All right. @oldmom4896 has turned me around with an assist from @garland.
But can anyone just make me feel better and say it was a lousy headline for an article.
@privatebanker I think “ too white” means that the rules of FIRE are too much a part of a White culture to be of complete use to those part of a different culture. This was one of the examples given:A lot of FIRE blogs, while well intentioned, can be very tone deaf,” Mrs. Saunders says. “They have these lean plans that are like, ‘Oh, we live on Soylent and frozen burritos, and that’s how we’re able to save 50 percent of our income.’ And it’s like, ‘O.K., but what about the other things that life sometimes requires? Where’s the budget for taking care of your mother-in-law?’”
The “ black tax” as I’ve heard described the cultural almost-requirement to provide heartily for the generation behind you, one who was even more likely to have lost out on economic opportunities, is a necessary expense for many African Americans.
Because this need to “pay it backward” is not anywhere near as ubiquitous in white culture FIRE tends to ignore this as a “ necessity” even though FIRE is all about dealing with “need to haves”
Ok. That makes a lot of sense. Thank you.
“But can anyone just make me feel better and say it was a lousy headline for an article.”
I think I implied that back in post #14 two pages back. 
@doschicos Yes. You did. Thank you!!!
Sorry I missed that…I was busy being offended at the time.
I noticed. 
Yes, this phenomenon is another reason why wealth is “sticky” across generations. Those with poor parents, in addition to having had to overcome having fewer opportunities and more barriers, are more likely to have to assist their parents as they age. Those with wealthy parents will not have to do that, and may end up with an inheritance afterward. So those from poor parents need to earn higher incomes and/or be more frugal than those from wealthy parents in order to reach the same level of “FIREness”. As the economy continues to tilt more toward rewarding capital over labor, the advantage of starting from wealth, and the “stickiness” of wealth across generations, increases.
Regarding how black and white people compare, it is not hard to see how racial discrimination from a generation or few ago (e.g. in housing and mortgage lending which greatly limited black people from taking advantage of leveraged home equity growth than can then be bequeathed across generations) continues to leave its mark in racial differences in wealth.
Many people attribute the concept of FIRE to the book Your Money or Your Life, first published in 1992. As that book aged through both the events you describe, I’m not sure it’s a short-lived or untested plan.
Of course major market corrections drastically affect one’s net worth in the short term, but those losses are only realized if you sell when the market dips rather than hanging on. In the case of recession, you’d only have to live on half your savings if you lose your nerve and sell everything near the bottom of the market. Most FIRE early retirees 1) keep a more conservative allocation between stocks and bonds and 2) can afford to ride out 5, 10, or even 15 years of a sluggish market by living on only a small (3-4%) percentage of their portfolio and thus minimizing real losses.
It’s also worth noting that many FIRE bloggers strongly encourage anyone considering early retirement from their primary career to develop a broad, diverse range of income streams as a cushion: rental properties, stock/bond income, pension, freelancing, turning a hobby into a part-time side gig, etc.
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I’m not personally on board the FIRE wagon, but I follow several FIRE blogs and find them informative, particularly in their emphasis on living simple, non-materialistic lives. My SO and I live in a fairly expensive city on a combined gross income of <65k (one of us is a grad student, and one works entry-level for a nonprofit). We paid off all our student debt, max our Roth IRAs, and are saving for a house down payment. It takes a lot of planning/work-- we always brown bag lunch, go out to eat very rarely, and share an old but reliable car.
Of course this isn’t for everyone-- many people have no desire to own a home or retire early, for example. But I’m not a fan of calling savers “monk like”-- seems dismissive or implying that we are masochistic, rather than goal-oriented.
@warriordaughter I referenced YMoYL upthread, as it had a huge impact on my H and I for the last few decades. We never did the financial instruments it described (I just couldn’t wrap my head around them) but it did/does give us a lot of financial freedom to make life decisions we would otherwise not have been able to make.
Of course the headline was intended as a diss on white men.
