The dangers of low expense lifestyles?

[TopHatFox]

https://radicalpersonalfinance.com/the- ... ojections/

RPF did a podcast on the dangers of a low expense lifestyle. Naturally, Jacob and ERE were mentioned. I disagreed on a lot of the examples, but I see the larger point.

About halfway, Joshua goes on about really expensive dog bills. It reminded me to never get a pet. He also made points on luxurious travel. It reminded how glad I am to not like luxurious travel.

Still, it would be nice to have the choice. And for that, I am okay raising 500K instead of 175K.

What are your thoughts on the podcast above?

[Dragline]

Joshua has stated elsewhere that he does not believe in early retirement, and has three kids as well as the pets. He seems to be working through a few things. YMMV, but I think your situation is completely different than his.

And I may have put the dog to sleep in his situation, although not in "Old Yeller" fashion.

My sister's choice in professions (veterinarian) has proven to be more lucrative than she expected.

[OTCW]

I listened to it a few days ago. I took away from it that circumstances change and don't get locked into early retirement via only a set savings number. Probably not what he explicitely meant, but it reinforced antifragility for me. Work longer/save more or have another part of the overall plan to make ERE more robust.

[RealPerson]

https://radicalpersonalfinance.com/the- ... ojections/

RPF did a podcast on the dangers of a low expense lifestyle. Naturally, Jacob and ERE were mentioned. I disagreed on a lot of the examples, but I see the larger point.

About halfway, Joshua goes on about really expensive dog bills. It reminded me to never get a pet. He also made points on luxurious travel. It reminded how glad I am to not like luxurious travel.

Still, it would be nice to have the choice. And for that, I am okay raising 500K instead of 175K.

What are your thoughts on the podcast above?

It is tempting to dismiss this podcast as just a listing of silly luxuries that can easily be avoided. Speaking for Jacob I would think his response is along the lines of adaptability and a Renaissance Man type of approach. But that assumes you are sane and capable. I know a healthy person who came down with a large brain tumor in their twenties, a cyclist who has brain damage from being hit by a car (he now has cognitive issues and memory loss, and is essentially disabled), a family whose child developed a serious chronic illness, etc. I even know a young guy on the internet who needs major jaw surgery . It is true that there are situations where your financial needs may greatly exceed the 4% rule, where future earnings potential is zero, and where nobody had any control over the situation to prevent it or deal with it cheaply. Some of these life saving procedures cost hundreds of thousands of dollars. Healthy eating and exercise can help prevent the usual chronic diseases, but that doesn't prevent every serious disease or serious accident.

I think that Joshua was trying to warn his listeners not to take a low cost early retirement with relatively small savings as the gospel. Being more aware of the issues he raised will hopefully help - especially younger - people think more thoroughly through these potential challenges. You could be more vulnerable than you realize. His point would have been better made by not using the excessive examples he used, such as fancy steak dinners, etc. There are plenty of legitimate, necessary and serious examples that he could have used.

I thought his use of the word "marketing" to describe the early retirement movement was interesting. When it comes to Jacob and ERE, the term advocacy may be more appropriate. I can honestly say that I have never seen Jacob market anything. Someone like MMM is earning large profits from his website. That's where the term marketing may be more suited. RPF should have differentiated there. Overall a plus for raising the issue, but a minus for his method of communicating and building his case.

[slowtraveler]

I don't understand what said dangers are from the original post.

Simply different lifestyles but danger is not knowing where to get food, water, or shelter. Low expense seems less dangerous from that perspective.

[Stahlmann]

Jacob, we have heretics in our cult!
I summon you, my leader!

Tl:dlhoa (but read responses here) - I think that he (RPF) forgot that there on ERE we speak more about strategies... Everyone can make his life more robust with our strategies... Up to some point.

For example:
Peolle who hoarded money AT LEAST will be able to pay starting/total fee of operations in USA. Rest of them will probably suffer heart attack after realising the price of the bill.

