Early Retirement Epic Fail

FIRE Early Retirement Epic Fail

Have you seen this post at Living a FI – The 2021 Early Retirement Update? This post was the best post about the FIRE movement I’ve read in years. LAF updated us on his FIRE journey and we can learn a lot from this post. I used to follow Living a FI when it was active, but LAF stopped updating when he retired in 2015. He was just about to turn 38, about the same age as when I retired from my engineering career. I’m still happily retired after 9 years. Whew! What did I do right and what can we learn from LAF’s journey? Let’s take a look.  

Quick recap

If you haven’t read it yet, I’ll give you a quick recap here.

  • LAF and his wife retired early on a Lean FIRE budget in 2015.
  • They lived a leisurely lifestyle and were very happy for about 3 years.
  • LAF tried to pursue writing in a serious way, but never got published. It’s a tough business.
  • LAF started to feel disconnected to some of his friends. They were all working, he wasn’t.
  • His wife became discontent. She thought everyone else was moving forward while they were standing still. Their friends were inflating their lifestyle and flaunted it.
  • LAF discovered he has a long term health condition.
  • LAF’s expense increased so he didn’t feel financially secure anymore. He retired on about a million dollars and planned to spend $30,000 per year. The math didn’t work out when his spending increased due to healthcare and …
  • Divorce.
  • LAF went back to work.

Yikes! This is a quick summary so it is missing a ton of details and nuance. The last two bullets made it look like his early retirement was an epic fail. However, that is not necessarily true. LAF got 5 years off from work to pursue his interests and discover himself. His net worth increased 30%. He found that his marriage had problems and divorced his wife. All these were good things. Even the divorce was good. It freed both of them up to find more compatible partners. LAF still believes in financial independence, but he’s putting off early retirement until later.

Alright, let’s see what we can learn from LAF’s journey.

Relationships are tricky

LAF and his ex-wife retired at the same time. She was enthusiastic about early retirement and liked the leisurely lifestyle…at first. After a few years, she became discontented and felt abnormal. She felt like she was a loser married to a slacker. She wanted to make progress in her life. LAF encouraged her to go back to work, but she didn’t want to if he wasn’t working. In short, she is a normal American. She wanted to fit in and she wanted to keep up with the Joneses. She thought she would enjoy early retirement, but she was wrong. She was happier when she was working.

On the other hand, LAF was perfectly happy with the unglamorous early retirement lifestyle. He loved being unemployed. He thought they were winning because all their friends had to spend so much time at work. LAF doesn’t care about material possessions or keeping up appearances. He values time much more than money. This is not normal. 

It’s hard to be a deviant. Life is much more acceptable when you’re normal. I think only a few people would really enjoy early retirement. Almost everybody is conditioned from childhood to work hard and amass material possessions. Something went wrong if you reject these deep-seated values. It is even more difficult for 2 people to have the same mindset. Even if you enjoy early retirement, your partner probably won’t be happy with it.  

This is the reason why my wife (Mrs. RB40) is still working. She likes contributing to society and gets a lot of satisfaction from accomplishing her assignments. We both understand that. She’s happy to work and have me hold down the fort. I made myself useful by being a SAHD, blogging, side hustling, and managing our investments. It’s a good division of labor. Mrs. RB40 enjoys being the main breadwinner, but she doesn’t care much about keeping up with the Jones. She also didn’t want to be a SAHM. Every relationship is unique. You have to customize FIRE for your relationship or it won’t work.

Long-term goals are necessary

Retiring to an adventurous and leisurely lifestyle sounds awesome … until you live through it for several years. I think LAF and his ex were too young for this kind of leisurely lifestyle. It might have worked better if they were 60. At this point in life (40 to 60 years old), most people want to make progress. This is when most people raise kids, pay down their mortgages, inflate their lifestyle, and create wealth. It is the wrong time to play defense. The second half just started.  

LAF tried writing, but it didn’t work out. I think that was the only serious long-term project he had. His ex-wife didn’t have a long-term project, from what I understand. This wasn’t enough. They felt stagnated. You need to grow and mark your progress somehow.

