How to Retire in Your 30s with $1M in the Bank | Hacker News Reader

How to Retire in Your 30s with $1M in the Bank

nytimes.com

130 pointspdog125 comments

"They saved a sizable portion of their income over the next five years and drastically reduced expenses, until their net worth was around $1.2 million. "

Every millennial retires early story always has a unique anecdote like this. How exactly do you save $1.2 million over five years on 110K a year? Did he already have 800K in the bank before learning about early retirement? Is his wife a highly paid executive or doctor?

"Because his wife currently works, they have yet to draw on those accounts."

Some important information is missing here.

Also, while I don't think FIRE is impossible or unattainable, lean FIRE practitioners are gonna get walloped in the gut when we hit a nasty bear market after a decade of markets pushed higher by crazy monetary policy.

I have two kids, and when I'm not in court with the ex for stupid reasons, my costs of living are about $75K in a very expensive city. It's completely doable, given the huge bull run on the indexes of the last decade.

Stock price and home appreciation probably had a lot to do with it, but that does seem like a very short time horizon.

Good point. Over that period, you probably could cash out on a house in Boulder and make a pretty easy 500K+ if you were lucky enough to purchase before the great weed deluge.

Then you'd have to move to Missouri to actually be able to spend any of that $500k. You couldn't "cash out" and simultaneously stay in Boulder, unless you moved from a four bedroom to an efficiency.

Likely. Luck of good timing presented as clever frugality.

I'm not sure that home appreciation helps, because you have to live in a home, and if you sell one home, you have to buy another. Or rent. But rents should track home prices.

The way I figure it, home ownership helps because once you own a home, you can't be priced out of the housing market any more.

It helps if you can go from a very expensive market to a much cheaper one. The catch is that most people aren’t actually ready to give up their friends, put their kids into financially struggling schools, etc. and lower cost is easy to overshoot when e.g. it turns out that the new place should have had higher taxes to pay for necessary infrastructure. As with most of these stories, there’s something there but it’s usually heavily cherry-picked to get the eye catching effects.

You many need to buy/rent another, but it can be in a lower cost market. Nothing says it has to be the house next door.

He's just a stay-at-home parent. It's a completely conventional thing. Let me go ask my Mom how she "retired" at 25 and lived off her savings (and also Dad's wages).

The socially acceptable way to be a stay-at-home dad. I am not a failed breadwinner, I am retired and spending more time with my kids.

Add up how much a nanny, preschool, etc. costs and compare it to a non upper tech salary, and you will quickly realize that stay at home parent != failed breadwinner. Especially when you’re starting to account for more than one kid.

I am not suggesting that being a stay-at-home parent doesn't make sense, just that the "I am retired" is just cover for a man who is the stay-at-home parent. While it shouldn't be this way, unfortunately many see a stay-at-home dad as a failed breadwinner.

Many people don't see it that way. People are generally understanding of changing circumstances and don't hold others to antiquated notions of masculinity.

I don't disagree, but many don't and that is where the need for cover comes in.

I think having one parent home looking after the kid is very important for the kids development, it doesn't matter which one stays at home in my opinion.

This reminds me of that article about an early thirty something who paid-off a quarter million in student debt in X years[1].

Her parents bought her a condo, she got a job at her mother's non-profit and she lived with a second-income earning partner.

The message was that if she could do it, anyone could do it.

[1] https://www.businessinsider.com/how-ebony-horton-paid-off-22...

Anyone[1]!

[1] Who comes from wealth, marries wealth, and benefits from nepotism.

Life and the economy is very much a lottery.

You get a ticket by signaling you spread memes that support the lottery economy.

If you question the lottery or don’t spread its memes, you loose your ticket.

I read this comment and then the name of the HN commentor who posted it, and chuckled to myself! :)

House appreciation and FAANG stocks would do the trick methinks. I hope he's diversified by now into some sort of reasonable mixture of stocks and bonds for the long run.

20 years ago I used to call this the "Live in California" investment plan where you buy a house and make a California salary. The trouble is that you need to cash out and move somewhere else someday to make this work. Then deep learning happened and everybody who understands backpropagation saw their salaries double or more so I'm still here hoping to win the lightning round or at least sticking around long enough so that when I retire my relatively modest lifestyle won't change much other than location.

Skimming the article:

His income was $110k. Hers seems to not be listed, but they plan to live on $40k and her work means they aren't yet dipping into savings, so presumably she makes at least $40k.