No, no, no. I don't attack 'capitalism tm' again. I mean in exchange of public health care in EU, we don't have here high savings ratio here.

So on and so on.

Will I become bonus points from 'cult' leader?

Also - producer's mentality. This untold part of ERE, maybe it's sold here. ERE isn't about being lazy (even in mainstream sense) bum who lives in RV.

I guess now my bonus points are substracted

[BRUTE]

not one of the more interesting RPF episodes. plus, ads in the middle? wtf.

the hypothetical danger, brute surmises, lies in a 20 something human deciding that he will FIRE on $175,000, too naive to realize that larger expenses will come later on, or he might change his goals in the future.

has this actually happened to any humans? it seems like a typical fear humans have w/ regards to ER, but brute hasn't heard of a case. it seems that most humans FIRE, decompress for a year or two, and then get back to working either on a similar job as before, or some other projects, often times even making money from hobbies. this is true for MMM, gocurrycracker, ROG, Dear Leader Jacob, ..

[The Old Man]

Joshua Sheats has some good podcasts, but this is not one of them. While I concur with his sentiments, his specific supporting examples are just stupid.

[Fish]

I thought this was a solved problem?

viewtopic.php?p=120055#p120055
viewtopic.php?p=127678#p127678

Audio's not my format so I haven't listened to the podcast, but I'd be surprised if there was anything not already covered by these 2 posts.

[IlliniDave]

I didn't listen to the whole podcast, but I think I got the gist of it. For someone like me his overall line of thought has validity. I value my money because I gave up my time to accumulate it, so I'm careful with it, but spending avoidance is not my life's great passion.

The are two things I've done to lower the risk of exercising FI at a lower-than-typical lifestyle spending level. The first was/is to spend years living at that level (with the means to live much higher off the hog) while collecting data so that in objectively looking at the data while setting my number I can account for many of the day-to-day "unexpected" things that can reasonably be expected to come up in the future. It's easy to dismiss those occasional things as, "not my fault" and tempting to exclude them in future planning, so for me it means marshaling discipline to let the numbers tell the story instead of my desires.

Second, I padded that number to provide wiggle room for any number of things, including a decision to increase increase spending towards more of a "normal" level. Things do change, and I want to have some room to adjust spending in both directions from my plan baseline.

[wolf]

viewtopic.php?p=120055#p120055
viewtopic.php?p=127678#p127678

Great references Fish. I haven't seen them yet and will read them. Thank you. From my first view I think the two threads cover the main topic of the podcast.
I only read un the comment section that Joshua recommends to compare your spending/income with the median of the country. Although it is only a rule of thump this could be an indication. But everyone has to know for oneself how efficient he/she spends money compared to the average.

[stayhigh]

I know a healthy person who came down with a large brain tumor in their twenties, a cyclist who has brain damage from being hit by a car (he now has cognitive issues and memory loss, and is essentially disabled), a family whose child developed a serious chronic illness, etc. I even know a young guy on the internet who needs major jaw surgery . It is true that there are situations where your financial needs may greatly exceed the 4% rule, where future earnings potential is zero, and where nobody had any control over the situation to prevent it or deal with it cheaply. Some of these life saving procedures cost hundreds of thousands of dollars. Healthy eating and exercise can help prevent the usual chronic diseases, but that doesn't prevent every serious disease or serious accident.

9-5 job can't save you from brain tumor, being hit by car or other unfortunate events. Monthly salary can be not enough to cover "procedures [that] cost hundreds of thousands of dollars". Those events will cause huge problems, no matter what source of income someone have.

What 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.

[C40]

ugh, ads in the middle? That's a full on podcasting faux pas.

I haven't listened to it, and I probably won't, as I think I already get the point. I often get annoyed by Joshua's podcasting style - talking super fast, sort of repeating points, and often monopolizing the episodes by talking over his guests and not letting them share fully. That said, I do like a lot of the shows he's done and I respect him for putting out so much content.

