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whyme

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  1. whyme

    Fanning The Flames Of The FIRE movement

    Steve, I don't think anyone here is trying to "cut off" a group of young idealists, nor are those FIRE folks being labelled by anyone as "filthy rich." The "negativity" that seems to weigh so heavily in your response could also be called critical thinking. I think it is not a contradiction for us to encourage the path to a sound retirement--frugality, long-term compounding, low-cost index funds, staying the course, etc.--and to also at times step back to question the version of capitalism and government regulation in which we find ourselves operating. We can and should try to make the best of our situation, but that doesn't mean the current system is natural or inevitable. You mentioned the precedent of the 'sixties movements that rejected consumerism and "straight" society. The leaders of that era were largely young people of privilege, mostly white males, many of whom were connected to elite universities (Berkeley and Columbia were big h o t-spots). Those folks were rejecting the path that had been laid out for them: highly paid professional or corporate jobs, a wife and single-family home, acquisition of both social position and consumer goods (while watching many of their less fortunate age-mates get screwed up or killed in war). In that case, (Harvard professor) Tim Leary's call was to "Turn On, Tune In, Drop Out," a much more meaningful idea if you knew that between family resources, your education and government benefits, you had a safety net. Subsequently, that movement was criticised by others on the left--women, people of color--on grounds that the sixties "revolution" reinforced a lot of the old patriarchal power structures. It wasn't that those critics were on the side of Ronald Reagan, against all that the Berkeley radicals were doing, but these later activists were trying to discover contradictions and limitations in the prior generation's thought so as to move the dialogue--and the social change--further in the direction of justice and equal opportunity. I think something close to that is the goal of the critical comments by Dustin and Ed. Make sense?
  2. whyme

    Fanning The Flames Of The FIRE movement

    Steve, as I read it, Ed is not criticizing individuals for trying to find financial independence and happiness while living well below their means. He and Dustin are raising a question about the effects of the rhetoric of the FIRE movement from a perspective of social equity; it's not about individual consumer choices or financial planning. (Dustin and Ed, please correct me if I've got you wrong.) It seems likely that most of the FIRE folks are coming from a position of social and financial privilege: people whose "natural" course in life would lead to substantial means and many options. In a way, the FIRE movement is openly based on unequal privilege -- the fact that this country is awash with money (at least for some). (It's hard to imagine the FIRE movement in places like Malawi or Bangladesh.) As Ed writes, the claim that "anyone can retire early" may have the unintended consequence of reinforcing the notion that those who don't--including the large group of our fellow citizens who remain relatively poor their entire lives and, at best, retire with a Social Security check, Medicaid and little else—just aren't rich because they don't deserve to be. That message--and perhaps the blind spot that some of the FIRE enthusiasts are exhibiting—is what is being criticized. Nobody is suggesting that the FIRE folks all need to lease a new Lexus. Ed, your frustration may be getting the better of you in that earlier post to Steve, you may want to reconsider your phrasing. PS: Dustin, I posted this before I saw your latest post, above. Please feel free to correct my interpretation of your comments as needed.
  3. whyme

    Interesting financial planning software

    No problem, Tony. Like Steve, you seem to have arrived at a happy, sustainable retirement lifestyle, so you may not want to change anything. Perhaps this planner is most useful for someone who is not yet retired. If anyone's curious, here's an article by the guy who designed Maxifi: https://www.forbes.com/sites/kotlikoff/2018/06/25/the-4-retirement-asset-spend-down-rule-is-rubbish/#368ccf8f5eb6
  4. whyme

    Interesting financial planning software

    I think it is good for a single person, even better for a family. In your case, Steve, it sounds to me as if you are very happy with your current plan and are not looking to further maximize your available spending money or make changes for some other purpose, so there's probably not much point. But for people who are still in the planning/retirement decisions stage or who are trying to get the most out of their nest egg without over-spending, this seems valuable to me. Some of those other planning calculators may also be very good, I have not looked at them all. The ones I have seen struck me as either less sophisticated than Maxifi or they exhibit complications that are daunting for folks like me who aren't fluent with Excel spreadsheets.
  5. I've run across what seems to be a very sophisticated d-i-y financial planning tool. I like it, so I figure it may also be of interest to some of you. It is called Maxifi planner. (It costs money--$99 for one year then $79/year if you continue to use it. I'm a recent customer, I have no affiliation with the product.) https://maxifiplanner.com/ This does not dole out portfolio advice. It is overall financial planning: you input the expected rate of return on your investment accounts (the default is a reasonable 5% annual return) plus your other sources of income. What it does consider, with considerable precision, are factors like taxes, social security, housing costs, effects of projected inflation on pensions, etc. You can run endless alternative scenarios--what if you sold your house and moved to a different state? what if you retired in 2021? what if you purchased rental property this year? what if the income tax rate jumps 20% in 2025?, etc. All of the calculations about things like income tax (including state taxes) and medicare part B premiums are done by the software. Designed by Lawrence Kotilikoff, a Professor of Economics at Boston University, it eschews the annual percentage method of calculating how much you can withdraw in retirement. Instead, it calculates the maximum amount of "discretionary spending" you can expect in a given scenario, considering numerous variables, with the idea being that you want that income amount to be level (inflation-adjusted) across your lifetime (through a default age of 100, which you can also adjust). Evidently the economists call this "consumption smoothing." Discretionary spending is the income that remains after "fixed" spending, which for purposes of this planner is housing, taxes and Medicare or life insurance premiums. As a single person with a relatively uncomplicated financial situation, I'm finding this both interesting and useful. If I had a spouse and children, it would be more useful yet. It calculates from which accounts you should withdraw money in what order, it calculates when you and your spouse should file for social security, whether and when to purchase life insurance or an annuity and more. It allows you to include expected future large expenses, inheritances and other anticipated changes to your financial picture in the plan. It will maximize your income such that you will spend it all by the year of death, or you can determine a percentage of your assets that should remain at the end of the allotted years. It has a fairly straightforward interface--all done online via a web browser--but if you poke around a bit, you'll see that there are many options and scenarios you can try out. If you follow the link above, you'll find v i d e o s that provide some examples of how this thing works, and you can also locate a page about the company president where he briefly lays out the reasoning behind this planning software.
  6. whyme

