Can this money ethos help you retire in your 30s?
The FIRE movement believes frugality is key to retiring in your 30s; others think the movement is about privilege more than prudence.
- An online culture of millennials is looking to min-max their finances to achieve financial independence and retire early.
- Called the FIRE movement, members aim to live lean and control their spending, an ethos catalyzed by Vicki Robin's work in the early '90s.
- Some are doubtful of the movement, arguing their strategies aren't exacting enough to be future proof or are a means for wealthy individuals to capitalize further on their privilege.
Jason Long hated his job. A pharmacist in rural Tennessee, Long dealt daily with angry and confused customers battling drug costs, the opioid epidemic, and health insurers cutting costs at the expense of the ill. He had to work 12- to 14-hour shifts just to keep up. He couldn't eat, and his health suffered from the stress.
Enough was enough. Long walked away from a $150,000 salary, choose to live off his investment portfolio, and retired at 38 years old.
As reported by The New York Times, Mr. Long is a forerunner to a movement of millennials aiming to retire well before their golden years. Called the FIRE movement — for "financial independence, retire early" — proponents believe frugality is the key to reaching early retirement in their 40s, 30s, or even their 20s.
The FIRE movement is a loose conglomerate of blogs, forum groups, and Reddit discussions. Gathering online, members share tips and stories on how to manage finances to maximize savings and minimize spending to propel one to early retirement.
If the camp has a catalyzing figurehead, it would be Vicki Robin and her 1992 book, Your Money or Your Life. Robin's message was to show readers how to increase their savings through strict budgeting and mindful spending.
"What we teach is an awareness about the flow of money and stuff in your life in light of your true happiness and your sense of purpose and values," Robin told Big Think. "And that your 'enough point,' having enough, is having everything you want and need to have a life you love and full self-expression with nothing in excess."
Recently, millennials have rediscovered Robin's book and followed its principles in their search for early retirement. Mister Money Mustache, a popular FIRE blogger who retired in his 30s (real name Peter Adeney), even provided the forward for the 2018 revised rerelease of Your Money or Your Life.
However, it should be noted that Robin isn't the founder of the FIRE movement, more its inspiration. Environmentalism is a core feature of Robin's message, and for her lean living is as much a way to find happiness as it is to save the planet. "We have measured the amount of planet we have and humans are consuming more than the amount of planet we have every year (that can be regenerated) ever since 1986," Robin notes.
The FIRE movement, on the other hand, does not maintain a green message at its core. Instead, members seek out their own reasons for financial independence and early retirement (of course, there's no reason ecological stewardship can't be one of those driving forces). The question for them isn't why you want financial independence, but how you go about it.
Holding one's finances to the FIRE
Have you ever spent time listening to fans of a popular online roleplaying game discussing how to min-max their wizards for the upcoming raid? If so, then you'll get a sense of déjà vu reading posts at FIRE blogs or Reddit pages. These sources are replete with users discussing the mathematical details of their FI setups, graphing their 401K contributions vs. gains, and devising grocery lists based on calorie to dollar ratio.
Their patois is also highly reminiscent of online-based groups like gaming culture. As noted in the Times article, members are said to be "firing" when they maximize savings while minimizing excessive spending (i.e., min-maxing). When they have achieved their financial goal, they are said to have "fired." Different levels of FIRE engagement also exist — "lean FIRE" is for extreme frugality, "fat FIRE" for more typical savings, and "barista FIRE" for working part-time after retirement (i.e., hardcore vs. casual gamer). And what would an online culture be without a bevy of initialisms, such as SWR (safe withdrawal rate).
It shouldn't be surprising that FIRE's most publicized figures tended to come from highly technical fields such as engineering and healthcare before becoming "fired." Mister Money Mustache was a software engineer; EarlyRetirementDude had a career in banking; Mr. and Mrs. Frugalwoods were a software engineer and communications manager, respectively; and Jason Long, as we saw, was a pharmacist.
But how does one start "firing"? As noted by Kristin Wong at Lifehacker, it's deceptively simple. All you have to do is "spend less than you earn" and save the remainder, meaning it all comes down to the "math and mechanics."
