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  1. Yesterday
  2. On another thread, Ed asked "Can you make the case as to why I personally should not FIRE? I truly want to hear the argument." I will not make that argument (I don't even know what, exactly, FIRE entails--I suspect that it looks very different from case-to-case). But I do think that there are common issues that don't seem to be talked about much in the small bit of reading about that movement that I've done which are worth considering. For example, if one has worked out that they can live on $25,000/year, they have arranged their affairs to produce an expected $30,000 of annual income (in today's dollars), they'll retire at 40, sounds good. But one may find themself reassessing that $25,000 budget at some future point when they don't have much control over their income. I'm guessing that many of the current FIRE followers will face these issues a few decades from now. I'm not talking about catastrophes. These are life changes that affect most people I know who are above, say, 55, myself included. 1. You will change. There are physiological reasons why many 17-year-olds enjoy roller coasters, while most 70-year-olds do not. Your body will change, and there's a good chance your interests and tastes will, too. Expenses that seem frivolous or uninteresting now may become desirable, even necessary. It may be exhilarating to hike and pitch a tent, but a quiet el bed may become a necessity for travel at some point. You may reach a stage where you really want to hire help in your home for things you now expect to do yourself (cleaning, gardening, household repairs, food preparation, health maintenance, etc.). 2. Your responsibilities to others will change. This is a big one. I wrote a long paragraph here describing my own situation, but the details became too personal to post publicly. I'll just say that I have two elderly relatives, a mother and a stepmother, for whom I feel responsible (I'm an only child); my mother lives in another country and I visit three or four times per year. The other one lives about 75 miles away and requires my help in navigating bills, doctors, transportation, etc. The ups is that one can face unexpected responsibilities that may last for decades and may involve expenses. If you have parents, children or siblings, there's a good chance that something will come up which will either strain your limited financial resources or leave you feeling unable to support them in their time of need. You may find that if your loved one needs lawyers, rehab, therapists, nursing care, housing, who knows what... you'll be responsible for the arrangements and expenses. PS: this silly board software has prohibited the word h o t e l above, hence the phrase "el bed." Really, h o t e l? Also, u p s h o t is verboten, reduced to "ups." Glad this isn't a cooking discussion board.
  3. This may not apply to most of us as it deals with those self-employed. Still, it might give some ideas about withdrawal rates and how to proceed. https://thefinancebuff.com/easy-early-retirement-portfolio-withdrawals.html
  4. Interesting facts and percentages https://etfdailynews.com/2018/10/18/take-a-peek-at-what-the-top-1-percent-have-in-savings/
  5. Do investors become less effective as they get involved in more complex analyses? https://www.gurufocus.com/news/756355/john-bogle-8-basic-rules-for-superior-returns
  6. Last week
  7. Ed I am glad you got some enlightenment out of the article. I think it comes down to whether you are more of an Introvert vs an Extrovert. From your comments, it sounds you and me may have somewhat similar personalities. Your workplace observations echo mine. Sound like you may very well be a FIRE candidate and I don't worry about you because you understand money. I worry more for those that have not developed adequate financial acumen and lifestyle planning and who are ready to jump into the movement without deep thinking on the subject. They may regret their decisions later in life. I did not retire exactly "Young" as I am now 64 and I retired at 62. I would have retired sooner but stayed in longer so I could claim my full pension. Quitting sooner would have cost me a great deal of money. I am not bored and don't have to be busy every second of every minute. I do whatever. I am also going to the gym often and have lost 20 pounds. I wasn't even ever heavy in the first place but I guess that workplace stress can put fat on you out of sight and around your internal organs. I'm healthier now than when I was younger. I don't need that constant human contact some folks need. I especially don't miss the workplace adult human interactions at all but I do miss the young people and students somewhat. I know a fellow teacher who retired just this year and he is already going crazy. He misses that human contact so much that he is volunteering for whatever in the school system for free as well as assisting the boy's basketball team and involved in classroom substituting in emergency situations. He told me he does not ask for compensation. So it can all come down to your personality type. He is emotionally struggling with retirement. I am not. I have heard that on any given day he can be seen hanging around the high school. I haven't been back.
  8. EdLaFave

    Playing with FIRE Documentary trailer! Must see!

