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FIRE: (financial independence, retire early)

 
master steward
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I saw an article about FIRE on the BBC and I thought it was very interesting.

there was also a recent kickstarter about FIRE that I missed :(

Anyone know anything about this?  Anyone here trying the FIRE approach?  
 
pollinator
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I did this just under thirty years ago and since then it's been great fun. I still "work" but it doesn't feel like it.

I do what I want almost every day. (Do you like dusting?) If I have to do something I really should do that I find boring/what's the point, I'll only have to do it again in six months etc. then I just put very loud techno music on, dance around and pretend that I have to work for a living. "I am just a jobbing gardener, I am just a jobbing gardener". That can be my mantra some days.

This technique usually does the trick and if I don't finish the job then I think, "What the hell" and laugh at people who think that a clean house/garden/pair of jeans is important.

This sounds really corny but it was Permaculture that helped lead me to my mission to be free and I am so grateful.
 
master pollinator
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I got "out of the system" by an injury at the shipyard where I worked. I was out for what should have been 6 weeks and instead was out for 6 months. After realizing that I had everything to just stay home instead of going back to work, at age 42, I did.

Was I ever glad I did. It is a very long story, but an accident on my farm revealed the radiation at the shipyard was literally killing me with cancer. While a crazy set of circumstances happened, I am glad I was spun out of the system at such an early age.

Like Irene, I "work" on my farm, but it is hardly considered work. Compared to the Unionized shipyard, I most likely "work" harder physically on my farm, but it is just not considered work to me. I don't feel "better than everyone else", and I freely admit I did not calculate a few things properly, but I also feel really blessed to be where I am today.

FYI: The two areas I failed to properly calculate for was property taxes doubling in costs, and my health be taken by cancer. I mention this so people can plan their own lives better than I did mine these last two years).
 
steward
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I FIRE'd too.  I'd recommend it to anyone who can do it.  I'm still working but it's on my own projects or little side jobs for people I like.  Some of the keys for us were:

Have and update a budget monthly.  We track all money in and out and allocate income to a series of columns in excel for each spending category.  New car, food, utilities, allowance, travel, insurance, etc.  Daily expenses are deducted from those categories as they happen.  That way you can keep putting the right amount in routine categories (food, utilities, etc) while also putting away the right amount to buy a car every 4 years.  As you update the budget and adjust for raises or new spending categories, you can be sure that you won't be accidentally spending your car insurance bill that's due in 5 months.  There were times we had $4000 in the bank but my allowance was at $36 so I couldn't buy any toys.

Live well beneath your means.  Fuck the Joneses.  They're broke.  Don't keep up with them or you'll be broke too.  Bring a lunch to work.  Drive a reliable but cheaper car.  Live in a decent house but not the house that the mortgage lender says you can afford.  Pound the excess into savings/investments.

If you have a dual income, try to live off one of them.  I'd tell this to engineering interns all the time.  If you can't make ends meet on one engineering income you're possibly doing it wrong.  If you're an engineer and your spouse makes $25K/year, max out your 401K and invest her money as well.

Once you're on the track to retire early, talk to an investment person to make sure you're putting it away optimally.  Many "easy" investments like 401Ks can't be touched until you hit 59.5 years old.  If you invest everything in them, you may want to retire at 45 but have no money to live off until 60.  We invested in two "pools".  Young money and old money.  Old is 401Ks and IRA, young is standard investments that don't have tax advantages.  Your mix may be totally different but be sure to plan where the actual money is going and when you can take it out.

Don't put your money under the mattress.  Inflation is climbing a bit every year.  Your investments should exceed it or you're losing the battle.  Not wanting to lose any money may trick you into investing in really safe things.  When you're young and trying to retire early, you'll be investing a lot so it's the time to raise the risk tolerance to "medium" or higher.  

