FIRE reaching Critical Mass

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ThisDinosaur
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FIRE reaching Critical Mass

Post by ThisDinosaur » Wed May 16, 2018 9:24 am

I've noticed an increased frequency of mainstream articles about FIRE. I've also noticed a number of acquaintances reading various FIRE themed blogs. If this niche gets too popular, one could imagine a drop in the supply of labor and a bubble in asset prices.

A Google Trends search for "Financial Independence" and "4% rule" show a possible upward trend. Although several other related terms did not.

How likely do you think this scenario is? Discuss.

Mister Imperceptible
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Re: FIRE reaching Critical Mass

Post by Mister Imperceptible » Wed May 16, 2018 10:04 am

Extremely unlikely. If anything the minority is just getting more visible. I work with and am friends with very bright and gainfully employed people and for most of them with whom I have discussed it, the means necessary to obtain FIRE is still an unfathomable “sacrifice.”

IlliniDave
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Re: FIRE reaching Critical Mass

Post by IlliniDave » Wed May 16, 2018 4:18 pm

I too think it unlikely. It takes a lot of work and discipline to pull it off. Much easier to read and think about than to actually do. I don't think there's enough wealth held by all the aspiring FIRE folks to move the market (and much of that even seems to be sitting on the sidelines, while folks stare into the campfire for signs and omens of the next crash).

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Seppia
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Re: FIRE reaching Critical Mass

Post by Seppia » Wed May 16, 2018 4:28 pm

Historically, talks of retiring early thanks to stock market investments rise close to market peaks.

I am convinced that most will bail at the next downturn, similarly to many "passive" investors that will turn very active once we see a 30% market drop.

I know I may be among those. I hope I'll have the testicular fortitude not to.

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Re: FIRE reaching Critical Mass

Post by jennypenny » Wed May 16, 2018 5:15 pm

I dunno. I feel like this stuff comes in waves. If there are more stories right now, it might just be because there are too many 24/7 news outlets who need to produce stories asap.

Has anyone ever plotted the market and economy alongside FIRE trends and publications? I remember the back-to-the-earth stuff being popular in the 70s when the economy was bad. Then it improved and there was more talk of living off of investments (when Dominguez started his talks that became YMOYL, and the famous 'fuck you money' movie line). After the '87 crash it was back to frugality (Tightwad Gazette) and that guy whose name escapes me who promoted living off of treasuries. When the economy improved later in the 90s, particularly the housing market, there were all those books about flipping houses and living off of that. Then the big crash came and frugality and homesteading was back in. Now things are better and the FI stuff is popular again.

I'm doing all that from memory so I'm not sure if it holds up under scrutiny. And ERE is the exception because it's a combination of frugality and FI. Maybe it's the combo that's becoming more popular? If so, then I guess ThisDinosaur is right to some extent.

IlliniDave
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Re: FIRE reaching Critical Mass

Post by IlliniDave » Wed May 16, 2018 6:41 pm

Interesting observations, jennypenny, though IMO YMOYL also combined frugality and FI and I think Dominguez was the treasuries guy. Jacob (I think) mentioned in another thread about generational tendencies and maybe that is superimposed on the economic cycles with Millennials perhaps a fertile field for the ideas.

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Re: FIRE reaching Critical Mass

Post by thrifty++ » Wed May 16, 2018 11:20 pm

I sometimes think this but I just think thats because I (and us) probably tend to have an eye out for that sort of thing. I almost never meet people into FIRE in the real world. I only have ever met two people who were into frugality, not into FIRE or the more extrme aspects, but they now are more FIRE oriented as a result of me discussing it with them and inspiring them after catching on that they are into frugal. But both are INTJ personality types and the interest in frugality was there at the start.

I dont think it can necessarily catch on as a fad because it requires intelligence, tenacity, extreme long term thinking orientation and extreme discipline as well as the ability to persist over many years. Very few people possess all of those things, possibly why it tends to be overrun with INTJ personality types who tend to possess those attributes.

SavingWithBabies
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Re: FIRE reaching Critical Mass

Post by SavingWithBabies » Thu May 17, 2018 8:47 am

I have the same suspicions as thrifty++. I started writing a reply earlier that FIRE was like dieting.

My impression of dieting: A lot of people want to loose weight (big group). A smaller group actually take action. Then in that small group, those that actually loose the weight and get to their goal are an even smaller group. Of those people, you have some that realize they need to change their habits/diet long term and keep the weight off and those that gain the weight back. So in the end, there is a much smaller group that is actually successful and stays with it long term. But there is a big group that is interested in the topic and receptive to fresh marketing.

