Retiring early is an aspiration for many.
So much so that people pay a small weekly sum for the infinitesimal chance it really, really, really could happen :
The lottery is just one means of skidding off the road to serfdom. You could, for instance, also launch an ICO .
But now, according to the New York Times, there's another way.
Meet the “FIRE” evangelists — standing for financial independence, retire early — a “growing movement of young professionals who are intently focused on quitting their jobs forever”. It's easy, anyone can do it. Just save aggressively, plan ahead, invest wisely, and live through the longest equity bull-market since records began and, hey presto, ride into the sunset.
Take this fellow, for example:
Jason Long, a pharmacist in rural Tennessee who retired last year at the ripe old age of 38, said his father had a hard time understanding why Mr. Long couldn’t continue to work and collect his $150,000 salary.
We have a harder time understanding how this idea is realistic for the median American household, which earns 40 per cent of Mr Long's previous income.
The article also contains the usual common sense-dressed-up-as-revelation fare such as this from FIRE advocates Scott and Taylor Rieckens:
After hearing a podcast interview with Mr. Money Mustache, a.k.a., Pete Adeney, who The New Yorker called “ the Frugal Guru ” (he retired at 30), Mr. Rieckens became fired up. He told his wife they should ditch their leased BMW and quit eating out several nights a week. But even with those lifestyle cuts, the couple couldn’t increase their savings rate substantially unless they relocated to a cheaper community, a deleveraging tactic the FIRE crowd calls “arbitrage.”
Of course, downgrading to somewhere cheaper is easier when you are spending $3,000 per month on rent (and have a joint income of $160k). Calling it arbitrage, like its some sort of 80s hedge fund strategy, seems a tad over-the-top.
Apart from plus-$100k incomes and inapplicable anecdotes of asceticism, one thing that links these stories is a dissatisfaction with the nature of white-collar work. Carl Jensen, who opens the piece, struggled with stress at a medical device company. Jason Long, with the vagaries of American healthcare. For Kristy Shen, the great awakening came when one of her co-workers collapsed from exhaustion.
Concerns about the working life of the average American are nothing new. In 2010, American Progress found the “typical American middle-income family put in an average of 11 more hours a week in 2006 than it did in 1979.” According to the OECD , Americans in 2017 on average worked longer hours than other developed nations, including Japan, Germany and the UK.
Further pressure comes from the lack of federal laws protecting the family unit. For instance, the US is the only OECD country that does not require companies to provide paid maternity leave. This meant, in 2015, a quarter of mothers returned to work within two weeks of childbirth, according to non-profit magazine In These Times .
Then there's the issue of paid holiday leave (or vacation, for our US readers). The States is the only developed nation where vacation is a perk and not a right . According to the Bureau of Labor Statistics, the average holiday allowance for a worker after one year of employment is ten days, rising to 15 for those who have served five years or more.
If ten days, excluding public holidays, sounds inadequate then you might be surprised to learn the majority of Americans don't even take their allotted time. A recent study by Kimble , a “professional services” company, found only 47 per cent of US workers used all of their holiday days last year. Reasons vary:
. . . workload-related stress is the number one driving force behind so many Americans opting to not take advantage of their paid time off (PTO). More than a quarter (27 per cent) say they just have too many projects or deadlines to take time off, while more than one in 10 (13 per cent) fear they’ll return to too much work. Unfortunately, employers and managers are not helping the situation. According to the survey, nearly two out of 10 (19 per cent) say that they’ve felt pressured by their employer or manager to not take their vacation time off. Furthermore, more than a quarter of employees either feel anxious or nervous when submitting a time off request — 19 per cent are anxious about being away from work while 7 per cent are nervous that the request won’t be approved.
While the NYT's FIRE advocates are at the affluent end of the income spectrum, and therefore perhaps not under all of the pressures mentioned above, it is not unreasonable to suggest the users of the popular FIRE Reddit forum may not be quite as lucky.
Sure, an early retirement may seem appealing, but perhaps even more so when the laws and institutions protecting workers are so light. Note, we've not even mentioned the state of US healthcare.
Otherwise, why would this lifestyle seem so appealing?
That morning, he’d woken up on his own, “not when an alarm clock told me that I had a responsibility.” He’d read the news online for 30 minutes, went on a seven-mile run, took a nap and “watched the ceiling fan spin around for a little bit”.
Related Links: Someone is wrong on the internet, millennial savings edition — FT Alphaville Self-help to buy — FT Alphaville