Pay cash for cars.  I know plenty of people who bought cars on a 0% interest loan.  "Why not?" they said.  Well, 6 years later they finally pay it off and decide to get another car.  They haven't saved for it so it's time for another loan.  Darn, now the rates are 1%.  Oh well, that's still pretty close to 0.  6 years later the rates are at 3%.  Well shit.  They still didn't save so they're starting to get trapped into car loans that are costing them money.  It wasn't long ago (80's) that car loans were 14%.  If you save up for them, you're making the interest instead of the bank.  Putting aside $300 a month for 4 years gives you $14,400 plus interest.  That is a decent car.
 
gardener
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I have about 4 years remaining until I retire and barring massive unexpected health expenses I should be all set. I wrote up a FIRE plan 20 years ago at 25 and making $10.50/hr back then had a plan worked out to reach it at 40, with house paid off and interest from savings matching my remaining expenses. But marriage changed those plans hah! I could retire now but I will get a better deal at 50, and while that deal gets better each year I wait up to 60, those are 10 years I won't get back and I expect I'd regret it.

Learning to ignore the marketing barrage we see/hear every day is key to avoid throwing your money at things you don't need. Upgrading the car, clothes, PC, phone, TV, etc etc... when what you have is working fine. Buying more toys/distractions when you aren't using what you already have, or learning about all the free options around you. Learning to cook rather than going out to eat or buying junk foods that cost more and are less healthy. Saving up to buy something once you have the money, and half the time that waiting lets the allure wear off and you decide to not buy it after all.

Avoiding the use of interest bearing credit whenever possible, but if offered 0% I take that and set aside the money in an interest earning account to pay off the bill before the real interest would come due (0% turns into 15-20% retroactive if you don't pay in full by the due date). I'm putting my spare money into a checking account and CD through Ally, they are offering 1.8% in checking and 2% in CDs right now, compared to 0.1% at my credit union. Doesn't seem like much, but it adds up and for the time spent it's good pay per hour of effort. I use a credit card for all my expenses, and have it set to autopay in full each month so no interest accrues but I get the money back feature over time.

Early Retirement Extreme and Mr. Money Mustache are two sites I found handy for ideas to further my frugal goals.
 
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Although I’m reluctant to post financial stuff on Forums, suffice to say I’m financially happy and debt-free. Aim to retire in about 5 years because that’s how my Superannuation was set up when I was 20-something and it’s locked in.

My parents instilled saving and thrift, but to still enjoy life – money was a tool, nothing more. Save up to buy, NEVER credit.

The thing that concerns me are the 20/30-somethings I see at work now. They’re on REALLY good money, tens of thousands more than I was at their age even allowing for inflation, etc; BUT, they have no idea of saving or living to a budget – I want it, I must have it, and I want it NOW attitude.

For example, they’re on about $80K a year ($1,538 a week less tax and health care) and have NOTHING left of that money come the following pay cheque. It beggars belief how they can consistently spend anywhere near that kind of coin in a week even paying rent (none have mortgages), food, utility bills et al!

They seem to think no further than the next pay cheque, holiday, or club night. When I raise the matter of marriage, mortgage, children and retirement, they just give a vacant stare. They are certainly rabbits in the headlights, and will be working until the day they die if they don’t get smart ASAP.
 
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Hi,

Our family 2 adults and 2 kids checked out from city life in London following the principles of Early Retirement Extreme (late 30's). Since then we have bought a small holding in the SW of France and are applying as many permaculture principles to our lives as possible (with loads of mistakes).

On FI

1. We saved over 50% of our take home pay and invested it all.
2. We sold what we needed to buy and renovate our farmhouse with 2.6ha of land.
3. We use the rest to generate a modest cashflow from companies whose products we use.
4. We need purpose in life so have lots of projects and some work to keep us engaged in early retirement.

FI mistakes

1. We tried to invest in renewable projects using unproven technologies when we should have kept to proven technologies and utility companies that used them.
2. We underestimated the impact of opting out of the mainstream to a quieter permaculture lifestyle would have on our old friendships.

We continue to live well below our means and have adopted many techniques and some technologies (many simple) to reduce our need for external resources.

Why Permaculture?

