FIRE movement?
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FIRE movement? (by MikeA [TX]) May 11, 2022 10:48 AM
       FIRE movement? (by Marcia [WI]) May 11, 2022 11:03 AM
       FIRE movement? (by BillW [NJ]) May 11, 2022 11:52 AM
       FIRE movement? (by #22 [MO]) May 11, 2022 12:46 PM
       FIRE movement? (by Allym [NJ]) May 11, 2022 12:52 PM
       FIRE movement? (by Ray-N-Pa [PA]) May 11, 2022 12:57 PM
       FIRE movement? (by Robert J [CA]) May 11, 2022 1:55 PM
       FIRE movement? (by 6x6 [TN]) May 11, 2022 5:54 PM
       FIRE movement? (by Marcia [WI]) May 11, 2022 6:21 PM
       FIRE movement? (by MikeA [TX]) May 11, 2022 6:30 PM
       FIRE movement? (by S i d [MO]) May 12, 2022 7:31 AM
       FIRE movement? (by Ray-N-Pa [PA]) May 12, 2022 8:35 AM
       FIRE movement? (by Ken [NY]) May 12, 2022 8:38 AM
       FIRE movement? (by MikeA [TX]) May 12, 2022 11:42 AM
       FIRE movement? (by RB [TN]) May 12, 2022 1:10 PM
       FIRE movement? (by Oregon Woodsmoke [ID]) May 12, 2022 1:20 PM
       FIRE movement? (by Taylor [TX]) May 12, 2022 6:18 PM
       FIRE movement? (by MikeA [TX]) May 12, 2022 6:28 PM
       FIRE movement? (by plenty [MO]) May 12, 2022 8:31 PM
       FIRE movement? (by MikeA [TX]) May 13, 2022 9:56 PM
       FIRE movement? (by Nicole [PA]) May 14, 2022 9:28 AM
       FIRE movement? (by MikeA [TX]) May 14, 2022 9:54 AM

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FIRE movement? (by MikeA [TX]) Posted on: May 11, 2022 10:48 AM

I had an interesting discussion with a young man about getting into RE investing. During the discussion he kept talking about the "FIRE movement" so I got him to explain it and then did some reading on my own, I found quite a bit of info on the interweb.

It stands for Financial Independence, Retire Early. Apparently is gaining momentum with the under 30 crowd. The thought being to live the most frugal life you can live for a few years so you can retire early and/or in style. There are several variations of it. Hmmm, guess many on this forum were early pioneers.

One of the premise of the movement is to maximize income. Specifically, look for a side gig or second job to help increase the percentage of savings you can accrue. Which is what brought this young man to me.

Am I the only one that hadn't heard of this "movement" before? Makes me wonder if that's what's spawning the droves of new investors the last couple of years.

FIRE movement? (by Marcia [WI]) Posted on: May 11, 2022 11:03 AM

I had never heard of this either until now. That is probably what has spawned the droves of investors and the daily phone calls I receive if I want to sell my house.

FIRE movement? (by BillW [NJ]) Posted on: May 11, 2022 11:52 AM

Funny, my 23-year-old daughter has similar plans, thought they donít include real estate, but just being frugal, making a good salary in a job you donít love and letting compound interest go to work. She is into investing and net worth tracking and would like to have a large family, but is concerned with the expenses of children. She tells me the ratios of home prices to salaries arenít what they used to be (houses expensive relative to salary). Iím very happy to have her live with us while saving, so no complaints here. --74.102.xx.xx

FIRE movement? (by #22 [MO]) Posted on: May 11, 2022 12:46 PM

Americans are idiots. Myself included. If we didn't consume like fools we could all retire good at 35 or 40.

FIRE movement? (by Allym [NJ]) Posted on: May 11, 2022 12:52 PM

It sounds like things people have been doing for a century and these young'uns think they discovered it. --108.24.xx.xx

FIRE movement? (by Ray-N-Pa [PA]) Posted on: May 11, 2022 12:57 PM

It has been around for about a dozen or so years.

You establish a number that you will need to live on. Say that magic number in todays dollars is $5,000. If you have say 6 rental homes that generate $500 in positive cash flow, then you have $3000 head start. So what is up with the other $2,000? Well you phrase that as ..... how much money do I need that if I take X% of the whole, then I would be able to get the money that I need.

Typically that number is about 4-6% annually of your nest egg.

