Jacob discusses ERE on E-R

Questions and comments
Hoplite
Posts: 489
Joined: Sat Dec 04, 2010 1:03 am

Post by Hoplite »

In case you haven't seen it, there is a revived thread on early-retirement.org (Nords' site) discussing the book and some good back and forth on ERE as a concept as opposed to traditional views of retirement:
http://www.early-retirement.org/forums/ ... 52627.html
I think that some of the confusion results from the very old problem of "retirement" seen as some kind of stasis, an idyllic and endless loop of the same activities, exclusive of working and receiving payment, that continues unto death. Failing to provide a roadmap for such an existence (or breaking the pattern by taking a job) leaves some feeling let down.


User avatar
jennypenny
Posts: 6643
Joined: Sun Jul 03, 2011 2:20 pm
Location: Stepford USA

Post by jennypenny »

First, let me say that I really like the people on that board. They are always considerate and helpful. I think I started reading that board before this one, but I can't really remember.
BUT, even though they all aim to retire early, most seem to adhere to the traditional work, retire, die theme. They just try to get to the retirement part earlier. There are seemingly endless threads about maximizing SS benefits, pension benefits, annuities, etc. It's still a retirement that's essentially working the system instead of opting out of the system. Granted, I think if you work long enough to be close to a pension then it's foolish to retire before you qualify. I just don't like the idea that everyone is bound by pensions and SS benefits.
I guess part of it is the age of the posters over there. Maybe that's why I like reading that board--they make me feel very young (as opposed to this board where I feel VERY old sometimes :).


Dragline
Posts: 4436
Joined: Wed Aug 24, 2011 1:50 am

Post by Dragline »

Sounds like I should be reading that board, too. ;-)


Hoplite
Posts: 489
Joined: Sat Dec 04, 2010 1:03 am

Post by Hoplite »

Yeah, I get the same feeling :)
Nords has guest-posted on the ERE blog, which is how I found the site:
http://earlyretirementextreme.com/guest ... ement.html
Also posted on this forum:

viewtopic.php?t=618
Some very smart, knowlegable and helpful people on that board, but as noted, some of the advice is less relevant for extreme early retirement in my view.


jacob
Site Admin
Posts: 13168
Joined: Fri Jun 28, 2013 8:38 pm
Location: USA, Zone 5b, Koppen Dfa, Elev. 620ft, Walkscore 73
Contact:

Post by jacob »

"I think that some of the confusion results from the very old problem of "retirement" seen as some kind of stasis, an idyllic and endless loop of the same activities, exclusive of working and receiving payment, that continues unto death."
This!
(And I think the baby boomers is probably the ONLY generation for whom the concept of "Early Retirement" will really apply. The previous ones enjoyed a traditional late retirement. The next ones will be differentiated between those who work for money and those who don't---it will be FI, not ER, that determines who people spend their time.)


Seabourne
Posts: 30
Joined: Fri Jul 30, 2010 10:22 pm

Post by Seabourne »

I've been a member on that board for about 5 years, and reading it longer than that. It was a big help to me in my planning, as well as just having the sense that 1)it's being done and it's very doable and 2)I'm way the hell ahead of the pack in general, which for me helps find what I consider a comfortable balance between me-now and me-future and not feeling that I should be pushing just a little bit harder and tightening things up just a little bit more, and could probably live on just rice a beans for a couple of years and shave 3 months off my retirement date...
There is, however, a major age gap, and it shows at times. Take a look at the age surveys and it jumps out. I'm under 35. Most of the people on that board are roughly my parents age or older. That is OK - while we are thinking about this stuff now, there aren't a lot of people our age who are, so if you want to have an interesting/informed conversation about these topics, you're going to have to bias older.
Jacob - I don't think that I agree about the baby boomers being the only generation that will have ER - I think that (for a reasonable period of future) that the professional class will continue to have that option with reasonable planning, but you are going to see a huge divergence in opportunity between people whose jobs can be substantially replaced either remotely or via logical breakdown to systems that can be operated by unskilled labor.


jacob
Site Admin
Posts: 13168
Joined: Fri Jun 28, 2013 8:38 pm
Location: USA, Zone 5b, Koppen Dfa, Elev. 620ft, Walkscore 73
Contact:

Post by jacob »

I dunno, I'm still concerned about the World3 model showing systemic collapse around 2020-2030. That should be the end of consumerism. This means that the DIY aspect of ERE will become important. Real returns in the financial markets will simply go negative.
However unlike my past doomer self, I think the world will adapt much quicker. I just saw the second article in under two weeks (from two different countries and two different demographics) about how people are shunning cars because gas has gotten too expensive. [The one thing I wouldn't want to do is to get stuck with a house in suburbia. That's ultimately going to be like dotcom stock from the year 2000.]