1. Our land was industrally farmed. The soil is clay, deep but depleted and we are leaving it alone for nature to do its work.
2. We want to be as self sufficient as possible but not in the same way as documented in the book "Back to the Land" - we have plumbing and insulation!
3. We don't believe that that living off investments will necessarily pay off in the long term. We want to be able to fend as much for ourselves as possible. We are moving investments into sustainability at home such as solar hot water and a solar greenhouse.
4. Ideally we want local work to be engaged with the community (my wife is already providing a translation service)
5. We are concerned about climate impacts (although more towards the cooling side of things)

Our Permaculture mistakes so far

1. I wish I had come across mass rocket stoves earlier. We have a wood heating system with a double combustion chamber but I worry how much heat goes out the chimney. We also have two stoves. One has a double insulated chimney and does not heat the room quickly where as the second has a floor to ceiling single chimney which heats a bigger room much faster and with less wood.
2. Not realising how much work needs to be done with damaged soil and how our soil type (clay) does not favour certain plants and trees. Unfortunately we have lost several nice plants and trees because of this.
3. Underestimating mother nature to be so variable from hail, heat and wind. We have to protect our crops more and make sure they recieve suficcient water and root protection.
4. We have insulated our house alot yet as it is at least 200 years old it needs alot of work to make it as air tight as possible.
5. Our permaculture mounds did not work well at all in the first year. We used soil from the intensively farmed field, failed to mix in the organic material sufficently and a had dry winter. The clay soild caused any rain we did have to run off instead of sink into the soil. This year we mixed the top of the mounds by hand adding some sand and compost whilst mixing in the wood chips from the year before. This seems to have done the trick as this year they were very productive.

Permaculture surprises,

1. We are amazed how abundant the garden can become following the principle of constant adittion of organic material. We collect leaves from the forest in the winter, add all of our garden waste and ash from the fireplace.
2. We have reduced our energy consumption so much that we are surprised when we talk to other people how much they use.
3. We have a well and a spring which we use under gravity to water the garden.

Next Steps

1. Grow all of our fruits and vegetables for the year
2. Build a permanant solar greenhouse
3. Options for electricity generation \ backup
4. Grow and prepare more of our heating wood

Good luck to all,

Darren


 
pollinator
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These testimonials are the most inspirational thing on the internet. Just sayin'. Thanks for sharing guys!
 
pollinator
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My motto has always been “what you don’t spend you don’t have to earn”.

I always buy homes in what many people consider ‘undesirable’ areas.  Under NO circumstances will I buy where there is a homeowners association.  My mortgages are always less than $500 a month.  My current house is in town within walking distance to grocery, credit union, restaurants, etc.

So many people say it can’t be done but I’ve been doing it, in town and in the country for 30 years.

I retired two years ago and couldn’t possibly be happier.  If I HAVE to get a job I can walk up the street and work as a cashier somewhere but my basic needs are taken care of.

I must add, though, that this retirement required me to do jobs of drudgery that a lot of my friends say they just cannot do.  My answer is “you gotta pay to play”.  20 years of doing jobs that others wouldn’t touch gives me the freedom to laze about the house and travel now at 58 years old.

I am currently teaching myself French (second language is on bucket list), establishing my second Urban Permaculture Demonstration garden, riding my bicycles, creating art, and traveling.  Next country on my list is France.
 
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FIRE is great and I wished I had. Even though I had the knowledge if did not have the wisdom to make the sacrifices.
Today at 62 I continue to work (at least it's from home). What we are doing reach financial independence is simple. We (wife and I) continue to earn for the next 12 years. Took early Social Security and invest every bit of it in aggressive growth mutual funds which average higher than twelve percent over the last 20 years. This done using self directed Roth IRA plans, 6500 each. The remainder goes into a HSA, Health Savings Account, also self directed and utilizing an aggressive growth mutual fund. At 74 we will be able to live well off of the interest.

If I could go back and change one thing, I would max out a Roth IRA and FIRE the system thirty years ago.

I hope you young folks learn from my mistake and follow Mike Jay's advise: "Live well beneath your means"
Love and peace.
 
 
gardener
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F Aricola wrote:

have NOTHING left of that money come the following pay cheque

I ran into the same thing 35 years ago, so people have not only not learned, they seem to be getting worse! I had already been raised by a frugal family that believed in fixing things rather than buying new, keeping cars for 8 to 10 years if not longer, learning skills to do things like sewing, painting the house and cooking etc. When I realized that people about my own age and in the same job were maxing out their credit cards and not paying them off monthly, it made me more determined not to fall into that trap.