Fortunately, I never felt stagnant. I have two huge long-term projects I’m working on – our son and my blog. Our son took a lot of time and energy when he was young. However, being a SAHD became much easier when he started school. We’re more than halfway through this long-term project! It’ll be very gratifying when we send him off to college. (I can’t wait, but Mrs. RB40 isn’t looking forward to it.)

On the other hand, blogging has been up and down. We had some good years and mediocre years. I keep at it because I still enjoy it AND it is a way to generate income. I never fully bought into the 4% withdrawal rate. That’s too risky when you retire before 40. My retirement could last 50+ years. That’s a very long time. Our withdrawal strategy is a lot more conservative. I plan to generate some active income until I’m 60. That way, we can continue to build wealth and put off withdrawal.

These two big projects will keep me busy for many years. Also, our parents are all getting older. We’ll need to help out more very soon. That’s another huge project. I plan to visit my parents in Thailand for 3 months next year to help out.

In short, I never felt stagnated because we can see some progress. Our son is maturing slowly and advancing through each grade level. Our net worth continues to increase every year. Sad to say, but wealth is a measuring stick. It’s an easy way to see your progress. Also, it’s better to stay busy. Too much leisure time will make you unhappy, IMO.

Lean FIRE might not work

LAF’s experience also shows that lean FIRE might not work for every situation. Lean FIRE is when you retire with just enough to get by. This is too risky especially if you go straight into the withdrawal. There are many situations that can screw up your finances.

  • Divorce – The cost of living is a little higher when you’re single. Also, a contentious divorce could deplete your savings significantly.  
  • Chronic health conditions – This is another huge problem. Even if you have health insurance, the cost of care would rise due to deductions, extra appointments, prescriptions, tests, procedures, and therapies. Healthcare can be very expensive in the US, especially when you’re unemployed.
  • Kids – They aren’t cheap. If you retired early without children and they come along, then your annual expense would increase, for sure.
  • Inflation – We got used to low inflation, but 2021 shows us that inflation can be higher too. Everything got more expensive this year. Inflation could wreak havoc on your budget if it’s too lean. Hopefully, the inflation will go back down to around 2% soon.
  • Etc

You really need a backup plan if you Lean FIRE. I retired with a bit more cushion than LAF, but not a huge amount. However, I never stop earning income. I monetized Retire by 40 and worked on various side hustles. It isn’t as much income as when I was an engineer, but every little bit helps. Also, Mrs. RB40 kept working. That’s huge. Our personal finance is much better today than when I retired in 2012.

Failure isn’t bad

Okay, early retirement failed and LAF went back to work. Is that so bad? He lived the way he wanted for 5 years. The first 3 years were immensely enjoyable. The situation went a bit awry after that. But would it have been any different if he didn’t retire early?

You’ll have to go read his post to find out more details about the divorce and his chronic health issue. The link is at the top. These events would have happened even if he was working. The breakup might have been put off for a few years, but I think it’s inevitable. They didn’t have the same values. It’s better to get it over with quickly rather than waiting for it to unravel later.

Now, LAF is back at work and he’s shoring up his FIRE fund. He also found a new partner with better-aligned values. I think this FIRE epic fail turned out okay for him. He is only 43 and could try early retirement again at some point if he wants to.

We also learned from his failure. Most bloggers rarely talk about how FIRE could go wrong. It isn’t all sunshine and roses like we make it seem. Even Mr. Money Mustache and JD Roth (Get Rich Slowly) got divorced. Jacob (Early Retirement Extreme) rejoined the workforce. Bloggers have the same issues as any regular people. I’m the exception, though. It is all sunshine and roses at the RB40 household. 😉

Luck is a huge factor

Lastly, I think luck is a huge factor. I retired early in 2012 and still love being retired. Well, semi-retired because I still earn a little income. Life is so much better now than when I was an engineer. My family is supportive and we are doing well financially. It worked out extremely well for me so far. I’d like to think it’s due to my wise choices, but it’s probably mostly luck. I’m a lucky optimist and I’m very grateful for it. Hopefully, my good luck will hold until we’re both fully retired.

