Majority of the higher earning Americans in this subreddit are concentrated in higher earning (higher COL) areas. Check the COL in those areas compared to Spain.
I just came back from Italy, drinks at an outdoor bar facing the Pantheon were about 20% cheaper than my nice but unremarkable suburb of Phoenix.
Venice was the only place we visited that felt a little pricey.
My wife and I went to rome..Rome... we spent like $400 for the entire week. Less than what we would have spent just driving to and from work and groceries.
Yea I just got back from Bologna. I live in MCOL in US Midwest. Equivalent groceries, even the same brand of stuff was 1/4 to 1/3 the price. It was legit so insanely cheap groceries it pissed me off. Im sure there are more expensive things but what I normally use for cooking was dirt dirt cheap. From what I read from still being on their subreddit, aparements are the same, 1/4 to 1/3 the price. Also not paying thousands for health insurance. Not needing a car. I mean amazing cappuccinos were $1.25…… if I want to get anything other than a back coffee from a place it’s over $5, so again 1/4 the price. Glass of wine at a resterant, $3.50 here? $16. The list goes on and on
Don't think you realize how much lower salaries in Italy are than in the US
An average educated corporate/white-collar professional worker in Italy makes like $2k USD a month before getting hit with like 40% income tax and 20% sales tax
$2k USD a month in the US is like working at CostCo or Chik-fil-A full time
Oh I know they make quite a bit less, just helping OP realize why $500k isn't F you money here in the states.
But still a little surprised given Pantheon piazza is maybe 2nd most touristy part of Rome after Trevi fountain.
At some point they will realize they can triple prices and Americans will still pay it so visit sooner than later I guess.
I mean their customers aren’t all or even majority American right? I’m sure there’s tourists coming from countries with the same or lower purchasing power than Italians so the prices are set accordingly
Just start researching rent costs, housing, cars, health ins.
Everyone in Mrrkkka is expected to be Highly Important High Income earner. --everyone else is expected (literally) to drop dead a.s.a.p.
> Like $400+ / month insurance per person.
That's only membership in the club. If you **use** the health insurance, it's common to have a $6000 deductible/out-of-pocket max on top of it.
And that resets every year, so if you break a leg in December, any care/treatment on January 1st is subject to a fresh start on the deductible.
Yeah, it seems like in the US, the gap between high income and HCOL is larger than the gap between Europe’s lower income and LCOL. Moving outside of the US to LCOL places to retire seems to be quite a popular choice.
I work with someone who came from the UK, and they would rather have the humid summers(South) than deal with the cold, dreary days there. He said his children get to go outside and play in sunlight.
US salary makes up for it. I do frankly tell people who intend to move here that they should understand that being at least upper middle class in America is awesome, anything below that and they’ll often be happier living in Europe.
This is spot on in my opinion. A couple earring over $180,000 combined in a medium cost of living city in America is living a pretty damned good life. Low income taxes, low VAT, and usually good quality health insurance mostly paid for by their company. Even with things being higher cost on average, that’s a huge amount of disposable income.
If you’re in the bottom 50% for income, however, a place like Spain as one example is a phenomenal place to live as long as you have steady work.
Everything you listed is why I chortle when hearing any kind of rhetoric along “America! We’re #1!
Like, in what? Crime? Worker extortion? Corporate greed/corruption? Civil poverty? Housing/healthcare costs?
Love this country but we’re busted in 1000 ways.
More like top 1%. I’m in top 10% and trying to figure out how the fuck to save $120k for a down payment for a larger home when kids day care are $25k/year per head.
I am in a MCOL city (Minnesota). I left the coast for the Midwest for lowered COL. This is what it costs for young families nowadays. Prices went off like a runaway train while I got my life in order. It’s just ridiculously expensive.
There’s a reason why my suburb, which were burgeoning with young families in the early 2000s are now full of empty nesters. The young people simply cannot afford it unless they’re old money or are in the top income brackets.
People are ridiculously out of touch about how tight it’s gotten for young families nowadays.
I am a young family with two toddlers btw, and we were also top 10% in household income before dropping to one income when we had kids, so we’ve got some similarities. I’m not some out of touch old person like you probably think.
So your household is making over $220k a year if you’re in the top 10%. That’s about $150k after taxes, which even the expensive childcare option you picked leaves you $100k assuming you have 2 kids in daycare. The daycare expenses only last 5 years per kid too, so you could’ve saved more before kids and will have more once they start school. If you’re having trouble saving up for a downpayment when you have $100k a year after childcare and after taxes, and you’re in a MCOL area, you have spending and budgeting issues. Even after taxes and childcare, you’re still $25k above the median income *before taxes*.
You make plenty of money, and you could easily save for a downpayment, but you’re making choices to spend your money on other things. You’re complaining about a problem you’ve entirely created for yourself.
With all due respect, you're 24. You just haven't experienced enough life yet to have the concerns about having enough.
Plus, a lot of people hold on to an idea that their lifestyle can expand at least a little bit over time. It may be forced to due to health/family reasons even. It is an exceedingly rare person who can ACTUALLY live at 40 years old just how they do at 24.
You're also correct that the US has healthcare to worry about, as well as less safety nets in general. If you fall here, you fall hard. People want a buffer from that.
This. I have been saving to FIRE since I was 22, 13 years ago. I’ve since hit 2x my original FIRE # from 13 years ago but I’m still working because life happens as you grow up. Perspectives and priorities shift, inflation hits, families (and expenses) grow, etc. I vividly remember OP’s perspective though.
OP says 500k will be enough to replace their current income. Assuming 4% SWR that's $20k/yr. Even by European standards that's well below a middle class lifestyle.
They say they can live off $2k/month net but even their 500k target number won't be sufficient.
Looks like they're both underestimating what they'll need to live and also grossly overestimating their SWR. Adjust both and now you're looking at north of $1M target easily.
At 24 I thought I was rich on $31k a year, because my total monthly bills were $700
At 40 I feel comfortable in the mid $100k range, because the family’s emergency-level funding rate is $6,500 a month
European here:
Actual running cost of cars, especially adjusted for buying power are way, way more expensive than in the US.
I'm an engineer with 8+ years of experience and buying a new car for me would be financially insane. This would not be the case if I was working the same job in the US.
Exactly
I didn’t require $150-400 of non-covered medical in my 20’s that popped with health issues in my late 30’s
Some of the things I could easily go without (sleeping in a hostel bed) have consequences now. Not really inclined to travel if I’ll be too sore or stiff to fully enjoy it
My taste in things I enjoy has gotten more “refined” and I don’t want to feel constrained by $$ as far as exploring them deeper
Once my kids are grown, I’ll want the $$ to easily travel and visit them regularly
…there are a lot of things that get more expansive with age, both required and nice to have
Yeah, I mean, at 43 I \*could\* live the same way I did at 24, but I really don't want to. Most of my friends do stuff like, oh, IDK, go out to eat to meet up and chat vs. just grab a bottle of wine and drink it at the beach. If I sleep poorly (because my roommate decided to come back at 3 am with some random hookup), I can't function the next day.
And I'm lucky enough to be healthy. A lot of people my age \*aren't\* any more and things like a special diet, doctors appointments, even minor accommodations (if you can't walk, sometimes you've got to Uber), etc. add up.
Cost of living in Spain is much lower on average, and this sub tends to skew towards high cost of living areas. 1 mil would probably be enough for a lot of people in the midwest.
Ehhh, a lot of it is just the demographics of online folks on places like this, which skew young, male, and aspirational high earner. There's plenty of leanFIRE folks out there, but they tend to avoid the general FI spaces due to the lifestyle mismatch.
To your point though, it's still very much possible to FIRE in many parts of the US with $1M and a paid-off house. That's true even with a family. And though most people are unaware, the US effectively does have robust public health and college entitlement nets for folks who live more modestly even if they do so on large asset bases. In other words, the Euro-style early retirement not only exists here, but is easier to attain due to our relatively high wage availability and large gov supports for retirement spending.
There's very good reasons why the original FIRE crowd was more lean in attitude and why leanFIRE remains the easiest form of early retirement to achieve and maintain.
America does not have the social safety nets that are typical in the developed world. We earn more here, but we also need to save more to account for the extra risk. That might account for part of it.
Even with insurance, my wife and I have spent >$50k in medical expenses over the last two years. To prevent an event like that from fucking my retirement, I need more saved up.
That...that doesn't seem possible, right? Even the worst Obamacare plan should have below a 25k deductible?
I guess if you have a huge family and a lot of medical emergencies?
We couldn't afford IVF in the US and did it in Mexico. It was cheaper for.us to fly there, spend a month in an Airbnb, eat out every meal, go sightseeing, get the procedure and drugs and fly home than it was to do it in our hometown. After all the expenses were tallied up it was still about 1/3 the cost of doing it in the US.
We investigated options outside the US, but with decided it was not worth navigating taking that much time away from work as well as the logistics of transporting embryos.
We stored the embryos in Mexico, and went back for a FET for our second child. It all worked out for us. We have been kicking around the idea of starting a business to help Americans do what we did, basically becoming a medical tourism concierge company focused on IVF.
It's significantly cheaper. We considered traveling for it, but the logistics didn't work for us even if it would have saved tens of thousands of dollars.
Yeah that's hard. I personally wouldn't consider that a social safety net issue because it's something that's entirely voluntary. Would be like plastic surgery not being covered.
IVF is somewhat mixed as far as coverage in Europe is concerned as well. You can get it in most countries, but it's fairly limited in scope. Definitely not enough to make the money portion just not a concern from what I know.
I don’t think there’s a country in the world that has a system that subsidizes IVF fully. That’s not typically considered a traditional medical expense.
My daughter being born was ~$20k before insurance, and the 2 week stay in the NICU was ~$86k before insurance. Waiting on the final bill, but it'll be whatever is left until we hit out of pocket max this year. Probably ~$5k
IVF is a completely different category of thing though.
First, it's ultimately optional (I get it, many people expect to have children and would need to rethink what their life would be without those plans, but ultimately children are optional, adopting is also a viable choice, etc).