So assuming you needed $2,000 monthly and were on the younger side of things so you wanted to be conservative about withdraws, your nest egg would have to be $300,000.

The FIRE concept is hard for experienced real estate investors to wrap there hands around. Because we don't think that way. We think instead, with $300,000 I could pick up this many more houses and end having this much additional cash flow. If you can't find a place to buy, we end up lending the money out and get even more than 4%.

I believe most of the regular posters here know the difference between a poor old man and grand old gentleman is money.

FIRE movement? (by Robert J [CA]) Posted on: May 11, 2022 1:55 PM

Many of my friends kids move back in with their parents because of poor financial choices. Credit card debt from over spending beyond ones means.

Last month one parent asked me if I had a 2 bedroom apartment in NoHo, a good part of town. I replied that yes I do. Their kids had been living with them for over a year and now can afford to move out and cover their rent.

So I met with the kids, a married couple with 1 child expecting a second. I showed the the unit. Ground floor. New kitchen, laminate flooring. New paint, appliances, etc.

The market rent is over $2,000 a month. But since their parents were friends I'd give it to them for $1,600 a month. But they had to fill out an application and come up with first and a deposit, totaling $4,800. But since I only had a carport parking spot they declined saying their car is too nice and had to be garaged.

After the kids, with parents in tow went apartment hunting, the only completable apartments were asking $2,400 to $2,800 per month.

So they called me back and I had to deliver the news, I rented the unit within 2 days of placing an ad.

FIRE movement? (by 6x6 [TN]) Posted on: May 11, 2022 5:54 PM

Ray brought up a good point about why investors have a hard time wrapping their heads around it. I would say the opposite is also true. I have been living a frugal lifestyle for decades, and it is hard for me to spend money. Only problem is, I have never made a large income, but I know how to live frugal, probably more than most.

FIRE movement? (by Marcia [WI]) Posted on: May 11, 2022 6:21 PM

My dad always said to me. "It isn't how much you make, it's what you do with it." So true.

FIRE movement? (by MikeA [TX]) Posted on: May 11, 2022 6:30 PM

Ray, interesting, he did start the conversation with a monthly dollar amount he wanted to clear and we went from there. I stepped him through how to calculate cash flow on a new property and then showed him what the cash flow would be once the property was paid for using a 12 year amortization. He got it pretty quickly. Many of the kids that come asking are really looking for a get rich quick approach, they get turned off pretty quickly when I bust their bubble. This young man was different, he clearly has a plan for his life and is seeking out advice on the best way to get there. I expect he will do well in life.

FIRE movement? (by S i d [MO]) Posted on: May 12, 2022 7:31 AM

FIRE is hyped on another real estate for called Bigger Pockets. You find tons of flash-in-the-pan newbs who show up claiming to be suuuuuper motivated and gonna get 100 doors and make $100,000 month cash flow in 6 months.... If someone would just be so kind as to mentor (hand hold) them through the entire process.

Then after a dozen posts or so they disappear.

I was on that site for a couple years, but it's the same schtick hashed over and over...and I didn't catch as much of a feeling of community as I find here.

No, the FIRE movement is just a combination of frugality and investing with a flashy name. I had a friend in HS whose parents banked the husband's salary in CDs and lives off of wife's for 20 years, then retired at age 50 to travel. Same thing basically, though not quite as intense.

The question I have for the FIRE folks is what they plan on doing after they "retire" at age 35. Most of them have no idea or say "volunteer". Okay... So you're going to live like a pauper, not have kids (this is a biggie among are too expensive), and eat generic toast for 15 years ... So that you can give "the man" the finger and go work for someone else for free? Mmmm...hmmm... Mighty fine "plan."

These are also the people who often want socialized medicine so they can have health care without the pesky issue of holding down a job. FIRE takes on an air of less "independence" when they start demanding social bennies paid for by those still "working." --184.4.xx.xx

FIRE movement? (by Ray-N-Pa [PA]) Posted on: May 12, 2022 8:35 AM

Sid, perhaps they are confusing the words independence and freedom.

FIRE movement? (by Ken [NY]) Posted on: May 12, 2022 8:38 AM

The big thing to me is they all seem to not want to work to a high degree,you can only do this long term if you want to do it and enjoy doing it. --74.77.xx.xx

FIRE movement? (by MikeA [TX]) Posted on: May 12, 2022 11:42 AM


I didn't find that to be the case with this young man at all, not saying it doesn't exist though. One thought did come through clearly though, he didn't want to be working for someone else his whole life and retire too old to enjoy life. I've heard that same sentiment expressed here on many occasions. He has a young wife and they do plan on having children. Wife is working but they are saving her income.

