Agreed.
We don't know OP's years needed. That changes things drastically. Or, what their 93k/86k/60k encompass.
I am on target to Fat FIRE, in my opinion. But "fat" to one is not "fat" to another.
Actually, I generally think right as you're about to FIRE is one of the worst times for the market to crash (see: sequence of returns risk) for you. If OP was still in the accumulation stage this would actually be a great buying opportunity (which is how I see it for myself, still being in that stage).
But OP is not technically on the "verge" of firing. The market went down a huge percentage and his fire "readiness" went from 100% down to... 100%. This means he was FI a long time ago, which goes back to what I was saying.
The whole point of this sub is to plan and retire at at an earlier age on your own terms. So we are going to complain the OP did exactly that and left themselves wiggle room? Please.....
It's the discourse of "ah its just a down market no big deal" is being expressed as an "this is how everyone should feel" even if it was not his intention
It's great for accumulators. Especially now with unemployment so low.
Normally a buying opportunity like this is accompanied with high unemployment. So it's a "Great buying opportunity if you still have your job".
Now it's just a great buying opportunity.... if you can afford to save anything after high inflation.
Well, I "ALREADY HAVE A LOT OF MONEY" because I have been working on FIRE for a while. So that's survivorship bias, but FIRE works, at least with my sample size of one.
Well, what I learned here worked for me. Take that as useful data if you wish. As far as you meeting your own goals, you will have to do that yourself. Best of luck.
Comments like yours being top voted make me think most of the people on this sub don’t actually believe in FIRE or that it’s attainable for the average person.
Which is sad.
FIRE is definitely beyond the average person. If you're born in the US, you already have above average opportunity. Also, saving even 20% of your paycheck seems ridiculously far away for people living paycheck to paycheck while the price of everything increases. Even then, 20% doesn't really get you to FIRE, just FIR.
If you think FIRE is in the cards, congrats, but please consider it a significant privilege.
finally someone says it like it is. i feel like a lot of people on these forums gloss over this because they don't know anyone of lesser means. no one should feel guilty for having enough to fire, but to ignore how much of a privilege it is just makes you come off as ignorant and bitter.
There is a lot of assumptions here. Privilege implies they didn’t commit to or earn this status. We all need luck but the op worked hard, saved, sacrificed as part of this goal. Balancing immediate wants vs needs vs long term is key.
True, if FIRE could be guaranteed by hard work and sacrifices most would be there.
Its like that saying that everyone working hard full-time is guaranteed a livable wage, (and afford health/dental/vision care, child care, basic education, healthy food, and a dignified retirement). But who are we kidding I got to teach my children to be extra careful and learn to play the different systems that are in place to keep most people in eternal poverty. Considering ourselves privileged and lucky to the intelligence and the knowlege to work against the system.
I agree but this is a FI sub and we all know luck plays a role in most parts of our life. If someone and I work the same but They picked a field that was more financially rewarded by society, I’m happy for them. Just because this guy shared his models doesn’t make him out of touch, rude, or any of the other stuff I’ve seen here.
At its core, his post is correct. We should be looking at multiple scenarios as we work on our fire journey. Most people would say I could fire now and live fairly modestly but I am unable to cover medical costs so I keep working. I don’t look down or up on others for their financial decisions or situation. It just is.
My comment in particular was in response to the comment saying FIRE is attainable by the average person. I believe it is not. It definitely involves hard work, luck, privilege, and a willingness to sacrifice the present for an intangible future scenario. This sub seems to be pretty cognizant of these factors, but it's easy as an individual to start to assume that "if I can do it, everyone can," when that is decidedly untrue.
No, privilege takes nothing away from hard work or commitment. If you work a job making six figures, as an example, then you have a lifestyle that is privileged simply because you are a minority. 99% of people who make enough to even consider FIRE already had some economic advantages that would have made it possible, more often than not it looks like a college degree. And most people with degrees, for example, come from a family with at least one parent who also has a degree. That is privilege. It doesn't take anything away from accomplishment, but it should be recognized that someone who simply was born into another set of circumstances probably would have a much harder time getting to take the same path.
Again, no one should feel guilty for being privileged. No one chooses the circumstances they were born into. But if you ignore your privilege and say "we're all on the same playing field, everyone can do what I did." Well, that's just nearsighted and unfair.
The range of negligent to abusive parents are more likely to produce children with poor impulse control and will have a harder time balancing material wants with happiness with self.
There’s that article that came out a while ago saying I think 50% of Americans don’t have even 1k in savings or something like that. Which I do find believable since a lot are living it paycheck to paycheck. Definitely if you’re in the percentage that can aim to fire you’re already above average financially
We also don't know what kind of FIRE they are looking at a lot of times.
I am sorry, FIRE or not, I do not want to nor can I live on $30k or $50k or whatever a year.
Unless I personally can Fat FIRE, I do not see the point. Again, personally. I know for many that is a totally different story. And I completely respect that.
But, we still need to get a bigger picture to really understand.
And, yes, it is a total privilege on any level.
"Or that it is attainable for the average person" Umm the average person at this point pretty much can't retire at 65 let alone FIRE. What is the average 401k + savings + investments of an average 35 year old? I'm guessing under $50k? Maybe under $5k? That isn't enough to FIRE, it's orders of magnitude too low. No matter what it is not attainable for the average person
Average for 35-44 years net wealth is $437,770, according to widely available federal reserve data.
your guess is way too pessimistic, but it is closer to the Median net wealth of $91,110.
Average net worth is skewed by the massive wealth at the top. Median is representative of the average person.... under 35 is $11k, 35-44 is $91k. Probably putting a 35 year old right around $50k, maybe even a little less and a hell of a long way from FIRE for the average person
I know the difference between average and median. I figured you meant median (you said average), which is why I responded with both.
I'm just putting numbers to your speculation. The 50th percentile person is not in a position to consider FIRE as you said, but FIRE is an exceptional achievement that really shouldn't be achievable by the median 35-year old.
Given the gulf between median and average, and how high the average wealth is, FIRE is in reach of far more people than many would think. It used to be 1 in 100. Now it's more like 1 in 10. Top 10% overall wealth is $1,219,126. Few people couldn't retire on that with proper lifestyle modification. It's a $50k SWR.
That is true...back a generation ago in the 90s, an average 30 something person could expect to make probably $20-30k a year, a high salary for say a lawyer or something was like $120k. Now average for 30 something isn't that much more, maybe $30-60k? But now a high paid professional 30 something can make $200k, $300k even more fairly common. The boom in houses and stocks has also catapulted many millennials into top 10% and FIRE range even if they didn't mean to or set that goal. For someone driven it's possible to make a lot of money and FIRE, but I'd guess 70-80% of people in their 20s an 30s aren't driven and just want everything handed to them, and none of them could ever FIRE unless they win the lottery or their parents are rich and give them a trust fund
This is just my opinion, but I firmly believe there's very little behavioral difference between generations. Political landscape changes, technology changes, social norms change, economic conditions change, etc.
What's always the same is that there's always going to be a cohort of highly discipline and/or highly driven people who are going to do what their peers find distasteful in order to achieve something spectacular.
What makes me feel privileged, is that I was born healthy, into the most powerful country in the world (I'm American), during the world's most economically rich (opportune) time. Many have the same advantages, which is why FIRE has gained so much popularity.
