What is your FIRE number? Your expected FIRE expenses?

Ask your investment, budget, and other money related questions here
BRUTE
Posts: 3797
Joined: Sat Dec 26, 2015 5:20 pm

Re: What is your FIRE number? Your expected FIRE expenses?

Post by BRUTE »

enigmaT120 wrote:You have to love badassity. Great word and attitude.
maybe subjective. brute has always found the whole MMM persona, and especially the b-word, extremely contrived and annoying. there's also a certain smugness to the b-word that's just inappropriate at that wheaton scale.

steveo73
Posts: 1733
Joined: Sat Jul 06, 2013 6:52 pm

Re: What is your FIRE number? Your expected FIRE expenses?

Post by steveo73 »

I just want to state that I love MMM. He also writes really really well.

BRUTE
Posts: 3797
Joined: Sat Dec 26, 2015 5:20 pm

Re: What is your FIRE number? Your expected FIRE expenses?

Post by BRUTE »

steveo73 wrote:I just want to state that I love MMM. He also writes really really well.
not an original joke, but let's rephrase it a bit: he's been observed typing.

The Old Man
Posts: 503
Joined: Sat Jun 30, 2012 5:55 pm

Re: What is your FIRE number? Your expected FIRE expenses?

Post by The Old Man »

I can't take MMM seriously. He does not include the implied income value of a paid-up $400,000 house in his annual expenses. He should at least consider the foregone income of 400K worth of 30-year government bonds as equivalent. His $24K annual expenses would then increase by an additional $16K. This is important as housing expenses are a huge part of my annual expenses and for most people as well. An adjusted $40K annual expenses is by no stretch of the imagination a major achievement in frugality or economical living. Many many people in the USA live on this income level.

steveo73
Posts: 1733
Joined: Sat Jul 06, 2013 6:52 pm

Re: What is your FIRE number? Your expected FIRE expenses?

Post by steveo73 »

General Snoopy wrote:I can't take MMM seriously. He does not include the implied income value of a paid-up $400,000 house in his annual expenses. He should at least consider the foregone income of 400K worth of 30-year government bonds as equivalent. His $24K annual expenses would then increase by an additional $16K. This is important as housing expenses are a huge part of my annual expenses and for most people as well. An adjusted $40K annual expenses is by no stretch of the imagination a major achievement in frugality or economical living. Many many people in the USA live on this income level.
I disagree with this on a couple of levels. Firstly he always mentions this. Secondly I own a house and I don't consider the imputed rent when considering my expenses. You just don't do that.

I also think MMM doesn't state that he is being ultra-frugal. He just stops the crazy type spending. I think that is all that you have to do or at least it's all that I have to do. I have 3 kids. My 13 yo son today went to a theme park. I have to pay for this stuff. I don't have to go overboard but I don't believe I can tell him not to go to these types of events. I don't though have to compete with his friends that spend 15-20k per year per child on private school expenses or go on overseas holidays every year.

User avatar
Seppia
Posts: 2016
Joined: Tue Aug 30, 2016 9:34 am
Location: South Florida

Re: What is your FIRE number? Your expected FIRE expenses?

Post by Seppia »

I think the overall net contribution of MMM is hugely positive.
He writes in a catchy, approachable way and is great in planting the seed.
Before discovering MMM, I was saving around 30% of my take home pay and I thought I was way above what i should have been doing.
I had been patting myself on the back.
Without him, I would never have discovered Jacob's book and I would still be splurging money in completely unnecessary ways.
I really don't care if he makes a few bucks on the side, even though I admire Jacob's more independent attitude.

Using a musical comparison, Jacob is Minor Threat and MMM is Pearl Jam: I know which one I appreciate more today, but without PJ many young people would not have gotten into Rock N Roll at all.

jacob
Site Admin
Posts: 15907
Joined: Fri Jun 28, 2013 8:38 pm
Location: USA, Zone 5b, Koppen Dfa, Elev. 620ft, Walkscore 77
Contact:

Re: What is your FIRE number? Your expected FIRE expenses?

Post by jacob »

General Snoopy wrote:I can't take MMM seriously. He does not include the implied income value of a paid-up $400,000 house in his annual expenses.
I don't include it either. Neither does JD Roth (GRS, now moneyboss). There can be good or bad reasons for not doing it. A good part of the first half of the this thread (see around 100 posts from the top or page 4 if you're setup to show 25 posts/page) was whether to include it and if so how.

CS
Posts: 709
Joined: Sat Dec 29, 2012 10:24 pm

Re: What is your FIRE number? Your expected FIRE expenses?

