The FIRE Movement Survey (October 2018)

[Fish]

https://s1.q4cdn.com/959385532/files/do ... search.pdf

Survey administered in Oct. 2018 to 1,503 US adults age >=45 with investable assets >$250k to assess awareness of the movement and attitudes towards FI/RE. Of these, 753 were either already FI or on a path to achieve it.

Notable: About 1 in 10 are aware of the FIRE movement, while 1/3 are aware of the concept. There is a general preference for fatFIRE (about 2/3). Also the FI mainly consider themselves investors while the wannabes in accumulation do not.

[jacob]

Interesting to see how dominant FatFIRE has become.

Alternative explanation: Maybe we were just living in a bubble until recently.

[prognastat]

Interesting.

92% of those already FI are confident in their ability to FI...

Also fatFIRE isn't really much of a revolution as it's generally rich people retiring rich. Hasn't that been the norm? Maybe they're doing it a little sooner with slightly less, but it isn't much of a change.

[jacob]

Yeah ... rich people adopting the "brand"-name, now that it's getting known/they're being asked.

Also noting that 89% hadn't heard of FIRE, but 26% were aware of the concept.

[AnalyticalEngine]

Wow, 1/3 of all Americans being aware of the concept is quite the statistic, as is the 95% increase in Google searches over the past five years.

I know it's been brought up on this forum before, but I still think the spread of FIRE is going to result in some kind of Fallacy of Composition. At the end of the day, not everyone can live on investment returns. Someone has to be out there doing the real work.

[jacob]

@AE - The standard answers to the composition-generalization are:

• Even if everybody knew about it or wanted it, not everybody would carry through with it. Discipline, etc. IOW, everybody is never going to do it.
• If everybody was able to push through, it would still require everybody to work to accumulate their portfolio. As more people start accumulating, it reduces interest rates because the supply of savings is higher and so it would require a larger portfolio. At the same time, the supply of labor is lower. This leads to either higher wages or less work being performed (again a reduction in returns). IOW, the system is self-adjusting.

Thus the spreading FIRE causes SWR returns to decrease according to the laws of supply and demand. However, there's nothing per se that can break the system because everybody still have to do real work (perhaps 10000-20000 hours worth of labor) in order to build their portfolio. This is in marked contrast to today where a person may work, say, 80000 hours during a lifetime. However, it's not going to go to 0 hours even if everybody did it as SWR-proof portfolios don't fall out of the sky.

Something like UBI is more dubious because the market doesn't set and balance its price.

[prognastat]

IF all people pursued FIRE and actually achieved it it would definitely mean accumulation would take longer as SWR would drop. Still probably would be possible to retire early, but less likely to be able to do so in as short a time as people are achieving at this time.

This is a big if though. 1/3rd is aware of the concept, I suspect the majority of those though aware aren't currently interested in actually pursuing it. and of those pursuing I believe the majority is likely to fail(at achieving FIRE, I'm sure they will still be financially better off for having saved more).

[Dream of Freedom]

1/3 of people with more than 250k isn't 1/3 of the population.

[Fish]

Using the 2016 data on this site, $250k NW (excluding home equity) applies to about 23% of the adult population (29.3M of 126M households). Only considering age 45+, that increases to 32% (25.1M of 79.2M). So this study is sampling the wealthiest 1/3 within the age group of interest.

Presuming FIRE is a ~10 year old phenomenon and given mainstream media has portrayed the movement as (roughly speaking) millennials trying to retire at age 30-40, the survey by construction completely excludes those actively in pursuit of extreme early retirement. And also excludes many who have achieved it such as @C40, @theanimal, etc.

[IlliniDave]

I never heard of "FIRE" until I was three years into a plan to accumulate enough money to retire as fast as I could. But it is interesting relatively few people have a solid connection between accumulating wealth and retirement. For many people with the tools and sometimes resources to FIRE, retirement is an age-driven thing rather than a wealth-driven thing.

[jacob]

Yeah, there is some irony that the survey covered age>45, whereas the FIRE'd "experts" who were interviewed about FIRE have an average age of "late thirties".

[suomalainen]

I get to give my kids time and that’s really the best thing you can give them. It's not stories or iPads or trips to Disney. It's just time with them.
- Carl Jensen, 1500 Day to Freedom

I don't know this guy or his situation, but I submit that this is too younger-kids focused. The amount of time they want with you goes down as they get older, and as they get older, the best thing you can give them is to know how much space to give them.

And what's wrong with stories? Reading time when they were younger was simply a fantastic time for both parents and kids.

Anyway, carry on.

