hobbies, not yours, and they really might want to kill themselves every Monday morning.  If FIRE makes their lives better than good for them.  The three issues I see are:

  1.  Discipline.  You have to dedicate yourself to your career without reaping any of the benefits of it for a decade or more.  It's like staying fit, many people are interested in it but not many look like Arnold.  My dad knew a guy who shoveled away tons of money for years to try and reach this goal but then he had a midlife crisis and is blowing it on his new mistress and her whole family as well as his old family.
  2. Healthcare in the US.  My dad recently retired before he was eligible for Medicare/SS and boy is it not pretty.  He has also seen boomers who just get random jobs and coast in them until they get fired just so they can have the healthcare plan.
  3. Family.  It's a lot easier to save when you're a single guy living in the shittiest apartment you could find with just a table and a laptop.  When family come into the picture it gets a lot complicated, are you really gonna send your kids to shitty schools so you can relax on the beach and not have to work?

But if you're willing to put in the effort, why not!  Definitely not for me but I can see the appeal


It's absurd to me people will put up with genuinely disliking their job for so long. You spend more of your life at work and life is too short for that...

Except, what do you do instead?  Most people on this site have a lot of options in the job market.  If you're 35 and you're working a low-skill desk job that you hate (think Office Space or something) what are your options?  The idea that we're supposed to find value or meaning in our jobs is absolutely wild to me.  Like, if you love what you do and find it rewarding, awesome!  And everyone should be looking for that.  But at the end of the day a job is just a job, which should enable you to do the other things you love.  People working in the fields for most of human history weren't thinking "oh boy, can't wait to get out there tomorrow morning and weed that next row of vegetables!"



It's absurd to me people will put up with genuinely disliking their job for so long. You spend more of your life at work and life is too short for that...

Except, what do you do instead?  Most people on this site have a lot of options in the job market.  If you're 35 and you're working a low-skill desk job that you hate (think Office Space or something) what are your options?  The idea that we're supposed to find value or meaning in our jobs is absolutely wild to me.  Like, if you love what you do and find it rewarding, awesome!  And everyone should be looking for that.  But at the end of the day a job is just a job, which should enable you to do the other things you love.  People working in the fields for most of human history weren't thinking "oh boy, can't wait to get out there tomorrow morning and weed that next row of vegetables!"

My first 2 businesses were started over something I was passionate about, then I discovered I liked the business end of things even more  than product.

But it's quite easy to build a low 6 figure income, say ~$120k -$300k, if you're passionate about something.

The guy that originally got me into entrepreneurship had a course about something he was passionate about making him ~$70k a year.

There is always a way, you just need to git gud. If you're on this forum, it's 100% possible. I get not being able to do it if you have room temp IQ.

Now, I am about to launch another brand for fun with a few friends that will probably pay us ~$100k each per year, all on a preorder basis, selling a custom high end product I am very passionate about. That one is mostly for fun.

But my point is...it's totally doable assuming you have a hobby or something you actually care about...

My friend, who is an independent watchmaker, went from $0 -> making ~$300k a year in about 2 years. He spends most of his time making watches, which is what he loves.

Have tons of examples of these...

It's really not that hard, assuming you are smart enough to be posting on this forum, to figure out how to monetize your passion.

(think Office Space or something)

 Something that always confused me about that movie is that those guys were software engineers in the peak of the tech bubble. Shouldn't they have been facing a FatFIRE situation off their inflated stock options? One of my ex's fathers was an engineer in a successful but lesser known tech company during the 90s (few billion market cap); retired in 2000 with tens of millions. 