So I could see FIRE rising as a media topic but like dieting, I suspect most will not take action.

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Kriegsspiel
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Re: FIRE reaching Critical Mass

Post by Kriegsspiel » Thu May 17, 2018 8:57 am

Almost all of the articles I've seen written by reporters (as opposed to practicing bloggers) are selling lifestyle porn and hope. A lot of people don't like their jobs and want to retire. They just don't want to do what it takes.

I think they see articles about FIRE and think "Oh, great! I just have to tweak something (minor) and then I can retire in my 5 bedroom house with 3 cars and I'll finally have time to go to restaurants for every meal, like those rich FIRE people."

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Re: FIRE reaching Critical Mass

Post by jacob » Thu May 17, 2018 9:54 am

jennypenny wrote:
Wed May 16, 2018 5:15 pm
Has anyone ever plotted the market and economy alongside FIRE trends and publications?
Only mentally so the confirmation bias could be strong. However, I have noticed that FIRE tends to lag the Kondratieff wave by a few years. Kondratieff waves in turn parallel Howe/Strauss.

2010s (dot com/RE crash) 4HWW, ERE, MMM, ... FIRE-bloggers, 4%-rule, minimalism, index funds.
1970 (go go investing crash, oil crisis) - YMOYL/Roadmap, Robin/Dominguez, Callenbach, Elgin, Luhrs, Simple Living, .. lots of ecology stuff.
1930 (great depression) - Nearing (again), Borsodi, frugality, self-reliance.
1890 (long depression) - Helen & Scott Nearing, As Man Thinketh, ... homesteading(*), self-sufficiency, thrift.
1850 (panic of 1837+) - Thoreau

(*) Also seems to be resurfacing during the current cycle.

It should be noted that there's a continuous background of people putting sufficient building blocks together to achieve enough delta (earning-spending) to achieve escape velocity. For example, Terhorst was mid-80s and he sold 100k books. During those wave heights, there's just more than usual. It's also interesting how the different eras appeal to different types of people. The loudest voices currently are high-income or digital-nomads or both. Without QE, I don't think the current wave would have been nearly as strong---or maybe it would be, but it would be different people.

Also, some ideas (and people) last over several cycles. The Nearings were active in both 1890, 1930, and 1970. Vicky Robin has recently come back with an update for the current cycle. Maybe I'll pop up again in 2050 or so.

As for the media (as well as social media), I think the echo-chamber effect is strong. The voices have grown exponentially. While exponential growth is scale-invariant in principle, it looks like an explosion (hockey stick) when we impose an external scale. Now the rate is high enough that people notice. However, this year I've talked to a lot of journalists ... and several of them mention how they first heard of me some years ago but how they've essentially been sitting on the idea since then. Maybe waiting for the critical mass. From my perspective (vis-a-vis scale), most years have been quiet except this year when it suddenly exploded. I've talked to as many journalists in 2018 as as I have in 2007-2017 combined.

One transformation is that the attitude has changed. Ten years ago, FIRE was very much perceived as a freak show. "Look at this crazy person .. and here's an expert to confirm the person is crazy/unrealistic($)". Now it seems like FIRE is taken more seriously. There's definitely strength in numbers here.

($) This doesn't happen very much anymore.

However, I doubt the numbers are enough to move the needle. As mentioned above, the more likely impact is that a small number (what CHS calls the remnant) will influence a medium sized number who will influence more. This is similar to the 1%-rule (1-9-90) of the internet. The way CHS has is that 4% will drive the 16% who in turn influence the 80%. We're at a point where the 4% is being built up. That number used to be much lower. You can use this to gauge how big the movement is.

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BRUTE
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Re: FIRE reaching Critical Mass

Post by BRUTE » Thu May 17, 2018 3:35 pm

jacob wrote:
Thu May 17, 2018 9:54 am
As for the media (as well as social media), I think the echo-chamber effect is strong.

...

One transformation is that the attitude has changed. Ten years ago, FIRE was very much perceived as a freak show. "Look at this crazy person .. and here's an expert to confirm the person is crazy/unrealistic($)". Now it seems like FIRE is taken more seriously. There's definitely strength in numbers here.
brute could easily see this being related. social media allows for an insanely strong echo chamber and lifestyle porn. thus it allows a handful of digital nomad types to sell an entire ideology to the masses via carefully selected lifestyle porn articles and images. this is of course as unfounded as the "lentils every day! never!" thought that it has replaced, but it is certainly more attractive to most humans, and thus converts more of them.

