The dangers of low expense lifestyles?
Re: The dangers of low expense lifestyles?
My brother tried to talk me into going in on a Grand Canyon helicopter tour with him while we were in Arizona this spring
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Re: The dangers of low expense lifestyles?
I know quite a few people who were unable to resume 9 to 5 after an illness or trauma. Maybe I need to reconsider my group of friends. Way too reckless risk takers!
Re: The dangers of low expense lifestyles?
that could of course happen, regardless of pursuit of 9 to 5 or ERE lifestyle. at that point, having more savings is probably better all else being equal.
the interesting question would be, can choosing ERE cause a later inability to go back into 9 to 5, if more money was desired later?
it's not that upon FIRE'ing, humans sign a contract forbidding them to ever work 9 to 5 again. the original podcast treats it a bit like that. but it could of course get harder as a side effect of FIRE'ing, which would be interesting to hear about.
the interesting question would be, can choosing ERE cause a later inability to go back into 9 to 5, if more money was desired later?
it's not that upon FIRE'ing, humans sign a contract forbidding them to ever work 9 to 5 again. the original podcast treats it a bit like that. but it could of course get harder as a side effect of FIRE'ing, which would be interesting to hear about.
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Re: The dangers of low expense lifestyles?
@ Brute: A worthwhile question. It is instructive to look at the experiences of women taking time out to have children, people taking a "career gap" to go travel, and of people sidelined due to illness or industry restructure. The reentry process is not easy and the longer one is out of the work force the harder it is to reenter. Please note, these observations even hold for low-level jobs. If one wishes to retain the option to reenter, then there needs to be some preplanning to smooth the way - it doesn't just happen.
Re: The dangers of low expense lifestyles?
Yes, reentering the workforces is really hard, I graduated in 2010 (bad time apparently), but I was still able to get 4 or 5 interviews, and then I started a PhD in 2012.
After quiting the Phd in 2014, I was not able to get any interview for two years, before deciding that as I had enough money and might just stop searching.
Now I changed my plan, and getting a job seems even harder.
After quiting the Phd in 2014, I was not able to get any interview for two years, before deciding that as I had enough money and might just stop searching.
Now I changed my plan, and getting a job seems even harder.
Re: The dangers of low expense lifestyles?
@Jean - I find it hard to understand how you are FI if you have been studying since before 2010. Curious how it was possible to accumulate?
Re: The dangers of low expense lifestyles?
I accumulated mostly during the phd. I saved about 60'000. I bought a house for 115'000 and I rent it for 750 a month.
Re: The dangers of low expense lifestyles?
Having cash buffer, healtier lifestyle, some usefull skills and little material need puts odds game into ERErs favour in SHTF scenario I believe.RealPerson wrote: ↑Tue Aug 08, 2017 7:35 pmOf course. But EREers have money. We are not like other 9to5ers! You cannot prepare for everything. But this is an odds game. What I got from RPF is a reminder that skating close to the edge may be too close. Maybe not all the ERE stars will line up perfectly. Creating a little buffer and improve your odds for success may be suitable for some, but maybe not you.stayhigh wrote: ↑Tue Aug 08, 2017 12:49 pmWhat is the worst thing that can happen to me? I will run out of money? Well, most 9to5ers have no money too. I'm gonna die? Everybody gonna die one day! But before all that bad things happen, I'd like to enjoy my life as much as possible - not spending my best time locked inside the office.
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Re: The dangers of low expense lifestyles?
That is true. This discussion is simply about the size of the buffer. The smaller the buffer, the less room for error or bad luck.stayhigh wrote: ↑Wed Aug 09, 2017 6:10 amHaving cash buffer, healtier lifestyle, some usefull skills and little material need puts odds game into ERErs favour in SHTF scenario I believe.RealPerson wrote: ↑Tue Aug 08, 2017 7:35 pmOf course. But EREers have money. We are not like other 9to5ers! You cannot prepare for everything. But this is an odds game. What I got from RPF is a reminder that skating close to the edge may be too close. Maybe not all the ERE stars will line up perfectly. Creating a little buffer and improve your odds for success may be suitable for some, but maybe not you.stayhigh wrote: ↑Tue Aug 08, 2017 12:49 pmWhat is the worst thing that can happen to me? I will run out of money? Well, most 9to5ers have no money too. I'm gonna die? Everybody gonna die one day! But before all that bad things happen, I'd like to enjoy my life as much as possible - not spending my best time locked inside the office.
Re: The dangers of low expense lifestyles?
brute took a bit over a year off as a career gap. then he went back to work pretty much immediately. maybe depends on the local job market. or maybe a year is not long enough to "fall out" of that bucket.General Snoopy wrote: ↑Wed Aug 09, 2017 2:50 am@ Brute: A worthwhile question. It is instructive to look at the experiences of women taking time out to have children, people taking a "career gap" to go travel, and of people sidelined due to illness or industry restructure.
Re: The dangers of low expense lifestyles?
It's hard to conceptualize how a low expense lifestyle can be "dangerous".
The one thing that is careless is blindly planning for a 25x super low expenses stash, all in VTSAX (80% of which in a 401k) and quit working without possessing any additional skill "because Trinity".
The unfortunate thing is that many MMM / FIRE wannabes seem to do just that.
The one thing that is careless is blindly planning for a 25x super low expenses stash, all in VTSAX (80% of which in a 401k) and quit working without possessing any additional skill "because Trinity".
