# What should you focus on to accelerate FIRE?

[Splitting topics to have more visibility]

And yet I reiterate: focusing on saving rate is what moves the needle the most, so it should be talked about more often. And if someone tells you that to achieve FIRE in a reasonable delay you should focus on being in a position to save more money, i see it as a welcome wakeup call, even if the tone is rough.

Let me illustrate my point (people allergetic to Maths can skip this section and go directly to the table below).

Assuming that you start from scratch and you will use the 4% rule (i.e your target capital is 25 times your annual expenses) then the time it takes to reach fire can be easily calculated.

Let:

• r be the annual yield of your investments
• and s your saving rate defined as savings/revenues

Then the time it takes to reach fire, N, in years, is worth:

N = LN(1+25 * r *(1- S)/S) / LN (1+r).

If you create a table of N as a function of r and S, it is very instructive:

I have highlighted the line where r=7%, which someone using index funds should expect over the long term.

Let’s try to describe the average guy on the forum (if such a thing is ever doable):

• it is likely that at some point it will be in a household, with partner and kids
• with such a configuration i haven’t seen many people having less than 40-45k CHF of annual expenses. (taxes excluded, you can add 10k of taxes)

if such a houshold is unable to save 100k within three years, it cannot save 33k within a year, so let’s say they save 25k per year, their saving rate is 25/(45+10+25)= 30%

The table say it then takes 24 years to reach FIRE at such a saving rate. Now if they focus on boosting saving rate to 60%, the time needed to reach FIRE is now 11 years: you save 13 f#*#g years!

As lowering expenses has a point of diminishing returns, there is only one alternative: increasing revenues.

I mean, i don’t know that is more eye-opening that gaining back 13 years of your life. If someone is a little bit rude saying that you should save more money, knowing this table, it should be a wakeup call for many.

Yes, it is hard to change job/career. But it is certainly worth it.

The fact that someone leaves in Switzerland does not automatically grants the right to retire early if the saving rate does not follow. it surely makes the game easier than in France (for instance). But still, at some point we have to eat the broccoli and do the hard thing. 13 years of life is worth it.

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Your point is well made, but I would hope that anyone who signs up for this forum would have already read one of the hundreds of articles on the web that state exactly what you just stated (you’re probably right that this is not the case).

To further spice up the conversation, I would add this question for discussion…
Why don’t people find a job/career that they actually enjoy enough not to consider “13 fucking years” of working in that domain as being a horrible prospect?

Edit: I should add that this enjeu is actually something that I have personally considered… I have a PhD in an engineering domain, and probably spend about 40% of my week programming. I have seen some of my colleagues with very similar skillsets go off to work developer jobs… I do not think they are happier, despite the salary boost. I actually think that they are far more stressed and get to spend much less time with their kids and/or doing other activities they enjoy.

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Hi @Julianek,

True, but the assumption of Pandas was considering that this one person would put the 100k saved during 2-3 years into the IB account to reach the reduced fee levels… versus running with Degiro until a latter date.

It is a big and wrong assumption that someone would like to invest all his/her/their 3 years saving on the same position and not on RE, P2P, Business, Morgage, etc…

I’d like to believe it as well, but if they had read it and really gotten the gist of it, we would have many more questions on these topics

Fair question, and I will answer with my particular case rather than an improbable generalization.
I have been working for almost 9 years, and will probably continue to work for 6-7 years before reaching FIRE. Married with one kid, i have a job that has certainly a lot of advantages:

• a salary that is high enough so that my wife can stay at home to spend time with our child
• if i do my job (which i do) i am out of the office by 4 pm every day, so i have substantial time to enjoy family
• i can work remotely as well several days in the week
• and i have nice and interesting colleagues.
So all in all, many factors that in general people would find enjoyable.
And yet, i am getting tired of it. Tired of having someone telling me that i have to work from this hour till this hour at this place. Tired of my industry (i had joined it as a naive, i am now frankly disappointed). Tired of bureaucracy. Tired of not doing things on my own terms.
I have wondered if i should switch, but I will not. I will escape in 6 years. I could have created instead a business (which would have an uncertain outcome) but even if it was successful it would take as much time to make me wealthy. So i bite the bullet.
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Congratulations for building this life for yourself. Out of curiosity, what do you do?

