What is the FIRE Movement? Could it be Hurting Our Economy?
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- Опубликовано: 19 сен 2020
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The Fire movement is a growing trend amongst young workers which is growing in popularity thanks to its very enticing goal which is spelled out in the name.
FIRE is an acronym of Financial Independence and Retiring Early.
The idea is that by following a very aggressive saving and investing strategy people can get to a point where they are effectively retired at a very young age, sometimes younger than 30.
In a world where we are being told that pensions are running dry and the average person may have to work in some capacity for their entire life, this sounds like a bit of a lofty dream.
Sure, there are trust fund babies and young tech millionaires who may earn millions within their first few years in the real world, but surely kicking back on beach and never thinking about work again is not attainable to a regular wage slave right?
Well if some figureheads and internet forums are to be believed then well, yeah actually it is for pretty much anybody.
Now in the interest of full disclosure, I am a passionate advocate for the financial independence movement. But that does not mean that I don’t see issues with it.
Now many of those issues are glossed over in the sheer simplicity of it, which is also part of the reason it is so powerful.
So long as someone can get to a point where their investments are making as much as their living expenses long term, they have achieved financial independence.
Getting to that point is harder for some than others, but advocates of the movement argue that this difficulty has more to do with personal lifestyles rather than personal incomes.
So what are the mechanics of the FIRE movement?
How could someone use it to stop working forever?
Is this actually attainable for anybody like they say?
And finally
What would this movement do to the wider economy?
#FinancialIndependence #EarlyRetirment #Economics
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. . . Or I could use my super fund.
The site doesn’t work
I just heard about this FIRE movement , and since MGTOW has the same finacial goal , does the FIRE movement discuss the financial burden of a relationship/marriage?
you didn't consider that fact that people's expenditures also increase till 60ish and then flatten out or dip...
The idea of financial freedom to me doesn’t mean never working again. It means i can focus on things that aren’t very profitable.
I was thinking about starting an organic farm if i ever hit the lottery
B.C Drisk i’d dedicate myself to judo and teaching judo if i didn’t have to worry about money.
There are so many things in society that aren't valued enough to draw a salary, and yet which provide immense benefit to society and the economy anyway. Too many people are trapped in jobs that don't actually mean anything to them, or have much benefit to society in general, and yet are fully paid for simply because they make someone else money.
All that to say: I agree 100%.
If your goal is to work hard for 10-20 years like a slave, to be lazy for ext 30+ you're not doing fire correctly. Long before this movement had a name I've known people to simplify their lives and live off merge means in order to pursue things that make them happy that are not profitable. They still work hard, sometimes with low paying jobs. But they leave the rat race behind.
Wait we're a movement now? Cool. But agree with alot of the comments here.
Retiring in your 30's is very appealing, especially in your 40's.
Can you imagine working until 65 or 72 (the time social security kicks in in netherlands). Early means 60 there.
@@angelikalaser7778 i mean if u dont work whst are u gonna do with ur life
i mean sure quit the boring job and get something more fun but u always have to work
@@mouinemhb4960 you do pther things you don't get paid for. Like gardening, volunteering, all the stuff you don't have time for while working 9-5 (actually more like 7 to 6)
😂😂😂
@@angelikalaser7778 So, things that I actually like less than my job. ^_^
For me financial independence means being able to work in jobs I enjoy, rather than focusing solely on the salary :)
Yeah that's a good point. I was thinking the same when watching the video. That I don't care as much about being able to not do nothing, but rather being able to work on things I would enjoy and like doing! Because I think it is good and healthy for us to stay active and have challenges/work. But then obviously when the time comes when I just can't physically work anymore, that I would be able to still have money/income to pay for shelter and food, and some comforts hopefully.
joining and quitting willingly?
Rudolf Janse van Vuuren 16% daily paid weekly but this will vary if pool size price of zwaps rewards change
true
Amen
For me, financial independence means never again worrying about employment. It means working _with_ a company rather than _for_ it, and if I disagree with the principles of the business I can leave. It means working part time if I choose to do so and spending the rest of my life following paths that interest me and align with my values.
How to FIRE: Make a $997 course on how to FIRE
stonks 📈
haha your probably not wrong.
A natural businessman. Cheers
@@EconomicsExplained Lots of people do it.
Make sure the price ends with a 7
@@EconomicsExplained Sorry to be a Grammar Nazi, but you're
"Time in the market beats timing the market."
Warren Buffet approves this message.
Buffet doesn't seem like a big fan of F.I.R.E tho... that guy is like 90 and still working like a maniac
@@hammerhead_nz8864 "Find a job you enjoy doing, and you will never have to work a day in your life." - some famous dude
@@ericnipas49 Confucius, Chinese philosopher.
@@ericnipas49 I like this, even if I retire early I will continue to work, but on my terms and on projects that interest me and benefit the planet
I just heard about this FIRE movement , and since MGTOW has the same finacial goal , does the FIRE movement discuss the financial burden of a relationship/marriage?
i know i reposed but i wanna get info
"Wealth does not consist on having great possessions, but in having few wants."
@Esteb5n Caballero lol
Happy to pay rent cost do some travel don't need a lot of money to be happy
after you had what you wanted.
Seems a lot of poor people are inherently wealthy
@@JacksonOfTheJerry you want few wants not no wants
I’m sick of always trying to prove myself to a system only to realize their intend was to have me work my entire life without any reward.
Yeah I feel you brother.
Then again, it is the best system out there.
@@rjeffers3726 for those at the top, sure. Most other people are struggling.
I can see why people are turning into socialism and communism these days
you're rewarded, maybe not as well as you should be, but you are.
go to any undeveloped country and then you'll understand.
safety, education, water, electricity, entertainment, hospitals, roads etc
Usually people don’t want to retire that early. People are mainly interested in Financial Independence part
Yeah, it means that you always have the ultimate "you need me I don't need you" card with your employer. Also means that you can move into a less demanding or more rewarding field as well!
