What is your FIRE number? Your expected FIRE expenses?

[TopHatFox]

@Simple Life, what will you do with 2 mil that you can't get with 1? I have trouble asking myself what I'd do with 1 mil that I can't do w/ 500k or even 250k. My answer is usually something along the lines of a buffer if the financial world crumbles, but money is only so useful then anyway.

I'm convinced that money is simply a pixel/paper/what-have-you to let you live the way you want; once we have enough to do that and a buffer for reasonable market hurdles or sporadic life emergencies, there's less to no point in continuing to milk for YEARS just because we can. That time might be better spent doing something else. 1 mil compared to 700k does sound nice and round though!

[bryan]

I have a wide spectrum of FIRE numbers..

I have always seemed to prefer saving money, starting with coin collecting at a very young age, and the tendency even popping up in videogames (I was always the type that maximized income/resource generation and tech tree research before actually building any sort of army, not an optimal strategy, usually, by the way). I think I had the revelation of "not needing to work" late in high school or in university. So all savings were earmarked for investing (even while making pizza, I had a Roth IRA). I just ran across on-boarding papers from my decently paid internship before I was even 21 and I was electing 21% of my income to go to the 401k.

I never really had too much spending desire other than computers or, when I was 16, cars and audio equipment. I've pretty much kept that low spending desire since then (other than starting to drink alcohol and paying to listen to live music later in life). The desire, at least in earnest since my first white collar work experience, was always to avoid having a required 9-5, much preferring flexibility or doing my own thing.

So to get to the point.. my spreadsheets forecast a lot of different scenarios.. X number of kids.. marriage.. bare-bones vs. (relatively) luxurious lifestyles.. healthcare.. leaving behind some sort of wealth to the next generation. You'll notice they are actually skewed into more expensive outcomes, as it doesn't make sense to me to forecast less probable events like moving to Laos. Pretty boring stuff but it causes a wide spread in the FIRE number.

I've never spent more than $24k/yr, last year was $16k (and it was 52% on "Food & Dining" !!!, generally living a pretty lavish, imo, lifestyle, mostly in San Francisco). The numbers range from $400k to $1.3M. But honestly, the next time I have a life inflection point (I let momentum carry me for the most part, just steering into the right direction. There are the occasional big events that really change the momentum.) I will re-evaluate my options. I wouldn't be opposed to a semi-retirement situation, etc.

I am capable of <$400k if I moved away from SF.. it's just a question of what I (and probable wife) want. Note again I am pretty conservative (see videogame comment). I should at least hit $400k in the next 12 months.

edit: what I haven't considered that much is probable wife's negative NW. I would expect to do similar to what @jacob did if I got married. Though, we would be a team I'm not so sure I would just want to sit around in one spot while the wife is at work.

[bryan]

@Simple Life, what will you do with 2 mil that you can't get with 1? I have trouble asking myself what I'd do with 1 mil that I can't do w/ 500k or even 250k.

Personally, not that much in terms of "living" costs. The difference would be in the capital you could possibly deploy for various causes, like investing in something local or something you believe in. You could of course invest in other ways, but money talks and having that money yourself is useful.

[SimpleLife]

@Simple Life, what will you do with 2 mil that you can't get with 1? I have trouble asking myself what I'd do with 1 mil that I can't do w/ 500k or even 250k. My answer is usually something along the lines of a buffer if the financial world crumbles, but money is only so useful then anyway.

I'm convinced that money is simply a pixel/paper/what-have-you to let you live the way you want; once we have enough to do that and a buffer for reasonable market hurdles or sporadic life emergencies, there's less to no point in continuing to milk for YEARS just because we can. That time might be better spent doing something else. 1 mil compared to 700k does sound nice and round though!

Sure, I don't HAVE to get more money, but let's face it, more money = more options and more power. For me, I worked to get to the high income I have now. I figure get while the getting is good. That extra money invested will essentially replace my current 154K salary and then some. I'll still live frugal and save then reinvest the majority of it and keep the snowball going. I might even keep working at that point, who knows. Something about seeing several hundred thousand dollars a year income while living off 12-15K seems enticing to me.

