FIRE

[Yppej]

I saw a piece on ABC World News Tonight about this program called Financial Independence and Retire Early. To get to the needed savings I would have to put aside an amount in excess of my take home pay. It's the same idea as Your Money or Your Life but not doable unless you start young and/or earn a lot.

[SteveinMN]

It's the same idea as Your Money or Your Life but not doable unless you start young and/or earn a lot.
I see YMOYL and FIRE as different things.

My primary takeaway from YMOYL was the idea of justifying what you spend your money on by making the link between work effort and result more tangible. Want the shiny new car instead of the late-model used one? Okay. Still want it if it means working for an entire year's income just to pay the difference in the cost? Fine. But at least you know where those 250 days of work are going and that you're alright with passing up other items/events to get it.

FIRE is arranging your income (from wherever) so it covers your expenses. For example, DW is worried that we'll still have a mortgage payment when she retires. There's no practical way for us to pay it off in a year and a half. But we have sufficient income to cover the mortgage as part of our retirement income flow. Will it be nice when it goes away? Sure. But we're covered.

There is overlap between the concepts, but I don't see them as very similar except that both make you think about what you spend your money on.

DW and I were talking the other day. She's eyeing retirement at the end of 2019. She's mentioned more than once lately, though, that she'd be OK working another couple of months so we could go on a cruise somewhere. Or to take the grandkids on a trip by air. At one point I mentioned that making work/income tangible was the idea behind YMOYL. She'd never heard of the book but liked the concept and now is lining up things (actually, mostly experiences) she'd like to have if she works another couple of months/another year/whatever. She may change her mind at any point. But at least she now sees why she might want to work longer rather than stop next year and go without items we do not have in our long-term budget.

[iris lilies]

I saw a piece on ABC World News Tonight about this program called Financial Independence and Retire Early. To get to the needed savings I would have to put aside an amount in excess of my take home pay. It's the same idea as Your Money or Your Life but not doable unless you start young and/or earn a lot.

I didnt know how to take this post because it seems to me that’s what we do here, work toward FIRE. Are we NOT doing that? Isnt that our basic premise here? Hmmm, maybe not. But its gotta be at least ONE of a very few basic ideas here on this site. That is what YMOYLis about. I almost thought the OP was being sarcastic.

But now I see that Steve has a different take on the original post. Now I feel as though I have been living happily in the wrong country for years.

[Yppej]

I was reading more last night and standard retirement calculators give 10 times your annual salary at retirement which could be less than 25 times your annual expenditures recommended by FIRE. Both are daunting to me, as is the idea that one needs $100,000.00 per person for post-retirement medical costs. There is a lot the premium-free portion of Medicare does not cover.

[rosarugosa]

Yppej: I think those "rules" saying you need x dollars in order to be able to retire are not taking into account income streams like pensions and SS.

[LDAHL]

I think a lot of terms and systems are created to describe and work toward basically one simple condition. Strip away all the jargon, acronyms and formulas, and it's basically just about obtaining an income independent of employment. It's been compared to losing weight. We know what we need to do: it's simple but difficult. Eat less and exercise to weigh less. Spend less and invest to have more.

[SteveinMN]

But now I see that Steve has a different take on the original post. Now I feel as though I have been living happily in the wrong country for years.
Maybe not... You've been on this forum far longer than I have and what I've read over the years here suggests that the initial "ownership" of the forum pointed far more in the direction of financial planning than the forum does now.

When I found this forum and joined back in 2012 (wow...), I saw a like-minded group trying to live life simply, without defining it purely in income/expense terms or with an ascetic approach. I think the forum now has moved further away from even that norm. Participants have come and gone as a result, just as they did the first time the site morphed.

For the sake of not drifting too far off-topic, I will reiterate that I see YMOYL and FIRE as overlapping ideas. One can recognize even at 55 or 60 that they are spending too long each week at a job they dislike for stuff they haven't thought about consuming (YMOYL) and they can take YMOYL principles to heart without being anywhere near true FIRE status. Similarly, there are people (not many here, I don't think) who are all about the FIRE and who will do whatever it takes to get there because that's more of a motivator to them than what job they do or where they live or what their livs are like on weekends. Saves yer money, takes yer choice.

[Tybee]

Maybe not... You've been on this forum far longer than I have and what I've read over the years here suggests that the initial "ownership" of the forum pointed far more in the direction of financial planning than the forum does now.