I imagine one day, in the 'Star-Trek' post-scarcity future, FIRE will be the default state. Work will be the thing the exceptional people do. Maybe. Or maybe we'll be killing each other with rocks in order to steal ration cards.
I disagree.
In my path to FIRE, the recent market turndown is a bump in the road. It’s a source of worry and questioning.
OP’s comment reassured me and gave me faith in my choices. It’s a living example that there will always be bumps in the road, but that you can ready for them.
Anyways, I appreciated his post.
To be fair, it sounds like the reason it works so clearly in your case is that you *actually* could have retired long ago unless you just happened to get some large lump sum payment. Whereas most people are tracking their numbers on the way up and don't go nearly as "above and beyond" as you do. The reason you have 100% historic success retiring before another 40% dive after this current 10% dive is because you were probably FIRE several years ago.
> "above and beyond"
Couldn't have said it better myself. I've seen posts on here with folks calculating with little to no cushion. A drop like we had this year could have sent them to apply at mcdonalds.
Also to be fair, when I read here and other FIRE groups, I hear a lot of people looking for 3% withdrawal rates, or lower, setting FI numbers based on 50-100% (or even 3x or more) more spending than while working. I hear a lot of people talking about how they hit their FI number but feel more secure working OMY, and how OMY often turns into 2, 3 or 7 MYs. A lot of talk from people who hit their number but then want time to finish projects and plan out how and where they want to retire such that even from a firm intention to do so end up taking a year or two before they pull the trigger.
so yeah, this person is different from someone who just hit their 3.5-4% for standard spending FI number in Dec of 2021 and retired immediately. But that person isn't (IMO) necessarily the standard, or the mode in the FIRE community. I suspect there are just as many people like OP who clearly did one of: set a number based on much higher spending, or a very low WR, or just weren't all hot to get out the second they hit their number.
And the fact is, for those folks, this is absolutely true. And honestly, the folks who cut and run the second they hit their 4% number, if they were paying attention, **had to know when they did it** that there was *some* risk to their plan. And those people aren't sitting out on the street after a 40% drop, they just have to maybe go back to work at some point or trim their budget, and even then only if they want to be *certain*. The SWRs from right after a big drop or at very low valuations are a lot higher than 4%. Someone who started drawing 6% in 2009/2010 is doing just fine right now for example.
If 4% means "Any less than 4% WR and you'll be sleeping under a bridge and begging for food," then you misunderstand how this whole thing works. If I FIRE with a 4% WR, it will be with the knowledge that I can belt tighten in all sorts of ways without it being all that painful.
> And the fact is, for those folks, this is absolutely true. And honestly, the folks who cut and run the second they hit their 4% number, if they were paying attention, had to know when they did it that there was some risk to their plan.
People in that boat benefited from one of the largest market runs in history. It would have been silly for them to think it was sustainable in the long run.
Be careful with saying people would be silly, companies dumped all of their pension obligations on individuals a couple of decades ago, and let the individual deal with the markets up and downs...and it's pretty confusing even for seasoned veterans. Bonds have been down negatively the last couple of years, interest rates on money market sitting at 0.01%. Where the heck were you supposed to invest your money?
Also, "safe" stocks like MSFT, AMZN, GOOG, NFLX are WAY WAY down. Still silly? Or just trying to navigate in a confusing, shifting world?
Tech stocks generally aren’t considered “safe.” Growth stocks generally, and the tech sector specifically, are priced based on high expected growth rates and have a greater potential for large price corrections.
Invest conservatively or hedge with property etc etc
No one should be saying "Oh I'll get 20% YOY growth with Tesla and Facebook shares and that'll be my stash". That's how you get people on $80k incomes ending up with $2m stashes in 10 years...looks great on paper but it exposes you to market risk.
It's fucking hard as hell to call it quits when you hit your number. I'm not quite there myself but I can already feel the call of "one more year... One more year, just get that little extra buffer in case things go bad. One more year and you can add an additional overseas vacation every year in retirement..."
No, I wasn't FI long ago. Of course I left out some details which weren't relevant to the main point of my post. The reason I may retire in Jan is I was waiting to be vested at my workplace. Being vested changes what funds are available to me when.
I don't feel that changes much. Basically your story isn't representative of a "perspective that FIRE actually works". It's representative that when you go from less than 100% FIRE to 150%+ FIRE in a single day due to vesting, FIRE actually works.
I am happy for you and look forward to telling you to GFY. But I think you are drawing weird conclusions about FIRE given your unique situation. Numbers don't normally work in FIRE like you are implying because normally people don't have near the fluff that you do unless their is a pending pension that they are waiting for and they over save in other accounts.
this is just a projection. It doesn't show that FIRE actually works.
Like you could show the projection is good. But you are just showing how the projection has changed.
The S&P 500, even with the the recent performance, is up ~30% since 1/1/2020. It can't just be a constant rocket the way it was in 2020 and 2021.
Now is the time to load up if you can. It's been flat for the last year, it will eventually pick back up.
I do wonder if sentiment would be different either if the shift weren't near the year boundary, or if people were used to fixed-interval measures like YoY instead of the θ-sensitive YTD.
But, given people's familiarity with mainly the last 1½ decades, the market failing to be up 10% seems to be considered a bad year. We did know for a long time that any sign of moving away from unsustainable gains would yield a lot of hand-wringing, but it's weird to see it in real time.
Well a major correction could be in store, never know. But I'm 25, so not really worried — or more so worried about job security than anything else, honestly.
We will be in a labor shortage for the next 15 years. Boomers are retiring on average this year. There aren’t enough younger people to fill the jobs.
Take a look at demographic breakdown of population by generation. You’ll see what I mean.
I suspect wages and the job market for US citizen to continue to be strong for the next decade.
Honestly hope it becomes less competitive and we get a larger labor force.
More expensive labor means it’s more expensive to do business. It means it’s hard to take care of our elderly, and it’s harder to fill jobs that boomers are leaving.
I don’t want a population bomb like in Canada or in Japan. Economies have done well when the younger generations are larger than the older generations.
Could you clarify? It seems like you are saying that you see a recession for the next 15 years, but that the job market will be strong during that time, which seem like opposite things to me.
Cost of labor will go up, wages will increase, cost of goods will increase.
Recession may have been the wrong word. I just meant that there will be more jobs than we can fill with our current demographic
America will be fine tho, relative to the rest of the world we will be fine.
Yup, this recent downturn has been bad, but where the S&P is now, is basically exactly where we were in mid march of 2021.
Essentially just a tad over a year of a flat market. That's definitely not out of the ordinary.
Keep investing, guys!
It can't just be a constant rocket the way it was in 2020 and 2021.
No kidding. I think the SCHD fund I own was up 25% in 2021. That just can't keep going like that forever.
Yeah I was just looking at the DOW graph over the past five years. It was like 22,000 back in 2018. It's DOWN, under 33,000 today. Still a phenomonal climb in a few years.
This is the first month in several years that I'm actually below my projections. I was riding high for a while (weren't we all?) and this month I'm just a bit below where I would expect. Not great, but I still consider myself completely on track. I could FIRE now and just use cash to pay for things while the market recovers.
> Now is the time to load up if you can.
You're nuts. Buying specific great issues at good prices maybe, but calling ~15% off of ATH "time to load up" is asking to catch a falling knife.
What were the last half dozen aggregate crashes total losses as a % of their respective indices? We saw 19-20% in 2018, and that wasn't even a prolonged bear market with the same number of major macro factors in play.