The goals, dreams, ambitions, personalities, and ideal lifestyles between your average WSO posting Manhattanite and the average unwashed tech bro that is part of the FIRE movement are so different that it's almost not worth wasting breath trying to really reconcile the two here for those that dont 'get it'. But I will try

As for OP, most of your assumptions are wrong. Run up in equity has nothing to do with this. FIRE was a popular movement before the bull run even happened. Sure, the last 10 years allowed more people to cash out, but remove the last 10 years of market performance and the math behind FIRE still works. In fact the math behind FIRE is based on that historical performance pre-2012. It's also less about living on 40k /yr and more about being hyper viligant on consumption, spending habits, and maximizing most of what you find rewarding in life. While 40k a year lifestyle may sound insane (it's totally doable and can have a pretty good life from it IMO) to some, I think one of the reasons the movement is so popular because it just draws attention to a completely different way of doing things and challenges people to think differently about their relationship with money. One drive through suburban hell seeing pudgy middle managers in 5BR McMansions who finance a Ford Raptor to drive to their job at KPMG should be enough to showcase that most people never give second thought to this relationship at all. Hell, there is a reason Dave Ramsey is the nations most recognized finance guru and his advice is basically. 

Comparing it to a real estate scam is odd, as most scams involve getting the reader to consume a product or service of some sort and pay for it. Almost every FIRE blog that is popular preaches the exact opposite - consume and spend less. But I dont follow instagram, tik tok, etc. influencers so can see where you might want to call BS on some people especially if they are leveraging their social media platform as a significant stream of income - therefore undermining the entire point. That's not to say it's perfect. The example that most people think of - the guy or girl with 600k saved and finds a way to live a lifestyle on 25k a year or something absurd is IMO very rare and atypical, though it's what gets the most clicks. And it's true that if you get older, or have kids, then the math changes quite a bit than when you were a 28 year old engineer for a tech company. Most who pulled this off already had significant incomes (200k+) to begin with, and maybe the benefit of some stock options vesting. But the benefit comes from just challenging a lot of pre-conceived notions that I am sure are ingrained into your (and mine, and everyone elses) head:

- "It's too risky to quit your job" - Most have this fear that once you quit or retire, you are screwed. It's why they pause in fear at the idea of starting their own business, or retiring 'too early.' Truth is, you can quit your job, retire, and if you need to come back to the workforce you will be able to pick up where you left off. As someone already said, the average FIRE individual is quite a bit smarter than the average person. Getting employment and re-entering the rat race will always be a safety net. Will it always be the same title , income, etc? Possibly not. But youll always have something there

- "I dont know how you can retire at X age, it sounds so boring" - probably the most infuriating answer, but also the saddest. Shows someone who hasnt committed enough time to the world outside of work or themselves to really develop any real interests, ideas, or true ambitions. I do believe the human mind and body needs to be productive to be happy, and that a retirement of consuming TV as well as rum & cokes by a pool would quickly lead to depression. But so many people lack the introspection or creativity to think about being productive outside of their 9-5. It's why a lot of times peoples health goes sideways after retirement, they are no longer working towards something. It isnt the case for everyone as FIRE movement, but usually they have some end goal in mind of how they want to spend their time

- "You will run out of money, that isnt enough, what about inflation, bear markets, or X other issue?" - We live in an age where picking up additional supplemental income has never been easier. Driving for Uber or DoorDash, selling hand made trinkets on ETSY, being able to work remotely anywhere - potentially even part time. Examples go on and on. If you do the above you might only make 20k a year, certainly not enough to live on, but potentially more than enough to bridge the gap between what you are withdrawling from your portfolio and the cost it takes to live. Many just assume that once you 'retire' you will never earn a cent again. FIRE movement can allow flexibility here, some people still work but maybe as a weekend barista instead of as a software engineer. It's more enjoyable , less stressful, and there are always people looking for work.

Would be interested to know your age OP, I'm betting pretty young (22-25). While I'm personally not a member of the FIRE community, I understand and agree with a lot of their ideals. Once you get older a decade will go by pretty fucking fast - and you dont want to spend all that time just at work



- "I dont know how you can retire at X age, it sounds so boring" - probably the most infuriating answer, but also the saddest.