When I found this forum and joined back in 2012 (wow...), I saw a like-minded group trying to live life simply, without defining it purely in income/expense terms or with an ascetic approach. I think the forum now has moved further away from even that norm. Participants have come and gone as a result, just as they did the first time the site morphed.

For the sake of not drifting too far off-topic, I will reiterate that I see YMOYL and FIRE as overlapping ideas. One can recognize even at 55 or 60 that they are spending too long each week at a job they dislike for stuff they haven't thought about consuming (YMOYL) and they can take YMOYL principles to heart without being anywhere near true FIRE status. Similarly, there are people (not many here, I don't think) who are all about the FIRE and who will do whatever it takes to get there because that's more of a motivator to them than what job they do or where they live or what their livs are like on weekends. Saves yer money, takes yer choice.

I think too that FI was a big part of YMOYL, that "crossover point" on the graph where the income (I think it was passive income, basically, although you can definitely define that different ways) exceeded the expenses each year, so you worked at getting the expenses down, or you worked at getting the job income up long enough to transition to that FI state--remember the story about the waitress who achieved FI in 18 months, by being super waitress?

I have read MMM forums and Early Retirement (which uses the FIRE acronym) and prefer ours, because accumulation of wealth seems most important on those, with a lot of aggressive show-off ness about accumulation of wealth and putting down others without so much accumulated. But obviously, YMMV on any forum!

[ApatheticNoMore]

so you worked at getting the expenses down, or you worked at getting the job income up long enough to transition to that FI state--remember the story about the waitress who achieved FI in 18 months, by being super waitress?

good for the waitress, and getting expenses down is the easy part as I don't care about things all that much, but as for income - I've been in the running for jobs paying 6 figures and jobs paying half that, such a wide range really, and I have come to realize that though beggars can't be choosers, immediate pay is so low down on the list of what matters to me in a job, way below if I think it uses my talents/strengths well, if it 's a dead end or opens up opportunities, commute, hours, etc.. Of course I don't turn down raises either :) But it all amounts to a visceral feel, how do I feel about this job?

[Tybee]

Good point, APN, about the range of conditions that make up the job and the job experience and the net drain or net contribution to our health.

The waitress was a specific story in the book--who knows, maybe the waitress was Suze Orman, at the Buttercup Bakery.

[victoriarose1945]

I think too that FI was a big part of YMOYL, that "crossover point" on the graph where the income (I think it was passive income, basically, although you can definitely define that different ways) exceeded the expenses each year, so you worked at getting the expenses down, or you worked at getting the job income up long enough to transition to that FI state--remember the story about the waitress who achieved FI in 18 months, by being super waitress?

I have read MMM forums and Early Retirement (which uses the FIRE acronym) and prefer ours, because accumulation of wealth seems most important on those, with a lot of aggressive show-off ness about accumulation of wealth and putting down others without so much accumulated. But obviously, YMMV on any forum!

Hi, Vicki Robin here, perhaps as close to the horse's mouth you'll get since Joe Dominguez passed away 21 years ago. To me YMOYL is a set of tools for observing the flow of money and stuff through your life and asking "Is the money I'm spending buying me a life I love?" The byproduct of doing the steps is that expenses drop naturally by about 20-25%, representing the useless consumption that happens when we aren't conscious that money = your life energy. As people see their expense line go down, and pay off debt and start to save, they become more intentional about driving that process, and thus Step 6, increasing your savings. here's where FIRE folks get a little bragg-y about how much they're saving per month but that's fine with me. Step 7 is about increasing income once you see that the more you make the faster you get to the point where your income from savings (invested wisely) will cross over expenses. This is when people kick into high gear; they see FI on the horizon and they are like horses racing to the stable. So everyone here is right about some aspect of the program. BTW just updated the book for 2018 and have put up a platform http://yourmoneyoryourlife.com.

Would love to have you take a look - at the book and the platform. Same 9 steps but lots of new ideas.2133

[iris lilies]

Vicki, it is wonderful to have you here! Thanks for stopping in.

[gimmethesimplelife]

Vicki, it is wonderful to have you here! Thanks for stopping in.Agreed! So nice to have Vicki Robin drop by. YMOYL -though I'm not a 100% adherent - has helped me get my financial act together along with unexpected money coming into my life through the passing of a family friend and also being promoted helped, too. I'm interested in seeing the lastest edition of YMOYL, definitely. Rob

[Tybee]

Hi Vicki, thank you for posting the link! I am very much looking forward to it--the year I first read the book, I think it was 1997, I gave seven copies as Christmas presents! It has had a wonderful effect on my life, and I want to thank you.