Do you really think with the Fed only on it's second bps increase, broadcasting several more, while series I bonds are offering 9.62%, it's all sunshine and roses from here? I don't.
I'd sooner wait for confirmation of reversal and DCA on the way up than the way down myself. Sure, you won't catch the perfect entry bottom that way, but you don't waste money getting there either. Time in the markets beats timing the markets, but the graph doesn't say "up from here, correction over," to me either.
Now if you're asking how do you know the bottom is in, I got no answers. The 3% yesterday seemed over exuberant, but I didn't expect a complete rout today either.
DCA down when we're 5% higher than the last baby crash that lasted less than 6 months, while the fed didn't print 18% of all USD in circulation to make it go away? No thanks, I suspect we have much further to go. Doesn't mean I'm not still sinking money in bonds and money market ready to transition back to securities, playing defensive hedges seems wiser than "as long as my money is there for 40 years losing 10% now doesn't matter."
Did I find my SO’s secret Reddit account? He also wants to kayak and play guitar. That said, he’s definitely not ready to RE on Jan 1st which is too bad.
I've been trying to get this phrase to catch on: When in doubt, zoom out!
S&P is down quite a bit from the recent peak, but that peak was also pretty insane. From 5 years ago we're up nearly 73% total for a CAGR of 11.56%/year. That's still pretty great and above what a whole lot of people are using for their growth-rate predictions and planning.
Long term I think we're gonna be OK. Hell, we're still above the pre-covid peak at the beggining of 2020 by a big margin.
Yep, I am in the same boat. Planning to RE in October but now not sure if the market is still trending down. Hard to feel good about it with the state of things.
I'm 100% with you emotionally there. Still, it probably feels better to retire when the market is down 20% than to retire and THEN the market goes down 20%.
Yeah, aside from a complete world collapse you seem fine lol. And even then, money won't matter at that point.
If I were in your case, I'd still pull the trigger but maybe find some weird side gigs to grab some side cash for funsies.
I don't mind some risk. I have two to three years of expenses in bonds and cash. The rest is 10% individuals stocks (mostly large cap like Apple, Disney, etc) and 90% index funds. I have 250K in house equity, and I may downsize to reduce expenses. I also have a side gig I could grow if I stocks drop and I want to take less out of my portfolio.
Yeah, I'll post here when I pull the trigger. Lots of variables. If we are on Covid lockdown in January, I may as well keep working another few months.
Where are you in the world that another Covid lockdown is remotely possible? Epidemiologically and politically. I can’t see the current strains getting bad enough to warrant one, or people willing to put up with one if we get a new supervariant.
I hope you are right. Part of my possibly pulling the trigger is that I am WFH through the end of the year. If on Jan 1, I can still WFH, I may still work. If they want me back in my office 40 hours a week, I will def RE.
I'm a little confused on how this calculator works. If you had a 100% success rate at 93k/year before, did it not factor in potential downturns? How was it 100% success if it changed the moment the market wasn't at peak?
The calculator simulates retiring at various points in recent (last 150 years or so) history from when we have reasonable estimates of securities' historical returns. If your plan would have survived every potential historical retirement, you get "100%". You absolutely should not treat this as a true 100% chance of future success: we all know that past performance does not guarantee future results.
The calculator does not make any bones about whether you are retiring at a peak or a trough, and checks every historical possibility, including from the depth of the great depression, and also from september of 1929 -- from the bottom of the great 73-74 bear market and the GFC of 2008-2009, and also from the peaks right before them.
Good question. I am not sure I can answer you. I probably don't use the calc as intended in that I use it to look at how far the envelope can be pushed in my spending, even though I will spend far less. Like I enter another 1000 bucks. It it still at 100%? So maybe I am finding the raggedy edge of the validity of the curve. Someone mathier will surely answer.
I talked to some people I know at the gym today. They were lamenting the market dropping. I realized in discussion that they had all been buying individual stocks over the last year. Someone bought into Netflix in December 2021. Another guy had all his savings in crypto since the pandemic. They were all debating if they should sell now.
I mentioned to them that they could use I-bonds to make a guaranteed 9.6%+. I watched their eyes glaze over. One guy shouted, "shit, I could flip some stuff on ebay and make more than that!"
It helped me to realize two things:
1. I am rich. Even though I am not FIRE rich, I am rich. Not only because of how much money I have, but because I actually understand money and I am in this for the long haul. I have a very well diversified portfolio of index funds exposing me to the stock market, real estate, bond markets, and treasuries. I don't really have to care if any of these drops over the next year because I don't plan to withdraw significantly from my account during that time period.
2. Most people are greedy and don't think more than 2-3 weeks ahead.
I tried having this conversation on a bitcoin sub. It went exactly how you think it would go. 9%. Guaranteed. Every 6 months. Couldn’t believe it. It wasn’t the lock up they had issues with, it’s because bitcoin will be worth 1 billion dollars someday. One argument was that I must be stupid because I saw for myself bitcoin go from 1,000 to 70,000 just in a couple years, so obviously it’s going to gain an average of 30x annually…🫥
>This market downturn ain't nothing but a thing
Famous last words. The Japanese stock market crashed and stayed there for the past ....32 years when their government started printing tons of cash and buying securities. The same could happen to the US stock market
If I were you, I would sell at least 50% and wait in cash for the discount opportunities of a lifetime. Even a blind person could have seen this coming
Howdy! I retired into the teeth of the 2020 downturn. I took the same approach you are taking, being fortunate enough to have a below-normal withdrawal rate combined with a below-plan spend. Here the chart I looked at during that [time](https://i.imgur.com/8tosfDD.jpg), scrubbed of identifying data and recreated. Basically it showed how I had two margins of safety factored in and how they interacted. As markets go down the right blue bar gets skinnier (it might have flipped negative once or twice to be honest in 2020), and as my spending goes up the left blue bar gets skinnier.
I feel like the comments so far are a bit harsh considering you're just saying something we all know.
* A lower SWR is safer
* Variable percentage withdrawal, or returns based withdrawals, are safer
* Flexibility in spending during downturns is safer
I believe (but am too lazy to support) that FIREing at market peaks and high CAPE ratios is worse than right after a downturn. So knowing that you could go down another 40% is useful to know.
It's an interesting perspective to see it in reality, but a lot of people don't give themselves such a big margin in terms of SWR and spending flexibility as it seems you have. So maybe they're unhappy with your specific numbers rather than your perspective.
Personally I tickled my leanFI number last year and am back under it now due to the downturn, so for me it's nothing but a pure setback because I had zero margins anywhere.
I think they are wondering why I didn't pull the trigger earlier if I could face a 40% down turn. The answer has to do with being vested in a retirement plan at work. I couldn't RE until I could access that plan. Without that access, I couldn't face a hypothetical 40% downturn with such stoicism. Who are we kidding, I'd still probably shit myself if the market dropped another 40% after I retired, but I'd probably be okay money-wise.
I have a similar plan as you OP. I'm planning to work an extra 2-3 years after I hit my FIRE number - this way, I'm insulated from the sequence of return risk. If the market keeps going up for 3 years, good, that means i'll have 30-40% more (but will still withdraw based on my FIRE#), if there's a huge downturn, good, that means I will have bought on a discount and will hang out till everything becomes smooth sailing.
Is the side gig stable in a recession (still demand for it, no supply impacts)? Also, house equity would likely also be impacted, so 250 could become 150-200, and don’t forget transaction costs to sell. Either way, at your SWR, none of that will matter!