Their net worth was $1.2 million, not their savings. For most Americans, equity in their house constitutes at least half of their net worth and in some places house appreciation is incredibly rapid tight now, like $100 per hour.

They seem to have come up with a few talking points while not genuinely digging into the details. Okay, people want their privacy and yadda, but it winds up being kind of a case of how to lie with statistics.

I'm cool with the FIRE movement existing. But articles like this are more like inspiration than a guide book. I get it: Actually doing this requires a lot more detailed information than a single article can give you. That's fine.

But I basically agree that this approach is a bit misleading and I'm not crazy about it.

Yes, that's the biggest sign: net worth.

People seem to always confuse that with having liquid cash in the bank because it sounds nice, but it's rarely true and most people would have decent a net worth if they've accumulated a mortgage in a upward market.

Most of these "retire early" stories you'll hear in the media the person actually has a signifiant income stream. Blogging, landlording, Etsy shop, book sales, speaking fees, spousal support, part time job, whatever.

It's kinda weird.

Just like the "self made" stories that always include significant outside support, such as large gifts, huge interest free loans from family, or large inheritances.

It's just how the media works.

>Did he already have 800K in the bank before learning about early retirement?

They probably already had significant assets considering his income and the fact they were dual income.

That is because those that actually retire early have no need for publicity. I know lots of people who have really retired in their 40s and surprising none of them have a need to be in the news.

In first world countries it's not difficult at all given two conditions.

1. You have a good job (probably - but not necessarily - a professional job)

2. You are willing to spend less money than other people.

And in fact, point 2 is way more important than point 1.

The secret to having more money is not to earn more, it's to spend less.

I'm 36 and I have quit and done what I wanted twice in my life now - once for 2 years I drove AK-Argentina, now I'm well over 2 years driving around Africa. Before both jaunts I earned a mere fraction of what Bay area salaries appear to be. Before Argentina my salary was $48k CAD.

The trick is simply to spend less. Don't upgrade your phone (or don't even have one), don't eat out. Walk or ride to work, no TV, no Netflix, etc. etc. Pretty soon you'll find you have way more money than you actually need, and you can choose to work either part time, or not work at all for a while.

If you were willing to put in 10-15 years of this frugal life, you'd have enough money to never work again, easily.

EDIT: Because everyone always asks how I do it, I wrote a book about how I do this with my life: http://theroadchoseme.com/work-less-to-live-your-dreams

This is such an important point. I have friends who routinely go out for $300+ dinners, and then complain about having near empty savings account.

It’s honestly quite shocking, coming from software engineers who are (supposedly) analytically/numerically minded.

I thought you were broke and in debt when you left for Africa? That doesn't make your post wrong, but you're really shoehorning your book into a thread that doesn't have much to do with your path.

I was not even close to broke or in debt, and I'm still not 2.5 years later. Reddit read my story and came up with that story, when the story really was "I screwed up and lost some budgeted travel money, now I'll have to be more careful about my spendings".

Sorry if I'm wrong, but I thought there was some problem with the engine in your Jeep and you had to buy a new one and finance the trip on credit - I was going off what I remember of your words, not Reddit people.

If you managed to make it without debt because of your book sales, congratulations! That's impressive.

I did lose some money,yes, but it was not nearly enough to mean I had to finance the trip on credit.

Also book sales are not the reason, the reason is that I cut down on expenses. I camped for free for months and months in West Africa, spending as little as $500/mo for absolutely everything for many months in a row.

> The secret to having more money is not to earn more, it's to spend less.

I honestly thought it was the complete opposite? The whole "being poor is expensive" thing? That buying expensive shoes is economically better longer term vs buying cheap shoes?

Typing a paragraph of nuance isn't as easy.

Of course BIFL is better if you can afford it. It also means not keeping up with the Joneses, spending money out all the time, buying more than you need.

You're both right, but you're both speaking casually so it's hard to understand precisely what you're saying. Here's my take on it:

At least from a perspective of early retirement, if you can change your lifestyle so you can sustainably spend less, then (i) while you are working, you can save more money, due to lower expenses, and (ii) provided you are willing to continue living frugally after retirement, you don't need to build up as much capital to fund retirements from investment returns, as your post-retirement expenses are also lower. I think the second factor makes a bigger impact than the former one.

The point you make is also a good one: people with more wealth and resources are in a better position to make longer-term investments, which can help them save or make even more money in the long run.

