9-11-26 Can the FIRE Movement Really Work?

0:00And now for something completely different. Forget everything you've been told by others before. Get ready for the real deal. The full story, real talk about money, markets, life. Now, it's the real investment show presented by RIA Advisors. And welcome to Financial Fitness Podcast. I'm Rich Ross of CFP. Here with Jonathan. Jonathan McCarty. Good morning, Rich. Oh, we're here. We're here. Why are we here again? It's Friday. It's Friday. I want to talk a little bit about the fire movements. And some other accelerated savings. Cultures that are, or subcultures that are rising. I always find these, these different things that people do to save money.

1:00Fascinating. So we'll talk about that because overarching, and I'll say this again when we begin the segment, but I, anything that gets people to save more, I'm all for it. That's a win. It's a win. Yeah. Right. Even though we're going to talk about one of the calculators that's used, and it's questionable to me. But I don't know how that happened to save money. That happened to spur a movement when it's just an ordinary linear base calculator. Yeah. But we will, you know, talk about that. So it's the anniversary of 9-11. And you realize, and you'll know this having a child, man, time goes so fast. It's like, it's hard to believe. It's been 25 years. It's, you know, for me, it feels like yesterday, because I remember exactly where I was. And I'm sure a lot of people do remember where they were. Yeah. That date, although it seems like a lot of people probably forgot,

2:00or have forgotten, overall. But it's just one of the, you know, you think about the, the horrific manner of which this was. You know, I had so many friends in New York, and I remember the day it was so beautiful outside. It was really turning into like a fall day, you know. Like when you get the blue sky, the blueest, the blueest sky, you know, the seasons are changing. You're really relatively calm. You feel it in the air. You feel it in the air. And then all of a sudden, you know, you hear about this plane hitting the World Trade Center and go, oh my gosh. I then I started to think about a time when that did occur. I can't remember what it was, but it wasn't the World Trade Center, or was it? Was it a small plane or hit the Empire State Building? But there was an accident with an airplane with, I think it was Empire State Building in the 40s and the 50s or... B25, bomb. Was it something that hit? And it was foggy. Right. So it hit the Empire State Building in the fog. Right, in the fog. So I'm like, oh my gosh, you know, it's one of those kinds of things. Yeah, like military accidents, something like that. Until the second plane hit, right?

3:00Yeah. Then you went, wait a minute. Then you knew. Then you knew. But one of the things, and I post this every year, is about the falling man. It's that photograph taken by the Associated Press Photographer Richard Drew of that gentleman just head on off the building. Going for it. Right. He was on the upper floors of the North Tower. And it really didn't know whether he fell, you know, jump because of the fire in the smoke. I had a friend that was there. And people were just jumping to escape the fire. Like, well, I mean, I can't even imagine whatever decision you make. It's a bad one. Yeah. Do you go by fire and smoke or do you? I would. What do you do? I've been the falling man. Yeah. That, you know, burning is a really tough way to go. You don't go into shock if you burn it. You don't. Yeah. You don't. And I don't feel like that.

4:00You're watching. You should be lioness. Are you watching lioness? Oh my gosh. This season's amazing. But the the the the Iranian guy, the terrorists who kidnapped, sorry, if I blew up the one of this, but spoiler alert. Spoiler alert. He describes to Joe what burning does to you. Like your eyes popping your head. You'll still be alive. So to your point, I would probably have to leap. Yeah. I think I would do the same. I think because of that fact. It's a, you know, it's a instant. Instantaneous. Instantaneous. Right. Right. But what a terrible thing. So it's, um. It's disturbing. It's it's it's it is. Ghoulish. It is the gentleman Richard Drew who took it. It was just purely by he was just there. Yeah. Right. And always about who this person was. People believed it was this Jonathan Briley sound engineer who worked on windows in the world on a hundred and six floor. Some people said he was a.

5:03A waiter in the restaurant. And they were about probably what they were thinking probably about 200 to 250 people that dropped jumped from the upper levels of the sky. Skaper, right. So, um. This guy Richard Drew. He was on assignment for the press and he was photographing some eternity fashion show in Brian Park. And around fall, they do a lot of these. You do a lot of those at Brian Park. And, you know, he took the subway to Chamber Street. He near the world trainer site and he took the image at the corner of West and Vessie Street. From a low angle, he took like eight photographs and sequence. Um, after realizing you heard those crowns. I mean, he just like it's an instinctive as photographer just took the shot and just captured it. And he fell off the the gentleman fell from the south side of the North Tower West face. So, um, you know, that is such a seminal photograph.

6:03It just sums up terribly. His person falling head first from the North Tower. That how horrific it was. Um, I don't know. To me, I, I never forget that photograph. Yeah. Well, that one in the picture of the woman who had made her way to the opening on the World Trade Center. That's right. And that that was also a haunting image, you know, just the realization that that's, that's going to be it. That's just haunting. So terrible thing. So, you know, the ceremony every year. So we always feel terrible about what happened. Um, unfortunately, the based on where we are today in the culture, it seems that many people have forgotten or don't want to talk about it. Um, from what I hear. And again, I don't know for sure, but they don't really teach about it in school. Uh, in elementary school. And they don't really bring it up. Um, and, uh, yeah, I guess it's just the way the culture is, is, is going. So, but we always think about it.

