Financial Independence Retire Early (FIRE)

[slinxy]

Your last point i think is very pertinent. If everyone didn't live their life based on consumerism and spending a majority of their earnings then the stock markets wouldn't experience the growth required for people to achieve FIRE

Not true.. if people saved into saving accounts, the bank would use the savings to fund loans for businesses.

If people invested into the stock market.. the companies issuing the shares can float more shares at a higher value to fund other projects and investments.

Yes, some liquidation is required else companies will be going out of business… but it’s the same for the stock market, people only make money because there’s others making dumb money decisions.

it’s just the whole capitalist rat race, running around in a giant circle.

Say a person that’s in the 40% tax bracket decides to spend all their money rather than put it away into a salary sacrifice pension.. paying an item that costs £100 pounds, really costs them around £154 pounds once you consider the 40% tax and the 10% NI. Then there’s the 20% VAT on the item. So they are literally paying £154 for an £80 item, a nice £74 pounds to the government, without even bringing in corporate tax rates for the companies making and selling the item.

A person could be saving themselves at least 20% if they just salary sacrifice their pension to below the 40% threshold or 100% if they just didn’t buy the item, if they never needed it in the first place.

 

[danlightbulb]

Not true.. if people saved into saving accounts, the bank would use the savings to fund loans for businesses.

If people invested into the stock market.. the companies issuing the shares can float more shares at a higher value to fund other projects and investments.

But those businesses have to sell their products. If consumers aren't buying stuff, the businesses won't sell stuff.

Yeah we can still use investment to fund utilities, public sector etc. But a lot of private sector would be impacted if a high proportion of people stopped discretionary consuming.

 

[hurfdurf]

I’ve found this lifestyle fascinating. Mainly hearing about the extremes but ultimately people who don’t really live much of a life until they are 35 or even 40+

For me, there is something to be said about wasting your youth so frugally, because you are capable of far more fun at that age. I say that as someone rapidly approaching 40, and my body and ability to enjoy myself has definitely dwindled due to age. That’s my only real objection or concern I guess. Good luck to anyone trying to get out of the pleb lifestyle or rat run in what ever way they can. Working for a boss or a company just seems so humiliating ultimately.

 

[D.P.]

Not true.. if people saved into saving accounts, the bank would use the savings to fund loans for businesses.

Savings accounts won't get you to achieve FIRE. I get precisely 0% on my savings account and even shopping around might get me 0.5-0.7% for 1 year, all well bellow inflammation.

If people invested into the stock market.. the companies issuing the shares can float more shares at a higher value to fund other projects and investments.

It is not that simple znd largely wrong (stock price reflects investor s belied in future value via growth), and this point is completely contrary to your first. Should people save in a savings account or invest in stocks? These are completely different.

Yes, some liquidation is required else companies will be going out of business… but it’s the same for the stock market, people only make money because there’s others making dumb money decisions.

it’s just the whole capitalist rat race, running around in a giant circle.

None of this makes any sense.

Say a person that’s in the 40% tax bracket decides to spend all their money rather than put it away into a salary sacrifice pension..

now you are talking about a salary sacrifice scheme which is yet another completely different thing.

paying an item that costs £100 pounds, really costs them around £154 pounds once you consider the 40% tax and the 10% NI.

No, you have this backwards.

Then there’s the 20% VAT on the item. So they are literally paying £154 for an £80 item, a nice £74 pounds to the government, without even bringing in corporate tax rates for the companies making and selling the item.

Yeah, the government getting VAT to pay flr services is exactly why society would collapse if people stopped buying.

A person could be saving themselves at least 20% if they just salary sacrifice their pension to below the 40% threshold or 100% if they just didn’t buy the item, if they never needed it in the first place.

Again, this is a completely different concept. Who said you shouldn't contribute to a pension?

 

[D.P.]

I'm not even advocating for consumerism, in fact i think it is something inherently catastrophic for the planet with immense environmental impact, terrible societal consequences while doing the minimum to advance civilisation.