His two big goals were to retire by 45 and to have enough money to be able to travel the world when they do. I don't see those goals out of reach for someone who starts at 23 and invests wisely for 22 years. He has already saved up enough to easily purchase 2 small SFH's, he's been living the lifestyle for a couple of years now. That as well as his attitude gave me hope that he won't be a flash in the pan.

Personally, rather than run it down, I am going to encourage any young person (and older) to stick with a plan that encourages saving and investing for the future. That doesn't come naturally to everyone, some need structure and guidance to make it happen. I see this as another tool in the arsenal, much like Dave Ramsey, to encourage people in the right direction. There is way too much media attention on consumerism, it was a breath of fresh air to see that there is a "movement" in a different direction.

FIRE movement? (by RB [TN]) Posted on: May 12, 2022 1:10 PM

Same old song and dance,

with a different (title) spin on it.

FIRE movement? (by Oregon Woodsmoke [ID]) Posted on: May 12, 2022 1:20 PM

I hear the young talking about it. Most of what they spout qualifies as meaningless platitudes but they don't want to hear any about any real problems they are probably going to encounter.

I suspect that the Gurus are making a lot of money off of this, just like they used to make a lot of money "teaching" the lazy public how to become a millionaire through real estate.

The attention span of a lot of the population won't last longer than 25 words. They want the easy route. They want the dream without the work, and they don't want to put in the effort to learn how to do it.

Tenants are coming from somewhere and mostly if I give advice, I am wasting my breath, so I mostly don't bother any more.

FIRE movement? (by Taylor [TX]) Posted on: May 12, 2022 6:18 PM

I learned about it a very long time ago, and adopted it early. I've always had my FIRE number in the back of my head, it is what I used to think about when I was working on my rentals on the weekends from my day job. I bought rentals because I viewed them as housing an employee who was buying an asset for me and making me a little bit of money each month. I combined this was maxing 401ks and IRAs and working my day job. And it worked, surprisingly quickly.

Then I started hanging around more real estate folks and they made me feel poor - why have only ten houses when twenty is really the same, and then why not 50? so yeah. But FIRE is a thing, a good thing. Highly recommend.

FIRE movement? (by MikeA [TX]) Posted on: May 12, 2022 6:28 PM

Oregon, I hear you. It seems like most wanting to get into RE are trying to get rich quick. I'm not sure why they think RE is such an animal.

That said, I don't mind investing a little time in the next generation. I also don't have a problem calling them out if they have the wrong attitude, they usually listen to what I have to say and then cut the discussion short and go lick their wounds. Maybe they will appreciate it in a few years.

It is very refreshing though when you meet one that has his head screwed on straight, has a plan, and is wanting advice on making it better. I don't mind spending some extra time with them because I know it won't be time wasted.

FIRE movement? (by plenty [MO]) Posted on: May 12, 2022 8:31 PM

I'll dance around that fire! Ya mentor those young people. They may change the world!

FIRE movement? (by MikeA [TX]) Posted on: May 13, 2022 9:56 PM

Taylor, That is what I'm hoping with this young man. Right now his view is obscured by what he doesn't know. Once we cut down some of those trees the forest will become clearer and he will be able to see what is achievable with a little work.

FIRE movement? (by Nicole [PA]) Posted on: May 14, 2022 9:28 AM

I thought the post was going to be about flames moving through the duct work or along the roof line ... sigh.

I only read through Ray's explanation one time - I guess I'd need to read it several more to see if I truly understand it.

Work hard, save, invest wisely, don't be wasteful, toss in some good luck/right place at the right time. Aren't those the real keys? Mess up? Certainly, especially me, but get back on track and the forward movement, especially the work hard, gets you to a good place in life.

Kind of like people a few years ago started with a "side hustle". The term is SO wrong to me. A hustle doesn't sound honest. I digress. It's really what I have always called a part time job. People, forever, have had them but "side hustle" seemed like newly invented to some.

FIRE movement? (by MikeA [TX]) Posted on: May 14, 2022 9:54 AM

Nicole, Yes much of it is just a repackaging, using a Biblical reference, there is nothing new under the sun. However, if a new spin and packaging helps convert some folks from being a consumer living penny to penny into someone that has a disciplined approach with a long-term view towards their financial health, more power to it.

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