7:04And where we were, gosh, how old were you? I was a freshman in high school. You were freshman. I was. So did you remember? No, yeah, vividly. Yeah. Did they like stop everything? Yeah, put it on TV. They did. Oh, yeah. Yeah. And everybody's trying to figure out what's going on. What's going on? Yeah. And never forget George Bush's face at that school. Yeah. I mean, if it sums up when he gets that whisper in his ear, in the middle of reading the children, right. Yeah. And you see his face. I mean, if you talk about an expression that's just summed everything up perfectly, that was absolutely it. Yeah. That was absolutely it. So that's the kind of thing, you know, we, we just remember, feel sorry for the families. They're still hurting. It's amazing to see the children now who are adults who come and talk about it, who have become firefighters and police officers inspired by that. Inspired by that.

8:04So it's really is something to see. So we remember that. Not the best part of our history. Markets or history. We always look back at cycles and markets. And you know, it's just one of those things. That photographer Richard Drew will always be known no matter what he did. It was just instinctively raising his camera lens and snapping eight shots and catching that horrific, that horrific photograph, that image overall. So, so that's it. That's what we got. So, so everybody who acknowledges that or I'm sure you remember where you were. Remember where he was during Pearl Harbor. So people remember things. And that's the way it is. That's the way it is. Although we'll see, we'll see how it goes with events and other things that happen today.

9:05So obviously we hear about all the things that Gen Z goes through the trials and tribulations of saving money, even millennials, it's so tough to do it. Lance wrote a few pieces on the financial independence retire early movement. And that's fire. And so, you know, he was always like, well, you know, what are you going to do retire at 30 and, you know, they're pros and cons to it. But, you know, anything to me that gets people to go ahead and strive for a number and they look at rigorous savings, prudent investing and frugal living to accelerate their savings. You know, the dream was you retire early and I think Lance's assignment was on it. So that's probably not going to happen because few US workers actually retire early. Right. But the actual action itself of doing those kinds of things, you know, where you were

10:08voting live to extreme savings to retire far earlier, earlier than traditional and budgets and retirement budgets would permit. I still think that's a great action because you are trying to hyper focus on being a super saver. The skills, even if you don't retire, the skills that that builds to me. The discipline. Yeah. It's positive. I don't see anything negative about that discipline at all. And we've talked about it in the past, you know, delayed gratification is a less and less common feature of younger generations. And so I think anything that is encouraging them to get started sooner in savings, that's only going to work out to their benefit. You know, if you think about it, someone who starts saving for retirement at 25 versus 35, assuming they're using the same contribution amount, the same, you know, return on their investments, you're going to have about double by the time you hit 65 if you started at 25 versus 35. I mean, twice as much in assets, just for that 10 year period of time. If you imagine, say, for example, you are one of those parents who established a Roth

11:10custodial for your child, I did that for my daughter, Hailey, when she was working at a supermarket, HB here in Texas, just bagging groceries. I mean, we started then. Usually beneficial. So you think about what you would do, right? Starting so early, or maybe, and that's where the Trump accounts for a little unusual, really reclaws from the perspective of, yes, we have 529s, we say for college, we have custodial accounts. Sometimes people use those to teach their kids about investing. But there's never really been a vehicle that focused on your children's retirement. Right. This is the Trump accounts are that other focus. So all these different vehicles and different things that we see like fire are to create rules of thumb on as much as I hate them and then follow those paths to good outcomes. So they have a lot of variations, I don't know if you heard of these. This is all like this one, the fat fire. Though they want to reduce their, that means they're saving as much as 70% of their income.

12:12Right. That's aggressive. Yeah. That's aggressive savings. Lean fire. That's a minimalist, extreme saber. Many lean fire adherents live on 25,000 to 40,000 per year. Then there's barista fire. I think in Marvel's going to probably make a movie. Yeah. Right. Action fire. Tony Stark. I have a client who went that route, barista fire. That's about working and saving and then stepping down to a less stressful job, right? Something that just, they quit the traditional nine to five, right? Yeah. Have something that will, you know, provide some level of income. Part time work. Potentially benefits. If you can find it, I've had a couple of clients who have done exactly that. Really? Yeah. They did the barista fire. The heavy, demanding, stressful job and then took a, you know, a regular job at one of my clients went to REI because they give great benefits, even if you're part time. Yeah. And so, you know, that's one of the biggest impediments to people that are wanting to retire early is, how do you bridge that gap between needing employer-sponsored health coverage and getting

13:13to the age of Medicare at 65? And so that's a big consideration for individuals who are looking to retire early and how are you going to cover those costs? It does take, even though they still use the 4% withdrawal rule and things that I don't like because we have seen how it's much different. Yeah. Blacks nuance with that rule. But if they actually get you to do certain things, save more money, I still don't have a problem with it overall. It's just that the numbers are so simple and people might say, well, you guys are planners, you probably want to complicate things so people use you. And that's not really the case. The case is that if you're using linear returns on your money and you think stocks compound, I need one bad year to set me back quite a bit. Stocks are not really compounding assets, even though you're told that because you need an element of stability in your investment and there is no stability.

