Early Retirement is Elitist

If you have been around the early retirement blogger community for a while you will notice we have a high number of members who were engineers. I initially thought that was a interesting fact as I drank the kool-aid of thinking anyone could retire early. Then after reading this article in the Atlantic, my realization that I was never middle class it hit me all over again. I have always been really am well off and honestly I like to think it is my own merit and skill but I should really should mention I was born with a significant leg up on everyone else. Yet the real truth of the matter is it extends farther than just me. The entire concept of early retirement in your thirties or forties is really a niche carve out mainly of the subset of the professional class (like engineers, lawyers and other high paying career tracks) who crave freedom more than anything else.

After all we personal finance bloggers continuously preach that it is all a matter of saving a high percentage of your take home pay and just about anyone can do it.  If you can save half that is great, but if you can push it even higher to saving 66% of your take home pay then your working career gets even shorter and starts to approach a mere 10 year career.

See by telling the story in terms of percentage we mask the little details like it a hell of a lot easier to save 50% of your tax home pay when you are making a combined household income greater than $100,000 per year (and in a lot of cases per person).  When in fact, the median family in Canada is only $70,330 per year (2015).  Now toss in the average house cost in Canada is $495,000 and suddenly saving 50% of the median income at that level gets a LOT harder when you could be spending around 40% of your income on just the mortgage payment.

I used to think I was somewhat noble for doing early retirement after all I was giving up the option to be really rich if I kept working…of course I conveniently ignored the fact I was already rich compared to most people just not multiple millions in the bank rich.

My kids for example are already better off than I was. I was the last of four kids so my parents decided to cut off my university funding after my first two years and co-signed a line of credit instead (not that I’m blaming my parents at all for that decision there were a lot of factors that lead to that decision).  But it did result in me owing $25,000 when I left university.  My kids haven’t got to high school and they already have over $40,000 each saved for their post secondary education. Not to mention the fact they now have two parents who work in the house and are available to help them with homework, attend school functions and otherwise support them in just about everything.

While I can’t predict if my own kids will ever go after FIRE themselves the reality is they would end up with a huge leg up over my own attempt as they will likely graduate post secondary education with zero debt.  Thus further enabling my kids to retire even earlier than I did if they also go after a professional  or other high paying career.

So the question becomes is FIRE really possible for everyone?  While in a pure theory sort of way, the answer is yes.  The reality is much different.  The difficulty of early retirement keeps getting higher the less income you make and the scale isn’t just linear.  For a family earning less than medium income the odds start to become vanishingly small.  You basically need to live in a low cost of living region with a higher than average local income to make it work.   So in the end I have to conclude FIRE is basically an elitist concept that is mainly limited to high income people and those that succeed at it will always be a minority as compared to the general population.

Do you think FIRE is elitist?  Why or why not?

19 thoughts on “Early Retirement is Elitist”

  1. It is without a doubt elitist. I paid for my own education ($60K) but my son already almost has that half saved for his education and he is only 4.

    Retiring early is a privilege for the rich unless you plan on leaving for a third world country and living on very little.

    Even thinking about trying to save to retire early is elitist. I know I could afford to retire by 40 if I kept things going the way I did and saved a heck of a lot more money. All of this is SOLELY due to the fact that I make bank and so does my partner which means I don’t have to find his living or retirement the way many families have only one breadwinner to do both. We are two. With one kid. It’s bascially elitist with a capital E.

    The other topic is also marrying up or down. Women have it easier in the sense that it is more acceptable to marry up, but for men who do it they are emasculated or looked down upon, as they are pegged as the main earners in society in any couple.

    All good points. Will need to flesh out this answer a bit more (will link to you if I do).

  2. It is elitist, and I appreciate that you’re one of the FI/RE bloggers with the heart/guts/humility to say it. Everyone else seems to attribute it solely to their superior self discipline and moral character!
    I’m about 5 years away from FI/RE, but I try not to not flaunt it or be preachy to my friends who didn’t have all the advantages I did.

  3. Wow some honesty about fire. Good to read. Yes most blogs write ‘well if you weren’t a knucklehead then you be smart, rich, and retire early like me.’

  4. I have a different perspective since I have lived and supported myself since the age of 16, high school drop out, got into the sales profession on straight commission and did very well early on. While working I went to night school, finished HS, then went on a got a University level diploma and college technical training, while supporting a stay at home wife and 3 kids.

    Now in sales management, salary base + north of 150k.

    About to FIRE at 45.

    Do I see myself as elitist? No.
    Worked my butt off, and found what I was gifted at early (plus a little luck mixed in) – yes.

    Never had student debt of course based on my situation, but at age 21 was already showing 80k on my T4 and that was over 20 years ago.

  5. To retire early I think you have be more of an outlier than an elitist. By outlier I mean doing some things which go against the grain, or more commonly, “following the life script” of a house, mortgage, spouse, kids, working until 65, etc.

