Playing with FIRE

A freudian slip!

 

How to retire at 40, no matter how much you earn

 

Somehow I don't think so.

 

That show is how to retire by 40, but the episode is about a 43 year old.
It should be called "How to retire at 40, not matter what your age is"

 

Maybe they define 40 as everything after 39 and up to 49

 

So basically Scott is a loser who quit his job and dragged his wife into a lifestyle of deprivation that she didn’t want. I would not want to subject my wife to a lifestyle that stresses her out and makes her depressed. Even if it’s temporary. Risking marriage over FIRE plans that may or may not pan out is just not worth it.

Then all of a sudden in the end, she’s really happy with her life. Her complete 180 turn around just seemed so abrupt to me

 

Agreed. I was looking forward to viewing the documentary but lamentably I was quite underwhelmed. I think they are deadbeats.

 

So which is best FIRE or get into DEBT?

 

Would never show this so-called documentary to my wife or daughters. Ugh.
I really do not think it represents many of the FIRE journeys any of us are on. I really do not think it gives FIRE community a good look (not that we really care I suppose)

 

I also was able to watch it for free on the weekend. Your thoughts above conveyed my own sentiments. In fact, the film was almost "anti-FIRE" (moreover anti-RE) by its messaging. It kind of said "well strive for FI but RE is too difficult, may as well enjoy your life and take a longer time to get there".

I totally agree that they could have made some changes in their existing life-style and environment (cheaper abode, sell one car (and buy the 2005 CRV), more home cooking with the breakfast burritos (seriously) etc) to achieve a similar outcome with an improved savings rate and be "happier".

It also indicated one of the challenges for Australians, whilst not impossible, does have an impact in terms of the choices available for cheaper real-estate with good / higher paying jobs. The USA has many towns/cities of 100,000 people or more (about 300), whereas Australia has about 17 with the 6 capital cities making up strong contingent here, and hence our USA FIRE friends have a lot more choice to achieve such goals.

 

I have to agree with you as i watched the link..Most people within sites like this and other 's mostly always consider preservation of capital the most important consideration first..

 

They edited out the next 30 mins of her bawling her eyes out.

The title of the doco pretty much sums up this couple.

 

It's true that our housing price are higher and we don't have as much choice of low-cost housing as the US does. But we have much better minimum wages and I'd also bet our median full-time salaries make up for this to a decent extent.

As for home ownership, that's still a choice at the end of the day - housing is a need, but owning that house is a choice.

 

From MMM Forum

AUSTRALIA

WHAT
0. Pay the minimum required on all debts.
1. Establish an emergency fund for your satisfaction. See Bogleheads Emergency Fund Use your mortgage offset account OR use springy debt instead of a cash cushion
2. Pay off any debts with interest rates above your mortgage rate (if you have one)
3. Put money into your PPOR mortgage offset account (if you have one).
4. If your taxable income is less than $53,564 (before salary sacrifice) consider contributing $1000 per year to superannuation to get the Government co-contribution.
5. Pay off any debts above the return you can get on your investments.
6. If your taxable income is more than $37,000 optimize Salary Sacrifice into Superannuation - you need to work this out individually, because how much depends on at what age you will ER, how much is already inside/outside superannuation, and your marginal tax rate.
7. Invest any extra into low-cost index funds (long term investments - 10 years) or high-interest accounts (short term - 2 or 3 years).

WHY
0. Don't get yourself into trouble.
1. Give yourself at least enough buffer to avoid worries about paying bills.
2.& 3. Because it's untaxed, the effective return on a mortgage offset account is likely to be the highest percent return you can get on your money
4. When the government is giving you money - take it.
5. It's better to pay off expensive debt than to invest.
6. Salary sacrifice is taxed at 15% as it goes into superannuation and people on low incomes have a lower tax rate. You will need other money to last you between when you retire and when you are eligible for superannuation. However, superannuation tax rates are low.
7. Because earnings, even if taxed, are beneficial. If you are saving for the short term (eg. a house deposit whether PPOR or IP), you want to be absolutely sure that you will get back what you saved, but longer-term savings are better off in an index fund.

Note: This assumes that you are employed. If you are a business, make sure that you put the 9.5% superannuation guarantee for yourself because if the business fails, you will at least have that money in old age

 

Is MMM a computer programmer?

 

Software engineer link

 

Know of any good resources or websites on optimising the super vs non super allocations?

 

It was @Terry_w posting the MMM link that made me focus hard on retirement planning, lucky that when we lost our jobs we were in a good financial space.

 

Poor guy, he must always confuse Christmas and Halloween.

Because 31oct = 25dec



One of my favourite jokes!