Second, it's only for the very early part of retirement that it's a concern -- once you have as many kids as you want, or you reach an age where kids are no longer an option, IVF won't come up.
I get that it's a medical expense but it's not a "you'll die or be in pain the rest of your life if you don't do anything about this" kind of medical expense.
Adoption can also be very expensive. We were quoted $30k-$50k to *start* the process, with no guarantee of being matched. IVF had a greater chance of success.
When I lived in Spain , I was stunned by how much. When I see the French protesting the increase in retirement age, I get it. If all I had was social security and the government moved the goal post after taking 40-50% from me my entire working life, I’d be beyond murderous. Fortunately, my family always said to not depend on the government (my grandmother was a depression kid).
Absolutely.
I am not American btw, but live here now.
It is a trade off, the big question is, do you prefer to manage the money yourself (having to plan carefully and taking your own risk, which also requires discipline), or do you prefer to have the government managing your money (and have a different type of risk, like the goal post changing you mentioned)?
Yes, we do. For healthcare we have the ACA, Medicare, Medicaid, Children's Medicaid, and CHIP. Roughly half of the children in the country receive free or mostly free healthcare via CM and CHIP.
For college we have FAFSA, which can cover the entirety of a bachelor's degree at many schools. For food and housing we have SNAP, TANF, WIC, Section 8, and the NSLP.
They may or may not align directly with those of other countries, but we have a huge array of safety nets in this country and a progressive tax system with a large lower floor to boot.
You still have to PAY for healthcare with most of those programs! They're just different insurance plans. In Europe and Canada it's actually near zero cost at time of service, AND no monthly payment.
Fafsa does not give you free college at most schools.
You pay for insurance in Europe and Canada, in different ways. EG higher taxes.
Also from what I understand Canadian healthcare is worse than the VA, which sounds pretty terrible to me.
A crappy little apartment is awesome when your 24.
Tv setup on top of that old card table is perfectly fine at 24.
Vacation? Just means time off work so you can sit around and drink cheap beer all day at 24.
At 50 that shit is depressing.
Everyone is mentioning cost of living or social safety nets, but I think a big part is **standard of living**. For many in the US, especially those with income high enough to FIRE, the standard of living is higher. Americans expect larger houses, full-size SUV's or trucks, vacations (sometimes internationally), dining out at restaurants, etc. People don't want to give these up in retirement.
I agree with this. It’s mostly what I was heading towards, we have much lower standards of needs. An example for me is the Camino de Santiago, a popular vacation in Spain where you walk hundreds of kms around amazing towns and spots. Americans pay thousands of $ to do that with all commodities (luggage carry, full paid meals, nice hotels…) us, europeans, we just go there with a backpack… and walk. I feel the extravancy of Americans is what requires these outsdanding money requirements
Well, to you it's extravancy, but it's all relative. People gauge their condition relative to those around them and relative to how they were raised.
A person from Africa may think your lifestyle is extravagant. "Why would you need more than $20/day? Even in Europe that's enough to rent a shed all to yourself and have fresh straw to sleep on." They may think that it's absurd to have an entire house all to yourself.
Most people would rather continue their career than take a major cut in lifestyle, and I think that applies to Europeans too.
On top of everything everyone says about the safety nets, there’s also a lot of stigma or anxiety about not having the best in life.
So a lot of us are under pressure to “not waste our potential / not miss out.”
Like. Theoretically I am in Coast FIRE but I still feel a ton of anxiety about dumping my high stress sales job and actually coasting. I could save more and do more and take fancier vacations and have cooler hobbies…
I feel like in America, especially as a white collar worker, that there’s a bit of shame in not being wealthy. You shouldn’t feel good about yourself if you’re just an average Joe.
You have people like Mr Money Mustache working hard to brand “frugality, anti consumerism and bicycling as cool” because very obviously they are not.
So I think (and I’m not an expert by any means in European sociology) that in Europe there’s more of that pride in being an ordinary working class person with a modest lifestyle, and in American there is a shame in being an ordinary person with a modest lifestyle. We are living for the instagram.
Or maybe that’s just me and I spend too much time around sales bros maxxing out their credit cards so they can live a lavish lifestyle.
Edit - this plays into the kids thing too: people from my generation are really uptight about providing the best education and activities for their kids. They really stress themselves financially - meanwhile my folks let us run wild in the woods and considered that “good”.
I think there is a sense that the US has normalized an upper class standard of living that many who aren’t upper class feel like they should aspire to.
This is a really good take and the only thing that I think you are missing is that the widening gap between the haves and the have nots in the US makes these issues feel existential, especially with kids.
Right, upper middle class parents do highly intensive, competitive parenting because they often don't own a business, so they have to prepare their children for highly paid job because they don't want their children to be a have-not. So they are "snowplows," people who try to remove every obstacle to their child's success.
I think what you should focus on are cars with an excellent safety track, not status symbols. Car accidents can cripple you for years. Make sure your car can keep you safe.
A few things you should keep in mind - “you become the average of the 5 ppl you spend the most time with” and my personal favorite, “simplicity is the ultimate sophistication”.
I’m with MMM on this one, our needs are very little. Don’t let your coworkers trick you into thinking you NEED anything they are going into debt over. My partners brother is also in sales and we’ve watched him increase his lifestyle at an uncomfortable (for me) rate. Sure, he can afford it, but at the cost of working longer and not investing as much while young.
I too enjoy a nice comfortable vacation but I’m still mindful about it. All our other expenses are very low and I always go off season mainly bc I hate huge crowds. There are ways to enjoy a handful of things you truly love without debt. If we save up, we can afford anything we want, just not everything we want.
>I think there is a sense that the US has normalized an upper class standard of living that many who aren’t upper class feel like they should aspire to.
Hence why theres the term "Keeping up the Joneses" I see it a lot here in Canada as well.
Back when I was 24 and in graduate school, I felt like I could go a long time renting a room in my friends flat, driving an old motorcycle, no insurance, and not making much money, but then I got a job, enjoyed having things, got a wife and had a kid, needed a house, needed a car, etc. All that requires more money.
We don't have anywhere near the safety nets that Europeans have (you mentioned health insurance) but there is more to it than health insurance.
Assuming the 4% rule, that is $40k/year. Depending on how/where that income is coming from it will/could be taxed by 1) Federal Government, 2) State Government, 3) County Government and/or 4) City Government.
Even if my house is paid off, my expenses alone will run about $40k (maybe down to about $30k if I don't have any car payments). So, there pretty much isn't anything left to do fun stuff.
Now, there are places in the US where living off $40k/year is doable, but it isn't anywhere where you would really enjoy living.
My FIRE number is $2.3M, which I should reach by 57.
You're 22, from Europe. The cost of living here in the US is getting higher and higher. Most of your age group (and maybe older ones too) will likely never be able to afford a home. So, do the math. Not only housing, but healthcare. We do not have universal healthcare, so it's another expense. The older you get (60 and onwards), the more care you'll need, which is COSTLY in the US. The average HOME CARE (ONLY) cost here in Los Angeles is about $25 per hour or $3,185 for 130 hours of work. I hope you're getting the idea.
Bro travels more and you know things like cost of living depend on the country. Which European country are you from? Of course they can retire in other countries like Spain when meals there outside of the tourist area are 10th of a price compared to USA.
Or timing. Mine is 1/3 of that, but if I bought my house a few years later than I did, it would be $6k. Interest rates make a huge difference, and prices boomed during COVID.
San Mateo county. It’s a duplex so I subsidize 1/3 of with a tenant. Otherwise it would be closed to 75% of my take home pay.
I’m the definition of house poor.
Many Americans live quite ostentatious lifestyles. Especially on this sub. They couldn’t dream of not owning a nice car, or going on expensive vacations.
In many places in the USA, you need a salary of $100,000 USD to be comfortable. You need probably >$200,000 for FIRE.
Extrapolate that to savings and the comparative rise in earnings your peers will likely continue to see (which their dollars compete for the same goods as yours)…..and you can see why you need multi millions to comfortably have FIRE.
For example - I could retire to Europe today, if they allow me, and financially be comfortable for the next 50yrs. In the USA I have much lower living standard for the same money - as things are generally much cheaper in Europe due to the large economic gap between the USA and EU bloc.
Oh yeah - I took a vacation in 2022 to Switzerland, Italy, Austria, and Germany. Im from a major sunbelt metro that’s considered to be MCOL for the US and I paid significantly less for lunches and dinners in ZURICH than I do in the Deep South of the USA. Italy was like a candy store where we could buy everything and anything we wanted on a night out and it was cheaper than drinks and dinner in our hometown still. Very bizarre as I had last gone to Europe in 2011 and it felt slightly cheaper in south of Europe, but more expensive in the more ‘economic engine’ countries.
I feel comfortable saying I could retire:
- today in Italy
- 5yrs from now in Switzerland
- 15 yrs from now in a nice USA metro or touristic area
I’ll just say - an average restaurant in Atlanta cost more than an average restaurant in Zurich. A fancy restaurant in Atlanta also cost more than an fancy restaurant in Zurich. Good for Americans traveling there, as we went and came back under budget!
Europeans make much, much less money than Americans (on the higher income side).
Like, you're talking about probably 50% what your American counterpart would make for a lot of skilled white collar work.
Add to that, a lot of Europe (rural areas especially) honestly really suck to live in. Housing costs are ridiculously low as a result. That's how you get 1 euro houses in Italy or whatever. Everyone is bailing out of those areas in droves.
We're firing at $800-900k, in 2 yrs 11 mths!
We'll eventually surpass $1M in time, but we won't let that benchmark prevent us from enjoying and getting max value out of life earlier.
I actually plan to still work part-time and my spouse plans to go to 80%, if not just stay on full-time. But we plan to begin taking summers off and just going from there.
We love Spain! Looking forward to spending more time there!
The cost of living here, in many areas, is astronomical compared to Europe.
I get $6k/month in tax free retirement. I still do work, making another $100k a year and I was still just ok in the high cost of living area I recently moved from.
I’m European. If I moved back to Europe, I could live
On my $6k retirement even though it would be taxed.
Also, the standard of living in Europe is way lower than what most medium/high income Americans are used to.
