We know many people who are either on the path towards early retirement or will have the opportunity of do so. They make good, but not great salaries, live frugally (e.g., use public transportation), and save.
Not hard as a rule, but it has one fairly difficult (for many) yet deciding factor: getting that high earning job when you are young, in a FAANG (or comparable company). Working for these type companies is a luxury limited to a very low percentage of people indeed (I have interviewed for them).
We know one couple who makes FAANG level income. They have a very nice apartment, but otherwise are as reasonable with their spending (from what we’ve seen) as everyone else.
The rest of our social circle is decidedly middle income. We also live in a very high cost of living location that isn’t California or NYC.
Guess what guys, you can have a good life in all but a small handful of places while saving towards retirement and making median wages.
"It's simple. If you don't want to be poor, earn more money".
God I'm such an IDIOT. Why had I never thought of that...
Seriously though, I love reading the comments section of HN, a subsection of a subsection in a high-growth, high-value industry talking about how easy/simple it is to make a ton of money and use that money to do things they want.
Where my Eastern European hackers at? Where my Indian code-factory guys? Anyone want to chime in on your experiences?
I make ~100,000 euro yearly in eastern europe and invest maybe 90%. I can already retire, but think I'll do this for a few more years (job good, coworkers good)
Suppose that wasn't the experience you were looking for?:)
FWIW, I'm in indentical position as EEREPRESENT. I've even already "retired", but will probably come back to the contracting market for a year or three more, just to earn extra cash.
FWIW, the original point I was trying to make seems to have gotten lost which is that tech workers (a high earning cohort relative to the rest of the population) extolling financial advice that amounts to “make more money than you need to survive and save the excess” isn’t helpful to the vast majority of the population.
As someone in a less financially prosperous section of world than the US, do you think that advice is particularly helpful to your countrymen? Is the problem that people are wasteful and unwilling to make obvious choices, or that those opportunities aren’t as widely available as HN’s commenters might make them out to be?
You really need an income considerably above average to be able to think about FIRE in Poland (whereas in US you could probably retire early on an average salary). In that regard, it's less applicable.
I think this really gets to the crux of my original point: What is "average" (average for our industry, average for the country as a whole?) and retire "where" (I assure you, if you make an average US salary and want to retire early in the US, you have to have front-loaded a lot of financial sacrifices and been extremely lucky)
That is until they wake up in their mid forties/early fifties and realize the entire life passed them by.
The problem of being relatively rich and living like a poor person is that it is a life of a poor person. Spending money provides access to experiences. Having gobs of money at fifties or sixties won't reset the clock and unlock what one missed in twenties, thirties and forties
Frugality here is distinct from cheapness; I don't think the FIRE advocates would say to live like a poor person in the Sam Vimes' Boots sense. Ideally it's more about avoiding the hedonic treadmill as much as possible, where you'd be spending money without getting any meaningful experiences.
FIRE is exactly that. It is living like a poor person on a well off person income and banking the difference to retire early.
For example, my very nice apartment in NYC costs me about $4500/mo. I get a 35-40 minutes commute to my office door to door. I have a co-worker who lives in PA. His one way commute is 2h-3h ( depending on a day ) one way but he pays only $1300 for his apartment and $1000/mo on the commute, making his cost $2300/mo. He says it is a great deal because he saving all that money and he is going to retire before me.
We also have a custodian. The custodian is paid much, much less than either of us. The custodian happens to live next to my co-worker. In fact, it was the custodian who told my co-worker about that place.
Because of how much an average American works, including my co-worker, life of my coworker pretty much matches the life of our custodian.
>FIRE is exactly that. It is living like a poor person on a well off person income and banking the difference to retire early.
No, it's living below your means, saving and investing, because you value your time more than you value stuff. Your anecdotes are exactly that. The average person saving for FIRE is no miser.
> FIRE is exactly that. It is living like a poor person on a well off person income and banking the difference to retire early.
Here's the thing though, it's easy to live a fun fulfilling life while 'living like a poor person'. You just need to figure out what you enjoy and how you maximise that enjoyment while minimising spending.
Your commuting example is an example of saving the wrong way, commuting time has been shown to have a massive impact on happiness. A better property example would be looking at extra features you don't need. My flat's a one bed, with most of it being one big room about 390 square feet in size. I could easily afford a bigger one with a lot more features but I've got what I need, so why waste the money?
