Guest post on GRS: A ten year update

[jacob]

https://www.getrichslowly.org/early-retirement-extreme/

[1taskaday]

Great read.
Enjoyed finding out about your lives and pursuits.
Thanks for the update.

[C40]

Thanks for the updates.

Now I know what your net worth is again (a likely close estimation at least). Every now and then I've been curious to see how it has grown over the years.

Relating these two parts:
- ERE being a peak-oil blog in disguise (and an attempt, I believe, at getting people to lower their consumption and use of raw materials)
- FIRE now becoming more popular - among more than just us INTJ types and some/many of those mainstream types getting bored and then going back to work. Also, there is the popularity of FAT-FIRE or high-consumption style of retirement - including folks using frequent air travel to cross places off their ever-growing bucket lists.

So, I'm curious:
1 - How you're feeling about the more mainstream popularity of ERE/FIRE. Does it feel good/successful? Like you've had a positive impact?

2 - Relating to the more high-consumption style FIRE, and folks 'getting bored' and going back to work and high consumption:
2a - How do you feel about that?
2b - Do you think there are concepts that should/could be added to the ERE/FIRE messaging/education to help people calm down, be more mindful, entertain/fulfill themselves, etc?

[jacob]

1 - How you're feeling about the more mainstream popularity of ERE/FIRE. Does it feel good/successful? Like you've had a positive impact?

If I put on my academic glasses, I think it's been hugely successful. I don't know if I now live in a [FIRE] bubble, but the narrative has completely changed from where it was 10 years ago. It practically looks like everything personal finance now has some component of FIRE in it. I think the biggest impact has been to rephrase from "a million dollars via compound interest" to "high savings rates".

As for the mainstream popularity, I'll take it. It's of course a little annoying that we're now dealing with Wheaton1-2 players... but at least all the steps on the ladder are now there. I've gone from being outrageous or extreme to merely being seen as hardcore. This has been a relief.

The mainstream media treatment is bitter-sweet. They've settled on the "techbro millenial makes 150k and saves half their income to retire in their mid-late thirties"-narrative. It's not like I don't talk to journalists, etc. Rather they just always highlight that stereotype. Not only does this give the FIRE movement a bad reputation, but it also leaves 80% of the population behind.

2 - Relating to the more high-consumption style FIRE, and folks 'getting bored' and going back to work and high consumption:
2a - How do you feel about that?

One thing we have to realize that going mainstream has added a lot of weak hands. Many pursue FI now simply because it has become synonymous with "being rich", similar to becoming a millionaire. It's the new thing. I think in terms of savings and pollution impact, it still makes more of an impact if a creosotic techbro reduces their consumption from 150k to 75k even for a few years than several people reducing their spending from a median 35k to a decent 20k.

Yet considering the alternative where people would undersave or even go into debt, this is much better.

Although I think it would be much better if certain FIRE proponents weren't blasting CO2 around the world to accrete to their instagram profiles and do a $500 seminar in order to deduct their travels as a business expense, I also realize that this is the way of things... as opposed to holding one's free motivational speeches from a van down at the river.

In that sense, I feel the same way as I did about academic conferences. Why the @$@#$ do we have to spend $1000 each to fly to a Hawaiian resort to discuss supernovas when would be so much cheaper/faster/... to take the bus and gather at library somewhere. It's not like the presentations get any better by virtue of happening thousands of miles from where people normally live. But somehow they get more inspirational!

2b - Do you think there are concepts that should/could be added to the ERE/FIRE messaging/education to help people calm down, be more mindful, entertain/fulfill themselves, etc?

Nothing I haven't already added(*). It's just that---as seen in the yields and flows thread---these things take time to absorb and people will only grow when they're ready. In particular, I wish there would be more focus on alternative forms of capital instead of just the finances. That, after all, is what renders people resilient. But again, the only harm when not doing that is to the individuals who fail to evolve.

(*) Let me rephrase this. It would be nice to see more alternatives than spending one's FIRE on travel et al. A few of us [OGs] were advocating somewhat to pool the combined resources of the FIRE movement to solve "big problems", but the interest/agreement wasn't there, so we essentially "left" to focus on other things. When it comes down to it, the current form is the way it is because it's the most popular.

TL;DR - https://meaningness.com/geeks-mops-sociopaths ... describes it well. I therefore try to be careful about not blaming the other original geeks.

[Fish]

Nice update! I’m probably not the only one that notices a Kegan-level difference between your recent writing and the early days of the ERE blog.

Since we got married thirteen years ago, my wife's spending has also hovered around the $7000 per year mark.

Thanks for clearing that up! When I first started reading the ERE blog, the lack of detail on your wife’s spending made me suspect that her side of the financial house was not as tidy as yours. I understand that the ERE principles remain valid even if only one (or even neither) of you walked the walk, but for years, the skeptic in me was trying to confirm whether ERE HQ was a one or two-unicorn household. Two it is.

We’ve had hints along the lines of “DW spends about as much as me” and the household expense breakdown but I think this was the least ambiguous ever. The mystery behind DW’s spending was a favorite talking point for some of your critics in the earlier days. Being more upfront wouldn’t have silenced them, but it would have addressed some of that doubt I had early on about low-maintenance Mrs. ERE being as awesome as advertised.