Early retirement isn’t for everyone

For years, I have been saying early retirement isn’t for everyone. Most people want to be normal and fit in. There is nothing wrong with that. It’s the FIRE bloggers who are the deviants. We’re the weirdoes. We value our time and freedom much more than wealth and comfort. We don’t mind being different and we don’t need to fit in. That’s strange. I’m lucky Mrs. RB40 doesn’t mind this huge character flaw. Most women probably are more like LAF’s ex-wife.

In conclusion, I think FIRE is still a wonderful goal. Even if something goes wrong, you’ll still be ahead of most regular people. LAF is doing just fine these days after a little reset. His 5 years early retirement was a good experience to have. We can all learn from his mistake. It’s a useful chapter in the FIRE movement.

Go check out his post if you haven’t read it yet. What can you learn from his epic fail? Do you believe FIRE is real or just a fad?

Blogging is a great way to build your brand and establish a presence on the internet. Maybe you could even make a little income. Who knows what can happen? Here is my guide – How to start a blog and why you should. Check it out!

Image credit: Quino Al

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Joe started Retire by 40 in 2010 to figure out how to retire early. After 16 years of investing and saving, he achieved financial independence and retired at 38.

Passive income is the key to early retirement. This year, Joe is investing in commercial real estate with CrowdStreet. They have many projects across the USA so check them out!

Joe also highly recommends Personal Capital for DIY investors. They have many useful tools that will help you reach financial independence.
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31 thoughts on “Early Retirement Epic Fail”

  1. I came across the LAF blog some months ago. It is one of the best FIRE posts ever. Full of learnings. Your post complements it beautifully. LeanFIRE ? Thanks, not for me.

  2. The first time I retired from the day job (age 59) I missed my work friends and that senior expert cred quite a bit. But I sure enjoyed the free time, and since I was also still running my horse farm I wasn’t totally living the life of leisure.

    Then the job called me begging me to help out for 4-6 months, 100% work from home, flex schedule. I thought why not, pad the savings account, I’ll be free in no time. Four years later I was still working P/T for them, and really starting to resent it. During that 4 years, My dad fell and ended up in a nursing home, I had big headaches with his ex-wife who took him (me) to court and forced the sale of his home to pay off her back alimony, and my mother was diagnosed and then died from lung cancer. All this parent stuff totally changed my life perspective, hence the resentment of the day job. Tick, tick, tick… time’s a-wasting. Quit the day job 3 months ago, no regrets. Now am back to working on backlog of home/farm/personal details that fell by the wayside during the decades of working 2 jobs and parental issues. At age 63 I want to simplify my life and be free to travel and have some fun before getting too old.

    On the bright side my net worth has increased by a large margin during those 4 years, making retirement twice as feasible as it was before.

    • Thank you for sharing your experience. I think everyone has to figure out the right time to retire.
      It sounds like you’re really ready to retire now. Great job on building up your net worth over the last 4 years.

  3. I don’t think his story is an epic fail at all. He was very transparent and so many people learned from his story. It’s neither his nor his wife’s fault, it’s just that they had different priorities and goals in life.

    It did make me question whether LeanFIRE was the right path forward. I see so many of my friends getting promotions and making $200k+ in their late 20’s/early 30’s and I don’t know how I would feel if I was making $0 in my late 20’s/ early 30’s.

    Gave me lots to think about.

  4. Good post Joe. I’m a huge fan of Dr Doom. The biggest thing that I took away from his update post, and as you highlighted, was the catastrophic and almost unpredictable unknowns of the future. There was no way he could of known of his degenerative disease or that his wife would become unhappy and end up in divorce. More money would have helped cushion this blow. But these are two things we don’t have control over: love and health. Luck plays a little bit into this department.

    I consider myself lucky and rich to have both of these things that money can’t buy. The good thing is most, if not all FIRE chasers are pretty smart and will find a way around most obstacles as they arise, even if it means going back to work. Hats off to you for a successful early retirement. Having a understanding partner 100% onboard is a huge part of FI for those of us married.

  5. Fully agree with the point on we need big projects to work on when we retired, though I wanted to comment on some comments about “their value don’t align so they are doomed from the beginning”.

    I am exploring on a life with value hence this comment really gets my attention and gets me thinking.

    I tend to think of value as a compass in life, compare to purpose as a map in life. I myself is not a person with purpose, so I don’t know where I want to go to in my life, but I want to have a value to determine which direction I am going and how I want to live my life.