14:14If you were getting treasuries at 7%, yeah, that's a reasonable assumption because that wouldn't get my money back. Guaranteed. Right. Last time you saw a treasury at 7%, I mean, back in the 80s. Oh, head not where. We're getting close. We're going to get there soon. I'll leave. I don't know. I'm thinking. And again, it's, I think, again, I think it's positive that you want to do these kinds of fire moves. They sound pretty sexy. But I think it takes a lot of discipline to live below your means. Now that was just something our grandparents did. Right. Okay. Yeah. I mean, once you finished the cool whip, that jar with that container was just starting a new life. That's a leftover bin. Yeah. Like, I used to go, Grandma, what's in this cool whip container? Grandma, well, can you at least write that what's on it? Do I have to open every one of these? Like there would be a stack of them in there. First of all, I said, we're eating too much cool whip. Yeah.

15:14That's the first thing we've got a problem in this house. The second thing is, is it mystery container? Yeah, pickled eggs. Yeah. You know, and then like, oh my gosh, once you put tomato sauce in one of those things, never coming out. Never coming out. No, it's never coming out. We can get oil off of wildlife, but we can't get the oil from pasta off of any container. You put it in. I don't know about this whole dish washing liquid duck stuff. I think this was some magic of the commercials there. I've yet to, I've yet to cover a duck and oil and try and wash our mouth. I have yet to try to clean my duck with dish washing liquid. Yeah. The fat fire one actually makes me laugh. It reminds me of a client that I have who constantly says, his wife is going to save him into the poor house and that she's one of those super savers and tries to save 50% of what they earn into their accounts so that they can be prepared for whatever happens and drives him up the wall because he, you know, the saving into the poor house, when that got me a chuckle.

16:15Saving into the poor house. We can't eat anymore beans. Yeah. Bologna sandwiches every day of the week. I have, I just have a hard time knocking anybody who's doing it or at least trying it. What I don't, what I just don't hope it's not like a diet where you go extreme and then you fail. And then you crash the other way. And you crash the other way. Yeah. Right. So that's the one thing that I think. So now there's something called coast fire. And that's when you have enough in your retirement accounts without any additional contributions. So then you just let it ride, right? You let your net worth pasture, whatever that milestone is. And then you need, guess just, then you just need to earn enough to cover your monthly cost of living. You don't have to save for retirement anymore anymore. So there's this calculator at walletburst.com. So I went ahead and I said, okay, let's take a look at this. Today I'm 25 years old and I want to retire at 67 years old.

17:17Well, let's make it 62 years old. And I'll spend and I want to see. So here's what it does. The calculator will create a fire number. It'll look at here's your expected growth rate. Here's where you are from an inflation rate. Then you can go ahead and here's going to be my monthly contribution. And then you're going to wait to see where the coast fire number intersects with the net worth with no contributions. So if I'm 25 years old and I'm looking to retire at 62, I want to spend 40,000 in retirement. And I have 20,000 invested with a monthly contribution of 5% at 6% growth, inflation at 3. My coast fire number, my current age will be 334,000. I'm not saving enough. And numbers never intersect. Right. So this still requires that you do quite a bit of like other fires, like almost like the fat fire.

18:22So if my monthly contribution is 3,000, say 3,000 a month. And I'm say I want to do. I'm 25, I want to retire at 62 and I do a monthly contribution that gets 6% rate of growth, 3% rate of inflation and a safe withdrawal rate of 4%. It intersects at age 34, which means I do all this up to age 34. And then you set. And then I'm set. And I don't have to save anymore for retirement. So there are a lot of people when I read there's from the Wall Street Journal article that are doing this. Yeah, I actually was pretty surprised. I played with that calculator as well. And I have some bad news for you, Rich. I am over my coast target number currently. That's right. So you don't have to. So I'm going to switch to part time, sir. So it's been a lot of fun. So let's go into that for a minute. Let's go into this for a minute.

19:23The guts of the calculator. That's like you coming into a financial plan. And I'm assuming historical rates of return of 10%, 11% where valuations are, right? Yeah. You're living large, man. Your plan is great. So what you're assuming from this calculator is you've saved enough. Correct. So you now can go home to your wife and tell her. Spend away. Yeah. And I'm not working anymore. Yeah. The timing is between you. I can find a job. I can go work part time. Yeah. I'm going to be the beaver at Bucky. Yeah. And I want to see how. Well, hard that suit in the summer time. But I want to see how quickly you get kicked out into the. My couch wouldn't even welcome me. Your couch would actually, the pillows are, so there's a lot of hope and happiness in these calculators, which I don't like. Optimism. Yeah. The linear calculations, the assuming, listen, if I'm getting growth rate of 6% a year, that means I have no bad years.