That also removes a lot of stress making everything that much more enjoyable :)
Its always great to tell a boss it isnt about the money and watch their reaction. Did this to my last boss, I took a pay cut to go to a stable industry (I worked and went back to oil and gas). Completely stunned him.
Yes. I think the intent is to earn enough money so that your future choices are not guided by money. You have enough time and resources to do the things that you really want to do.
exactly, it's like people can't understand that one simple fact......it's about options and not being afraid to lose your job. Being debt free, having low expenses and having a healthy investment porfolio is something everyone should be living by regardless if you pursue FIRE or not
The cruel fact that makes FIRE possible is that the price of ASSETS is always rising faster than your SALARY.
☹️
Yes, until they're not.
Not in the Nixon years or the GWB years.
@@bo840 depends on what kind of assets you have. The chance that all asset classes will drop, is miniscule.
The more types you own, the higher chance you'll doing just fine. Not all stocks will go down in a recession.
FIRE isn't a easy way out, you have to be open to learn some basic things about investing. Then you'll learn that investing isn't that scary what people make to believe.
During a bad time unemployment is also a legitimate possibility. But because it's a bit more tangible, people think that's the only to do life.
@@georgeemil3618 in those times access to a stock market was harder due to starter amounts and commission fees. Now thanks to the internet, everyone can buy stocks.
Which means wins and losses are resolved quicker.
You're basically comparing a horse carriage to automobiles.
I'm personally a fan of the movement. Currently invest ~50% of my income (though it's easy since I'm a software engineer who's single lol).
I don't care about it so much in the way that
- 'I want to retire early'.
I care about it in the sense that
- 'If I wanted to go fk off for 2 years and do what I want then I could'.
👏🏾👏🏾
Yup. Couldn't agree more. We are 6 months into fking off and doing whatever. Our fking off might last for the rest of our lives. It's pretty great waking up each morning doing whatever I want.
Buy zil and port put in liquidity pool in zilswap passive income from zil can help you retire early
King
👍
I just like the idea of turning working into a choice. I would still work, but it would be because I want to be there not because I have to. That perspective shift makes a huge difference.
Even if your income isn't high enough to get you to financial independence, it might get you halfway there, allowing you to maybe work less hours or choose a career that pays less but is more fulfilling.
I found when I hit a few years worth of income, even though I worked a normal career, things that bothered other people didn't worry me. When you know you can walk away, even if you don't, you feel in control.
Agree. I am at the point that if I don't touch retirement investments, I will have a very nice retirement. I could work a job in which I save nothing at this point. My costs are low, so almost any job would do. Kinda nice having that mentally.
Don't forget the other video this channel put out about the value of a boring job. 😏
I'm on FIRE too, except in this case it's Forced to pay Interest Repayments for Eternity :')
ah a man of culture. Western culture that is.
a harsh punishment indeed for willingly taking on an unbearable amount of debt
at least you learned a lesson i guess
@@acey457 Obviously, it's satire by the OP. Debt can also be good, even if they are long.
A sad state of affairs to be certain
Likewise
When people retire early it opens up those jobs to other people which helps the economy.
Thought this too. Having more people with disposable income may also help the crowdfunding/shareholder scene expand by quite a bit. Currently, the majority of shareholders are very wealthy and ravenously greedy. Maybe if FIRE becomes popular that might changed slightly. I hope I live long enough to see.
and innovation
The very originate of retirement from what I’ve been told.
My grandparents retired early thanks to bonds. When they started working, they saved a lot and started buying 4-5% yield bonds in the 50s when it was bullish. Eventually at 40 they had like 600k in bonds at 5% rate, and were earning 30k a year. They lived in a small town so they were more than enough, and my grandpa kept working just because he has a family business, a couple of hours a week.
But yeah, they were living off investments, it can be' done bit its hard
There's an insane difference in investing between the 50's and today. We've seen unprecidented levels of growth in stocks and bonds, sure, but most people don't capitalize on this because the wages have not increased to meet/beat inflation, and housing prices have skyrocketed to astronomical levels. You could buy a house on minimum wage in the 50s, now you're lucky if you can keep living with your parents, if they even have a home of their own.
What happened when the bonds matured, cutting them off from the coupon payments? Or did they not live to see it happen? 😅
@@naefaren3515 No, you couldn't buy a house on minimum wage in the 1950s. Please stop exaggerating.
"only left with $60k a year to live on"
Bruh... that's a pretty comfy yearly income in 2020...
I mean that would pay for like 250% of my current lifestyle.
And you only need 2 million dollars to pull it off 🤣
It's not alot when you need to pay for your health, and energy to do things which you can't/don't want to do when your older. May also have to pay for care and entertainment.
It all adds up.. Not huge amount of fun when you're old ;)
@@JLneonhug Most of your health care expenses will be covered by Medicare in old age. I'd imagine it's even easier if you live in any first world country other than the U.S.
@@rightwingsafetysquad9872 yes, but no.
You get basic healthcare in the EU for free (mostly) but it'll be shared between in a ward of x people, and in queues of months before you get specialist treatment by teaching doctors.
Don't forget you get taxed heavily in those countries to subsidise for such 'free' healthcare luxuries.
20/40/50%+ plus x% for the privilege to work in UK. Sweden is similar with 40-50% tax rates.
@@JLneonhug Oh, I'm under no misconception that "free" actually means free.
Me: "well, if an Australian RUclipsr is using an American app, it's probably worldwide available"
Literally the second page: "citizens of the United States only"
Acorn is limited to the US only?😂
*Insert sponsor* So, you ever heard of NordVPN?
XD
It's okay. Australia is a US company after all.
I think it's only in Australia and USA. In Australia it has a different name I think.