    To a lot of extend “having big projects” is the purpose way of doing life, going with my analogy it is about having the map laid out in your life.

    So do we need both value & purpose, both compass & map? I am still asking myself that question because I don’t know what’s my map. Maybe this means that I will fall under the situation as LAF if I do retire early?

    Ultimately, what’s the point of having value (whether it’s the same or not), if we are just staying at the same place without going anywhere? That I think is one of the main problem with LAF & his ex. And this is why retiring to a life of leisure doesn’t work in my mind.

  6. Thanks Joe! It’s a great post! I’m just so curious that if the “lean FIRE” actually works in the real world for the “entire” retirement era till the very end of it, especially for those “ultra-young” successful ones who might have something like 50+ years ahead of them with all kinds of uncertainties.

    • It probably works if nothing big goes wrong. However, it’s better to have some extra just in case. Healthcare is a big problem in the US. Also, people tend to spend more as they get older. Even the most frugal people want to be comfortable when they’re older.

  7. I remember reading that post earlier this year and was astounded – both by what happened as well as his honesty. But I appreciated that he put it all out there regardless. I think a lot of folks will find it helpful.

    Similar to you, I haven’t felt stagnant in early retirement either. I feel like I’m always working on something as well as spending quality time with my daughter as she grows up.

    But I can understand some of this in that my wife doesn’t have any projects she’s working on (other than helping raise our daughter). That sometimes worries me and it’s part of the reason why we’re going to be moving back to the U.S. She can’t really get a job here in Panama and sometimes feels that disconnect. Once we’re back, she’ll be able to get a job to feel a part of things again.

    • I agree. People need to see there are downsides too. Things can go wrong. You have to be flexible and adapt.
      My wife doesn’t want to retire full-time right now. She gets a lot of validation from work. Most people are like that.

  8. I read LAF’s post and liked it. Didn’t sound like a failure story at all. More like exploration & self-discovery.
    I like this post, RB40. Thanks.

  9. I had never heard of LAF before that post got shared a lot several months back. It’s strange, because he’s from the Boston area and I know most of the Boston bloggers a little bit. I think it was because he was popular around the time we started having kids and I was reading less PF around 2012-2015.

    This is one of the reasons why we think we’ll always work in some capacity. As you mentioned a long-term project such as raising a tiny human or two can keep you busy and productive.

    I’m not as convinced all the stuff would have happened if he had continued to work. If he worked, then his wife probably would have as well and there wouldn’t be a rift. It also could have turned out that he found out about the medical condition and continued to work for the money. So maybe he would still be with his ex. It does sound like he’s more compatible with his new partner though, so at least part of it doesn’t seem like a failure.

    • He wasn’t as active as some bloggers and flew under the radar. He also didn’t promote his blog that much.
      Maybe his marriage would have fared better. But they have different values. The early retirement just exposed their core values. I think he’s way better off with his current partner.

  10. i really think a certain maturity continues as we age. i sure didn’t now this 20 years ago when i was in my 30’s. at least how it worked for me was a certain stoic calm emerged and i really think it helps the home dynamic. i don’t know what i would do without a happy home life. i’m happy to keep working for now and as long as mrs. smidlap has a fair share of good time/entertainment money the arrangement seems to be working well.

    ending up as spouses who genuinely continue to like one another is like winning the lottery.

  11. Great post, showing what can sometimes be the flip side of the coin. I think that’s useful for people to see and be aware of. The other important lesson that came through is that you can try something and, if it doesn’t quite work out, it doesn’t mean it’s a disaster – things can be adjusted and fixed, as LAF has showed. One of the mantras that I try to remember is that it’s better to have tried and failed, than to never have tried at all.

  12. I often thought that your version of retirement could work for us for some years but I’ve revised that now that we have two long term projects to raise and I have the blog (not as an income generator though), along with our own personal interests that we’d like to have pursue but don’t. Taking our parental leave as an example during the pandemic, neither of us had any desire to go back to work. We were too busy! I know we’ll be less busy when the kids are older but only then would we finally have time for the fun stuff we like.