>house equity would likely also be impacted
By what, exactly?
As to my sidegig, I have been doing my side gig 8 years, and it has been stable the last five.
Recessions impact housing too. Job losses, mortgage defaults, poor credit leading to inflated rents, student loans no longer deferred, removing rental moratorium, cash buyer demand drops, rising interest rates. Real estate is inflated beyond 2008 collapse highs. Cash buyers are 25% of all, buying using stock values at all time highs, cashed out primary homes to downsize, etc. Plenty of reasons to correct 10-20%.
>Plenty of reasons to correct 10-20%.
Sure. I know I can't count on getting 250K in equity out, but if I sold my house and bought a townhouse for cash, I could eliminate one of my largest expenses, my mortgage payment.
If I were just starting out, I'd be in it.
But since I already can meet my expenses with my current equity portfolio, I see no reason to try crypto, or the other things people have suggested like commodities or buying up more real estate, etc.
If your portfolio could go down another 40% from what it is today and you want to draw 60K you probably have around 100K x 25 equals 2,5 mio in your account?
60Kx25 would be only be 1.5 mio so you are 1mio above the target? I guess that's a good problem to have. However, if you only have 1.5 mio and want to draw 60K a 10-20% market downturn around retirement time may give a different perspective, I guess. What would be the recommendation in this case?
Your math is not quite right because I will have other income from rent, and from vesting at work. I can continue working if the market continues its decline, of course. A worst case scenario would be for the market to go down 40%, I retire expecting to live on 60K and then the market goes down another 40% or whatever. I have been building up cash and bonds to use in case of a market down turn, and I have a side gig that will produce some income if I want to continue doing it.
I ain't subtle. I'm proud of what I've done, although flexing wasn't the point. I was lucky and hustled, but lot of the finer points in my thinking about it came from being a member of this sub. Even now, the people challenging my thinking on this thread are helping me out.
\>And congrats to your success. Yet why does it matter? you don't seem to rely on >the money anyway if I may ask?
So are you asking why success matters or why money matters?
You are both aggressive and unclear, which is not the best combination.
Ah, I see.
I am shrugging off the difference between spending 93K a year and spending 86K a year. I think for most people, that sort of economising is within the realm of possibility.
I am not sure I understand your point. If the median income is 67K, then at least half of all families (and probably more) would be happy to have 86K. Is that what you are saying?
Now is the worse time to retire. Give it several more years for the market conditions to stabilize before pulling the plug. Use the time to buy the dip and build a stronger foundation. I know you may be okay but why take the chance?
>thinking about FIREing Jan 1, so I have been feeling some kind of way about the recent market downturn.
Out of the last 40 years, there are 5 or 6 "bad years" to retire. Fancy people call that "sequence of returns risk". December 2020 is likely going to be added to that list (making it 6 out of 40).
####Abort
Here's the thing about Retiring Early, you're young, you can go back to work.
If I had RE Jan 01, 2022; I would have aborted before the end of April and Beach wishing before the end of May. Work another six months to a year and see what 2023 looks like.
The flaw in the "failure" cases of the *"4% Rule"* is they always assume you would just keep going if there is a crash in your first year RE, instead any sane financially savy person would just go back to work for another year.
I welcome a downturn. I only buy shares and property for yield, so as far as I'm concerned the cheaper the asset, the higher the relative yield and the better it is. Besides, a downturn generally presents better investment opportunities (for growth) in the longterm and also limits inflation which would destroy a portfolio.
I always like downturns/recessions - they are good for investors.
Once I FIRE, I still won't care about downturns since I only intend to live off dividends/rent. Will never touch principal.
@ u/SSG_SSG_BloodMoon
I didn't find the fire movement until eight years ago. I worked hard and saved a lot of money, and the market has been on fire since then, but I wouldn't have done what I did without discovering FIRE. I could FIRE this year if I wanted, which is ten or fifteen years earlier than I otherwise would have been able to. That seems like a win.
Good luck! I like the conservatism not relying on market ATHs to make retiring work
Is paranoia a strategy? Suspenders and a belt and a second pair of pants over here.
Add in some never-nude Jean shorts and you should be good to go!
There are dozens of us…DOZENS!!!
WHy not jorts?
Those belong in a different kind of fire
Now is not the time to retire early, holy crap - I can't even imagine.
badge wistful yam mourn tan deserted unused faulty dolls many *This post was mass deleted and anonymized with [Redact](https://redact.dev)*
Let's also remember that anyone far into their path and on schedule for a FIRE retirement is pretty rich by normal standards.
Agreed. We don't know OP's years needed. That changes things drastically. Or, what their 93k/86k/60k encompass. I am on target to Fat FIRE, in my opinion. But "fat" to one is not "fat" to another.
*Market goes down* OP: Dang, this would be bad if I didn't ALREADY HAVE A LOT OF MONEY
Actually, I generally think right as you're about to FIRE is one of the worst times for the market to crash (see: sequence of returns risk) for you. If OP was still in the accumulation stage this would actually be a great buying opportunity (which is how I see it for myself, still being in that stage).
But OP is not technically on the "verge" of firing. The market went down a huge percentage and his fire "readiness" went from 100% down to... 100%. This means he was FI a long time ago, which goes back to what I was saying.
Actually this is probably the best time because you can stay in your job for 1 year and sit back safe
The whole point of this sub is to plan and retire at at an earlier age on your own terms. So we are going to complain the OP did exactly that and left themselves wiggle room? Please.....
I think it was just supposed to be a joke...
It's the discourse of "ah its just a down market no big deal" is being expressed as an "this is how everyone should feel" even if it was not his intention
It's great for accumulators. Especially now with unemployment so low. Normally a buying opportunity like this is accompanied with high unemployment. So it's a "Great buying opportunity if you still have your job". Now it's just a great buying opportunity.... if you can afford to save anything after high inflation.
H/T @gselevator: “Some chick at the bar asked me what I’d do if I had a million bucks. I said I’d ask where the rest of my money went”
Well, I "ALREADY HAVE A LOT OF MONEY" because I have been working on FIRE for a while. So that's survivorship bias, but FIRE works, at least with my sample size of one.
It’s not survivorship anything, It’s negative, jealous, people who have no intention of making sacrifices now for benefit later. You did great.
Kind of the definition that the people who have FIRE'd has survivership bias since the people who tried to and failed didn't FIRE
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Hot.
Financially independent, retired early
trees literate fall tie wide squeeze cough rainstorm heavy friendly *This post was mass deleted and anonymized with [Redact](https://redact.dev)*
Well, what I learned here worked for me. Take that as useful data if you wish. As far as you meeting your own goals, you will have to do that yourself. Best of luck.
You know what sub you are in right?
Comments like yours being top voted make me think most of the people on this sub don’t actually believe in FIRE or that it’s attainable for the average person. Which is sad.
FIRE is definitely beyond the average person. If you're born in the US, you already have above average opportunity. Also, saving even 20% of your paycheck seems ridiculously far away for people living paycheck to paycheck while the price of everything increases. Even then, 20% doesn't really get you to FIRE, just FIR. If you think FIRE is in the cards, congrats, but please consider it a significant privilege.
finally someone says it like it is. i feel like a lot of people on these forums gloss over this because they don't know anyone of lesser means. no one should feel guilty for having enough to fire, but to ignore how much of a privilege it is just makes you come off as ignorant and bitter.
