Eureka wrote: ↑Fri Aug 11, 2017 3:54 am
Seppia wrote: ↑Thu Aug 10, 2017 12:24 pm
The unfortunate thing is that many MMM / FIRE wannabes seem to do just that.
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.
Of course, the world is full of opportunities and in civilized market based economies it's fairly easy to go back to work and find a way to survive.
I think optimism is very positive in general, but if you're smart enough to save 2/3 of what you make, why would you want to be overly optimistic?
I think the current mindset of
"I don't care that valuations of USA equities are high, the stock market always goes up, so I'll just pull the plug and go live in Ecuador" + the blind fate in the 4% rule* is prone to potentially put some people faced to some tough reality checks in a relatively short time frame.
It's a LOT harder after 4-5 years of early retirement to just go back to work and make the same 6 figures you were making before. Society is not that used to people quitting work for that long.
Maybe in some tech jobs (at least today, who knows in the future), but definitely not in most jobs.
Or maybe stocks have reached a "permanently high plateau" and everybody will be fine (didn't work out super great the last time thought that was the case though).
*there's people working off of the 4% rule in Europe, without considering the much higher taxation and many other factors.
In Italy, for example, you're taxed a fix 0.2% of you invested assets every year no matter how they did, plus capital gain and dividends are taxed 26% (no matter how much you're making this way, or if it's long/short term).
A year ago I tried to talk a fellow Italian out of keep stashing money (euros) in an S&P500 fund, when the dollar was at a historic high, and USA valuations had one of the largest valuation gaps VS euro stock in history.
See any danger here?