Available worldwide*
Even though I find it extremely important to save money and built a portfolio, it is also important to remember that you have a life right now that is worth living. Always thinking of a holiday or an item I really want as as exchange for a longer time I have to work can get really toxic and makes it easy for me to get too fixated on numbers, in my opinion..
I think that's definitely an issue. If I did that I'd be looking at roughly 38hrs of work to pay my rent, ~20hrs for bills, 10-15 for vehicle expenses and probably another 20 for groceries.
FIRE gives you a more realistic and mature framework on how to live life. We live in a capitalist society that will impoverish you at the first available opportunity once you step out of your front door. FIRE is simply one practical strategy for navigating this bleak reality, but not the only strategy or the "right" one. I get a lot of motivation and hope from it personally, so I have begun to adopt some of its principles. I mean, who doesn't have a few different plans for the future aspects of their life? We are celebrated for having well-thought-out health, family, and educational goals, so why not detailed financial/investment goals?
If you're living paycheck to paycheck or are drowning in debt and think focusing on the numbers can be "really toxic", then you have a whole other world of issues at hand and need to grow the heck up and realize where your life is headed.
Now, if you're in a great financial situation, and already have a good emergency fund and know your line of work isn't going anywhere, then sure, don't focus on the numbers as much, but you still REALLY need to pay attention to your spending habits and correct any issues you have that could be costing you unreal amounts in the long run. You should also build good saving and investing habits for the possibility of disaster, we're not immortal and everyone has some issue in their life that comes up.
I say if you're financially stable, to still check your bank account often for fraudulent purchases, and check your trends/habits at least quarterly to make sure you actually are financially stable.
Great overview! My wife and I follow the FIRE strategy with more emphasis on the Financial Independence portion. I think the most important thing we learned through adoption is to shift focus on what we really value and that is time rather than things. We still can work after we've achieved financial freedom and probably will, but with greater flexibility. FIRE never feels like a burden to us because our values match our lifestyle.
One thing to consider when asking a question like what would happen to the economy if everyone practiced FIRE is that capital investment yields are subject to diminishing marginal returns. If there was a societal preference change towards investing at the rate FIRE demanded, the investment yield would drop, making achieving FIRE harder for individuals. The main reason it is achievable for people who’s individual consumption/investing preferences allow them to achieve financial independence is because there is a larger segment of society that value having a higher consumption rate opposed to having a higher investing rate. The fact that people who desire to reach FIRE are generally abnormal is what makes their goal relatively achievable.
There also exist a exceedingly larger portion of the population who are living under debt to support the financial "investments" they received.
Companies are even more pressured to give higher returns to compete for the larger amount of funds from distinct individuals or funds.
This means even more repressed wages and working conditions, be it local or overseas.
The investment returns has to come from somewhere. There isn't a magic portal that opened in the sky that drops money when you invest.
I don't doubt the feasibility, I doubt how ethical it will be.
@@Razorwindsgcompletely agree, I was thinking about this the whole time I was watching. Still think I'll purse FIRE though, maybe save myself.
@@Razorwindsg The western capital- interest based economy is totally unethical and unsustainable.
That's why there's a strict prohibition on usury in Abrahamic faiths.
@@elementj4830 ill pursue fire aswell so maybe i can focus on other aspects of life and start a family etc etc
Just enjoy life for what it is
Spot on!
I'm gonna break some hearts. A large cross section of developed world society 'could' FIRE or semi-FIRE if they wanted, but it would require to radically rethink what you expect out of life and what you consider to be a good living standard.
By "it", you mean the selfish politicians and billionaires who want not just a lot of $$$, but all of the money on the world?
True, simple life is cheap cheap especially if u bring in currency conversion. This is my plan, to “ fire” by investing in diverse portfolios and then move to the phillipines ( I’m from Sweden). If it turns out solid, I could be doing that in a couple years
Yes exactly. A car, eating out, coffee, abroad vacations etc. Those add up. I want to FIRE but I don't want to cut on personal development. If I want to keep my personal music lessons and still be able to save a ton I have to be frugal on everything else. And it doesn't hurt me that I won't eat out or that I wont drink expensive coffee. For me the choice is: burning money on insignificant stuff vs learning music. When I put it like that this choice becomes very very easy.
Max Gutkovski yes, I lived in phillipines for 6 month before corona, working sales online. I really appreciate the simple things, the people are happy and it’s palm trees and coconut juice. I’m 24 now, so plenty time to think and play chess
Max Gutkovski danger is not so much on my mind, call it youthful optimism
“Go play a sandbox game with unlimited money hacks turned on, see how fun that is”
Minecraft creative mode community
Haha sounds like a dream! Please make this reality!
Was looking for this comment. Exploring ideas is always fun.
It is fun though...
Take it from an old guy. This stuff has been around a long time and life has a way of derailing all your best laid plans.
So true! You can do everything you can to set up a safety net for yourself but life just sweeps it at the legs and makes to start your savings all over again.
Cope
Divorce for one.
This whole FIRE thing assumes your health will be ok when you retire or you'll still be alive. It's not so rare seeing people just waiting for their retirement to do "all those great things" then die of cancer 1-2 years after retiring. Going full YOLO is irresponsible but the other extreme can play tricks on you too.
Don't get married. Send kids to Navy by 18. Live in means.
Retire? I would rather do this fire thing and keep working to use the money on things I enjoy, like earth-movers, dirt and buying up sparse land to plant needless amounts of trees.
I mean all power to you, the idea is that you have a choice at that point at least :)
@@EconomicsExplained Bah, I still think making money with money is wrong. But I have insurance so what do I know? Worth and value should come from actually providing something. Using money to purchase goods or services to provide them to customers and the like. How silly does it seem that a rich person doesn't even have to lift a finger to acquire money, as if it grew on a tree and fell into their bank account? But then again, maybe it's just my pride and honor for what I do and the things others do that requires effort that makes me feel envious.