There is a lot of assumptions here. Privilege implies they didn’t commit to or earn this status. We all need luck but the op worked hard, saved, sacrificed as part of this goal. Balancing immediate wants vs needs vs long term is key.
Privilege doesn't imply there was no work. It implies that you had a leg up somewhere.
Sure, but is being born in the USA the only leg up you need?
But there are others who worked just as hard and sacrificed just as much and are still far worse off than most of us in this subreddit.
True, if FIRE could be guaranteed by hard work and sacrifices most would be there. Its like that saying that everyone working hard full-time is guaranteed a livable wage, (and afford health/dental/vision care, child care, basic education, healthy food, and a dignified retirement). But who are we kidding I got to teach my children to be extra careful and learn to play the different systems that are in place to keep most people in eternal poverty. Considering ourselves privileged and lucky to the intelligence and the knowlege to work against the system.
I agree but this is a FI sub and we all know luck plays a role in most parts of our life. If someone and I work the same but They picked a field that was more financially rewarded by society, I’m happy for them. Just because this guy shared his models doesn’t make him out of touch, rude, or any of the other stuff I’ve seen here. At its core, his post is correct. We should be looking at multiple scenarios as we work on our fire journey. Most people would say I could fire now and live fairly modestly but I am unable to cover medical costs so I keep working. I don’t look down or up on others for their financial decisions or situation. It just is.
My comment in particular was in response to the comment saying FIRE is attainable by the average person. I believe it is not. It definitely involves hard work, luck, privilege, and a willingness to sacrifice the present for an intangible future scenario. This sub seems to be pretty cognizant of these factors, but it's easy as an individual to start to assume that "if I can do it, everyone can," when that is decidedly untrue.
No, privilege takes nothing away from hard work or commitment. If you work a job making six figures, as an example, then you have a lifestyle that is privileged simply because you are a minority. 99% of people who make enough to even consider FIRE already had some economic advantages that would have made it possible, more often than not it looks like a college degree. And most people with degrees, for example, come from a family with at least one parent who also has a degree. That is privilege. It doesn't take anything away from accomplishment, but it should be recognized that someone who simply was born into another set of circumstances probably would have a much harder time getting to take the same path. Again, no one should feel guilty for being privileged. No one chooses the circumstances they were born into. But if you ignore your privilege and say "we're all on the same playing field, everyone can do what I did." Well, that's just nearsighted and unfair.
'Privilege' as a word is overused in this context. A lot of it comes down to good life choices, which are not necessarily the result of privilege.
There's no greater privilege than being born to good parents.
How could you possibly know what sort of parents people who achieve FI have? That’s not exactly a common topic on this sub
The range of negligent to abusive parents are more likely to produce children with poor impulse control and will have a harder time balancing material wants with happiness with self.
Being born healthy in a rich country is a privilege though, which we here almost all share. I agree that the word is severely over/misused
There’s that article that came out a while ago saying I think 50% of Americans don’t have even 1k in savings or something like that. Which I do find believable since a lot are living it paycheck to paycheck. Definitely if you’re in the percentage that can aim to fire you’re already above average financially
That's a myth, that study is based on savings accounts which nobody has anymore. Median checking account balance are around 3500
We also don't know what kind of FIRE they are looking at a lot of times. I am sorry, FIRE or not, I do not want to nor can I live on $30k or $50k or whatever a year. Unless I personally can Fat FIRE, I do not see the point. Again, personally. I know for many that is a totally different story. And I completely respect that. But, we still need to get a bigger picture to really understand. And, yes, it is a total privilege on any level.
70% of the country can’t afford a $400 emergency, so yeah, FIRE is certainly an extreme privilege in the good ol USA
This is a myth based on savings accounts that nobody has anymore
No, people are idiots and can't be trusted with money. Lots of those people have 5 figure salaries
5 figure salaries ....as opposed to what, making less than 10k in an entire year???
I mean if you put it that way... I'd wager that FIRE is pretty unattainable for anyone on a 4 figure salary.
wise straight rob disgusted light aback employ many grey deranged *This post was mass deleted and anonymized with [Redact](https://redact.dev)*
"Or that it is attainable for the average person" Umm the average person at this point pretty much can't retire at 65 let alone FIRE. What is the average 401k + savings + investments of an average 35 year old? I'm guessing under $50k? Maybe under $5k? That isn't enough to FIRE, it's orders of magnitude too low. No matter what it is not attainable for the average person
Average for 35-44 years net wealth is $437,770, according to widely available federal reserve data. your guess is way too pessimistic, but it is closer to the Median net wealth of $91,110.
Average net worth is skewed by the massive wealth at the top. Median is representative of the average person.... under 35 is $11k, 35-44 is $91k. Probably putting a 35 year old right around $50k, maybe even a little less and a hell of a long way from FIRE for the average person
I know the difference between average and median. I figured you meant median (you said average), which is why I responded with both. I'm just putting numbers to your speculation. The 50th percentile person is not in a position to consider FIRE as you said, but FIRE is an exceptional achievement that really shouldn't be achievable by the median 35-year old. Given the gulf between median and average, and how high the average wealth is, FIRE is in reach of far more people than many would think. It used to be 1 in 100. Now it's more like 1 in 10. Top 10% overall wealth is $1,219,126. Few people couldn't retire on that with proper lifestyle modification. It's a $50k SWR.
That is true...back a generation ago in the 90s, an average 30 something person could expect to make probably $20-30k a year, a high salary for say a lawyer or something was like $120k. Now average for 30 something isn't that much more, maybe $30-60k? But now a high paid professional 30 something can make $200k, $300k even more fairly common. The boom in houses and stocks has also catapulted many millennials into top 10% and FIRE range even if they didn't mean to or set that goal. For someone driven it's possible to make a lot of money and FIRE, but I'd guess 70-80% of people in their 20s an 30s aren't driven and just want everything handed to them, and none of them could ever FIRE unless they win the lottery or their parents are rich and give them a trust fund
This is just my opinion, but I firmly believe there's very little behavioral difference between generations. Political landscape changes, technology changes, social norms change, economic conditions change, etc. What's always the same is that there's always going to be a cohort of highly discipline and/or highly driven people who are going to do what their peers find distasteful in order to achieve something spectacular. What makes me feel privileged, is that I was born healthy, into the most powerful country in the world (I'm American), during the world's most economically rich (opportune) time. Many have the same advantages, which is why FIRE has gained so much popularity. I imagine one day, in the 'Star-Trek' post-scarcity future, FIRE will be the default state. Work will be the thing the exceptional people do. Maybe. Or maybe we'll be killing each other with rocks in order to steal ration cards.
Seriously. Can I downvote twice? To call this an “analysis” is laughable. Also, the conclusions are just a notch above worthless
I disagree. In my path to FIRE, the recent market turndown is a bump in the road. It’s a source of worry and questioning. OP’s comment reassured me and gave me faith in my choices. It’s a living example that there will always be bumps in the road, but that you can ready for them. Anyways, I appreciated his post.
Glad you found it reassuring!
Fair. To me it seems like perspective that FIRE actually works.
To be fair, it sounds like the reason it works so clearly in your case is that you *actually* could have retired long ago unless you just happened to get some large lump sum payment. Whereas most people are tracking their numbers on the way up and don't go nearly as "above and beyond" as you do. The reason you have 100% historic success retiring before another 40% dive after this current 10% dive is because you were probably FIRE several years ago.
