Author Topic: Appropriate mental allocation for FIRE  (Read 6364 times)

nycrite

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Appropriate mental allocation for FIRE
« on: September 12, 2018, 11:24:33 AM »
FIRE topics often hit on quantitative topics like asset allocation, controlled spending, etc.

For those of you pursuing FIRE, or better yet, already in the midst of it, what is your mental allocation for FIRE? Do you mull over every spending decision, big or small, or do you take a laid back approach and let things run on cruise control?

Being a meticulous person, I tend to think through most financial decisions, but I wonder if I'm trading the freedom afforded by [eventual] FIRE with constant mental gymnastics. I've tried to take a more hands off approach and tell myself, "As long as I save X% each year, I'll hit my goals." But I find it hard to feel in control without having at least some engagement in the weeds of everyday spending.

Just curious how others approach this. Is your mental allocation toward FIRE high, or is it something you think about once a month and otherwise leave it alone?

Sam

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Re: Appropriate mental allocation for FIRE
« Reply #1 on: September 12, 2018, 11:29:34 AM »
 Getting used to the mental aspect is probably the hardest part of staying happy in FIRE.

In the beginning, you will wonder whether you will have enough to survive comfortably. You spent years estimating how much you need, but she won’t really know until you go through it.

But what I’ve discovered is that you need about 30% or so less than you truly think you need to be happy. Part of the reason is because you don’t have to save for retirement and once you retire anymore. The other part is that your expenses go way down and there are a lot of fun and free things to do when you can do them during the week day.

I’ve been hardwired to keep on saving and generating passive income. It’s really hard for me to spend principal.
Regards,

Sam

rtysmith

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Re: Appropriate mental allocation for FIRE
« Reply #2 on: September 13, 2018, 11:02:33 AM »
I'm with Sam, I can not spend the principal.
That keeps me working, but I love working, but I'm after FIRE as a mindset vs an achievement. Mark Manson would refer to it as unf**kabilty - that I can live my life with no others having any control over the financial quality of my living to my terms. Maybe it is a new type of FIRE...FU FIRE...

romeojeremiah

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Re: Appropriate mental allocation for FIRE
« Reply #3 on: September 13, 2018, 08:18:04 PM »
Maybe it is a new type of FIRE...FU FIRE...
LOL

FU FIRE. I like it.

Believe it or not, mental FIRE is the hardest struggle for me. As a pensionnaire (as I like to call it), it's impossible to spend down principle, but I have to "figure out" what I want my FIRE to look like. I'll be 39. I'm interested in everything but I don't want to work anywhere unless I know it's going to provide complete job satisfaction. I think that's a fallacy, much like Sam wrote about the other day. Once my dream job becomes my job, I'll quit.

defomcduff

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Re: Appropriate mental allocation for FIRE
« Reply #4 on: September 14, 2018, 06:23:16 AM »
I resonate with this idea very much.  We practice this in my family.

We have certain savings % targets.  As long as we're hitting them, we don't worry so darn much.  We're aiming to save 20-40% of gross income.  Some years it's more, some years it's less.  But as long as we're in this range our financial spreadsheets look a-okay over the long run.

If you're a high earning professional, your mental energy is better spent advancing your career than eeking out 2-3% additional savings.

I'm guessing not everyone would agree with this approach, but it works in our family.

Being a meticulous person, I tend to think through most financial decisions, but I wonder if I'm trading the freedom afforded by [eventual] FIRE with constant mental gymnastics. I've tried to take a more hands off approach and tell myself, "As long as I save X% each year, I'll hit my goals." But I find it hard to feel in control without having at least some engagement in the weeds of everyday spending.
DeForest
Boston, Massachusetts

nycrite

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Re: Appropriate mental allocation for FIRE
« Reply #5 on: September 14, 2018, 07:18:36 AM »
I resonate with this idea very much.  We practice this in my family.

We have certain savings % targets.  As long as we're hitting them, we don't worry so darn much.  We're aiming to save 20-40% of gross income.  Some years it's more, some years it's less.  But as long as we're in this range our financial spreadsheets look a-okay over the long run.

If you're a high earning professional, your mental energy is better spent advancing your career than eeking out 2-3% additional savings.

I'm guessing not everyone would agree with this approach, but it works in our family.

This is how I'm beginning to view personal finance in my current situation. I've consistently achieved a strong savings rate for years, and I wonder if my involvement matters that much now that it's habit and also systematic. I agree that at best, I'd achieve another 2-3% savings, if I manage in the weeds. Maybe less!

Mental sharpness (AKA time) is valuable, and if I'm burning brain cells on a daily basis for personal finance, does this come at a greater cost such as lower career performance or even lower health due to stress?

My family and I are fortunately wired to NOT over-consume, so I'm tempted to make a 2019 goal to check in on finances at highly spaced intervals--perhaps quarterly or even bi-annually. As long as I don't get overdraft emails, the system will take care of itself, because most of my savings are automated anyway.

defomcduff

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Re: Appropriate mental allocation for FIRE
« Reply #6 on: September 14, 2018, 08:48:26 AM »
Mental sharpness (AKA time) is valuable, and if I'm burning brain cells on a daily basis for personal finance, does this come at a greater cost such as lower career performance or even lower health due to stress?

My family and I are fortunately wired to NOT over-consume, so I'm tempted to make a 2019 goal to check in on finances at highly spaced intervals--perhaps quarterly or even bi-annually. As long as I don't get overdraft emails, the system will take care of itself, because most of my savings are automated anyway.

Agreed on both points:

1. Keeping mental sharpness in the highest-value areas is key.  Maybe that's career, maybe that's family, or hobbies.  But if you're on cruise control, it's probably not personal finance.

2. I monitor finances every quarter or so, and I think it's completely sufficient to make sure you're on track.
DeForest
Boston, Massachusetts

LVITBR

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Re: Appropriate mental allocation for FIRE
« Reply #7 on: November 08, 2018, 09:28:42 AM »
Here's something I've been thinking about: how do you get children (particularly teenagers) to have the same work ethic you had if you FIRE? 

Kid: "(Previous primary breadwinner) is at home all day and he's only [insert number between 45 and 55 here], and we live well.  I guess I can do that, too!"

Then instead of enjoying FIRE, you're worrying about whether your kids are going to become entitled foul balls. 

Anyone go through this?