[Yppej]

It's good to hear from you Vicky. I looked at your platform and like the section, "Is Financial Independence Just for the Privileged?"

[Teacher Terry]

Vicki, I also read your book in 1997 and thought it was very helpful and informative.

Steve, I know you and your wife agreed that she would work and you would retire but now it sounds somewhat unfair that if you guys want to go on vacations, etc she must keep working. What about a compromise where you both work p.t.?

[lmerullo]

I think I'm in a similar position as Steve's wife...

Three years ago, the only real employer I'd had went out of business. Hubby and I decided I would stay home and we would live on his income. We are debt free and own two homes free and clear - as well as three trucks, eight motorcycles and a motorhome. Our living expenses are low.

I did compare what every.litte.thing was costing during that time. Denied so many things, just to hold onto that dollar as the dollar was worth more to me than the whatever.

Then, my hubby had a medical event. Lifeflight was involved. As is the way, so much was deemed "not medically necessary". The helicopter ride was $30K! And there was five days stay in hospital and a ton of pricey tests. All denied by our so-called "good" insurance. Once we knew dh wasn't going to die - he had a long recovery time - I got a job. And a simple request to review our case resulted in coverage of all but a manageable sum.

Now, since my working is "my choice" as opposed to something I have to do, mentally it's easier to get up each day and go work. We still live frugally, and actually just reviewed where we'd like to be when we both stop working. I think since we are 56 and 54, theres a number of work years available to us!

BTW, that recommended $100K for medical can get gone in one long weekend! Our eyes were opened!

[sweetana3]

Vicki, been talking up your book for many many years. Used to give a copy away (and keep several in storage) when someone expressed an interest. Flexible and thought provoking.

[gimmethesimplelife]

I just read the section under the heading of Universal Basic Income on the new platform for the updated YMOYL. Very interesting! I will read the rest of the platform as time allows this week. Looking forward to getting my hands on a copy of the updated book! Rob

[rosarugosa]

Thanks for visiting us, Vicki! YMOYL was one of a few books that helped change my life for the better.
Lmerullo: I have retiree medical insurance from my former employer, with a $3000 out of pocket annual maximum. That OOP is one of the most critical numbers in my world, and I am so grateful for my retiree medical benefits. Not surprisingly, the premium is very expensive and gets more so every year.

[SteveinMN]

Steve, I know you and your wife agreed that she would work and you would retire but now it sounds somewhat unfair that if you guys want to go on vacations, etc she must keep working. What about a compromise where you both work p.t.?
Oh, we still can go on vacations and the like. Being frugal is helpful but we are not pinching every last penny and I perhaps should have been more clear about that.

We have money in our budget for vacations. But they're longish weekends in new places or maybe 2-3 consecutive weeks visiting friends and relatives. A 12-day cruise from a port halfway around the world would require a different arrangement. It just is not in the budget we've agreed to.

And I will note that though I may be retired from a career-type job, I am working. I do the housework. All of it. Inside, outside, DIY repairs, our finances, .. DW does the laundry because she enjoys doing it, but if she didn't, I would be doing the laundry as well. I think every woman on this forum would agree that housework has a value. It's not like I'm spending afternoons at the casino or golfing. DW still is happy to go to a job she still loves and then come home to "play". I'm still happy to not be filling out four-blockers and warding off Pointy Haired Bosses.

With the closing of my photography business last year (another job but, admittedly, not much of a time sink), I offered to get a McJob this year. DW and I discussed it and agreed that it likely would wreak havoc on our weekly schedule, which would make it more difficult to get errands done, to watch the grandkids as needed (I'm first call in case one of them gets sick at day care), etc. We also figured we would not net as much income as we'd hoped because the job likely would require more use/fuel/maintenance on my car, a work-suitable wardrobe, etc.

Not at all ruling out a change in this arrangement. It's just that right now it suits both of us but big changes in expenses will -- as it will for most of us -- require some changes in income.

[catherine]

To me YMOYL is a set of tools for observing the flow of money and stuff through your life and asking "Is the money I'm spending buying me a life I love?"

Would love to have you take a look - at the book and the platform. Same 9 steps but lots of new ideas.2133

Vicki, thank you so. much for stopping by and adding your insight to the overlap between the two concepts: YMOYL and FIRE. That central question is key--and prevents FIRE from being some kind of marathon of deprivation.

