Did FIRE Practitioners Just Get Lucky 2002-2022?

[vand]

I retired in 2003, age 39, but I never followed any FIRE promoter. From what I've seen, the vast majority aren't fully retired. They and/or their spouse may have a part-time job, or they're making money from their FIRE advice.

Can we ask how you do managed to do this? was it through real estate?

As pointed out by the ERN SWR series, the garden variety path to FIRE has precluded anyone from actually being able to FIRE at the best times in history to do so (ie coming out of a large bear market):

https://earlyretirementnow.com/2017/12/ ... nt-timing/

this is why you also have to be very skeptical whenever you read anyone claiming that you are far more likely to die with many times your original wealth than going broke - I understand why they claim this, but it just isn't true when you look at extrapolation from endogenously generated retirement dates

[DelianLeague]

I’ve been at rather longer, since my dad gave me some shares in 1954. Then I steadily bought shares from about 1970 so saw some dramatic ups and downs. The huge inflation of the seventies taught me that real assets, shares and property, were much much safer overall than our rotten currency or anything denominated in it. In those days mortgage interest was tax deductible so with the high rates of tax that applied then, it was a no brainer to get a large mortgage and buy a house.

Was I lucky? Probably but if history does not exactly repeat itself, it rhymes, and I would still apply the principles of investment in the seventies.

Wow,

That is incredible, so very interesting. You have had shares in 1954!
I bet you find it strange, just how many people nowadays complain about insignificant things when you would remember very well the 70's oil crisis, soaring inflation, many recessions, industrial strife, wars, job losses etc.

My first shares were in the newly privatised BG. Then some F&C trust.

Thanks for the post. I always find it interesting how people got started in share buying or about historical events in the past that may have effected peoples attitude to risk etc. D.L.

[SalvorHardin]

I retired in 2003, age 39, but I never followed any FIRE promoter. From what I've seen, the vast majority aren't fully retired. They and/or their spouse may have a part-time job, or they're making money from their FIRE advice.

Can we ask how you do managed to do this? was it through real estate?

It was through shares. I got lucky with work, which gave me a lot of spare cash to invest (I had been investing in the stockmarket since the early 1980s). I live cheaply as I'm single (not divorced), no children and here in rural Somerset house prices used to be very cheap. I could have easily gone back to work, maybe as a teacher (degrees in Maths and Physics, which are always in demand), so it wasn't too tough to decide to try retirement.

On the assets side: My income rose dramatically in the late 1990s and early 2000s as the demand for anyone with Actuarial skills soared to sort out the pension mis-selling mess. Importantly, unlike many people that I worked with, I didn't acquire any expensive spending habits to absorb the extra income.

Most of my excess income went into the stockmarket, first into several Warren Buffett wide moat shares and later in small oil explorers (E&P). I avoided the dotcom boom and bust. Then in the early 2000s the Oil E&P sector took off (Soco is a name well known to many who were on TMF back then) and I rode that wave for several years. I had made 24 times my total investment in Soco, when I largely sold out in 2008.

Why retire: in 2003 the pension misselling review finished. My net income would have fallen by at least two-thirds as there was no demand for pension review Actuaries, who had gone down a career dead end. I was offered several jobs, all in Central London, but I fancied a break.

When I retired I wasn't 100% certain that I had enough, but I would have if the previous couple of years worth of gains in oil E&P shares were broadly repeated. It turned out I was more than okay. Mentally I fully retired in a hotel in Munich when on holiday in 2005, after seeing that my oil E&P shares had gone up by over £100,000 in the previous week (my best ever weekly gain, back then). The following week, when I returned to the UK, I started diversifying out of E&P.

[vand]

I retired in 2003, age 39, but I never followed any FIRE promoter. From what I've seen, the vast majority aren't fully retired. They and/or their spouse may have a part-time job, or they're making money from their FIRE advice.

Can we ask how you do managed to do this? was it through real estate?

It was through shares. I got lucky with work, which gave me a lot of spare cash to invest (I had been investing in the stockmarket since the early 1980s). I live cheaply as I'm single (not divorced), no children and here in rural Somerset house prices used to be very cheap. I could have easily gone back to work, maybe as a teacher (degrees in Maths and Physics, which are always in demand), so it wasn't too tough to decide to try retirement.