The one thing I'd like to add is the importance of teaching these concepts to your children, your neighbor's children and your relatives children at an early age. Our policy was that even if our kids were given birthday money, if they wanted to buy something new that was strictly "optional" (bicycles didn't count - they were transportation and kids grow    ), they had to earn 50% of the cost themselves. This taught them the connection between "work" and "acquiring stuff". It taught them delayed gratification, because they had to wait until they'd saved up for it. It taught them about fads - if it took them too long to save up, the fad was over and they had the money for something else. I think it may have even given them some insight into the fact that keeping up with the Joneses is a loosing proposition because the goal posts keep moving. My younger son (20+) is trying to teach these concepts to his girlfriend and he's finding it a bit of a frustrating experience. She's totally clueless about the inaccuracies in most if not all advertising, and is only marginally better about planning for financial security.

To all you permies working hard at financial and life skill independence, I salute you!
 
pollinator
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Yes!  There is a lot of overlap between permies and FIRE.  

There is a decent forum about it here.  [They are not as nice as permies (they believe in "face punches" or brutal honesty with people who are making poor financial choices) but it isn't a bunch of meanies either and lots of different types of people and active discussion]:

http://forum.mrmoneymustache.com/

I am working towards it (and someday living full-time on my homestead) and I wish I had discovered the concept earlier.  I got into Dave Ramsey/Suze Orman /etc. in my mid-20s so after I was debt-free and saving I thought I was doing all that I could and was reasonable.  It was only after stumbling on Mr Money Mustache and that forum a few years ago that I realized I could be doing a ton more and saving for freedom was a feasible, reasonable option.  Now all of my increases and bonuses go to savings.  I live simply and there is joy in not always wanting MORE as I used to.
 
Darren Tasker
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I fully agree with Jay on educating the kids.

From what we are seeing most kids are just entertained at home and are taught to repeat facts at school. The school environment is nothing like a real world work environment yet we expect them to move straight from school to a job.

Secondly - the need to get a good job at the end of it all. This means doing a difficult and useful subject that is in demand. There is no point in studying something that can be learnt from a book and paying 40K for it ending up with no specific qualification or advantage.

Third the school system is about gaining grades - typically an individual pursuit where the world of work typically means getting results as part of a team. Working with other people in a constructive way needs different skills.

Unless kids are introduced to these skills early they will suffer in work - learning on the job. Making these mistakes on the job will hold them back and they probably wont learn all of the skills they need to get ahead (unless they are fast tracked or mentored).

The same goes for financial intelligence unless the parents are clued up something like FIRE it is up to them to find out (it will never be taught in schools). Even if they do find out about it they need to understand the importance of its message, actually take an interest in it and put a plan into action.

Otherwise they are sold the retirement dream of handing over their money into a pension account invested in the market. Another promise is made by the government if you work long enough you will get a pension from them as well. Unfortunately the government keeps on moving the goal posts farther away, its amount can be a guarenteed but not its purchasing power - it is out of your control.  Even worse pensions are underfunded and governments get deeper and deeper into debt. It does not sound like a financially stable system to me.

Further financial education is required for big purchases such as a house - how to do it at the right time, right cost, right pace and right size. How to save and invest and how to have clear goals and plan for the long term.

We are spending lots of time with our kids to try and introduce them to some of these real life skills. We include them in small renovation jobs, growing food, splitting wood and the like. We have no TV and we sit down as a family at every meal. We are trying to fill in skill gaps such as:

Confidence
Curiosity    
Self-control
Emotionally Intelligent
Communication skills
Cooperativeness
Setting Goals
Being Proactivity
Keeping a Positive Outlook
Looking out for themselves

Further gaps include philosophy, planning, languages, some coding, art and crafts and the like so they can start to understand the world around them and how choices have different outcomes.

Coming back to the FIRE movement I think it has to look at the education it is giving as well. My opinion is that it needs a much wider discussion other than index investing and 4% drawdown while living really frugally. My concern is that it needs to look at risk of the market more and other alternative investments. These can be investment in yourself, different ways of living and ways of working.

We have lived in a prosperous time (Just to say - I am not a doomer type of persion more a realist ;) yet long term history has many stings in its tail. For instance if there is huge crash, you are all in on the market and you halve you savings but still have to take say 20K out a year, your savings and investments probably wont last very long.