    Surely, there are people who follow at least some of those things and still manage to retire early. But IMHO the more you are an outlier, as in not doing those things, the better chance you will be able to retire early.

    I am single, childfree, had a mortgage for only 9 years, live in a small co-op apartment (not a house), and surely don’t do many other things most people do (not necessarily relating to early retirement). Being an outlier comes very easily for me, so having retired 10 years ago at age 45 was an achievement, but not necessarily shocking to me personally. It felt very natural.

  6. I absolutely think that retiring early is for anyone. Life is about decisions. You can become an engineer and retire early or work until 65 and still carry debt. The difference is choice. My husband and I retired in our 30’s. I only had high school, my husband trade school. Oh yeah, and we retired from part time work. As soon as he finished his apprenticeship he worked part time, I always worked part time. We had no offer from parents to pay for any schooling, to buy us cars or to contribute to a down payment. The choices we made were to “househack”, bought a house, rented apartment in bsmt, and at busy student times had international students rent rooms for 700-800 per room, 3 students at a time. We did this although not every month for a couple years. We always grew a huge garden. We never had car loans, which meant some of our vehicles cost 1000$. We chose to become efficient with every penny we spent. Our renters paid for our homes. Our garden, coupons and home cooking fed us. We lived in Vancouver, so hiking, walking, and snowboarding, snowshoeing were what we did instead of expensive vacations.
    I believe anyone can retire early but it requires making choices that support that goal.

  7. I think there are a few factors that need to be considered when looking at this. Consider two people and two ladders, and let’s say the goal is to get to the top of ladder (FI/RE).

    The first factor to consider is where you start off – some folks as Tim alluded to start off much higher up the ladder than others. (student debt, family scenarios, living location etc). Second factor becomes how fast you can move up the ladder. This is determined again by multiple factors such as education level, income level, location etc. To put it in perspective, a family with 150K income spending 45K a year is moving up the ladder much faster than a family making 70K and spending the same. While this is somewhat under a users control (employment choices / spending choices etc) there is a minimum cost of subsistence living as dictated by where you live and lets face it not everyone can be an engineer even if they had the heart/motivation fully into it. In my university days I worked in a warehouse job with a guy a few years older than I with a Masters in Biology. He had no desire to be in a warehouse job, but the laws of supply and demand dictated there was no science researcher job for him where he lived. Again that is a factor of choice, he could have chosen to study law or other higher paying more in demand jobs or moved elsewhere. Still at the end of the day, a society of 50% engineering grads will dictate that a number of them will be working at McDonalds serving fries. The third factor in all of this is your concept of FI/RE. There is a vast difference in FI covering the bare essentials with little leeway to having so much excess funds you can’t spend it all even if you wanted too. For the ladder analogy consider it having both hands and feet firmly on at the top versus having only a few finger holds with the rest of you hanging off. From the perspective of having reached the top of the ladder both are there, but I think you would rather be one of those versus the other.

    In conclusion, everyone has a chance of getting there (FI/RE) but as Tim mentioned it will be vastly easier for some than others. Does this mean it is elitist.. not necessarily, however it does cater to a small subset of the population that has the desire/willingness and or resources to make it there. It is a small club and not everyone can be part of it, society can’t support that.

  8. If you have the means to exploit the tax system which is designed around working until 65 and retire at 35 to do nothing, that is elitist. Seems similar to the way aristocratic living used to allow a life of leisure. To be sure aristocrats had usually around 25 times the average income to be considered comfortable whereas fire often entails living on less that the working class. Unless you are pursuing something that contributes back to society there is a drain from the system filling your pond at the expense of others. By no means do you need to earn money to contribute.
    Also I have little moral judgement for those who would choose a life of leisure. But when you or a family member need expensive health care or the protection of the justice system you must admit that you neighbor is the one paying for this. It seems to me that fire is a way to reinvent yourself with more security than if you just bit the bullet and attempted the transition before you had your savings.

  9. This is the most authentic, honest post you have written. There are all kinds of systemic factors that advantage some people over others. Yes, some people work very hard to overcome odds and live frugally to achieve the goal of early retirement. But many people start way closer to the goal line than others, and most of them don’t acknowledge their privilege and judge others who have not had the same. Kudos to you for doing so!

  10. I think timing is also a factor that can help one speed up the FIRE process. 15 years ago when my family bought our first house in Toronto for 250k, we paid about half of the 250k with all of our savings and borrowed the rest from the bank. I started working full time when I was 20 and saved up almost all of my salary to help paid off the remaining mortgage within 3 years. Those who follow the Toronto real estate market would know that the value of most properties has tripled or even quadrupled within the last 15-20 years (depending what you bought, the value of detached homes for example would definitely go up a lot more). My uncle bought his house for 380k 15 years ago and now it’s worth at least 1.2M which will be passed onto his son and grandson. I agree that the cost of living might be higher now thus making it more difficult to save up, but I believe it’s also true that the Generation Z etc. would benefit from their parents’ wealth way more. There are more people that I know who will inherit million homes from their parents. In a way I’m glad that I’m not one of them because it is a lot more difficult to buy a home without help now.