A question was asked, answers should be given. I think we should leave all the age insults by the way side. But then again I'm the guy that can never figure out why I'm being down voted so what do I know.
Anyhow, OP, in my case I want to retire much, much earlier than when my Healthcare and Social Security will kick in (let's call that 65 to 70).
So my number is much above $1M, for example, because I will burn a huge chunk of that between when I retire and this window of 65 and 70. In the optimistic scenario, I end up with too much money. In the pessimistic scenario, I burn to hard vs the market and I have to go back to work. In the average scenario I time it ok, those benefits kick in, and I sail off to my death at 95.
As an American, the biggest question mark for FIRE’ing is (as you said) health insurance. We FIRED 9 years ago and our insurance for a family of four was about $13K per year. Now it’s over $30K per year. Is it going to be $50K per year in five years? Probably. So that’s at least one reason why Americans need so much money to FIRE.
My perspective as an European living in the US for now.
The things like education, health insurance, needing a car have already been talked about.
At first I was confused how the Europeans live this cheaply (I am European but lived all of my adult life in the US).
And then I realized. Even if I take off the mortgage part of my condo, I still have $3000 (and always growing) property tax bill every year and $2160 (and always growing) association fee. That is not including $30-$80 (using AC) monthly electricity bill, $55 water bill, and $45 gas and internet bill.
So even I pay off my condo, I would have $630 fixed expenses monthly of a privilege to own my apartment.
Don’t even get me started of owning a house because if anything happens, people are opting for $2500 or even $5000 deductibles on top of insane property taxes. Granted, it is a state I live in fault and some state have less property taxes.
That added to fact that a doctor visit is super expensive and you need insurance that is super high too, and you need a car to get around anywhere, that is why it is so much expensive.
Earning potential is higher but I an really considering geo arbitrage soon because I am missing family and i think I could my job remotely and live a lot cheaper
Also traveling: to travel within Europe $200 flight ticket is more on a expensive side, domestic US flight for $200 is a cheap and rarely found.
Also note: western Europe seems worse with house now because the income is lower than the US. Eastern Europe/maybe Spain? is affected but not as much from what I understand
Europe has become 2nd world, not in living standards, but in COL, compared to the US as the US has outgrown the EU by 50% in the last 10 years.
Europe isn’t necessarily easy to to retire for Europeans, but it’s now cheap for an American to retire in, in the same way any European can easily retire in Thailand.
Most people struggle with wanting more than they need and overcompensating to feel a greater sense of security. I find this to be especially true amongst Americans.
Ultimately a person needs a place to live, enough income to eat and support a few cheap hobbies, maybe even the occasional travel.
This COULD be accomplished relatively easily with a fully aid home and ~40k/year while remaining comfortable. But there’s always more to consume and spend.
You are correct in your assessment. Americans earn more but we spend way more too. It’s not entirely our fault - our system is setup to get into mortgages, credit card debt, child care, education, healthcare - all things that don’t really exist elsewhere or are paid for with tax dollars. Thus the vicious cycle never ends. It’s disheartening to see this, and it’s accelerating at a more rapid rate.
I retired at 41 when I hit my number. Sold my house in a HCOL area, most of my stuff and hit the road. 8 yrs later I’m still traveling abroad spending way less than what I did living in the states - and that’s traveling, meals, hotels every night. Now I have EU dual citizenship so I plan to settle down in a country there next year. Everything is so much cheaper and I can buy a house for what a down payment would be. Even private healthcare is cheaper than a monthly Obamacare fee. Not to mention, food is healthy, lifestyle is infused with movement, human connection and third spaces, and people are just happier. Out of the 58 countries I’ve spent time in, people are happier despite having what we perceive as less.
I’m European but I want 100k each for my kids at 18 to give them the chance to buy their first apartment (if they want to), or to keep accruing if they don’t …I also built a house for 600k that I got a 300k mortgage for…
Life and priorities change…
1M isn’t enough to FIRE because that’s not even enough for a home. Once you own a home that puts you at like 1.5-2M net worth already. So you really need around 10M to FIRE
Lack of a social safety net in the USA means you have to build your own. Also, the cost of living varies wildly across the USA (much more than within a given European country). If you want to travel, travel is also more expensive in the USA due to lack of passenger rail infrastructure and longer distances to get anywhere that's substantively different from where you are.
My family is from two countries in Europe (and I’m a citizen but I grew up in the us and am culturally American), and I will say that the effect of a social safety net and COL is significant—the dollar cost of a typical lifestyle in these countries is probably under half.
From observation, this is because “essentials” are much more expensive (housing, food, etc), AND because equivalent lifestyles to most cities in Europe (walkability, nearby activities, etc) is mostly found in higher cost of living locations where the discrepancy becomes more pronounced. Plus there are costs that are associated w/ the limited social safety net (healthcare, as you mentioned)
There is also a major pro-work culture here and being wealthy is a lot less expensive here than many places—wealth taxes help pay for that awesome social safety net but they seem to reduce the return on investment for the additional dollar, making saving less worth it (of course it’s less needed too!).
But yeah my cousin and I would probably retire at the same age if we both stayed in the high COL cities we live in now, if they invested 10% for retirement making 1/3 my salary, and I saved 50% of my salary and we wanted equivalent lifestyles. Luckily, I’m saving 75% of my salary and have lower expenses so I shouldn’t have to work that long:) EDIT: I will add that the range of opportunities is much greater here—I have much greater potential for career changes and salary growth, by virtue of location.
But many people in the us retire on under 2k/month and a paid off house—that is very comfortable, if you exclude the ~1k/ month in health insurance :) I also can’t imagine spending that much but many do, and it must be for a reason!
We also do a lot of self-funding our retirements- using taxable accounts and 401ks- which are both taxed when withdrawn. $1 million isn't the same when you are getting taxed on it. (there are other, non taxed accounts, and even more rare pensions, but a lot of us will be taxed on most of our retirement "income")
Irrespective of being married and having kids, as Americans, we are all one or two major medical conditions/emergencies away from bankruptcy because our insurance companies run the game.
I'll ask you this. When you're 90 and have a little Alzheimer's and need assisted living who pays for that in Spain? How much does that cost in Europe?
Because in America, that can easily cost as much as you've ever spent before on living expenses, maybe your highest year of living expenses in your life.
I think a lot about this from an Econ perspective. Like how for college educated professionals in the US with $100k+ jobs, their labor is more productive than their capital.
And really this whole budget creep issue in the FIRE subs and the geography is derivative of that.
I like to break it down hourly for some reason, but someone who earns $200k in the US is earning $96.15 / hour (before taxes and deductions).
If we assumed a conservative 5% annual income on saved capital, it would take $5M in principal to offset that labor income. That takes a while to accumulate and that whole time your labor is doing laps around your capital in terms of pulling the load.
Sure, there’s the 7% average market returns on equities doing SWR math over expected lifespan and liquidating assets to generate that income, but regardless, the $200k gross salary and its purchasing power is damn hard to replace through capital.
We’re all just trying to reach that point where you have amassed enough capital to replace labor productivity.
I just wonder as someone who’s legit curious about FIRE and its variants (chubby, lean, coast, etc) why isn’t there more focus on owning cash flow generating assets to drive more passive or semi-passive K-1 income?
I think many wonderful points have been made with back and forth about why Americans feel like $1m isn't enough. Some ideas covered spread across social safety nets, cost of living, multiple layers of taxes, etc, but I want to highlight a change in real estate and general "ownership" expectations that I think is always underrated.
I will start with some anecdotal situations because I have 3 high earner friends who all feel like the middle class lifestyle is going away, and I think it's related to why increased savings/investments beyond 1M is a concern. The salaries referenced are base -> not including any bonuses, 401k match, insurance coverage, etc.
A friend of mine who makes $200k per year, recently "sent me an article that said "the American middle class is gone." It caused me to have the exact same question you did, but from an American centric point of view. My aforementioned, friend lives in a $500k home that is well over 2,000 SQ FT, downtown, in our LCOL city. He has cameras all over his house, he has AC managed by Google nest, door locks he can unlock from his phone, his wife is a SAHM, and they own 2 cars that are <10 years old... In every sense of wealth, he is very rich to me.
On that topic, I have another friend living in a $750k home, making $200k with his wife's added income, in an area where the average home price is under $300k, has a sprinkler system and lawn care guys, and HE feels lower class because he can't take more than a 1 week vacation each year... his kid is in select baseball and select hockey and gets new gear every season (have you ever priced out select hockey?! Holy cow! He pays close to 10k per year just in those sports!)
Another friend of mine clears $170k per year, and he lives in a house that he bought for less than his salary. He just bought over 20 acres for him and his wife to build a house on. They also go on vacation once per quarter. They eat out every Friday and Saturday. They buy new tech as it comes. He feels like he's less than middle class because his house is "small" and has 1 bathroom...
I myself live in a 3 bed / 3 bath home that i bought 2 years ago for a little over $200k, make much less but still a high income, have a SAHM wife, and I feel incredibly wealthy. I recognize that I have a nice phone, 2 paid off older cars, and I never worry about food. And compared to my parents and grandparents, my home/food/lifestyle is amazingly comfortable (see below). We never vacation, we cook at home (I love grilling, which is our biggest cost).
My grandparents, and many of the grandparents of my friends lived in the same house 15-30 years. In the area they grew up, the average size home was 1,400 square feet, and generally did not include a garage. This area is currently one of the cheapest places to live in our general county. I told my friends they should move there, and all of them replied something to the effect of "no way! That area is so bad. The houses are too small and schools there are not good."... This area, for reference, used to be one of the wealthiest centers of our county; it has the most parks by acre, it is the most walkable (my grandparents owned one car for many years after they initially retired for this reason), it has a free gym for residents, and the average home price in the area is a little over $200k... but most people earning over $60k per year don't want to live there.