The two heuristics "spend less" and "earn more" aren't always in conflict, you can often find opportunities that strictly improve one without damaging the other one.

I'm not the GP, but spending less is not the same as being poor. The former is about having options, the latter is lack of options. Poor people have to buy the cheaper shoes because that's all they have enough money for (compared to a wealthier person who made the decision based on average cost over time, even if the initial outlay was more).

The reason that earning more never works out is because the more you work (and attempt to earn) your actual money in hand asymptotes and you're not getting reward for your effort & time.

Taxes go up the more you earn. You'll spend more on food and stuff the more you work because you're more tired, you'll spend more when you earn more (b/c the goldfish fills the bowl), you will be surrounded by people who earn more, so you'll live the "high life", etc. etc.

Also it's a bit of a play on words, because when you spend less, you'll realize you need less, and so it will appear you have more.

Of course you're not going to achieve FIRE if you spend all the money you earn, the whole point is to save the most you can, if you can earn more of course, go for it, but for a lot of people it's out of reach, so it would be pointless to recommend that.

It is

If you were making $50,000/year you might be able to save $10,000-$20,000 a year by cutting spending. However you'd be able to save infinity more by increasing earnings. If you were making $50,000 and got a raise and were now making $100,000/year a year that would let you save $50,000/year. You aren't going to save $50,000/year by cutting expenses.

There's no theoretical limit to your earnings, however, you can only save at most 100% of your salary.

It's also a LOT (and I mean a lot) easier to cut spending when you earn more.

I think what the GP meant to say was if you increase spending when you increase earnings you'll never save any money.

> If you were making $50,000 and got a raise and were now making $100,000/year a year that would let you save $50,000/year.

These are the kind of simplifications that get thrown around all the time that are simply wrong.

You're forgetting all the extra tax you'll have to pay to earn that extra $50,000, so right from the start you are not getting anywhere near $50k extra into your account. You're forgetting it will cost you more to earn that extra (better work clothes, longer hours means buying more food, require better phone, on call, etc. etc.) and you're forgetting that when you earn more you'll spend more.

Certainly if you get a pay rise from $50k to $100k you have the potential to save more, but I still stand by the statement that it's not the best way to go about it, if in fact your goal is to work less (reduced hours or retirement). That's a very important point to keep in mind - the goal here isn't to save as much money as humanly possible, the goal here is to work less.

Salary goes up $50k, tax goes up $15k, expenses climb by $6000, net income goes up by $29k. Saving $29k on $50k is harder than saving $60k on $100k.

> longer hours means buying more food

this is where you're failing to understand the frugal mindset. People with a frugal mindset rarely if ever buy more food (if you mean, not make their own meals), no matter their work hours.

I'm not failing to understand it, I live it.

You wind up spending more on food because you're utterly exhausted from working longer hours. It's not that you want to, it's that you get backed into a corner and don't have a choice.

When you have more money, you won't fall into poverty traps, even if you spend less.

For example, suppose you were a middle-to-high earner and you lived well below your means. If you face financial burdens like health issues, accidents or layoffs, you'll have a liquid cushion to fall back upon.

Those without liquidity will need to find the funds elsewhere. Elsewhere is an entire debt and rent-seeking industry that tends to prey upon people that do not have the means to defend themselves legally, nor do they have the means to escape that market into one with terms that are a bit more fair.

From what I've seen, it seems to be the other way around.

As we get better linearly (e.g. code faster), our income increases somewhat exponentially. So, it seems like a better strategy to try to earn more.

Not to mention that having more money will potentially earn you more as well.

Ranked tennis players and their earnings are a good example. It seems true in a company setting as well.

Every person successfully doing this seems to also be selling something. From the article: "Mr. Jensen also practices an activity that for many FIRE achievers seems to be the new golf: writing a financial advice blog." That blog seems to be mostly affiliate marketing. There's even a comment here already (https://news.ycombinator.com/item?id=17894385) where the author talks about living without a job then posts a link to a book they're selling.

The real story here isn't about retiring early, it's about how to change your career to writing books about retiring early. Writing is still a job.

It's the new making money blogging by blogging about making money blogging.

The simple question you need to ask yourself is: If everyone did this thing will it still work? If the answer is no, and you've seen it in popular media, don't do it.

Can everyone retire in their 30s? Sure if life expectancy was 35.

Of course you won't hear about those that are not writing about it, as they're not writing about it.