I see that I missed out on a heated discussion! Thanks for splitting the topic @Julianek. I took the liberty of merging even more posts into this one.

Technical moderator rant: sorry if the topic looks a bit messy. When I merged additional posts, they did not appear in chronological order! I had to move them to a temporary topic and then back here…

Back to the topic. I get why people get offended by “100k is not a lot” etc. But looking realistically, you will need 3000 CHF per month when retired, that means 36’000 CHF per year, so a wealth of 1’000’000 CHF. And 100’000 CHF is only 10% of that. 2-3 years is rather ambitious, but if you’re seriously thinking about FIRE, then you need to find a way to save at least 20-25k per year.

And cutting fees should not be the main focus at that stage. I can give my example: until I got 30, I was focused on improving my skills and getting a better job. I had no idea about stocks and brokers. And only after my net value crossed 100k I thought: man, I need to invest this money somehow.

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I’d say it’s not hard, it’s insanely difficult. It’s basically blood and tears over couple of years. It’s a subjective thing if somebody values FIRE that much to take these risks. Some people might prefer to focus on richer standard retirement and live their life calmly. What’s worth all the money in the world if you’ll make yourself miserable?

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Sounds like you have a really balanced work-life set-up (which is an extremely important factor in general happiness in my experience). But I can totally understand the desire to do things on one’s own terms.

For myself, I know that I must beware of the grass-is-always-greener-on-the-other-side mentality. With age (and kids), I am getting better at recognising more objectively when certain situations in my life are great or terrible.

Obviously if someone can earn more without increasing stress and losing work-life balance, then he/she should do it, but often there are big trade-offs. In the context of FIRE it then becomes a question of better life today vs. better life tomorrow, which is a hugely personal choice. I’ve always been someone who believes that youth is temporary and that one should plunge head first into gaining the most diverse experiences possible while young, albeit with an eye on the future. In my mid-30’s, I’m happy with how this has played out, even if I will probably end up FI in my 50s rather than 40s.

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I agree. I personally work 80% to spend more time with my kid and let my wife work part-time, Even tough it will extend my journey to FI by couple of years. I consider this forgone income as an investment into good family life (i.e. happiness). I personally believe it’s not only about the aim, it’s also about the journey.

On the other hand, it’s easy for me to say that as I’m Software Engineer with a good salary, like this arrogant anti-social youngster who started this heated discussion.

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BTW. For most FI-seekers in Switzerland, I’d seriously recommend considering moving to cheaper country to boost their FI date. It might be easier than changing careers.

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How much would you need if you would just travel the world till you die? Would 60k/year be enough?

60k CHF per year? Way more than enough, unless you are backpacking in Norway and Switzerland.

It would be really easy on 20-25k CHF, I think. And doable on 12k CHF, although you’d probably be more limited (i.e., hanging out in SE Asia and/or Latin America). There would likely need to be a pot of money available for healthcare.

However, do not underestimate how much and how rapidly you will change over the course of your life! Endless backpacking sounded like the dream for 20-year old me. About 55 countries later, I still love cheap, light-weight travel (and have done a fair bit of it with kids in tow, too), but the idea of having no fixed address for the rest of my life and being constantly on the move is no longer appealing.

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I consider this a risky strategy. You can’t rely to be in good enough health to travel until you die. And you might get tired of it sooner than you would like.

By the way, living without a fixed home is called being a nomad, and if you’re also working on your laptop from a beach or a coffee shop, then it’s called digital nomad. There are even websites which cater to such people.

When you do this, there are complex domicile/tax topics to get the grasp of. You need to take care that you are legally in a country of your choice.

As for costs, I can give you an example. When I lived in Poland, my monthly expenses were around 1’000 CHF, which is anyway above median net income. It’s enough for a simple life.

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I really like the idea. Spending 3 months in Thailand, then fly to South America, spending a couple of weeks there, flying back to Switzerland to visit some friends and family. But of course that might change with your state of health.