    Looking forward to it.
  9. I enjoyed the read. I keep reading on the topic and I’m becoming more convinced that I’m well suited to FIRE. This subculture is so interesting to me. Just my two cents on the author’s five points (reasonable people will disagree): 1) You will suffer an identity crisis for an unknown period of time. As the author says, this varies based on how much you identify with your job title, which thankfully is 0% for me. I’m always puzzled by people who attach identity to a job that they want to leave. 2) You will be stuck in your head. The author talks a lot about being upset that you’re not “productive,” I never did understand why people derived happiness from productivity and I’ve always enjoyed being “stuck” in thought. 3) People will treat you like a weird misfit. I’ve always felt like an alien in this world where I’ve had to study the behavior of normal people because they frequently behaved in ways that were unexpected. My wife, having worked with autistic kids in school, is now convinced I’m autistic, but very highly functioning. I believe she is correct. Either way, I’ve always embraced the misfit title. 4) You’ll be disappointed that you aren’t much happier. I don’t think it is reasonable to expect retirement to generate happiness. It is reasonable to think retirement will remove a source of unhappiness from your life and then you’ll be left with whatever else you have. 5) You constantly wonder whether this is all there is to life. There is no point to life except for maximizing enjoyment. I’ve never understood the angst around searching for life’s purpose beyond that simple statement; there is no purpose. I’ve also never understood being fulfilled by earning a salary and by making your boss wealthy through your labor. I don’t get it.
  10. Is early retirement really that great? Food for thought. https://www.financialsamurai.com/the-negatives-of-early-retirement-life-nobody-likes-to-talks-about/#comments
  11. Ready , Aim, FIRE ? https://www.usatoday.com/story/money/personalfinance/retirement/2018/10/18/why-1-million-may-not-enough-retire-comfortably-savings/38157041/?utm_source=usatoday-Retirement&utm_medium=email&utm_campaign=baseline&utm_term=hero
  12. Ed, I've got some thoughts on this topic but don't have time now to write. This includes both changing needs as you age and my discovery of what seems to be a sophisticated retirement planning tool that - arguably - supersedes the annual percentage withdrawal rate idea with a different model (called Maxifi planner, if you want to take a look). Stay tuned, I'll try to fill this out during the weekend.
  13. I think you should Fire but just learn all you can by the process and keep an open realistic mind of what might go wrong . With all that extra time on your hands you may very well spend more money not less. There are mental and emotional factors governing a FIRE lifestyle as the article below points out . Many retired people despite their ages are miserable and bored. I've also posted my opinion on other threads that not being able to predict the future makes a Fire lifestyle scary. Ed, I think you are too darn smart to stop contributing to society at a very young age . https://www.financialsamurai.com/the-negatives-of-early-retirement-life-nobody-likes-to-talks-about. Scroll to the top for article before reading comments.
  14. This reminds me of when I was on a book adoption committee at my school. We found the perfect personal finance book that was easy to read and made its point simply. It was perfect for a wide range of student ability levels but was very intelligently written without being overly complex .The committee (teachers)was unanimous in the choice of the textbook. The parents on the committee voted against adopting it. Reason? "My son or daughter deserves a more complex and thicker textbook"........and full of big words their kids probably didn't understand HA HA!. The parents chose the most complex, hardest to read, and understand books as better choices. To many folks, complex and confusing equals "must be better". I've always thought the opposite . KISS (keep it simple stupid) has always been my preferred method. However simplicity can be confused sometime as " low level" Thus the word simpleton exists. I too felt years ago that index funds were too simple, too easy so that something must be wrong with them. I drank the Kool Aid offered by the financial industry. It took this site and John Bogle to get me to understand that index funds were the way to go. Previously I had just managed funds. I remember reading all the manager interviews in Money magazine on how their stock picking prowess was so brilliant. Turns out it was all hype. Still is.
  15. One thing I’d like everybody to know about index fund investing (target date or otherwise)... You’ll hear people preach about simplicity. If you’re anything like me, you’ll think they’re saying that you should accept lower/mediocre performance because you can’t handle the complexity. However, it is the low costs associated with this type of investing that will deliver superior performance and it is just a happy perk that it is also incredibly simple! This initial argument of simplicity turned me off to the idea almost immediately and caused my conversion to index funds to be delayed by multiple years while I searched for superior performance. Learn from my mistake.
  16. EdLaFave

    Playing with FIRE Documentary trailer! Must see!

    Can you make the case as to why I personally should not FIRE? I truly want to hear the argument. I won’t take exception to anything you might say, but it may take time to fully set aside my bias and truly hear you. I’m quite looking forward to seeing the documentary. Based on the math I’ve seen, my concern for FIRE folks is that they don’t understand just how aggressive their portfolio needs to be and just how low their withdrawal rate needs to be in order to be “safe” (i.e. not get into a race between a dwindling portfolio and a dwindling, or not so dwindling lifespan). I’ve frequently read some FIRE comments talking about a 4% withdrawal rate from a portfolio with 30-70% bonds...and I worry. In a lot of ways the conventional wisdom of “safe” investing is very dangerous to FIRE folks.
  17. Great Trailer. Look forward to seeing the documentary. Regardless if the fire movement is realistic or not ( I'm still not convinced its possible long term for everyone) what these folks will learn along the way of the journey will be invaluable. I do wish them the best of luck and I admire the FIRE mentality towards less consumerism and a more frugal lifestyle. I hope whatever comes out of this movement catches on with a larger population over time.
  18. One of the biggest stories in investing over the past ten years has been a shift away from expensive, actively managed mutual funds towards lower cost, index-based mutual funds and ETFs. Coinciding with this trend has been the rise of fee-based registered investment advisors (RIAs) and the decline of commission-based brokers. https://theetfeducator.com/2018/10/16/fee-war-moving-to-advisors/
  19. Just listened to the Mad Fientist podcast about the producer of a new documentary that features all of the heavyweights in the Financial Independence Retire Early movement. I love the anti-consumerism built throughout. These young people get it, they will NOT be part of the borrow and spend, "keep up with the Jones" crap that the older generations have bought into 100%. The 90-minute documentary will be out sometime early next year. Can't wait to watch it.
  20. sschullo