On the assets side: My income rose dramatically in the late 1990s and early 2000s as the demand for anyone with Actuarial skills soared to sort out the pension mis-selling mess. Importantly, unlike many people that I worked with, I didn't acquire any expensive spending habits to absorb the extra income.

Most of my excess income went into the stockmarket, first into several Warren Buffett wide moat shares and later in small oil explorers (E&P). I avoided the dotcom boom and bust. Then in the early 2000s the Oil E&P sector took off (Soco is a name well known to many who were on TMF back then) and I rode that wave for several years. I had made 24 times my total investment in Soco, when I largely sold out in 2008.

Why retire: in 2003 the pension misselling review finished. My net income would have fallen by at least two-thirds as there was no demand for pension review Actuaries, who had gone down a career dead end. I was offered several jobs, all in Central London, but I fancied a break.

When I retired I wasn't 100% certain that I had enough, but I would have if the previous couple of years worth of gains in oil E&P shares were broadly repeated. It turned out I was more than okay. Mentally I fully retired in a hotel in Munich when on holiday in 2005, after seeing that my oil E&P shares had gone up by over £100,000 in the previous week (my best ever weekly gain, back then). The following week, when I returned to the UK, I started diversifying out of E&P.

But you see the point in my asking, right? You did not follow the straightforward index fund methodology that of FIRE practitioners of today all preach.

You have stories today of people who have become very rich in a very short span of time on the back of eg Tesla, Crypto or even something well established like AAPL/MSFT. So they made active bets which paid off for them.

Money easily earned is very often money that most easily lost. Maybe they've been smart enough to know when they've hit a moonshot and diversified out, but many will end up holding all the way back down, or, worse, buy more just before these things give back all their gains.

One of my predictions that is that we will see a huge swath of recent early retirees trying to re-enter the workforce at the lows of the next bear market.

[SalvorHardin]

But you see the point in my asking, right? You did not follow the straightforward index fund methodology that of FIRE practitioners of today all preach.

You have stories today of people who have become very rich in a very short span of time on the back of eg Tesla, Crypto or even something well established like AAPL/MSFT. So they made active bets which paid off for them.

Money easily earned is very often money that most easily lost. Maybe they've been smart enough to know when they've hit a moonshot and diversified out, but many will end up holding all the way back down, or, worse, buy more just before these things give back all their gains.

One of my predictions that is that we will see a huge swath of recent early retirees trying to re-enter the workforce at the lows of the next bear market.

I agree. Indexing is unlikely to provide sufficient returns for FIRE nowadays IMHO, unless you are putting a lot of your income aside. In my last three years at work at least 50% of my net income went into the stockmarket and thanks to the oil E&P boom in my worst year were during this period I made just over 35%

On TMF there were quite a few people who had retired not long before the 2008 financial crisis, anticipating that future investment returns would be sufficient. Most of them went back to work after the crisis hit.

Living costs matter a lot. I was greatly helped by not getting caught up with some colleagues' and clients' big spending lifestyles, with lots of Thorstein Veblen's "conspicuous consumption" (link below). Keeping up with the Joneses does not mix with FIRE.

I still rehularly shop at Aldi and Lidl, though Sainsbury's, Marks & Spencer's and my local farm shop's ready meals are a staple part of my diet (they're better than Waitrose IMHO).

https://en.m.wikipedia.org/wiki/Conspicuous_consumption

[Itsallaguess]

The three major drivers of my financial life so far, that with a fair wind might ultimately help to deliver some level of FIRE for me at some stage -

• Persistent drive to improve work-based opportunities - producing long-term and regular up-lift in underlying earnings - sweat the returns of your own human capital

• Enjoy a relatively low-maintenance lifestyle - be fairly cheap to run over the long term

• Regular saving and investment - 'time in the market' - allowing much of the free-capital available from the above two important processes to work for you over the very long term

Whilst much of this thread seems to be concentrating on the chances of 'beneficial market-returns' continuing in the future, I have purposely placed that driver third in the above list, as I think the first two drivers have probably played a more important role for me over the long term in helping to embed what I consider to be a FIRE-related 'mindset requirement', rather than a particular FIRE-related 'investment-returns requirement'...

Cheers,

Itsallaguess