But it is just ironic the FIRE movement absolutely depends on 99% of the population being extreme consumerists and buying the latest iPhone without fail so stock prices can skyrocket. If consumers were utilitarian then the stock market would more or less increase with inflation and FIRE would be impossible. FIRE advocates really need to be telling as many people possible to buy a Tesla, NV GPU , an iPhone and subscribe to Netflix so thier investments grow well above inflation, yet they always seem to be pushing People to break thr system that makes FIRE remotely feasible,

 

[danlightbulb]

For me, there is something to be said about wasting your youth so frugally, because you are capable of far more fun at that age. I say that as someone rapidly approaching 40, and my body and ability to enjoy myself has definitely dwindled due to age. That’s my only real objection or concern I guess

I think this is a really good point. I had a great time in my early 20s. Wasn't earning much money, but we went out multiple times a week, we went on holidays, trips around the UK, sports events, music events.

There's no way that I could find a friendship group to do that with into my 40s or 50s. Would just end up lonely and without those experiences to look back on.

Yeah it cost me money, I spent everything I earned back then. But I wouldn't change that choice.

 

[arknor]

There's no way that I could find a friendship group to do that with into my 40s or 50s. Would just end up lonely and without those experiences to look back on.

for current gens it could happoen as less people are having kids and more people are staying single

 

[Kenai]

Like many things in life, imo financial behaviours taken to the extreme are unlikely to result in genuine happiness for those people.

Whether that's not living life through your 20s and 30s so you can work/save aggressively and retire in your 40s or spending every penny you earn living life to the max and realising you have no real retirement plan underway by your 40s and might need to work until you drop dead - either extreme will probably lead to regrets of some sort in the long run.

For me the sweet spot lies much nearer the middle (and obviously skews towards either extreme for different people). I could have been more frugal, I could also have been less frugal. Financially speaking I spent my 20s preparing/saving to buy a house but not at the expense of living life a bit, then once I was settled moved on to more focused retirement planning, building pensions, etc. but I still try to balance my spending between enjoying the here and now and not negatively impacting my future financial security.

I could have had a wilder youth or a bigger pension fund but I'm not sure achieving those things would have left me happy in the long run and I think there's a lot of value to be found in life by living as much as possible of it happy.

 

[dlockers]

I’ve found this lifestyle fascinating. Mainly hearing about the extremes but ultimately people who don’t really live much of a life until they are 35 or even 40+

For me, there is something to be said about wasting your youth so frugally, because you are capable of far more fun at that age. I say that as someone rapidly approaching 40, and my body and ability to enjoy myself has definitely dwindled due to age. That’s my only real objection or concern I guess. Good luck to anyone trying to get out of the pleb lifestyle or rat run in what ever way they can. Working for a boss or a company just seems so humiliating ultimately.

Fringe stories exist everywhere. Take living your 20s to your extreme and you end up like the pill-dependant bloke still living his best life in Goa.

Working for a boss or company is humiliating? It's probably because you've never achieved anything bigger than your own entity. Dream bigger

 

[Penfold101]

I entered the workforce and had my 20’s in the early 2000’s - bottom rung wages in the armed forces watching house prices rise faster than what I was being paid each month. I didn’t stand a chance really…

 

[hurfdurf]

Fringe stories exist everywhere. Take living your 20s to your extreme and you end up like the pill-dependant bloke still living his best life in Goa.

Well indeed, but this doesn’t seem to be a fringe amount of people, it seems to be the norm/done thing and exactly the point.

Working for a boss or company is humiliating? It's probably because you've never achieved anything bigger than your own entity. Dream bigger

Please don’t make assumptions about me.

Yes. I find the idea of having to ask someone permission to go on holiday, work for a monthly pay cheque paid by someone profiting a great deal more than said pay off of me and being subject to their decision on if I continue work or not, fairly humiliating. That’s not a knock on those who do work for someone for a living, be it your shelf stacker on minimum wage or someone with a really well paid job who earns more than I do a year and with a lot of autonomy in said job, I don’t judge them, especially if they enjoy it and chose to do it, more power to them, it’s just not for me.

 

[D.P.]

Well indeed, but this doesn’t seem to be a fringe amount of people, it seems to be the norm/done thing and exactly the point.



Please don’t make assumptions about me.

