Will FIRE turn into “Fake Independence Rapidly Evaporating?” Relax! We’re going to be fine, despite the recent stock market volatility!

Happy New Year! Geez, are you all glad that 2018 is over? What a rough fourth quarter! It started quite harmlessly with Suze Orman poking fun at the FIRE movement. Not a big deal, we hit back and even had some fun with it. But the quarter ended with Mr. Market taking our stock portfolio to the woodshed. The S&P500 Total Return Index (dividends reinvested) was down 19.36% at some point (closing value Oct 3 to closing on Dec 24, total return). Not only was the fourth quarter brutal on your stock portfolio, but the FIRE movement has also become the target of continued ridicule. It looks like FIRE critics have come up with some cool and creative new acronyms:

  • FIRE = Foolish Idealist Returns to Employer (MarketWatch)
  • DIRE = Delay Inherit Retire Expire (Financial Samurai)
  • And even I made up one, just for fun, see the title. Just to get everyone’s attention!

But how serious are the gloom and doom predictions? I posted two months ago why I’m not worried yet but that was before the precipitous drop in stocks. Has anything changed now? Readers have asked me that and I have asked myself what the recent equity plunge will do to the FIRE movement. So, that’s what I will do in today’s post. First, my take on the wild equity market moves and then why I think that this is obviously not the end of the FIRE movement.

Come on, the stock market wasn’t that bad!

Let’s look at the big picture. 2018 was a down year for the stock market as the S&P 500 lost about 4%, with dividends reinvested. Big deal, if you get your pants in a knot over that you probably shouldn’t invest in stocks in the first place. Keep in mind that 2018 marks the first annual loss in 10 years (!), see the table below. Nine years in a row, we saw gains between just above zero percent all the way to 30+%. And guess what? That run had to come to an end. It was about as predictable as anything can be!

cy spx data
Calendar Year S&P 500 stats: Growth rates are 12/31 vs. 12/31 of previous years. Valuation Measures as of  12/31. Drawdown stats are based on daily closing values i.e., not intra-day highs!

But I grant you that: What’s more painful than the annual loss is the drawdown, i.e., the sharp drop between October 3 and December 24. But is that so unusual? The other sharp drawdowns comparable to the one in 2018, let’s say anything worse than 15%, occurred in 1990, 1998, 2000, 2001, 2002, 2003, 2008, 2009, 2010, 2011. Eleven occurrences in 31 calendar years. So, this was a “normal” loss you’d expect every three years, even outside a recession year.

Also, notice that when calculating the annual drawdowns from the previous peak, I reset that number every year on January 1. This underestimates the true drawdowns if the bear market stretches over multiple years (2001-2003, 2007-2009). Now the 2018 drawdown looks a bit more benign when compared to 2001-2003 (47% below all-time-high in 2002) and 2008-2009 (55% below all-time-high in 2009). To reach the 55.25% drop peak to trough as in 2007-2009 we’d still have another ~48% to go from the December 31 close. Oh my, let’s hope we won’t go there!

SPX CY Returns vs Drawdowns.png

But there’s good news: Equity valuations look pretty attractive now!

Just for fun, because I have all the data at my fingertips, I included some valuation stats in the table as well:

  • Quite amazingly, corporate earnings (4-quarters trailing) grew by a whopping 27% (!!!) in 2018 (based on Q4 estimate of just under $140 from S&P Dow Jones, as of 1/4/2019) over the year, compared to the average growth rate of just under 7% p.a. during that time. This is mostly due to the corporate tax cut that started on January 1, 2018. It’s quite rare for earnings to grow at a double-digit rate and the index to lose in the year. I’d argue that with earnings growth so strong and at least solid going forward there’s a good chance that drawdown in Q4 is only temporary.
  • The PE ratio fell substantially because of this double whammy: P=numerator dropped and E=denominator increased. We’re now significantly below 20. In fact, today’s PE Ratio is now below both the median and mean for the 1988-2018 era. For full disclosure, we’re still above the all-time mean and median, though!
  • Not surprisingly, the Shiller CAPE ratio fell to about 27 again from about 33 at its peak. Because the denominator is the average of 10 full years worth of earnings the drop wasn’t quite as dramatic as the simple PE ratio, so 27 still looks quite high in absolute terms. But keep in mind that some of the really low earnings numbers from 2009 will be rolled out, so the Shiller CAPE is bound to drop some more!
  • A few other valuation measures: I always like to look at the earnings yield (simply the inverse of the PE ratio), and the earnings yield relative to the longer-term (10-year) Treasury bond yield and the short-term (3-month) T-bill rate. All three valuation measures look quite attractive again, especially the yield spreads are among the highest in the entire 30+ years. Anybody who feels the itch to throw in the towel and sell stocks should look at those yield spreads. What are you going to buy with the proceeds? Bonds at less than 3% yield?