Plus I'll only need to make the money last about 40 years by the time I retire at 40. Between that much money and social security, being single (not married) with no kids, I don't think I'll have to worry about money again.

At this point, I've learned how to play the corporate game and plan on creating wealth, not just retiring early off a 200K nest egg. A lot can go wrong with a 200K nest egg as Jacob described earlier with the sequence of returns risk. One bad health or legal issue and you are done, back to work. Plus, with this much money, I can live a posh lifestyle if I wanted to, sports cars and all. But just living in a paid off house and not having to "worry about it" anymore is all I need. When you grew up poor, you don't need a lot to be happy. For me living in a paid off house is living like a King considering I grew up in a mobile home. But I'm not going to say no to millions of dollars extra money. Not going to let toxic people at work keep me from getting my money...Not going to quit because of the drama. Instead I let them hate and watch my money pile up.

[GandK]

Our numbers are a moving target because we have kids still at home, plus child support in the calculation. This effectively creates a pot we'd need today that decreases every month until they're grown, alongside the amount we need to grow for the full retirement money for ourselves. However, assuming a paid off residence and continued good health, I estimate we'd want about $25k a year for living expenses plus an additional $10k a year for travel/experience in order to both live comfortably and make steady progress on our bucket list items.

[EdithKeeler]

My number is pretty much what I have currently in my retirement fund, but with my house paid off. I'd also like to have a little bit more built up outside the retirement accounts, mostly for emergencies and things, plus a new car when I finally really need one. The "number" I'm shooting for is 55, which is the age I can access my retirement account without penalty, and the age when I can start drawing my pension at work, which is not a ton--probably about $400 a month or so by then. I'll also have quite a bit more paid down on the mortgage of my rental house, and will add extra income to my monthly income as well. Basically I've calculated I really "need" $2500 a month, but I'd like a little more as buffer. My various sources should actually give me a little more than that once I'm 55, and then I figure I'll find some part time gig. Right now, I'm leaning toward a small dog-walking/dog-sitting business to bring in a little spending cash.

[BRUTE]

Sure, I don't HAVE to get more money, but let's face it, more money = more options and more power. For me, I worked to get to the high income I have now. I figure get while the getting is good. That extra money invested will essentially replace my current 154K salary and then some. I'll still live frugal and save then reinvest the majority of it and keep the snowball going. I might even keep working at that point, who knows. Something about seeing several hundred thousand dollars a year income while living off 12-15K seems enticing to me.

...

Plus I'll only need to make the money last about 40 years by the time I retire at 40. Between that much money and social security, being single (not married) with no kids, I don't think I'll have to worry about money again.

154k investment income @ 4% is almost 4 million. SimpleLife is spending 12-15k per year and plans to live only to 80. this means he could spend 100k/year in retirement (with the 4 million). brute predicts SimpleLife will end up with way too much money, having wasted decades of his life to work for it. unless the job is SimpleLife's main fun in life, of course.

[jacob]

Maybe fun=meaning, just maybe, eh? ... In any case, anyone whose real return exceeds their real expense, say an SWR under 2% will probably have this exact problem sooner or later. I can tell you that the flip side of this---which has been alluded to above---is that if you're already deriving $50000 in passive income per year, you might not be inclined to engage in any kind of productive effort that pays less than that. I've already recognized some reluctance towards getting into/developing productivity that pays less than $20/hour ..

And I think that's a very bad thing because it includes an increasingly larger fraction of human activity (and thus interacting with other people).

It's similar to the blowback of education. You might find it tough to interact with people the more educated/smarter/whatever you get (not all, but some) ... ditto, ... you might find it hard to interact with the dominant human activity i.e. work the wealthier you get.

The FIRE trap here is: Too rich to care, too unconnected to engage at the next level.

[BRUTE]

exactly. so why artificially increase the limit by unnecessarily accumulating millions, when all it does is induce loneliness?

stopping earlier sounds like a great idea.

