FIRE movement & Financial Minimalism

[farmbochur]

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.

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...

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).

I'm not arguing that FIRE is attainable to most people. The FIRE community seems to consist mostly of people in careers that require no more than a 4 year degree with high earning potential (things like finance, accounting, engineering, etc.). 

FIRE is not tailored to people who hate work and want to sit at the beach all day. Money in the bank gives one the flexibility to take on risks or explore new interests that would be otherwise unadvisable.

All this to say that the pursuit of FIRE itself is beneficial, even if the couple comes up short of their target. I still don't understand what it means to fail FIRE.

[ushdadude]

I'm not arguing that FIRE is attainable to most people. The FIRE community seems to consist mostly of people in careers that require no more than a 4 year degree with high earning potential (things like finance, accounting, engineering, etc.). 

https://www.physicianonfire.com/

He achieved FAT FIRE before 40

[Lurker]

I'm not arguing that FIRE is attainable to most people. The FIRE community seems to consist mostly of people in careers that require no more than a 4 year degree with high earning potential (things like finance, accounting, engineering, etc.). 

FIRE is not tailored to people who hate work and want to sit at the beach all day. Money in the bank gives one the flexibility to take on risks or explore new interests that would be otherwise unadvisable.

All this to say that the pursuit of FIRE itself is beneficial, even if the couple comes up short of their target. I still don't understand what it means to fail FIRE.

You keep talking about financial flexibility, which is great, but that's not FIRE. The FIRE lifestyle has a clearly defined goal: retire early. When one sets that as the goal and doesn't reach it, that is considered failure. That doesn't mean nothing good can come out of the pursuit.

My issue isn't with the pursuit of financial flexibility. That can be attained through varying degrees of sacrifice and discipline. My issue is in the pursuit of extreme, unattainable goals, which require extreme sacrifices. Those extreme sacrifices have a cost. As I said before, if an individual feels that they can justify the cost and achieve the goal, kol hakavod. I just don't think the vast majority of people can do it without compromising on the values of a frum lifestyle.

[bendor]

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.

This resonates with me, very much.

You keep talking about financial flexibility, which is great, but that's not FIRE. The FIRE lifestyle has a clearly defined goal: retire early. When one sets that as the goal and doesn't reach it, that is considered failure. That doesn't mean nothing good can come out of the pursuit.

Personally, the "idea" of FIRE has always appealed to me, but I also think it's not an all or nothing approach.

As @Lurker and others have correctly pointed out, to achieve "true" financial independence and early retirement requires earning large amounts of money (ideally as young as possible) while at the same time minimizing your expenses in order to save as high a percentage as possible - both requirements which, while (IMO) not "against" Torah values, don't really work with a frum lifestyle today (where we mostly marry young,  be"H lots of kids, not necessarily working high-paying salaries). The financial investment in children in particular is a significant point which many FIRE bloggers and evangelists are quick to highlight (and oppose, or delay until much later in life).

But for me, the goal of financial independence doesn't equate full early retirement. The point is to give me independence to live my life the way I want - while not being locked in to a full-time job (even one I enjoy doing) for the next 30-40 years in order to support my family.

I would love to take a year, or a few months here and there to spend traveling the world with my family. Or to spend a few years working part-time (or not at all) in order to spend more time learning. That is my personal "goal" with regards to FI(RE). As mentioned above, I too don't see any value in early retirement just for the sake of "retirement".

With regards to living below ones means, and trying to achieve a higher savings - I truly think that's just smart financial behavior that everyone should be aiming to achieve, not only diehard FIRE.

[farmbochur]

You keep talking about financial flexibility, which is great, but that's not FIRE. The FIRE lifestyle has a clearly defined goal: retire early. When one sets that as the goal and doesn't reach it, that is considered failure. That doesn't mean nothing good can come out of the pursuit.

I keep talking about it, because that's what FIRE means to most in the community.

My issue isn't with the pursuit of financial flexibility. That can be attained through varying degrees of sacrifice and discipline.

Great, sounds like we agree on the underlying issue and are arguing only the interpretation of RE in FIRE.

My issue is in the pursuit of extreme, unattainable goals, which require extreme sacrifices. Those extreme sacrifices have a cost. As I said before, if an individual feels that they can justify the cost and achieve the goal, kol hakavod. I just don't think the vast majority of people can do it without compromising on the values of a frum lifestyle.

Pursuit of a goal with incremental payoffs is worthwhile even if the ultimate goal is never actually achieved. FIRE is a prime example of this, and it's unfit to consider such people a failure. As for the "extreme sacrifices" required, it's up to the individual to measure the actual cost of those and calibrate their savings rate accordingly.

[Lurker]

Pursuit of a goal with incremental payoffs is worthwhile even if the ultimate goal is never actually achieved. FIRE is a prime example of this, and it's unfit to consider such people a failure. As for the "extreme sacrifices" required, it's up to the individual to measure the actual cost of those and calibrate their savings rate accordingly.