The unfortunate thing is that many MMM / FIRE wannabes seem to do just that.
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Re: The dangers of low expense lifestyles?
I wouldn't take advice from a religious fanatic, but that's just me.
Re: The dangers of low expense lifestyles?
How could this be unfortunate? Then they will face challenges and aquire new skills as need arises along the way, enabling them to be more in charge and have way more interesting lives than elsewise.
Or do you think the RPF example of someone retiring early and then suddenly waking up 20 years later with an inbred dog with allergies and a wife with bad teeth is very common?
My guess is that lots of stuff happened during that period enabling the early retiree to handle the situation (and any other unforsen situation) just fine.
Re: The dangers of low expense lifestyles?
On portfolio management, I just read The Intelligent Asset Allocator by Bernstein. My portfolio with two total market funds and 100% equity stands to shame. lol
Will need to update.
It seems the hardest part about FIRE is raising the capital. Investing in a well-diversified, low-fee portfolio takes much less time. It takes a professional money manager maybe an hour to make a shit portfolio into a suited one. Then, even with 6-12 asset classes in retirement and taxable accounts, rebalancing once a year doesn't take very much time either. This accumulation difficulty is likely what makes low-expense FIRE tempting for many.
Will need to update.
It seems the hardest part about FIRE is raising the capital. Investing in a well-diversified, low-fee portfolio takes much less time. It takes a professional money manager maybe an hour to make a shit portfolio into a suited one. Then, even with 6-12 asset classes in retirement and taxable accounts, rebalancing once a year doesn't take very much time either. This accumulation difficulty is likely what makes low-expense FIRE tempting for many.
Re: The dangers of low expense lifestyles?
Don't believe the hype -- its the saving rate that matters the most, not getting wound up about particular portfolios. See https://seekingalpha.com/article/405978 ... -investing
Leave your funds alone and keep reading/studying until you find something that you are willing to stick with for a decade or more AND feel that you do not want to do any more research. One of the worst things you could do is changing investment strategies every time you read another book about investing.
Leave your funds alone and keep reading/studying until you find something that you are willing to stick with for a decade or more AND feel that you do not want to do any more research. One of the worst things you could do is changing investment strategies every time you read another book about investing.
Re: The dangers of low expense lifestyles?
I didn't listen because I usually don't like audio or video on the internet, but does he seriously suggest a lean retirement is unsafe because you can't get $15 martinis or helicopter rides and you'll crave them when you're an old person?
I'm still working, but I will NEVER buy a $15 (inflation-adjusted) martini. I'd rather be sober.
I'm still working, but I will NEVER buy a $15 (inflation-adjusted) martini. I'd rather be sober.
Re: The dangers of low expense lifestyles?
maybe this is actually a necessary phase in maturation as an investor. it seems to happen to pretty much every human that starts out investing, until they've heard most ideas and no new books gives them sudden confidence in something completely different any more. kind of like human teenagers are "in love" with a different human teenager every weekend.
Re: The dangers of low expense lifestyles?
yes he does. his particular examples likely won't strike gold with any humans but himself, but brute thinks there's something to be said for increasing future flexibility. individuals change over time. "locking in" a certain minimalist lifestyle could be problematic when desires change in the future. the argument brute doesn't really buy is that it is even possible to "lock in" and then become unable to ever make any more money, unless tragedy strikes (and tragedy can strike 9 to 5ers just as well). in fact, brute thinks that ERE especially, but MMM also, would make the average 9 to 5er MORE flexible in the future.
Re: The dangers of low expense lifestyles?
wow, that puts everything in perspective a bit. brute continuously feels like he's wasting tons of money and not saving very much, but maybe only because he spends too much time on this forum, where a 50% SR is smiled at politely. 43% of Americans don't have $400 for an emergency. even among six-figure income earners. wow.Dragline wrote: ↑Fri Aug 11, 2017 9:04 amDon't believe the hype -- its the saving rate that matters the most, not getting wound up about particular portfolios. See https://seekingalpha.com/article/405978 ... -investing
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Re: The dangers of low expense lifestyles?
Have to agree with the excerpt you quoted from Dragline. The advice I always give younger people when they ask (lifted from Dave Ramsey) is the best thing you can do for yourself financially is learn to say, "No," to yourself. Just by sheer luck I managed to avoid the worst of the chase-the-next-strategy pitfall (my first 15 or so years only had 2-3 choices in 401k, and after that was mostly too lazy/preoccupied with life to fiddle with it) BRUTE could go visit bogleheads.org on occasion where they believe someone like me is in need of intervention since only the psychologically disturbed would ruin their life by consigning themselves to the wretched scrooge-like misery inherent to a savings rate higher than 20%. That helps mitigate feeling like a slacker around here.BRUTE wrote: ↑Fri Aug 11, 2017 3:31 pmwow, that puts everything in perspective a bit. brute continuously feels like he's wasting tons of money and not saving very much, but maybe only because he spends too much time on this forum, where a 50% SR is smiled at politely. 43% of Americans don't have $400 for an emergency. even among six-figure income earners. wow.Dragline wrote: ↑Fri Aug 11, 2017 9:04 amDon't believe the hype -- its the saving rate that matters the most, not getting wound up about particular portfolios. See https://seekingalpha.com/article/405978 ... -investing