This is why we have to look at risk planning and resilience as part of our lifestyle - because of history.

For us permaculture fits perfectly into this (risk planning, a simple less stressful and enjoyable lifestyle). It is reconnecting us with nature and we love it.    

 
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Being on the roller coaster can be fun for a while but you soon realize its all for naught. I asked my wife when 'enough is enough' and her answer was never. I was at the divorce lawyers a month later. She is now my ex. Sometimes the price of FIRE can be very high, anticipate it.

Things I tell my tech students which are probably applicable here:

* What's your second gig? Costs are such now that for most 'the job' pays the bills with little left over.
* You have an end result in mind. Now work the puzzle in reverse. What tools and resources do you need to get there? For a homestead like desire what skills will you need? Get them.
* Skills transfer. Pick skills that are. If you are an auto mechanic, learn diesel. You will earn more and that will directly translate when you need to fix the tractor.
* What is the exit? Way too many people worry about how to 'get in' and forget to worry about how to 'get out'. Know what it will cost you if you had to abandon a plan and are they ways to mitigate it? Plan for it up front.
* Sell the TV and the game boxes. You are trading your time for someone else's profit. Stay off Facebook and Twitter they are just variations of a TV. Do use YouTube. Done right it is the best university for the money as an introduction to skills.
* Learn automation. Nor does automation have to include computers, though it helps. Automation leverages your time/effort. If you have the knack, learn scripting and adruino or raspberry pi. Not essential but it leverages automation cheaply to whatever level your imagination can cook up.
* Finances. Investments should be based on people not things. The thing might be the means but the person behind it is was is important. That matters whether its the CEO of the company you invested in all the way down to your local tire dealer you offered a loan to. Look into peer to peer lending if you have a small nest egg beyond the IRA/401K.
* Don't be enamored with labels. Some of the worst performing persons I ever hired came from Harvard or Yale.

Just some of the things I have learned spending 60 years on this ball of dust.

I wish for everyone's success in achieving FIRE. It is a satisfying feeling when you realize you are there.
 
Travis Johnson
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john mcginnis wrote:Being on the roller coaster can be fun for a while but you soon realize its all for naught. I asked my wife when 'enough is enough' and her answer was never. I was at the divorce lawyers a month later. She is now my ex. Sometimes the price of FIRE can be very high, anticipate it.



John, I used to be cynical like this as well, and was that way for the same reason you were, my first ex-wife could not see the long term financial plan and wanted out. I re-married again, and she wanted to be just like everyone else. Now...now I am married to someone who understands long term strategy a little better.

There is no reason to believe that such a thing will happen, it could, but it depends upon the marriage. I do DivorceCare at my church, and have noted some trends. It would be wrong for me to say this is the reason, or that is the reason, but rarely does a person just quit a marriage, they check out of a marriage longgggggggg before talking to an attorney most of the time. It toom me a long time to understand that fully, sadly well into my second marriage, but now that I got a better grasp of life, have realized my part in my failed marriages, forgiven both of my ex-wives for their part, I am a much happier, and better person for two hard diveorces. (Aren't they all though?)



 
Travis Johnson
master pollinator
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In high school I figured out as a Freshmen, that if I took extra classes instead of study halls, did my homework at home, by Senior Year I would have all my required classes done, and could have an easy year by going to vocational school. So I did that, and while other kids made spit balls and talked during study hall and got into trouble, I was planning for my Senior Year. When my Senior Year came, all the other kids saw me down to Vocational School, taking Welding and Diesel mechanics. They all said what I did was not fair.

But I also planned right out of High School. Compound interest is not hard to calculate, even in those pre-internet days! :-)

Like in High School, I worked every day, if not welding battleships together for the Navy or Hauling Freight on the end of a Tug Boat or on the Locomotive of a Train, I was working on my farm making it better.

Today people say the same thing, "It is not fair to retire at age 42", but that is not the case at all, in both cases they failed to PLAN, where as I strategized. It does not mean surprises will not happen. I would get a job tomorrow...for a little while anyway...if i had to in order to get through a tough time. I am Not painting myself into a corner. But my long term goal will not change.







 
john mcginnis
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Travis,

Cynicism? Maybe, maybe not, its been quite a while. Though you are probably right that such decisions are a 'long time coming' kind of thing. I had been thinking for at least six months maybe more as to what my end game was to be. I did not have the entire answer what I wanted when I popped that question but getting the answer that I did was shall we say the tipping point. I knew then that at least with her there was no exit.