Yes. I find the idea of having to ask someone permission to go on holiday,

Holidays are a legal requirement.

work for a monthly pay cheque paid by someone profiting a great deal more than said pay off of me

It is a business transaction, but can always negotiate a higher salary
Plus it would be very presumptuous to assume you are adding more value than your salary. Plenty of companies make a loss, so by definition the average salary of employees is higher than the value they are adding.

and being subject to their decision on if I continue work or not,

This is pretty standard in anything from relationships, services, shopping. Of course the other party had a right to say no. Just mike employees can quit at anytime.

fairly humiliating. That’s not a knock on those who do work for someone for a living, be it your shelf stacker on minimum wage or someone with a really well paid job who earns more than I do a year and with a lot of autonomy in said job, I don’t judge them, especially if they enjoy it and chose to do it, more power to them, it’s just not for me.

 

[mattyfez]

Savings accounts won't get you to achieve FIRE. I get precisely 0% on my savings account and even shopping around might get me 0.5-0.7% for 1 year, all well bellow inflammation.

What kind of crazy planet are you on? lol!

I have an instant access savings account (among other investments) paying 4.3%, but I'm going to move it as you can get very similar accounts paying 4.6-4.8%.

Why on earth would you have an account that pays zero interest, unless it's just a current account?

 

[200sols]

What kind of crazy planet are you on? lol!

I have an instant access savings account (among other investments) paying 4.3%, but I'm going to move it as you can get very similar accounts paying 4.6-4.8%.

Why on earth would you have an account that pays zero interest, unless it's just a current account?

Yeah that poster is hopelessly misinformed.

 

[Uther]

What kind of crazy planet are you on? lol!

I have an instant access savings account (among other investments) paying 4.3%, but I'm going to move it as you can get very similar accounts paying 4.6-4.8%.

Why on earth would you have an account that pays zero interest, unless it's just a current account?

D.P's in America IIRC? Maybe things are different there.

 

[Efour]

Same in Sweden right now.... 4.7% sounds insane

 

[dlockers]

Well indeed, but this doesn’t seem to be a fringe amount of people, it seems to be the norm/done thing and exactly the point.

Expand your horizons

Please don’t make assumptions about me.

Yes. I find the idea of having to ask someone permission to go on holiday, work for a monthly pay cheque paid by someone profiting a great deal more than said pay off of me and being subject to their decision on if I continue work or not, fairly humiliating. That’s not a knock on those who do work for someone for a living, be it your shelf stacker on minimum wage or someone with a really well paid job who earns more than I do a year and with a lot of autonomy in said job, I don’t judge them, especially if they enjoy it and chose to do it, more power to them, it’s just not for me.

Your god complex is presenting again. By saying humiliating you are trying to position yourself as higher or better.

 

[Ayahuasca]

Yes. I find the idea of having to ask someone permission to go on holiday, work for a monthly pay cheque paid by someone profiting a great deal more than said pay off of me and being subject to their decision on if I continue work or not, fairly humiliating. That’s not a knock on those who do work for someone for a living, be it your shelf stacker on minimum wage or someone with a really well paid job who earns more than I do a year and with a lot of autonomy in said job, I don’t judge them, especially if they enjoy it and chose to do it, more power to them, it’s just not for me.

You're sounding an awful lot like that fella you don't like:

 

[danlightbulb]

What kind of crazy planet are you on? lol!

I have an instant access savings account (among other investments) paying 4.3%, but I'm going to move it as you can get very similar accounts paying 4.6-4.8%.

Why on earth would you have an account that pays zero interest, unless it's just a current account?

That's only been the case the past couple of years though. fIRE has been going way longer than this and for the past decade had to rely on stock investment performance as normal savings accounts were really low.

 

[413x]

People could always learn the stock market it and risk it for the biscuit.
this was the year of fat gains.

Anyone whos 20-25now and already sinking money into trading212 or robin hood, I suspect in 30-40 years time people are going to luck at them like they do boomers now...


These are the generations that can get in the stock market for virtually free and start investing, it's basically becoming a ponzi scheme now and they are the early birds

They just need to start chucking a few grand a year in, this years gains would have had most people wanting to live frugal

Absolutely.
Back when I was that age, even though I was interested in finance/saving I didn't really get into it until much later. No one talked about it. I was saving for a house etc.

Anyone just putting cash into a pension and isa even modestly from 20-25 is going to do fine.

The pension contribution I could make now if I had been saving much younger would be far far lower.

I look back at my 20s and tbh, it was a terrible decade for me. I didn't do much, nor earn much, nor enjoy myself