If you want to find "real" people who have retired early, have a look at the threads in the "Post-FIRE" section of the Mr. Money Mustache forums: https://forum.mrmoneymustache.com/post-fire/

Speaking personally, I'm giving early retirement a try this year and I'm making it a point to _not_ bring in any "active" income this year, so as not to "dirty" my experiment. All of my income is passive, via dividends. I, too, have written about it, but my blog makes no money: https://blog.michaelscepaniak.com/starting-stopping-working

This was a feel-good article but rather devoid of substance, and I say that as someone who pursues personal frugality. There's not much in here that hasn't been established in pretty much every other discussion on the topic (lower costs, maximize investable savings) without even the token discussion on diversification and tax structure that usually give something concrete.

I'm bashing on the article a bit, perhaps unfairly, I just found it to exemplify a trend I often see in these FIRE newslets, wherein the samples given are wonderful encapsulations of "how to retire at 30 with 1m in the bank? Make >100k a year and save most of it"

Saving 60% of your salary above a standard of living cost for 8-10 years appears to be the key.

Whether you increase income, cut spending, or both, software devs are well positioned to do this, especially dual income.

There's lots more to read on this topic than a single article and it shouldn't be used to bash down the relevancy of learning financial literacy.

Let me be precise: I would do nothing but encourage ANYONE to be financially literate.

However, I did not feel this article did that. If anything, it portrayed the FIRE group as "those weird nerds who find that number stuff cool." (which, while not necessarily incorrect for some of us, seems to bury the lede that ANYONE can take learnings from this)

What I felt was _lacking_ were the breadcrumbs (outside of the token reddit reference) towards financial literacy. I've seen far better introductions in that respect than this article. (In that vein I'd namedrop bogleheads as well, if anyone reading this is looking for other avenues)

I would also note that saving 60% of your salary for 10 years will only set it up if you're making well over the median US household income, which was a component of my original point.

Without reading the article, $1M isn't nearly enough to retire on at 30, unless you have some disease that will kill you before you're 45.

If you can manage 1 million in cash/stocks and own a home somewhere (reasonable if you’ve saved up that much). 4%/year is $40k, and will hopefully be below your earnings on the money. That’s a reasonable amount to live on if you don’t insist on New York or San Francisco or something.

That’s still 25 years of living if you get no interest or earnings.

https://gersteinfisher.com/wp-content/uploads/2018/04/Gerste... suggests that 4% is sustainable in the large majority of cases and 3% is sustainable is essentially all cases, assuming there isn't a total economic crash.

Assuming 0% inflation or a real return on the $1M well above 4%, no health issues, no change in expenses, no massive drawdown in the market in year one, etc.

Build a spreadsheet that has "expected return" (e.g., 1.06) and inflation (e.g., 1.03), annual expenses, taxes, starting principal, and then project out the annual rate of return net of expenses + taxes for 30-60 years from age 30. You will be surprised at how soon $1 million seems like nothing. Keep in mind that both expenses and returns can see shocks (not to mention taxes) that put you in a situation where "be below your earnings" assumption goes underwater and the compounding effects work against you rather than for you.

All I'm saying is this: be prepared that 5-20 years into your super-early retirement that you're kicked back into the job market--so have skills and a reasonable path for where you're going to come back into the market. It's not really a coincidence that many of these early retirement lifestyle gurus are supplementing their decisions via the job of competing for eyeballs as bloggers.

How much interest per year would $1 million yield?

With _zero_ risk? I guess a CD ladder would get you about 30k/yr

It all depends on cost of living. A reasonable withdrawal rate that should be sustainable is 3.5%. [0] $35k is what a lot of families live on in America. Many live on a lot less. You're not going to have many indulgences, but for a lot of people, $35k/yr and no job is better than thrice that but having to work 40+ hours per weak.

In America, 35k per year was the 29th percentile for household income in 2014. An even more sustainable withdrawal rate of 30k per year puts you at the 24th percentile. [1]

Sure, you can't do it in San Francisco, but if you think you can't sustainably live on $1m, you're living in a bubble. Because a huge fraction of people in America essentially do it, but they also have to work forty or more hours a week.

[0]: https://gersteinfisher.com/wp-content/uploads/2018/04/Gerste...

[1]: https://en.wikipedia.org/wiki/Household_income_in_the_United...