Which brings up a topic that best is moved to another forum, but here goes. Guys if you are not married yet but considering it make sure you inquire about two items:

* Any debt? Not something like a reasonable note on a car no, but say $100k of student debt. That can be crippling to futures.
* Ask her what she thinks she will be doing 20 years from now.

Ponder the answers carefully. Ladies the reverse is also true. Many a man is 'All hat, no cattle'.
 
john mcginnis
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"It is not fair to retire at age 42" -- Travis

Boy that shows a mindset right there. Travis that is exactly what most would say and its sad. That is a slave at a drone job, consume, get gold watch, watch a few sunsets then drop dead sort of thinking. We have lost the understanding as to the idea that an individual can be a producer and not just a consumer at any age.
 
Darren Tasker
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It is amazing how rich the west is yet how much we squander on consumption. It is not real wealth or generational wealth just some entertainment or plastic gizmo that will end up in the dump.

We cut our consumption by at least 30% with some simple activities, pay as you go phones that just make calls, no treat food, re-negotiating insurance contracts and the like. We are now using permaculture to cut our living expenses even more by becoming more self-sustaining.

We have been using the permaculture principles to look at our whole lives from investing, where and how we live and how we interact with people and our thought processes. It has really opened our minds in many ways. For example

1. Defining what is really important versus consumption and entertainment
2. How we don't need to waste fuel, food etc. just by changing some habits.
3. Healthly eating and the impacts of bad eating and processed foods etc.
4. Mental health - we were stressed out monkeys in our corporate jobs, keyboard bashing, going from meeting to meeting, appraisal to appraisal all the time stuck in boxes all day long. Cutting consumption to work in the garden is so much more relaxing and we get to exercise.

On retirement: We did initially fall for the retirement "dream" of slogging away doing something, we did not really like, for a very long time. Just so that we could continue to live at the same consumption level. I regret putting so much aside in accounts that are locked up now knowing what I could do with the funds invested in our land instead. We will just have to wait!

On interest in FIRE: We have been fortunate to have checked out early yet we have been astounded by the lack of interest in how and why we did it. Some of our old friends spend eye watering amounts of money and work all hours and we struggle to see the joy in that lifestyle.

On interest in Permaculture: In the SW of France permaculture is gradually gaining more traction as is organic farming. We have a few friends that are practicing some aspects of it which is great to see. We can swap seeds, vegetables and ideas with them. There just does not seem to be a critical mass to push it into the mainstream here yet.


 
Travis Johnson
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john mcginnis wrote:"It is not fair to retire at age 42" -- Travis

Boy that shows a mindset right there. Travis that is exactly what most would say and its sad. That is a slave at a drone job, consume, get gold watch, watch a few sunsets then drop dead sort of thinking. We have lost the understanding as to the idea that an individual can be a producer and not just a consumer at any age.




"Well, you cannot just not have a job Travis". That was what my own father told me, who incidentally, retired 3 times becaue he just could not quit. In fact we had a retirement party for him on Saturday, and on Monday he was back at his old job, working, just not for money.

But they are filled with consumerism. I make no bones about it, my mother is a shopaholic, the cities she goes to are based on one day of the week it is. (Monday=Belfast, Tuesday=Bangor, Wednesday-Newport, etc). They also have a 5,280 sq ft house. They also have a garages and shops that add up to 8 garages in size. They do buy everything in cash, and are not exactly poor, but it is out of control. They either spend $5500 in oil to heat their house, or 16 tons of pellets!

THAT IS NOT ME. I am a minimalist.

I love our new Tiny Home, a concept my parents just cannot understand. My father is forever thinking about additions for this place, but me...while my wife and I do not have a bedroom, we are trying to devise ways to make our home work without adding on. Small does not have to equate to "cramped", and that is what we are doing as we add creative storage solutions here and there.
 
Mike Jay
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Darren Tasker wrote:On interest in FIRE: We have been fortunate to have checked out early yet we have been astounded by the lack of interest in how and why we did it.