20:26Where am I going? What am I getting at 6% a year? Where am I finding this investment that has no downside? At Unicorn. Even with inflation at 3%, and then I think I'm going to withdraw 4%. Even though when the active part of retirement, I'm probably withdrawing 11, 12. So this calculator itself is a very simplistic calculator that I would not use to calculate what I need, because it doesn't take it to account real life. Well, and some of the good points made by the Wall Street Journal article, it's assuming that you can plan for the expected cost in retirement. And as we have pointed out to clients, there are so many different variables that come into cost analysis in retirements. And there are so many different components that inflate at different factors. If you're just using generalized terms, I mean, yeah, okay, these numbers match up, but that doesn't mean that they're accurate. And you could be setting yourself up for a world of hurt later by pulling the cord too early, basically. Like you just said, you said that to yourself, I could retire right now.

21:31Like in other words, I don't have to say for retirement. I can stop saving retirement right now. And whatever you want to buy or whatever you want to do, you're able to do. So this whole cost FI is when you have enough of contributions again to fund your full retirement without any more contributions. And then once you free it up, you go ahead and take that lower paying job. I could get my paradise job at Bucky's, because I don't longer need to save for retirement. Maybe I want to start a business. So as Wall Street Journal said, I wrote very eloquently, it is pleasing in its simplicity. It's like eating a donut for me. But it's not reality. But man, it is good. If you run this number, understand that a planner is never going to say, oh yeah, don't say that three thousand a month, that's crazy. The discipline to get there and what you need to do.

22:31If that's your guide, but it is a simplistic calculator that have been these calculators have been out there forever. That we try not to do. And so this cost FI, so here's the one I'm talking about here. In a recent survey, this is by TIA of a thousand Americans, 15% of respondents said they were actively pursuing coast FI. The same survey found 64% of Gen Z. They felt very or somewhat confident that they will be able to retire comfortably by a traditional age down from 77% last year. Pretty stark. So one of these wealth managers, guys, this inflation is a number one killer of retirement success. Yeah, it is. But I think the worst killer is you estimating that you're going to get five, six percent compounded

23:32over this over 130 year period. We've seen linear numbers in our, some of our planning software and we show clients that you know, hey, you're going to, if you do this, you're going to have like 15 million dollars. Isn't that nice? Right. And it's silly. Right. And it's time you're using linear numbers. And if you've got to use linear numbers, you better take them down quite a bit. Yeah. Overall. So they say young adults may calculate their cost FI number before they get married, have children by a house, but here's what it does. And this is, I think, the theme or the heart of the article. It has inspired some early career adults to give priority to retirement saving. That part of it. So this, you see the example of this Tina saying. She moves back home with her parents in Georgia after graduating from college, having a full time job. Six figure full time job. Right. Yeah. But she saves most of her take home pay and one of the cockles of my heart, whatever those

24:33are, maxed out her Roth IRA every year and they do. They sure do. You got to be born after you got to be in the 1900s. Ah, I wanted to get the cockles. So she put all her bonus money toward the efforts stock market rallies by age 27. And she had a million dollars in savings. Phenomenal saving. Just because she ran this simple calculator and it was the absolute exercise. And I always tell people this once you start saving like that, it becomes an addiction. Yeah. Yeah. Just like spending is an addiction. It's a good addiction, but it is an addiction where people go, I got to say more. I got to say more. This is what she did. She stayed home and she worked with her parents to say, here's what I'm going to do. And our parents probably said, this is great. I'm going to give my kid a head start. I don't even have to do it. Yeah. She's going to do it. And if the coast, a fine number got her to do it, then I'm all for it. But you've got to manage the expectations of reality of what it is.

25:34It's also creating that muscle memory. You know, it takes what it's three to six months to build a habit, right? That's right. That's what I'm saying. That's right. That's right. After you get on this track, even if you don't save as much as you initially were, because of circumstances in your life changing, right, getting married, right, having children buying a house, whatever that may be, you still are in the mental focus of trying to save as much as you can. And that's going to pay massive dividends later. So here, but here's what she did. She went ahead and this is the part that I don't like. She went ahead and she quit her job. Good paying job. And she went into, she's still single. So here's what she did. She saw that million dollars. And she said, seeing that number in my bank account was very, no, I don't know. Hopefully it's not just sitting in a bank account. She said it's very free. She's 28 years old. So but in 2022, she decides I'm going to leave my six figure job as a soft one engineer due to stress, take a pay cut at a new job. Then she quit that job to pursue online content creation. An influencer. Yes. Yes.

26:35Most popular career path of any Gen Z or younger. So that's the part, I think, where I'm cruising along. And all of a sudden, a missile comes out and blows me up, right? Because if it were me and I had done that, the last thing I probably would have done is leave my six figure job. Right. I had a very good friend of mine did exactly this. He worked at basically a startup. They focused on carbon capture technology. He got stock options as part of this company. They were bought out by Occidental. Whoa. He cashed in those stock options because of the buy out. And he ended up with a seven figure balance in his account. He has since quit his job at Oxygen. I don't think he couldn't handle the corporate environment, which I don't blame him. I don't blame him. I don't like it either. Yeah. But now he and his fiance are just traveling right now and just kind of figuring out what they want to do. But he had a very, very well paying role at Oxygen. I mean, very well paying role. And he gave it up to just do, I don't even know what. Right.