So, what do I make out of this? It’s clearly not the end of the world when the stock market goes down occasionally. If the economy doesn’t completely tank (and the indicators I follow still look all right) my early retirement should be just OK. I pointed that out again in November and that assessment hasn’t changed yet.

So, here in the ERN household, we should be OK despite the equity volatility. We actually made decent money with our options trading strategy in the calendar year 2018 and even in the tumultuous fourth quarter. How about the FIRE community in general? That brings me to the next point!

Why the FIRE community will be just fine

Most members in the FIRE community will likely be just fine because they fall into (at least) one of the following categories:

  • You’re not even retired yet! Most people in the FIRE community fall into that category. I did an informal survey in the ChooseFI Facebook Group and the overwhelming majority of FIRE fans there are more than 5 years away from retirement. My personal advice to them: If you’re still saving for retirement then a drop in the stock market is a lot less scary. Don’t listen to the naysayers! Keep contributing regularly to your equity portfolio so you can even make Dollar Cost Averaging (essentially Sequence Risk reversed) work in your favor. You’re picking up shares at discounted prices and by the time this current mini-bear-market blows over, you’ll be ready for a fun early retirement. And who knows, maybe at that time a 4% withdrawal rate is sustainable if equity valuations normalize again!
An informal (non-representative, non-scientific) survey I performed in the ChooseFI Facebook Group. Most FIRE enthusiasts are far from actually retiring.
  • Many FIRE bloggers retired many years before the equity market peak (Root of GoodGo Curry Cracker, etc.) and I’m sure they were smart enough not to ratchet up their withdrawals in response to their growing portfolio. Their withdrawals, even if adjusted for inflation, would have shrunk as a percentage of their portfolio when the market went from one all-time-high to another. Thus, even with the recent drop, they may just withdraw well below 4%. If you’re retired now and you withdraw less than 4% of your portfolio now, then relax, you will be just fine!!!
  • Most of my blogging buddies who indeed retired at or close to the equity market peak in 2018 have very conservative withdrawal rates: yours truly, Fritz at The Retirement Manifesto, Tanja at Our Next Life, just to name a few. If your withdrawal rate is low enough that your portfolio would have made it even through the Great Depression (e.g., closer to 3% rather than the often quoted 4%) then there’s a pretty good chance that you’ll make it through this garden-variety mini-bear-market. I doubt anyone I know who started with their withdrawal rates at around 3% would have reached an effective WR of 4% by now. But even 4% looks pretty safe now considering that we have pretty attractive, close to the median, equity valuations again!
  • Many established FIRE bloggers bring in sizable income from their blog and other businesses. I don’t mean to shame anyone (I’m not the retirement police) but just to point out the obvious. As much as folks like the MarketWatch writer Shawn Langlois hope the FIRE community will quietly go away (or blow up with a bang and a tearful apology video???), let’s just all agree that this will be is very unlikely.
  • If you don’t invest heavily in equities you don’t feel the pinch from the recent pullback. Some FIRE bloggers specialize in real estate (Chad Carson, Paula Pant and others) and they will likely not feel the pinch of lower equity prices. Their blogs may even gain more traction when folks disenchanted with the equity volatility will start looking for alternatives. A caveat, of course, is that if this market pullback were to become a full-blown recession (which I doubt) then even real estate investors will feel the pinch: property prices will drop and even the cash flow may come under pressure when more renters become delinquent.
  • Many FIRE bloggers have working spouses and don’t have to rely (much) on withdrawals from their portfolio. That reduces or even completely eliminates Sequence Risk.

