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by analyst74
1779 days ago
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FIRE, or any retirement strategy tend to rely on smart investment to generate income, and investment only makes the difference between how much worker is getting paid and how much they generate. If we all become full time investors, who do we invest in? |
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Normally people in generation X spend the first 40 adult years producing goods & services, partly consumed by themselves, partly exchanged for credits with old retired people of generation X-1.
After generation X is done with this working period, they retire, now holding credits. They exchange their credits for goods & services produced by generation X+1.
And so on and so forth.
FIRE simply shifts the lengths of the working periods and generations. Instead of working from 20 til 70, it may be from 20 til 60, or 50, depending on how successful you are in accumulating credits.
The credit system ensures that this doesn't really turn into a big issue. After all, if people are hugely successful accumulating credits and stop producing, and the population of producing people becomes small enough, then the exchange rate of goods&services to credits will worsen. The demand of goods & services will be lower than the supply, such that goods & services cost more credits. This is a natural incentive for people to start producing again, as the value of their accumulated credits goes down, but the value of them spending their time earning credits goes up.
Of course credits is money and the worsening exchange rate is inflation.
In short, we could all FIRE (i.e., every generation can retire at some point). But we cannot all FIRE at extremely early ages. The FIRE movement is essentially exposing the 'true' retirement age possible if we were more deliberate and intentional about our production & consumption. In a world where we all consume as much as we can, it makes sense we may need to work many years till an old age. A world in which we consume much less means we can produce much less, and thereby work less and retire sooner (or retire partially, i.e. parttime work).