I agree that it’s possible but that doesn’t leave a ton of margin for unanticipated expenses: just healthcare for a family of 4 would take a significant chunk of that (I just tried Colorado, a popular choice for former Californians, and got $16k/year for the lowest usage tier), and it seems unlikely to bet on that going down as you age.

It’s similarly the case that anyone who owns a home has to be prepared to drop non-trivial cash in a hurry for repairs. Combine a few things like that and you’re eating into principal.

4% of $1m = $40K... there's people that go to work for less, you know!

It's true that if you've got the sort of job that lets you save $1m by the time you're 30, switching to a $40K/year lifestyle could feel like a bit of a step down. But, look on the bright side: you don't have to go to work.

You just need to ask yourself what you want from life, and choose accordingly.

The first person featured in the article "retired in his 30s" when he was 43 and his wife still works. :\

Depends.

It's enough for some people to live on, not me though, I'd prefer to spend more.

To me, FIRE is more about financial freedom, than early retirement. Having the ability to quit your job at any time is the ultimate leverage, and gives you the ability to choose work that fulfills you intellectually, without worrying about the financial consequences.

So this is one issue I, like a lot of engineer types no doubt, have been contemplating for some time. Goals differ depending on who you talk to. This article talks about in one's 30s with $1m in the bank.

By the 4% rule that will generate you $40,000 a year. There are a lot of places in the US you can live on that. It gets more difficult with kids but not impossible. It's not what I'd call a retirement lifestyle I'd want however.

Indeed the article mentions working at Starbucks and I imagine for these folks there's a lot of this. I wouldn't call this retirement as such, I'd call it semi-retirement (which is fine).

Speaking of Starbucks, it mentions the real big problem with retiring early in the US: health insurance. I really don't see a good way around this. It's also why many countries are popular for US retirees (notably Costa Rica, Mexico and more recently Ecuador).

Now I'm Australian so I could go back and retire in Australia (I live in the US) but honestly I find that idea unappealing. Whereas there were parts of Australia that had a relatively low standard of living, those days are long over. Housing is ultra-expensive (particularly in the East Coast cities). Other expenses like utilities are expensive. Hell, electricity prices were a factor in recently toppling a sitting Prime Minister (fun fact: the last Australian PM to serve a whole term as PM was John Howard ending in 2007; there have been 4 coups since, 2 per major party).

Europe is an option. Not everyone has that option of course. And it varies a lot by country. Germany is a pretty nice compromise between being good for expats, being relatively low cost (compared to Switzerland, the UK or France at any rate). Some countries are relatively cheap now and have good climates like Portugal, Italy and Greece but are financially precarious.

Personally I'd like somewhere that's relatively inexpensive, safe/stable and with a good climate. The last one eliminates a lot of otherwise good options (eg Canada).

The US has a lot of affordable cities still (eg Atlanta). The health insurance problem is a huge risk/cost though.

IMHO i think we need a another acronym for "RE" in "FIRE" because it is a lil bit of a misnomer. Most people who come across the concept of FIRE will inadvertently ask the following questions:

• What will I do after i am "retired early"?

• Wouldn't I be bored when I'm "retired early"?

• What happens when I need more money than I expected later for <insert reason here> after I'm "retired early"?

• If an emergency crops up, how do I deal with the unexpected expenses after I'm "retired early"?

People seem to equate the "RE" part as you show the finger to your boss, stop working completely, and you are at home now doing nothing. While that might be true to a very very very small percentage of people that FIRE, in my personal experience, most people (including myself) continue to work or at the very least, do something part time (sell things on the side, cut their working hours down to 3 or 4 days, part-time "menial" jobs, etc). I will hazard a guess that most people that FIRE-ed are actually still "working" ergo still have some form of income to supplement their living expenses (on top of their FIRE stash) thus I will describe the RE part more of a mental freedom thing than an actual thing one does.

My personal anecdote - I am technically FIRE in a lot of measures but I am pursuing a fat FIRE (mentioned in the article) so I'm not exactly there yet from my perspective. However I do have the choice to FIRE if I want to but yet, I continue on working. Why? CAUSE I LOVE MY JOB! but let's say tomorrow if I stopped liking my job for whatever reason, I will still continue finding another job that I like even though I have the freedom to sit at home and be "retired early". I will even boldly say that 9/10 people I know that are on the way to FIRE or have FIRE-ed all are either still working or continuing on doing something they love that most people will define as a "job".

