Dear Ms. Orman,
So you hate the FIRE movement, eh? Well, my love, the FIRE movement doesn’t think much of you either.
You, Ms. Orman, are a demagogue…and demagogues aren’t to be trusted. Especially when giving life advice. You stay true to type in this interview, in which you deliberately use misdirection and outright misinformation rather than logic and facts to scare people into believing you when you contend that anyone who attempts to FIRE is doomed. And you spread your misdirection and misinformation by scolding those whose positions differ from yours, especially Millennials, instead of approaching them respectfully.
People are smarter than you give them credit for. My method of refuting your contention is therefore gonna be 1) revealing the flaws in your logic and 2) properly informing anybody reading this so they can draw their own conclusions. That’s the true art of persuasion.
And to that end I’m gonna do my best to keep my patent sarcasm reined in. Since the way to defuse a demagogue is to dispassionately expose her rhetoric for the bullshit it is, that’s how I’m gonna handle you. Objectively proving to the crowd, in other words, that the empress goes bare-assed.
Think about it logically.
Ms. Orman–can I call you Suze?–a basic principle of logic is that anything that can be asserted without evidence can also be dismissed without evidence.
And that’s my number one problem with your assertions about FIRE, Suze: you’ve produced very little evidence of them. So produce your evidence. Until you produce your evidence, you’re merely speculating and/or trying to deceive people by offering up flawed logic as proof of what you say.
But you try to legitimize this approach by explicitly stating over and over that the audience should take your words as fact simply because you’ve got a curriculum vitae as long as a kitchen spatula. You’re therefore committing a logical fallacy known as “appeal to accomplishment.” As in: “Since I say it and my resume is dope, it’s true.” Signals of this fallacy include words and phrases like “Trust me” and “Believe me, I’ve seen” and “Speaking as someone who’s” and “Take it from me” and others you repeatedly use.
To demonstrate, here’s your opening:3
“Here is the problem as I speak to you at seventy—at sixty-seven years of age, approaching seventy. As you get older, things happen. Not only do things happen as you get older; things happen when you are younger. You’re hit by a car. You fall down on the ice. You get sick. You get cancer. Things. Happen. And if you don’t have a significant amount of money—listen, if you have twenty, thirty, fifty, or a hundred million dollars, be like me, OK?—you have that kind of money, and you want to retire, fine. But if you only have a few hundred thousand dollars, or a million, or two million dollars, I’m here to tell you I doubt highly that when you no longer have a paycheck coming in and you’ve invested that money and maybe it’s making some interest for you, or dividends, or whatever, if a catastrophe happens, if something goes wrong, what are you going to do? You are going to burn up, alive, because you won’t have the money to—listen, when my mom got older, I was responsible for her. I spent on her in seven years over two-and-a-half million dollars. And here’s what the FIRE people: you are not thinking about, so I’m gonna give it to you straight here now.”
In rational debate an appeal to accomplishment neither builds up nor tears down an argument. It’s simply bad logic…or worse, deliberate misdirection. For example, I have a cousin who’s a young-earther. She claims to be an expert because she’s taken an online course, watched YouTube videos, read books, and visited a museum. So she’s forever asking me to take it on faith that the planet’s only six thousand years old because “I know what I’m talking about.” But in an academic setting if I cited my cousin’s claims of expertise as a factual source in a geology dissertation, my review committee would instantly flunk me. Her assertions of expertise aren’t evidence.
Neither are yours.
You continue by speculating that machinery driven by artificial intelligence will by the year 2030 have caused a 25% unemployment rate. You then say when the robots have replaced us there’ll be severe consequences. Taxes will go up, Social Security will fail, etc., etc. A whole long list.
All this is just a condescending and hyperbolic way of telling us, “Mark my words: if you quit your job you’ll end up living under a highway overpass someday!” Do you think nobody’s ever tried to frighten us like that before? Do you think we’re unaware that catastrophes befall people? Do you think we’ve neglected to lay in plans for them?
