FIRE

[conor_mc]

And FI, he is. He isnt retired he is FI.

Do you think so? I think he was relying heavily on website income continuing ad infinitum which I personally wouldn’t rely upon for my next 40-50 years.

Maybe he has discounted those over time but didn’t go into that detail on his podcast, but I feel he should be considering those incomes as accumulations for another few years and get them invested for long-term incomes before considering himself FI.

Again, I’m not knocking the guy, I just think he’s stretching the definition of FI for clicks a bit.

 

[ArthurMcB]

He is FI. He has declared it. It isnt for us to say whether he is or not. Think he deems himself FI on basis that his portfolio has reached a certain number

 

[ClubMan]

Not at 41 you can't.

Sorry, I meant if you retire early in your 50s and draw pension income.

 

[Cervelo]

Also.. and this jarred with me… where do you get takeaway for 5 for €50? Seriously want to know that!

I can't access the articles as there behind a paywall but if the pictures are anything to go by then feeding a young family for €50 from a takeaway should be easy but it would mean sharing some or all of the meals and would also depend on what type of takeaway we're talking about
Feeding a grown family would of course be a different matter altogether and doubt very much you'd feed them all for under €50

 

[ArthurMcB]

In limerick you could feed a fam of 5 for 50euro. Similarly in my corner of ireland. As you say depends on takeaway but can be done and some good options where i am.

Its not impossible or even overly difficult and not worth ruminating over re this thread.

 

[huskerdu]

But is 700k a magic number for early retirement?

No , €700k is not a magic number for retirement. He’s not going to live on €700k for the next 44 years. He’s still earning . He’s making a good living telling people not to spend too much money on takeaways and first class flights

 

[Annieindublin]

Maybe that’s the secret. Write about being FI and it becomes a self fulfilling prophecy when you sell advertising on your website

And I found a few articles, his kids are young. The teenage years we found more expensive, no childcare but other costs were higher, but a lot depends on where you live and what education and activities are available to you. Most of us try to get the kids into sports and for some that’s expensive. But these are like take away coffees… sometimes luxuries and sometimes essentials depends on your viewpoint.

If he was able to quit the 9 to 5 and find something he enjoys that works for his family. Plus having 2 investment properties bought a few years ago (and mortgage free?)

And 5 people on 40k a year is good. A fair bit of shopping around for groceries, no take always and lunches and coffees out and shop around for car and health insurance etc.

Not buying first class flights is a no-brainer… if only I’d thought of that

 

[Premos]

And while people don't speak about it as such glorified achievements, plenty of family make the kind of daily choices he depicts when they decide to have one of the parents staying at home.

 

[Annieindublin]

True, many of my friends opted to be the SAHM at least part time for a couple of decades so walking the kids to school and shopping around for unbranded clothes is not news to them.

The salary sacrifice for those years is upwards of 500k.

 

[misemoi]

I listened and read to some of his stuff before this series of articles. I guess you can take from it what works for you, I have gotten far better education and advice on here than anywhere else. 100% agree that you can tame your family expenses when kids are younger - my picky eaters don't like takeaways apart from the sides so it is a very inexpensive option but as a result one we rarely have as we still have to cook for them! So there's a life hack

 

[fistophobia]

Theres a key difference in this world, between FI and FU money.
FU means, you can tell your boss to do one, safe in the knowledge that you have enough money to walk away.
FI means, you have enough money invested, in order to sustainably live off passive income.

I know this guy from the FIRE community, and his strategy. I would not define him as fully FI.
He has rental properties, but they are financed with debt.
One bad tenant, overholding, or trashing the place.. then the wheels come off.

 

[ArthurMcB]

I think he has an equity portfolio too? If significant enough and if invested in equities it will compound nicely and can be a big factor in being FI.

 

[Fortune]

first class flights

You'd struggle to find many first class seats.....

 

[ClubMan]

From what I've seen of it a lot of the FIRE stuff can be a bit zealous and even cult like and an unnecessarily extreme version of simply living within/below ones means, saving/investing for an early full or partial retirement and exercising self control and maybe "mindfulness" when making spending decisions. It always reminds me of the family on some Irish TV finance programme in the Celtic Tiger years who were basically living off porridge in order to pay down their mortgage early. No thanks...

Edit: apologies, it was a UK TV show, not an Irish one...

Clear your Mortgage in 2 years!

Yep - at the time I was convinced by all those GURUS who told us the property market was heading for a crash, so I hunkered down. Of course the GURUS have been proven wrong...again...and again...and again.....

www.askaboutmoney.com

 

[Sarenco]

So, I listened to the latest podcast and I gather the €700k portfolio is made up of a combined €200k in pension assets and €500k spread across four investment properties, three of which are held within his limited company (I’ve no idea why).

