I should have put these thoughts in the previous post, but they came together later.

I was thinking more about some of the case studies I’ve been around.  I think of two people who tend to share their advice from their perspective quite often.

     Please note: these are my recollections, and both people are truly trying to help others get a perspective.

Influencer 1

        (retired for a long time)

They shared with the participant that they could retire right now because they didn’t seem to realize two key points

1. Returns

The advice was that the participant didn’t realize their assets (as a whole?) will go up more than they spend at 4% per year (locked into the 4% “rule”). 

This sounds very logical based on historical market returns.  It also makes sense that 2/3rds of the years the “market” tends to rise, as I understand it.

The influencer also either said or implied the participants’ X million asset base would grow at X% estimated return.  OK?  That’s interesting to project someone else’s future returns.

Here’s where I shuffled in my seat: the influencer seemed to calculate the assets as 100% equities.  OK, yes, the long-term US equity returns have been great/good.  Yet, I don’t know of many retirees–who are living solely off their assets–who are 100% equities.  The Sequence of Returns Risk is significant at the beginning of retirement, and maybe fixed assets can level out some of the risk?

So, returns in retirement matter on asset allocation and other income.  Yep, the influencer has a nice (very nice?) side income.  Maybe the influencers’ side income is like a fixed return portion of their assets and yearly income stability.

2. Spending

The influencer also strengthened their advice position by explaining that the participants’ expenses would be less than they are planning, and will go down after leaving work.  I’m not sure I recall exactly how this would happen for the participant. 

I feel this was because the influencer’s FI Mode is a low-cost living lifestyle.  There may or may not have been a reason to think this participant (or others at the event) strives for the (very) low-cost lifestyle of the influencer.

I do recall the participant wanted to travel.  Yes, (full-time) travel could cost less than US housing, but not if you keep your home.  MANY retirees spend increased amounts in the early years because of travel, activities, and hobbies.

So, will expenses drop and income/returns be high(er)?  We don’t know.  But, to advise from their personal FI Mode, which may differ from the participants, can have huge consequences.  (yes, actually, many things can have huge consequences)

Community respected person 2

         (early 30s “FIREd” with a working spouse)

There’s a great Advicer in the community who now has some financial credentials telling people when they have $1 million that they can retire because they have plenty, and it will grow.  It doesn’t matter that the people may be 35.

What is the FI Mode of the Advicer? 

What assets does the advicer have?  What is the advicer’s asset allocation?  What spending does the advicer have? 

Yes, the advicer has a partner.  Yes, the advicer’s partner is still working in a profession.  Not a full-FIREd household.

Has the advicer been invested during a nasty market downturn?  Has the advicer lived off their assets in an inflationary period?  Have they had health scares, family changes? Etc.

In general, I think a FI influencer with income/a working spouse is VERY different from a fully-FIREd household.  Especially when talking about living off your assets.  Drawdown is HARD!!!

MY Personal Experience

I know some of what my LifeInFIRE structure is, has been, and wants to be.  I have lots of observations to give me some experience.

I know there is SO MUCH I don’t know.

I know to take “advice” as input data that I want to process into information and then use for our lifestyle.

When I talk to people, I try to raise thought issues for them to consider.  I may give ideas on how I or they can work on those issues.  I may give tasks or questions to ponder.

I tend to share guidance “considerations” I’ve used in my life to see if that will help them. 

Sometimes these considerations come with structure: if A, then consider X, or B consider Y.  Help with the process.

What is the current FI mode of the person giving you advice?  Are they leading the same lifestyle off the same assets and income as you?  If not, are they thinking in your shoes, or theirs?

Helping is sometimes not helpful.   Sometimes you get what you pay for.

*** Nothing in this article is to be construed as financial advice.  I am not a financial planner, nor do I pretend to be.  You should always consult your own professional when seeking advice. This post is not a piece of literary mastery, just a random thought I had.