But not everyone will be OK

I don’t want to be accused of the false dilemma fallacy. Just because calls for the “obliteration” of the FIRE community (Shawn Langlois’ words, not mine) are premature, it doesn’t mean that every single FIRE enthusiasts will have a pleasant early retirement experience. You will likely have a very rough ride if one or more of these apply to you:

  • You retired in your early 30s at the peak of the 2018 market and applied a 4% withdrawal rate. Maybe you were impatient and thought that 22x or even 20x annual expenses is close enough. Well, if you keep that withdrawal amount you’re now withdrawing closer to 5% maybe even 6%. A quick look at my Google SWR sheet reveals that a 5% SWR has a 30+% chance of running out of money over a long horizon (60 years). With a 6% rate, we’re looking at 50+%. Good luck with that!
  • You previously retired with a 4% SWR but you made the mistake of ratcheting up your withdrawals. Of course, you could simply “ratchet back” your consumption if the bull market comes to an end. Most people in the FIRE community should be able to do so. But keep in mind that in the past, one would have tightened the belt for years, even decades, as I pointed out in my “flexibility posts” in the SWR Series (see Part 24 and Part 25).
  • You fell for some of the other not so prudent advice out there on the internet: simply “diversify” with small-cap value stocks and you increase your SWR by another 0.5 percentage points? The only problem: the value/small-cap outperformance hasn’t worked for quite a while. It certainly did between 1926 and the mid-2000s. But just when everyone heard about the small-cap and value “premium” is when it was apparently arbitraged away. More recently, small-caps and small-cap value stocks mostly underperformed the broader index funds: VTSAX for the total stock market VFIAX for the S&P 500 (large cap, which I use as the benchmark for my Safe Withdrawal Rate Series). Large-cap value (VVIAX) did slightly better during Q4, but small-caps (VSMAX) and small-cap value have had a pretty bad run, both over the longer horizons and especially during 2018 and Q4. How about diversification with international stocks? They took a bath in 2018 as well, even more so than the small-cap value fund, though the drawdown in Q4 wasn’t quite as bad. So, the lesson here is that there is no magical trick to squeeze out more out of your safe withdrawal rate by just picking the “right” equity style. If you listen to some of the nonsense out there in the personal finance world and think that miraculously affords you a higher SWR, don’t be surprised if doesn’t work as planned!
equity index performance 2018
Equity Index Fund Performance up to 12/31/2018. 60 and 36 months figures are annualized. Source: Vanguard, PortfolioVisualizer.com


Over the last few years, the FIRE movement had its spot in the news. Even the ERN family was featured on CNBC.com in October. But with the increased visibility comes more scrutiny and we should welcome that scrutiny as an opportunity to kick the tires and test our assumptions. I don’t see a serious threat to my personal retirement (yet) and the calls for the end of the FIRE movement are likely premature as well. Most early retirees who were prudent with their safe withdrawal rate will likely do well. And if you’re not yet retired, keep saving and keep Dollar-Cost-Averaging through this market drop and you’ll do just fine!

We hope you enjoyed today’s post! Please post your comments and suggestions below!

59 thoughts on “Will FIRE turn into “Fake Independence Rapidly Evaporating?” Relax! We’re going to be fine, despite the recent stock market volatility!

  1. This is a nice perspective on the recent drawdown. The stock market drop has little to do with the overall economy. The earnings are doing well and the valuations have come more in line with that.

    The media is really terrible to consume as it conflates a stock index drop (and one that represents the overall market poorly, the Dow) with the economy. Best to ignore and know what you own.

    Lastly, I am not concerned with the FIRE movement. That is like saying I hope exercise doesn’t go out to style because the CrossFit movement dies out. FIRE is an extreme. It is a good gateway drug into savings and investing. Most people will not achieve FIRE but will be damn glad they found it when they are 60. Just like someone who starts CrossFit and learns what exercise and mobility are may not keep up CrossFit into 50s and 60s but finds a routine that is intense and sustainable for them over the long term. And they’d be glad they found it as a gateway drug to exercise.

    Hopefully, the market drop didn’t shake out people just getting enthused about saving and investing. Blog posts with this type of perspective and analysis will hopefully help folks to hold on for the long term. Well done and thanks!

    1. You are dead on. I am focusing on the FI part of FIRE. To me, whether or not I retire early, take a lower paying job with lower stress, or work at my current level until age 75 is immaterial. I will have more options tomorrow, and be better able to deal with financial challenges, the more I adhere to the tenets of FIRE today. To be honest, it’s really just the echos of the things my grandparents, whom were born before the Great Depression, would often say.

      For us, we are going for a late Fat FIRE hoping to retire in our late 50s or early 60s depending on how well the market does it’s job. In the meantime it’s live well, and save more.