Post by CS »

MMM also sold that 400k house a while back (at least a year or more ago) and now has a much smaller 200k house that he has fixed up with lots of labor, plus appliances off craig's list. The cost of all that extra space, and tied up capital, were given as reasons why.

jacob
Site Admin
Posts: 15907
Joined: Fri Jun 28, 2013 8:38 pm
Location: USA, Zone 5b, Koppen Dfa, Elev. 620ft, Walkscore 77
Contact:

Re: What is your FIRE number? Your expected FIRE expenses?

Post by jacob »

I believe I can explain many of the differences of individual impressions and perceptions of MMM in this thread with a controversial table ;-)

Recall the general observation that
* Anyone who is 1-2 levels further than yourself is inspirational
* Anyone who is within +/- 1 levels of yourself is relatable
* Anyone who is 1-2 levels behind yourself "could obviously do better"
* Anyone who is more than 3 levels ahead of you is completely unrealistic
* Anyone who is more than 3 levels behind you is a slow train wreck in one way or another

There you go! You're welcome :mrgreen:

In analogy space, ERE served to carve a trail into the side of Mt Fuji that went all the way to the top. A few monks would occasionally do the hard/unsupported 20km trek from the base of the mountain to the top as part of some spiritual journey but they were generally considered crazy by the villagers at the foot of the mountain. MMM is the one who made the mountain cool and established a paved road and bus trips that went half way up the mountain to the impressive "village" (hotel, restaurant, souvenir shop) that has been established at the 5th station. This meant that the Fuji was no longer for a few people. Going half way up by bus and getting a idea of the view means many more people wanting to climb the rest of the way. In particular, walking all the way to the top is no longer considered to be as crazy as it once was. Before MMM appeared in 2011, blog readers would have to make the leap from 4 to 7 without intermediary stepping stones. That wasn't easy.

Image

denise
Posts: 48
Joined: Sat Oct 12, 2013 11:53 pm
Location: Georgia
Contact:

Re: What is your FIRE number? Your expected FIRE expenses?

Post by denise »

Just thought I'd chime in. I've been using Republic Wireless since October 2013, and have nothing but great reviews of it. I still use the same old phone, Moto G 1st generation, and plan to keep it for at least another year before upgrading to a new phone due to lack of storage. I usually pay $14.50-$17.50/month.

It'll take 11 years, because I have student loans to pay off, but I expect to reach FIRE in 2028, with $500k. I can't imagine spending more than $15k/year, I currently still live like I'm in grad school anyway, but first I want to earn my PhD in robotics or something after I 'retire', if I can get it for free.

Noedig
Posts: 191
Joined: Tue Aug 26, 2014 10:15 pm

Re: What is your FIRE number? Your expected FIRE expenses?

Post by Noedig »

We're on the level 4 "Embracing Efficiency" part of the Wheaton scale. Thanks for posting that as an image, Jacob.

Savings just went over 1m this week: however is gross of low interest debt so not there yet. Hence going back to work.

Retirement expenses have many variables due to personal circumstances. Hence uncertain. Hence going back to work.

Think once have 1.5m will reconsider and hopefully bail out of work again.

User avatar
Bankai
Posts: 986
Joined: Fri Jul 25, 2014 5:28 am

Re: What is your FIRE number? Your expected FIRE expenses?

Post by Bankai »

Plan A is £100k and paid off flat.

Plan B is just £100k.

Current expenses are £5-6k pa, expected ERE expenses below £5k or below £4k with paid off flat. I expect to still be making some money in various ways.

TopHatFox
Posts: 2322
Joined: Thu Oct 17, 2013 10:07 pm
Location: FL; 25

Re: What is your FIRE number? Your expected FIRE expenses?

Post by TopHatFox »

Noedig wrote: Savings just went over 1m this week

I'd like to nonchalantly pass the 1m line in a few years time too. Nice job. :)

Stahlmann
Posts: 1121
Joined: Fri Sep 02, 2016 6:05 pm

Re: What is your FIRE number? Your expected FIRE expenses?

Post by Stahlmann »

General Snoopy wrote:I can't take MMM seriously. He does not include the implied income value of a paid-up $400,000 house in his annual expenses. He should at least consider the foregone income of 400K worth of 30-year government bonds as equivalent. His $24K annual expenses would then increase by an additional $16K. This is important as housing expenses are a huge part of my annual expenses and for most people as well. An adjusted $40K annual expenses is by no stretch of the imagination a major achievement in frugality or economical living. Many many people in the USA live on this income level.
How was he able to ,,stash his cash"?
I mean how [/where in terms of expenditures] he lived during his saving part of life.

NPV
Posts: 188
Joined: Fri Dec 06, 2013 9:41 am

Re: What is your FIRE number? Your expected FIRE expenses?