    I also agree with deegee’s comments.

  11. Is anyone else worried about the recent market crash or is it just me? I think I lost like 20k (unrealized, but still), sigh

  12. What’s elitits is telling people that they can’t retire early. The reality is that most people are forced to retire earlier than they planned. So like everything else in life plan to arrive early so if something comes up you are on time.
    The question we all have to ask ourselves is want can I do different today to put myself in a better situation. Not compare how easy it is for some and hard for others.
    I don’t know how far you will go or how fast you will get there if you try but neither do you.

  13. It is elitist, or perhaps Darwinian for all the reasons you enumerate. However it isn’t exclusive because people choose their income when they choose the training or education they select. If someone majors in history or sociology they are selecting a lower income and much more difficult path to financial independence. If they choose to be an electrician or an engineer they are virtually insuring they can have a six figure career. Nobody assigns careers in the US, we choose our occupations. Not everyone can pass engineering but almost everyone could become a skilled technician.

  14. It’s not Elitist, it’s a goal and subsequent lifestyle. However, I do feel it’s also become a trendy buzz word now in our society, or at least in the blogging world. “I’m FIRE”. Much like vegans and cross-fitters want to tell everyone they should do it and how they are doing it, I feel FIRE is the same. It’s now an overblown term. I have been FI for over 5 years but still work as I enjoy what I do. I am sure I’ll ‘retire’ someday but always have side businesses going so technically not retired? I see many bloggers who are RE and want to tell the world but when you read how they live, they live like they are on welfare. Maybe they are happy that way, kudos. Whether you work because you enjoy it or are retired early, the goal is to be content. (I had a friend retire at 40 and found it was now what he thought so after two years went back into the workforce simply to have purpose)

  15. I think the word elitist is going too far. But it’s certainly true that some people have an easier road to FIRE than others.

    I’m someone who chose the liberal arts route, could’ve gone into a higher paying job. I’m already in my late 40s. I won’t retire super early, but likely in my mid 50s. Possibly earlier if I moved to a cheaper area.

    I agree with the poster who said it’s more about being an outlier than coming from a privileged background. I’ve always looked around and thought much of what mainstream society promoted was ridiculous and not in my best interest. It drives me nuts that other people don’t seem to see this–or that they complain about the corporations making them rich while eagerly supporting those same corporations with their spending.

    I’m the type who doesn’t care if I’m not doing what everyone else is doing. There are FIRE people like Jason Fieber from http://www.mrfreeat33.com who was abandoned by both of his parents. Yet be became FIRE at 33 while never earning more than 55k a year at his day job. A big key (although not the only one) for his FIRE was he didn’t care what others around him thought.

    And to some degree, the age at what people become financially independent is less relevant than the underlying values the FIRE movement promotes. Deferred gratification, having goals, thinking outside the standard boxes that are pushed on us…basically living a more conscious life instead of just going along with the standard program like a helpless sheep.

  16. You struck a nerve. Elitist is an attitude marked by the belief that society should be led by the elite. Elite is defined as “a select part of a group that is superior to the rest in terms of ability or qualities.” By those definition, people who are successful at FIRE are elite but not necessarily elitist. I’m struck by how many FIRE blogger want to essentially drop out of society. They want to travel the world, socialize with other FIRE bloggers, go to their FinCons and Chautauquas, count hits on their blog site, etc. They want to engage society on their own terms which is different than trying to lead society or even change society. They write their blogs and say “This is what I accomplished so you can do it too.” Blithely ignorant of the conceit in their very message. Anyone who starts a blog to espouse their ideas or lifestyles has a healthy sense of self-worth bordering on narcissism. There are some characteristics of elitism if not strictly adhering to the definition.

    One of the dirty little secrets of FIRE is it helps to have a well paying job. Countless FIRE bloggers will write that your salary doesn’t matter but when you read about people saving 50% or more of their salary, those are invariably well-paid individuals.

    I find it telling that whenever FIRE blogger are attacked with statements like a) you don’t have kids, b) your parents must be helping you, c) your spouse still works, etc. that there is such a counterattack.

    To me, FIRE is kind of like white privilege. To achieve FIRE, many have had a leg up in terms of education, job salary and family support. Not 100% as many bloggers like to highlight the outliers of the outliers, i.e. people with low paying jobs that achieve FIRE. I don’t mind admitting I was lucky. My parents were well off. They sent me to private schools. They encouraged me to pursue a career which paid well. They left me a significant inheritance. They taught me financial literacy from an early age. They taught me frugality. Take all that stuff away and I would have had more difficulty achieving FIRE. Perhaps I would have been unsuccessful. However, there is little point in wondering about the counterfactual events. My life took the path that it took based on several variables.

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