      1. Very well said! I like that approach! I certainly enjoyed my job between reaching FI (in about 2016) and actual RE (in 2018) because the FI part makes you much more relaxed and confident and reduces stress at work. But there comes a point when you feel the itch to retire, so watch out! 🙂

  2. I feel like the fire movement naysayers don’t get how carefully we plan things out. Im sure everyone who is already retired has a “barista fire” back up plan in case things get bad for them. We also plan our retirements knowing full well that the market will have ups and downs. I don’t think the movement is going anywhere

    1. Very true! Even though I’d prefer to not work another day, it’s a nice option to do some side gigs. I’d just make sure I don’t have to do those after age 60 and certainly not after 70. 🙂

  3. Good data….. good analysis. I must admit, I was “baby” freaking out as the market was tanking. Then I realized this was the perfect moment to rebalance and buy additional stock. It might not turn out perfect , but we have a strategy and we’re following through. It’s certainly better than climbing in a hole, screaming at the ticker tape and blaming the govt. History tells us to simply, earn, save, invest, repeat.

    1. Haha, it got a lot of people nervous. I was nervous. The economy and earnings looked good but you get that feeling that there might be something I could have missed. Fortunately, the major indexes jumped bacl again. 🙂

  4. Yes, we checked several of the “will be okay” boxes. Retired in 2013 and watched our portfolio go up 50%+. Our initial withdrawal rate was right at 3% therefore very conservative. And I have a blog that covers most or all of our spending!!

    However we did up the withdrawals shortly after retiring. From $32k to $40k/yr. I realized that a sub-3% withdrawal rate isn’t necessary for anything more than peace of mind. Even today we aren’t quite spending 3% but I’m in no hurry to ratchet up the withdrawals just for the sake of doing so. Maybe once the kids are older.

    1. Wow! I didn’t know that you walked up your withdrawals (more than simple CPI adjustments)! Well, you did that at the right time and – more importantly – you STOPPED ratcheting up at the right time, too! That gives you all the wiggle room now. Again, you’re the perfect example of a FIRE retiree who’ll do just fine no matter what! 🙂

      1. We walked up the withdrawals at a very early stage in the game. And the above-CPI increases were mostly academic as our spending in “normal” (non-lumpy year where we don’t buy big assets like a major renovation or new car) years is roughly equal to our initial withdrawal rate. $32,000 was the 2013 budget figure and we’ve come in right at $32,000 or just below the past couple of years. And CPI would probably add 8-10% since 2013!

        So I think you’re right that we’ll do fine however the markets shake and jiggle. Lots of spending flexibility and a very low baseline budget that represents a sub-3% withdrawal rate even on our initial $1.2M portfolio.

  5. Thanks BigERN, great perspective, thank you! Always look forward to your posts. Leaving the workforce at the end of April (53yo, wife is 55 and left work 2yrs ago) after years of planning, saving, investing, and LOTS of math and education on withdrawal rates. Your ongoing series has been exceptional and massively appreciated. Concerned about the timing for the next downturn of course, but trying to keep a big picture view, absorbing perspectives like this one. Am nervous, and excited, and moving forward. This summer and fall are already fully scheduled with stuff so…I really can’t stay at work! 🙂

    1. Thanks for the compliment! 🙂
      So, you already scheduled your travel and post-retirement activities? That’s what I did, too, and it’s the best cure for one-more-year sybdrome! 🙂
      But I can see when people get nervous about volatility now. If you use a CAPE-based withdrawal rate (see SWR Series Part 18) you’ll see even with the recent drop in the portfolio the withdrawal AMOUNT hasn’t changed all that much. Best of luck!!!

  6. I’m happy there was a nice 8% post-Christmas rebound. Otherwise, the DIRE Movement would be gaining some huge momentum right now! At the end of the day, a -6.4% return for the S&P 500 is not that bad at all.

    Just know that valuations can be deceiving since earnings estimates are likely going to be cut, sometimes more than the downward price of the security.

    I hope FIRE folks follow this basic tenet: have enough passive income to cover their normal living expenses. If you’ve got to run around and do consulting, earn blog income, etc… you won’t feel truly financially free in FIRE.


    1. Thanks, Sam!
      Noted! Earnings estimates are notoriously wrong (late!) around turning points. Hence my focus on some of the other macro leading indicators, which still look quite strong!
      And also agree with your basic tenet. You’re not really independent if still dependent on side hustle income! Very true!
      Thanks for stopping by! 🙂

  7. As always, a well written blog. However, given wage inflation due to the tight labor markets, there is a reasonable chance that corporate earnings could come in lower than expected in 2019. This coupled with reduced liquidity due to QT, could potentially trigger a further 10-20% drawdown! The well known “Buffet ratio” of market cap to GDP is still flashing red!
    Recent retirees with significant equity exposure could thus be “playing with FIRE” under this scenario! ERN is smart enough to make money with options even during high volatility periods, but most of us readers are not!