My copy of YMOYL is dog eared and worn. I'll definitely have a look at your new platform.

[Teacher Terry]

We signed up with Royal Caribbean and have found some great deals. They sent us email once saying if we could cruise within 40 days it would be 500/person for 8 day cruise. Also repositioning cruises are much cheaper too. Taking care of the home front and childcare definitely has value:))

[ApatheticNoMore]

cruises do a lot of nickle and dime-ing though, that is to say that $500 each cruise could be twice that when they're done adding a charge for this and a charge for that ..

[Teacher Terry]

Basically you decide what you will buy. We always take excursions because we want to see places and not just walk around town and shop. We never eat at the upcharge restaurants because the main dining room food is excellent. Some people on Early Retirement .org have found better deals then we have. Some of them have been gone for a month with spending a total of 5 k for both people.

[sweetana3]

But if you are really careful, you can shop around and get many things included with the fare.

Tips could be included as an incentive. Could be $17 per day and up per person. If you drink alcohol consider getting the packages if included as an incentive. Could be $40 and up per person and if one wants it sometimes everyone in the cabin has to pay. Shore excursions are way way overpriced.

I can usually go on a cruise and maybe buy some coffee, a couple of drinks, and pay tips. I know the alcohol packages are not worth it for us. We totally enjoy the ship when all the other passengers get off to go on their expensive shore excursions. It is all in what you want to pay.

I always check consolidator sites for great deals. vacationstogo.com has an easy to use excell type searchable database of sale cruises and a search site for anything else you want. Since checking with them, I am now aware of the huge markups in cruises from normal locations.

[SteveinMN]

Our rule of thumb on cruises is that under $100 a day each for the cruise is a pretty good deal. Maybe not a smokin' deal, but at this stage of the game there are cruise lines on which we'd rather not cruise and places we've already been (so why repeat)?

That $100 a day, though, is per person, so it's really $200 a day. Then add flying there and back (we live nowhere near a cruise port); a hotel (and meals and transportation) near the port the night before the cruise (because weird things can happen in air travel); excursions (we don't always go on shore trips but even planning your own costs some money); travel insurance (we get it for the bigger trips); and so on.

We don't get the drink packages, rarely eat at the premium restaurants on board, and have been on one cruise line enough that our status gets us some useful freebies (like Internet access or cheap laundry). But a 7-9 day cruise still typically totes up to $3,000+ all told. So we pick our spots. We actually have a cruise budgeted for 2019 with a group of college friends with whom we've cruised a few times before. But the way things work for us meant that the 2019 trip happened only by not cruising in 2017 and 2018. ;)

[organictex]

"And I will note that though I may be retired from a career-type job, I am working. I do the housework. All of it. Inside, outside, DIY repairs, our finances, .. DW does the laundry because she enjoys doing it, but if she didn't, I would be doing the laundry as well. I think every woman on this forum would agree that housework has a value. It's not like I'm spending afternoons at the casino or golfing. DW still is happy to go to a job she still loves and then come home to "play". I'm still happy to not be filling out four-blockers and warding off Pointy Haired Bosses."

kinda funny how housework and such is still undervalued even if the man
is doing it ;)

[SteveinMN]

kinda funny how housework and such is still undervalued even if the man
is doing it ;)
Oh, I get that, at least at some level, everyone has to mind their own store (so to speak). When I was single I still had to keep my place clean, wash the dishes, and balance the checkbook (though everything was simpler and smaller back then). So in that sense, housework and such is not as distinctive, transformative, and highly-valued as, say, brain surgery even if there's now twice as much of it.

But it does seem to be an assumption made by many people (all over) that retired folks don't work. Based on the number of people I know who are my age and older and are busy maintaining farms, remodeling homes, active in non-profits, raising grandkids half-time or more, or still caring for adult children who can never be independent, I'm thinking a new definition (or perception) of "retirement" is in order.

[Rogar]

I could probably look up work and get a technical definition, but it may be in the eye of the beholder. I'm single and do all the house chores. I consider much of it work because it does not especially appeal to me and gets in the way of things I'd rather be doing. I'm physically active and hope to do so until I'm unable. Certain hard physical activity is probably considered work by some and recreation to others. I brush painted my home exterior last year and sort of enjoyed it. For me the lines between work and fun became hazy. I consider real work sitting at a computer screen for much of the day doing mindless things for the ever present boss. Or actually just sitting in front of a computer screen all day for any reason.