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Comment by the_gastropod | Hacker News Reader

> In my circles, everyone from 25-35 is simultaneously preparing to FIRE and no-one that's 35+ has actually changed jobs despite being 'financially independent'.

I think your circles are rather unusual, if this is true. A $900k net worth is in the 99th percentile for 30-34 year olds and 95th percentile for 35-40 year olds in the US (https://dqydj.com/net-worth-by-age-calculator-united-states/)

Even among my anecdotal very-highly-compensated NYC tech-salary coworkers and friends, having money issues and easily sub $100k net worths is way more common than not.

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Of course it's unusual. If you're in SF and work in first tier startups/FAANG, your social circle is going to be mostly people in similar situations. It's a very unusually high earning and unusually rapidly high earning career path.

I would be shocked if in that specific cohort the median net worth at 30 was less than 500 k$. And if less than 1/10 were millionaires at 30.

SF is a bit of a one-trick pony these days, sure, but to me this is a broad over-generalization that is easily proven false.

The individuals who occupy the upper-echelons of this world in SF tend to be the unusual kinds of unusual people. They often have unique upbringings, come from distinctly not-obvious academic/work backgrounds, and keep much more dynamic forms of company than the typical "Backend Engineer 3" at Amazon or Google.

This doesn't match my experience at all. I know a few extremely wealthy folks in SF, a bunch more wealthy folks but who still work 9-5, and there is nothing unusual about any of them. I've met CEOs and billionaires and there's nothing unusual about them, either.

Sure, maybe SF has more unusual kinds of unusual people than the average city, but I wouldn't say that's the norm. VC folks are especially boring.

A $900K net worth is not enough to FIRE in my estimation. $36K/yr with the need to still buy housing is spartan and/or risky with a 60-year outlook.

May not be enough to pull the trigger, but definitely enough to transition down to a part time or remote web dev gig in a low cost of living area. Once you have such a net worth secured, you just have to keep from pulling from it for a few years while it compounds.

The big thing is that around 900k is when you get diminishing returns on savings vs market fluctuations. Bumping that amount by 10% would require saving $90k, which is a tall order. Or you could wait for a 10% market increase (it's up 14% this year). Not that the market is guaranteed to go up, or even by that much (we're in an unusually good market at the moment with inflated optimism). But at a certain point you hit a tradeoff where the market on average increases your wealth faster than savings off your salary will. At that point it makes sense to transition to a job that just covers your cost of living - one that you like more and offers more freedom.

I’ve never understood this logic. If you’re going to be working, why take a significant pay cut? It’s not like other lower tier jobs are actually that much less work; you’re working with less skilled people in general and often poor management. This is the coastfire philosophy and it makes no sense. You could work a a few more years at high-paying miserable job or an extra decade at low-paying probably miserable job.

There exist many jobs/fields where the pay is below top market but could scratch the person's personal itches. Non-profits, research, etc.

At a former job we could not pay anywhere near top of the market and yet we attracted decent talent as the mission was something that resonated with many people. One category of people we'd attract were those who had already made enough money that they didn't have to focus on that, and now just wanted to do good in the world.

I think of it more as I could work a few more years at my current high paying miserable job, or the same few years + 1 at a flexible (arguably less miserable) job.

For me at least, the goal has been to bank big cash early, then let the compounding do the heavy lifting towards the end. As I mentioned above, getting a 10% increase takes a lot more savings late in the game whereas the snowballing effect of compounding interest is stronger, so I'm coming out ahead just by staying afloat without dipping into my savings. I look at the work that appeals to digital nomads (pre-covid, this was work FAANG and other high paying jobs didn't widely offer), and it seems more valuable to spend some mobile years financing a nice adventure with the stability of a job that lets me work from home. It means a gradual transition to RE and that very little in my lifestyle should change once I pull the trigger. Personally I'm looking to reach FI /then/ transition to a remote/part time job as a way to reduce risk while offering some extra flexibility - everything I earn in that time should be gravy and it should allow me the freedom to travel and enjoy the experiences.

the 4% rule is viewed by many to be very very conservative, many are looking at 6-8% as a better base line.

Of course if you are retiring in your 40% you may want to be pretty conservative...

That's not really even close to true anymore... There have been a few studies that have attempted to update the Trinity study, like this one that gives an 89% chance of success even at a 3% SWR:

https://www.financialplanningassociation.org/article/journal...

People in the FIRE communities are routinely discussing 3.5% and 3% SWR's, and see 4% as risky.

Of course, it's easy to look at the last ten years and nudge the number up.

Retiring in 40s is a pretty big decision. It's not impossible to re-enter the professional workforce in your late-40s or 50s, if things don't work out, but it will almost certainly not be easy.

Is it even possible to access US pension savings in your 30s or 40s?

In the UK tax advantaged pension accounts cannot be accessed until you're 55 (and 58 for my generation)

Yes, it's possible.

https://www.investopedia.com/terms/s/sepp.asp

These people are not conditioning their withdrawals on valuations. If you retired in 1978, yeah, 6% was probably fine. In 2000 you’d likely already be beyond recovery even today.

I didn't have any substantial savings until I was well into my 30s. I didn't graduate from grad school until I was 28. (Worked for a few years prior in engineering but nothing like the salary levels in SWE today.)

Despite being in software I had no savings until my late 30s. I am forever grateful that our field is one that allows for huge earnings, as it has enabled me to flip that all the way around.

I'm now in my mid/late-40s and show up as low/mid 80s on that calculator depending on if I include my home equity. When I punch in my net worth at 40 I was around 20%. If my current glide path holds I'd be low-90s when I turn 50. While unlikely to be feasible, it's in the realm of possibility that I could retire by mid-50s.

That's a privileged position simply not available to most human beings. Really remarkable when one thinks about it.

Yeah, I did OK through the 90s but it was certainly not a high-paying job by current coastal software standards. (I actually looked at a few west coast jobs in that period and, frankly, they'd have been a downgrade because of CoL. Stocks were hit pretty hard, including my shares in my employer, and for various reasons my job during the next decade I generally liked (and it set me up for my current job well) but it didn't pay that well.

It was only really my current job and associated stock which took savings from just OK to pretty decent. I could retire now if I wanted to but not really in a big hurry assuming business travel comes back post-COVID.

Being subject to constraints on your living standards can force you to be more disciplined. I’d bet that there are some in your circle that earn less yet are more financially stable than you would expect. They just don’t talk about it as much, partly out of politeness and partly because they think it’s pretty boring.

Oh, absolutely. My point was more that it's not particularly common. Having a relatively low-ish FIRE-worthy NW (e.g., the $900k in my example) is very uncommon for 30-40 year olds.

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