While it’s not entirely clear, I assume the €500k figure is his estimate of the net equity in their four investment properties, which all appear to be mortgaged. Is the €500k headline figure gross, net, after-tax? All very vague.

Apparently the rental properties “cash flow” €28k per annum. Gross, net, after-tax? Again, all very vague.

The leveraged property portfolio sounds very 2007 to me. And we know how that worked out

No details on his PPR and whether that is mortgaged.

I did pick up that he has personal loans outstanding for solar panels and a car upgrade.

He reckons he can fund his family of five with €40k per annum. However, he is bringing them on holidays to New Zealand later in the year where the flights alone cost €7k and he is a member of a golf club. That doesn’t sound like a €40k a year lifestyle to me.

Maybe I’m doing him a disservice but, on the basis of that podcast episode, I don’t think he is anywhere close to being financially independent.

 

[fistophobia]

S. I agree with you on this.
He used to post regular updates of his portfolio holdings, performance.
Some of the named individual stock-holdings would have me lying awake at night, staring at the ceiling.

I do agree with his philosophy of early retirement, but he has a complicated set-up.
One can still retire early, and keep it simple.
The one thing to remember is ... early retirement is about your savings rate, not fancy investment returns.

 

[Steven Barrett]

@huskerdu He’s making a good living telling people not to spend too much money on takeaways and first class flights

You find a lot of people make their money selling "how to guides" rather than actually doing what's in the guide itself.

I'm not interested in the FIRE lifestyle. The first thing is why are people doing jobs that they hate so much that they want to get out of it as soon as they can? Do something else that you enjoy doing.

And I couldn't be bothered living a lifestyle where you count every penny and are always questioning whether you are getting the best price. We've two teenage kids (both in private schools, so that's an immediate expulsion from the FIRE movement ) and while they aren't demanding, they aren't cheap. My daughter is going to Irish college this year and my son is going to Italy. I wouldn't want to tell either of them they couldn't go as their dad wants to stop working 3 months earlier and I am saving the money instead of them having great experiences with their friends.

 

[Premos]

We lived on a limited budget (particularly for 5 to 7 years) when my children were small and less than €40k would have covered the mortgage, everything as well as our trips abroad. At that point, I would have been really careful of our expenditure. The thing is we are much more comfortable nowadays and while I don't consider us financially independent, we have no mortgage and substantial assets on top of our PPR. We will never be rich but work could stop tomorrow and we would probably manage. We have somewhat a reasonable lifestyle outside the children and travelling. We just do what we want to do. To be perfectly honest, sometimes I wondered if we could have "lived" more when we were younger though... So personally, while I am planning for retirement, I am not living for retirement.

 

[Annieindublin]

That’s well put… I’m planning for retirement too, but not just living for it.

A fairly serious health issue for my husband at end of last year. Like life threatening serious! All came out well but while I’m still paying attention to the retirement plans we will still take holidays when we can and enjoy life. Never know when that might have to stop. And I’m not scrimping on health insurance either. I’m not enamoured of my job but I can put up for a few more years as it’ll pay for a nice lifestyle.

 

[BIG-notorious]

The FIRE lifestyle is all very Dave Ramsey, rice & beansy.

I consider my salary to be good but not awesome at €70k-ish a year. I put about 40% of my income away in pensions, savings/investments and mortgage overpayments. This will enable me to reduce my working year further and (if I really really want to) to retire (relatively) early at 55. So far for FIREy...

BUT we also go on holidays twice a year, go to concerts (babysitter required as well as tickets), eat out when we want, buy the food we like to cook at home, have health club membership and just generally have nice things. We don't particularly deny ourselves much of anything: we pay €56 a week to get cleaners in which is about un-FIREy as it gets. I'd say I spend another few grand a year on nice things on top of that.

It's really not at all necessary to go nuts with frugality to cut way back on your expenditure and line yourself for an early retirement. Just shopping around a bit and not being stupid will do most of the heavy lifting.

It's also important to remember that experiences make people happier than things. (That's not me saying it, there's actual serious research on the subject!) So even if you are splurging, you're really much better off dropping a grand on a holiday than on the latest iphone for example.

The first thing is why are people doing jobs that they hate so much that they want to get out of it as soon as they can? Do something else that you enjoy doing.

My perspective on that is why are people not working on having personal lives they want to retire to? The vast majority of people could literally die tomorrow and some of their colleagues might be shocked and sad for a week or two but that'd be it. I've seen it: lovely people dropped dead at relatively young ages and even the medium-term personal impact on their work colleagues was near zero. Their families were surely devastated but not their colleagues. Why give so much to work when work only gives you a paycheck in return?

Work to live.