This is another fallacy you’re using: the ad hominem attack. Your condescending tone and grade-school word selection and sickly-sweet patience betray your opinion that since we’re all fools, our reasoning should automatically be dismissed.
Particularly indicative of this comes at 12:18 and 17:28 when you say if we believe in FIRE you’ve got a bridge to sell us.4 You mean you think we’re easily duped, so the case for FIRE must be invalid. But again, that’s not evidence—just bad logic intended to stir people up.
And I have to admit, you did stir me up with this:
Those [catastrophes] are all the things none of you are thinking about.5
Bullshit, bullshit, bullshit. All I have to do here is point you towards Reddit’s financial independence forum, where the sheer volume of conversation among the 400,000+ subscribers about planning for catastrophe is an utter, utter refutation of your statement that FIRE aspirants aren’t planning around worst cases.
Besides being ad hominem, your whole catastrophe line is also an example of appeal to fear and appeal to consequences, i.e., attempts to refute an argument by listing the bad things you say it’ll lead to if true. Woe betide ye who attempt to retire early, etc. This is where the highway overpass routine I mentioned above falls. Your opening statement is riddled with it and you keep repeating it, which I’ll discuss further along.
Appealing to the stone and reductio ad absurdum. Summarily dismissing an argument and/or its conclusion as ridiculous without actually producing evidence to its contrary. Kinda like ad hominem, except it applies to the proposition instead of the proposer. For instance, when Paula asks you if a 4% withdrawal rate against two million dollars for someone who’s willing to be frugal and work part-time and stay flexible is sufficient, you literally say:
I think it’s just ridiculous.6
And again you cite your personal experience as confirmation.
More ridicule elsewhere, in a stretch of dialogue concluding with:
Are you kidding me?7
No. We’re not kidding you. We’re basing our case on a considerable amount of social science that uses gold-standard data and peer-reviewed methodology to produce conclusions that are easily reproducible by disinterested parties. I’ll cite specific studies shortly.8
Pooh-poohing the argument. Painting an argument as so meritless that it doesn’t even deserve serious consideration.
In every statement you make in this interview you’re pooh-poohing the argument. You know why I say that? Because serious consideration demands the provision of evidence, and as I get tired of mentioning, you’ve brought none.
But I have. One piece is anecdotal, which obviously isn’t conclusive but at least demonstrates the possibility that FIRE is achievable and sustainable and therefore deserves discussion. I’ve only been FIRE’d for thirteen years, but the track records of people like Amy Dacyczyn and Joe Dominguez and Vicki Robin and others prove that multi-decade FIRE is indeed a real thing.
You’d no doubt rebut that we should come back when our lives are over and tell you if it really went like we hoped. You’d likely remind us catastrophes befall people.
But it’s not a matter of hope, Suze. It’s a matter of risk appetite.
Those aren’t the same thing. A person who stays in her job for the sake of what you call security has accepted the risk that she may NEVER retire. She hopes she will, but there are just as many catastrophes that can befall her as us. She can, to use your examples, get hit by a car, fall on the ice, get cancer, etc. Maybe she’ll even get laid off. But people who choose FIRE have only chosen the other side of the value equation. They’ve accepted the risk that without steady jobs they may end up living under the proverbial highway overpass. You caution them to the contrary. Fine. But advising caution isn’t evidence that FIRE plans will fail.
Arguing from incredulity. You can’t imagine it being true; therefore it’s false. Remember this excerpt from your opening?
I’m here to tell you I doubt highly
Doubt all you like. Doesn’t prove a thing.
Arguing from repetition. How many times in a half-hour is it necessary to tell us bad things happen and that people who FIRE are therefore fools? Honestly, I lost count. This kind of fallacy is nothing more than an attempt to browbeat one’s audience until they stop listening and mentally move on, at which point their silence is taken for agreement.
