FIRE movement & Financial Minimalism

[zh cohen]

The latter

I think looking at retirement (as it is typically understood) as a goal is not a Jewish value.

Even if you plan on spending retirement learning/dining mitzva, I don't know if it is appropriate to minimize those things now (as the FIRE philosophy seems to recommend) in order to maximize then later. See for example the famous t'shuva of the Radbaz regarding someone who was offered one day furlough from prison.

[hvaces42]

certain skills tend to correlate to closed mindedness.
Actuaries have that reputation, for example (deserved or not)

Actuaries are just boring accountants. 

[Kobe Bryant]

I find it interesting that everyone is focusing on the Raisha and not the Saifa

[Euclid]

I find it very interesting that everyone is focusing on the Raisha and not the Saifa

Financial Minimalism by itself is a meaningless phrase - one person's necessity is another's luxury. It all depends on your priorities - therefore I understood the topic to be financial minimalism in the context of FIRE. 

[zh cohen]

I find it interesting that everyone is focusing on the Raisha and not the Saifa

When you say saifa, do you mean RE or Financial minimalism?

[Kobe Bryant]

When you say saifa, do you mean RE or Financial minimalism?

The latter. When it comes to FIRE you were only focusing on the Saifa

[Lurker]

I find it interesting that everyone is focusing on the Raisha and not the Saifa

Because while the goal may be great, many (if not most) who attempt it will ultimately not succeed. Can one justify the sacrifices that will have to be made in a failed attempt?

[zh cohen]

Because while the goal may be great, many (if not most) who attempt it will ultimately not succeed. Can one justify the sacrifices that will have to be made in a failed attempt?

I think financial minimalism is a value for it's own sake, not just in order save money.

[Lurker]

I think financial minimalism is a value for it's own sake, not just in order save money.

This is way beyond minimalism. In order to put away that percentage of one's income, serious sacrifices would have to be made within a frum lifestyle. Much of the excess that people spend on can most certainly be done away with, but it would take a very strongly principled person to toe the line without compromising on things like tzedaka and hiddur mitzvos.

[Euclid]

Technically, FIRE is what yidden who make extreme financial sacrifice for torah learning/teaching are doing. I'm talking about the 12 kids in 2 room apartment yidden. Except their minimalism is for retirement in olam haemes.


(This thought popped into my head when thinking about how children would fare being raised in a FIRE home.)

[yos9694]

We have a retired NYC traffic engineer in our shul who literally retired at the first possible moment he could and is waiting to die. Its scary how someone with million dollar a year skills and experience can just be so closed minded. His vice pre-Covid was getting up for the second minyan instead of the first minyan he attended his entire career.

I don't understand a word of this. Can you please explain
1) retired and is waiting to die: is he in hospice?
2) million dollar skills is close minded: what would be be like if he were open minded?
3) His vice was going to the second minyan: what"s his vice now?

[farmbochur]

Because while the goal may be great, many (if not most) who attempt it will ultimately not succeed. Can one justify the sacrifices that will have to be made in a failed attempt?

Can you explain what it means to "fail"  FIRE?

Consider a typical candidate for FIRE who happens to be frum. The couple has combined income of $100-250k / year and achieves a savings rate of 30-50%.

Fast forward 5-8 years and the couple now has several children in school. With tuition and other expenses adding up, they reduce their savings rate to 15%. They also happen to have $0.5M+ in the bank. Too little for FIRE, but far ahead of their peers on the journey to financial independence.

Knowing how far ahead they are so far ahead, the couple has options to consider. Maybe cut back hours to spend time with the kids? Maybe the take on riskier projects at work with high payoff potential?

Is this couple really a failure?

[Euclid]

Can you explain what it means to "fail"  FIRE?

Consider a typical candidate for FIRE who happens to be frum. The couple has combined income of $100-250k / year and achieves a savings rate of 30-50%.

Fast forward 5-8 years and the couple now has several children in school. With tuition and other expenses adding up, they reduce their savings rate to 15%. They also happen to have $0.5M+ in the bank. Too little for FIRE, but far ahead of their peers on the journey to financial independence.

Knowing how far ahead they are so far ahead, the couple has options to consider. Maybe cut back hours to spend time with the kids? Maybe the take on riskier projects at work with high payoff potential?

Is this couple really a failure?

How many frum couples have a $100k-$250k net income in their first 5-8 years of marriage? Definitely not common in the Lakewood yeshiva community.

[Lurker]

Can you explain what it means to "fail"  FIRE?

Consider a typical candidate for FIRE who happens to be frum. The couple has combined income of $100-250k / year and achieves a savings rate of 30-50%.

Fast forward 5-8 years and the couple now has several children in school. With tuition and other expenses adding up, they reduce their savings rate to 15%. They also happen to have $0.5M+ in the bank. Too little for FIRE, but far ahead of their peers on the journey to financial independence.

