After smashing a bottle on the bar and coming after you with the jagged remnants over your Paula Pant/Afford Anything FIRE interview I was gratified to read that you’d had a change of heart about our movement. Your tone is much more positive, your position seems better thought out, and you make points I agree with.
I gotta say, however, that I’m not convinced, or at least not yet. In only ten days you seem to have pivoted from being the FIRE movement’s worst critic to being one of its biggest advocates and even an original architect. You’ve gone from “hate it, hate it, hate it” to this:
I’m asking a serious question, here: what new information spun your head so far around in such a short time? I’d very much like to hear about it, because it’d be a nice tidbit to whip out of my back pocket for the purpose of whacking skeptics who aren’t amenable to open-minded discussion.
I’d also like to hear about it because–as I said in the title–big pivots after bad publicity always seem icky. Even a half-witted cynic like me can see there are a number of ways to explain your new position on FIRE:
- Did you blink because you underestimated the backlash?
- Are you now concern-trolling us for another round of book publicity?
- Are you sounding out whether marketing a book to our movement is commercially viable?
- Are you sincere?
- Is it some combination of the above?
I can’t be sure of the answer, alas. A clue might lie here, in the fact that you’re still not producing evidence for statements like this:
But hey…let’s go ahead and work from the assumption you’re indeed sincere. No matter what your motivation might be, establishing common ground is a Good Thing. So let’s do just that.
I maintain my contention that your remarks during your original Afford Anything podcast appearance were illogical, abrasive, arrogant, and devoid of fact. Furthermore, it sounded like you winged the interview rather than doing any serious prep beforehand. I still suspect you were intentionally trolling us for book publicity.
But now you’ve said things that speak positively to me.
Good. We all have such questions. Exchange of ideas is why we have places like Reddit’s Financial Independence forum, which I invite you to visit or even sit for a written interview with.
You also say (albeit in a different post):
Thanks for the vote of confidence in the FAQ and for referring it to your followers. There were a lot of good people who put a lot of fine thought into it. I encourage everybody to keep it handy as not just a FIRE reference, but also as a source of dependable personal financial management information.
And I also thank you for using the words “fairly sane.” When I got started on my FIRE plan roughly twenty-five years ago, the few people I discussed it with without exception thought I was delusional and needed the butterfly-net treatment. So “fairly sane” is a big compliment, and I’m not being sarcastic about that even one bit.
(But…I have an evil ten-inch prick. On my shoulder. And he IS being sarcastic. He’s whispering in my ear that since I’m a mod in Reddit’s FIRE forum and have editing rights to the FAQ you endorse, I should change its first line to:
FAIRLY SANE PRECEPT ONE: DO NOT LISTEN TO SUZE ORMAN.
How funny would that be? Pretty damn. But nay…I resist temptation. Common ground is what we’re after.)
You cite the following as the reason for your pivot:
Look…you gotta own this, right? It’s not that you were GIVEN bad info, it’s that you RELIED on bad info without first verifying it. That’s on you, not somebody else.
But it’s a common failure and there’s not necessarily any shame in it unless you continue the practice. There’s obviously a lot of bad financial management information out there; stuff that’s way too easy to fall prey to. This is one reason I get so worked up sometimes about how terrible we are in this country at educating our kids about basic personal finance. That’s a mindset I think you and I share. A great thing about the FIRE movement is that we–all umpty-ump hundred thousand of us or however many there are–are collectively stepping into this void, as it were, and trying to fill it with good information. As we should.
Next you express some healthy skepticism about the 4% rule:
Great starting point. I totally agree: assuming any such thing would be foolish. So go read the science behind the strategy and consider whether you should in your own mind upgrade the 4% rule from a bare assumption to a justifiable principle.
As I discussed last time I wrote you, start with the work of William Bengen, the initial proponent of the strategy you refer to. In his 1994 study entitled Determining Withdrawal Rates Using Historical Data he wrote after a great deal of analysis that:
It is clear…that an “absolutely safe” (to the extent history is a guide) initial withdrawal level is 3 percent, in that it ensures that portfolio longevity is never less than 50 years. (This is also true for withdrawal rates as high as approximately 3.5 percent.) However, most clients would find such a low level of withdrawals unacceptable.