[classical_Liberal]

It's a great update, I enjoyed the read. Whenever I see Jacob's stuff in the greater FIRE-sphere, I'm torn between touting the greatness this forum and the process towards ERE, and just remaining silent and smiling at the comments. Partially because I have no energy to fight/explain with the MMM/GRS folks who instantly assume 7K a year is OK for crazy badass ERE'ers, but not them. Partially because I'm selfish and don't want this forum overwhelmed with mainstream FIRE posts, like the MMM forum. There may still be some value in the MMM forum, but it's so hidden now-a-days it's not worth much time. It seems to me there are enough links to ERE in mainstream FIRE that those who are actually interested in learning about ERE will end up here of there own accord.

[unemployable]

Interesting article.

A very astute person recently tweeted that ERE is a peak oil blog in disguise. This is correct.

Including all the moralizing, not necessarily from Jacob, that we've been free riders and that it can't last forever and that permanent collapse is right around the corner.

You know how the standard refrain amongst personal finance gurus is how nobody can predict or beat the market? Well, I met and now know a lot of nobodies who regularly beat the market.

These folks have no desire to start a blog, get a paper published, explain the details, or debate the possibility with the internet. Rather, the attitude is one of “live and let live”. I think some of that attitude rubbed off on me. Why bother explaining if the audience always sees it as a starting point for a win-lose debate rather than an opportunity to learn?

That's because they're several Wheaton levels above the people who think index funds are the next CDOs, my own Wheaton level being right at the lower limit of being able to understand them. They don't need to prove themselves. They're either right and make money, or are eventually wrong and accept it because you're gonna be wrong often in this business.

Mostly these people rely on structural inefficiencies and information asymmetry, including nonpublic "insider" information, which is typically legal in asset classes other than stocks.

[Scott 2]

I enjoyed reading the update and vote for another in 10 more years.

JD seized on the idea that "Spending money is a failure to solve problems by smarter means." It's a fun concept, but I wonder about the opportunity costs. Society wins if Jacob spends all his time on cancer research, while someone else brings food to his door and does the home maintenance.

I'm interested to see how the ERE portfolio gets deployed over the next decade, especially as it grows.

[Mister Imperceptible]

Society wins if Jacob spends all his time on cancer research, while someone else brings food to his door and does the home maintenance.

Sometimes he goes all the way for awhile before pulling it back to 90%.

[fiby41]

No RV pics.

[Seppia]

Thanks for the update Jacob.
I initially thought that the $7000 figure was for the whole ERE family, $14000 total is still very low but not as... uhm... extreme, and in general and very achievable here in Italy.

[wolf]

currently 1 JAFI is $8647, which would be circa 7884€ (neglecting differences between cost of living)
(viewtopic.php?f=3&t=10135&p=193065&hilit=JAFI#p193057)

Very achievable in Italy maybe, but how many do it acutally?

[Bankai]

Italian unofficial min wage is around €7 so 12740 assuming 35h week. Jafi would be 62% of that. There must be some one earner households living on 12740 (less after tax I presume?). Also, paid off house helps. Mmm advertises 20k pa but lives in 0.5m house so with imputed rent hes spending at least double that.

[Seppia]

According to ISTAT, the median monthly expense per family is around 2150€, and the median number of people per family is 2.4.
So I would guess a relatively large chunk of the italian population lives on 600€ per person. It's a poor country.

[7Wannabe5]

A very astute person recently tweeted that ERE is a peak oil blog in disguise. This is correct.

I knew next to nothing about peak oil when I first read the book, so my thought was more like "The subtext of this book is something like bring back the squirrels to the parks of Europe."

Scott 2 wrote:
Society wins if Jacob spends all his time on cancer research, while someone else brings food to his door and does the home maintenance.

You can't optimize or assign creative complex problem solving work like manufacturing piece work*. Ironically, this is why huge government spending projects related to science/technology (often during wartime) do create benefits for society as second order effect. Easy enough to imagine a room full of nerds being paid to invent thing-not-yet-possible, and instead coming up with the world's best ever recipe for making margaritas out of nothing but Field Corn #2 and common lab equipment.

*Of course, in any field of endeavor it is possible to be just putting together the pieces of plumbing and/or just pimping. For instance, if the directions for putting together the fibreboard entertainment center is written in Japanese and you are the only human in the room who can read Japanese then you may be highly valued for your ability to assemble fibreboard entertainment centers, but it's still not creative, complex problem solving.

It's a poor country.

One thing I've been thinking about after reading some recent Chinese novels is that maybe the Jacob should be adjusted in relationship to rising global middle class, since humans value relative wealth over absolute wealth. Of course, this would lead to a fail on the basis of resource conservation (especially given still rising global population until mid-century), but might be instructive as alternate lens and likely critical when evaluating "head tax" (minimum you must spend to not be declared vagrant.)

[IlliniDave]

JD seized on the idea that "Spending money is a failure to solve problems by smarter means." It's a fun concept, but I wonder about the opportunity costs. Society wins if Jacob spends all his time on cancer research, while someone else brings food to his door and does the home maintenance.