Knowing how far ahead they are so far ahead, the couple has options to consider. Maybe cut back hours to spend time with the kids? Maybe the take on riskier projects at work with high payoff potential?

Is this couple really a failure?

None of this sounds like FIRE to me. It sounds like a decent financial plan for people making decent money. It also doesn't sound like it would apply to 90%+ of the frum world.

ETA: FIRE calls for people making normal money to do extreme things. Your scenario describes people making extreme money (frum couple in their 20s netting 100-250k) doing normal things (living off of 70-125k/yr).

[sguitarist18]

Can you explain what it means to "fail"  FIRE?

Consider a typical candidate for FIRE who happens to be frum. The couple has combined income of $100-250k / year and achieves a savings rate of 30-50%.

Fast forward 5-8 years and the couple now has several children in school. With tuition and other expenses adding up, they reduce their savings rate to 15%. They also happen to have $0.5M+ in the bank. Too little for FIRE, but far ahead of their peers on the journey to financial independence.

Knowing how far ahead they are so far ahead, the couple has options to consider. Maybe cut back hours to spend time with the kids? Maybe the take on riskier projects at work with high payoff potential?

Is this couple really a failure?

My response is "LOL."

The suggested income, as well as the proposed saving rates, are unlikely.

The point is that most newly married couples are also relatively new to the workforce. And as you start to earn more money, your tuition breaks get reduced as well - so with, say, 4 kids in school, you're tuition is easily $40-80k, depending which community you live in. As a starting point, that makes it difficult to save 30% of your income, even if making $150-200k.

That said, I think trying to save money and retire early is definitely worthwhile. I know there are lots of things I'd love to have more time for that my job doesn't allow for. More time with family, friends, learning, davening...

[saw50st8]

Can you explain what it means to "fail"  FIRE?

Consider a typical candidate for FIRE who happens to be frum. The couple has combined income of $100-250k / year and achieves a savings rate of 30-50%.

Fast forward 5-8 years and the couple now has several children in school. With tuition and other expenses adding up, they reduce their savings rate to 15%. They also happen to have $0.5M+ in the bank. Too little for FIRE, but far ahead of their peers on the journey to financial independence.

Knowing how far ahead they are so far ahead, the couple has options to consider. Maybe cut back hours to spend time with the kids? Maybe the take on riskier projects at work with high payoff potential?

Is this couple really a failure?

When I have 3 kids in high school and one in elementary school, my tuition bill will be over $100,000 (post-tax). My mortgage is a joke in comparison. There is only so much cutting back you can do in meaningful ways in order to save money for (early) retirement.  If you take two young adults getting married in their early 20s, their salaries are not likely more than $100,000 combined and one or both of them may still be in school. Even frugal people have challenges with being able to save 30-50% of their income.  If you factor in children within a year or so and childcare, it makes it even harder.

[ushdadude]

You don't have to retire when you achieve FIRE.

[ushdadude]

First, I question the technical feasibility. In order to make it work with a secular lifestyle, you need to be making six figures. The secular lifestyle allows cheap food, finding cheap housing with little regard to amenities, marriage between 28-35, first chIld after 30, an average of 2 children, possibly public schooling, and no religion-related expenses (shabbos, yomtov, garb, etc.). Factor in the cost-of-living differences, for a frum person to be putting away 75% of income, they'd need to be making very significant money. This is without calculating how to make the money stretch over a lifetime of expenses in the frum world. There are very few who could even consider trying.

I had a paragraph typed up with a bunch of points where I felt it was not in-line with Torah values, but it didn't feel right. Too judgemental. I'll just say this: if someone can find a way to live this life without compromising Torah values, or losing sight of why they were put in this world and what they feel they should be accomplishing in their avodas Hashem, kol hakavod. My personal opinion is that it is very hard to walk that line, but that doesn't mean it's impossible or shouldn't be attempted. I don't think most can pull it off, va'ani b'rosham.

There are other principles of FIRE that can be applied to a Frum lifestyle. Most importantly, living below your means.

[Lurker]

There are other principles of FIRE that can be applied to a Frum lifestyle. Most importantly, living below your means.

There are principles from most financial strategies that can and should be applied to the frum lifestyle. My point wasn't that everything about FIRE is worthless, just that the strategy as a whole is not feasible for over 90% of the frum community to even think about attempting, and those for whom it is within the realm of possibility have to reconcile the sacrifices required with their personal views of Torah values.

[ushdadude]

There are principles from most financial strategies that can and should be applied to the frum lifestyle. My point wasn't that everything about FIRE is worthless, just that the strategy as a whole is not feasible for over 90% of the frum community to even think about attempting, and those for whom it is within the realm of possibility have to reconcile the sacrifices required with their personal views of Torah values.

fair enough. Focusing on the FI and not the RE can be a good compromise.
Realistically, passive income is more easily achievable than living frugally.