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  • Still FIRE...?

    This appeared in yesterday's NY Times regarding FIRE: https://www.nytimes.com/2020/04/02/s...ronavirus.html

    Curious what everyone thinks will happen - the FIRE movement sprung up during the bull market over the last 10 yrs; I'd imagine some of these folks who were "lean FIRE" now are rethinking their plan. Likewise, a slew of doctor financial blogs and podcasts also were born in that period; I imagine some will have less relevance if the financial underpinnings of their angle has changed with the downturn - which may well be prolonged imho. I'd think some of the most successful ones (obviously the WCI...) will not be significantly affected at all however, thankfully.

  • #2
    Didn't MMM retire prior to the GFC?

    Hopefully those who FIREd planned for catastrophe

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    • #3
      I expect that the FIRE folks are better prepared to weather the storm than most. A lot depends on where they are in the journey. A 38 year old doc five years into a planned 15 year career diligently saving and expecting to retire at age 48 may have been set back a few years by all of this. On the other hand, the recently retired PhysicianOnFIRE is probably relatively unscathed by the crisis.

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      • #4
        FIRE minded folk who are able to keep their job and continue investing through this are going to be set much earlier then expected.

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        • #5
          Well, no actually. I think the true FIRE folks and/or FI folks are MUCH better off than the general paycheck to paycheck never met a lone they did not love folks.
          The FI and or FIRE planners were thinking, discussing, expecting this bull to come to a crashing halt. They did not know how or when but they had (have) plans to deal and frankly benefit from this terrible thing. They will buy stocks (rebalance, buy low, market time, whatever you want to call it) and hold those stocks for another 20-30 years. They will tax loss harvest. They will probably focus on keeping family safe and helping others during this crisis.
          They have few debts, live on less than they make, and were ready for this or as ready as anyone can be.
          Much better prepared than some of my Doc friends with multiple car loans, boat loans, second home loans, expensive lifestyles and little savings and no idea that they might not be able to work as a doc during a crisis (no elective cases). I never thought I would see a day when we did not do elective cases either, not picking on these folks but the ultra frugal MMM type dude is chilling and not worried about......well much of anything really financial. Are they worried about family, friends, health, sure, but money.......nah.

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          • #6
            Can FIRE now, 20 years from full retirement age. Never intended to RE so if I do, this economy or any potential health issue would have to force it.

            More so, no intention to voluntarily retire in a time when patients need all healthcare firepower.

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            • #7
              I think this crisis shows the importance of obtaining FI. It also shows that you better have some type of a cash bucket when you actually retire.

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              • #8
                why wouldn't they be? I am sure they have planned to having portfolio slashed into half and still be ok. They probably have other sources of income. I wonder though whether the other sources of income are comparable to doctor's salary. Did the real estate syndication offer protection not related to stock market decline?

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                • #9
                  The 4 percent rule has historically worked in all market conditions. Even when retiring directly into a recession or depression.

                  The guy who early retired 5 years ago is fine. There's a good chance he has more money today than when he started. The guy who early retired two months ago will probably be fine, but may be rethinking things if it was a ''lean-FIRE'' situation without much fat to cut.

                  As a young doc with a somewhat vague plan of future early retirement, this hasn't really affected my future planning much.

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                  • #10
                    Computationally yes, emotionally, no f'way. Emotion>>>>>>>>>>>>>>Dr. Spock cold rationality. My random thoughts of RE have absolutely evaporated.

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                    • #11
                      Originally posted by DEE F View Post
                      why wouldn't they be? I am sure they have planned to having portfolio slashed into half and still be ok. They probably have other sources of income. I wonder though whether the other sources of income are comparable to doctor's salary. Did the real estate syndication offer protection not related to stock market decline?
                      Generally not; most syndications and funds now are either cutting or holding distributions, since tenants (whether in MF or retail or office) are either delaying or not paying rent for at least a few months. Hopefully that will turn around.

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                      • #12
                        Fun article. The issue is that some (many?) of the knuckleheads writing about FIRE are not FI nor are they RE. You are not FI if your back up plan is apparently to go live in your parents' basement. You are not RE if you depend upon the gig economy to live (e.g. renting out your house with Airbnb). And much of this is on crazy math...I'm going to go out on a limb and say that if your NW only dropped 100k these last few weeks, you are not in a position to kick back for the next 60 years.

                        Edit: (Unless your plan is to kick back in a country much poorer and with LCOL than the US.)

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                        • #13
                          Originally posted by VagabondMD View Post
                          I expect that the FIRE folks are better prepared to weather the storm than most. A lot depends on where they are in the journey. A 38 year old doc five years into a planned 15 year career diligently saving and expecting to retire at age 48 may have been set back a few years by all of this. On the other hand, the recently retired PhysicianOnFIRE is probably relatively unscathed by the crisis.
                          Exactly. Why would having a huge chunk of change be a bad thing when weathering a storm where the main issue is unemployment? If anyone is prepared for unemployment it's those who are already retired.
                          Helping those who wear the white coat get a fair shake on Wall Street since 2011

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                          • #14
                            The FIRE folks have savings and investments. They can weather months of an economic downturn better than anyone because they have been living below their means and they have that huge cushion of financial resources that they have squirreled away.

                            Is it possible some of the FIRE folks might have to go back to work? Sure, but they have way more time and flexibility to figure things out. Plus they have no near term fear for food or shelter security, unlike the average American who is living paycheck to paycheck.

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