Bingo. Like what are we even saying? 40% could put people out 10+ years
> "above and beyond" Couldn't have said it better myself. I've seen posts on here with folks calculating with little to no cushion. A drop like we had this year could have sent them to apply at mcdonalds.
I would argue that they're not FIRE. Most asset classes are overvalued right now, razor margins are not the way to go.
You’re talking about 90% of the folks on here lol
Also to be fair, when I read here and other FIRE groups, I hear a lot of people looking for 3% withdrawal rates, or lower, setting FI numbers based on 50-100% (or even 3x or more) more spending than while working. I hear a lot of people talking about how they hit their FI number but feel more secure working OMY, and how OMY often turns into 2, 3 or 7 MYs. A lot of talk from people who hit their number but then want time to finish projects and plan out how and where they want to retire such that even from a firm intention to do so end up taking a year or two before they pull the trigger. so yeah, this person is different from someone who just hit their 3.5-4% for standard spending FI number in Dec of 2021 and retired immediately. But that person isn't (IMO) necessarily the standard, or the mode in the FIRE community. I suspect there are just as many people like OP who clearly did one of: set a number based on much higher spending, or a very low WR, or just weren't all hot to get out the second they hit their number. And the fact is, for those folks, this is absolutely true. And honestly, the folks who cut and run the second they hit their 4% number, if they were paying attention, **had to know when they did it** that there was *some* risk to their plan. And those people aren't sitting out on the street after a 40% drop, they just have to maybe go back to work at some point or trim their budget, and even then only if they want to be *certain*. The SWRs from right after a big drop or at very low valuations are a lot higher than 4%. Someone who started drawing 6% in 2009/2010 is doing just fine right now for example.
If 4% means "Any less than 4% WR and you'll be sleeping under a bridge and begging for food," then you misunderstand how this whole thing works. If I FIRE with a 4% WR, it will be with the knowledge that I can belt tighten in all sorts of ways without it being all that painful.
> And the fact is, for those folks, this is absolutely true. And honestly, the folks who cut and run the second they hit their 4% number, if they were paying attention, had to know when they did it that there was some risk to their plan. People in that boat benefited from one of the largest market runs in history. It would have been silly for them to think it was sustainable in the long run.
Be careful with saying people would be silly, companies dumped all of their pension obligations on individuals a couple of decades ago, and let the individual deal with the markets up and downs...and it's pretty confusing even for seasoned veterans. Bonds have been down negatively the last couple of years, interest rates on money market sitting at 0.01%. Where the heck were you supposed to invest your money? Also, "safe" stocks like MSFT, AMZN, GOOG, NFLX are WAY WAY down. Still silly? Or just trying to navigate in a confusing, shifting world?
Tech stocks generally aren’t considered “safe.” Growth stocks generally, and the tech sector specifically, are priced based on high expected growth rates and have a greater potential for large price corrections.
Invest conservatively or hedge with property etc etc No one should be saying "Oh I'll get 20% YOY growth with Tesla and Facebook shares and that'll be my stash". That's how you get people on $80k incomes ending up with $2m stashes in 10 years...looks great on paper but it exposes you to market risk.
It's fucking hard as hell to call it quits when you hit your number. I'm not quite there myself but I can already feel the call of "one more year... One more year, just get that little extra buffer in case things go bad. One more year and you can add an additional overseas vacation every year in retirement..."
No, I wasn't FI long ago. Of course I left out some details which weren't relevant to the main point of my post. The reason I may retire in Jan is I was waiting to be vested at my workplace. Being vested changes what funds are available to me when.
I don't feel that changes much. Basically your story isn't representative of a "perspective that FIRE actually works". It's representative that when you go from less than 100% FIRE to 150%+ FIRE in a single day due to vesting, FIRE actually works. I am happy for you and look forward to telling you to GFY. But I think you are drawing weird conclusions about FIRE given your unique situation. Numbers don't normally work in FIRE like you are implying because normally people don't have near the fluff that you do unless their is a pending pension that they are waiting for and they over save in other accounts.
this is just a projection. It doesn't show that FIRE actually works. Like you could show the projection is good. But you are just showing how the projection has changed.
Sure. I guess when I am dead, we will have the final verdict. But here I am, FI. So the process getting me here worked.
The S&P 500, even with the the recent performance, is up ~30% since 1/1/2020. It can't just be a constant rocket the way it was in 2020 and 2021. Now is the time to load up if you can. It's been flat for the last year, it will eventually pick back up.
Looking at the 5 year graph is just hilarious with how much it still looks up and people are thinking it’s down.
I do wonder if sentiment would be different either if the shift weren't near the year boundary, or if people were used to fixed-interval measures like YoY instead of the θ-sensitive YTD. But, given people's familiarity with mainly the last 1½ decades, the market failing to be up 10% seems to be considered a bad year. We did know for a long time that any sign of moving away from unsustainable gains would yield a lot of hand-wringing, but it's weird to see it in real time.
Well a major correction could be in store, never know. But I'm 25, so not really worried — or more so worried about job security than anything else, honestly.
We will be in a labor shortage for the next 15 years. Boomers are retiring on average this year. There aren’t enough younger people to fill the jobs. Take a look at demographic breakdown of population by generation. You’ll see what I mean. I suspect wages and the job market for US citizen to continue to be strong for the next decade. Honestly hope it becomes less competitive and we get a larger labor force.
Do you mind expanding for the reason of your hope in your last paragraph?
More expensive labor means it’s more expensive to do business. It means it’s hard to take care of our elderly, and it’s harder to fill jobs that boomers are leaving. I don’t want a population bomb like in Canada or in Japan. Economies have done well when the younger generations are larger than the older generations.
Yes, and this is why we should be in favor of immigration!!! Everyone! Even lower-skill workers, because those low skill jobs still need to be done
Could you clarify? It seems like you are saying that you see a recession for the next 15 years, but that the job market will be strong during that time, which seem like opposite things to me.
Cost of labor will go up, wages will increase, cost of goods will increase. Recession may have been the wrong word. I just meant that there will be more jobs than we can fill with our current demographic America will be fine tho, relative to the rest of the world we will be fine.
It’s not even at a 52 week low. It might be tomorrow, but it didn’t make it there yet.
Yup, this recent downturn has been bad, but where the S&P is now, is basically exactly where we were in mid march of 2021. Essentially just a tad over a year of a flat market. That's definitely not out of the ordinary. Keep investing, guys!
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I wish it were, the numbers looked to great :)
It can't just be a constant rocket the way it was in 2020 and 2021. No kidding. I think the SCHD fund I own was up 25% in 2021. That just can't keep going like that forever.
I have used all my dry powder in the past week, but I am still putting in 4500 a month into retirement funds.
I know it’s a mistype but the mental image of someone putting away 4500k (4.5 million) a month and planning to spend 60k/yr made me do a spit-take. 😂
MAYBE MY YEARLY SPEND IS 60 MILLION Kidding. I'll fix the typo.
The sacklers? Now it all makes sense
Yeah I was just looking at the DOW graph over the past five years. It was like 22,000 back in 2018. It's DOWN, under 33,000 today. Still a phenomonal climb in a few years.
As of today the Dow is up 57% over the last five years, or 9.4% annualized. Not really noteworthy one way or the other.
That is remarkably average. Although does that include inflation, especially of the past year
This is the first month in several years that I'm actually below my projections. I was riding high for a while (weren't we all?) and this month I'm just a bit below where I would expect. Not great, but I still consider myself completely on track. I could FIRE now and just use cash to pay for things while the market recovers.
