Into the Woods

/ Sex Health Money Death

I see on my Twitter account that the Early Retirement community is winding a lot of people up again by being a bit opaque about the financial facts that underpin the objective – namely, that you need a rather large wedge of cash to be able to do it.

This week it was the Frugalwoods and their 66 acre Vermont abode that was ruffling feathers, and no wonder. I won’t go into the detail, because you can read the article and comments for yourself, but I do understand the annoyances expressed over it. I used to feel the same about Mr Money Moustache and Jacob at Early Retirement Extreme and, to be honest, a whole load of bloggers exalting the FIRE lifestyle, including myself. You absolutely need to have money in the bank to do it in the style some of the bloggers extol. Quite a lot of money. You can be relatively up front about this, like Mr Moustache is, or you can fudge around the issue, as I tend to do. Yes, I did retire aged fifty one on pretty much the same income as I had while I was working – but I don’t think that reaching 51 and retiring readily qualifies as  “early”. That, however, is how long it took me to save the money necessary to quit work and not worry about it drastically altering my lifestyle.

I’m not about to divulge how much I had in savings, investments, pensions, cash, payouts and the rest that allowed that choice. But I do recognise that it was a substantial nest egg, regardless of how much I felt that my career, lifestyle and habits up to that point had been aimed toward that goal. I feel I was quite a committed saver as opposed to choosing to “Spend Spend Spend” as I “Earned Earned Earned”, but I was also in the fortunate position of having disposable income to make the choice. Many people don’t.

It seems to me now that it’s quite obvious that FIRE is an aspirational, middle class fixation. After all, in Britain, if you never want to work, if you shun possessions, if your ambition is to life a frugal life and have then all the time in the world to follow your muse, then do it. You can tailor your lifestyle accordingly and you probably won’t starve or live in a bus shelter – but you certainly won’t be living in a 66 acre rural estate in Vermont.  However, for many of us in the FIRE community it’s the latter type of lifestyle that’s the goal as opposed to a pretty basic existence.

Our dream is to be financially independent on our own terms. We won’t have to rely on others – either an employer or the State – to determine the financial course of our lives. This might mean that we still set out to generate income, but we’ll be doing it through our own endeavours and we’ll feel that this is more of a choice than a need. Which makes a big difference and, I think, is a valid and worthwhile ambition to have. It’s about taking control, striving to get to the goal you’ve set for yourself and discovering the myriad of ways and options that you have to realise it. You can choose the level of income you want to attain. We like having the feeling that we are captaining our own ship, which is why so many of our Recommended Reading lists are peppered with Self Help and “Be all You can Be” books, as opposed (or in addition) to the collection of Stephen King or Lee Child novels.

So, FIRE is about personal ambition for self-improvement. Other people will have other goals – maybe their ambition will be to improve the life of others before themselves. Maybe it will be just to simply live for today. Maybe it will be to care and provide for their family and community while a job – any job – provides the means to better achieve this. Each to their own, which is the problem with the Frugalwoods interview – God, they sound pretty smug and pleased with themselves, don’t they? Did they really have to shout about what they’ve achieved so publicly, or is that because they have a book to sell? It’s an underlying paranoia that I have myself – while I’d love to advertise the virtues of being Financially Independent and consequently Retiring Early, I don’t want to sound all smug and self-satisfied while doing so. It’s a difficult line to walk. Perhaps I was trying  to have my cake and eat it when I chose to go back to work?

I still haven’t turned against being Financially Independent though. Try as I might, in the society that we live in today, there’s very few downsides I can see to reaching that goal.

19 thoughts on “Into the Woods”

  1. “We won’t have to rely on others – either an employer or the State – to determine the financial course of our lives.”

    I seem to remember your retirement will be relying on:

    – a final salary pension from your former employer on terms so advantageous that I bet they haven’t it offered to new joiners in more than a decade
    – a state pension funded from future tax receipts
    – special pleading for some sort of state insurance to protect your inheritance from care home fees last post
    – the tax payer funded national health service

    “We like having the feeling that we are captaining our own ship” – mostly FIRE types seem to either have a product to sell or be surfing on someone else’s financial couch

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    • @NL, So do you believe that FI as a concept can actually exist? Even someone with investments in stock markets is dependent on those companies performing, paying out dividends, etc. Perhaps someone who holds only cash, and sufficient to be sure of it lasting their lifetime, could be considered FI?