Trees are never needless keep planting them and doing good for the world thank you
I've reached FI and I'm semi-retired. work six months a year. it's perfect. Just when I get tire of working, I get six months off,. Just when I get tire of being off, I work six months and the best part is I make enough in six months to pay my bills for the year which means I spend money only on the things I enjoy too
We are going to need every tree we can get after all these FIREs on the west coast :(
Dear god..i just wanted to learn about the economy of france and here I am now learning about fire bending
I found this channel while doing research on Canada school project. One due date latter I was explaining why Norway has a great economy
Useful skills man!!
@@LIBqueen I know. Who doesn't need to know of how great of an economy of Norway has, and why Australia is a US company
Financial independence in my words means being able to supply my needs without working too hard, dying, risk, stress. Financial independence means not stressing anymore in spending your money and energy. Also financial independence doesn't come with "having tons of money" but you can achieve financial freedom by educating your self and being disciplined in your spending. Tons of money means nothing if you spend more than what you can get
Spare me. This isn’t a “movement” it’s people doing what people with enough wealth to pull it off have been doing since retirement became a concept
But now it's a possible stated goal for anyone. Not something to be dreamt or laughed about, but instead just a spreadsheet and some frugality away from achievability.
"Financial independence" and "not working" are different concepts. Most people don't want to spend their lives sitting around doing nothing, but they also don't want to spend their lives struggling to pay bills and being employed in jobs they hate. If millions of people could focus their minds on pursuing activities that genuinely interest them (aka "hobbies") instead of fitting into the Capitalist labor system, the world would be much better for people instead of corporations.
Couldn’t agree more
It is such a simple concept to understand, but some seem bent on making it seem like it's not worth pursuing. FIRE just puts you in the position that gives you more options. I notice that a lot of people who don't like FIRE seem to have a very narrow view. FIRE is extremely malleable to your financial situation. It's based on your expenses, not your income. It's like they are intentionally trying to persuade people not to pursue FIRE but instead seem to be trying to convince people that working in a cube from cradle to grave is a better option.
And then who would put the food on the supermarket shelves?
‘retire early’ is just the idea that you don’t HAVE to work. And it makes the cool FIRE acronym. In reality it just means you can spend your time working / pursuing hobbies etc that don’t earn as much money
@@Sabamike192 the people who don't pursue FIRE.
ok now i just need to find a few million dollars asap
Luís Filipe Andrade so $100k a year? $8333 a month? $2083 a week? $297 a day?
@Luís Filipe Andrade you take 33x your expenses, not your income...
@Luís Filipe Andrade not necessarily, that's only true if you have 0 margin
@Luís Filipe Andrade because returns are not stable.
soundlyawake $100k a year in a savings account earning 0 interest yeah, the idea is that you invest and let the money compound. Your money will make money ontop of you saving. It grows a lot faster then you think.
Literally the best and most useful segway to a sponsor I've ever seen. Mad props.
This video was really good. I was an Economics major and I love this channel.
The videos are very well done and interesting. Sometimes, Economics can be dry and poorly explained.
Great job EE.
As a young neurosurgeon following your channel, thanks for overestimating our income to 500K/year ( only possible to my knowledge for the average Neurosurgeon in the US and Switzerland at the height of their career (from age 45) , which is not my case). I wish everyone financially appreciated our skills as you do. I would then only need less than 10 years to retire with such an income. I wish that was true. Sometimes I ask myself if the juice was worse the hard squeeze. After all, you flattered us, Thanks :-)
Out of interest, where do you study and is the UK a viable option?
@@emilebichelberger7590 I am Lebanese. No the UK is not a viable option if you are aiming for such a high level income (as a foreigner practicing in public facilities, I have no idea regarding to private sector in UK which should be definitely better)
Maybe they were thinking of your hospital admins income
*world's. Smallest. Violin. 🎻
The way acorns rejected me for not being a US citizen 💔
leave the u.s to their overinflated stocks. the rest of the world has access to crypto
You should consider yourself lucky. If you're an expat living abroad, a lot of brick and mortar banks will reject you for *being* a US citizen.
South Africa Gents😂💔
Do not use acorn, all of those kinds of apps charge more than they're worth in fees.
Most banks-even out of the USA-have a platform to invest in the market. Don’t listen to the nay sayers. Invest in the market and give yourself time. You’ll do great.
The closer I get to financial independence the less I have to work for other people. To me, the closer you get to that the better your life gets :)
FIRE is absolutely possible. I retired at 31. I don’t know what to do with my life now. Don’t just retire. Create some meaningful work for yourself
Help oyher people retire early
Bro, you can litterally do your dreams, just find something that needs doing in your community, start doing it as a non profit and make the world a better place!
What job did you work as?
retired at 40…two words…rental proprties
Most people doing this don’t really plan to retire completely. They just want to be able to do any job they want, anytime they want, without worrying about money in the long run.
Idealy
1 People retire early
2 Supply of labor goes down
3 Demand of labor stays the same
4 Price of labor goes up
5 Lower class workers get better wage
Reality
1 and 2 same
3 Government brings in more migrants to keep wages down
4 companies export more jobs
5 workers still shat on
Really, 3/4/5/ were going to happen anyway. The only difference is where the equilibrium point is, and with the "ideal" there'd be less shatting upon.
Migrants have nothing to do with low wages. That's the Fed and Job creators playing you/us.
I think scenario 1 that would lead to more job exporting, since higher wages means more to gain by moving to india.
@@tentons10 Don't be silly, wages are largely a product of demand and supply, like any other price that hasn't been over-regulated .
What has increased supply? Feminism roughly doubled it, which coincides with real incomes flatlining. Immigration adds a large pool of workers too. Longer lifespans and a need for older people to have more income also has increased the supply of labor.
On the demand side, automation and technology advancements reduce the need for labor.