The goal is crucial because it determines what sacrifices one needs to make in order to achieve it. If the goal is financial flexibility, that will mean something different to each person. We have no argument there. Redefining what the FIRE movement is completely change this conversation, IMO.

[ushdadude]

By definition, financial freedom means you can retire early.

[Lurker]

By definition, financial freedom means you can retire early.

Freedom and flexibility are not the same thing.

[Kobe Bryant]

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...

A thread to discuss income and expenses in the frum community

[ltttc]

Anyone here part of this movement?

To answer your question, Yes.

[googwallet]

To answer OP's question I would say I was part of this movement but have since become distant from it, although I will say it has taught me a lot about finance and savings.
What I came to dislike about the FIRE community was the sheer number of blogs and podcasts all trying to make a living by promoting products (Personal Finance, M1 Finance, CIT Bank, Credit Cards sign-ups and the list goes on.) and giving biased reviews of the benefits of the lifestyle. The other part was seeing on Reddit all the people counting every day until they reached their 'FIRE Number' and then not knowing what to do once they achieved their number. It seems most people just continue to hoard money and don't actually do the RE part. The community is also a little fanatic and prioritizes saving over everything else in life.

However, some of the good things I learned from FIRE are:

Living below my means
Setting up automatic transfers to investment accounts each week
Not trying to time the market
Keeping track of my expenses (I don't call it a budget since I don't spend based on it, rather it lets me know how much my lifestyle costs.)
Choosing to live in a smaller out of town community where expenses are lower instead of living in a higher cost of living city where most of my family is

Of course these lessons are not unique to FIRE but I did pick them up there.

[ltttc]

I think personality plays a big role. Just like some find roller coasters thrilling (while I have a hard time relating), I find saving thrilling (while others can't relate).
I bought my first house when I was a teenager -(crazy times back then when banks gave a/o with a social a mortgage...)
It's not for everyone, but if you truly enjoy the ride, you'll find ways to make it work. Most people prefer roller coasters though.

[Kobe Bryant]

To answer OP's question I would say I was part of this movement but have since become distant from it, although I will say it has taught me a lot about finance and savings.
What I came to dislike about the FIRE community was the sheer number of blogs and podcasts all trying to make a living by promoting products (Personal Finance, M1 Finance, CIT Bank, Credit Cards sign-ups and the list goes on.) and giving biased reviews of the benefits of the lifestyle. The other part was seeing on Reddit all the people counting every day until they reached their 'FIRE Number' and then not knowing what to do once they achieved their number. It seems most people just continue to hoard money and don't actually do the RE part. The community is also a little fanatic and prioritizes saving over everything else in life.

However, some of the good things I learned from FIRE are:

Living below my means
Setting up automatic transfers to investment accounts each week
Not trying to time the market
Keeping track of my expenses (I don't call it a budget since I don't spend based on it, rather it lets me know how much my lifestyle costs.)
Choosing to live in a smaller out of town community where expenses are lower instead of living in a higher cost of living city where most of my family is

Of course these lessons are not unique to FIRE but I did pick them up there.

The first rule is “it is a lot more important to know what one is retiring towards than from”

[gozalim]

I bought my first house when I was a teenager -(crazy times back then when banks gave a/o with a social a mortgage...)

this would be a major game changer, not relevant to 99% of frum community

[ushdadude]

I also think it's more popular because of the bull run were on.

[gozalim]

Choosing to live in a smaller out of town community where expenses are lower instead of living in a higher cost of living city where most of my family is

I can only speak for what I know (chabad), but:
I hear people constantly talking about moving out of NY for the cheaper housing costs. My question is, once you hit 2-3 kids(+) wouldn't the tuition difference outweigh the benefits? which other chabad community (except maybe beachwood OH) has tuition on par with NY?

[Lurker]

I can only speak for what I know (chabad), but:
I hear people constantly talking about moving out of NY for the cheaper housing costs. My question is, once you hit 2-3 kids(+) wouldn't the tuition difference outweigh the benefits? which other chabad community (except maybe beachwood OH) has tuition on par with NY?

FL, after Step Up and scholarships.

[gozalim]

FL, after Step Up and scholarships.

really? can you get it down to $5-8K per child after those?

[ltttc]

this would be a major game changer, not relevant to 99% of frum community

Why not?
To say it was easy, would be a lie. Difficult, yes, Not relevant, don't think so.
I have too much to say on this topic as I am extremely passionate about achieving financial stability.
As I've mentioned previously, I teach young adults how to achieve that because so much of this issue is a lack of some basic education. Discussions re finances are taboo in so many communities/families which is so unfortunate.

[Lurker]

really? can you get it down to $5-8K per child after those?

Yes. Tuition doesn't usually exceed $18k on paper (through 8th grade) after all the fees and before any discounts or Step Up. Take off $6600-7100 for SU. Schools will work with you to get it down to $8k or less, especially if you have multiple children and are very straightforward about what you can actually pay (vs trying to oversell your need).