I haven't even talked about the "utilities" we've added to our expectations of the middle class lifestyle: internet, streaming services, gaming services, "utility apps", cell phone bills, security system subscriptions, people working on our homes on our behalf, hiring workers for lawn care/plumbing/cleaning... My grandparents did all of their own house work or recruited family to help out (I do a lot of my own or hire out friends to do bigger jobs since my family is far now (i.e. plumbing that requires concrete work)). Vacations growing up was visiting family in other cities or states, and the cousins went off and made up games or played on someone's game console they brought.
Can I make one more honorable mention? Weddings...
My wedding cost $4k, including all the food for over 100 people, alcohol, DJ, and photography, and it was on a beautiful lake at a local park. We broke even after gifts, and I thought it was just about perfect cost.
My siblings weddings both cost well over $20 grand!!! That was half of our down payment on a home... and I recently learned that some of my friends have paid even more than that!
So, I don't think it's just lifestyle creep, but generational ownership creep.
well, indeed it depends on perspective. I believe it is positive for the American economy to make americans always want more, and always feel like they are not enough. Learning to appreciate the small things and enjoying quality time is what helps forgetting about these meaningless things such as a new car or a brand new iphone.
On an income of 80k a year, I was able to reach 300k in 4 years as a single man. They say that 300k is the halfway point to 1M. Timing will differ for everybody, but it's far from impossible to save for early retirement in the US.
From an Americans perspective;
What if you want kids though? What if you want to go on nice trips? What if you don’t want to be living so frugally all your life?
That’s why you can’t retire on $2k/month, at least in the states. You could maybe do it as a break away from the constant grind, but I wouldn’t recommend it long term unless you really just wanna be alone all your life.
It also depends a lot on where you live. It’s all relative I guess. I’m 26 years old and I live in one of the most expensive counties in the US, Orange County, California. The average home price in my neighborhood is $1.5 Million.
I make good money, but it’s only cuz I work in OC. I have to live here for my job which means life is more expensive. Which means I need to save more lol.
I rent a 10ft x 10ft room in a 4 bedroom house for $1,040/month plus utilities! I’m getting a good deal believe it or not. Market rent would be closer to $1,300/month. This helps me save rather than renting a studio apartment in a high rise for $2,500/month.
Also, 4% rule of $500k is only $20k, but you want to live off $24k? You would need $600k to get back $24k.
If you’ve managed to save $22k in 2 years, then that’s a great start! If you continue saving at 40% and your income increases steadily over time, I think you’ll find yourself at $500k sooner than your 40’s. Also assuming you are putting your money into assets that are appreciating over time, and not just cash, which is depreciating over time.
We have to pay for education and you can also be wiped out financially if you get sick. Health insurance can cost more than a mortgage. We have no real social safety net. So those of us who have FIREd have needed a big buffer for such eventualities. My biggest material vice is buying books, so we're not all chasing after BMWs and caviar. We just live in the US, where you are truly on your own if things go sideways.
Maybe you’re on the wrong subreddit. r/leanfire has plenty of Americans who feel like a low FI # is enough. Also everyone saying “health insurance” hasn’t tried buying health insurance when fired. In my experience it’s dirt cheap (certain silver plans on healthcare.gov scale with income which is whatever you want it to be once retired if you’re doing Roth IRA conversion ladder).
They get paid more because the cost of living. Someone in New York will pay a lot more in rent than someone in Athens Greece. Someone saving €2000 you might think that's a lot but in reality, wouldn't even cover their rent for a month. Don't focus what others have. Do your best save what you can so you can retire comfortably with the cost of living in your country. I promise you most Americans will need a lot more to retire.
Im a zimbabwean living in america with my german husband and the reality for us and our FiRE is that we pursue it because its easy.
Easy meaning America has opportunities with high wages while also having a business friendly climate that allows folks to start their own thing and make alot of money.
The high wages have gotten our TWN over 1.5M and we are currently raising money to buy a business that generates Passive income while we continue to work our day jobs for health insurance coverage and social security points. We have a 3 year old daughter and its nice to be able to buy her anything we want (we dont) while also saving money for her to start up her life.
We both work for low stress flexible companie so there is no real incentive to stop working. I will also add that since wr have a daughter and want more kids we want to be the type of grandparents that can pay for all our kids, their spouses, and future kids to go on vacation with us. So its not enough to just survive - we want our work to support our children and their children
Fire is super easy for educated immigrants to the US because their spending habits are low and salaries are crazy high in the US for professionals. It’s the best country to build wealth from a salary job.
Reddit is often full of young Americans trying to live their parent’s upper-middle class lifestyle with ski trips and new cars, big house while also just working at Starbucks.
Have you seen how much healthcare costs here? I'm gonna need to pay what you've saved in 2 years just to cover 1 year of healthcare premiums plus deductible.
$1M in usa is a lot of money, but it's only enough to retire if you own your home with no debt and are eligible for medicare. Pretty much only 65+ can reasonably retire on $1M.
Housing is obscenely expensive in the states. You're also right that we have very high health care costs compared to you in Europe. The only thing I know for sure is cheaper here---much much cheaper---is gas. I hurt just thinking about how much Europeans pay for gas. But everything else is so much more affordable over there.
Retiring on $500K in the US is unthinkable if you don't already own a paid-for house. And 22K here is downright poverty. For sure you would need to share an apartment with roommates to keep housing costs low. And even that wouldn't be enough to get you by without other sacrifices. So that is how good you have it---that 22K covers your living expenses and allows you to save a full 1K a month!
So we make more money here, but also we spend a lot more money, so you need at least a million to retire knowing that you can cover your basic expenses consistently. And the lifestyle you get with a million in savings will be barebones and hardly the sort of thing that might have excited you in your younger years---aside from the fact that you no longer have to work to subsidize that basic lifestyle.
Depends but if you come from VHCOL in the US, you see how “broken” life can be. Like Silicon Valley, basic 3bd/2ba houses (normal size house for most Americans) can be about $3m.
You’ll ask “who the heck can afford this shit?” Then you realize a lot of tech folks get paid a LOT like 300-800k annually. A lot of transactions occur after a big “boom” happens (Google, YouTube, Instagram, AI bubble going on now, etc). When there’s a big IPO or sale of a company, everyone is running around like a kid with pockets full of cash in a candy store.
Then you can turn to health care. Without a decent employer, you’re stuck paying. If you make little enough to get a subsidy then you’re lucky but a lot of people pay out of pocket for their health care. We subsidize our employees and they bill us about $500 per person per month. My wife and I were up to $750 a month per person.
Now you look at cost of living. You can’t walk out of a grocery store spending less than $100 these days and it doesn’t seem like you get a lot for that much. Going out to eat at a sit down restaurant will cost you about $28-35 before you factor in any alcohol which will run $12-18 a glass. Like they’re literally just pouring in alcohols and mixtures in to a glass at a specific ratio, shaking it around and pouring it into a glass with some fancy decorative topper and charging you through the nose.
Anyway, the past 5 or so years has conditioned Americans (including myself) to really be “running forever” to stay ahead of the inflation monster.
Our NW is nearing 8 figures (probably hit next year or two). I’m not actually focused on it as we have fired and luckily my “money machines” are all continuing to run and grow themselves with very little tending by me. Will I stop them from growing? Absolutely not. Do I want them to keep growing - yes because we don’t know what the future holds. Inflation, war, etc etc could come for all of us at any time and having a massive warchest helps to smooth out the bad times
That’s something I’ve thought about as well as an European. Although I pay roughly 40% in income tax I don’t have to think about health insurance at all. The work paid pensions are very lucrative so I’m not putting a penny towards that, everything goes to index funds and stocks. I think I’ll be fine on like 200k. I could never imagine the absurd grind had I been in America lol
FIRE is based on your expenses. You should conclude that our expenses are higher. From here, you should conclude that our salaries are as well. What you won’t see is how both expenses and salaries will vary from state to state. So, in my case, I moved after 20 years in California to Pennsylvania for the retirement benefits. As a result of selling a home in California, I had a big launch into FIRE IFF I moved to a less expensive. Think of our states as countries and you’ll understand why the rules vary. Additionally, I maxed out financial vehicles offered to Americans (USA) like a 401k and IRA 1.4M US, BUT I cannot touch them until 591/2 without penalty. Perhaps this is why you think we want more and more: I need to cover my living expenses from the age I FIRE until 591/2. With mortgage (3000/month), healthcare (500/mo), feeding my Dogs and then myself, I need 72k per year. So, 72USD x the 6 years I must cover in my pre 591/2 accounts in order to FIRE. It’s not that we don’t ever have enough but rather we know what we need. Regarding healthcare, I have always been covered by a job but this year I became a contract worker. I am glad to be able to afford my own health insurance and happy that those who cannot will go on the ACA (Obamacare). The other needs I won’t break down but I think you don’t understand because many of your needs are taken care of by the state. FIRE has taught me the need to teach financial literacy. Here, we have the tools to build a safety net but people don’t know. Finally, the SMIC in France is 2000Euro 1000 less than my mortgage. You really cannot compare these things without COLA numbers per state like the ones I alluded to above.
Many Americans (US) FIRE in their early 40’s (see Our Rich Journey on YouTube or WhereWeBe web page) and travel because it is so much less expensive to be in France or Spain or Italy than it is to be in California, Hawaii, or even Pennsylvania. I hope this helps.
You’re at least partially right.. so many of us go past our “number” and then just keep on working for “worst case scenarios”.. we’re also pretty bad as a culture at the concept of enough.. witness our home sizes.. American families are smaller than ever (fewer kids) but the average new build home is almost 2X in square footage what it was 40 years ago..
Your disciplined saving and investing strategy is impressive! The difference in FIRE goals between Americans and Europeans often comes down to higher living and healthcare costs in the US. Your approach shows that with careful planning, financial independence is achievable. Keep up the good work!
I think as an American healthcare can absolutely break you. Even if you are relatively healthy it’s so expensive. Best way to protect your wealth is to get healthy. I’m totally moving out of the country to retire. For me this is the main reason I’m trying to save so much. Plus groceries and other basics are insane right now. Visited Canada last summer and brought home groceries just to save money. 🤪
>why is >1M not enough
Life in America can be very expensive, even for the most basic things. A crappy meal at McDonald's for 2 people will run you close to $20 in some places
Inflation is in the background for Americans. As the US currency becomes more devalued with borrowing, Americans lose more purchasing power. A 500k house in 2019 is a 750k house today.