Seabourne
Posts: 30
Joined: Fri Jul 30, 2010 10:22 pm

Post by Seabourne »

alright, so the midpoint of that is 2025, or 13 years out. While the kids of folks our age might be screwed, you managed financial independence in 5 years. I've passed baseline, and I'm increasing to where I'd like my comfort level of lifestyle to be, and I've been working for about 9 of the last 10 years (excluding the 9 months I took off sailing). That leaves a reasonable margin for people to get their gear together and get independent still, even on a moderate salary. We're looking to hire 5 people in my group in the next 9 months, and our fresh-faced new grads make about $56k. I still think that it's doable for people right now, but I haven't looked ahead enough to project past the next 5 years or so.


secretwealth
Posts: 1948
Joined: Mon Jun 27, 2011 3:31 am

Post by secretwealth »

The last decade showed a growing preference for urbanization. The word "gentrified" hardly existed before 1975: http://books.google.com/ngrams/graph?co ... moothing=3
From 1990 to 2012, you see the word increasing in popularity. More telling is the explosive growth of the term "urban loft": http://books.google.com/ngrams/graph?co ... moothing=3
It seems abundantly clear that a preference for urban housing and urban living grew in the past 10-20 years. Last decade, that preference was fueled by Gen X rebellion against the American Dream and suburban life.
I think in this decade we will see that preference grow as Millennials can't afford gas. I agree with Jacob that suburban housing is a foolish investment. That's why I bought a tiny (and I mean tiny) sliver of Manhattan.


palmera
Posts: 267
Joined: Thu Aug 25, 2011 8:16 pm
Contact:

Post by palmera »

^same.


mikeBOS
Posts: 569
Joined: Sat Nov 13, 2010 6:46 am
Contact:

Post by mikeBOS »

Small and rural communities existed before the automobile.
I agree the idea of "bedroom communities" (the ones w/o commuter trains anyway), where tens of thousands of people commute 10-40 miles into the city daily for work, will turn to ghettos. But there are small towns and small cities all over the place that are well laid out where people can walk to the schools, grocery store, post office, hardware store, drug store, restaurants, etc.
Maybe the bedroom communities could save themselves if they allowed for some radical rezoning.


Seabourne
Posts: 30
Joined: Fri Jul 30, 2010 10:22 pm

Post by Seabourne »

I'm a fan of diversified investment - I own a small condo a block from the largest freshwater body of water, in a city in the heart of food-growing country with cold winters (global warming would likely extend growing season as Kentucky et al fry), and Chicago is the major rail transit hub in the midwest.
I don't own a car, but I have a girlfriend with one who also has an 80 acre farm in her family, and I'm about 2 hr drive from my brother with 150 head of cattle and a cheese making dairy farm.
I think that I probably need a sailboat, a container garden, and a motorcycle to expand my "world goes to hell" flexibility, but moving in the right direction. I have my captains license, but really ought to learn to ride a motorcycle I suppose...
EDIT: reading that, it sounds a bit like bragging, but it's partly tongue-in-cheek, though they are all thoughts and discussions that I've had. I agree with the above that urban growth is likely to continue, and I suspect that the hard time new grads are having now is going to exacerbate that trend as they get into scarcity habits and pursue network efficiencies for work and living. Rural land can support you, but it's HARD to produce savings, cash or work-free production there.


George the original one
Posts: 5366
Joined: Wed Jul 28, 2010 3:28 am
Location: Wettest corner of Orygun

Post by George the original one »

Commuter trains will be the way bedroom communities will thrive in a future with few automobiles. Chicago has torn up a lot of the tracks as industrial rail traffic declined in the past 50 years, but it is still one of the best examples of how the rail systems work.
I personally don't think the automobile will go away. It may be a very different animal in the future, but society all over the world truly loves the travel independence it brings.


