At what age do you hope to retire/Personal Finance and Investing Thread

[MrTPlush]

I guess I don't understand passing down an inheritance. Is that actually a thing people feel required or expect to have done? By the time I am dead I should have kids that are 40+...I don't think they need me to leave anything behind. Not to mention the concept of saving and saving for retirement specifically is pretty well known now. So anyone younger than 30-40 years of age should not need a big inheritance.

 

If I have any grandchildren or great grandkids at college age they will likely get a lot of money for that.

 

I will help my kids when they are younger and need the help.

[OldSchoolSnapper]

I guess I don't understand passing down an inheritance. Is that actually a thing people feel required or expect to have done? By the time I am dead I should have kids that are 40+...I don't think they need me to leave anything behind. Not to mention the concept of saving and saving for retirement specifically is pretty well known now. So anyone younger than 30-40 years of age should not need a big inheritance.

 

If I have any grandchildren or great grandkids at college age they will likely get a lot of money for that.

 

I will help my kids when they are younger and need the help.

 

This was my position for many years but it was bore mostly out of the fact that no one helped me. If someone had, I'd probably feel very different. Once I had kids and was better with money than my parents, the attitude to shifted more toward "Well if I can, why wouldn't I?"

 

The idea of my kids going to college and merely studying without worrying about the financial aspect sounds incredible to me. Or just doing the "I love you, here is $50k for your first house." I can't imagine how good something like that would have felt. Is it best for them? I think that varies person to person. Some people get handouts and continue working very hard; others do not...I think that is for the people doling it out to decide. But as I went through those experiences and admitted to myself that the only reason I was upset about it was my own jealously, I got past shaming people who give their kids a lot of money...If I were in position to do it, I wound up thinking I would have done the same.

 

I'll stop it short of doing things like taking out a 2nd mortgage so they can go to UNC or using my 401k to pay for their Hawaiian wedding. But practical things that are expensive? Idk what I'll do, but I'm more open to it than I used to be.

[homer]

How much do you honestly care about money at 80+? If my medical bills overwhelm me at 80+ oh well if that is the argument.

 

Some people want to donate money upon their death to a charity.

[MrTPlush]

How much do you honestly care about money at 80+? If my medical bills overwhelm me at 80+ oh well if that is the argument.

 

Some people want to donate money upon their death to a charity.

 

Just seems like a poor investment to look at the average lifetime 76(M) and see the break even point is 81. For a normal person the average life expectancy might be a little higher (take out freak accidents and poor health), but once again probably at or less than that 81 mark. How long would you have to expect yourself to live to make the risk worth it? 87-90?

 

I think I would have to be healthy at retirement age and have a family with strong bloodlines of 90+ to wait till 70 to draw. Then again that will probably be the age to draw when I retire.

[gypcasino]

FIRE

 

These people must be a blast when it's their turn to buy a round at the bar. No thanks.

[OldSchoolSnapper]

They don't go to bars. Lol. That's specifically in one of the MMM blogs. They opt for campfires with friends with store-bought beer at in-home get togethers, but there's a specific part where they attack the bar life. It's hard to disagree with any of it from a financial perspective, but obviously, I went to a lot of bars. I don't go to them anymore, but a $10 shot that cost the venue $12 for the entire bottle is kind of funny. I get it, and I did it, but it's funny.

[nodakfan17]

One of my best friends is very frugal (whereas I’m just frugal). He’s the closest thing to a FIRE devotee I know. He used to avoid picking up the tab so often that it became comical and a running joke among our close group of friends. Now he’s well on his way to financial independence and one of the most generous people I know.

[OldSchoolSnapper]

Not buying a round after you've had 3 or routinely avoiding the tab for a meal you took part is not frugal, it's just douchey.

[nodakfan17]

Not buying a round after you've had 3 or routinely avoiding the tab for a meal you took part is not frugal, it's just douchey.

He’d always pay his share for a meal he took part in, but he’d be the last guy to volunteer to drive or buy a round. He’d chip in just often enough to avoid being labeled a free loader. He didn’t mind being labeled as cheap. Now he’s got plenty in the bank the first guy to volunteer to cover group expenses. But yeah, he’s kind of a character. Still love the guy, though.