@@ordinaryhuman5645 yeah we've reached this weird point where almost everyone is available to do most work now through easier education, geographic access and less working culture boundaries, but all that work is being sent off through automation anyway. And nothing is replacing the lost income. I guess the difference between future utopia and dystopia is whether the people in charge care if ordinary people are able to fend for themselves or not
“Work is better if you don’t need the money” - Ben Sasse (i think)
I'd say it's easier to find better work if you don't need the money. Chit jobs are worse if you know you don't need to be there.
I mostly. If feels like my job got much more tolerable when I realized I wasn't stuck and didn't HAVE to be doing this job. I started appreciating it more.
An important part of FIRE to me that was missed here is that *where* you retire is just as important as how much money you have to retire with. Those that are doing FIRE in strong currencies have the option to retire in places where the exchange rate helps cover for a smaller investment capital.
Even if you wouldn't want to leave your home Country for good, you can use this geolocation trick to weather down bear markets during your retirement. If you structure your life so that you can shut it off for a year or two and go live somewhere else for a bit, you can weather financial storms and still maintain a good lifestyle on a smaller pool of money.
For example. My plan is to achieve FIRE with a 4 to 5% withdrawal rate because when things go bad in the economy, I plan to lock my mortgage-free house down and go live in Greece for 2 years (or Equador, or Vietnam, or... you get the gist) where I can lower my withdrawal rate to say 1% to 2% and still have an OK to decent lifestyle due to having moved to a much lower cost-of-living area. This allows me to visit a cool place, sell less of my investment assets when the market is down, and still maintain a good quality of life.
FIRE buys you *freedom*, and that is why it is so powerful.
As I watch more of your videos it's becoming increasingly clear that growing an economy doesn't mean bettering people's lives. At some point people need to stop relying on GDP as a main indicator of how well a country is doing
The economy doesn't exist to improve your life, it exists to make money.
@@ZodiacEntertainment2 and you use the economy to impove your life.
@@lajya01 use the economy to improve your life? What a joke, being able to retire early and save rather than continuously spend is an improvement to life yet it hurts the economy
@@pacodave4885 As explained in the video, it only hurts the economy in the short run. And it's unlikely that the savings rate is going to massively spike from people adopting the FIRE movement...because most people would rather just do what their friends and family are doing.
Everything was fine until fire movement started.
Coincidentally, NAFTA and the book that started the FIRE movement were published in 1992. So everything was fine until NAFTA came along. Ask the Limitless movie. It has an expansionist comment that is self fulfilling for the main character and the global economy.
@@SimGunther wow really? What is the name of the book?
@@jesseholliday3480 yeah i wanna know too
@@jesseholliday3480 "Your Money or Your Life" by Vicki Robin and Joe Dominguez
I thought that was an Avatar joke
Cant wait to retire at my 30s. Im saving 60% of my income now
If you can save 60% of your income I suspect you are coming from a privileged background. Normal people have bills and try to pay those bills on 21 - 35k a year.
@@edwardmauer7442 what is ESL?
@@edwardmauer7442 3% per month? that's more than 36% per annum. No way that's sustainable long-term.
@@edwardmauer7442 What million or two million dollars? You just said you have 40k. If you can do 36% year, every year, then stop wasting time on some ESL and become broker or something. You will get to your millions much quicker earning 20k than your current 2k a month.
What? I invested my FIRE near egg to a guy from Nigeria. He said we’re long lost cousin 🤪🤪🤪
Americans : we want to be Financially Independent and Retire Early
*Student Loans : allow us to introduce ourselves*
Funny, but fortunately there are of people who can work past student loans and still reach FIRE
Why pay them? If you are able to invest and draw profit they cant garner your wages. There is literally no reason to pay off the debt. Default on it, and if you need then pull money from your investments into real estate if you want to lower rent coats.
@@senoraraton nice cope
@@senoraraton not true they garnish me for 800.00 a month I still owe 53,000 out of 110,000.
@@d3rtmcg3rt53 you have a wage. They cant garnish your assets.
No, it wouldn't hurt the economy. Not in the long run anyways. Having a huge savings rate of 50-70% to fervently invest money in order to retire early/earlier does not replace consumption; it only delays it. After achieving financial independence, those people become consumers for the rest of their lives, likely spending the majority of their withdrawals/dividends/rental income. The money wheel keeps turning regardless. Unless you run away to the forest and be a hunter gatherer the rest of your days, there's no escaping consumption.
Got VA disability after my enlistment ended, didn't have to work after that if I played my cards right, but I was able to use the financial security to build up a freelance illustration buisness. Way happier than I'd be working at the local tech plant, and I hope everyone gets the chance to follow their passion.
I’m glad it isn’t the FYRE movement if you know what I mean 😂
yeah definately dont want that!
I'm dumb. What does it mean. Lady fyre?
@@catalindeluxus8545 Fyre Festival. Google it.
@@catalindeluxus8545 a man of culture! Laz is a lucky guy!
The Internet Historian covered it well
Just discovered your channel! Love the info you’re putting out there !!
Australian nurse here. Lived with my parents till 27 yrs old. Managed to save 200k in 6 yrs, then moved out and got married. Now 35 with 2 kids and with modest home paid off plus an investment home with mortgage. Total expenses are around the 35k per yr. Work 5 days a fortnight but technically only need to work a weekend and 1 weekday shift (3 shifts) per fortnight to survive reasonably. All done on a single income. Don't follow fire but do enjoy our lifestyle especially our family time. My job has made me realise life is just too short to work all the time.
I'm from a very low-cost country and work remotely for first world countries. If I can maintain momentum for 5 years, I can retire (25yo atm).
How?!?!!? Please teach me. I am in the Philippines and been trying to find out how to get this setup for months now.
@@deantan4080 He probably makes a lot of money and is investing it in rental properties.