Seabourne
Posts: 30
Joined: Fri Jul 30, 2010 10:22 pm

Post by Seabourne »

look up the CREATE project in Chicago for the modernization of freight and passenger rail in Chicago. Major project to get some of the bottleneck that's evolved straightened out. I agree about commuter trains - in Chicago Metra sustains a huge number of suburban workers, but almost all have cars because the rest of life is easier with the travel ability. They do, however, add an enormous ability to the city to aggregate labor/creativity/productivity while dispersing actual residence further out and avoiding some of the nasty real estate prices you see in badly space restricted environments (NYC, Hong Kong, SF, etc.)


jacob
Site Admin
Posts: 13168
Joined: Fri Jun 28, 2013 8:38 pm
Location: USA, Zone 5b, Koppen Dfa, Elev. 620ft, Walkscore 73
Contact:

Post by jacob »

It's not just transportation. It's 3000sqft homes with bad insulation and poor construction quality paid for by two person households who can barely find one job to hold everything up when the real costs of energy and food [what CPI now leaves out] have gone up substantially.
The systemic problem is a combination of running short on resources simultaneously with the costs of pollution being too high. The 8-9 billion people population will act to increase the pressure.
I still think transportation, being a soft demand in the long run as the smart people can relocate to avoid it, will be the first good to be sacrificed. Travel will become a luxury again, as it once was.


jacob
Site Admin
Posts: 13168
Joined: Fri Jun 28, 2013 8:38 pm
Location: USA, Zone 5b, Koppen Dfa, Elev. 620ft, Walkscore 73
Contact:

Post by jacob »

My initial point with ER being a one-generation phenomena was that since industrialized consumerism will be severely reduced starting 10-20 years from now, the idea that one generation can simply save up money and then have the next generation provide investment income to allow a continuation of standard consumerism will be null and void.
Effectively, there will be a lot of money (from all our savings and investments) chasing much fewer goods from the reduced production.
It's possible that this adjustment will happen faster than we can perceive it as such. It may already be happening; noting that the nominal interest rates are close to zero and the real interest rates likely negative.
[Since governments can so easily manipulate the nominal numbers, it's hard to predict how the numbers will look. It's pretty easy to foretell what the real economy will do though.]


secretwealth
Posts: 1948
Joined: Mon Jun 27, 2011 3:31 am

Post by secretwealth »

Jacob hit the nail on the head.
I also think there is a cultural issue to be considered--urban spaces allow for greater human interaction and social connectivity in the real world, which will become increasingly desirable as social media makes people feel disconnected and alienated. Likewise, the suburb was successful in the mid-twentieth century because everyone was reading the same newspapers and watching the same t.v. shows. It didn't really matter that much where in America you lived--the major differences were architectural style and climate.
As culture gets more fragmented, I think we're going to see communities develop in physical spaces where they can interact politically, culturally, ideologically, and philosophically. You've already seen this in San Francisco, Seattle, Portland, and Brooklyn. I think this is going to become a more common phenomenon, especially if work becomes more location independent.


User avatar
jennypenny
Posts: 6643
Joined: Sun Jul 03, 2011 2:20 pm
Location: Stepford USA

Post by jennypenny »

@secretwealth--"urban spaces allow for greater human interaction and social connectivity in the real world,"

You say that like it's a good thing :P. I agree that many (most?) will be driven toward urban living. The rest of us will go the Ted Nugent route.
Stepford is a bedroom community built around an old town from the 1600's along a waterway. I think it might survive by going back to it's roots. It's the same with a lot of the communities up near mikeBOS. Many established towns in the northeast have been around for at least 200 years (sorry Europeans--that's OLD for us) pre-dating cars or trains. The communities completely fabricated out of farmland or desert are the ones in trouble.


OurLifeInc.
Posts: 56
Joined: Tue Aug 10, 2010 2:08 am
Contact:

Post by OurLifeInc. »

So if ER is a one generation phenomenon, what exactly will FI look like? I'm just thinking of all of us here, who are either ER(E) or on our way. All of that capital just sitting there...how will we maintain FI if Financial Markets aren't returning anything? My guess is investing locally...who wrote the book on that a year ago or so? FI was all about doing it yourself and investing in real businesses locally. I see many companies surviving, but as Jacob said, at much lower production....


secretwealth
Posts: 1948
Joined: Mon Jun 27, 2011 3:31 am

Post by secretwealth »

I wish I could invest in the local community and get a good ROI. Sadly, I have no idea how to do that and I'm really too timid to try. If I could put 5% of my capital in a local business--or better yet, a diversified portfolio of local businesses--I'd do it.


Post Reply