[FVBrewerFan]

Not buying a round after you've had 3 or routinely avoiding the tab for a meal you took part is not frugal, it's just douchey.

He’d always pay his share for a meal he took part in, but he’d be the last guy to volunteer to drive or buy a round. He’d chip in just often enough to avoid being labeled a free loader. He didn’t mind being labeled as cheap. Now he’s got plenty in the bank the first guy to volunteer to cover group expenses. But yeah, he’s kind of a character. Still love the guy, though.

 

Your friend is Ted Thompson?

[GAME05]

Just volunteer to be the DD every time you go to the bars. Still get to go hang out with friends and free soda all night!

[nodakfan17]

Here’s a good article on a few folks who tried the FIRE lifestyle and had things go poorly. I salute them for trying, but there are just so many things that can go wrong in a 40+ year retirement. Nonetheless, the key for most of them would probably have been to raise their magic numbers (hindsight is 20/20). Oh, and the woman who thought she could retire at 27 and then was back living with her parents by 29 is just foolish.

 

https://www.marketwatch.com/story/these-people-left-their-jobs-behind-to-retire-early-then-life-got-in-the-way-heres-how-they-coped-with-fire-plans-gone-wrong-2018-11-29?siteid=yhoof2&yptr=yahoo

[OldSchoolSnapper]

I'm sorry, but that article is really poorly done. I think if you shared that with the FIRE community, it would rightly get ridiculed. I fully suspect MMM is going to have a blog about that ripping it apart, because it is really bad. That first woman does not have anywhere close to the capital she needed to shut things down.

 

His outline calls for securing 20x your annual spending when you "retire." They did not. He thinks crypto is stupid; it was a cornerstone of their plan. They had a horrible grasp on their actual spending habits as well. There are extensive guides for handling the health insurance questions as well. These people did not do their diligence.

 

These people aren't FIRE. They are really bad planners who thought they were FIRE. There are thousands upon thousands of people who have achieved FIRE. If you have the will to power through and the income to save enough early, it works. It did not work for me, but I am honest about why. It was my fault, not the strategy's. These people are really terrible examples.

 

If I retire tomorrow with $25 that doesn't mean FIRE is flawed.

 

That read had a very strange propaganda feel to it.

[nodakfan17]

I think these subjects are poor representatives of the FIRE movement, but they are representatives nonetheless. I think the author’s intention was to highlight the subjects’ missteps, not ridicule FIRE. Either that or click bait. Probably click bait.

 

I actually thought the young couple who saved $600,000 before burning out prior to turning to 30 and the other couple where one spouse passed away at a young age were both very legitimate examples.

[OldSchoolSnapper]

I had more time to really go back and re-read and I agree with your assessment. I think it's fair; but the first couple was kidding themselves and put the cart waaaaaaay before the horse. The couple with $600k retired with 50% of want they thought they'd need...

 

I get why he mentioned Suze Orman too, but I personally can't stand her

[nodakfan17]

I get why he mentioned Suze Orman too, but I personally can't stand her

Suze cracks me up. She thinks everyone needs to work until 70. I loved when Kristen Wiig used to spoof her ‘Can I afford it?’ segments on SNL.

[MrTPlush]

The FIRE system is a little risky to venture into. The one thing that sticks out when I think about it was quoted in the article:

 

“Explaining to your employer you have this gap in your resume because you decided to retire … I feel like you would have to come up with a really good spin on that.”

 

If you have unexpected problems and have to go back to work ten years later will you even be qualified anymore? The educational requirements likely change in your field and your “relevant experience” is pretty questionable when you haven’t been in your field for so long. Sure you might have a flexible part time job in your field, but unlikely at the level you once had or would want if you had to get back in.

 

I don’t know. If I had that much disposable income I would probably buy a ton of rental properties. Sounds waaaay safer and more sustainable. Why not put it into something that will generate money and can be passed down? Instead of slowly depleting it to nothing. If you still want to work and do something managing those properties would be pretty easy.