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Re: FIRE reaching Critical Mass

Post by jacob » Thu May 17, 2018 3:42 pm

Yes! Another way of viewing this is through the Gartner hype cycle superposed on the long-term Kondratieff wave train. We might be in stage 2 of this. I particularly worry about the "yay, simple, 4% rule"-crowd who has been unconsciously boosted by high-income and QE. We're one recession away from stage 3. I wonder whether those guys can be saved from themselves? Eventually, some of the current ideas will make it through to stage 5 and become part of the next Kondratieff wave.

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BRUTE
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Re: FIRE reaching Critical Mass

Post by BRUTE » Thu May 17, 2018 7:18 pm

brute would be surprised if there was never a next crash, and also if 75-95% of hypees didn't get disillusioned with FI/4% rule then.

it was exactly the same thing with crypto beginning of this year. as Bitcoin climbed to its high of 19k, it was all over the media. every human and their female parental unit were talking about it and buying, even if only small amounts. then it crashed back down to ~7k, and has roughly stayed between 6-9k since then. all those humans jumped off the train, having predictably bought high and sold low. some are now "burned" by crypto.

the same phenomenon, if on a different time scale, will probably happen to the "Digital Nomad FIRE 4%-rule 100% Vanguard credit card churn minimalism posted from laptops on beaches" ideology.

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Re: FIRE reaching Critical Mass

Post by Augustus » Fri May 18, 2018 1:07 pm

BRUTE wrote:
Thu May 17, 2018 7:18 pm
the same phenomenon, if on a different time scale, will probably happen to the "Digital Nomad FIRE 4%-rule 100% Vanguard credit card churn minimalism posted from laptops on beaches" ideology.
Ouch! You're making me question my self worth :oops:

What's wrong with credit card churning though? My obamacare health insurance premiums cover the spend, I haven't paid for flights or hotels in the last 3 years because of all the points I've racked up. I also very much enjoy working with a laptop at the beach... A bronze plan is running me 800/mo right now, because I want access to good doctors. Not all plans are equal unfortunately.

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BRUTE
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Re: FIRE reaching Critical Mass

Post by BRUTE » Fri May 18, 2018 4:07 pm

haha, brute's not saying that there's anything wrong with those things. brute does most of them himself, or has done them. but just because something works and is popular and one is part of it doesn't mean it'll continue being popular in the future.

personally, brute hates the glare on the beach, his laptop overheats too quickly, and he's afraid of getting it wet or sand into the keyboard..

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bryan
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Re: FIRE reaching Critical Mass

Post by bryan » Sat May 19, 2018 3:15 pm

I don't think the risk is "too many people doing it". There are probably some corollary risks, though, which I imagine many economists and "sectors" will be sweating, fretting over or blind-sided by. Is FIRE interest a cause, effect, problem, solution (for who)?

The FIRE trend coincides with the so-called "Late Stage Capitalism" trend. Google also shows an up-trend for stuff like cyberpunk, vanlife, etc.

Assuming reaching a "critical mass" is a bad thing, it makes me re-consider the ideas behind the "risks of placing so much into Vanguard" thread. Basically an additional risk of the Vanguard, Black Rock, etc centralization of personal assets is that they are relatively easy to analyze, seize, or freeze by e.g. government.
jacob wrote:
Thu May 17, 2018 3:42 pm
Eventually, some of the current ideas will make it through to stage 5 and become part of the next Kondratieff wave.
Probably at least the one about living out of your car/van to save money -> to survive.
BRUTE wrote:
Thu May 17, 2018 7:18 pm
every human and their female parental unit were talking about it and buying, even if only small amounts. then it crashed back down to ~7k, and has roughly stayed between 6-9k since then. all those humans jumped off the train, having predictably bought high and sold low. some are now "burned" by crypto.
What are the folks that are "burned" and allegedly turned off of cryptos doing about it? How will they act during the next crypto pop? Folks I talk to (that bought high) are mostly still holding some coins or otherwise seeing their loss as bad timing. The stories of other folks getting rich from cryptos has more mind-share than those of folks losing money.

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Re: FIRE reaching Critical Mass

Post by arcyallen » Sat May 19, 2018 4:31 pm

I think the reason FIRE will never be truly mainstream is that American Materialism is way, way too strong. I think we might see some weak ERE versions of it, like someone who becomes "a hardcore vegetarian for life"...for six months.

I've seen very few people in my personal life take any interest at all in FIRE, and definitely none in ERE. Of my 166 friends on Facebook, one knew who MMM was. She said reading his blog made her feel better about her crappy apartment, while in another post stated she was trying to "up her facial cleanser game" from high end to ultra-high end. No one I know personally actually embraces fire, except me.