    1. Thanks!
      I hear ya. But QT has been in effect for a while now and hasn’t dinged GDP growth yet. Time will tell and of course we may have a recession and bad bear market. But I doubt it would come from QT.
      Wage growth will SLOW the earnings growth but it’s hard to create NEGATIVE earnings growth just with that.
      So, again, time will tell but I’m still confident we’ll escape an economic slowdown in 2019. If I change that forecast I’ll write a blog post and tell everybody! 🙂

  8. Hi Ern, regarding your comments about the arbitraging away of the small cap value effect, what do you think of aaii.com’s model shadow stock portfolio? Essentially a micro cap value portfolio with an impressive 25 year track record, yet I notice a decline In outperformance over recent years. Now they are recommending adding the factor of “momentum” to the size and value factor mix. Also they recommend using RSP (S&P equal weight) instead of IVV (market cap weight) essentially a size and value factor approach I think. Any thoughts?

    1. Good point! If you want to outperform the index with a (mostly) static and replicable and rules-based portfolio based on observable characteristics, there’s always the risk that any outperformance will be arbitraged away. AAII will have to innovate to stay ahead of the curve and add more styles.
      Generally, I like the following styles that apparently haven’t been completely arbitraged away:
      1: low-beta bias
      2: equal-weighting
      3: Free Cash Flow bias

      Also see: https://earlyretirementnow.com/2018/06/13/good-and-bad-reasons-to-invest-in-individual-stocks/


  9. “Fake Independence, Rapidly Evaporating”, so funny but thought-provoking. Having retired in 2010, I find myself in the category of being way before this peak. But my sense is that many have really not experienced a bigger downturn. This one really is mild, but I see some people out there watching things on a daily basis rather than looking at the really big picture. For instance, I saw a tweet from a FIRE enthusiast last night with excitement that the SP500 futures were looking positive for today. I just have to say, so what? Investing is for the long-term and people have to always keep that in mind.

    What I love about this post is the optimism and long-term perspective that you have. We are experiencing market conditions that are truly new and unable to be predicted. That’s why your series on Safe Withdrawal is truly a gift to the FIRE community. Hopefully people will find the series and study it carefully before pulling the trigger.

    1. Thanks Susan!
      Ha, I check the S&P futures, too but just because it’s fun to watch. No need to stress out over futures moves, especially during the off-hours. 🙂
      Thanks for stopping by!

  10. Glad you included the note on why “But not everyone will be OK.” There are people in any walk of life that get impatient / are impulsive / have totally unfair bad stuff happen beyond what is reasonable to expect, but just because something doesn’t work out for those few doesn’t mean it’s a bad deal overall.

  11. Awesome post, and as you know much of our story and details already, we loved this follow up perspective. We are at 2.7%SWR. Our portfolio allocation is overall 50% US equities, 14% international, 26% bonds, 5% REIT, 5% cash and has been since FIRE on June 1, 2018.

  12. Loved your FIRE acronym! It made me laugh.
    I’m still a couple of years away from retirement and could just keep working if the market tanked. Like you, I’d rather not have to rely on a side-hustle in my 60’s and 70’s.

  13. Big Ern,

    Agreed, most of the FIRE community will be fine. We don’t try to time the market like the folks who read that Marketwatch column. Almost every FIRE enthusiast I’ve met is Frugal, Inteligent, Resouseful, and Entrepreneurial. We’ve got a leg up from the get go. I’ve always liked a 50/50 split between index funds and real estate. When one is down I just spend time thinking about the other.

    1. Thanks, Brad! I like the Real Estate route. I’ve “only” 10% in that asset class so far (not counting our primary residence) but would like to grow that share for exactly the reason you mention!
      Good luck!

  14. Great analysis, as always. But, don’t you think you might be underestimating the risk of a frothy stock market? We could easily go down 30-40% and that wouldn’t make it even a long-term bottom. I think such a decline would be challenging for the FIRE community.

    But, we can’t plan our lives or savings plan around that possibility. Keep on trucking — onward and upward!

