“Retired in 2013 at age 33. Life is Good”
Would you like to or would have liked to retire at 33?
Of course, the folks who claim to have saved tons of money in a few years, retire young and then live off their investments are mostly as phony as a $3 bill.
Many times they don’t have children and have a lifestyle that most people would not accept, but hey, that’s a choice.
Collectively they are known as the FIRE movement (Financially Independent Retire Early) The thing is many, if not most, have another source of income. They promote themselves, write blogs (that actually make money unlike the one you are reading), write books, consult or have part-times jobs or a spouse does.
Here is a quote from the Root of Good blog. I guess life is good when you can get others to pay your bills. Remember this family has $2,600,000 in the bank and brag how they pay very low or no income taxes.
Healthcare/Medical/Dental – $135:
Our 2021 healthcare premiums are $135 per month [a family of five] thanks to very generous Affordable Care Act subsidies that we receive due to our low $45,000 per year Adjusted Gross Income. The benefit of being “poor” on our tax return.
We decided not to renew our dental insurance for 2021, so there are no recurring monthly dental insurance payments. Instead, we’ll just pay cash for our routine cleanings and exams throughout the year.
February was a good month for our finances. Our net worth went up $36,000 to end the month at $2,580,000. Income of $6,967 significantly exceeded our spending of $951 for the entire month of February.https://rootofgood.com/february-2021-early-retirement-update/
If you want to know how they did what they did (or claim to as I’m skeptical) check them out here.
I donât understand why these are bad people just because they made choices you didnât. Paying lots of taxes does not get you brownie points from me. Government benefits are to be used. How are they fake? Wendell
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I totally agree if you qualify for benefits and you need them, take them. I’ll help you fill out the forms.
I also believe that if you can work, you should not be on welfare, unemployment, or collect other poverty related aid or tax credits because that just raises costs for everyone else or limits benefits for those that need them.
FIRE people getting benefits because they choose not to work falls somewhere between the two extremes. Why should I support you because you don’t want to work 30-40 years like everybody else that is able to work. I am not sure how I really feel about them collecting government benefits. Am I jealous that I could not “stop working at 33 or am I mad that I will help support them for the rest of their lives? Is it fair that we want to tax millionaires while these people get those benefits free because they don’t want to work?
In the end, if they can retire and collecting everything legally, I guess I am happy for them?
Also, I took the fake part as that they are hustling other income streams so did they really retire? Or did they just find a cheaper way to live their life. FIRE implies that you retire never to work again. Collecting benefits that you qualify for is not fake, but smart. In any government program, there are the people who really need benefits and others who figure out the system and legally use the system to get the benefits. And then there are the people who commit fraud which is not the case here.
Being 59, I know I view the world (and finances) through a different lens now than I did when I was 33 (or 43 or 23). Sometimes you don’t know – what you don’t know. I tend to share your views on this topic Mr. Quinn. I’ve always been more about the business of “FI” vs. “RE”.
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With so many people utilizing costly credit to fuel their lifestyles, its easy to see why someone who lives without debt as being considered frugal. I’ll never criticize anyone for living within their means. But I agree that too many FIRE advocates are earning money by selling the concept. Thus, they are not really retired at all.
So, I read it and yes, if you want to live in California or North Carolina as a couple with kids on $45,000 a year, I guess this is possible if you are lucky enough to never make a mistake, attend a state school with $3,000 a year in tuition (no longer available), never get sick, sell property at a 33% profit, earn fantastical rates of returns on your investments, and if both spouses are willing to both work full time and save every penny possible for over a decade.
So, at 33, he would have had, at most 10 years of employment, perhaps less given his law school education. His spouse perhaps of the same age, had another 10 years. Assuming they both started out at $70,000 a year and that wages steadily grew to $120,000 a year over 10 years (not likely, 6.2%/year), had a 35% marginal income tax bracket (all in, CA/NC, local, federal, FICA, FICA-Med, property, sales, etc.), spent $45,000 a year, they could have socked away as much as $750,000. Assuming a 15% per year rate of return on dollars invested, all in tax deferred accounts (not likely), I come up with $1.6MM. So, that must mean that the other $1MM or so is in property appreciation or capital gains from the sale of a home.
So, it is possible, but it required living 10 years with next to nothing margin, a lotta luck (15% per year returns, significant gains on sale of residences?) and, it will require living on a next to nothing margin and counting on subsidies from the government for health coverage as well as avoidance of a wealth tax as well as good health for the rest of their lives… both spouses, all of their children, etc.
They better hope that neither the D’s (wealth tax) nor the R’s (entitlement reform, perhaps a need based test for taxpayer subsidized health coverage) gain full control over the federal government, or their careful plans may suffer a jolt. Wonder how a 5 – 10 year gap in employment will look to the corporate recruiters if they have to go back to work after suffering a setback? Or, if they decide to start a business, wonder just how willing they will be to risk their own money as an investment? Most small businesses fail, by the way.
On the other hand, as we are moving to create an entitlement state that penalizes those attempting to accumulate wealth so as to transfer their property/income/wealth to others “more” deserving from an “equity” perspective, well, us stupid people will end up paying more in taxes to subsidize his health coverage and his children’s college and graduate education with awards and financing that are “need based” – they waiving any residual student loan debt.
This all reminds me of Health Reform, and the academics, like Professor Hacker, who wrote the Great Risk Shift. He assumes that once upon a time (yes, this is a fairy tale), everyone had a lucrative defined benefit pension plan, generous health care coverage, could support a family with high wages from a single earner without working lots of overtime – able to fund all the necessities and all the extras life has to offer, etc. However, that was never the situation – most people never had a pension, or they never vested in a pension, and most never will – except for union employees and public employees who still have them and are counting on people who don’t have them, current day workers and taxpayers, to fund them.
For comparison, I know a young lady, age 33, single, has a job that pays her $30,000 – $40,000 a year, without any benefits, and she also relies on health coverage from the federal government. She pays $300+ a month for her single coverage with a $2,000+ deductible – obviously subsidizing this guy’s family coverage.
So, like I said, they need to vote for D’s so that this can continue, just not too many D’s – such that they gain a supermajority and full control over government and then try to confirm a famous quote President Ford once borrowed:”“A government big enough to give you everything you want is a government big enough to take from you everything you have.”
He didn’t retire, he just stop working for someone else. In 10 years of working, he must have worked were hard after getting his law degree to getting PE license (which takes at least 4 years before you can sit for the tests.)
I don’t blame him for wanting to quit the rat race. But by his blog, he hustling just as hard counting every dollar he can get. It is his choice and it seems like it is working out for him. But you are right. The FIRE movement implies you can retire and just sit on a beach for the rest of your life. This guy didn’t.