27:35So there is a freedom, maybe, to say to yourself, I can, maybe I can do something that I wouldn't have done, take a chance on a business that I wouldn't have done. Because I have this flexibility and the cushion. Right. Where there were probably more people who would have started a business if they had a cushion like that to do that. Like you said, you may not be, you're from may not be done with work forever, hopefully. I don't think so. Maybe they took a break to figure out what do we want to do? He's a crypto trader now. So I'm sure he'll be back in the workforce in no time. You know that whole crypto thing, man. I don't even hear that. I don't hear him on. They were. Where are all these? He quietly lately. Yeah. Where did they all go? It's a hibernating for the winter. No, okay. Yeah. In in August. Yeah. Yeah, the CK is right. Yeah, exactly. So people that are, you know, a little bit more well established older people have been in business long time.

28:35Say, listen, you know, if you're pursuing coast FFI, it doesn't mean that you should quit your job and stop contributing. Right. Right. And if I were going to do this, say, because listen, I've always been old. And we have more than I was young. I was old. And I would have done more of the stayed with the job. Or maybe found another job that I would have liked better, even if it was a little less pay, but I would have still kept saving. Yeah. And if I wanted to start a job, I probably would have done it part time to figure out, is it viable? You know, I still would have followed the track. So I don't have to tap that money. But it's nice to see where the discipline is there. But in some ways, you, you can't just cut the engine on the boat and coast. You still keep the engine running. But maybe not as much, right? You, you don't have to just totally veer off course or coast. You can continue to hit the gas with a pedal and move forward. But maybe at a different job where I can say, I want to do some part time, not just quit

29:37and then move on to something. Right off into the sunset. Right. I think really the benefit of this, you know, becoming more popular and more prevalent is getting younger individuals to start saving early. Yes. And that, even if you were one of those aggressive savers and you were able to hit that million dollars by 27, doesn't necessarily mean that you need to completely drastically change your life. It actually gives you much greater flexibility when you get into that stage of life where you are going to have those big life events, right? Marriage. Buying a home. You have more liquid funds available. You don't have to focus on contributing as much, but you still can contribute. That's right. But you also have the resources to build out those other aspects of your life that you may want to complete. That's right. It does build out the choice element of things because of all that hard work, but it doesn't mean you just stop. It's just like people when they do lose weight or they then you have to maintain. Right. Right. It's not like, oh, now I could eat five donuts. Or I've changed my lifestyle of working out. And now I've gotten the body I want and I'm going to stop. Well, even the- You can't do that.

30:38It's the same thing here. Yeah, even the so-zampic craze, right? How many people have you heard about that? Got on a zampic, lost a ton of weight. But great. I'm better and then stop taking it and put all that weight back on. Right. It's the same thing with any diet fat. It's if you don't have the change in discipline and lifestyle, it's just going to come right back. It's just going to come right back. But maybe, you know, listen, we always talk about maybe the robots are just going to take over. Although I will tell you, there was this humanoid robot attack. Have you seen this? No. KTLA, five news. What's talking about this? So in an electronic store in Russia, this thing goes kung fu fighting. What was the Chinese model? He's attacking a- He was just- I got to show you the video, but they're all trying to handle this thing because it's- It's throwing Chuck Norris round the house. It's doing all this stuff. It was so bizarre and he's just hitting the customer and he's doing that. He's- He's doing Rocky. Yeah. He's doing all kinds of things.

31:38He's got all kinds of things to fight off this customer. They trained him on Bruce Lee movies. I think they did. They probably- This robot. And they're handling it by the neck. You know, they're trying everything to knock this robot down, but he's going, whew, you know, like you could put the sound, you could put the song kung fu fighting to this video. Classic. And like this one guy, like he's got his hands on the shoulders of the robot, like come on, calm down, dude. Take, just walk away. Just walk away. It's not worth it. Sorry. I'm- Tell you, Rich, I'm investing in the first startup that has pocket EMPs. That's all I'm looking for. Really? Just a safe guard. Safe guard against the coming robot wars. I just want to pocket EMP and just press- Yeah. Off button. Thank you. Yeah. Moving on. We've been robot you just online. Yeah. And the front says, listen, I just got married and you go, this is a robot. And at the wedding, you press it. That would be great. And the robot falls apart. It falls apart.

32:39The skull is crazy. Yeah. How cool would that be? That would be absolutely cool. So back to the fire thing. We're not going to throw any robots on a fire today. But the issue becomes. There's a form. There's something that clicks in people's brains with these fire stuff. Yeah. The FUTE, it's marketable. It's not in the other calculation that you could run coming to a financial plan. But people feel what does all this lenders' calculations. If it takes the action, like I said, I don't like the follow-up. And maybe some people don't do it that way. It's just an example where, wow! This 20-something. And if my child said, hey, look dead, I've got this good job on a stay home. and all I'm gonna do is sock away my check. Are you okay with that? I'd be like absolutely fine with it. I'd be absolutely fine with it. Take out the trash. Yeah, just watch the dogs while I go away. But for the most part, there's nothing wrong with that.