Presenting “alternative facts.” To quote:
“You know, most people are living now till ninety-five to a hundred. Are you sure your money’s gonna last you that long?”9
In point of actual fact, Ms. Orman, most people are NOT living from ninety-five to a hundred. Per the US Department of Health and Human Services:
“In 2016, life expectancy at birth was 78.6 years for the total U.S. population—a decrease of 0.1 year from 78.7 in 2015 (Figure 1). For males, life expectancy changed from 76.3 in 2015 to 76.1 in 2016—a decrease of 0.2 year. For females, life expectancy remained the same at 81.1.”
Sure, there are exceptions, but exceptions by definition don’t constitute “most.” So when you’ve supported your argument with misinformation in one place, I’m inclined to think you might’ve in others. Naturally you also might not’ve, but it’s still a sign to your audience that they need to listen with healthy skepticism.
And on the subject of misinformation, a person with, say, two million dollars CAN reasonably expect their money to last that long.
William Bengen—whose work you really should read if you haven’t—is the financial adviser who first proposed the idea of the “safe withdrawal rate” in a paper from 1994 entitled “Determining Withdrawal Rates Using Historical Data.” His research and modeling led him to the following conclusion:
“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 [Figure l(b)], 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.”
Past performance is no guarantee of future success, of course, but that goes both ways. Past performance is no guarantee of future failure, either. And while Bengen’s assumptions were couched in the market conditions of his time, more modern examination based on more current market conditions has borne out his conclusion. I refer you to a paper entitled “Retirement Spending: Choosing a Sustainable Withdrawal Rate,” AKA the “Trinity Study,” which is a re-examination of Bengen’s safe withdrawal rate concept that was first published in 1998 and has since been periodically updated.
The authors10 used Monte Carlo simulations11 to conclude that historically a 75% stock/25% bond portfolio would survive in 100% of the cases where an individual made annual withdrawals of 4% a year for thirty years.
Two problems with that conclusion:
In their update, Cooley & Hubbard & Walz haven’t carried their analysis beyond the aforementioned thirty years. Thirty years obviously doesn’t get a Millennial from age twenty-five until death at the current life expectancy. Furthermore, their latest update was based on pre-Great Recession data.
But these are each reasons why the FIRE community has lately come to rely more and more on Monte Carlo tools that sample from real-time data and user-determined parameters. For an example, see FIRECalc. FIRECalc doesn’t constrain users to an academic’s assumptions; it allows them to calculate the savings targets they’d need to achieve 100% portfolio survivability across varying historical periods and market conditions and lifespans depending on individual spending requirements.
You can say all day long that you don’t trust such models, as you implied in your opening statements when you brought up robots and high unemployment…but again, you’d merely be speculating. A better criticism might be an analysis of portfolio longevity models in the context of the current bull market. But I leave that to you. Not my job to load your gun.
Besides those two studies, we also base our approaches to FIRE on concrete poured by other highly-credentialed people like Wade Pfau, Michael Kitces and his team, Jack Bogle, and we even take the advice of Warren Buffet. Mind you, when I say “concrete” and “highly-credentialed” I’m not suggesting we should believe these people for their accomplishments…I’m saying their work is generally considered to be dependable, and is therefore worth reading and considering the truth of for yourself.
So, yeah…we’re not just taking a flier out of wishful thinking. Our pursuit of FIRE is justifiable by dint of fact.
OK. What’s common to all your logical fallacies is what I first led with: in none of them do you produce any objective evidence whatsoever for your claim that FIREees as a class are doomed to “burn alive.”
So it’s obvious that your demagoguery hasn’t convinced me the FIRE movement is misguided, and hopefully I’ve been able to inoculate others. Granted that you and I aren’t gonna change each other’s minds today, but at least we can lay out our best and most logical arguments and let our readers come to their own conclusions instead of trying to clench their sphincters for them. It’s what we owe them, and it’s simple professionalism. And what the hell…as I indicated, my beliefs are totally open to refutation. I hope you work the same way, because otherwise when you hate on FIRE you’re just blowing smoke, and your audience deserves to know it.
Christ, that’s a horrible line. “Blowing smoke.” But whatever. I’ve got at least twenty hours in this thing now, and it’s time I was done. Gonna go have a drink and then hit my hammock for a soul-cleansing nap.