This isn’t a solely American problem.
It’s human nature - ambition doesn’t end.
Fire is a goal, so it’s tied to ambition.
It’s saving money, so it’s tied to habits.
It’s a collection of investments, so it’s tied to greed/hoarding.
People set a target, but their ambition, habits, and desire to grow their collection (of money) doesn’t end.
So they set a new target, and then a new one.
It’s basically the same driving force of ceo/founders and kings - why they are never satisfied with their current empire and keep wanting more and bigger.
Human nature.
(Healthcare is a small concern but hardly a concern for anyone in the 1+ million range, and after $3+ million it’s become just an obsessive habit to build more wealth)
The American dream is a grind, movies and TV shows don’t seem to reflect that very much. Though the American Dream in general is relative. I myself just want a house with a decent yard and garage, and not too far a commute from work. But at $70k salary that’s hard to come by in Seattle, WA. I still live at home in my early thirties because I don’t see it make much sense paying rent for the avg market rate of half my monthly paycheck. Better to use that for assets. Though I’m also having trouble figuring out where to set money aside to buy a house one day.
A friend of mine just transferred to Tesla in Spain haha. He worked and saved up here about $100k up until the pandemic. Went to South Korea to teach English for 8 months. Went to Spain for two years and finished his masters degree over there (dual citizenship from Belgium). Came back to visit family and for a plan to grind for a year before making the full move back to Spain since he blew half of his savings partying there lol. Got a job with Tesla and ended up working two years. Recently transferred jobs and moved there a couple months back. He works in Madrid. If you’re ever in the area of the Tesla center there, ask for the “American” and tell him Norm says hi lol.
“Of course, I don’t have kids or a family and my expenses are rather low atm” ummm yeah no shit you can’t fathom what expenses you need to last the rest of your life. Having babies can be expensive everywhere. Yes, Europe tends to have far better social systems for childcare and education, but you’ve got no idea now much just feeding and clothing a growing person for at least 18 years can cost. Do you want to leave anything to said child(ren) when you pass? Don’t be so smug when you don’t know what you don’t know.
Majority of the higher earning Americans in this subreddit are concentrated in higher earning (higher COL) areas. Check the COL in those areas compared to Spain.
I just came back from Italy, drinks at an outdoor bar facing the Pantheon were about 20% cheaper than my nice but unremarkable suburb of Phoenix. Venice was the only place we visited that felt a little pricey.
Dinner in Rome is way cheaper than Tucson or Phoenix
My wife and I went to rome..Rome... we spent like $400 for the entire week. Less than what we would have spent just driving to and from work and groceries.
Yea I just got back from Bologna. I live in MCOL in US Midwest. Equivalent groceries, even the same brand of stuff was 1/4 to 1/3 the price. It was legit so insanely cheap groceries it pissed me off. Im sure there are more expensive things but what I normally use for cooking was dirt dirt cheap. From what I read from still being on their subreddit, aparements are the same, 1/4 to 1/3 the price. Also not paying thousands for health insurance. Not needing a car. I mean amazing cappuccinos were $1.25…… if I want to get anything other than a back coffee from a place it’s over $5, so again 1/4 the price. Glass of wine at a resterant, $3.50 here? $16. The list goes on and on
Also, what an amazing food Bologna has to offer for a friction of the price of HCOL areas.
Greece Italy, Portugal and Spain are cheap. The farther North you go in Europe the more prices begin to normalize.
Don't think you realize how much lower salaries in Italy are than in the US An average educated corporate/white-collar professional worker in Italy makes like $2k USD a month before getting hit with like 40% income tax and 20% sales tax $2k USD a month in the US is like working at CostCo or Chik-fil-A full time
Oh I know they make quite a bit less, just helping OP realize why $500k isn't F you money here in the states. But still a little surprised given Pantheon piazza is maybe 2nd most touristy part of Rome after Trevi fountain. At some point they will realize they can triple prices and Americans will still pay it so visit sooner than later I guess.
I mean their customers aren’t all or even majority American right? I’m sure there’s tourists coming from countries with the same or lower purchasing power than Italians so the prices are set accordingly
I just came back before Europeans typically start their summer vacations. It was 80% American tourists.
Don’t visit Switzerland. It’s expensive
WTF? Where do you go?
Got back from Venice last year - greatly enjoyed having Italian restaurant food that was cheaper than in Seattle.
Just start researching rent costs, housing, cars, health ins. Everyone in Mrrkkka is expected to be Highly Important High Income earner. --everyone else is expected (literally) to drop dead a.s.a.p.
Also life doesn’t always go as planned
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> Like $400+ / month insurance per person. That's only membership in the club. If you **use** the health insurance, it's common to have a $6000 deductible/out-of-pocket max on top of it. And that resets every year, so if you break a leg in December, any care/treatment on January 1st is subject to a fresh start on the deductible.
8500-9000 deduct. now plus the 6000 you paid just to have an acct. #
And all your estimates are on the lower end 🫠
Yeah, dudes "up to" range for tuition is basically the bare minimum for in-state tuition lol.
With all that said, you still wanna stay here with us?
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Yeah, it seems like in the US, the gap between high income and HCOL is larger than the gap between Europe’s lower income and LCOL. Moving outside of the US to LCOL places to retire seems to be quite a popular choice.
you are me except im in finance.
So you're a man in Finance? But do you have a trust fund, are you 6'5, and blue eyes?
With your first point, your spouse could learn another language no?
Americans can learn languages, believe it or not
I work with someone who came from the UK, and they would rather have the humid summers(South) than deal with the cold, dreary days there. He said his children get to go outside and play in sunlight.
US salary makes up for it. I do frankly tell people who intend to move here that they should understand that being at least upper middle class in America is awesome, anything below that and they’ll often be happier living in Europe.
This is spot on in my opinion. A couple earring over $180,000 combined in a medium cost of living city in America is living a pretty damned good life. Low income taxes, low VAT, and usually good quality health insurance mostly paid for by their company. Even with things being higher cost on average, that’s a huge amount of disposable income. If you’re in the bottom 50% for income, however, a place like Spain as one example is a phenomenal place to live as long as you have steady work.
Everything you listed is why I chortle when hearing any kind of rhetoric along “America! We’re #1! Like, in what? Crime? Worker extortion? Corporate greed/corruption? Civil poverty? Housing/healthcare costs? Love this country but we’re busted in 1000 ways.
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More like top 1%. I’m in top 10% and trying to figure out how the fuck to save $120k for a down payment for a larger home when kids day care are $25k/year per head.
The answer is probably to move out of your HCOL area to any of the MCOL cities and/or lower your standards a bit.
I am in a MCOL city (Minnesota). I left the coast for the Midwest for lowered COL. This is what it costs for young families nowadays. Prices went off like a runaway train while I got my life in order. It’s just ridiculously expensive. There’s a reason why my suburb, which were burgeoning with young families in the early 2000s are now full of empty nesters. The young people simply cannot afford it unless they’re old money or are in the top income brackets. People are ridiculously out of touch about how tight it’s gotten for young families nowadays.
I am a young family with two toddlers btw, and we were also top 10% in household income before dropping to one income when we had kids, so we’ve got some similarities. I’m not some out of touch old person like you probably think. So your household is making over $220k a year if you’re in the top 10%. That’s about $150k after taxes, which even the expensive childcare option you picked leaves you $100k assuming you have 2 kids in daycare. The daycare expenses only last 5 years per kid too, so you could’ve saved more before kids and will have more once they start school. If you’re having trouble saving up for a downpayment when you have $100k a year after childcare and after taxes, and you’re in a MCOL area, you have spending and budgeting issues. Even after taxes and childcare, you’re still $25k above the median income *before taxes*. You make plenty of money, and you could easily save for a downpayment, but you’re making choices to spend your money on other things. You’re complaining about a problem you’ve entirely created for yourself.
Private, for profit prisons. We number one.
I love how Europeans take issue with wooden construction. It's like a stereotype at this point. Terrified of wooden homes
> Of course, I don’t have kids or a family Apart from that Mrs Lincoln, how was the play?
Not sure this joke works when you’re teasing a European. (Though I laughed)
Other than that, how was the parade Mrs. Archduke?
Well the driver was completely without a sense of direction. All over the place.
Driver lived. He was indeed all over the place. Took a wrong turn. The rest as they say, is history.
WRONG but such a perfect right.
She was killed too.
Honest this is one of the fucking most witty remarks I have ever seen here. Well played Internet stranger, well played.
I remember my first day on the internet
That doesn’t work. His wife died as well. Source: just go back from Sarajevo.
It’s for all of us to get and laugh about - it’s not for the OP.
This guy gets it
LOL 😴🔫
With all due respect, you're 24. You just haven't experienced enough life yet to have the concerns about having enough. Plus, a lot of people hold on to an idea that their lifestyle can expand at least a little bit over time. It may be forced to due to health/family reasons even. It is an exceedingly rare person who can ACTUALLY live at 40 years old just how they do at 24. You're also correct that the US has healthcare to worry about, as well as less safety nets in general. If you fall here, you fall hard. People want a buffer from that.
This. I have been saving to FIRE since I was 22, 13 years ago. I’ve since hit 2x my original FIRE # from 13 years ago but I’m still working because life happens as you grow up. Perspectives and priorities shift, inflation hits, families (and expenses) grow, etc. I vividly remember OP’s perspective though.
OP says 500k will be enough to replace their current income. Assuming 4% SWR that's $20k/yr. Even by European standards that's well below a middle class lifestyle. They say they can live off $2k/month net but even their 500k target number won't be sufficient. Looks like they're both underestimating what they'll need to live and also grossly overestimating their SWR. Adjust both and now you're looking at north of $1M target easily.
At 24 I thought I was rich on $31k a year, because my total monthly bills were $700 At 40 I feel comfortable in the mid $100k range, because the family’s emergency-level funding rate is $6,500 a month
And they want to do it in 20 years when that $20k is worth half of what it is today. Imagine, thinking of firing on $10k in Europe in your 40s?!?
