Category Archives: Blogs

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?

Going Dark: The Post FIRE Disappearing Blogger

“Are you going to keep writing your blog after you quit?”

“I was planning to do a few posts afterwards, so yes.”

“But I don’t want you to disappear like so many other FIRE bloggers.”

Ah, yes, the post FIRE (Financial Independence Retire Early) disappearing blogger case.  For those of you that read a number of FIRE blogs you have likely noticed a bit of trend with them.  They write like clockwork until they hit early retirement and then after perhaps ten posts or less they vanish without a trace into the voids of the internet.

Some examples that I recall and miss include:

https://livingafi.com/

http://www.bravenewlife.com/

http://lackingambition.com/

http://earlyretirementextreme.com/

And there are many more examples so if you have any in particular you miss feel free to share in the comments.

So what the hell happens after everyone retires early?  Well in short I would guess the original reason for the blog is basically dead.  After all most of these blogs focused on the journey to FIRE so after getting there they write a few post cards from the other side and eventually just stop writing.

Also I suspect there is the other side of the issue.  After getting ER they go do other things with their lives  such as learning new hobbies and developing new passions about life.  Then eventually they realize they want to spend more time on those things and they drop old things that no longer interest them (like their old FIRE blog).

And finally I suspect another leading cause of leaving their blogs behind is they feel they have nothing else to add.  They saved, they invested, they taught you how to do it and they told you about the ER life…so after that anything else they would say would largely be repeating themselves.   After all, how many times can you say “yep, still retired and life is good”? I understand this problem well as I know I have repeated myself on this blog in the last decade, but honestly I just stopped caring if I did that a few years back.  Hell, I even got over contradicting myself as my views changed over the years.

Yet here is the most important thing for people to understand, it is natural to lose interest in something.  Most blogs do in fact have a life cycle: they are born by a strong passion for a topic, the blogger learns more about the topic and cross links to others, they may even get a bit respect in the community and their life goes some other way and they lose interest and stop writing.  Hell this is so common place there is reason why most bloggers burnout and stop within the first three months or 100 days.

It take effort to collect new ideas, draft a post, edit the post (I suck at that stage), add the links and respond to comments and you are mostly doing it out of pure interest in the topic (since most bloggers make VERY little on their blogs…me included, but that is another post).

So will I go dark after I retire early?  Potentially yes but I honestly don’t know.  On the one hand, I am really attached to this little blog after all these years, but on the other hand I don’t just keep something just because it is old.  I suppose it depends if my other interests in my post ER life take over or not.  I will say that I plan on to keep posting for at least the first full year afterwards to document my transition.  Since I plan on writing a second book on the actual transition to retirement so I likely won’t lose interest in this blog for a while.

So what FIRE blogs do you miss? Or how do you keep interested in a given topic?

10 Years of Blogging

Ten years ago today I decided to create a blog and wrote my first post.  The idea was simple I wanted to retire early and I picked a number out of thin air of retiring at 45.  It sounded good.  Really that was it.  The blog wasn’t anything particularly special and I really didn’t have a bloody clue on what I was doing, but I did enjoy writing and I learned a lot from people the commented.

Now ten years later just about everything has changed.  I have had seven different jobs during that time, had two kids, got a dog, moved houses but still have the same wife (or does she still have me…I can never tell the difference).  The blog has grown to 1878 posts and 11,695 comments so basically together we have written several books worth of text between us…good job!

As for my retirement goal, well I am far exceeding just about every expectation I had for my goal.  I will likely be in a position to semi-retire before my 40th birthday.  How the hell did I managed to take a vague goal with no plan into exceeding the original goal?  Well I have looked back on some of my previous posts and data to come to the following key drivers:

  1. I believed it was possible. Pardon?  Honestly, without the thought that I could I would have never gotten to this point.  It would have been easier to give up many times, but I kept at it.
  2. Aim slightly lower on savings.  I always left a buffer to my planned savings in a given year so I would often exceed the initial target.  If I thought I could save $12,000, I would aim for $10,000 instead.
  3. Be realistic on investment returns. I always aimed for a 5% real return on investments (given inflation has been 1.6% per year over the last decade that would work out to 6.6%).  Then proceeded to exceed that most of the time (notable exception was 2008, but 2009 made up for that).
  4. A bit of luck.  We managed to buy a house in Regina prior to the local housing boom which saved me about $200,000 off my house’s current value.  So yes there was some luck involved.
  5. Assume no raises in salary beyond inflation.  As noted above annual inflation for the last decade has only been 1.6%, but my increases in salary have exceeded that.  Mainly because I changed jobs and asked for more money rather than annual increases.  In total, I have exceed inflation by an additional ~2% a year, which isn’t much but it does add up over decade.

Yet only enough despite all of the above the biggest thing I have learned in ten years is this: what’s in your head matters more than your wallet or bank balance.

I know you were expecting something a bit more profound, but developing an awareness of your thoughts and adjusting your life to your particular interests is the most critical thing you can learn to do to help you retire earlier.  After all, the math of early retirement is very basic the more you can save of your take home pay the sooner you can retire.  So 20% is good, but 60% saving of your take home pay is better.

Yet what really changes during the journey is understanding yourself and what you need to know is when you have enough to try your hand at early retirement.  Understanding your own personal tolerance for risk and your own fears is key to that and you won’t learn that from a book or reading a blog, but rather looking at the thoughts in your own head.

For me personally I realized that I don’t actually care about doing some work, that I’m more than willing to trade a bit of work over the decades in exchange for entering my semi-retirement period earlier.  I think the average person grossly under estimates one of the key assumptions to the entire 4% rule which is: you never earn any external sources of income (only investment income).  No government pension, no income form odd jobs or hobbies, no gifts and no inheritance.  In my particular case I am sure I will break every one of those, so I’m willing to roll the dice with more risk in my plan than some other people.  I understand myself and my situation and I don’t expect it to apply to others.

So for this blog’s birthday wish, I wish you all the gift of self knowledge.  Find your own path the early retirement, it will take a lot of work and a lot of soul searching but you can get there.  Remember it starts with believing you can and then be willing to learn.  Good luck on your journey.