@garland that’s awesome! I haven’t read YMoYL myself, but I really appreciate the mindset of making unconventional money decisions based on personal priorities. No one is forcing me to work a full-time W2 job until 65-- if I plan and play my cards right, I can have the flexibility to retire a decade or two early, or switch to a part-time or low-paying job I love, or take a few year-long sabbaticals to travel, or to take a risk and start my own business, or…
To return to the main topic of this thread, financial independence is perhaps particularly valuable for women, who are more likely than men to have nontraditional career trajectories. Being able to live frugally and save up that nest egg can give women options: to take extra maternity leave, to stay home during children’s early years if they wish, to care full-time for a special needs child, etc. On the flip side, the frugal living + nest egg also give the family a cushion in the case of death or divorce, both of which are often catastrophic for women who have downscaled their careers to care for children.
Of course there are many who argue that women should never downscale their careers period, but sometimes life happens and I’m of the opinion that having more options is better than not.
“Of course major market corrections drastically affect one’s net worth in the short term, but those losses are only realized if you sell when the market dips rather than hanging on. In the case of recession, you’d only have to live on half your savings if you lose your nerve and sell everything near the bottom of the market. Most FIRE early retirees 1) keep a more conservative allocation between stocks and bonds and 2) can afford to ride out 5, 10, or even 15 years of a sluggish market by living on only a small (3-4%) percentage of their portfolio and thus minimizing real losses.”
Tell those who hung onto now worthless stocks or stocks that never recovered. This is all great in theory, just wait until you get to practice this.
Here is the deal. To live off the $40k/4% without touching the principal, which seems to be the amount the FIRE crowd preaches, one needs $1M in relatively conservative investments that are shielded from 50% market drops. To get to that $1M, unlike the few bloggers who were able to quickly sock away their giant bonuses, the vast majority of us needs years of aggressive investments… if the market tanks in the middle of that accumulation, it could mean death to the RE part of that FIRE. So… keep your job skills up to date or have $2-5M conservative investments so you can ride out the 50-80% market drops.
The main purpose of life insurance is to provide financial security in the case of death of a breadwinner. This is a basic measure that everyone should undertake and periodically review. Divorce is another matter.
Except this statement is directly at odds with decades of financial research by Robert Shiller and others. Housing, after paying for taxes, insurance, and maintenance, is a consumption item, not a particularly good way to develop inter-generational wealth. From the standpoint of accumulating wealth, the white family would have been better off renting a cheap place in a low cost black neighborhood and investing the money that would have gone to a high PITI in the stock market instead.
I don’t think that’s what you’re supposed to be able to do. More commonly the recommendation is to live off 4% (for a 30 year retirement) or 3% (for an early retirement) of the intinial nest egg, then index that amount for inflation every year. The portfolio may decline in value - you’ll touch principal in many cases - but should last through retirement.
^^The FIRE blogs I scanned generally do not recommend touching the principal - it is being kept as an LTC insurance for the final days or left as a charitable gift or passed down to the heirs.
“The main purpose of life insurance is to provide financial security in the case of death of a breadwinner. This is a basic measure that everyone should undertake and periodically review.”
A benefit to saving rigorously is being able to skip life insurance completely and save $$ which can then be plowed into your investments. Self-insurance is a big money saver.
I disagree @doschicos. You really only “self-insure” after you are are self-sustaining on your own income. For someone who is at home with children, the death of a working spouse is financially devastating. And term insurance is really quite cheap if the working spouse is healthy.
“And term insurance is really quite cheap if the working spouse is healthy.”
It doesn’t take much to be deemed unhealthy by insurance companies.
Not sure what you mean by “self-sustaining on your own income”, @hebegebe. At some point, one will have the assets to self-insure for one’s family, a natural by-product of FIRE. A stay at home spouse doesn’t need to stay at home forever and that should be factored in as well. Don’t over-insure. One should be looking to make sure the family has some financial protection in the event of one’s death not make it more beneficial to have the working spouse dead than alive.
I would assume you yourself are at a position in life where between your own asset base and what your company provides in terms of life insurance coverage as part of your benefits, you could be self-insured? Are you? I know I was a very long time ago.