33:41But this jumping from job, I wonder when we see in a few years, what happens to those people that at the end of the road, if they would have just stuck with it, you know, just if they was invested in the market, did we have a big correction? What if we get lower returns for longer? Is it enough? Well, that's the biggest risk. And that's the risk. Yeah, exactly. Are you putting a lot of faith in these projections? And you've got to have a lot of projections. On many of your projections. Right, a lot of confidence in your numbers here. And, you know, as some of you... I don't have any confidence in that. Yeah, I don't, especially anything that you're using as an estimate. I mean, look, those are guesses. Let's call them what they are. You're making your best guess as to what the expected costs are gonna be 30 years from now. Are you kidding? Look at what the costs were 30 years ago and compare them to now. And you see any of the projections from back in the 90s, as far as what the costs of things we're going to be. Now it is not even close. Right. Not even close. Housing prices. It is a great example. Huge disparities. And listen, you had a period of time where people could put money in bonds

34:42and clip a coupon. That's it. Never touched their principle. Not a total return approach. Where we're trimming gains. We're using stocks. We're creating buckets. Didn't have that, right? Because you were doing so well. And interest rates were now going on this historical long-term downtrend. So the prices of those bonds went up. And inflation was on a downtrend. So if you were locking in six, seven, eight percent on bonds, you wouldn't even need stocks. I mean, that's how Bill Gross became Bill Gross. That's right. I mean, that's how he became Bill Gross. That wasn't gross at all. Yeah. That was actually pretty good. Did not live up to his name, did he? No. Until he left. Right. Then all kinds of crazy stuff. Then, but the point I'm making is to your point. To base everything on a linear calculation based on a clever marketing gain. And listen, hey, if it works to get you to save more, I'm all for it, but don't change dramatically everything that you want to do. Yeah.

35:43My interest is going to be on the where are they now, series of all these fire investors. Yeah. When it's 30 years from now and they're completely out of money because they underestimated it. Well, they have a name for it already. It's called smoke. That's all it is. It's just everything's gone. Oh, that's good. You're smoke no fire. Hat no cattle. That's, you know, I don't know. I love the idea of sparking someone's excitement over saving. That part of it is really good. Now, if you they can just get a hold of a good planner to help them along the way to say, wait a minute. Wait, whoa, whoa, whoa. I understand a million dollars. That's a great accomplishment what you did. Absolutely amazing. Hands down. Hands down. But even if you want to find a new job, like take some time and find a new job, that's maybe doing the same thing, maybe in a smaller company where you can make a bigger impact, right? Or you go, gosh, you know, I really would like to try this business, but maybe I can start it at night.

36:44See how it goes. But I'm not giving up this, right? So I understand the flexibility part, but man, to base everything on a single calculation is something. But this fire movement, the book came out, I think, in the 90s. I think so. The whole book about fire. And to see that, it's, well, look that up. To see that that's where people are going, who created this book? Well, and I think a lot of the younger generations, you know, this is probably very appealing to them of having that financial independence, really, what they're looking for is this freedom, you know, to be able to do what they want with their time. And growing up, seeing their parents go through the 2000 and 2008 financial crises, you know, that absolutely had an impact on them and how they're looking at this. And you know, they're looking for also the prevalence of AI. I mean, just this week, the CEO of NVIDIA congratulated OpenAI in reaching AGI. Now, you know, there's a nebulous definition of what that really means, but their new astramodel

37:44is unbelievable. I mean, it solved one of the two of the Millennium mathematical theorems. Is that crazy? Two of them. That's wild. You know, it took them 88 hours to solve something that mathematicians haven't been able to solve for the last 200 years. So yeah, I mean, there's real threats to the workforce. And they're probably looking at this saying, okay, well, all we're hearing is that AI is going to take over our jobs. And unfortunately, the first ones to go are those entry-level jobs that a lot of these younger people are looking for. So, you know, there's a cultural shift going on as well. It's probably contributing to the rise of this movement. Yes. So the book, the foundational book for fire, financial independence retire early, was your money in your life, written by Vicky Robyn, Joe Dominguez, 1992. The core idea that money is life energy and laid out a nine-step plan to achieve financial freedom and retire early. So, you know, you understand why they're using 4% rules and all this other stuff, right? So... Modern portfolio theory. You know, early 90s. Right. That's all you, you know. And again, 4% rule for a period of time,

38:45we didn't have anything. It was great that we had this kind of seminal research, but man, the world moves. As we know, we talked about this last podcast. If you're an advisor, the last thing you're doing is stopping reading. All you're doing is reading and learning and reading new studies, following new mentors. That's what you're doing as things change overall. So if your children want to read this book, your adult children, that's great. They want to start, you know, front loading, savings, starting early. These are all great foundational rules. Definitely. It's just when they see those six or seven figures in their accounts and decide that, you know, they're gonna, they're not just gonna lighten up their foot on the gas, they're taking it off totally. That's the part. Yeah, I mean, it's not, you know, don't take it as the gospel, but it definitely has some good uses. It does. It's some good lessons. It's just like anything else, right? Except for that robot that tried to kick somebody's butt. I want to see this video. I got to see. Yeah, you love all those things, you know,