Post by NPV »

jacob wrote:
Sat Oct 01, 2016 10:39 am
I'm mostly concerned about liability and tort-reform. Umbrella was added for that reason since our NW began to exceed the liability on other insurances.
Jacob,

Isn't it possible in the US for a court to award to the plaintiff more than the net worth of the defendant? E.g., defendant has net worth of X and umbrella insurance of X. Court awards plaintiff 2X hence both are gone.

In addition, umbrella insurance can even increase one's attractiveness as a lawsuit target as there is now a larger pool of money available for a payout.

Wouldn't something like storing most of your net worth in an offshore trust or other asset protection vehicle be a more robust solution?

Fish
Posts: 570
Joined: Sun Jun 12, 2016 9:09 am

Re: What is your FIRE number? Your expected FIRE expenses?

Post by Fish »

The legendary thread is revived! :D

@NPV - Depending on your insurance limits, a plaintiff may be convinced that accepting a settlement for the liability+umbrella amount may be preferable to the uncertainty of a trial. Furthermore, some assets in your NW are shielded from creditors even in bankruptcy, reducing the additional amount that can be awarded by going to trial. See this post on Bogleheads: https://www.bogleheads.org/forum/viewto ... 6#p2916036

An answer to the question about other asset protection methods was hinted at on page 9 of this thread, in the quote below. At some point, the increase in perceived safety simply isn't worth the effort. Think of this in terms of expected value - you are insuring yourself against events that are ever more improbable. At some point the effort-reward ratio is such that you will simply accept the risk and move on with life. (@jacob - Let us know if you would prefer speaking for yourself instead of us quoting things you have written in the past. I've found you to be remarkably consistent with your views and attitudes across time.)
jacob wrote:
Sun Oct 02, 2016 9:52 pm
I think working for the sake of more money (or perceived safety) gets really hard to justify past 1% SWR. At that point it's not a question of whether there's enough anymore. It becomes a black swan question which can no longer be hedged with additional money.
Edit: Fixed link
Last edited by Fish on Thu Aug 10, 2017 2:46 am, edited 1 time in total.

NPV
Posts: 188
Joined: Fri Dec 06, 2013 9:41 am

Re: What is your FIRE number? Your expected FIRE expenses?

Post by NPV »

Thanks Fish. The link unfortunately does not open.

My main purpose behind this question is to see if there are additional considerations behind a choice which I have not thought about and which would change my view on which choice is preferable.

wolf
Posts: 1102
Joined: Fri Jan 06, 2017 5:09 pm
Location: Germany

Re: What is your FIRE number? Your expected FIRE expenses?

Post by wolf »

Initially my FIRE number was 350k€. That was 2016, when I started ERE.
Then it became 420k€, due to contingecy planning, margin of safety, conservative investment style.
Nowadays I would say that my FIRE number is lower, due to semi-ERE plans and mindset (shift).
My FIRE expenses would be accordingly lower.

2Birds1Stone
Posts: 1596
Joined: Thu Nov 19, 2015 11:20 am
Location: Earth

Re: What is your FIRE number? Your expected FIRE expenses?

Post by 2Birds1Stone »

This thread is chock full o' nuggets of wisdom and excellent debate. The discussion on E-ER vs. ERE has triggered an existential crisis of sorts, at least in respect to figuring out a path that will be most rewarding while gaining a Wheaton level.

Thinking has changed much like yours, wolf.

2011 - Second full year of career work, earning <$40k/yr and thinking I would need $1m to retire (didn't know about 4% rule), at age 50+
2012 - Discovered FIRE and more specifically MMM, shortly after ERE blog. Thought Jacob was a nutjob and anyone living in an RV/boat/Tinyhouse was pretty much crazy, couldn't imagine living carless, or anything that was prescribed by the ERE crowd. 4% math introduced. Now thinking I would need $900k and could get there by 50.
2014 - get more involved in the FIRE community, figure out I can live ultra luxuriously on $24k/yr and the "number" is now $600k with a goal of age 35
2016 - reread ERE book, and get inspired to think more in terms of flows, spending reassessed and dropped to ~$20k/yr
2018 - Start getting burnt out from full time work (60+ hours a week in my case), cut spending to $18k/yr, while planning to pull plug in early 2020 with ~$500k invested.
Today - questioning everything thanks to these great discussions and unique perspectives.

prognastat
Posts: 991
Joined: Fri May 04, 2018 8:30 pm
Location: Texas
Contact:

Re: What is your FIRE number? Your expected FIRE expenses?

Post by prognastat »

Now that I'm heading to divorce and as such need to change plans I vacillate between having enough to cover my own costs only and then FIREing or gathering enough to FIRE a household in case I find a new partner at some point and start a family.

With the first option I can FIRE sooner, however with the latter I'm more prepared in case I do start a household without either me or my hypothetical partner having to work. This would about double the amount necessary and in turn drastically increase the time necessary to reach this.

Post Reply