FIRE advocates look at their income, budget mandatory expenses, and then ruthlessly cut discretionary spending in order to maximize their savings. They've devised many life hacks to accomplish this, such as minimizing housing costs, seeking cheaper services, not purchasing expensive depreciable goods, lowering tax liability, and being mindful of spending money on unnecessary goods (looking your way, bar tab).
Ultimately, the goal is to reach a point where their expenses line up with how much they can sustainably withdraw from their portfolios, ensuring they still have enough money down the road. This is colloquially called the "four percent rule" — so called because 4 percent is the amount a retiree can typically withdraw from investments.
While simple in principle, this is the kind of thing that's made "it's easier said than done" such a cliché. It's difficult to manage such frugality or know the best ways to invest your money. But those who have fired seem to enjoy the challenge as much as the results.
Revolution or dumpster FIRE?
A young backpacker enjoys early retirement, yet many argue that FIRE strategies don't properly plan for the unexpected realities of the sunset years.
(Photo by Abhiram Prakash/Pexels)
A cynical critic may point out that the FIRE movement's more successful champions haven't retired in the traditional sense. Mister Money Mustache hosts advertisements on his blog. Early Retirement Dude and MadFientist both utilize affiliated links to earn fees. Ms. Frugalwoods is the author of a book published by HarperBusiness and the Frugalwoods' blog also publishes affiliated endorsements.
These early retirees haven't so much retired as switch jobs to self-employed promoters of the early retirement ideal. But as Tanja Hester, early retiree and blogger at our next life, told Lifehacker, FIRE isn't really for people who hate their job and want to quit working.
"A good reason to retire early is that you have an alternative vision for your life that you are eager to pursue, but which you can't pursue while employed full time," Hester said. "Achieving financial independence allowed us to leave that career chapter of our lives from a place of gratitude and appreciation, and move onto our next chapter that we're in control of."
Fair enough, and "FIRE" without early retirement doesn't sound so catchy. Then it's just "FI." However, there are two other criticisms of the movement that potentially carry more weight.
The first, as stated by financial advisor Suze Orman, is that early retirement is a myopic pursuit that greatly underestimates the costs and pitfalls of future living. Orman notes that rising healthcare costs will make the golden years more expense for future retirees and that planning for senior health needs in one's 30s is difficult. She also believes that early retirees underestimate loses in compound returns.
"I hate it, I hate it, I hate it, I hate it," Orman told Time. "I personally think it is the biggest mistake, financially speaking, you will ever, ever make in your lifetime."
The general rule is that you need 10 times your current income to retire. Calculating for average returns of 6 percent and inflation at 2.5 percent, the AARP estimates a retiree would need $1.18 million to draw $40,000 per year for 30 years. Depending on where you live, that figure may fall within the lower income bracket. (Check out the Pew Research Center's income calculator to find out where your income falls for your area.)
And even may not be enough. Speaking with AARP, wealth advisor Dan Yu points out that spending rarely decreases after retirement. Vacations are taken more often, cost of living continues to climb, and inflation and interest rates can fluctuate. Adding to this financial uncertainty is the fact that people are living longer. On average, men reaching 65 today will live to be 84 years old, women 86, meaning investments much stretch further than in previous generations.
The second criticism is that the FIRE movement is less about prudence and more about privilege. Opponents argue that FIRE successes aren't the result lean living. Plenty of people live frugally out of necessity already. Rather, it is glorified virtual signaling offered by those who already enjoy the benefits of above-average incomes and access to capital.
"What [FIRE evangelists] have embraced is a model of advice-giving that mostly involves telling self-congratulatory stories about how they achieved financial independence by being frugal," Miles Howard wrote at The Outline. "And that's a shitty idea to perpetuate. Because whatever happens in the years ahead, penny-pinching will likely remain a lifestyle enhancement for bourgeois Millennials who posses enough money to enjoy the dividends of being thrifty. For most of us, there are no dividends: just thrift."