So lonely :)

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Re: FIRE reaching Critical Mass

Post by Jason » Sat May 19, 2018 5:14 pm

You have to think there is a thread on FlatEarth.org titled "People Finally Starting To Realize That The Earth is Not Round" and "Bigfoot Awareness Growing" on Bigfoot.Net. I'm not saying this is fantasy (I apologize in advance to people who think otherwise on the former), but the idea of this movement having a material impact on the economy is well, delusional. I'm sure it is growing, as is the tiny house movement and minimalism and all that. But its an infinitesimal portion of the population. I think its more of you notice what you are interested in. 99.99% of the world is googling "George Clooney's Wife's Hat" and "Megan Markle's Hot Friend's Ass." At least that's what I heard.

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BRUTE
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Re: FIRE reaching Critical Mass

Post by BRUTE » Sat May 19, 2018 10:09 pm

that is a weird hat

Jason
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Re: FIRE reaching Critical Mass

Post by Jason » Sun May 20, 2018 5:52 am

If you do a side by side of the ass and the hat, it's like a visual demonstration of the Copernican revolution.

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Re: FIRE reaching Critical Mass

Post by Farm_or » Sun May 20, 2018 6:36 am

The fact that we are all still attending this forum says that there's not many others next door. I like the simple test of observation to assertion.

Of course, I am much more isolated than most others here, but I get out. And I have not seen or head of anybody else catching on. The literal armies of marketers for everything under the sun has seen to that.

The addiction to consumerism is unscathed. That is the first essential indicator. For any difficult lifestyle change to occur, there is usually a major catalyst. People don't normally look outside of their current existence to ponder deeper questions. The deeper stuff? Isn't that what all the theology majors are for?

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Re: FIRE reaching Critical Mass

Post by jacob » Sun May 20, 2018 6:58 am

IIRC, I've run into 1 person who asked me if I knew who MMM was. And I've run into 1 person who knew who I was (in terms of ERE).

I have run into several who either knew about or practiced minimalism. There might be a self-imposed selection bias here though. People might be more inclined to openly discuss their stuff than their financial plans.

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Re: FIRE reaching Critical Mass

Post by slsdly » Sun May 20, 2018 9:14 am

Outside of meetups, and those I've personally converted, I've met a number of people who are into early retirement. In each case I was the one to bring it up first. But given how many engineers are here, and the composition of my social circle, it seems I may be more likely than average to meet those in the movement.

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Re: FIRE reaching Critical Mass

Post by prognastat » Mon May 21, 2018 5:58 pm

Of all the people I have met in person, I'm aware of only very few that have made any attempts at becoming financially more secure(not even FIRE, mostly just DR/becoming debt free) and they weren't even able to achieve and maintain being debt free and saving any disposable income.

I think the diet analogy is quite apt in that many spend very little time thinking about their diet/finances, a large minority is familiar with some financial concepts whether it is pursuing being debt free or FIRE, a small minority is actively pursuing some kind of financial goal and an even smaller minority will actually achieve/maintain these.

Though being unhealthy/financially unstable isn't fun it can be quite comfortable in either eating whatever you want or in spending whatever you want without thinking about it. Delaying gratification isn't something most people are good at. Sure it'll feel great to be healthy/in shape/FI, but that cheesecake will taste great now and buying a big fancy car I can't afford on credit will mean I don't need to work to find a good deal on a car plus almost everyone will congratulate me and be envious of my new car.

Most people just care far more about what other people think and also about their short term comfort than anything more than a few weeks in the future. Due to this I'm not too worried about too many people achieving FIRE.

I would actually be surprised if the % of people that are actively pursuing any kind of non-purchase related long term financial goal(so anything from seriously working to pay off debt to becoming FIRE) is in the double digits.

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Re: FIRE reaching Critical Mass

Post by ThisDinosaur » Wed May 23, 2018 4:25 pm

A Growing Cult of Millennials Is Obsessed With Early Retirement. This 72-Year-Old Is Their Unlikely Inspiration
Another data point. This is becoming a Millenial Phenomenon.
The financial independence subreddit has more than 350,000 subscribers around the world. A directory on the blog Rockstar Finance counts roughly 1,600 personal finance blogs, many dedicated to early retirement.
This generation is, as a group, anti-materialist and has no sense of civic responsibility or company loyalty. Yes, this could be a cyclical thing. But the cycle will last a generation. A generation of overpriced financial assets and reduced earnings from a lazier workforce and anti-consumerist customers. Maybe airline and RV manufacturers will be profitable as home prices decline.

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