Sorry for my verbose explanation but the "RE" is a lil bit of a pet peeve of mine of all concepts of FIRE. Definitely need a better acronym - maybe something closer to FU money.

Where this is all going to fall apart is when the stock market goes down or inflation takes off. You really don't want to be retired, out of the workforce for 10 years, and only have a million dollars in assets if either of these happens.

Depends what your assets are in. You really want to have ownership of monopoly assets that are low down on Maslow's hierarchy of needs if this happens. That could be apartment blocks in metro areas where demand exceeds supply, or it could be Google/Facebook/Amazon stock, or it could be defense stocks (war is usually the inevitable result of hyperinflation), or it could be a successful local medical practice.

The people who get fucked by inflation, in order of screwedness, are a.) people who depend on cash savings or fixed-denomination bonds for survival b.) wage workers in non-differentiated industries c.) commodity small business owners (eg. restaurant or gas station owners) d.) salaried workers in differentiated professions and e.) monopoly business owners and executives. There's also a separate debtor => creditor axis where inflation benefits debtors much more than creditors.

Not necessarily disputing your second paragraph's financial/economic points, but if you're owning apartments (and managing them) or have a medical practice, you're not retired. That does say to me that a lot of this early "retirement" mythos is merely a euphemism for "non-traditional career downsizing." Nothing wrong with that.

How is this story not about the increasing prevalence of horrendous work environments and expectations? Of course these people wanted to retire - their relationships with their jobs were wildly unhealthy.

Which seems, unfortunately, increasingly common.

Step 1: make about $110,000 a year, apparently. Then, save a lot of it up. Amazing.

Also, his wife is still working?

> Also, his wife is still working?

Technically, this alone is enough for early retirement.

The guy on the article retired in his 40's.

"On Tuesday, March 10, 2017, Mr. Jensen called his boss and gave notice after 15 years at the company. He wasn’t quitting, exactly. He had retired. He was 43."

And wife still works.

So obviously this isn't really a guide about how to retire at age 30. But the key message to take from the article is to live within your means with a strict budget. And if you can't live within your means, be prepared to move to another part of your country with more affordable housing and lower expenses.

In one sense, it’s switching from working one’s professional job to being a homemaker, a penny pincher, and an amateur investor.

It could work and one may enjoy it better than a certain job. But isn’t it a better use of one’s time to switch to a related job, perhaps a part-time one, where one can deploy existing skills/education productively, and not worry too much about everyday’s expenses?

Also, what would happen to one’s mental state when a bear market hits and the nest egg one depends on takes a big hit at the same time that the job market freezes up?

Using the privilege of time to find out what one really loves to do and embark on a journey to master that and perhaps make a living out of it in future would be both more fulfilling and less risky in the long run.

I'm retired early, but mainly because I got lucky in bitcoin. I'd suggest retiring to Asia. You can live a lot cheaper here.

My thinking is as technology progresses, the gap between the life styles of the poor and the rich will continue to decrease. If all we do is spend our day staring at screens and phones, and one day wearing VR goggles, what does it matter what car you drive, how big your place is, or whether you live in a big city or out in the countryside (or in another country, in my case)?

I’m 28, from Europe, have worked for a well known large tech company in Silicon Valley for over 4 years (and a few startups before that). I currently have a bit under $500k “in the bank” (mix of cash, stock, bonds, index funds). I intend to leave tech in 2 years when - according to my current savings rate - I’ll be a bit under $750k.

I intend to travel and do my own thing for a year or three, and then go into teaching (primary school). I’ve worked with kids in various settings since I was 17, so I know it’s something I love doing. The goal is for my saved income to be an additional safety net/reservoir of money for buying a home in addition to my potential teaching salary.

Outside of Silicon Valley, I can live under $30k a year, which will be roughly 4% of my total savings. Not super aggressive, but not super conservative either.

The way I see it, tech will have (ideally) provided a very healthy jumping point to my subsequent non tech career. I think that’s the way to do it, because I honestly can’t see myself starting a family with my current workload/obligations/etc. Working remote is a distant option, but not super appealing for some reason.

I’ve been writing software since I was 12, I don’t intend to stop - just that after a bit under a decade in the tech industry, I realize it doesn’t match my ideals in the ways that teaching does.

Plus, I figure I can keep contributing to open source etc with the summers off and what not.

Who knows, maybe this is very idealistic, and I will fail miserably and in 5 years I will be begging for my job back - but at least I tried, and I think with my experience and resume I won’t have too much of a hard time getting employed in tech again.