39:46I think robot getting chased, chased for a hog. I'm a big nerd about the coming humanoid robots. I'm a big nerd about everybody. Anybody who talks about this? You get out one in your house? Oh, absolutely. Really? Yeah. I think so. I mean, maybe not until my kids are a little older, just because I don't think they'll be available that soon, but yeah, I think that's, it's gonna be happening. Don't let these robots watch the news. Well, I mean, that's the one thing you don't want. The real concern really is just privacy issue, if you think about it, but I mean, there's already, I mean, you're walking around with a camera on a microphone in your pocket all the time. You know, you hear these stories about TVs that are logging conversations and selling it to advertisers. Oh, I'll talk to you about something. I don't even have the phone. It's in my hand and my pocket and write all every ad that comes up. Pops up. Yeah. How could it not be? Or maybe it's based on the bias that once you want a red car, all you see are red cars. Maybe. But I don't think so. I think there's some manipulation of these algorithms because my wife and I were watching Amazon the other day

40:47and they do very targeted commercials that you watch Amazon Prime. Well, one of the courses that came on was for male depends. And I'm like, hey, where's this coming from? I only hit 40. What is this? This is not seem targeted to me. What the way you're going. I asked my wife, did you buy something for your father? Like, what's happening here? How did this happen? No, I bought a few, honey. Well, I'm getting a lot for this beautiful cemetery. It's a beautiful plot. 100-year lease. 100-year lease. Oh, my. That looks like a really nice place. Yeah. It is frightening. So the key is any of these gimmicky things, hate to use that word, that gets these positive responses that maybe we don't with all our other tools is not a bad thing overall. So, but yeah, you could be in for a lot of disappointment down the road because maybe it isn't enough. Right. And like you said, and if I could get that compounding effect

41:47and that calculator is pretty powerful, I put in 6% growth. Oh, it's very attractive. That's why people fall for it. It's pretty awesome. Right. Yeah. Because, oh, wait a minute, I'll have this. Yeah. And then that's it. You hope you will. And then I'll have 6% going out another 20 years. Compound it. Year every year. Yeah. Sign me up for that. Yeah. So whatever that is, with no downside risk, I'm for it. Yeah. And I think the part that the people who use this calculator are missing is the variability. And you know, this is, yes. We take a plan for the worst hope for the best approach in planning, right? And that you want to make sure that you build some cushion in here. So if you're assuming that 7% return, I mean, that's a rose colored view. Big time. Now we'll tell you in this video, the customer did push the robot. Put a picture on it. Oh, he had a comment, huh? He called him a client. The guy had a comment. Yeah. He absolutely had a comment. Yeah. It's really terrible. Terrible what they did. So it's a crazy world, man. Listen, we just try to help you make sense of it. But this fire thing really caught me.

42:48And then I tried the calculator like you did. And you go, like you said. So imagine if you took that as gospel, like you were in a plan or and you went, hey, Rich, guess what? This podcast is over. And you do it. I put in my application. I put, yeah. Do you want to be the paint guy? I just want to be the paint guy. I'm really good at that. No stress. I'm going to work in the lawn department at Lowe's. Be great. I know my soils, whatever. I know my pots, my pans, whatever. All I'm saying is you can't make big life decisions on a simplistic calculator that does everything on a linear basis and makes everything look rosy. And listen, you can go for a sophisticated plan that you think is not going to do that. And it could, even though you'll have variability, it also depends where I start. So if I am using historical returns and I'm going to use those for your future returns,

43:49then I could look really rosy. But what about where valuations are today? I understand we've got the AI bump and the infrastructure bump. But sooner or later, valuations matter. And you get something called sequence of returns risk. And that doesn't mean that markets just fall off a cliff. And that's it. But they just give you lower returns over longer period of years. It's stagnation. And I think we are at great risk of that. Right. Well, not only lower returns. Through this boom. Higher inflation as well. I mean, that's getting it from both sides. If you have lower returns and higher inflations, you're getting your knees cut off from under to you. Right. And there is some part of retirement, but ladder stage health issues come up. Right. Like you're already going through this. Yeah. Right. That depends. Yeah. I mean, they're stucking up. Apparently, Bezos knows more than I do. I need to get to the doctor. Are you having a hard time? I mean, just a McCarty holding in your, you know, every commercial is like, baby to this baby that, you know, and then you get,