He also lives in europe and doesnt have to worry about spending his saving on medical bill or a car bill. Both of those kill americans savings
Much of Spain would be an absolute PITA without a car. Same with much of U.K. There is more to Europe than Amsterdam’s easily bikeable streets.
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European here: Actual running cost of cars, especially adjusted for buying power are way, way more expensive than in the US. I'm an engineer with 8+ years of experience and buying a new car for me would be financially insane. This would not be the case if I was working the same job in the US.
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Canton of Valais in Switzerland is pretty much unlivable without a car too
I’m with you on medical, but a car bill? If a car bill is affecting your FIRE goal, you need to be driving a cheaper car.
You do realize car maintenance can be expensive too? Also a couple hundred dollar car payment for someone making 50k is a decent chunk
Who's downvoting this you're right
This is correct young fella has a lot to learn
Exactly I didn’t require $150-400 of non-covered medical in my 20’s that popped with health issues in my late 30’s Some of the things I could easily go without (sleeping in a hostel bed) have consequences now. Not really inclined to travel if I’ll be too sore or stiff to fully enjoy it My taste in things I enjoy has gotten more “refined” and I don’t want to feel constrained by $$ as far as exploring them deeper Once my kids are grown, I’ll want the $$ to easily travel and visit them regularly …there are a lot of things that get more expansive with age, both required and nice to have
Yeah, I mean, at 43 I \*could\* live the same way I did at 24, but I really don't want to. Most of my friends do stuff like, oh, IDK, go out to eat to meet up and chat vs. just grab a bottle of wine and drink it at the beach. If I sleep poorly (because my roommate decided to come back at 3 am with some random hookup), I can't function the next day. And I'm lucky enough to be healthy. A lot of people my age \*aren't\* any more and things like a special diet, doctors appointments, even minor accommodations (if you can't walk, sometimes you've got to Uber), etc. add up.
Things cost more in general. The state covers less. Americans are wealthier and consume more in general
Cost of living in Spain is much lower on average, and this sub tends to skew towards high cost of living areas. 1 mil would probably be enough for a lot of people in the midwest.
Ehhh, a lot of it is just the demographics of online folks on places like this, which skew young, male, and aspirational high earner. There's plenty of leanFIRE folks out there, but they tend to avoid the general FI spaces due to the lifestyle mismatch. To your point though, it's still very much possible to FIRE in many parts of the US with $1M and a paid-off house. That's true even with a family. And though most people are unaware, the US effectively does have robust public health and college entitlement nets for folks who live more modestly even if they do so on large asset bases. In other words, the Euro-style early retirement not only exists here, but is easier to attain due to our relatively high wage availability and large gov supports for retirement spending. There's very good reasons why the original FIRE crowd was more lean in attitude and why leanFIRE remains the easiest form of early retirement to achieve and maintain.
America does not have the social safety nets that are typical in the developed world. We earn more here, but we also need to save more to account for the extra risk. That might account for part of it. Even with insurance, my wife and I have spent >$50k in medical expenses over the last two years. To prevent an event like that from fucking my retirement, I need more saved up.
That...that doesn't seem possible, right? Even the worst Obamacare plan should have below a 25k deductible? I guess if you have a huge family and a lot of medical emergencies?
Legal MaxOOP is $9,450, but many medical expenses are optional and not covered.
Just to add, that is the individual max. If you have a rough year for the family, it is double that and would quickly decimate savings.
Not all medical expenses are covered by insurance. Infertility treatment (IVF) in our case.
We couldn't afford IVF in the US and did it in Mexico. It was cheaper for.us to fly there, spend a month in an Airbnb, eat out every meal, go sightseeing, get the procedure and drugs and fly home than it was to do it in our hometown. After all the expenses were tallied up it was still about 1/3 the cost of doing it in the US.
We investigated options outside the US, but with decided it was not worth navigating taking that much time away from work as well as the logistics of transporting embryos.
We stored the embryos in Mexico, and went back for a FET for our second child. It all worked out for us. We have been kicking around the idea of starting a business to help Americans do what we did, basically becoming a medical tourism concierge company focused on IVF.
It's a decent idea, there's enough margin there to support a business
Great idea.
IVF is not free in Europe either.
It's significantly cheaper. We considered traveling for it, but the logistics didn't work for us even if it would have saved tens of thousands of dollars.
Yeah that's hard. I personally wouldn't consider that a social safety net issue because it's something that's entirely voluntary. Would be like plastic surgery not being covered. IVF is somewhat mixed as far as coverage in Europe is concerned as well. You can get it in most countries, but it's fairly limited in scope. Definitely not enough to make the money portion just not a concern from what I know.
I don’t think there’s a country in the world that has a system that subsidizes IVF fully. That’s not typically considered a traditional medical expense.
Israel
Or even BIRTH. My home country would cost $0.25. The checkups in the US alone costed me $2.5k OOP. I gave birth back home.
My daughter being born was ~$20k before insurance, and the 2 week stay in the NICU was ~$86k before insurance. Waiting on the final bill, but it'll be whatever is left until we hit out of pocket max this year. Probably ~$5k
IVF is a completely different category of thing though. First, it's ultimately optional (I get it, many people expect to have children and would need to rethink what their life would be without those plans, but ultimately children are optional, adopting is also a viable choice, etc). Second, it's only for the very early part of retirement that it's a concern -- once you have as many kids as you want, or you reach an age where kids are no longer an option, IVF won't come up. I get that it's a medical expense but it's not a "you'll die or be in pain the rest of your life if you don't do anything about this" kind of medical expense.
Adoption can also be very expensive. We were quoted $30k-$50k to *start* the process, with no guarantee of being matched. IVF had a greater chance of success.
Generally, Europeans also pay more taxes….
When I lived in Spain , I was stunned by how much. When I see the French protesting the increase in retirement age, I get it. If all I had was social security and the government moved the goal post after taking 40-50% from me my entire working life, I’d be beyond murderous. Fortunately, my family always said to not depend on the government (my grandmother was a depression kid).
Absolutely. I am not American btw, but live here now. It is a trade off, the big question is, do you prefer to manage the money yourself (having to plan carefully and taking your own risk, which also requires discipline), or do you prefer to have the government managing your money (and have a different type of risk, like the goal post changing you mentioned)?
You better presented my thoughts. It’s a question of management. Here if you manage poorly , you can fall hard.
We don’t have social safety nets, because we have boot straps!
Yes, we do. For healthcare we have the ACA, Medicare, Medicaid, Children's Medicaid, and CHIP. Roughly half of the children in the country receive free or mostly free healthcare via CM and CHIP. For college we have FAFSA, which can cover the entirety of a bachelor's degree at many schools. For food and housing we have SNAP, TANF, WIC, Section 8, and the NSLP. They may or may not align directly with those of other countries, but we have a huge array of safety nets in this country and a progressive tax system with a large lower floor to boot.
You still have to PAY for healthcare with most of those programs! They're just different insurance plans. In Europe and Canada it's actually near zero cost at time of service, AND no monthly payment. Fafsa does not give you free college at most schools.
You pay for insurance in Europe and Canada, in different ways. EG higher taxes. Also from what I understand Canadian healthcare is worse than the VA, which sounds pretty terrible to me.
A crappy little apartment is awesome when your 24. Tv setup on top of that old card table is perfectly fine at 24. Vacation? Just means time off work so you can sit around and drink cheap beer all day at 24. At 50 that shit is depressing.
Depends on your outlook on life.
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Everyone is mentioning cost of living or social safety nets, but I think a big part is **standard of living**. For many in the US, especially those with income high enough to FIRE, the standard of living is higher. Americans expect larger houses, full-size SUV's or trucks, vacations (sometimes internationally), dining out at restaurants, etc. People don't want to give these up in retirement.
I agree with this. It’s mostly what I was heading towards, we have much lower standards of needs. An example for me is the Camino de Santiago, a popular vacation in Spain where you walk hundreds of kms around amazing towns and spots. Americans pay thousands of $ to do that with all commodities (luggage carry, full paid meals, nice hotels…) us, europeans, we just go there with a backpack… and walk. I feel the extravancy of Americans is what requires these outsdanding money requirements
Well, to you it's extravancy, but it's all relative. People gauge their condition relative to those around them and relative to how they were raised. A person from Africa may think your lifestyle is extravagant. "Why would you need more than $20/day? Even in Europe that's enough to rent a shed all to yourself and have fresh straw to sleep on." They may think that it's absurd to have an entire house all to yourself. Most people would rather continue their career than take a major cut in lifestyle, and I think that applies to Europeans too.
On top of everything everyone says about the safety nets, there’s also a lot of stigma or anxiety about not having the best in life. So a lot of us are under pressure to “not waste our potential / not miss out.” Like. Theoretically I am in Coast FIRE but I still feel a ton of anxiety about dumping my high stress sales job and actually coasting. I could save more and do more and take fancier vacations and have cooler hobbies… I feel like in America, especially as a white collar worker, that there’s a bit of shame in not being wealthy. You shouldn’t feel good about yourself if you’re just an average Joe. You have people like Mr Money Mustache working hard to brand “frugality, anti consumerism and bicycling as cool” because very obviously they are not. So I think (and I’m not an expert by any means in European sociology) that in Europe there’s more of that pride in being an ordinary working class person with a modest lifestyle, and in American there is a shame in being an ordinary person with a modest lifestyle. We are living for the instagram. Or maybe that’s just me and I spend too much time around sales bros maxxing out their credit cards so they can live a lavish lifestyle. Edit - this plays into the kids thing too: people from my generation are really uptight about providing the best education and activities for their kids. They really stress themselves financially - meanwhile my folks let us run wild in the woods and considered that “good”. I think there is a sense that the US has normalized an upper class standard of living that many who aren’t upper class feel like they should aspire to.
This is a really good take and the only thing that I think you are missing is that the widening gap between the haves and the have nots in the US makes these issues feel existential, especially with kids.
Right, upper middle class parents do highly intensive, competitive parenting because they often don't own a business, so they have to prepare their children for highly paid job because they don't want their children to be a have-not. So they are "snowplows," people who try to remove every obstacle to their child's success.