[nodakfan17]

I don’t view my magic number as a stack of money that I can deplete for a certain number of years in retirement, but rather an amount that can generate enough passive income to sustain my wife and I indefinitely.

[OldSchoolSnapper]

Every time FIRE comes up (at least the MMM version of it) in a community that is less familiar with it, there are a bunch of misconceptions and misunderstandings. The version of it promoted on the blog is as risk-averse as it gets. He is basically protected against anything besides death. He’s written extensively about all the common reasons people say his plan doesn’t work, multiple times. If you poke around the website, you will find rebuttals to all of those concerns. It has been replicated by many, many people. There is little no risk if it is followed to the letter.

 

But perhaps the biggest misconception is that his plan is not on money-centric as you think. A big reason his budget is so low, is because he has trained himself to enjoy free or very low cost activities. Nature is his main source of recreation. He outsources nothing. He has replaced his own roof, windows, HVAC system. He spends a ton of time in the outdoors. His family has one small vehicle, which they very rarely use for out of town travel. Almost 100% of his travel is done by bicycle, he has even rigged up a cargo to his bike for trips to get lumber, etc. He rejects cable, fancy phones, and useless trinkets. He rarely runs his dryer. Anything you can think of, he is doing it. He didn’t wake up one day and know how to the more complicated things, he learned them.

 

His blog alone is bringing in half a million dollars per year, but he continues to live that way. He’s an amazing guy, but the point of the blog isn’t for people to look at it and go “I can’t travel by bike because I have 4 kids.” It’s to take what you can and apply it to your own life.

 

The blog is more about betterment, how we have cluttered our lives with consumption and waste and how many of things we have grown to accept as built-in expenses to life are much more optional than we think they are.

 

Too many critics stop by and just start throwing out excuses for why he was able to do what he did and they never could. They’re missing the point entirely. Everybody, and I mean everybody, can trim things if they really want to.

 

People just have this nature of resisting whenever someone comes along and has found a way to “beat the system” so to speak. I follow a personal finance community, and often people drowning in debt stop by for advice. To a T, their story is almost always very similar.

 

“My mortgage is $1800 a month and I am paying $450 for my car and $367 for student loans. I am drowning what do I do?”

 

The first person will tell them to sell their car, and they will, almost 100% of the time, reply that they can’t because of XYZ and the car is great and they need it. I honestly believe about 75% of finance problems are due to people simply not being honest with themselves about needs.

 

The strategy of the blog is absolutely not “save a pile of cash and hope it’s 0 when you die." It is far and away more a lifestyle movement than a money one.

[homer]

But perhaps the biggest misconception is that his plan is not on money-centric as you think. A big reason his budget is so low, is because he has trained himself to enjoy free or very low cost activities.

 

I think that's the key that people have a hard time wrapping their heads around. You can live for 40 years on $1million if you live a certain lifestyle. The issue is that most people don't want to or can't do that. The thing that would prevent me from ever doing FIRE is health. In this country your life savings could be wiped out in a year if you got some genetically related disease.

[OldSchoolSnapper]

This is one of the more rational rebuttals I have read to his strategy. I first found it years ago, but I think it's a decent argument that rises above the usual slop.

 

https://www.whitecoatinvestor.com/what-mr-money-mustaches-gets-right-and-wrong/

[nodakfan17]

This is sort of in the realm of personal finance:

 

Target has gift cards 10% off today only. You can order them online. They only run this deal once per year. I buy the maximum allowed ($300) every time. $30 savings right there.

[OldSchoolSnapper]

They used to let you turn around and buy their other gift cards with the Target cards. That made it really nice. So that $270 could be used to buy $300 on Amazon or Disney or something. Shut that down this year.

[MrTPlush]

I don't think my significant other needs 300 more reasons to go spend money at Target.

[nodakfan17]

I use the $300 Target gift card (that I buy for $270) to buy paper products at Target whenever they have their ‘free gift card with purchase’ deals. For example, I can usually get a $5 Target gift card when I buy two $10 packs of paper towels (if I wait for the sale). That adds up to about $75 worth of extra gift cards by the end of the year, which I usually spend on fun stuff like movies and books on Black Friday or other Christmas presents.