By now you're probably either excited to learn more about FIRE strategies or have written the movement off as another online fad. Either response is acceptable; you do you. But when making financial decisions, be sure to seek out professional financial advice, preferably from a fiduciary. FIRE or no, the last person you should seek financial advice from is some online rando.
Researchers documented the most common negative side effects of smoking weed, and who might be most susceptible.
- A team of researchers identified a total of 26 possible adverse reactions to cannabis use.
- Coughing fits, anxiety, and paranoia are among the top three most common adverse reactions to smoking weed.
- It was the people who smoke on a less frequent basis who were more likely to have had the bad experiences.
The most common adverse effects of pot<p>As it turns out, coughing fits are among the top three most common adverse reactions to cannabis use, along with anxiety and paranoia, according to a new study published in the <em>Journal</em><a href="https://jcannabisresearch.biomedcentral.com/articles/10.1186/s42238-019-0013-x" target="_blank"><em> of Cannabis Research</em></a>. </p><p>Now that weed is legal in the state, a team of researchers at Washington State University sought to document potential negative reactions to cannabis in order to paint a detailed picture of the effects of smoking weed for newbies. The authors surveyed more than 1,500 college students on the specific type and frequency of adverse reactions they had experienced while using pot. Additionally, the students in the study were surveyed about their demographics, personality traits, reasons for using cannabis and their use patterns. </p><p>Despite marijuana's <a href="https://bigthink.com/sex-relationships/marijuana-sex" target="_self">numerous benefits</a>, the team identified a total of <a href="https://jcannabisresearch.biomedcentral.com/articles/10.1186/s42238-019-0013-x/tables/2" target="_blank">26 possible adverse reactions to</a> the drug. More than half of the study participants reported having coughing fits along with anxiety and/or paranoia while using cannabis. The most frequently occuring of these were the coughing fits, along with chest/lung discomfort and body humming. A subset of the study group reported these reactions occurring around 30–40% of the time they were using pot. On the flip side, the three <em>least</em>-commonly reported reactions to cannabis use were fainting, visual hallucinations and cold sweats. </p><p>"There's been surprisingly little research on the prevalence or frequency of various adverse reactions to cannabis and almost no research trying to predict who is more likely to experience these types of adverse reactions," <a href="https://news.wsu.edu/2020/03/30/new-research-sheds-light-potentially-negative-effects-cannabis/" target="_blank">said Carrie Cuttler</a>, assistant professor of psychology and an author on the paper, according to WSU News. "With the legalization of cannabis in Washington and 10 other states, we thought it would be important to document some of this information so that more novice users would have a better sense of what types of adverse reactions they may experience if they use cannabis."</p><p>The most distressing of the 26 negative reactions were panic attacks, fainting, and vomiting. Yet, the survey data suggested that cannabis users generally do not find even acute adverse reactions to cannabis to be severely distressing.</p>
What causes a bad reaction?<img type="lazy-image" data-runner-src="https://assets.rebelmouse.io/eyJhbGciOiJIUzI1NiIsInR5cCI6IkpXVCJ9.eyJpbWFnZSI6Imh0dHBzOi8vYXNzZXRzLnJibC5tcy8yMjkwOTEwOC9vcmlnaW4uanBnIiwiZXhwaXJlc19hdCI6MTYyNTQ5MDQ2Mn0.S2Pkbh3VAgB4Gk5tkavamMv0_4t76dg65yGWpCHG17U/img.jpg?width=1245&coordinates=0%2C1872%2C0%2C1252&height=700" id="dee45" class="rm-shortcode" data-rm-shortcode-id="df6e30ecae156ba0012f4773a374800c" data-rm-shortcode-name="rebelmouse-image" />
Tea and coffee have known health benefits, but now we know they can work together.
Credit: NIKOLAY OSMACHKO from Pexels
- A new study finds drinking large amounts of coffee and tea lowers the risk of death in some adults by nearly two thirds.
- This is the first study to suggest the known benefits of these drinks are additive.
- The findings are great, but only directly apply to certain people.