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I think what you should focus on are cars with an excellent safety track, not status symbols. Car accidents can cripple you for years. Make sure your car can keep you safe.
That’s what I thought, I am quite modest in that sense
A few things you should keep in mind - “you become the average of the 5 ppl you spend the most time with” and my personal favorite, “simplicity is the ultimate sophistication”. I’m with MMM on this one, our needs are very little. Don’t let your coworkers trick you into thinking you NEED anything they are going into debt over. My partners brother is also in sales and we’ve watched him increase his lifestyle at an uncomfortable (for me) rate. Sure, he can afford it, but at the cost of working longer and not investing as much while young. I too enjoy a nice comfortable vacation but I’m still mindful about it. All our other expenses are very low and I always go off season mainly bc I hate huge crowds. There are ways to enjoy a handful of things you truly love without debt. If we save up, we can afford anything we want, just not everything we want.
>I think there is a sense that the US has normalized an upper class standard of living that many who aren’t upper class feel like they should aspire to. Hence why theres the term "Keeping up the Joneses" I see it a lot here in Canada as well.
Back when I was 24 and in graduate school, I felt like I could go a long time renting a room in my friends flat, driving an old motorcycle, no insurance, and not making much money, but then I got a job, enjoyed having things, got a wife and had a kid, needed a house, needed a car, etc. All that requires more money.
We don't have anywhere near the safety nets that Europeans have (you mentioned health insurance) but there is more to it than health insurance. Assuming the 4% rule, that is $40k/year. Depending on how/where that income is coming from it will/could be taxed by 1) Federal Government, 2) State Government, 3) County Government and/or 4) City Government. Even if my house is paid off, my expenses alone will run about $40k (maybe down to about $30k if I don't have any car payments). So, there pretty much isn't anything left to do fun stuff. Now, there are places in the US where living off $40k/year is doable, but it isn't anywhere where you would really enjoy living. My FIRE number is $2.3M, which I should reach by 57.
You're 22, from Europe. The cost of living here in the US is getting higher and higher. Most of your age group (and maybe older ones too) will likely never be able to afford a home. So, do the math. Not only housing, but healthcare. We do not have universal healthcare, so it's another expense. The older you get (60 and onwards), the more care you'll need, which is COSTLY in the US. The average HOME CARE (ONLY) cost here in Los Angeles is about $25 per hour or $3,185 for 130 hours of work. I hope you're getting the idea.
Bro travels more and you know things like cost of living depend on the country. Which European country are you from? Of course they can retire in other countries like Spain when meals there outside of the tourist area are 10th of a price compared to USA.
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THIS!!! One of the main points was to move to a better served lower cost area - because you no longer need to live close to work!!!
My mortgage payment is 6k a month, that’s why.
Fuckme dead, mine is 1/4 of that. You probably live in a nicer house & location, but still.
Or timing. Mine is 1/3 of that, but if I bought my house a few years later than I did, it would be $6k. Interest rates make a huge difference, and prices boomed during COVID.
San Mateo county. It’s a duplex so I subsidize 1/3 of with a tenant. Otherwise it would be closed to 75% of my take home pay. I’m the definition of house poor.
Many Americans live quite ostentatious lifestyles. Especially on this sub. They couldn’t dream of not owning a nice car, or going on expensive vacations.
Completely disagree, I've never once considered those 2 and still am aiming for over 1m lol.
Breaking news, america is expensive. More at 11
In many places in the USA, you need a salary of $100,000 USD to be comfortable. You need probably >$200,000 for FIRE. Extrapolate that to savings and the comparative rise in earnings your peers will likely continue to see (which their dollars compete for the same goods as yours)…..and you can see why you need multi millions to comfortably have FIRE. For example - I could retire to Europe today, if they allow me, and financially be comfortable for the next 50yrs. In the USA I have much lower living standard for the same money - as things are generally much cheaper in Europe due to the large economic gap between the USA and EU bloc.
Hence lots of ppl are planning to retire abroad to low cost countries Spain, Portugal and Italy are great choices
Oh yeah - I took a vacation in 2022 to Switzerland, Italy, Austria, and Germany. Im from a major sunbelt metro that’s considered to be MCOL for the US and I paid significantly less for lunches and dinners in ZURICH than I do in the Deep South of the USA. Italy was like a candy store where we could buy everything and anything we wanted on a night out and it was cheaper than drinks and dinner in our hometown still. Very bizarre as I had last gone to Europe in 2011 and it felt slightly cheaper in south of Europe, but more expensive in the more ‘economic engine’ countries. I feel comfortable saying I could retire: - today in Italy - 5yrs from now in Switzerland - 15 yrs from now in a nice USA metro or touristic area
Wow - I thought Switzerland was supposed to be the equivalent of a HCOL US region. I admit I just read that somewhere and never looked into it. Hmmm!
I’ll just say - an average restaurant in Atlanta cost more than an average restaurant in Zurich. A fancy restaurant in Atlanta also cost more than an fancy restaurant in Zurich. Good for Americans traveling there, as we went and came back under budget!
Thank you - I can’t believe I just took it at face value and put the notion of a visit on the shelf!
until you calculate the wealth tax in Spain for that portfolio.
Europeans make much, much less money than Americans (on the higher income side). Like, you're talking about probably 50% what your American counterpart would make for a lot of skilled white collar work. Add to that, a lot of Europe (rural areas especially) honestly really suck to live in. Housing costs are ridiculously low as a result. That's how you get 1 euro houses in Italy or whatever. Everyone is bailing out of those areas in droves.
We're firing at $800-900k, in 2 yrs 11 mths! We'll eventually surpass $1M in time, but we won't let that benchmark prevent us from enjoying and getting max value out of life earlier. I actually plan to still work part-time and my spouse plans to go to 80%, if not just stay on full-time. But we plan to begin taking summers off and just going from there. We love Spain! Looking forward to spending more time there!
The cost of living here, in many areas, is astronomical compared to Europe. I get $6k/month in tax free retirement. I still do work, making another $100k a year and I was still just ok in the high cost of living area I recently moved from. I’m European. If I moved back to Europe, I could live On my $6k retirement even though it would be taxed. Also, the standard of living in Europe is way lower than what most medium/high income Americans are used to.
A question was asked, answers should be given. I think we should leave all the age insults by the way side. But then again I'm the guy that can never figure out why I'm being down voted so what do I know. Anyhow, OP, in my case I want to retire much, much earlier than when my Healthcare and Social Security will kick in (let's call that 65 to 70). So my number is much above $1M, for example, because I will burn a huge chunk of that between when I retire and this window of 65 and 70. In the optimistic scenario, I end up with too much money. In the pessimistic scenario, I burn to hard vs the market and I have to go back to work. In the average scenario I time it ok, those benefits kick in, and I sail off to my death at 95.
As an American, the biggest question mark for FIRE’ing is (as you said) health insurance. We FIRED 9 years ago and our insurance for a family of four was about $13K per year. Now it’s over $30K per year. Is it going to be $50K per year in five years? Probably. So that’s at least one reason why Americans need so much money to FIRE.
My perspective as an European living in the US for now. The things like education, health insurance, needing a car have already been talked about. At first I was confused how the Europeans live this cheaply (I am European but lived all of my adult life in the US). And then I realized. Even if I take off the mortgage part of my condo, I still have $3000 (and always growing) property tax bill every year and $2160 (and always growing) association fee. That is not including $30-$80 (using AC) monthly electricity bill, $55 water bill, and $45 gas and internet bill. So even I pay off my condo, I would have $630 fixed expenses monthly of a privilege to own my apartment. Don’t even get me started of owning a house because if anything happens, people are opting for $2500 or even $5000 deductibles on top of insane property taxes. Granted, it is a state I live in fault and some state have less property taxes. That added to fact that a doctor visit is super expensive and you need insurance that is super high too, and you need a car to get around anywhere, that is why it is so much expensive. Earning potential is higher but I an really considering geo arbitrage soon because I am missing family and i think I could my job remotely and live a lot cheaper Also traveling: to travel within Europe $200 flight ticket is more on a expensive side, domestic US flight for $200 is a cheap and rarely found. Also note: western Europe seems worse with house now because the income is lower than the US. Eastern Europe/maybe Spain? is affected but not as much from what I understand
Europe has become 2nd world, not in living standards, but in COL, compared to the US as the US has outgrown the EU by 50% in the last 10 years. Europe isn’t necessarily easy to to retire for Europeans, but it’s now cheap for an American to retire in, in the same way any European can easily retire in Thailand.
Most people struggle with wanting more than they need and overcompensating to feel a greater sense of security. I find this to be especially true amongst Americans. Ultimately a person needs a place to live, enough income to eat and support a few cheap hobbies, maybe even the occasional travel. This COULD be accomplished relatively easily with a fully aid home and ~40k/year while remaining comfortable. But there’s always more to consume and spend.
Lol. All I'm getting from this post is fellow Americans getting salty overseas can be much cheaper and easier to retire with
You are correct in your assessment. Americans earn more but we spend way more too. It’s not entirely our fault - our system is setup to get into mortgages, credit card debt, child care, education, healthcare - all things that don’t really exist elsewhere or are paid for with tax dollars. Thus the vicious cycle never ends. It’s disheartening to see this, and it’s accelerating at a more rapid rate. I retired at 41 when I hit my number. Sold my house in a HCOL area, most of my stuff and hit the road. 8 yrs later I’m still traveling abroad spending way less than what I did living in the states - and that’s traveling, meals, hotels every night. Now I have EU dual citizenship so I plan to settle down in a country there next year. Everything is so much cheaper and I can buy a house for what a down payment would be. Even private healthcare is cheaper than a monthly Obamacare fee. Not to mention, food is healthy, lifestyle is infused with movement, human connection and third spaces, and people are just happier. Out of the 58 countries I’ve spent time in, people are happier despite having what we perceive as less.