@@deantan4080 I'm doing something similar. I teach English online to Chinese kids for $23 an hour. On top of that I also trade options and have been doing so profitably for the last year now, returning about 3% per month on average (currently 40k profolio, so $1200 a month for now). I figure once I hit 100k in a few years and assuming I can keep up that rate of return, I'd be ready to retire quite soon. So yeah, just gotta find some telecommuting skill. And as a side hustle find something remote and scalable like stock trading (but it's not for everyone, quite risky and you really have to know what you're doing) or some kind of online business.
@@edwardmauer7442 Yes i do stock trading. But I do not have the telecommute side which I am wanting to look for.... current portfolio now is about 10,000 USD, hope to build it faster as I save 60% of income. I hate working.
How do you teach kids in China? How many hours a day? Is it tough?
@@deantan4080 I'm a Software Engineer with a good client base and reputation. I invest ~90% of my income and still live very comfy.
Most people wouldn't be completely inactive once they retire at an early age. Lots of early retirees start small businesses or learn crafts that generate them further income but it's actually something they enjoy. I'm aiming for mid-40's and a yearly expenses of £40,000 (in in the UK) based on progress so far I'd say it's achievable. Most of my cash goes into a handful of ETF's with just 10% for my own individual company bets. The FANG stocks have been growing by 20% every year for ages and picking up reliable dividend payers during a market downturn gets you a nice discount. It's also relatively simple to invest in long term trends like green energy expansion and electric vehicles.
This completely derails from your point, but I respect your pfp. It’s an amazing song
@Muhammad Zohair محمد زھیر Hope EE see's your comment too. Would make an interesting video. Not sure why the Bangladesh and India markets have reacted differently but there are two factors that would effect the whole region. Perhaps you could advise on how they apply? 1) A pandemic is a serious issue for the region because over the counter medication without prescription is common and has led to many people with resistance to antibiotics and other medicines in general so they cannot be treated easily in a crisis. 2) The are in a transition period from manufacturing to enterprise and are at risk of falling into the middle income trap if progress slows. The pandemic hit at the worst time for a rapidly growing economy that's trying to develop. Investors will abandon growth in the region and just stick to save bets overseas in large established companies and commodities.
I like how he said that in order for us as a society to move towards more freedom and less work, the means of production basically have to be communally owned
This sounds similar to the "Your Money or Your Life" book that was popular in the 90's. While this is possible, it requires levels of discipline that is difficult for most people.
As a psychologist, I'm EXTREMELY wary of people who think they can dedicate to 10 years of grind and then transition out of it easily. This is seldom the case, this movement tends to lead to lifelong workaholics FAR more often then it ever leads to individuals who actually enjoy life. They have crippling anxiety, extreme levels of stress, horrible family life, and too many detrimental relationship problems to deal with even with a decade of therapy.
This isn't always the case, there are exceptions, but the general rule is you BECOME the behavior your practice. So if you practice working like this for 10 years, it won't be something you can turn off, it will become your norm, and any effort to retire will be gone. There will ALWAYS be the temptation of "I could work another year for a bit more money" or 2 years, or 5 years, or 10 years, or 20 years... or 50 years... Until they just NEVER stop. This is the common route.
The "movement" is less a reality and more an ideal, it's something a lot of people get on the path to, but only a very small minority ever succeed at.
The good news is they are extremely productive and wealthy workers of course, and this is nice. The stresses of financial shortfalls tend not to be an issue for them. However, there are people with a more balanced financial situation, work life, and personal life that are far more mentally healthy and probably successful in terms of their happiness and quality of life.
Put simple, work as much as you can be happy working for the rest of your life, that should be your target. If you are working too much right now, you need to find a way to increase your knowledge and value in a field you can be comfortable with indefinitely, until you do that you haven't really settled in well. People who make this their approach to work are nearly always happier than those that aim for "retirement" whether extremely early, or extremely late.
100% correct
A flaw in this episode is the assumption of "retirement" to mean not work. The R does not mean not working or earning money, it refers to working for yourself. Do things that make you happy more so than working for a paycheck to buy things. Mass consumption has taken over the US and thus you will always be broke trying to live up to the standards of "a good life". This is touched on in the vid about college debt forgiveness. The median income per person as of 2018 is only $33k, so the constant reference to $60k and $100k retirement incomes do not have much value. So what I would like to see is how someone making so-so income can get a portfolio of $900,000. If two people couple up and live off one income, invest the other, it will take about 15 yrs for them to replace that one income with dividends - but what if you dont find a life partner?
Yup. His numbers are whack. Another one is the pipe-dream you can get a safe 8% return in 2020. It's like these guys quaffed a barrel or two of FIRE colored kool-aid. Investment risk was glossed over, if it was even mentioned. The risks are multitudinous! Political revolutions, tidal waves, technological revolutions, climate change (it is not going to affect everyone equally), war, asteroids, plague, medical issues associated with your preferred lifestyle choice, random accidents, unforeseen legal challenges, and so on. The list of negative risks is ENDLESS and most are calamitous, whereas, the risks to the positive are very finite and are unlikely to significantly improve one's lifestyle/happiness. The only way this FIRE nonsense, as put by EE, could/can work is via the certainty of one's death.
2-3% inflation seems to be a joke when they printed 25% of all usd dollars in 2020 alone
Yes, that's 25% inflation in 1 year
@@keywestalert6329 you're both dumb. physical cash only makes up 10% of all us dollars. which brings that down to 2.5% inflation. and that's not counting all the cash being destroyed.
Hey just wanna say I love you're videos! Very thought provoking and educational! Thx!
Tbh, for me the problem is finding a job I can bear doing at all, rather than how long I want to do it.
Just saving enough (minimising spending) to make it possible for you to work one less day a week would make a big difference to your happiness. I remember how much happier and refreshed I felt at university when I had a whole day off every week for a semester.
I would never have thought having a Tuesday free would make such an impact.
brilliant, enjoyable content, precise delivery, and perfect diction. thanks for this.
