FIRE movement is largely a result of crazy high salaries and a booming stock market, it wont last forever.
It's become perverted in recent years by high salaried hyper consumers who have started idealizing "fatFIRE", which is really only achievable by a small group of people.
Yeah that is what I mean, what happens when the stock market drops 75% over 25 years? Not much compounding happening. https://finance.yahoo.com/quote/%5EN225?p=%5EN225
A quick check here, https://www.portfoliovisualizer.com/backtest-portfolio, with JPXN between 2002-2021 investing a static amount monthly and reinvesting dividends suggests you would have doubled your money over the period.
Bad compared to US growth to be sure. You're right that Japan is a great example of how this strategy doesn't work as well for people locked in to stagnating economies.
Retirement always was and will continue to be a risk that depends both on how much you've saved and how well the economy will continue to function and grow once you're no longer working. Like all things in life, nothing is certain.
that's why you don't invest in a single region. A globally diversified portfolio (which, to be fair, is more difficult to achieve for people in some nations that's not the west) is what's required to get the market returns.
You, on the other hand, are not including inflation...
I've worked with some very intelligent, brilliant people, who simply cannot comprehend how their own financial spending is foolish, or more likely, know this and choose to play ignorance. I've always found it fairly bizarre, almost like an addiction. It's fascinating how some people can be so skilled in one domain, but so lacking in self-control, especially when obtaining said skill requires enormous self-control in the first place.
And beyond that, so many of my peers hit the ground running on the hedonic treadmill right out of college, quickly filling up their consumption habits to meet their newly high income, while I continued to live low and plow huge amounts of my paycheck into my investments. Well, they're all still slaving away with no end in sight and I'm financially independent after many lucky breaks in my early investments that wouldn't have happened if I didn't have such a frugal mindset early on.
It seemed so obvious to me that this would be the outcome. I still don't understand how so many people can't seem to grok how much early sacrifice can yield outsized reward down the line.
- Separate investing and frugality/budgeting. I guess a lot of those people do actually one of those, but not the other.
- You talk about high earners/engineers. In most of they earning life they never knew the need to ration, or lacking funds - so with the trajectory they see in early adulthood, especially if they like what they do, and they're successful, there simply isn't any recognizeable need to save for later (or even retire early)
- Maybe you like dealing with money, watching stock news early in the morning - I hate it. I hate the thought of dealing with this. It's an active aversion. Of course, the majority of investments should be "set and forget", but it's not always apparent how (especially outside US) and you need quite some research beforehand.
- Coupled with this, you put your life savings in a thing that you don't understand, won't follow. There may be a not entirely unfounded fear of South Park's "aaaand it's gone"
- There is something absolutely tempting about money sitting directly available on an account. Especially when you're young and single, you have no idea what happens with you next year, or what you will probably spend on. Walling away your funds is a critical and worrysome thought.
Sure, you can sum this all up as "financial illiteracy", but they are still cemented in valid concerns or life experiences, instead of mere negligence.
I really wish things like annuities or pensions were available for the 21st century economy. So many people don't want to deal with investing and understanding markets (which change!) and avoid making smart decisions.
There should be a way to just put money in a magic box that pays a little bit back each year, and every time you put money in it grows a bit more.
Productivity per employer has gone up a lot, ideally everyone would be earning more, but at least some are. FIRE doesn't require a booming stock market to work... It simply requires places to put capital that return annually (ideally perpetually). For example buying solar panels is a form of capital sink that has a practical return annually, or sinking money into a home or insulation. At some point someone's savings + annual "income" will be enough to survive on.
FIRE is possible for everyone only when full automation is developed.
But I’ve never heard anyone proposing that nobody should ever work again — you still need to work for long enough to build up a big portfolio. Maybe you can choose to just work 20 hr weeks for your entire 40-yr career… or 60 hour weeks for 15 years, then retire early. But the idea is that if people could consume much less, then we could build a better economy that supports everyone needing to work less in a lifetime.
Society needs to produce X amount of goods and services to sustain itself. If insufficient goods and services are produced, you get stagflation that kills your retirement nest egg. It's reasonable to say that a society where everyone stops doing work they don't like around age 35 cannot possibly produce enough goods and services, unless these people also die by 40.
I also don't buy the idea that it's possible to utilize only ~10-20 years of high productivity from an average person to sustain that person perpetually. This would only be possible with much more advanced automation than what we currently have, in everything from food production to medicine.
FIRE works for now because productivity continues to grow, at least in the US, and in part due to population growth. It also does only work for a small subset of the population (be it high earners or high savers), because the larger this subset, the higher the systemic risk. And it's a bad idea to advocate FIRE as a culturally sustainable approach to life. That idea is absurd.
Check out earlyretirementextreme.com
The author shows how it can be done in 5 years on a sub-$100k salary. The catch though is that he doesn't have children. With dependents, it would probably be more like 10 years.
the people who have not yet FIRE'ed would have to do it, and they do it because they are getting paid by people who are FIRE'ed - presumably, with the intention of FIRE'ing themselves after reaching some target net worth. Unless you're claiming that somehow the population would stagnate and no new people would be born, this will continue to work.
Why does it have to be possible for _everybody_ to be in the same position, at the same time, for FIRE to work?
More and more people are not interested in spending 50+ hours a week in bullshit jobs to just be able to buy a Mercedes and join a golf club. A lot of us are perfectly happy driving Toyotas.
Also... I hate the power your username has over my mind. It's never going to give me up
Of course it's easy to see how they arrived in this situation. There is a constant stream of propaganda telling us we need to spend in order to become successful. Without that SUV you aren't a good parent, without the big house you can't be a good partner, without the expensive holidays you must be a loser. Thank Bernays[1] for all of this.
Not many people can resist that and take a different path which is why we don't need to worry about "what if everybody does it".
Short of a multi year recession, most FIREed folks will survive. You don't need to get another job when you can just downsize your expenses in bad years.