That's an interesting way of stating something I've been mulling over (bringing in "opportunity cost"). Maybe it's an artifact of collecting gray hair, but I find myself frequently projecting decisions onto time versus money space. Specifically, examining the potential of, in a sense, buying free time to pursue more enriching activity. It's probably not hard to slip from there into "buying fun", or wasteful pursuit of convenience (aka laziness). And it puts a burden/responsibility on me to follow up by using the "extra" time well, something I fall short on more often than I like to admit. Having gone through a period a couple of years back where belt tightening was a higher relative priority I learned activities that superficially appear mundane can be enriching if approached correctly. But I'm getting an impatient feeling that I've followed that trail about as far as I can.

[jacob]

It's a fun concept, but I wonder about the opportunity costs. Society wins if Jacob spends all his time on cancer research, while someone else brings food to his door and does the home maintenance.

The opportunity cost to society is minimal. NIH postdocs (phds writing cancer papers) work in one the lowest paid research fields. Back in my days, a NSF postdoc would make 40k/year writing papers about physics, while a NIH postdoc would make about 35k/year. With inflation, I think you can add about 40% to those salaries now. Basically, cancer researchers are a dime a dozen, whereas people who can demonstrate how to live in a way that motivates others to save up six-figure sums are rarer.

PS: Promoting home cooking cf. eating takeout shouldn't be underestimated wrt cancer risk.

[Scott 2]

The opportunity cost to society is minimal...

PS: Promoting home cooking cf. eating takeout shouldn't be underestimated wrt cancer risk.

Strong point on the disease prevention aspect. The ERE movement itself is a good example of "Jacob as an outlier." I don't think it's accurate to compare your potential to a typical researcher.

Not to say you should be locked in a lab somewhere. Rather, that expanding a topic like "systems thinking" offers far more runway than shredding laundry soap for the 9th year in a row. I understand there are trade offs, and some behaviors are leading by example.

I even agree with the statement "Spending money is a failure to solve problems by smarter means." However, there was an implication by JD, that the failure is undesirable - lazy. I think that's what bugged me. Systemic optimization leads to local inefficiency. Not only is it ok, it is expected.

I think that systemic optimization includes fully leveraging your portfolio of investments. When you're running at 100x+ living expenses, there's a lot of untapped potential. Bringing that down to 33x, to use spending as an impact multiplier on "everything Jacob," offers interesting possibilities.

Again, it's really good to see the update. It's cool to have your adventure summarized, and I agree with 95% of what was written.

[7Wannabe5]

I think that systemic optimization includes fully leveraging your portfolio of investments. When you're running at 100x+ living expenses, there's a lot of untapped potential. Bringing that down to 33x, to use spending as an impact multiplier on "everything Jacob," offers interesting possibilities.

I don't disagree on the level of interesting possibilities, but all this leverage requires is gaining competency in another skill set(s) such as, for example, "starting and running a non-profit" rather than increasing personal spending. Sometimes this sort of thing just seems like an accounting trick (especially when done by somebody more scheming* than Jacob ), but there is some basis of reality behind the madness of the tax code. In YMOYL, the Personal Expense and Income/Hourly Wage inputs are calculated as if you were running a business and deducting business expenses such as commuting you will no longer do once early retired. IMO, this is the only rational way to proceed when you have some rough mix of W2, Schedule E and SE, 1099, Schedule B, etc. etc. not to mention Gift and Barter flowing into your system. One amusing idea I had was to approach Renaissance lifestyle by maximizing the amount of IRS forms you might have to fill out each year, as in "Hurrah, 2022 was the year I achieved income from Marine Salvage operations while living in free lodging provided to member of clergy!"

*A scheme is like the poor, wishful step-daughter of a strategy dressed up for the ball riding behind a pumpkin on midnight glass slipper deadline or the plot line of every episode of "I Love Lucy."

[jacob]

Nice update! I’m probably not the only one that notices a Kegan-level difference between your recent writing and the early days of the ERE blog.

A likely side-effect of years of managing the adult daycare center that is this forum When I wrote the blog and the book, I was mainly writing for my own edification or as I liked to put it: for someone like myself but 5 years younger before I learned about this. Call that Kegan2.

Seppia thinks I've been ruined now that I'm spending more time editing and rephrasing, caring more about how my words affect other people and what other people think about me and other people than telling people what I really feel

That's probably true. I actually struggle to write because I think too much about all the different ways a sentence might be perceived. JP will confirm.

I didn't explicitly mention the forum (and a bunch of other unfinished projects---it's a blogging rule never to talk about your plans and only what you've finished) on the guest post. But you might remember me spending a lot of time on the forum thinking about learning levels, stupidity, growth of maturity, etc. a few years ago (2015-2017). I think this resulted in some personal growth as well. At least I'm better able to suffer fools gladly than I used to be(*)

(*) Interestingly as a cult leader, I turn more towards Confucius Analects than the popular stoics, so when I feel like tearing my hair out---what little remains---that's where I turn for guidance/inspiration.