[jacob]

The stopping too early trap has also been mentioned above.

Someone will choose a lifestyle that requires above minimum annual wage but do nothing for the next 15 years only to find themselves needing to either make serious adjustments of find a way to consistently make $25k/year at age 45 at which point their resume is dated. It would work if they only needed to make $10k/year. Here the world of opportunities is quite a bit larger. But $25k/year is quite a bit smaller. The MEDIAN wage in the US is $27000/year or so!

[SimpleLife]

Maybe fun=meaning, just maybe, eh? ... In any case, anyone whose real return exceeds their real expense, say an SWR under 2% will probably have this exact problem sooner or later. I can tell you that the flip side of this---which has been alluded to above---is that if you're already deriving $50000 in passive income per year, you might not be inclined to engage in any kind of productive effort that pays less than that. I've already recognized some reluctance towards getting into/developing productivity that pays less than $20/hour ..

And I think that's a very bad thing because it includes an increasingly larger fraction of human activity (and thus interacting with other people).

It's similar to the blowback of education. You might find it tough to interact with people the more educated/smarter/whatever you get (not all, but some) ... ditto, ... you might find it hard to interact with the dominant human activity i.e. work the wealthier you get.

The FIRE trap here is: Too rich to care, too unconnected to engage at the next level.

I will say I experience some of the blow back. I find it odd going out to the store and public events or dealing with low income, non college educated and even some college educated people like a friends wife that is about 40 now and still making $13 an hour with a Masters degree she's had for well over a decade. The level of class and critical thinking skills of lower income people is astoundingly low. Some of these people are ready to start fights and do whatever at the drop of a dime. I'm thinking to myself, I have a ton of education and make more money than that person, his brother, sister, mother, father and Aunts and Uncles do COMBINED, why on Earth would I risk imprisonment teaching this inebriated fool a lesson?? Then I just remind myself that person is so dumb they can't think more than 2 minutes into the future. I know one such guy that thinks about 2 minutes into the future and he is serving essentially a life sentence in prison. The thought of visiting him and rubbing my success in his face has crossed my mind several times. I wonder how he would feel knowing I am wealthy and getting wealthier while he is rotting in prison?

[FBeyer]

I sincerely hope I will never devaluate to the point were my success is something I hold against others, rather than something I use to help those who deserve it.

[SimpleLife]

I sincerely hope I will never devaluate to the point were my success is something I hold against others, rather than something I use to help those who deserve it.

You don't know this guy, but ok, you can play angel behind your anonymous keyboard. Just remember you have no facts on the matter. I know him and what he is doing his second and probably last prison stint for...

[BRUTE]

brute sometimes experiences this in various other domains of life. the basic concept that once he's pretty high up some ladder, it's hard to connect to people far below him on that same letter. example ladders include travel, financial understanding, philosophy, food/diet, working out, reading, languages..

it's not that brute "feels above" people, it's just that there's sincerely nothing to connect about sometimes, and sometimes the very fact that brute has ascended the ladder seems to offend humans, leading to brute just shutting his mouth and nodding a lot. potential outcomes are the human disliking brute and brute feeling smug about himself, or the person thinking brute is a great listener and brute trying to accept that he can't talk about things he likes talking about because it alienates humans.

brute believes that he has the tendency to enjoy climbing ladders for the sake of climbing, thus quickly diving deeply into any random topic, and, at the same speed, alienating himself from the majority of humans.

[Chris]

The level of class and critical thinking skills of lower income people is astoundingly low.

Hey man, know your audience... there's a lot of lower-income people here on the ERE forum....

[Fish]

I see ERE as something quite different from "extremely ER" both in terms of skill-set and attitude when it comes to earning and spending. I see ERE as multidimensional and E-ER as fairly one-dimensional.

To me, FI is just backstop safety-net. It's not something I depend on. At all.

Thanks Jacob, this clears up a lot for me. This recent post on the 4% rule also helped. I’ll introduce myself later but I wanted to share the insight that resulted from contemplating these words.