There's so much other shit I would do with my time if I felt like I had an adequate financial cushion. The only reason I'm even in this industry is for money. It's really not that interesting 

You have to consider that FIRE is targeted towards normies. The average normie is trash at saving and financial planning. If the movement causes average people to save more and make more responsible decisions, then it's better than no movement


FIRE is the funniest thing to me - a bunch of NPCs thinking they'll do whatever they want once the are free (TM), but don't know what that even means. "Oh I'll just do whatever I want" Okay, so what do you want? Their dissatisfaction with life comes from Human nature, not any outside force. I'll guarantee that once they have scraped together their little pennies and set up their little 5% CAGR accounts, they'll wake up one morning, or rather, midday, and feel just as empty and frustrated as if they had to go to work - only now with the added horrible realization that they have played themselves for fools, and that their emptiness had always been inside of them.

...and the Truth shall set you free

lmao the term NPC is so beat to death today, but calling someone who is FIRE an NPC is fucking idiotic.

Even if the rest of your point is valid, it's a hyper niche group that is complete counter-culture in every way possible to traditional American consumerism. You dont get there without going against the grain of the status quo to some degree. Tbh it might be as least NPC a group as there is

You might think that way, yes, however these people, by defining themselves over the "grind" they want to escape and financial independence as the goal of their existence, validate your "traditional American consumerism" wholly and without restraints. They are essentially fighting on the ground and terms of their enemy. A true "independence" would, for instance, be separation of your identity and your work, so you toil and yet have your own mental space (faith, family, etc). I'm not saying either one is better than the other, but if you define your weltanschauung as a reaction to your opponent, you are, by definition, accepting their viewpoints.

...and the Truth shall set you free

Lol what an absolute cope. 

Imagine being so jealous of people with free time that you have to invent scenarios about how miserable people with free time must be. 

This is honestly a sad comment. There’s nothing wrong with people earning enough money to allow them to pursue hobbies and spend time with friends and family. 

I traveled the world for 9 months on $10k. on $40k you can live comfortably outside of US. you guys just have skewed sense of reality due to living in NYC. in Asia and LATAM you can live like a king on that, enjoying fresh fruits and seafood, getting massages, traveling, enjoying beaches, banging chicks. it's even comfortable in Europe with 40k per year. but keep working 100h work weeks and paying 50% tax and $7k/m on rent in NYC, just so you can wake up and go to work and work until it's time to sleep.

It's retiring early for people who are wealthy enough to be able to have their cake and eat it too.

Obviously the questions and advice they would have are different from regular people so they have their own community.

At OP, I get your point but I also get the other side of it, so I see it both ways. 

- On one hand, its easy to poke holes in the theory of FIRE. It's really just people who say they want to "retire", really just quit a corporate job to live a life without much expenses, however they usually do have some kind of job to support them, typically a blog (I never really understand how they all have a blog or who reads it, but I digress). So really it shouldn't be looked at as a movement to retire, but as one where you find a job you enjoy doing. Its also living without attached to material goods while also living off investments that most likely are from people buying material goods. Kind of like how Warren Buffet zigs where others zags and it works out for him, we can't all zag or it wouldn't work.

- On the flip side, I understand they are basically trying to life a live where they don't worry about material goods. If you think about it, once you take away the prestige that comes with owning things, theres not a ton left. True, owning a certain type of car, or boat, or golf membership might give you pleasure outside of just wearing expensive clothes, but they don't subscribe to that. 

Ultimately I'd say people do FIRE or work a job people do things for a bunch of different reasons, that doesn't make it good or bad if its what that person wants. Also, some people aren't cut out for one lifestyle or the other, but most of the time that because its painted in a bad life to them. Some people see corporate workers as slaves, others see them as doing exciting things on the job. Some people FIRE people as smart, others see them as lazy. Its all different. 

People always say that, but being a stranger in a strange land doesn’t seem that appealing, at least to me. You wind up far from friends and family, frequently in a place with very different customs and language. A non-trivial chunk of countries that are frequently cited have stability issues e.g. coups, crime or corruption. I also think it’s telling that people from these countries are frequently trying  to emigrate to the United States.