^^^THIS^^^

I couldn't believe how few people in corporate world were interested in how I was able to quit that life at 40 without picking up another cubicle job.  A few said "I'll have to talk to you later about your secret sauce".  That both implied that it was easy and there was a trick to it.  Curiously enough, none of those people talked to me later about it.  I had plenty of incredulous coworkers and one who seemed to truly not comprehend how to do such a thing.  Doesn't work=money=things?  How can you live without making money?  Um, maybe by saving it so you can live off it while you're still healthy.

I had some co-op students over the years that did listen and changed their ways at a young enough age to matter.  One came in to talk to me after a meeting with her financial adviser.  He had told her she was saving too much money to retire at 55.  She didn't really want to spend the extra.  She had such a cute look on her face when I suggested retiring at 50 instead.

Another coworker was struggling away with a decent paying but not upwardly mobile job.  Stay at home wife and expensive teenagers.  I turned him on to Dave Ramsey and he took after that immediately.  Things changed around their house and he got the mortgage payed off in three years.  He wished he heard about it before he turned 45 but it still gave him a major new look on life.
 
Darren Tasker
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Mike Jay: Doesn't work=money=things?  How can you live without making money?  Um, maybe by saving it so you can live off it while you're still healthy.



Completly agree Mike - a job can seem secure to buy stuff and waste money. I tried to have similar conversations about wasting money in work pointing out the exotic holidays, titanium alloy bikes (for getting fit - never understood that one), German cars, gardeners, cleaners and the like. They could not understand how my family was saving 50% of our salaries - often saying that it was not possible (so why bother) so didn't think for a second about it.    

My observation, having been there, is that working for someone else means you get "paid" and they get the "benefit \ profits". Secondly a salary is an odd type of security as pay is typically related to living cost so will never be very high unless you land that dream job. Spend the excess and you are left with nothing at the end of the month.

A salary is one dimensional \ one income source. This makes it inherently fragile - one income source (poof its gone) and probably high living costs (how do I pay for that withot my paycheck). Unfortunately compounding this is modern work is usually highly specialised. This makes it difficult to move to a different job if the role is eliminated.

I worked for a large multinational and the rate of automation was amazing and is just moving faster and faster. Unfortunately without having transferable skills and multiple income streams the salaried employee looks like a riskier and riskier situation.

So coming back to point on to why rely on a single salary in your prime? Why give all your effort to a profession that may be eliminated without diversifying and saving for those rainy days? This may sound harsh but these are the best years of your life and health truly is wealth. Expecting a salary to pay the bills indefinately and a pension to be there, in hindsight seems fragile now. If a shock comes hopefully it works out ok and it is a blessing in surprise and a creer you always wanted. Unfortunately it has the possibility to impact health and vitality possibly through having to work longer / take a lower paying job.  

Compare this to someone who has their own business. They will have lots of customers. They choose who they serve and how many customers they need to have or find. They expect their income to go up and down but the profts are theirs. They will naturally hedge their bets and spend below their income. For example the gardener can loose a client but still have many other jobs and just needs to fill a "gap in their schedule". A highly specialised production line worker looses a job has no other income and has to re-skill or find a similar job fast or drawdown savings fast.

Savings and personal businesses considered this way can give some breathing space. Space to say "I need a day off", "To enjoy life a little" or "Reduce my workload" - it is their choice. It is the reason we went for FIRE to have some space for our kids, not burn out, and enjoy our health while we can. Work=money=free time=freedom ? :)

We like permaculture as this alings with our ides of freedom for us  growing our own food
1. We now where it comes from and what has gone into it
2. saves us a huge amount of money that otherwise would have to be purchased with after tax money (hours worked).

The same can be said for anything purchased money = time. I guess we are looking for the right balance between money and time.....

 
master steward
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Lots of discussion about FIRE in this three hour interview with jacob lund fisker

 
john mcginnis
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Observations for Paul from the Podcast....

Story:

Tom is a finance broker at a TBTF bank, has a MBA from Wharton. Tom makes oodles of money. Decided to take a vacation in the Yucatan. Walking the beach one day Tom meets Jose a fisherman cleaning some tuna for the local market.