Let's break down all the things that could be better.
- It has very limited storage (I could convert a bit of loft space if I really needed to)
The limited storage makes me consider whether I really need things when I buy them, reducing impulse spending and encouraging me to keep a semi-minimalist home, which I think is nicer.
- It only has one bedroom
I have a big comfy couch so friends can crash easily enough but I'm never folks first choice which is actually convenient. The lack of an office has sucked during covid but even if I had one I wouldn't want to WFH so hopefully it won't be an issue going forward.
- No Garden
I live in one of the greenest prettiest cities in the world and there dozens of parks and walks close by. If I want to sit in the sun it's a very short walk and it encourages me to get out and about.
- No Bathtub
I rarely took baths when I had one so not having one isn't a big deal. Actually now when I go on holiday and get one I'm really excited and enjoy them a lot more as a treat so overall I'm actually happier than when I had one.
- Expensive to heat
In non-covid times I spend most winter evenings out and about and a flat with cheaper heating generally costs a chunk more, so the extra expense is still less.
For some people those might be deal breakers and that's fair enough. Everyone is different. The point is to figure out what makes you happy and get it as cheap as possible not to be as cheap as possible regardless of happiness.
A person in their mid forties is not looking back on the prior 20 years of adulthood as their "entire life", I can assure you. Nor are they regretting the dollars they've saved so far.
> A person in their mid forties is not looking back on the prior 20 years of adulthood as their "entire life", I can assure you. Nor are they regretting the dollars they've saved so far.
How many people in their mid-40's have you talked to? I know a lot who regret wasting their 20's and 30's grinding at academia and work. They feel like they fucked up and lost very many valuable years of their life to the grind.
For some - the grind didn't even pay off. They are still working and have a much lower NW than they expected.
> That is until they wake up in their mid forties/early fifties and realize the entire life passed them by.
This is more fitting to people who have spent their entire life up into their fities in jobs. Esp. so in US, where there's very little vacation. From what I've noticed, people who work non-stop since leaving college are pretty dull - they just didn't have time to have many varied experiences. Also, the job often becomes their identity and they have problem seeing that there are many other things to life. I've genuinely felt sorry for some managers that I've gotten to know better in my career - they're 20% of what they could be, if they didn't just work all the time.
> That is until they wake up in their mid forties/early fifties and realize the entire life passed them by
This only happens if you equate life satisfaction with your car brand or the size of your house.
A depreciating 50k USD car and a large mortgage changes the math for the worse. One or two vacations a year or a hobby that takes up a relatively small percentage of your income is easily doable at median wages while saving 15% of pretax income.
I can eat on $4/day, probably less. That means giving up the pleasure of eating at Jean-George. Both feed me. One is just more enjoyable than the other.
Not going to the MET saves $20.
Not going to a bar saves $5 a beer, vs. getting a beer at a bodega.
Not going on a date saves hundreds.
And yes, after living that life for thirty years one would save a lot of money. It will be paired with his or hers mental health crisis in the fifties.
Let's take NYC as an example. At median rents for a one bedroom apartment, living in Queens instead of Manhattan saves approximately 1K USD a month, which equates to 60K USD over five years.
Going with an annual Metro card costs 1.5K USD, while a loan payment on a BWM 3 series costs approximately 7.4K USD. Over five years, the Metro card saves 29.5K USD. This is before you factor in parking, insurance, taxes, and fuel.
Together, living in a slightly cheaper, but still expensive area and using public transportation saves you 90K USD over five years.
There are no one bedroom apartments in Queens that are $1K USD a month that exist where the apartments reachable by the public transportation from Union Sq for under 2.5 hours one way when everything is running ( so most often ~ 3 hours ) . So that's basically living in Poconos.
To get there for 1.5 hours one would have to buy a car and pay for insurance and find parking by the subway.
Dave Ramsey who peddles FIRE is a charlatan who makes money not of following his advice but of selling his advice to his followers.
If the average one bedroom apartment in Manhattan costs 3.5K USD a month, and the average one bedroom apartment in Queens costs 2.5K USD a month, the average one bedroom apartment in Queens costs 1K USD - less - than the average one bedroom apartment in Manhattan.
You can - save - 1K USD a month by living in Queens instead of Manhattan.
It’s not hard.