Some of my friends in SF are surprised at how much I’ve saved in that time. I’ve certainly made sacrifices - not going to Tahoe every other weekend in the winter, cooking at home more often than going out for overpriced SF restaurants, etc.- but I don’t feel like I’ve had to particularly deprived myself. I do have the luxury of having gone to school in Europe and paid as a TA/RA in the US, so I have no school debt - certainly a privilege.

Just another anecdata point in case it is useful to anyone. Happy to answer any questions - i feel like money talk is still kind of taboo and should be discussed more openly.

Were you raised in the East side of Europe, by any chance? I noticed, that those, who grew up in post-communist countries, generally deal with money much more carefully. They primarily see it as a tool to free themselves from external dependencies, not the other way around.

Nope, France. My grandparents grew up during the nazi occupation though (and one of them fought in the resistance) and raised my parents as such, so perhaps that had an impact.

FIRE is awesome. The retirees live their dream, then they vacate their high-paying job for the next applicant.

Everybody wins.

Step 1: earn a million dollars.

Yeah, that's the key point with a lot of these articles. They assume you're able to get a job making $100,000+ a year. Not sure about anyone else, but that seems like it's both unrealistic for people in many fields (aka ones that aren't tech/finance/law/medicine/high level business related ones) and unrealistic for many locations. I mean, over here in London that's a steep ask, with only about 17% of roles I've seen offering anywhere near enough for this sort of plan.

So yeah, step 1 is earning a million dollars, arguably by being in the top 10-20% of your industry salary wise.

That's a big ask in most places. Median personal income in the US is right around $45k.

How does one do this and put kids through college? Do you just set aside a certain amount of money and hope it covers the cost of college, which is notable for accelerating faster than the rate of inflation?

How do you explain to your kids that they have to go to a public university if the savings aren't enough? I'm sure some kids would be self-aware enough to appreciate all the extra time they had with you, but others might just wish you'd worked like a "regular person" and tha they could afford to go to a private university.

You'd put some money in a college fund. That fund would be invested so it would be collecting interest and capital gains as well as whatever you're putting in weekly or monthly.

>others might just wish you'd worked like a "regular person" and tha they could afford to go to a private university.

Then you've raised bratty kids. Parents don't have any sort of obligation to put their kids through college - mine sure didn't put me through college, lmao. I took out loans and went to a private university; then I paid my loans off myself. If my parents helped me out that would certainly have been appreciated, but I certainly wouldn't expect it.

> Then you've raised bratty kids. Parents don't have any sort of obligation to put their kids through college

If you retire in your 30s and tell your kids “I don’t have an obligation to put you through college”, I think that non-bratty kids might well be not thrilled.

First, try to pick somewhere to live with decent community colleges that have a good transfer program to the state universities. (California has several excellent community colleges for students planning to transfer, but housing costs are hard). About ten years before college age, figure out what you need to do to game the FAFSA (i changes over time) and spend the next ten years arranging your finances to match. Having low income, because you have retired should help, although having liquid assets will tend to hurt. Keep up to date on the rules over that ten year period, because you don't want to chase closed loopholes.

Going to the "right" school may help get your foot in the door, but it's not a requirement for a successful career.

What are the ways to game FAFSA? Convert all your cash into diamonds, so you don’t have to report it?

Currently, if you can get your money into retirement accounts, it doesn't count for fafsa (or the CDs profile).

I'm having a hard time finding what's excludable in the case profile, but if you have parents or other people you absolutely trust open to it, there's the option of having them hold your investments for several years. Normally poor 'investments' in life insurance could work. I'm a few years out from trying to optimize this, so I haven't yet researched that deeply.

Sorry for the typos. Both of those should have been css profile.

Bogleheads [1] has an interesting thread on the same topic. Mostly the same talking points, but a lot of anger towards millennials for "not paying their fair share".

A bit disappointing. Bogleheads is an excellent investing forum, but a lot of the advice is from boomers with the world's most generous and poorly planned pensions.

[1] - https://www.bogleheads.org/forum/viewtopic.php?f=10&t=257992...

How can you retire with $1M at 30? Even frugal living seems as though it would burn through this. And what about travel and entertainment? This seems like an unreasonably low amount of money to have.

He who wants nothing has everything.

It's a neat idea if you can keep a high wage job, and move to a low wage area. Otherwise I fear its impossible for most.