People always say that, but being a stranger in a strange land doesn't seem that appealing, at least to me. You wind up far from friends and family, frequently in a place with very different customs and language. A non-trivial chunk of countries that are frequently cited have stability issues e.g. coups, crime or corruption. I also think it's telling that people from these countries are frequently trying  to emigrate to the United States.

Good points but if you've got all the time in the world you can definitely learn the language to better assimilate. I think the West has a really flawed view of Asia, some countries offer a more vibrant lifestyle with a much cheaper price tag - something you could only dream of in the US or Western Europe without a nice 6 figures job.

The US is still attractive for now but I'd not be surprised if that changes in the next decades; China, India, Malaysia, etc really are on the rise and have a huge potential with such over 1Bn people for the first two.

I don't think you need to dislike your job/career to pursue FIRE/FatFIRE. Ultimately, your preferences and priorities in life can and will change over time, so financial independence will protect your downside in that scenario. Personally, I really like my job and always have done. Therefore, I aim to achieve FatFI while continuing to work as long as it is enjoyable, leaving myself the optionality to add the RE when those circumstances change.

1) Their crappy standard of living to them isn't crappy, this is a relative perception. 

2) For many, the goal isn't to have zero income forever, rather not be bound by a w2 with 10 vacation days a year. Many have side projects, own and manage property, etc. 

3) Many of these people have hobbies and passions they want to pursue and their jobs are getting in the way. Its not because they hate their job. Time is finite and they don't want to spend their entire lives focused on a career. Some want to devote their lives to their children.

4) Worst case these people can easily re-enter the workforce. Maybe at a lower comp trajectory but nonetheless if needed would be fairly easy.  

While I agree some may run out of money and hit snags along the way, to each their own. 

Being anti-FIRE really shows the risk tolerance level of OP and others on this board. Some people view their career path almost as a pacifier, and the thought of quitting a job for a different pursuit with the risk of their promotion trajectory now being 3-5 years behind their peers as a devastating loss

For someone in FIRE it's a similar risk equation just different inputs. The risk is getting to end of life and realizing you spent most of it in an office doing work you absolutely gave 0 shits about. 

The average white-collar professional American experience is to work some job you are at best lukewarm about until you are late 50s/early 60s, spending your vacation time visiting family and your in-laws family and maybe one beach week a year, dont visit those countries you always say you want to go to until you are 62+ (assuming you are still healthy and alive by then), and steadily increase your quality of life with your income aka nicer brand cars, nicer finish in the kitchen, bigger yard, private school for the kids, etc. What's funny is that almost everyone on this board and in the FIRE movement come to the same exact conclusion: that life sucks. The reponse to it is completely different (living meagerly vs earning a lot), but there is more in common than most think between the two groups

I started actively budgeting a couple months back and quickly realized that just over half of my expenses each month exist solely to help keep me working.  That's madness.

You really don't need that much to maintain a decent lifestyle (assuming you don't have multiple kids) once you strip away the bullshyt.  Stick me in Colombia on $40K a year and that's an upper middle class existence. 

It's not like I'm going to "retire" in LA.  The lack of imagination is a little depressing  - we've really bought in to the "work for 50 years then die" paradigm.  

Am I crazy for thinking $40k (adjusting for inflation as that happens) in many parts of the US is decent enough living? My family made <50k for most of my childhood and we were fine.

Assuming the house and car are paid off so your housing/main travel expense is minimal, $40k is $3k+ a month to spend on shit. That's pretty solid for one person, and assuming you have a spouse who has that level of passive / post-retirement income, ya'll can do a lot of shit with that. Won't be flying first class and can't develop exorbitant hobbies/tastes, but pretty good living. Like, my monthly CC bill is around $3k and I'm pretty much buying whatever I want and eating out for like 50%+ meals.

I'm planning to work longer and retire a lot more comfortably, but FIRE seems perfectly fine.