      I’ll be the beneficiary of a DB pension one day (I don’t include the state one in my calcs.) I consider myself FI at 42, achieved by a decent, but not huge, salary, a fair savings rate in my final few years of work, and relatively low (but not extreme frugal) outgoings.

      I know FI can’t be a consideration for the low paid, and also not for young folk burdened by today’s property prices (for S. of England in particular; I don’t rule it out for all areas of the country, as prices everywhere aren’t as bad as the London-centric media make out.) However, something like FI could be achievable for many middle income earners if they wanted it.

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      • @Scott – I don’t think the existence of financial independence is the point NL is making?

        My interpretation is that he’s pointing out the occasional cognitive dissonance arising in SHMDs posts surrounding his interaction with the state’s finances and the state’s interaction with his finances.

        The principles behind the issue seem to be fairly fluid and largely dependent upon which of those two parties end up being worse off.

        At least he’s honest?

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  2. @NL – I think that’s probably a fair cop?

    Everyones a libertarian until something doesn’t go to plan. Then they are a socialist.

    That FW article is pretty unbearable, but that’s their USP. Relentless positivity. I thought the comments, although critical, were pretty polite for a broadsheet?

    And for sure, always keep the incentives in mind, i.e. a book to sell, service to flog etc. I assume thats why TEA does what he does?

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  3. For me the main problem with that article was the blatant contradiction between the title, about them retiring at 32, and the fact they weren’t actually retired. It also didn’t help that they clearly earned a lot between them, much more than your average couple, but they kept going on about painting their kitchen as though that one act would get you this lovely house in 66 acres of land.

    I don’t understand why, on anonymous blogs, there is so much secrecy around the numbers, what you’re earning and what you’ve got saved. I think my favourite blogs are the ones that are upfront about these things. I honestly think if you just show people the maths then let them make up their own minds you’ll have more converts, but then perhaps that’s just my personality style, ie that’s what I like.

    There’s so much more to say on this, about misconceptions and mistruths on both sides of the argument. Fodder for a blog post perhaps.

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  4. I think there are swathes of the general population for whom FI/RE in today’s world is close to impossible now, meaning that unless they get a crazy piece of good luck, the system has no way for it to happen. These are the poor, those who allow themselves to be limited by a working-class mentality, the stupid and the seriously unlucky, who get hit by one life-changing event so cataclysmic they can never get up again. It is nearly a guarantee though for the 1% who’re already born FI/RE and have to really screw up to lose that amassed wall of advantage/privilege, while it is still achievable with effort for a swathe of the middle classes if they’re a strong-enough combination of smart/hardworking/lucky/able to delay gratification/resist social pressure.

    An ugly truth is that most people are either sheep or cats by character, the former will follow others all their lives even if they realise that that path can only end up in an abattoir, while the latter will do it their way even if they realise the social price is very painful.

    So I say there actually is quite a high price (your downside) to reaching FI, that the majority, who are sheep will not pay, even if that discomfort vastly improved their quality of life and that is social ostracism (in the form of disapproval for not blindly following social norms) especially from their own loved ones.

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    • > that is social ostracism (in the form of disapproval for not blindly following social norms) especially from their own loved ones.

      Too true. The guy who warmed me up to the existence of 40% tax relief on AVC/SIPP contributions with the deathless quote “you’re crazy of you’re working here after 45” wasn’t able to sell the idea to his wife and kids who quite liked their liefstyle as it was, thanks.

      I started using his sage advice when I was two years over the hill in his frame of reference at 47 and cleared off three years after. He’s still working there ten years after imparting that gem. His theory was great, but to be different you gotta do different

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  5. Interesting post @SHMD. A lot of the USA blogs are pretty hard to stomach, the combination of smugness and relentless positivity is pretty jarring to the UK sensibility.

    There is undoubtedly a dirty little secret in the FI(RE) movement in that you have to have a considerable (positive) gap between income and expenditure for a good few years to stand a chance of it being a possibility. That’s ignoring the combination of “smart/hardworking/lucky/able to delay gratification/resist social pressure” that @FI Warrior refers to – this is necessary too and you have to have both to stand a chance.

    There is no way that FW’s vermont place would be my choice, just imagine if one of you suffered a major health issue and you couldn’t keep up the continuous work required for such a large area. It looks like it might be fun in your 30’s, but on the wrong side of 50 that place would be a huge burden.

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  6. What the Frugalwoods have done is shown how people on their high levels of income can escape the rat race and that there is an alternative way to live their lives. There will be some who will be inspired by their story, will buy the book and perhaps look to improve their own situations.