There’s a very important distinction to be made between ERE and “extremely ER.” E-ER is one-dimensionally focused on attaining ER through the practical application of FI math, that is, frugality and investing. Those pursuing E-ER are likely motivated by the desire to quit working and as such try to find the shortest path. Retirement is largely nonproductive and solely supported by investment income, as attempts at self-directed value generation will likely fail with a limited skillset. Such shortcuts result in quality of life being constrained to fit within the planned SWR.

By contrast, ERE is a more deliberate and thoughtful endeavor where needs and wants are satisfied in the most appropriate and efficient way possible, using the strategies in the book. Those pursuing ERE seek to maximize quality of life, which in turn is limited only by an individual’s skill level. The value generation and income resulting from the constant acquisition and application of new skills makes financial independence a natural consequence of this lifestyle, even if it is not a goal. Because investment income is just one of several income streams, it is also more resilient.

For those like me who picked up E-ER first because it aligned with our goals and was easier to understand, there may be a huge blind spot where we can’t see the difference between E-ER and ERE. The ERE people stand out as being much more skilled, but we E-ER people still see ourselves as one of them. But those who understand ERE will certainly know the difference. I think PF-bloggers like Jacob and MMM personify ERE while many of their followers only ever get to the E-ER level of comprehension and practice.

E-ER is freedom through investments, ERE is freedom through skill. Period. What they have in common is low expenses. For someone with an ERE mindset, the function of investment income is to provide enough confidence to start relying entirely on the skills that got him to FI. Whereas if the E-ER practitioner were to be separated from his investments, he would have no choice but to get a job. That’s the difference.

[Did]

is that if you're already deriving $50000 in passive income per year, you might not be inclined to engage in any kind of productive effort that pays less than that. I've already recognized some reluctance towards getting into/developing productivity that pays less than $20/hour ..

Jeeze for me the whole point of it is to not to need to have regard to cash once you've hit genuine FI. You're off the treadmill. I understand keeping an eye open for cash when enjoying yourself (you'd be a fool not to), or even picking enjoyable hobbies with a potential eye for commercialisation if you need to, but not being productive unless it pays a certain amount sounds like the Cave to me....

[jacob]

@Fish - Nailed it!

@Did - We're not talking about the same areas of the map. Suppose there are two activities: 1) Watching TV all day. It's mildly interesting. Pays nothing. 2) Moving furniture in a warehouse for a month. Boring work. Pays $10/hour. Free exercise. Meeting new people which could lead to something else.

If $10/hour makes a difference, then option 2 will be picked (even if it is more boring than netflix) but eventually this could and likely will lead to a more interesting life. If $10/hour makes no difference, more TV it is.

Of course, there's also option 3) find another and more interesting activity than either. However, one thing that became clear to me the first time around was that 95% of human activity consists of work. It's what most people do all day. It is also a question of scale. Even at FI, some activities are better done with access to people and capital than at home. I had this argument when I went into finance. Some people thought that blogging about stocks from my kitchen table should be sufficiently satisfying. But it just doesn't compare to what's available in terms of things to do and do them with at a financial company. Compare flight simulators to real jets. No matter how FI anyone gets, nobody, but the king of SA, can afford their own Boeing 747.

My point is, thus, that too high of an FI can lead to some stagnation. Of course one can deliberately choose not to, but I definitely feel the temptation to pick option 1 ... and by 1 I don't mean just TV, but generally things that are unproductive or don't lead anywhere.

[Dragline]

Don't forget option 4: "DO BOTH." I couldn't resist . . .

[cmonkey]

@Fish, That's a great explanation of the difference between ERE and E-ER. Well done.

I think almost all people might start in the E-ER stage, but never get to the ERE phase which is alright. I can totally see the difference and I think its something that takes time to get too and maybe you never fully realize it simply due to all the potential.

I'd like to think I am moving toward ERE slowly with my public transit lifestyle, selling seeds that funds my homesteading activity and also building DIY skills that could lead to potential work/hobby later on.