Taking the RE out of FIRE

Retiring early, like really early, like 35 is a pretty bad idea for a bunch of reasons. Financial independence on the other hand, as soon as possible is a great idea for a bunch of reasons.

1. Investment portfolio sustainability

The odds of a sub-$2 million portfolio lasting for 60 years, when being drawn upon are pretty low. That is just too many years of occasional large declines, one or two big mistakes, a lifetime of random, one-off, unbedgetable budget busting unexpected expenses or maybe even illness.

2. No social security

You don't need that many years to qualify for Social Security but you do need a lot of years to have Social Security be meaningful. It is calculated based on your highest 35 years of earnings. If you retire at 35 or 40 then your calculated payout would include a lot of zeroed out years. You might think there won't be Social Security when your time comes. That could be the case but that outcome seems unlikely but years of no earnings ensures your benefit will be minimal. Reduced Social Security is a more likely outcome.

3. Not being challenged can increase the chance of cognitive impairment

No, I don't have data but my opinion is that intellect and problem solving skills are use them or lose them attributes.

4. Financial independence on the other hand...

... doesn't have to mean punching a clock at a job you don't enjoy wishing the week away to get to the weekend. Some FIRE how-to's give suggestions on how to hustle to create a series of side gigs which lead to multiple income streams. Quite the opposite of being retired, that sort of hustling is hard work, harder than mindlessly punching a clock somewhere and maintaining that sort of personal empire is plenty challenging. Additionally, that sort of self-employment income will count toward your Social Security calculation. Finally, your odds of portfolio sustainability go way up.

5. Own your time, set your schedule

Owning your time is freedom, literally it is freedom. If you can figure out how to have that freedom and derive an income from your idea of freedom, you'd be foolish not to.

6. Live below your means

This is a fast track to FI, to financial independence. Paraphrasing Naval Ravikant, people who live below their means have a freedom that others can only dream about.

7. Figure it out now or figure it out later...

...but you'll be happier and have the life you want if you can figure it out now. My wife and I are incredibly lucky to have figured this out many years ago.

kriscalulo89 @kriscalulo89

Good read! I understand that 35 is too early to retire. When is the best time to retire?

Reply1 Reply0

randomroger @randomroger

Your question is a great one for its own thread. How old are you, when do you want to retire (rhetorical)? At 56 I still LOVE my day job as an investment advisor, for years I've said I have no desire to give that up and that is still the case. As opposed to retire, I would encourage people to stay curious to learn new things to have interests evolve to seek out new opportunities. Maybe at 50 or 60, with a solid financial cushion, someone could transition to something that might make less money but invoke far more passion, purpose and fun??

I am still in my early 30s. I want to retire as early as possible and do things that I am more passionate about. Maybe retire around 50 years old. But will see where life will take me. Thanks for sharing.

Reply0

Randomroger

Taking the RE out of FIRE

1. Investment portfolio sustainability

2. No social security

3. Not being challenged can increase the chance of cognitive impairment

4. Financial independence on the other hand...

5. Own your time, set your schedule

6. Live below your means

7. Figure it out now or figure it out later...

How to Write AND Publish a Book in 30 Days

Reframing "Ladies" Products To Make Them Appealing To Men

Replacements for the iconic hotel Do Not Disturb sign

The Essential 5 Trend Following Rules For Guaranteed Success In Any Trending Market.

Have some free time? Follow these 10 steps to become a Facebook Marketplace seller and make $100 your first month.

10 Professions You Can Start at 65