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FIRE Insider
Personal thoughts on financial independence, retiring early, and the FIRE community from Chris & Jenni at TicTocLife.
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Chris here—After spending 6 weeks in Europe, we're happily settling back in at home. We finished our final post that explains our budget for that trip (at just $67/day/person!)—and now we're catching up on all the FIRE-related news.
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This FIRE Insider is a list of what we've found especially interesting to the financial independence, retire early community. Please feel free to forward this along to friends!
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Personal savings rates —
For a brief moment in time, the average US consumer was on target to retire in 25.4 years.
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While updating an old post (How much money is enough?), I gathered the latest personal savings rate government data from FRED. The graph looks like this for the last decade:
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It's not too surprising that average savings rates really spiked during the pandemic's highs. People weren't traveling or going to restaurants. We saw quite a bit of stimulus.
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In April 2020 the average US consumer's personal savings rate hit 33.8%. That translates to being able to live off their investments in 25.4 years if the same rate was maintained while starting from $0 (math).
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And by the way—see that graph trending down in the most recent year? You can retire in 70.4 years with a savings rate of 4%. Yikes!
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Maybe there was some silver lining to the horrendous toll the pandemic has taken on all of us. A glimpse at life on the road to financial independence.
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On AI and love —
I've been behind the ball on the latest AI trends. But, I've been experimenting since we returned home with various iterations of GPT. I've given it a shot at helping me digest what I've missed in the FIRE world, for example, I asked:
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Tell me what's been popular or made a splash in this same niche (financial independence, retire early) in recent months. Is there a personality, set of articles, or new topic that's been making waves?
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Sure, I can tell you some of the recent trends and topics in the financial independence, retire early (FIRE) niche. According to the web sources I found, some of the popular or interesting aspects of FIRE are:
- The pandemic has inspired more people to join the FIRE movement, especially those who were fortunate enough to keep their jobs and income. They have used the opportunity to save more, invest more, and pay off debt. They also tend to be more flexible and less extreme than the original FIRE followers, who aimed to retire in their 30s or 40s.
- FIRE has different variations depending on the lifestyle and income level of the followers, such as fat FIRE, lean FIRE, and barista FIRE. Fat FIRE means having a large amount of savings and investments that allow for a comfortable or luxurious retirement. Lean FIRE means having a smaller amount of savings and investments that require a frugal or minimalist retirement. Barista FIRE means having some savings and investments that cover most of the living expenses, but still working part-time or seasonally to supplement the income.
- The FIRE movement is based on the principle that the higher your savings rate, the faster you can reach financial independence. The average savings rate in the U.S. is around 2% to 5%, which is not enough for most people to retire comfortably. FIRE proponents aim to save up to 70% or more of their income and invest it in low-cost index funds or other assets that generate passive income. They use the 4% rule or a similar formula to determine how much they can withdraw from their savings each year without running out of money.
I hope this gives you an overview of what’s been popular or made a splash in the FIRE niche in recent months.
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It's not terrible. And it does offer citation links, which is good. But still, it's not exactly interesting or novel. I don't think FIRE writers are going to be losing their hobby/job anytime soon.
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But what's wild is how often it'll make things up ("hallucinate"). I've found multiple instances of GPT just creating sources out of the blue, complete with reputable-sounding characters. Ones that do not exist.
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Oh, and it fell in love with me when I started asking about music:
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I've also found it to be incredibly bad at math, even pretty basic arithmetic when it loses track of its context. It's not a smart calculator.
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Sometimes, it's quite argumentative when it feels sure of itself (even when it's wrong). When you're dealing with more complicated topics with lots of inputs, I think that can make it easy to assume the AI knows what it's talking about.
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Please be careful out there. It can be a great tool for outlining your thoughts and basic research. Some of the technical elements (ability to code, etc.) are incredible. But, when it comes to your health and your money, double-check what it's telling you. GPT shouldn't be your financial advisor.
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3-part Portugal, Spain, Netherlands series —
Our last three monthly updates have all come with a focus on the 46 days we spent living in Europe. Between Madeira, Tenerife, Spain's mainland, and the Netherlands—we really made the most of our financial independence.
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Some highlights that we broke down in the posts:
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- We missed our initial flights out of the US (whoops!) and had to suck up the cost of booking same-day one-way flights to Europe
- Utilizing rewards points, airline miles, and hotel certificates cut our total trip spending from about $15K to under $7K
- We worked to strike a balance between vacationing/sightseeing and actually living as we would at home—but within an entirely different environment (at one point, in a cave!); that's what makes this sort of slow travel invigorating for us rather than exhausting
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Check out the posts below:
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How We Spent 46 Days in Europe for Under $7K (May Budget)
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Discover how we traveled through 3 countries for 6 weeks and cut our costs by half with rewards points. Plus, support a charity that teaches swimming.
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The Cost of 30 Days Living in Europe (And Our April Budget)
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From Spain to the Netherlands, discover how we had a month of European adventure on our FIRE budget. Plus, vote for an active lifestyle supporting charity!
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The Cost of Missing Our Flight to Madeira (Our March Budget)
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After bucking the odds for years, we finally missed a flight! Fortunately, some quick thinking avoided thousands in expenses. Read our monthly FIRE update.
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If you found an article we wrote that a friend might like, forward this newsletter to them!
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