    Feedback on SEC Rise Conference in Sacramento

    Hey Sandy, Welcome to this board. We need your voice! Steve PS Sandy and I have known each other for 20 years. We organized an informal informational group at a restaurant for years to help teachers. Back in the day, NOBODY was dealing with this problem that has not changed much in 20 years. She has also worked very hard to bring formal investing workshops to the Los Angeles teachers union.
  21. sschullo

    Feedback on SEC Rise Conference in Sacramento

    We don't know. All we know is this: The San Francisco and the Los Angeles SEC offices are the only ones I know who have stepped up to the plate to help the education profession deal with the predators in the 403b. They responded to the NY Times articles two years ago. The Consumer Federation of America has also chimed in. We are attempting to find out what they can do. Unfortunately, both CalSTRS and SEC have their own compliance hands tied behind the backs and probably cannot help much. At the summit, each speaker had to say "What I say here doesn't represent the SEC." Scott and Barbara (our committee consultant) who are the best fiduciaries in Calfornia and know the state insurance laws here were not asked to speak. The only two nonprofessionals who were on the panel were from the CTA, both were chairs of the CTA retirement committee. There was one member from the state insurance commissioner who only spoke about what they do for all insurance policies. Nobody mentioned the hideous 770.3. I was very happy they put this together. I met the Vanguard rep and some old friends from TIAA.
  22. https://www.cnbc.com/2018/10/16/target-date-funds-are-super-simple-but-is-that-all-you-need-to-know.html?__source=yahoo|finance|headline|story|&par=yahoo&yptr=yahoo
  23. If you feel unsure of your basic financial knowledge this article might help you move in the right direction. These terms mentioned in this article are often discussed here. Note if you see story continues in blue, click on it as there is more to the story than might appear at first. https://finance.yahoo.com/news/many-americans-don-apos-t-220400790.html
  24. Dustin Before you can get them to take action you will need to educate them on basic financial literacy as most Americans are deficient on this topic due to lack of educational emphasis in high school, college and workplace . In my high school our teacher advisory counsil was powerless and our recommendations were ignored. I hope its different for you. Good luck.
  25. Here in Chicago (one of the largest districts in the Nation) I'm on the board of ed's "teacher advisory council." I'm trying to take this up as the issue, but we'll see what the appetite is for such action by other members of the council.
  26. JT1906

    Reputable 403B Houston Area

    As I continue to search for information regarding my school district and 403 B information. I came across this and wanted to provide the link. It is about a contribution matching based on attendance. https://www.alvinisd.net/cms/lib03/TX01001897/Centricity/Domain/266/Employee Incentive Pan - 401a.pdf
  27. EdLaFave

    Help deciphering fees

    I believe the most useful way to analyze fees is to calculate (after adjusting for inflation) what percentage of your real profits were lost due to the fees. My Investing 101 page has a link to a spreadsheet (could be more user friendly, sorry) that will let you do just that for a variety of parameters (number of investing years, inflation rate, nominal return rate, investment per year, expense ratio, management fee, and sales load). Let's assume a 3% annual real return and a 30 year investing time frame: 5.75% sales load and a 1.25% expense ratio = losing 60.97% of real returns. 5.75% sales load and a 1% expense ratio = losing 52.64% of real returns. 0% sales load and a 0.07% expense ratio = losing 3.08% of real returns. Let's switch the real return to a more aggressive 5%: 5.75% sales load and a 1.25% expense ratio = losing 43.14% of real returns. 5.75% sales load and a 1% expense ratio = losing 37.19% of real returns. 0% sales load and a 0.07% expense ratio = losing 2.21% of real returns. Let's keep the 5% real return and switch the time frame to a shorter 10 year window: 5.75% sales load and a 1.25% expense ratio = losing 49.95% of real returns. 5.75% sales load and a 1% expense ratio = losing 44.85% of real returns. 0% sales load and a 0.07% expense ratio = losing 1.62% of real returns. So the fees you're describing will absolutely devastate a portfolio. I've found that it is easier to get people to understand the impact of fees like this: A 1.5% yearly expense sounds like nothing right? Well lets say you get a typical return of 6% on the year. Guess what? A typical 3% inflation just took away half your return, now you're at a 3% real return. Now the 1.5% yearly expense took away half of your real return. So the 1.5% of your portfolio fee just took way 50% of your returns....it is a big deal!
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