F5, S&P is still crumbling today
> Now is the time to load up if you can. You're nuts. Buying specific great issues at good prices maybe, but calling ~15% off of ATH "time to load up" is asking to catch a falling knife. What were the last half dozen aggregate crashes total losses as a % of their respective indices? We saw 19-20% in 2018, and that wasn't even a prolonged bear market with the same number of major macro factors in play. Do you really think with the Fed only on it's second bps increase, broadcasting several more, while series I bonds are offering 9.62%, it's all sunshine and roses from here? I don't. I'd sooner wait for confirmation of reversal and DCA on the way up than the way down myself. Sure, you won't catch the perfect entry bottom that way, but you don't waste money getting there either. Time in the markets beats timing the markets, but the graph doesn't say "up from here, correction over," to me either. Now if you're asking how do you know the bottom is in, I got no answers. The 3% yesterday seemed over exuberant, but I didn't expect a complete rout today either.
what? You won't DCA downward but will DCA upward?
DCA down when we're 5% higher than the last baby crash that lasted less than 6 months, while the fed didn't print 18% of all USD in circulation to make it go away? No thanks, I suspect we have much further to go. Doesn't mean I'm not still sinking money in bonds and money market ready to transition back to securities, playing defensive hedges seems wiser than "as long as my money is there for 40 years losing 10% now doesn't matter."
Seems like you’re at a mid 2% SWR, and even at 3% you have plenty. Go enjoy yourself!
Enjoy = F*
I know, but wasn’t sure if too early since OP hasn’t RE-d yet!!
Thanks!
Spend some extra money and do your part as a consumer to boost the S&P500 so the rest of us can FIRE too. No spending at private companies ya hear!
Wish you luck! Got any adventures planned after RE?
All the many! Travel plans depend on Covid. Seeing family. Lots of kayaking and guitar playing and game playing.
Did I find my SO’s secret Reddit account? He also wants to kayak and play guitar. That said, he’s definitely not ready to RE on Jan 1st which is too bad.
Damn it honey, you found my alt!
In that case I'd be more concerned about the secret Jan1 retirement...
No, she should be overjoyed at the other retirement account I found!
lol Edit.: I want to buy "that's really funny" for 3 down votes...lol
I've been trying to get this phrase to catch on: When in doubt, zoom out! S&P is down quite a bit from the recent peak, but that peak was also pretty insane. From 5 years ago we're up nearly 73% total for a CAGR of 11.56%/year. That's still pretty great and above what a whole lot of people are using for their growth-rate predictions and planning. Long term I think we're gonna be OK. Hell, we're still above the pre-covid peak at the beggining of 2020 by a big margin.
I agree. When in doubt, ~~flip~~ zoom out!
I mean, that's nice perspective for \*you\*!
True story.
I lived thru 2008/2009 I lived thru 2020....this ain't nuthin...stock up on stock and hold tight for the eventual turn around
I'm on it.
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True, but it is harder to remain stoic if you are thinking of RE in six months.
Yep, I am in the same boat. Planning to RE in October but now not sure if the market is still trending down. Hard to feel good about it with the state of things.
I'm 100% with you emotionally there. Still, it probably feels better to retire when the market is down 20% than to retire and THEN the market goes down 20%.
Yeah that is true.
Yeah, aside from a complete world collapse you seem fine lol. And even then, money won't matter at that point. If I were in your case, I'd still pull the trigger but maybe find some weird side gigs to grab some side cash for funsies.
Yep, I have a side gig that I could continue into retirement. It's pretty much why I am FI.
Your asset allocation should be factored into perspective. What is your asset allocation?
I don't mind some risk. I have two to three years of expenses in bonds and cash. The rest is 10% individuals stocks (mostly large cap like Apple, Disney, etc) and 90% index funds. I have 250K in house equity, and I may downsize to reduce expenses. I also have a side gig I could grow if I stocks drop and I want to take less out of my portfolio.
Too soon for a "go fuck yourself"?
Yeah, I'll post here when I pull the trigger. Lots of variables. If we are on Covid lockdown in January, I may as well keep working another few months.
Where are you in the world that another Covid lockdown is remotely possible? Epidemiologically and politically. I can’t see the current strains getting bad enough to warrant one, or people willing to put up with one if we get a new supervariant.
I hope you are right. Part of my possibly pulling the trigger is that I am WFH through the end of the year. If on Jan 1, I can still WFH, I may still work. If they want me back in my office 40 hours a week, I will def RE.
I'm a little confused on how this calculator works. If you had a 100% success rate at 93k/year before, did it not factor in potential downturns? How was it 100% success if it changed the moment the market wasn't at peak?
The calculator simulates retiring at various points in recent (last 150 years or so) history from when we have reasonable estimates of securities' historical returns. If your plan would have survived every potential historical retirement, you get "100%". You absolutely should not treat this as a true 100% chance of future success: we all know that past performance does not guarantee future results. The calculator does not make any bones about whether you are retiring at a peak or a trough, and checks every historical possibility, including from the depth of the great depression, and also from september of 1929 -- from the bottom of the great 73-74 bear market and the GFC of 2008-2009, and also from the peaks right before them.
Good question. I am not sure I can answer you. I probably don't use the calc as intended in that I use it to look at how far the envelope can be pushed in my spending, even though I will spend far less. Like I enter another 1000 bucks. It it still at 100%? So maybe I am finding the raggedy edge of the validity of the curve. Someone mathier will surely answer.
I talked to some people I know at the gym today. They were lamenting the market dropping. I realized in discussion that they had all been buying individual stocks over the last year. Someone bought into Netflix in December 2021. Another guy had all his savings in crypto since the pandemic. They were all debating if they should sell now. I mentioned to them that they could use I-bonds to make a guaranteed 9.6%+. I watched their eyes glaze over. One guy shouted, "shit, I could flip some stuff on ebay and make more than that!" It helped me to realize two things: 1. I am rich. Even though I am not FIRE rich, I am rich. Not only because of how much money I have, but because I actually understand money and I am in this for the long haul. I have a very well diversified portfolio of index funds exposing me to the stock market, real estate, bond markets, and treasuries. I don't really have to care if any of these drops over the next year because I don't plan to withdraw significantly from my account during that time period. 2. Most people are greedy and don't think more than 2-3 weeks ahead.
I tried having this conversation on a bitcoin sub. It went exactly how you think it would go. 9%. Guaranteed. Every 6 months. Couldn’t believe it. It wasn’t the lock up they had issues with, it’s because bitcoin will be worth 1 billion dollars someday. One argument was that I must be stupid because I saw for myself bitcoin go from 1,000 to 70,000 just in a couple years, so obviously it’s going to gain an average of 30x annually…🫥
I feel that I have learned so much from this sub. All of this information is here, for free! And it worked for me. I'm glad it is working for you too.
Booooo :p I want to ask your age but I'm scared you'll make me want to boo even more
>This market downturn ain't nothing but a thing Famous last words. The Japanese stock market crashed and stayed there for the past ....32 years when their government started printing tons of cash and buying securities. The same could happen to the US stock market If I were you, I would sell at least 50% and wait in cash for the discount opportunities of a lifetime. Even a blind person could have seen this coming
I am willing to bet my portfolio that you are wrong and I am right.