If you want to live cheaply and see the world (or staying in one place does not appeal), consider becoming a perpetual cycle tourist and live in a tent. There are tonnes of countries where it is easy and spectacular to travel this way and these days a light bluetooth keyboard and a phone with HDMI out are all you need to make money.

I’ve seen this before with someone who inherited a sizable amount of money from a deceased relative right after the financial crisis. Given where the market is today I’m not sure what advice I’d give to them if the same were to happen today.

Do you still just go with the long-term play and put it into index funds when they’re at all time highs?

Will you short the S&P 500 right now? If the answer is no, just hop on the index fund train. It might be near an all time high, but it can go higher while your money is sitting idle. Maybe it will drop and wipe out most of or more than those gains, but you will be there for the recovery. Studies have shown this to be an incredibly effective strategy.

Does anybody here own rental property? If so how did you start out and what kind of property did you start out with?

A quick search on reddit will answer your questions better and give you days worth of reading. /r/financialindependence

What's the $1M equivalent for the Bay Area?

You don't do it in the Bay Area, you come here for the salary, live with roommates in the cheapest place you can find, and if you keep things tight you walk away with $1M ten years later.

At which point you can retire in the Bay Area and keep the roommates, move somewhere else, or aim for a few million to stay in the area.

Detroit, Buffalo, Youngstown, Ohio and Houston, Texas in 20 years when electric cars own 50% own the road. You would do very nicely.

Detroit ? lead-in-the-water, streetside shakedowns, multiple burglaries.. living with .. whom?

I don't like any of the towns I mentioned, I used them as an example as to what sort of environment you would have to live in which would allow you to live on the interest of 1-million dollars for 50-years-plus.

You can live comfortably in the bay with $1m, if you don't have to pay rent or mortgage. So $1m + a house.

Or, if you can finance a multi family property and all of the other units cover your mortgage.

Disclaimer: Mid 30s, on the FIRE path, tech gig, real estate investor, all that jazz.

You still have to pay a chunk of change in property tax and HOA fees every year as homeowner.

You shouldn't be buying in an HOA if you're FIRE or living on a fixed income, where someone else sets the annual costs and rules. My property taxes on 2600 sq ft of single family home are ~$3400/year. Still manageable on a $40k/year investment income budget.

You're in the Bay Area, and you somehow found a house without HOA here in NIMBY land?!

Whoops, my apologies. Not in the Bay Area.

Thought those property tax numbers were a bit outrageously low ;)

Why would you retire in the Bay Area?

Friends and family mostly. Also the food and weather are hard to beat.

Move to central or south america, take cheap flights a few times a year back to the Bay. You'll still come out ahead.

direct story -- a Bay Area artist saved money and bought a tiny plot of land in unnamed central american nation.. brought his lowpressure friendly style to the modest home there.. after two months the nearest neighbor started visiting more frequently.. by the fourth month the neighbor entered the home with a machete and said it was time to leave now or else.. end of story

Could you not have a similar violent encounter in the mission or tenderloin districts in SF? Or in the East Bay?

https://www.mercurynews.com/2017/01/06/bay-area-homicides-20...

By far. Why South America? Move to a safe location in Mexico.

Sounds miserable -- maybe just get a job you enjoy instead of eating lentils every day so that you can squirrel away an extra $3 into a retirement account?

Either way, enjoy watching your plan to get rich doing nothing crash and burn when this bubble pops in 2 years lol

> Either way, enjoy watching your plan to get rich doing nothing crash and burn when this bubble pops in 2 years lol

And living beyond your means while slaving away somehow better prepares you for that future?

I hope you're as young as you sound.

I’ll be better off than you when that happens.

Doubtful; I make more money than you, and I only make high liquidity investments, so I came away looking pretty nice the last time (too young to have made any money from 2008 though)

You joke in an earlier post about how people should "get out of here with reddit puns", yet you make wild conjecture about stock market moves, the plight of people who have invested, and and it with "lol" as if this were some Twitter banter.

$3 a day is more than $1000 a year, and for poorer people that would make a lot of difference. For modest earners, even, that is an emergency fund or a local family holiday. But enough with rebutting your specifics: I agree with the other poster. Given an option of "live within your means" or "Don't have a savings account and carry a credit debt", there is a pretty obvious choice. And before you try to call me out on false dichotomies, re-read your post.

Never read my posts again lol

Reply on news.ycombinator.com