I think this movement is kind of the answer to the increasing automation. People aren't stupid, they already feel their work is less and less valuable and that they no longer can expect to work at the same place for decades. It's either financial independence or poverty. At least in the US. In Europe you may be able to rely on social security, but it's better to be safe than sorry.
So this movement could be the way we can safely transition into the world of full automation. If a big enough chunk of the middle class can get through to the other side, we have a much better chance of building a utopia instead of a dystopia.
It certainly seems that way. The media is especially amplifying the trades. I was a tradesman for 5 years and I can tell you that those kids are going to be kicking themselves in 10 years. My opinion is not based on the fact that it is dirty manual labor, that is irrelevant. It is the attitude of the people in charge that really make it unbearable.
Karm G
“basic”
I agree. I don't see it as a choice. Either be FI (RE is optional) or be automated out of a job and have nothing. The biggest problem I see is that the younger generation don't really have a choice - it might be too late to save for 10-20 years.
@Karm G
That's the problem. Some could work their way out of it, but most probably couldn't. That's where the government should step in. That's the main reason why social security exists. That's why I worry about the US much more then Europe.
The FIRE movement isn’t a threat to society. Retiring young usually takes a lot work and let alone the brains and determination to realize you can even free yourself from the system I the first place.
It is. If everyone did it, then what?
If even 10% of US workers managed to do this it would have a drastic economic impact. However, we already see this affect occurring. The upper middle class has mastered the art of "making the money work". Which is a romantic way of saying hoarding money and using that money to buy property and capitol and then taking the lower classes for everything they have. In other words they have mastered the art of not actually doing anything for their country or humanity. For the most part they are parasites and they have grown so fat that the whole country is sinking into a pit of despair. The only force that can ethically be utilized to work less for more is technological innovation and automation. The rest is just legal theft.
@@Deno2100 I pity you really. I replied to one of your other comments here and I hope you read it. Typical envious socialist, jealous, always blaming others. For your own good I hope you grow up, snap out of it, and learn to take control of your own destiny and make sometihng of yourslef.
Deno Moto bro what lol your envy is showing
@MeerSchijvenMeerWijven it's not a matter of same or different laws. It's that the laws that are there can be used by anyone, as long as you start with money. It's the old "spend money to make money" idea. Those who have money, either from a high paying job or inheritance, can use the system to buy up land, capital, and other similar investments and then turn them for profit. It is essentially worthless to the economy, adding nothing, all the while hiking up prices for poorer people who actually need to buy them. I think that's what they meant in the previous comment.
Good to see a breakdown of this movement from a comprehensive perspective.
Also, wow I hadn't heard anyone talk about the issue of inflation with this! Thank you for this.
I plan on pursuing this, and am close to buying my first property which I plan to be a duplex so I don't have to pay the mortgage on.
But when I "retire" I'll be starting an experimental local company I've been planning for a while, mainiting my music production business, and further investing in real estate. So by no means doing nothing.
I think people who think "retiring" is doing nothing just haven't ever found things they enjoy doing, or have any goals they want to achieve, and that makes me sad.
THANK YOU for illustrating how important expenses are when figuring out time to FIRE/retirement. So many seem to parrot the investment industry advice that correlates specific sums to specific ages. Ie one "must have $xxx saved by age yy".
Sooo... In the short run maybe, in the long run probably not? At least in Germany, people always saved up tons of money... can't imagine it's too different! In stocks should be better than under a good old German mattress!
people all around the world save money. your acting like germany is the only country who does so
the german exchange students at our school gave us a presentation on stocks in our german class and when the asked how many of us had parents who owned stocks they were amazed that around 70% of us said yes.
Sebastian nah German people are different. Very stuck in old ways of traditionally saving up even with very low current interest rates and very scared of investing in stocks or real estate. German people don’t like risk so they do it the old way even if it’s dumb
@@cardboardpackage The vast majority of people around the world live in such poverty , or they live in countries where the cost of living is so high, that they do not have the ability to grow appreciable savings.
@Luís Filipe Andrade It hasn't, but it has a tendency to save everything in cash or classical loans
last time i was this early my state wasnt on FIRE
Music is on point :) Thanks for making this video!!
I thought it was about the FYRE festival .
haha no go watch internet historian for that one, little bit outside of my scope I am afraid.
@@EconomicsExplained You should do a video on it anyway.
@@EconomicsExplained well both are a scam imo
Everything was fine until the FIRE movement attacked
ruclips.net/video/IFHz-5jsI3Y/видео.html
Loved this. We have been thinking about this awhile and really didnt know how to explain it. Such a great job. I am all for the Financial Independence side but there are consequences to our actions both individually and as a group!
"Could it be hurting the economy" Couldn't care less.
But feel free to be a debt slave if you think that's the responsible thing to do.
the question of whether it's hurting the economy isn't about your individual decision. one person retiring early changes nothing, one million people retiring early might lead to an economic depression. and even if you only care about purely selfish motivations, an economic depression would mean that the investments funding your early retirement would dry up.
Could be for the better, alot of jobs right now need to be automated, they just dont need to exist
@@GeekProdigyGuy The system revolves around the constant exploitation of an underclass -- there's no middle class without the working class. Capitalism has a economic crisis every decade anyway, I think the decision to still have it is the more selfish choice. People have just started to do what the rich have been doing for decades.
I'm more interested in financial independence rather than retiring early. If I can help my country, I will.
Great choice of topic! 🙂👍
More people need to know about FIRE 🔥
Wish you made this channel whilst I was in high school before falling into reading books that encouraged FIRE theory
Excellent info. Thanks!
Australia Comment Gang Rise Up
Straya... Strayyyyaaaaahhhh... 😂
Bro love from india
MAKE WAY FOR THE INDIANS
It’s too late the Americans are already here
You know it.
Acorns is called RAIZ in Australia.
You’re welcome.
Thank you for a great video!
If we factor in the incoming Automation Apocalypse, then this movement should actually be promoted to expand.