Dammit, Suze…I wasn’t gonna cut loose, but I hit my hammock and then I couldn’t get to sleep. Because despite my determination to keep myself in check, you read your book pitch and then you had to go and say this:
“Now, I pray that all of you that do this, that nothing ever goes wrong in your life, that you’re always OK no matter what happens…but I’m sure all the people that were on that duckboat in somewhere, where they all went down and they drowned, I’m sure at the end the only one that lived was one person and they lost, what, nine family members? I’m sure she never thought any of that was gonna happen. I’m telling you, don’t be naive.”12
“Duckboat in somewhere.” Bloody hell. And you’re sure only one person lived.
I’m going hoarse repeating this, but get your fucking facts straight. There were seventeen people who drowned when that boat sank, Suze. Seventeen human lives lost, including children, on Table Rock Lake outside Branson, MO, on the evening of July 19th, 2018. A woman named Tia Coleman did indeed lose nine family members, but she wasn’t the only survivor. There were thirty-one people on board at the time of the sinking, seven of whom were hospitalized with two of them in critical condition.
You know…I was a calm friendly he-mammal until you trivialized human fucking tragedy to scare people who don’t know any better into buying advice of questionable soundness and rearranging their lives around it. And then I lost my cool, because that’s a total fucking breach of decency.
God. Do you even hear your own words?
You’re calling us idiots at the exact same moment you’re insisting we stay in the workforce so we can support you in your old age!
And you say Millennials are the ones who act entitled! Jesus! If you’re not the paragon of the worst kind of self-righteous baby boomer, I’ll strip off these cargo shorts and sprint naked down to the local precinct and rip rails right off the duty sergeant’s desk! Remember back in the day when so many of you ganged up and burned your draft cards to protest how the Man was keeping you down, and how you vowed never to trust anyone over thirty? Are you now in hindsight beginning to understand why we’re rejecting your values just like you rejected those of the generation that came before you? Or is that an exercise that’d require too much introspection?
And then there’s this:
You WILL get burned if you play with FIRE.13
Well, shit, Suze…if that’s what passes for wisdom and pith in your line of work, I gotta get myself an agent. How the fuck did I miss out on this racket?
But there’s my patent sarcasm. Sigh. In the heat of composition I’ve crashed into the very trees I’ve accused you of being lost in all along. Couple of deep breaths are in order.
Before I start drinking in earnest, I’m gonna say this one last time. 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.
Why? Because you’re telling folks their dreams aren’t just impossible…but also stupid. And that’s reprehensible. So go peddle your shit somewhere else. We never liked you anyway.
Hi, ya’ll. Enjoy the crap I crank out? A free & effortless way to support The Work, as it were, is to shop on Amazon through the Early Retirement Dude gateway. Click this link, bookmark it, and use it from now on. Much obliged…
- I need to go ahead and give a shout out to Paula for making that happen. Orman’s a controversial figure and has a communication style many find infuriating, but Paula did a great job interviewing her even though she disagreed with Orman’s position. I hope you’ll all subscribe to Paula’s podcast.
- At 12:57. I’ll be citing the times of these quotes so readers can easily follow along in the podcast itself.
- Starts at 5:55.
- Which, sure, I’m always open to a business proposition. Let’s hear about this bridge. How much are you asking? Where is it? When was it built? Do you have clear title? When can I bring over an appraiser? When can I have it inspected by a team of structural engineers? Do you collect tolls? Can I see the books? Is it burdened by legal obligations?
- And by the way, I hope you’ll get back to me with critiques of those studies, because generally in the FIRE movement we’re capable of changing our minds when presented with new facts. But remember, I said facts.
- Philip L. Cooley, Carl M. Hubbard, and Daniel T. Walz, a trio of professors from Trinity University whose academic credentials I kneel before.
- One use of Monte Carlo, which I’m sure you’re aware of, relies on random sampling of continually-updated (and verifiable) historical data like stock market returns to compute probability distributions in order to, among other things, test hypotheses like, “In most scenarios my two million bucks has an acceptably high chance of outliving me.”