[Tom] Nice fish.
[Jose] Thank you Senor. Would you like to buy one?
[Tom] Would you want to sell more fish?
[Jose] Possibly Senor I could use it for a few items.
[Tom] You need to buy a bigger boat.
[Jose] Ok, but then what do I do after I have bought my few items?
[Tom] Buy a bigger boat and catch more fish.
[Jose] Then what?
[Tom] Use the profits to buy a big house.
[Jose] Then what?
[Tom] Buy more boats and open a cannery.
[Jose] Then what?
[Tom] Sell it all to an investor and retire on a beach.
[Jose] But Senor! I do that now. I sell my fish and an hour later my family are here having a meal and enjoying the sunset.

Moral:

The direct path is the best path.

--------------------------

Personal life:

I am semi-retired. I did IT for 40 years, and I was a fern. I was a full description of a wage slave; single income though really high, high stress, etc. I lucked out however and was offered a buyout. I took it. I immediately paid off the house, eliminating my biggest expense. (Yes and took the tax hit.) Had a second property land in my lap that is now a rental. Now working on a third with acreage that I intend to retire on and become a gert. That was the lede for these points:

* I have over a $1m net worth. In today's financial markets, even a $2m net worth is insufficient to 'live on'. In my best year my investment returns was 9%. That was the best in a 30 year period. These days most investors would be lucky that they turn 2-3% returns year on year. CD's are doing 1.5% right now.

But an interesting thing happened when I converted many of those investments to property. I had income. I lost weight working on the properties. I learned new skills. I was happier and if I had a 'bad day' I had the chance to just pull the cover over and call it a day.

* Do I still work? Yep. I teach at a tech school. For me its more of a mission to return back to the industry that I worked on. Its not the highest yield on my time, but that is not the point. If it ever stops being fun I will just stop.

* The conversion process got me kicked into thinking of it in a broader context:

-- Gym. People spend $50/mo on up to go to them just to pump and sweat. Conversion: garden. One can certainly get the same level of cardio doing so than acting like a rat on a treadmill.
-- Repairs. House or auto. If you break down the cost structure the biggest cost of maintenance is labor not materials. One can be charged $300 to replace a $40 part. Typical dealership labor rates are in the $150/hr range. Conversion: Most repairs are detectable with a ODB meter. Lean how.
-- Food. There are multitudes of ways to save $$ here, most of which don't involve the supermarket. Conversion: Garden to reduce costs (and stack functions). Look for ways to buy in bulk. Can. Many wholesalers will sell to the public if you buy in box lot minimums. Frugal lifestyle folks know these tricks.
-- Clothing. If one is a fashionista pass on this. Conversion:For most of us, Goodwill and 1/2&1/2 stores are good enough. When one is off the professional track why do you need a $600 suit?

-----------------
Notes:

* Passive income streams. Define passive? My neighbor has cattle he places on the property next to ours. He buys calves, rotates them on pasture once a week, some feed, sells them two years later. His total time per cow? About 5hrs over the entire cycle. Sounds pretty passive to me. He has not bought supermarket meat in 20 years of doing it.

* Kickstarter. Its the vehicle that turns the capitalist system on its head. Typical arrangement: R&D --> Assessment --> Marketing --> Sales --> Profit. Kickstarter: R&D --> Sales --> Profit --> Marketing. If one gets funded it is the assessment. The backers represents the sales. It rips out huge levels of start up capital to get a product to consumers. It is probably the closest one can get to Open Source without doing so in the capitalist system.

* Mr Slappy. I agree there are way too many people who are not self-directed in temperament. Sounds like there is a market for a chunk of software that is nagware that operates as a life coach. I nag my students who graduate and land that first job -- "What is your second gig??" That gig of course could be anything, active or passive income methods.

* Communal Living. The problem is one asshole can ruin the experience. Most college students experience this lifestyle and end up hating it for this reason. I will offer. I worked and knew people in the Philadelphia area. Many were in arrangements of the extended family. Grandparents bought first row house. Kids raised, they helped them buy a row house in the same block. Rinse, repeat. An entire block of family generations all on the same street. The original homeowners association.

------------

Look forward to the book!

 
Yeast devil! Back to the oven that baked you! And take this tiny ad too:
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