Anyways, this is a subject I think about myself. I have plenty of low-cost lifestyles in mind that are likely to allow my net worth to grow and grow. But I do worry at times about the possibility of me deciding I want to do something that costs more than I have money to be a sure thing for. Recently, an older family member of mine has been considering some serious dental work and the price seems incredibly high: $50k. Part in truth, and part to try to keep him from asking me for money for it, I said "Oh, shit man, I don't have $50k for that (for myself), I'd better find a way to come up with that over the years.

I do expect that it's very very likely I'll make more money over the years. I don't have the kind of full-on throw-myself-entirely-into-it motivation that Jacob points to in the first post fish links, but still, I'm sure I'll make some. I already have from other hobbies, I'm on the verge of starting to make money by sharing my van-traveling pictures and stories, I have a handful of other ideas in mind that will work better when I'm stable, and it's also fairly likely that I'll take some kind of standard paid employment for a while at some point. If, over the next 30 years, I merely cover my own spending for 5 years, my net worth would likely jump up by 10 years' worth.

[Jean]

not one of the more interesting RPF episodes. plus, ads in the middle? wtf.

the hypothetical danger, brute surmises, lies in a 20 something human deciding that he will FIRE on $175,000, too naive to realize that larger expenses will come later on, or he might change his goals in the future.

has this actually happened to any humans? it seems like a typical fear humans have w/ regards to ER, but brute hasn't heard of a case. it seems that most humans FIRE, decompress for a year or two, and then get back to working either on a similar job as before, or some other projects, often times even making money from hobbies. this is true for MMM, gocurrycracker, ROG, Dear Leader Jacob, ..

That's exactly what I did, but now, I'm just looking for a job.

[BRUTE]

would Jean say that the danger described in the RPF podcast episode is real, then? did surprising expenditures enter Jean's life, and re-entry into the workforce now is difficult?

[Jean]

I didn't listen to the podcast.
I was not surprised by expenditures. My ERE was to proove me that my asset could sustain me.
I always wanted to have children, but what changed is that I have been proven to that I was able to attract a good partner for this pursuit, and now, building more asset in order to support those children seems worth the effort.
Re entering the work force seems more difficult than it was to enter it the first time (which I already found very difficult).

[C40]

it seems that most humans FIRE, decompress for a year or two, and then get back to working either on a similar job as before, or some other projects, often times even making money from hobbies. this is true for MMM, gocurrycracker, ROG, Dear Leader Jacob, ..

I'm definitely in the group of people who are likely to do what Brute described. At this point, I don't expect to go back to a full on career type job. I do expect to spend a quite large chunk of time on things that (may) earn money - hobbies that I can get paid for, simple work that I like, and entrepreneurial efforts, - all things that support my web of goals well.

I've been thinking lately about how much time I'm spending on sort of 'productive' things, like taking and processing pictures, writing for my blog and instagram, and other similar things. I also have an urge to earn more money, I believe for a better safety factor, to allow a wider range of lifestyles, or to pay for expensive medical stuff when needed. But maybe it's just an urge that is there unrelated to wanting money for those things.

It's a bit ironic so far that my 'productivity bug' has cost me much more money rather than I've made from it, as I bought expensive camera gear, a decision driven at least in part by that urge to be productive, to improve, to do/make better stuff, etc. But it may be a good thing that being FIRE allows me to point my urge for productivity to things more artistic and less stressful than my old career.

[RealPerson]

What 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.

Of 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.

[BRUTE]

You cannot prepare for everything. But this is an odds game.

yea. it seems like RPF is comparing super-learn-FIRE with the promises of 9to5 ("security!"), vs. comparing it to the actual experience of most 9to5ers. instead, realistically, anyone who FIRE'd can likely go back into the workforce once the need for pet medicine, grand canyon helicopter tours, or front seat broadway seats arises.

[TopHatFox]

It'd be ironic if the grand canyon helicopter tour leads to unforeseen medical bills ':D