Assuming a minimum requirement of 30 years of portfolio longevity, a first-year withdrawal of 4 percent…followed by inflation-adjusted withdrawals in subsequent years, should be safe. In no past case has it caused a portfolio to be exhausted before 33 years, and in most cases it will lead to portfolio lives of 50 years or longer. [Emphasis mine.]
Note that he’s constantly qualifying himself: “to the extent history is a guide,” etc. Again, healthy skepticism, even about his own findings.
You’re in the ballpark of Bengen’s original analysis when you cite age 65. Bengen used “60 or younger” as his lower limit for “early retirement,” and–like many financial advisors–didn’t envision a movement like ours.1 This doesn’t have to be a point of division between us, though, because what exactly “early retirement” means is a subject of a great deal of debate in the FIRE movement.
So when you make blanket statements like:
you can expect to have them challenged. But remember you’re dealing with a movement guided in part by the Wiccan Rede: “An’ ye harm none, do as ye will.”2 Not that we’re all Wiccans, but you get the point: to many of us, FIRE is most certainly about stopping work completely. Others think it’s about switching fields and still others about developing side gigs. There are as many definitions of early retirement as there are aspiring early retirees.
And in that context let’s get back to Bengen’s use of sixty-ish as his lower early retirement limit. When I personally–me, meaning myself, the guy who’s writing this–put the question to Bill about how he felt about the FIRE movement, he replied:3
I think the financial independence movement is great, in part because it means people must educate themselves more in this field so they make good decisions. I have “retired’ three times, and am now in my fourth career, as a writer/researcher. But many friends and acquaintances of my generation are still working, even into their late 70’s, so I wonder how “early retirement” is succeeding in this environment. Like everything else, if you plan and execute early and well, you will most likely achieve what you want.
Is that an endorsement? A word of caution? Encouragement? Could very well be all three, or none, but in any event I think it jives nicely with what you and I are both saying, which is basically “Do the right thing, in the right place, at the right time.”
Moving on, then, to your final comment:
Richest of lives? Ayup. Yep-yep-yep. Yeaaaaah, buddy. Definitely huntin’ the same ducks there.
I have one last thing.
I’m not gonna apologize for the invective in the postscript of my last article. I was deeply offended, as others were, by how you trivialized the Bronson, MO, duckboat tragedy to enhance your book pitch. And since I’m committed to having this blog be a true reflection of my feelings, I spoke from the heart.
In my postscript I also said this:
Convincing people to keep their heads down and slog away at jobs they hate by frightening them with polemic and bad reasoning and outright lies into believing it’s their only option—and profiting from doing so, to boot—is WRONG, Suze, and I stand by that.
I stood by it then and I stand by it now. So I found it especially cool when you said:
Well…you implied very very very strongly that we should, actually, to support your generation in your old age and to avoid destitution in our own…but this is the most important of all reasons that I’m glad you’re pivoting.
Consider taking that pivot a few degrees further. Sure, it’s good advice to tell someone that they shouldn’t work at a job they hate. It’s even better advice, though, to tell them that life is best lived not in moving away from negativity, but towards positivity…such that “I gotta get out of this horrible gig,” becomes, “You know, I’ve always wanted to work as a paramedic, and although I’d have to deal with a pay hit, now’s the perfect time to make it happen.”
And that’s where I’ll leave it. Again, I’m not sure why you pivoted, but I’m glad you did. So let’s continue focusing on what we have in common and exchanging what we learn. If you’re willing to commit to that…well, welcome to the FIRE movement.
- He discussed that and many other early FIRE-related topics in an “Ask Me Anything” interview I set up with him in Reddit’s FIRE forum, linked here.
- I’m forever quoting that, so if hearing it gets tedious, mentally replace it with your favorite knock-knock joke.