The Lemon Fool

I follow a few uk fire blogs, noticed less activity of late. Do you think fire has been doused with covid 19, or just a temporary set back whilst markets, economy returns to normal. Millenials won't have had a correction or bear market before and those with 100% stocks are going to have taken a big hit unless primarily in nasdaq, tech. Obviously if you early retire in your 30s or 40s you're going to face multiple market corrections and bear markets over your lifetime so lessons learned. The fire movement took off during a ten year bull market and double digit returns in the US markets, obv not a sustainable situation. Recent retirees must have the skills available to reenter the job market once the employment situation stabilises, either in permanent or contract work. Of course highest earning US based bloggers don't need to concern with such matters, as selling the dream is very profitable at the very top. Your thoughts?

1980 to 1999 saw something like 19% annualised rewards for UK stock, 17% for US investors. Even cash massively outpaced inflation. Many backtest in a manner that includes those years/decades and form opinions of what might be achieved in forward time. With the right asset allocation, dot com bubble bursting, 2008/9 financial crisis and Covid-19 saw no losses. Market just running as normal.

It's often the way, when stocks do well so posting rates rise, when stocks get hit so postings drop.

If you're retired and dependent upon all-stock, then there have been decade long periods (and longer) where stock total gross rewards with dividends reinvested only paced (or even lagged) inflation. Spending/drawing any was paramount to eating the capital and subject to the consumption rate could have drawn down to critical levels. Stock lighter portfolios can yield the same withdrawal rate support, maybe even more. https://portfoliocharts.com/2015/11/17/ ... ates-work/

As 1nvest has said, when the stockmarket is doing badly there is a general decline in the frequency and volume of stockmarket related posts online.

Many prospective early retirees will have seen their plans evaporate with the fall in the value of their investments and the now uncertain jobs market. Especially those who have focused upon the FTSE100 where an extremely large number of companies have stopped paying dividends altogether. Some will now be out of work. Consequently the overall confidence in FIRE will have taken an almighty hit.

Then there are the FIRE bloggers. I don't closely follow any FIRE blogs, but whenever I have looked at them in the past I got the distinct impression that the vast majority of FIRE bloggers had not retired. Instead they had switched careers to do something quite different from their pre-FIRE career, and were doing this as a sideline, and/or that advising on FIRE / being an "influencer" now produced much of their income. I reckon that some of them have seen their second career income take a big hit, combine this with the fall in the markets (and investment income) and they may be having some doubts about their "retired" status.

It will be interesting to hear of FIRErs forced back to work. My finances have taken a hit, but I had a big buffer and my expenditure has collapsed, so dividends still cover it, but life is so dull in retirement. I expect the finance bloggers are just writing CV19 blogs for a bit, and worrying about tax rises.

JohnB wrote:It will be interesting to hear of FIRErs forced back to work. My finances have taken a hit, but I had a big buffer and my expenditure has collapsed, so dividends still cover it, but life is so dull in retirement. I expect the finance bloggers are just writing CV19 blogs for a bit, and worrying about tax rises.

Chin up John .

I've just had a fun video chat with my stockbroker. And have a pretty full diary. Admittedly I have a company pension as well as an investment portfolio.

Retirement surely doesn't mean boredom?

We are lucky enough to live in the country and it's been a glorious summer for walking and biking.

So much to do! I wouldn't have time to write a blog about FIRE.

regards

Howard

JohnB wrote:It will be interesting to hear of FIRErs forced back to work. My finances have taken a hit, but I had a big buffer and my expenditure has collapsed, so dividends still cover it, but life is so dull in retirement.

From experience, the trick is to ensure that you have things planned to do shortly after retiring and to also have a few things in mind for doing afterwards. This keeps you busy, so you are less likely to let the work-shaped gap in your life influence you. Eventually you hopefully wonder however did you find the time to work

It helps to have a nice buffer. When I retired in 2003 I didn't have all that much of a buffer. But it would have been easy for me to get a job. Today at age 57 I am probably unemployable, but I could live comfortably off just one-third of the income that my portfolio generates.