Maybe you should enjoy this article with a cup of coffee or tea.<p> The <a href="https://drc.bmj.com/content/8/1/e001252?T=AU" target="_blank" rel="noopener noreferrer">study</a> involved 4,923 type 2 diabetics living in Japan. The average participant was 66 years old. All of the participants were taken from the rolls of the Fukuoka Diabetes Registry, a study geared at learning about the effects of new treatments and lifestyle changes on the health of diabetics. <br> <br> The participants filled out questionnaires concerning their health, diet, habits, and other factors. Among the questions were two focused on determining how much green tea or coffee, if any, the participants consumed over the course of a week. The health of the participants was recorded for five years. During this time, 309 of the test subjects died from a variety of causes. <br> <br> Subjects who drank more than one cup of tea or coffee per day demonstrated lower odds of dying than those who had none. Those who consumed the most tea and coffee, more than four and two cups a day, respectively, enjoyed the most significant reductions in their risk of death. This level of consumption was associated with a 40 percent lower risk of <a href="https://www.sciencedaily.com/releases/2020/10/201020190129.htm" target="_blank" rel="noopener noreferrer">death</a>. </p><p>Most interestingly, the effects of drinking tea and coffee appear to combine to reduce risk even further. Those who reported drinking two or three cups of tea a day and two or more cups of coffee were 51 percent less likely to die during the study, while those who drank a whopping four or more cups of tea and two or more cups of coffee had a 63 percent lower risk of <a href="https://www.medicalnewstoday.com/articles/diabetes-coffee-and-green-tea-might-reduce-death-risk" target="_blank" rel="noopener noreferrer">death</a>. </p>
So, should I start swimming in a vat of coffee and green tea?<iframe width="730" height="430" src="https://www.youtube.com/embed/LY0E-JQxeoY" frameborder="0" allow="accelerometer; autoplay; clipboard-write; encrypted-media; gyroscope; picture-in-picture" allowfullscreen></iframe><p> Not quite. </p><p> The primary takeaway from this study is that Japanese adults with type 2 diabetes who drink a lot of green tea and/or coffee die less often than similar people who do not. If this effect is caused by something in the drink, lifestyle choices people who drink that much tea all make, or something else remains unknown. The finding must be considered an association at this point. <br> <br> The eye-popping reductions in mortality rates are compared to the risk of death of others in the study. The people who died reported drinking less tea and coffee than those who lived. Unless you have several demographic and conditional similarities to the subjects of this study, you probably won't suddenly be at a two-thirds lower risk of death than your peers because you drink green tea. </p><p> Like all studies that depend on self-reporting, it is also possible that people misstated how much they consumed any one item. The study also did not look into other factors like socioeconomic status or education level, also known to impact death rates and potentially linked to coffee and tea consumption. </p><p> However, it is yet another study in the pile that suggests that <a href="https://www.healthline.com/nutrition/top-13-evidence-based-health-benefits-of-coffee" target="_blank" rel="noopener noreferrer">coffee</a> and <a href="https://www.healthline.com/nutrition/top-10-evidence-based-health-benefits-of-green-tea" target="_blank" rel="noopener noreferrer">green tea</a> are good for you. That much is increasingly <a href="https://www.health.harvard.edu/press_releases/health-benefits-linked-to-drinking-tea" target="_blank" rel="noopener noreferrer">agreed</a><a href="https://www.rush.edu/health-wellness/discover-health/health-benefits-coffee" target="_blank" rel="noopener noreferrer"> upon</a>. This study also suggests the benefits are additive, which is a new development.</p><p><br> So, while it isn't time to start the IV drip of green tea, a cup or two probably won't <a href="https://www.webmd.com/diabetes/news/20201022/coffee-green-tea-might-extend-life-for-folks-with-type-2-diabetes" target="_blank" rel="noopener noreferrer">hurt</a>. </p>
But most city dwellers weren't seeing the science — they were seeing something out of Blade Runner.
On Sept. 9, many West Coast residents looked out their windows and witnessed a post-apocalyptic landscape: silhouetted cars, buildings and people bathed in an overpowering orange light that looked like a jacked-up sunset.