44:50yeah, which is reasonable because my wife is pregnant again. I know I don't think I've announced it on the show officially, but yes, my baby McCarty number two is on the way. So we're very excited. Do we need a boy or girl? It's a girl. We did the blood testing. Yeah. I know. My life is over. I know. I started my gun collection for any of you guys, any of you newborn baby boys who were thinking about it. But yeah. And she's of course due on Valentine's Day. Oh, yeah. On Valentine's Day. Somebody's going to be, I know. My life's over. I've seen my brothers, my uncles, just turned into big, puffy marshmallows. I have to be a, I'll be canned with you. I, when my wife had gotten pregnant. I was saying, please don't be a boy. I have no idea what to do with a boy. My dad was like a hairstylist in New York City and, well, like, he didn't play catch with me. Like, we, we do not, we want to go to the bar and hang out. I'll do that with you. And he did do that with me at seven or eight years old. Yeah. So, but, um, I, you look, we bring this little kid

45:54like Del Monaco's and send me the one, oh, he's so cute. He's so cute. He just used me to get chicks. Dad, that's what you do. Um, which is fine. I got free hamburgers and stuff. That was good. I sat there and ate like a pig. That's why it was huge. Um, so it's, it's really important to look at things in a practical manner. But this is great news. Thank you. But when you, when I was so happy, when I found out I was having a girl, I don't know, it's just, I mean, I would have loved a boy. But, you know, I, I just, I don't hunt. I don't do all those kinds of things. You know, growing up in New York City, what, what were you going to hunt? I mean, you were a hunted in New York. In New York, you were the hunted. The rats hunt back. Oh, my grandparents say pigeon all the time. We had pit, that's, that was, that was a delicacy in the Italian neighborhoods. You would add pigeon coupes on the roof. You know, so you'd have, you know, free range. And fresh eggs. And fresh eggs. So I'm like, oh my goodness. In New York, you just eat anything.

46:55It's just the way it is. But, um, think about what you just said. You have a huge life event. Right. Now you run this clear F, this calculator and go, I don't care. Now I can direct more funds to building out our family and supporting them. No, no, I mean, like you can go ahead and quit. And then you can. Oh, yeah. No, no, no. I'm having a girl rich. That means I'll be working probably until I'm 70. So yeah, my son, he's going to get the bare minimum. He's going to sleep on a cot. I mean, I'm going to make him tough. I thought about naming him Sue. Oh, that's, yeah, but today it's okay. Honestly, I didn't want to encourage anything later in life. So I have to not go. No, I mean, that might cause a problem. Yeah. I mean, today it's funny. Johnny Cash couldn't record that song today. Not a chance because it's not going to make the kid tougher. It's going to be like, oh, that's great. You're so forward. You're thinking, yeah, you're so forward thinking and good for you. Poor Johnny Cash. I'm just going to sing that song again. So it's, you have those kinds of life events and you go, I can't do this fire thing.

47:56Yeah. Like I can't do that second part of walking away. If I stay single and I just have cats, maybe. Yeah. And there are a lot of women out there and a lot of people in general that will probably just have cats. So, and a robot. Well, even the woman in the example from the Wall Street Journal article, she was single. That's right. And she didn't see, you know, she wasn't really dating. It seemed like by herself. And was forecasting being single and not having children. So, yeah, I mean, those are the types of variables that make it easier to kind of forecast these things. But if you, you know, life comes at you unexpectedly. That's right. You know, and it was. 202 was not what I had in mind when my wife and I started, you know, having, having the conversation around starting a family. And now we're going to be in the, in the 202 camp. So I'm slightly terrified. More coming after that. I hope so. But I don't know. Are you on a big family? I want a big, I'm from a big family. Other such. And you like, okay. I love having a big family. That's cool. You know, there's always someone to play with growing up. Yeah.

48:56So, I mean, that was for me. Or, or kick somebody's butt. Oh, I was a little brother. So, I mean, I was the one being kicked most of the time. Yeah. Yeah, it was good. So now you have a third one and it's a little boy and that poor kid is going to be tortured by two. By two older siblings. Right. Yes. But we'll, we'll see. So, that's what to have another child. But ultimately, we just want to have happy and healthy children. That's right. That's right. But again, anything that encourages your kids to spend more. I'm saying, well, say more. I'm thinking about the kids you're got kids. Yeah. I'll be spending more. Yeah. But you will be spending more. The pink tax is the thing with girls. I mean, we're looking at right now building out a nursing. Like why is this so much more expensive than something like this? I still will go through a store and go, oh my gosh, look at that Halloween outfit. With that look great on it. On my kid when she was little. Like you want to dress her up. You so want to dress her up. It's my wife's already started the collection. Oh, yeah, yeah, I've been warned Yeah, me and the Amazon delivery guy we're back on your friends Carl how are you man? Yeah, it's a little warm out here some water have a good one No, you know what he said to you the other day goes no fire book for you. He delivered nope

50:00You know he gets got book. I would like that book to know that book is not for you anymore He actually thanked me for helping with his child's college tuition. I think that's right So that's all we have again rules of thumb are fine if they create an action but to be The Bible of your ongoing life is not going to work. So listen, we're gonna have events coming up very soon Jonathan and I will do we want you doing one then you and John yep, you'll we have some things coming up You know you get through this August low and then you pick it up again, but other than that We're glad you're here have a good week to see you next week You

51:09You