At the moment a newly retired person is quite restricted in what they can do because of the coronavirus-induced restrictions. It would be impossible for someone retiring today to do what I did, which was several months of intensive interrailing around Europe starting one week after retiring. The other thing to occupy my time in my first year of retirement was an Open University Law degree - the OU has been running socially distanced distance learning degrees ever since it started. They're still offering many degrees and other courses, including Law

So in my second year of retirement, I had a lot to keep me occupied. Then after finishing the Law degree I then signed up to retake a few OU Maths and Physics courses which I took in the late 1980s. More degrees followed...

And there's always boxed sets of the good stuff on TV to watch. Since lockdown started I've managed to watch more than 1,000 episodes of really good TV on DVD which I've accumulated over the years. A few shows never get boring (e.g. Justified), so long as I leave a few months between viewings.

Great posts all, interesting thread-comments. @Salvor, sounds like you've done well to build that buffer! @JohnB, life can be dull at work too! Just finding a niche in work or play you find enjoyable. Take care.

Adamski wrote:Great posts all, interesting thread-comments. @Salvor, sounds like you've done well to build that buffer! @JohnB, life can be dull at work too! Just finding a niche in work or play you find enjoyable. Take care.

Glad to help. There's a lot of stuff about early retirement in the thread linked below (from 2017), in particular about adjusting to early retirement and how much do you tell your friends and neighbours. In my case I created a cover story; a fake job which I could easily do from home and which was sufficiently boring to deter people from pressing the issue.

https://www.lemonfool.co.uk/viewtopic.php?f=30&t=3214

SalvorHardin wrote:Many prospective early retirees will have seen their plans evaporate with the fall in the value of their investments and the now uncertain jobs market. Especially those who have focused upon the FTSE100

That is the folly of investing solely in the UK.

The S&P 500 is up 2% so far this year. The Nasdaq is up 10%. Dividends have mostly held up in the US and Canada. Covid decline? What Covid decline?

I know you know this of course.

Life is dull because of CV-19, not retirement! I can't go on holiday, do my conservation work, visit friends, pubs, museums and gardens or country shows. And when I do my country walks every day, you tread the same paths so many times...

Inetersting thread.

I first became interested in FIRE well before it was called FIRE when I started reading the Living Below Your Means board in 2001 when I was still in debt.

Nearly two decades later I am FIREing at the end of this month and can hardly wait. After a long break I might take on some consultancy work (I enjoy the mechanics of my profession but not the soul destroying commutung and drudgery of wage slavery) but I don't need to.

I suspect that many people who can't work from home and have been going to the office throughout the Covid-19 restrictions and who, like me, are financially fortunate but physically and mentally tired, are looking at early retirement as an option.

For disclosure, I am 57 so my FIREing is later in life than many advocates.

Gostevie

Not just the FIRE bloggers that might be quieter of late. Via Readly I have access to lots of financial magazines, and this month both Money Observer and Moneywise have announced the end of publication. In looking at them I see they are both Interactive Investor publications, perhaps "Inactive Investor" would be more appropriate.

Andy

Lootman wrote:That is the folly of investing solely in the UK.

The S&P 500 is up 2% so far this year. The Nasdaq is up 10%. Dividends have mostly held up in the US and Canada. Covid decline? What Covid decline?

I know you know this of course.

Indeed Anyone who restricts themselves to investing in the UK market is doing the investment equivalent of shooting themselves in the foot. With a minigun (the GE M134, as used by Arnie in the later Terminator films).

I've taken a bit of a beating this year. Down 11%, mostly due to being massively overweight in Burberry as well as Central London and Manhattan commercial property. These were great plays until the coronavirus hit, and I was a bit slow to react due to illness and fatigue (not the coronavirus, just age catching up with me!).

The big increase in investment trust discounts hasn't helped either. Nor has not having much in the FAANGs directly (a tiny 10 shares in Amazon is my sole direct holding).

But the key factor IMHO for FIRE living is that I operate under the assumption that I will have bad years (roughly 1 in 3) and I cut my cloth accordingly. 2020's capital loss is mildly annoying.

The income loss is trivial (-0.6%), mostly thanks to my avoiding anything that qualifies for a classic HYP (except National Grid).