    As pointed out, the title is misleading as neither of them are retired and both are still working. But they look and sound happy, so good for them if that is the minimum they have achieved since so many on high salaries aren’t happy with their lot. First world problems, I know.

    It’s not the best written piece, as someone commented, she could have been more ‘frugal with her words.

    ” I don’t think that reaching 51 and retiring readily qualifies as “early”. ”

    Not when compared to the tiny minority ‘retiring’ in their 30s we read about within the FI community bubble, but definitely early compared to the majority in the general public.

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  7. I read the article and commentstorm it generated a few days ago. I thought most of the comments posted were surprisingly polite and accurate given how often anything about early retirement in mainstream media gets completely shot down as impossible by the vaste majority of comments.

    Saying that; the article is completely misleading to the point of fraudulent in order to push the book sales agenda.

    I’ve no doubt they both work hard, and saved quite efficiently, however neither are actually retired in the slightest. Infact from looking at their About Me on the blog it seems the husband works a totally standard 9-5 but from home. Is that all it takes to qualify as retired now?

    Looking at their last tagged Expenses Report; monthly expenses for Janurary were $2,342.59 excluding mortgage. £1,680 worth of non-mortgage bills and spending. Hardly frugal in the slightest and certainly not Extreme.

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    • I think part of the problem is that the article is written to be clickbait-y / sensational rather than accurate. I have been reading the FW’s blog for a few years on and off and all that they have really done is downshifted to a cheaper rural area funded by a rental property in a very expensive location and savings that have been magnified by a good stockmarket run over 10 years. That is simply not retirement as people understand it.

      They are both still working and being paid, albeit more on their own terms than before. That doesn’t make such a good story though, so no journalist would pursue that angle.

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  8. I have been a big fan of the Frugalwoodsies from the beginning, but yeah, some of the vitriol is of their own doing. You can’t help but come off as smug if you’re retiring in your 30s. And they do seem kind of oblivious to how they come off.

    But most of the comments are the same ones you see posted on every financial independence interview. A lot of “their family must be independently wealthy,” or “they must be living on beans and rice” or simply asserting that it’s not humanly possible to retire that early. Commenters are always dying to explain away the subject’s financial position and not give them any credit. There’s a lack of imagination out there, and a severe lack of financial education, combined with no desire to actually learn about what they speak.

    I also think a huge part of the negative commentary happens when you make yourself the focus of the blog/book/whatever, as the Frugalwoods do in that lifestyle blogger way with all the splashy photos, instead of making it strictly educational. Do you think Vicki Robin of Your Money Or Your Life ever had to deal with this? I doubt it. Her book is about the method. There’s an author photo and not much else.

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  9. The Frugalwoods do sound a bit pretentious in some of their articles, and especially in this one.

    I remember one of their articles infuriated me because they were sharing tips on how to be more “eco friendly”, avoiding the topic of their gigantic house which, being far from the city and all, is most likely a disaster for the environment. (See freakonomics episode explaining how living in concentrated cities is the thing to do if you want to be actually environmentally friendly, and not just pretending you are).

    That specific article is just an example that particularly triggered me, but I think it’s the general tone of the blog, which can come off as a bit patronizing sometimes, when in many cases they are just amateurs in a given field they are talking about. E.g. When they start talking about painting their own cabinets, and people saying that they should basically build their own house before pretending they are saving money on carpentry/services.

    Then again, we’re all a bit pretentious once in a while in the FI world. I have my share of pretentious blog posts too.

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  10. See, I’m much more forgiving of people than the general population it seems, Sure some people aren’t exactly open about their income, but I don’t necessarily blame them, it’s difficult to leave everything out on the internet, for eternity. Post Trump and Brexit, compared to politicians, I think they come out favourably.

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  11. I agree that a lot of FIRE bloggers come across as self satisfied. Credit to them for earning a lot of money but it is hardly an earth shattering achievement to be able to fire when you have a large disposable income, are therefore able to save and exploit the tax advantages for pensions and investments, have a defined benefit pension, bought property before it was so expensive etc. Those on average earnings with families managing to maintain their heads above the water financially are actually facing a more challenging task.

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  12. A bit more information leaked out on the discussion on the Money Mustache forum – it appears that Mr Frugalwood earns over $225K per annum at his “non profit” & it is likely that Mrs Frugalwood was earning $100K+ at her office job.

    That really is a lot of plusses on the income side of the equation.

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