I think that 3.5k per month is light, figure $700/month for 2 for an ACA health care plan, $400 for taxes and homeowners insurance, another $100 for car insurance. Home repair/replacement/maintenance vary widely, but let’s call it 1% of replacement cost, be cause roofs, HVAC have finite lifetimes, that could be another $250. I know that cars are paid off, but they will need to be replaced eventually even if it’s a 12k car every 10 years, that’s another $100 per month, that’s also assuming only one car. Add in gas, groceries, utilities, internet at $100, $400, $150 and $50. That leaves $1,250 for discretionary expenses including clothes, travel.

More or less agree with the math. I think you illustrated more or less that it works pretty decently. If you're single you're still rocking a $1K+ monthly fun budget. If you have a partner to split housing and transportation costs, there's going to be even more fun budget per person.

Then if you adjust the estimated retirement income to what is still a pretty modest $50k, and you've got tons of cushion.

Where it potentially gets tricky is when you get real old and need to go into a retirement home -> assisted living and so forth. At that point you could sell the house I guess and likely would receive subsidies from the government but that's where the finances could get dicey.

You can have a pretty good life on 40k in even MCOL cities, and that is rent included.

Ive done it before, still able to go abroad too. You can do many expensive type things on the cheap

Biggest money sucks that are easy to avoid:

- cook almost every meal

- when getting drinks master the pre-game, get like 2 tops at bars

- Ditch the car, or go cheap as possible. Gas, maintenance, insurance will kill you. Live in a place that has good transportation or get a bike, moped, etc

- Cut back the dumb monthly expenses like a million subscription services, cable, etc.

- Pick hobbies that are relatively inexpensive. You can do tennis, basketball, surfing, running, etc for all next to nothing

- Take a 'dont get me a gift, and I wont get you one' approach to everything. This may jar some people, but between all the Hallmark holidays, birthdays if you have a decent sized family, life events like baby showers, etc. you will find yourself buying stupid shit all the time. Either learn to make people cheap gifts, thrift it, or just dont give gifts at all

- Rent, get a roommate or if you have a spouse split with them. Cutting utilities, rent bill, etc. is big. No reason you shouldnt be paying more than 1k a month this way unless you live in HCOL and if that's the case 40k wont cut it anyways

The above really isnt even true austerity measures either. You can be social, healthy, have interests, things to do, and live an all around fulfilling life doing the above on 40k easy. You could even pull this off in a city like Chicago or Houston. Dont tell me it cant be done


I see it as the same vein as people who are younger and think they will work for a long time. Sometimes you can't physical work any longer and sometimes life gets in the way. 

So its not so much that living on $40k isn't doable, its just that if life happens or you have a draw down for a reason or your investments have a lean year or two things may not work out. 

Yes... you are right. I've seen elderly folks spend almost a million dollars near the end of their lives for treatment, etc. 

Truth is you can never stop working in the united states. Costs/inflation rise faster than people expect. Only going to get worse from here. 

Find a career you enjoy and focus more on longevity than retiring as soon as possible. 


Man, the idea that we should forego taking off when we're young and enjoying our life how we really want to now in order to make sure we have enough money to pay for our treatment in the last couple years of life when we can hardly move just seems insane.  I'm not planning to FIRE off a low income, but I could see it in another 5-10 years when I have at least $2 - $3 million, and if I get to the point I need a million dollars just to extend my life for a couple years when I'm already old as shit, I'll be fine if they just let me die (or I'll self medicate and do it myself if I have to and ride off in peace). It blows my mind how much money we spend on these end of life treatment facilities when these are for sure the worst years of our entire lives. I'm fine cutting my life short 2 years when I'm already 80 - 90+ years old if it means I get to live how I want in the coming decades when I have my youth

I agree and disagree. I think the 'career and working your entire life sucks' crowd comes from a position of immense privilige and have to remind ourselves, myself included, that the avearge white collar set up in 2023 of working 40 hours a week (how many of those are difficult), with 2-3 days at home, in a comfortable environment isn't the end of the world. When you reach the top of the hiearchy of needs and all needs met, security, friends/family, health, etc. then that last piece is fulfillment. So to even be asking that question of 'can i do something with my life that brings me more joy' is a great spot to be in even if the answers ahead are difficult.