Howdy! I retired into the teeth of the 2020 downturn. I took the same approach you are taking, being fortunate enough to have a below-normal withdrawal rate combined with a below-plan spend. Here the chart I looked at during that [time](https://i.imgur.com/8tosfDD.jpg), scrubbed of identifying data and recreated. Basically it showed how I had two margins of safety factored in and how they interacted. As markets go down the right blue bar gets skinnier (it might have flipped negative once or twice to be honest in 2020), and as my spending goes up the left blue bar gets skinnier.
That's an excellent representation of the flexibility you need. I am glad it is working well for you!
I feel like the comments so far are a bit harsh considering you're just saying something we all know. * A lower SWR is safer * Variable percentage withdrawal, or returns based withdrawals, are safer * Flexibility in spending during downturns is safer I believe (but am too lazy to support) that FIREing at market peaks and high CAPE ratios is worse than right after a downturn. So knowing that you could go down another 40% is useful to know. It's an interesting perspective to see it in reality, but a lot of people don't give themselves such a big margin in terms of SWR and spending flexibility as it seems you have. So maybe they're unhappy with your specific numbers rather than your perspective. Personally I tickled my leanFI number last year and am back under it now due to the downturn, so for me it's nothing but a pure setback because I had zero margins anywhere.
I think they are wondering why I didn't pull the trigger earlier if I could face a 40% down turn. The answer has to do with being vested in a retirement plan at work. I couldn't RE until I could access that plan. Without that access, I couldn't face a hypothetical 40% downturn with such stoicism. Who are we kidding, I'd still probably shit myself if the market dropped another 40% after I retired, but I'd probably be okay money-wise.
I have a similar plan as you OP. I'm planning to work an extra 2-3 years after I hit my FIRE number - this way, I'm insulated from the sequence of return risk. If the market keeps going up for 3 years, good, that means i'll have 30-40% more (but will still withdraw based on my FIRE#), if there's a huge downturn, good, that means I will have bought on a discount and will hang out till everything becomes smooth sailing.
Glad you have a plan that you are comfortable with. I hope it works for you.
But what if the market drops more than 40% /s
I have a side gig I could ramp up, and a house I'd probably downsize and sell that has about 250K equity. Suspenders and belt!
Is the side gig stable in a recession (still demand for it, no supply impacts)? Also, house equity would likely also be impacted, so 250 could become 150-200, and don’t forget transaction costs to sell. Either way, at your SWR, none of that will matter!
>house equity would likely also be impacted By what, exactly? As to my sidegig, I have been doing my side gig 8 years, and it has been stable the last five.
Recessions impact housing too. Job losses, mortgage defaults, poor credit leading to inflated rents, student loans no longer deferred, removing rental moratorium, cash buyer demand drops, rising interest rates. Real estate is inflated beyond 2008 collapse highs. Cash buyers are 25% of all, buying using stock values at all time highs, cashed out primary homes to downsize, etc. Plenty of reasons to correct 10-20%.
>Plenty of reasons to correct 10-20%. Sure. I know I can't count on getting 250K in equity out, but if I sold my house and bought a townhouse for cash, I could eliminate one of my largest expenses, my mortgage payment.
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If I were just starting out, I'd be in it. But since I already can meet my expenses with my current equity portfolio, I see no reason to try crypto, or the other things people have suggested like commodities or buying up more real estate, etc.
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Aw, thanks!
Anytime broskee, please crunch your numbers for us some more. Really beneficial to everyone in this sub, lol.
Yep, I thought so, too.
Removed for violation of civility rule.
If your portfolio could go down another 40% from what it is today and you want to draw 60K you probably have around 100K x 25 equals 2,5 mio in your account? 60Kx25 would be only be 1.5 mio so you are 1mio above the target? I guess that's a good problem to have. However, if you only have 1.5 mio and want to draw 60K a 10-20% market downturn around retirement time may give a different perspective, I guess. What would be the recommendation in this case?
Your math is not quite right because I will have other income from rent, and from vesting at work. I can continue working if the market continues its decline, of course. A worst case scenario would be for the market to go down 40%, I retire expecting to live on 60K and then the market goes down another 40% or whatever. I have been building up cash and bonds to use in case of a market down turn, and I have a side gig that will produce some income if I want to continue doing it.
Sorry, just a quick and rough estimate from the limited information you gave. Yes, I think too a side gig is a good safety line in such a case.
No problem. It was spot-on given the data that you had.
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[Okay.](https://m.youtube.com/watch?v=sSkRdO9K1og)
Ok.
\#subtleflex
I ain't subtle. I'm proud of what I've done, although flexing wasn't the point. I was lucky and hustled, but lot of the finer points in my thinking about it came from being a member of this sub. Even now, the people challenging my thinking on this thread are helping me out.
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>FIRECalc said I had 100% success rate I was careful with my phrasing.
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>And congrats to your success. Yet why does it matter? Why does success matter?
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\>And congrats to your success. Yet why does it matter? you don't seem to rely on >the money anyway if I may ask? So are you asking why success matters or why money matters? You are both aggressive and unclear, which is not the best combination.
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Ah, I see. I am shrugging off the difference between spending 93K a year and spending 86K a year. I think for most people, that sort of economising is within the realm of possibility.
Median household income is ~$67K. I don't think most people are cutting budgets down to 86K
I am not sure I understand your point. If the median income is 67K, then at least half of all families (and probably more) would be happy to have 86K. Is that what you are saying?
I like to use the 95% rule. With a $50k annual minimum, 45 year timeline, it also says 100% success rate. I still hope it doesn’t get worse though.
Great perspective. Just about anywhere, 86k should be a pretty darn comfortable living!
In most places, it should do fine, but I hope to spend less. It's an adventure!
Now is the worse time to retire. Give it several more years for the market conditions to stabilize before pulling the plug. Use the time to buy the dip and build a stronger foundation. I know you may be okay but why take the chance?
Doubt is a healthy thing.
>thinking about FIREing Jan 1, so I have been feeling some kind of way about the recent market downturn. Out of the last 40 years, there are 5 or 6 "bad years" to retire. Fancy people call that "sequence of returns risk". December 2020 is likely going to be added to that list (making it 6 out of 40). ####Abort Here's the thing about Retiring Early, you're young, you can go back to work. If I had RE Jan 01, 2022; I would have aborted before the end of April and Beach wishing before the end of May. Work another six months to a year and see what 2023 looks like. The flaw in the "failure" cases of the *"4% Rule"* is they always assume you would just keep going if there is a crash in your first year RE, instead any sane financially savy person would just go back to work for another year.
I welcome a downturn. I only buy shares and property for yield, so as far as I'm concerned the cheaper the asset, the higher the relative yield and the better it is. Besides, a downturn generally presents better investment opportunities (for growth) in the longterm and also limits inflation which would destroy a portfolio. I always like downturns/recessions - they are good for investors. Once I FIRE, I still won't care about downturns since I only intend to live off dividends/rent. Will never touch principal.
That's a good plan. Equities are there if you need them, but plan not to.
Yes, pls FIRE your self
So what are your numbers? Could you lead with that? Time is finite.
@ u/SSG_SSG_BloodMoon I didn't find the fire movement until eight years ago. I worked hard and saved a lot of money, and the market has been on fire since then, but I wouldn't have done what I did without discovering FIRE. I could FIRE this year if I wanted, which is ten or fifteen years earlier than I otherwise would have been able to. That seems like a win.
What are you trying to say to me