SalvorHardin wrote:The big increase in investment trust discounts hasn't helped either. Nor has not having much in the FAANGs directly (a tiny 10 shares in Amazon is my sole direct holding).

Better than me. I had 6 shares in AMZN and sold one of them when they hit $3,200. It was getting nuts.

Likewise I sold 5 of my 35 AAPL shares when they hit $420 (man). At a $1.9 trillion market cap, something has to give. Interestingly BRK has become a proxy play on Apple. My 100 shares of BRK.B amount to a significant position in Apple. As does my 200 grand position in a S&P 500 index fund with 7% in Apple.

Sure beats a HYP any which way.

Lootman wrote:Better than me. I had 6 shares in AMZN and sold one of them when they hit $3,200. It was getting nuts.

Likewise I sold 5 of my 35 AAPL shares when they hit $420 (man). At a $1.9 trillion market cap, something has to give. Interestingly BRK has become a proxy play on Apple. My 100 shares of BRK.B amount to a significant position in Apple. As does my 200 grand position in a S&P 500 index fund with 7% in Apple.

Sure beats a HYP any which way.

Most things beat a HYP nowadays, at least for income (or is it an HYP!).

I bought my Amazon shares last December. I'd just read Brad Stone's book about Amazon "The Everything Store" (an excellent read) and decided to try to extend my circle of competence.

So I bought Amazon, to force myself to follow it, despite not having a clue how to value it. That goes against all of my investment philosophy. Amazon is a truly superb business, but I'm still struggling with the valuation.

I'm increasingly convinced that Berkshire Hathaway is seriously undervalued. It's not just the undervaluation of its Apple stake, the rest of the portfolio and the operating companies. It now has a big conglomerate discount; the sum of the parts exceeds the whole by a lot.

e.g. Berkshire's railroad BNSF is a little bit bigger than Union Pacific (UP is my largest shareholding) and they operate in the same part of America so there aren't too many geographical differences to worry about (West Coast rails have a massive advantage over trucks, their only competitor).

Currently UP's market value is $116 billion, Berkshire's is $484 billion. The rest of Berkshire is worth a lot more than $368 billion

ReallyVeryFoolish wrote:The FIRE bloggers are the only winners really. The FIRE bloggers haven't retired, have they? They have found an alternative income stream by writing about retiring early. Nothing wrong in a bit of entrepreneurial spirit and generating a new income stream or a new career but to maintain the pretence of retirement is somewhat disingenuous, in my book at least. .....
RVF

That's a bit cynical. I can think of at least one, though he doesn't count as a blogger, who clearly didn't view it that way.
https://www.nytimes.com/1997/01/27/us/j ... style.html

If you have read the book then you will know that he advised using Treasury bills (government bonds), rather than the stockmarket, and that you didn't have to give up work when you achieved financial independence. Indeed he did sugest that at least one option was simply to use your salary for charitible works if you liked your current job. Retire early is just one option of financial independence.

Gostevie wrote:I first became interested in FIRE well before it was called FIRE when I started reading the Living Below Your Means board in 2001 when I was still in debt.

Nearly two decades later I am FIREing at the end of this month and can hardly wait.

How excellent is that?

What a turnaround

Gostevie wrote:For disclosure, I am 57 so my FIREing is later in life than many advocates.

Not bad at all though. I remember your posts on Dealing with Debt back in the early 2000s, and your flirtations with potential bankruptcy. To get from there to where you are now is nothing short of amazing.

Scott.

@Gostevie - congrats on your early retirement. Good age to go, if drawing on pensions can keep ISAs intact! When I go also plan to keep my foot in, for me that's be contract work. Yes I think Covid caused a lot to reevaluate their life priorities. There will be more home working and flexible working in future. Vast majority though will be unable to early retire as for most either don't save enough or family spending commitments won't allow it.

RVF, some fire bloggers enjoy the writing, but there are some who are in it for income, you can tell if they keep on pointing to affiliate links, ebooks, courses etc. Nothing wrong with that at all, but the more authentic ones are more about leisure than selling. Cheers Adam