I disagree a bit on needing to work forever to live. If you are flexibile with the life you want to live you can retire tomorrow with $2 million easy, and have a great quality of life in 95% of the country. Even with inflation, you can make it work. And if money gets tight then in 2023 there are infinite ways to monetize a hobby, skill, your assets (car, house renting), gig economy, etc. 

IMO I'd be less concerned about long run inflation and more concerned about future stock market returns with our soon to be declining population if I had to pick something to keep me up at night. 

As another poster mentioned, think most people that pursue fire have side projects and other large goals outside of their career. It’s a non-traditional lifestyle like not having kids or living in Hawaii. I don’t disagree, the sacrifices involved often make the path unappealing, but to some extent, many of the concepts are pretty powerful if you incorporate into your own life as a finance person/ high income earner. As an example:

  • Many fire advocates suggest having rent/ monthly house payments below 10% of your income to accumulate a nest egg that will eventually give off enough passive income to live. This is compared to common advice of 30%. Assuming you make 160k, this would mean monthly rent of $1.3k versus 4k. Call it 2.5k a month difference or 30k annually. If you did this for 5 years, you’d have 150k of a nest egg which at 5% can give 7.5k annually or $625 a month of passive income. Assuming your rent is 1.3k, you quickly can approach a situation where your passive income completely covers your housing expenses at which point you don’t care if you get fired and you can take jobs only for the sake of interest rather than being dependent on your wages for survival.

Finance lifestyles to me are odd because often people work horrible hours and experience poor treatment for the money, but they crap the money away by competing with other high income earners on nice apartments, fancy purchases, and wealthy hobbies. It’s been pretty shocking to me the amount of wealth you can accumulate if you lag lifestyle increases by ~5 years. If you are an analyst, live like you are in college, if you are an associate/VP live like you are an analyst. 

I am at a tech company where people do both - apartments that are about 3k for a studio + a luxury car.  There's only two people I know who take the bus to work and they live frugally.  I see high-end cars in my area (about 60k+) per car, most of the cars I see daily are 80-100k plus.  I am not sure how people can afford it.  

I have a post I’m planning on posting at some point about saving and personal finance. But I think the answer is there are 3 types of people:

  1. People who budget
  2. People who don’t budget
  3. People who are supported by their parents 

It’s really easy as a young person to watch groups 2/3 and think certain behaviors are justified or make sense, but truthfully those people aren’t good models for how you should live. In my experience, there are a ton of professionals who come from money with no loans and inheritance and general parental financial support lasting into their 30’s who spend recklessly because they can and they just aren’t playing by the same rules as everyone else. I also have been stunned by the guys late on credit card bills in 140k jobs or dudes who buy a Rolex or expensive car with their first IB bonus—like are you trying to be broke?

The math just doesn’t make sense if you don’t save money pre-30. Lot of people on this website seem to think they will be fine because their income will grow, but really expenses and societal expectations grow alongside your salary. It’s way easier being the guy at 25 living below his means than a guy broke at 50 living in a smaller house than all his peers since he has no savings that are compounding from when he was young.

The below is from the popular Mr Money Mustache blog but was a lightbulb moment for me. Yes, some of these savings rates are reserved for high income earners and may require pretty extreme living measures, but it was the first time really seeing how quickly you can reach financial independence - and this coming from someone who obviously understands compound interest. Basically, for every dollar you elect to spend instead of save, not only does your savings rate go down so you have less to pull from in future investments - but the amount required to have for your cost of living also goes up meaning you are saving less but requiring more. It's a double edged sword.

Similarly, if you can save $10 it also means you dont need those $10 to live off on. Very simple concept for sure but outlined in a pretty creative way 

The Shockingly Simple Math Behind Early Retirement | Mr. Money Mustache

The critisim of this is hilarious becauase it entirely misses the point.  The idea of FIRE is to create the opportunity, it doesn't require the action.  The idea is to create the opportunity to step away early. 

The actual issue has to do with the economy collapsing if the majority of people do this.  

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