Hey Economics Explained, A Small Video Request:
Please make a video on Indian Prime Minister Narendra Modi's Economic Policies. I am in quite a dilemma about him and really need help in that regard. Moreover, It would be quite a good video for your channel too.
That sounds a little more like a VisualPolitik video.
I would Gladly Help in collecting information if you want.
@Bhavesh sinha Well, I hope not
@@Sahalrocks Thanks
@@justinfreeman4614 Well so be it......
"I can live off a million"
Fed: *laughs in hyperinflation, money printer goes BRRRR!!!"
Stocks are denominated in dollars and are therefore inflation protected.
@@nocrtname Do you mean stocks are denominated in US dollars and are thus protected from the inflation of other countries?
Pet theory: Fed money printing is making up for debts that are being defaulted on and wiped out. same amount of money supply, just less of it is credit
lol what a troll comment. Companies actively try to increase their value. It's not paper sitting under a mattress.
@@HELLO7657 I thought the increasing rate of share buybacks and companies going/taken private over the past 20 years has greatly reduced the aggregate outstanding share balance?
I've been in a firefight before.
Well, I was in a fire.
Actually, I was fired... from a fry-cook opportunity.
That ad transition was smooth.
Literally no one:
Boomer: That's a scam!
This meme is already nothing but a memory
Felipe Goleta
Boomers want us to fund their precious social security.
Matthew We will all become "boomers" when we are older. Maybe people are so childish to not think that. We will see technology that we can't even comprehend or understand
Sakakksksk Skakkska
I never mentioned technology. I’m talking about how that entire generation never saved for retirement and instead is relying on the government. I don’t even even factor in social security or Medicare with my retirement planning. I live below my means.
Matthew, I didn't mean to make you feel attacked, I just hate today's society. How we have such short attention spans, RUclips itself encouraging it. I don't even feel like humans are an intelligent species anymore. At least they don't deserve it. Honestly I wish I was an alien on another planet.
i have to say that was a very good advertisement at the end lol
Yeah, incredible transition. Got me all excited to learn something new, I forgot that the video was about to end, and then he hit us with that ad. Brilliant.
I honestly didn't see it coming haha
I like my job, and the stretches of my life when I haven't been working or studying have also been the most depressing and left me with no motivation to do anything, not even fun stuff. But I still invest like I'm trying to FIRE because worst case scenario I have a nice comfy pile of cash someday and maybe can quit my job if I want to.
As per several other comments I’ve read here, my focus is also more on the financial independence element of this. I want to get rid of the worry about covering my most basic expenses month-on-month, and to know that I have at least a frugal lifestyle to fall back on.
If I reach that point, I might continue doing my current job with a more relaxed mindset, I might take a risk doing a job with more responsibilities and higher pay (where I might fail), I might work part-time or take extended time off to travel or pursue hobbies, I might try out lower paying jobs to learn new skills, and might do charity / voluntary work. In any case, I envisage keeping myself busy and not fully retiring.
The problem with all this is that it assumes a 6-8% year over year growth in a world that is rapidly changing, and the rate of change is accelerating. Somehow that seems like a significant risk to me.
Its a risk and it is selfish
Real estate cashflow and houses keep rising at long term
Taking risk is the only way to become wealthy.....
@Sorcize what reduction in population?
@@hapybratt8640 You haven't heard? current demographic predictions are that there will be a population decline before the end of the century.
Some people still think infinite growth will happen.
but sane population demographic predictions show either a levelling off between 8 and 11 billion people, or the start of an actual decline.
No current up to date population model shows continual ongoing growth much past 2080.
The more extreme predictions suggest we're on path to peak at about 8-9 billion with an eventual drop to as little as 4 billion...
That seems a bit of a stretch, but yeah.
Population demographics suggest a decline is coming.
I belong to this movement long before the movement even existed!.!.
I'm going into tech, so I'm glad to hear FIRE is an option available to me.
Very interesting video. I think the psycholgical aspect cannot be underestimated, as someone who has spend a number of years of of work for various reasons, you really need something to give you a sense of purpose and a feeling of being productive. I am sure after retiring at 30 it would only take a few years before that person started working again or started their own business to give them a sense of purpose.
yea, but there's a MAJOR difference between NEEDING to work to live, and working just to have something to do.
in America this would be sustainable because so few Americans have any sort of financial literacy. 70% of Americans have less than $1000 saved.
If you are here and watching this video and others like it, you're at least two or three times as likely to be building any sort of long lasting wealth compared to the average american
Funny you would cover this now, I just mentioned your channel in my most recent videos on FIRE for Aussies.
I do not want to retire early. I want to be immortal so I can contribute forever, in ways that people would find valuable.
Same, a million times over. I would go back to physics in a heartbeat, or become a robotiscist instead of doing programming.
@@thepurplepanda4 What's stopping you?
ThT transition to ad at the end was smoooooooth af
"Crowdsourced - offgrid independence" love that coinage!
FIRE is more about living frugal than making a ton of money. I do camping for vacations, I play guitar for a hobby, I learn russian and spanish, I don't eat out. I spend dirt a month and for me retirement means part time job and maybe capitalizing a bit of my hobbies, which would let me keep adding to my savings. That would mean I would have to rent a room in the city and spend most of the week in the lake house/ forest house. Totally doable.
nope. that's leanfire. There's 4 different types of fire: coast, lean, regular, and fat.
Do a video on collective bargaining/unions and why they are used as the market based answer to the power that employers have over employees
thanks very informative
How world will work without workers?
Is simple:
The employer will raize wages and make the job less like slavery and more comfortable and a plesent thing to do.
And boom,you have your workers back
yes i want to sleep for 3 hours also starbucks free a massage while i work and breaks every 30 mins
I like it rather than universal income.
Reality: World will continue to outsource to maintain cheap labor. Labor remains a deathtrap until collectivizing.
The only thing that will make employers raise wages and value employees more is the threat of social backblast.