    I’d hope that by the time both kids are out of the house, we would have developed enough new positive routines to feel content and stable in our own ways then. But we’re still figuring it out. We have time as we accumulate. Plus I won’t want to retire before knowing we have enough for ourselves and some extra to give away.

    • I think kids make a huge difference. They keep you so busy. You don’t have time to get bored.
      Once our son goes off to college, we’ll have a lot more time to ourselves. Mrs. RB40 probably would be ready for full retirement by then.

  13. Thank you for this. We are new to chasing after FI and it’s nice to see a completely different perspective. It’s a good reminder to have a solid plan in place before retirement.

    I’m now picturing my husband walking aimlessly around the house, listless, staring out the windows. He could easily morph into the “get off my lawn guy” and no one wants that!

  14. That is the big risk of FIRE that few talk about, how the extra time together may effect a relationship.

    Some relationships can survive when there is time apart, which work provides. When both partners are retired there is a lot more time together which may push the relationship over the edge.

    Divorce is certainly a risk and a nest egg that could support a couple likely will not support two individuals.

    • You’re absolutely right. The last year and a half has been a big eye-opener for so many couples. Suddenly we’re spending 97% of our time within fifty feet, endlessly, with no “relief” (as it were) in sight. My wife and I are lucky; we’ve gotten better at instinctively providing space to one another, and somehow we like each other more now than we did a couple years ago. But it’s a hell of a gamble and takes a good bit of work.

    • That’s the peril of too much leisure time. Most of us aren’t geared to be like that.
      We’d be annoyed if our partner is unproductive all the time. Of course, that’s okay when we’re older.
      But when you’re 40, you want to be a little productive.

  15. Great post Joe and a good summation of Dr. Doom’s last post. I also referenced it in a recent post, especially about us FIRE folks being “50 yards away” from everyone else. You just call it weird or not normal, haha, yes I guess it is.

    I would make one point in that you are contributing to society in a HUGE way by raising your son first and foremost and secondly by educating people about financial independence and how to achieve it. It’s just not the traditional corporate 9-5.

    • Thanks! Hopefully, our son will grow to be a good human being. There are too many jerks in the world.
      Financial independence is great. Everyone should learn about it. Then they can choose to try for it or not.

  16. A great post.i

    I could comment on a number of things but my reply would be way too long.

    In regards to, “LAF tried to pursue writing in a serious way, but never got published. It’s a tough business.”

    Yes, it is a tough business. I tell people that only one in 10,000 or one in 50,000 writers will attain the success I have attained. (And my success has nothing to do with luck.)

    These quotes come to mind:

    “Writing is the hardest way to earn a living, with the possible exception of wrestling alligators.”
    — Olin Miller

    “What people really want … is to be broke. At least, that’s one likely interpretation of a new YouGov poll that shows more people [in Britain] would rather be a writer than anything else. Now, it’s possible they’ve all got their eyes on the J. K. Rowling squillions, but the financial reality is rather more depressing. Most book manuscripts end up unwanted and unread on publishers’ and agents’ slush piles, and the majority of those that do make it into print sell fewer than 1,000 copies … It’s not even as if writing is that glamorous. You sit alone for hours on end honing your deathless prose, go days without really talking to anyone and, if you’re lucky, within a year or so you will have a manuscript that almost no one will want to read. Your friends and family will come to dread requests for constructive feedback . . .”
    — John Crace writing in “The Guardian”

    In fact, there now are over 1,000,000 books published in the US every year. Over 95 percent of these books will sell fewer than 100 copies in the book’s lifetime.

  17. I like your positive spin on LAF’s experience Joe. I’ve never believed in the Lean-FIRE way of doing things (or even the 4% rule for that matter), so it’s interesting to see the outcomes of those who tried it.

    I’m glad the outcome wasn’t all bad.

    I think you’re right that we’re mostly weirdo’s. Most people want to show-off and display their wealth. I’m just not wired that way.

    My sense of accomplishment in life has nothing to do with what I can buy, or how much I have compared to my neighbors.

    I measure myself with a different tape-measure. 😉

    • Right, we are different than regular people. It’s hard to find a partner with the same mindset or at least accepting. We got married in our 20s. I didn’t even know what I wanted back then. Fortunately, Mrs. RB40 is very accepting.


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