    Early retirement considerations

    This is a marginal issue, so I'm not inclined to spend time reviewing the literature, but I'll try with the example closest at hand, the Mr. Money Mustache article on marketwatch that I linked to earlier; it starts out with stern words that brook no dissent and seem to imply that anyone who does other than the FIRE program is lazy and sad: "If you think there is even the slightest flaw with the ideas behind FIRE, you’re probably just not understanding it correctly. Because the whole reason for doing any of this is to lead the happiest, most satisfying life you can possibly lead. "Sure, there are a few tricks behind the curtain — I’m going to make you occasionally tackle some moderately difficult stuff instead of the lazy, easy things you are accustomed to doing. But this too is a win, because a lazy life is a sad, depressed, unsatisfying life." He goes on to cite $10-plus-tip glasses of wine as an "easy example" of money being squandered on "things that don't improve any of our lives." He follows this with admonitions about the "fundamental truth in society" that "most people are pretty bad at math." (A little later in the article, he brags about his brain having "a math side I can't turn off" which is "incredibly helpful.") So, to me, the tone of the piece suggests that someone who, for example, enjoys expensive wine or restaurant meals is morally or intellectually deficient and in need of correction.
  7. whyme

    Early retirement considerations

    Ha! Drop in computer lingo and make it seem like a new idea. Of course, live-in-one two and three unit places are very common here in California, and have been for about a century. Elsewhere, too, I presume. It's not a bad idea at all, if you can put up with the role (and the work) of being a landlord.
  8. whyme

    Early retirement considerations

    If that's the scenario--the person is unhappy as a software engineer making $175,000/yr, lives frugally, avoids debt and puts together a substantial investment portfolio, then re-invents herself as a much happier freelance graphic designer making $40,000/year (while that investment portfolio continues to compound), I can't find much to criticize. I certainly agree, Steve, that the FIRE folks' attention to financial planning and their skepticism about consumerism are admirable (though some of the columns I've read have a Puritanical moralizing tone that I'm not crazy about--did you encounter that at the conference? ).
  9. whyme

    Early retirement considerations

    I presume that anyone attentively planning to retire--early or not--will make provisions for emergency needs and predictable periodic expenses such as a new roof. FIRE aficionados also seek to minimize those eventualities, I think: they may choose a small house with smaller expenses, maybe they make do without a car, or with a modest "beater" that they own for two decades, etc. There's much to be said for living well below your means and applying extreme skepticism to our culture's propaganda linking consumer purchasing to happiness. My point above is that even if you achieve happiness on a modest budget, later-in-life changes in circumstances (sometimes unexpected and outside your control) could create an entirely rational desire for more income at a time when you can't generate new income (or an enlarged investment portfolio) the same way you can when you're in the workforce in your 30s or 40s.
  10. 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.
  11. 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.
  12. whyme

    Money Moustache responds to Suze O

    Darn cockblocking right! ... maybe "the Mooch" is behind this board...
  13. whyme

    Money Moustache responds to Suze O

    ... or a term acceptable to the software on this board, which prohibits such offensive words as V I D E O.
  14. Forgive me if this has already been linked. I see that FIRE is a current topic here, and FYI, here's an argument for FIRE by one of its most prominent exponents: https://www.marketwatch.com/story/mr-money-mustache-wants-suze-orman-and-everyone-else-to-understand-these-8-things-about-the-fire-movement-2018-10-05
  15. whyme

    Switching vendors; need help!

    Sorry if I played a roll in scaring Sophia away--are you still with us, Sophia? The point I was trying to make, perhaps badly, was that any diversified low-cost index fund portfolio (including a one-fund target date portfolio) should be fine, if she sticks with it.
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