[classical_Liberal]

I'd be very interested to see how the question on pg 15 was worded. Frugalism vs minimalism. Using those specific words would probably have skewed the results due to self identification. However the definitions used are interesting. Fugalism is to save money, whereas minimalism is to reduce consumption. Using those definitions, it seems there may be some motivational information there, also some idea of the consumer vs producer mentality.

Only 8% have a "number" under 500K. This could be skewed because, as @fish pointed out, we are dealing with wealthier subset of people 45+. Many years of hedonistic adaptation added to probably higher salaries at that point in life bring up the average. Still though, 500k+ in liquid assets seems such a far flung, very long term goal for a median household with income of around 50K post tax. Assuming they start from scratch and create a 50% savings rate (no small feat in Wheaton level change), It'll still take 15 years to reach that 500K. For someone who is miserable in their work life now, that's a pretty hard sell. Work hard, change self, cut spending by 50%, then wait another 15 years just have what most in FIRE would consider a bare minimum.

This is why the normal FIRE sites are dominated by top 20% income earners. It is also why ERE is so valuable to median income earners. It seems, anecdotally, there are more and more people flowing into these forums from MMM or the like for this exact reason. I wonder if "I just came from traditional FIRE site and am interested in the differences between them and ERE", would be a good wiki FAQ?

[Seppia]

But it is interesting relatively few people have a solid connection between accumulating wealth and retirement. For many people with the tools and sometimes resources to FIRE, retirement is an age-driven thing rather than a wealth-driven thing.

This is exactly what occurred to me.
While the concept of FI is mathematically very simple, I had to discover MMM for the light bulb to turn on.
I guess this is because being a hybrid ISTJ/ESTJ (depending on the day I take the survey), I tend not to question rules or norms

[Fish]

https://s1.q4cdn.com/959385532/files/do ... survey.pdf

“Millennials and Money” survey of 1,519 US adults age 21-37, Feb-Mar 2018. On average, millennials achieved/expect to achieve the following milestones:

• Age 25 - being completely financially independent (in the traditional sense of self-supporting) from their parents
• Age 36 - start saving for retirement (I think this question was misinterpreted since slide 8 shows that 38% are already saving for retirement)
• Age 56 - retire

4% of those surveyed are already millionaires. Another 7% expect to become one by age 30, and another 19% by age 40. Per the link in my last post, the reality for 40-44 yos in 2016 is that the 70th percentile for wealth is about 250k *including* home equity. So this is an optimistic group that expects to hit it big or save aggressively? Slide 7 shows that 70% consider themselves “savers” as opposed to “spenders” (I wonder how much overlap there is between the 30% spenders here and the 4+7+19% current/future millionaire group just mentioned. It could be that the millennial generation is a group of haves and have nots.)

17% of those surveyed still rely on their parents for financial support.

[Seppia]

I encourage everybody to read the survey posted by Fish, it's a brilliant display of what I call "people VS math"

Average millennials expect to start saving for retirement at 36 years of age
Males expect to retire at 53
73% of males expect to become a millionaire at some stage of their lives
50% of millennials have credit card debt
70% of males consider themselves "savers". The main reason for saving: vacations
49% of males consider themselves "very knowledgeable" with regard to investing

[jacob]

I don't think I was doing much real-world-adjusted math at that age (hypothesis: it's an age thing, not a generation thing). When we started as freshmen physicist, pretty much everybody figured we would eventually become professors, and maybe half figured that there was a chance we'd one day win the Nobel Prize. Even after 5 years of reality-adjustment, 1/3 (me included) still figured that professorship was well within reach although nobody was talking about Nobel Prizes anymore. The Dunning-Kruger effect was strong.

[Seppia]

I suspect it's a humanity thing.
These types of completely illogical findings are common in all surveys where people have to rate their skills. The absurdity obviously comes out only in the aggregate and almost nobody is immune to these biases.

The funny thing is that:
I expect to be able to retire early
I expect to become a millionaire at some stage of my life
I consider myself a saver
I consider myself above average in terms of investment knowledge

So who am I to judge?

[Stahlmann]

[comment of angry person who wanna be part of cools kids... well adult club, but unfortunately can't join in]

(not to the Seppia's post, but more to the whole idea of the whole thread)

[Laura Ingalls]

Yeah, there is some irony that the survey covered age>45, whereas the FIRE'd "experts" who were interviewed about FIRE have an average age of "late thirties".

I noticed that too. I also noticed a heavy tilt to Nordic sounding names

@iDave. I have gotten you can’t be retired you’re not old enough more than once. I also had a conversation with a person close to me who told me 50 was his goal (in early 40’s at the time with pretty close to zero saved). Now he is 48 and had no more savings. I am curious if he has upped his age on this goal . He also seemed oblivious to how many years expenses would equal “enough”.