    – DeForest

    1. Yes, I could underestimate the risk of another drop. But again, that drop would only happen if fundamentals go bad and we have another bad recession. Right now, I don’t see that on the horizon. But I’ll speak up when I change my mind! 🙂

  15. I agree that most of the retired members of the FIRE community will be ok, because being part of the community they will be aware of the risk of market downturns and the effect on the sequence of returns, and will have a plan already in place to guide them. I’m very pleased to have found ERN, as it was instrumental in me forming my plan.

  16. Excellent insights ERN. The future will definitely not look exactly like the past but it will closely resemble it at different market phases across different points in history. Analysis like this, backed with solid mathematical evidence, is invaluable to the new FIRE movement. Thanks a ton for the contribution!!

  17. Great detail! The majority of people I talk to that are down on FI/RE are people who don’t care for or don’t understand the math behind it in conjunction with notion of buying in a down market that really drive the confidence of FI/RE people. When Mid-December 2018 hit I was telling my co-workers to move funds around to buy whatever stock(s) that are at a discount.

  18. Nothing wrong with FIRE. Well, with FI in any case. Then you can RE if you want to, or you can do something else. I aimed for 55-60, but knew kids could knock that back 5 years. Our oldest has special needs, and my pension plan was ‘altered’ 6 times… so we’re on track to retire at about age 62, depending on how all the variables play out.

    Given all that, I got my youngest contributing to a Roth by matching his contributions from his first summer job. He’ll be approaching 5 digits when he graduates from high school. Over and over he hears my advice, be able to retire by 35-40 or so if it’s at all possible. That’s super aggressive, but he has the personality for it, analytical and disciplined.

    Anyways, markets appear reasonably strong. There are undercurrents of weakness which could hit fairly soon or not at all, so we stay aggressively invested.

    1. Thanks for sharing. Your story shows that there’s a lot of “personal” in personal finance.
      I’m very impressed you set up your kid for success like that. I hope I can do the same. Giving kids the right direction at that age will have a wonderful long-term impact!

  19. The FIRE movement’s premise is – “The stock market always goes up over time.” FIRE folks are an optimistic bunch and always want to believe that tomorrow will be better than today. This is human nature.

    1929, 1987 and 2008 has no relevance to what is happening today. Never before has the US had so much debt at all levels. Never before have global supply chains been so disrupted. Never before have 50 million people lost their jobs in US at one time. Many, many more job losses are soon to come, especially in the energy sector where there are still good-paying jobs that form the backbone of our economy. Close to 50% of all workers are employed by small businesses. Even if the quarantine were lifted today, many small businesses won’t be able to open their doors and no one would come in anyway. People without jobs aren’t spending money, just like you. People won’t be getting on planes, going to movie theatres, malls and restaurants any time soon. They are just as scared, if not more so, than you, because they have far less! Even if the Fed monetizes everything everywhere they can’t restore consumer confidence. We are truly in uncharted territory – “this time it’s different!”

    FIRE fanatics need to ask themselves – “What is my investment horizon?” 10, 20, 30 years? Because recovery, if it happens, will be measured in decades. FIRE folks also need to look at corporate earnings. Companies that don’t earn any money will be toast, and very soon. Shorting the stock market is the best way to make any money right now, if your broker lets you.

    1. I hear ya. But the economy will be up and running faster than after 1929.
      Also: “The stock market always goes up over time.” is probably not the premise of the FIRE community. Certainly not on my blog.

  20. ERN, I sincerely hope I’m wrong and let me be the first person to cheer if I am wrong. However, the vast majority of people are greatly underestimating the damage done and how difficult it is going to be on businesses and consumers.

    95% of FIRE adherents can never retire early on their income alone. They simply don’t make enough money. 95% rely on stock market or even rental income. They can’t stuff enough cash under the mattress (the very safest place right now), retire in their 30s or 40s, and drain it down – no matter how “frugal” they are! Additionally, any small-time real estate investor will have their hopes and dreams dashed in the coming months when their tenants lose their jobs and can’t pay rent.

    Thank you ERN, for letting me comment on your blog. Many FIRE bloggers will not publish my comments because it conflicts with their pre-existing beliefs and plans.

    1. I’ve seen a lot of people with enough passive income from their investments alone (no blog, no side hustle). I made a Case Study Series out of it:

      I’m worried a bit about the real estate folks as well. Especially if they still have mortgages on the properties. If you planned your FIRE well and all properties are paid off you’ll be OK if maybe 20-30% of the tenants are late with their rent.

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