Actually, I have been playing with the idea of being able to travel for longer periods of time (up to a year). This way you can really learn the culture of a place and enjoy lower prices. I like to discover new places, but I don’t like to sit in a plane/train/bus/taxi. But at the same time I would like to keep the Swiss domicile, keep paying taxes here and have a place to come back to.

4 months in Switzerland, 4 months in Poland, 4 months in Thailand? Sounds like a fun year?

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I mean a few things stand out for me

1/ Many FIRE folks work in tech (high salaries, often math-oriented and highly rationale people, less peer pressure to spend on nice cars, etc).

2/ Delayed gratification isn’t trivial but it is probably a core aspect of nearly all successful people that I know. Not buying something, saving today, etc all goes back to that.

3/ Salaries in Switzerland and the taxation in places like Zug or Schwyz are simply unheard of in the rest of Europe (and it is actually within reach for pretty much everyone with an EU passport)

So if you can combine 1+2+3 it is actually a reasonable goal to reach FIRE 10 or 20 years before the actual retirement age.

On the flipside: my friends in other EU countries (Germany, France, etc), other professions (even law, etc) and so on struggle a lot more. I mean I know tech folks that are making in SF roughly 600-800k (RSU + base) per year but also pay 4-6k for their apartment and California taxes aren’t
exactly enticing. If the external factors are right it really doesn’t matter that much whether you pay (initially) 15bps or 12bps in fees for your ETFs.

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Would you have real estate in Switzerland in that scenario? I’m not sure if buying a flat for 800k (spending 160k of my assets) would get me faster to FI or the opposite.

But I really like your idea. Spending 4 months in a country is totally different to your usual 2 weeks vacation.

I don’t know, that’s a good question. I can only tell you that at the moment I do not own any real estate and thinking about buying a flat only makes me more anxious. I guess owning a bigger place where you rent out a part of it would be helpful for when you’re gone for a long time (for example a holiday chalet with two flats/entrances). It’s convenient to have a fixed address and not depend on your landlord and rent contracts.

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I am a software developer in a financial company based in Zürich.

I would not be so pessimistic, as I really think that this is what our society is slowly transitioning to, FIRE movement or not.

For a long time, most jobs on the job market have been credential-based: you get a nice diploma and it is reasonable to think that you can do the same job your whole life based on this diploma (hence the gatekeeping of high-end universities). As soon as people left school, they did not need to learn any new stuff to keep their job. (this might be exaggerated but you get the idea. Now i am getting to my main point).

I feel like we are going in the direction of a skill-based society, where what matters is the skill that you have, not how you got them. More importantly, the pace of innovation is high enough that this set of skills will only be relevant for several years: you will have to update yourself every 5 years or so to get a new set of wanted skills. This is of course obvious in the IT world where frameworks change every now and then, but i think this mindset will generalize to the whole society. There will be very few credential-based jobs left (maybe family doctor, lawyer), and those who stopped learning after school will be left on the road.

Maybe i am wrong here, but i think that within the next 15 years, switching jobs/career due to renewing skills will be more the norm than the exception.

Those guys do it for 40k USD per year, so it is certainly possible.
This might need to be a bit more with children though.

I have thought about this and slow travel as well. Having a basecamp in a country with a low cost of living to minimize fixed housing expenses (like Poland or Bulgaria) where i would live 3-4 months and spend the rest of the year to explore the world. Nice idea anyway.

For those that cannot wait for FIRE and still want to travel by remote-working, there is this superb link that centralizes all the resources needed to get a remote job. Might be strongly IT-related though.

I can see why people want to own real estate as owning a house instead of renting is somehow recomforting. However, i don’t think that with current prices it accelerates the time to FIRE.

• you have indeed an interest payment that is lower that your rent due to low rates (will it continue?)
• but this is largely compensated by the huge opportunity cost of not having the downpayment compounding at 7-10%
• even if the house appreciates in value, it is hard to translate it into cash flow as you will have to sell the house to realize the gains.

In my case, if i had to own a house that would likely be in Poland. There, houses cost 100k CHF on average.

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As far as I know, you need to stay in a country at least 6 months to be abtax resident. Some countries (e.g. Poland) have different conditions: for example your wife and kids need to stay in the country for at least 6 months.