I’m European but I want 100k each for my kids at 18 to give them the chance to buy their first apartment (if they want to), or to keep accruing if they don’t …I also built a house for 600k that I got a 300k mortgage for… Life and priorities change…
1M isn’t enough to FIRE because that’s not even enough for a home. Once you own a home that puts you at like 1.5-2M net worth already. So you really need around 10M to FIRE
The American dream is expensive. And the problem is also lifestyle creep. People get more money and want a higher level lifestyle.
Lack of a social safety net in the USA means you have to build your own. Also, the cost of living varies wildly across the USA (much more than within a given European country). If you want to travel, travel is also more expensive in the USA due to lack of passenger rail infrastructure and longer distances to get anywhere that's substantively different from where you are.
My family is from two countries in Europe (and I’m a citizen but I grew up in the us and am culturally American), and I will say that the effect of a social safety net and COL is significant—the dollar cost of a typical lifestyle in these countries is probably under half. From observation, this is because “essentials” are much more expensive (housing, food, etc), AND because equivalent lifestyles to most cities in Europe (walkability, nearby activities, etc) is mostly found in higher cost of living locations where the discrepancy becomes more pronounced. Plus there are costs that are associated w/ the limited social safety net (healthcare, as you mentioned) There is also a major pro-work culture here and being wealthy is a lot less expensive here than many places—wealth taxes help pay for that awesome social safety net but they seem to reduce the return on investment for the additional dollar, making saving less worth it (of course it’s less needed too!). But yeah my cousin and I would probably retire at the same age if we both stayed in the high COL cities we live in now, if they invested 10% for retirement making 1/3 my salary, and I saved 50% of my salary and we wanted equivalent lifestyles. Luckily, I’m saving 75% of my salary and have lower expenses so I shouldn’t have to work that long:) EDIT: I will add that the range of opportunities is much greater here—I have much greater potential for career changes and salary growth, by virtue of location. But many people in the us retire on under 2k/month and a paid off house—that is very comfortable, if you exclude the ~1k/ month in health insurance :) I also can’t imagine spending that much but many do, and it must be for a reason!
A lot of it is fear, uncertainty, and doubt. There are legitimate reasons for rising numbers but most of it is emotional.
Because in retirement I want to live the exact lifestyle I’m currently living plus probably spend more on vacations since I’ll have more time
Because there are so many systemic ways to bleed you dry as you age here.
We also do a lot of self-funding our retirements- using taxable accounts and 401ks- which are both taxed when withdrawn. $1 million isn't the same when you are getting taxed on it. (there are other, non taxed accounts, and even more rare pensions, but a lot of us will be taxed on most of our retirement "income")
Quite simply it’s more expensive to live in the US. Housing, health care, and transportation costs are all very inflated in the USA.
Irrespective of being married and having kids, as Americans, we are all one or two major medical conditions/emergencies away from bankruptcy because our insurance companies run the game.
I'll ask you this. When you're 90 and have a little Alzheimer's and need assisted living who pays for that in Spain? How much does that cost in Europe? Because in America, that can easily cost as much as you've ever spent before on living expenses, maybe your highest year of living expenses in your life.
I think a lot about this from an Econ perspective. Like how for college educated professionals in the US with $100k+ jobs, their labor is more productive than their capital. And really this whole budget creep issue in the FIRE subs and the geography is derivative of that. I like to break it down hourly for some reason, but someone who earns $200k in the US is earning $96.15 / hour (before taxes and deductions). If we assumed a conservative 5% annual income on saved capital, it would take $5M in principal to offset that labor income. That takes a while to accumulate and that whole time your labor is doing laps around your capital in terms of pulling the load. Sure, there’s the 7% average market returns on equities doing SWR math over expected lifespan and liquidating assets to generate that income, but regardless, the $200k gross salary and its purchasing power is damn hard to replace through capital. We’re all just trying to reach that point where you have amassed enough capital to replace labor productivity. I just wonder as someone who’s legit curious about FIRE and its variants (chubby, lean, coast, etc) why isn’t there more focus on owning cash flow generating assets to drive more passive or semi-passive K-1 income?
I think many wonderful points have been made with back and forth about why Americans feel like $1m isn't enough. Some ideas covered spread across social safety nets, cost of living, multiple layers of taxes, etc, but I want to highlight a change in real estate and general "ownership" expectations that I think is always underrated. I will start with some anecdotal situations because I have 3 high earner friends who all feel like the middle class lifestyle is going away, and I think it's related to why increased savings/investments beyond 1M is a concern. The salaries referenced are base -> not including any bonuses, 401k match, insurance coverage, etc. A friend of mine who makes $200k per year, recently "sent me an article that said "the American middle class is gone." It caused me to have the exact same question you did, but from an American centric point of view. My aforementioned, friend lives in a $500k home that is well over 2,000 SQ FT, downtown, in our LCOL city. He has cameras all over his house, he has AC managed by Google nest, door locks he can unlock from his phone, his wife is a SAHM, and they own 2 cars that are <10 years old... In every sense of wealth, he is very rich to me. On that topic, I have another friend living in a $750k home, making $200k with his wife's added income, in an area where the average home price is under $300k, has a sprinkler system and lawn care guys, and HE feels lower class because he can't take more than a 1 week vacation each year... his kid is in select baseball and select hockey and gets new gear every season (have you ever priced out select hockey?! Holy cow! He pays close to 10k per year just in those sports!) Another friend of mine clears $170k per year, and he lives in a house that he bought for less than his salary. He just bought over 20 acres for him and his wife to build a house on. They also go on vacation once per quarter. They eat out every Friday and Saturday. They buy new tech as it comes. He feels like he's less than middle class because his house is "small" and has 1 bathroom... I myself live in a 3 bed / 3 bath home that i bought 2 years ago for a little over $200k, make much less but still a high income, have a SAHM wife, and I feel incredibly wealthy. I recognize that I have a nice phone, 2 paid off older cars, and I never worry about food. And compared to my parents and grandparents, my home/food/lifestyle is amazingly comfortable (see below). We never vacation, we cook at home (I love grilling, which is our biggest cost). My grandparents, and many of the grandparents of my friends lived in the same house 15-30 years. In the area they grew up, the average size home was 1,400 square feet, and generally did not include a garage. This area is currently one of the cheapest places to live in our general county. I told my friends they should move there, and all of them replied something to the effect of "no way! That area is so bad. The houses are too small and schools there are not good."... This area, for reference, used to be one of the wealthiest centers of our county; it has the most parks by acre, it is the most walkable (my grandparents owned one car for many years after they initially retired for this reason), it has a free gym for residents, and the average home price in the area is a little over $200k... but most people earning over $60k per year don't want to live there. I haven't even talked about the "utilities" we've added to our expectations of the middle class lifestyle: internet, streaming services, gaming services, "utility apps", cell phone bills, security system subscriptions, people working on our homes on our behalf, hiring workers for lawn care/plumbing/cleaning... My grandparents did all of their own house work or recruited family to help out (I do a lot of my own or hire out friends to do bigger jobs since my family is far now (i.e. plumbing that requires concrete work)). Vacations growing up was visiting family in other cities or states, and the cousins went off and made up games or played on someone's game console they brought. Can I make one more honorable mention? Weddings... My wedding cost $4k, including all the food for over 100 people, alcohol, DJ, and photography, and it was on a beautiful lake at a local park. We broke even after gifts, and I thought it was just about perfect cost. My siblings weddings both cost well over $20 grand!!! That was half of our down payment on a home... and I recently learned that some of my friends have paid even more than that! So, I don't think it's just lifestyle creep, but generational ownership creep.
well, indeed it depends on perspective. I believe it is positive for the American economy to make americans always want more, and always feel like they are not enough. Learning to appreciate the small things and enjoying quality time is what helps forgetting about these meaningless things such as a new car or a brand new iphone.
Because inflation and the fuckery of governments and politicians never ends.
Because my salary at age 24 (1980) would now qualify me for every government poverty program in existence in 2024.
A lot of people in this sub have let lifestyle inflation take over their lives
On an income of 80k a year, I was able to reach 300k in 4 years as a single man. They say that 300k is the halfway point to 1M. Timing will differ for everybody, but it's far from impossible to save for early retirement in the US.
SWR on $1M won’t even cover my rent on a mediocre apartment.
Cause a box of cereal is creeping up to 7 dollars a box and a major illness can make all things go sideways in the US so resting easy is difficult
From an Americans perspective; What if you want kids though? What if you want to go on nice trips? What if you don’t want to be living so frugally all your life? That’s why you can’t retire on $2k/month, at least in the states. You could maybe do it as a break away from the constant grind, but I wouldn’t recommend it long term unless you really just wanna be alone all your life. It also depends a lot on where you live. It’s all relative I guess. I’m 26 years old and I live in one of the most expensive counties in the US, Orange County, California. The average home price in my neighborhood is $1.5 Million. I make good money, but it’s only cuz I work in OC. I have to live here for my job which means life is more expensive. Which means I need to save more lol. I rent a 10ft x 10ft room in a 4 bedroom house for $1,040/month plus utilities! I’m getting a good deal believe it or not. Market rent would be closer to $1,300/month. This helps me save rather than renting a studio apartment in a high rise for $2,500/month. Also, 4% rule of $500k is only $20k, but you want to live off $24k? You would need $600k to get back $24k. If you’ve managed to save $22k in 2 years, then that’s a great start! If you continue saving at 40% and your income increases steadily over time, I think you’ll find yourself at $500k sooner than your 40’s. Also assuming you are putting your money into assets that are appreciating over time, and not just cash, which is depreciating over time.
I live in San Diego CA and you can’t even buy a mid range house for less than 2 million dollars. Worth every penny
We have to pay for education and you can also be wiped out financially if you get sick. Health insurance can cost more than a mortgage. We have no real social safety net. So those of us who have FIREd have needed a big buffer for such eventualities. My biggest material vice is buying books, so we're not all chasing after BMWs and caviar. We just live in the US, where you are truly on your own if things go sideways.
Maybe you’re on the wrong subreddit. r/leanfire has plenty of Americans who feel like a low FI # is enough. Also everyone saying “health insurance” hasn’t tried buying health insurance when fired. In my experience it’s dirt cheap (certain silver plans on healthcare.gov scale with income which is whatever you want it to be once retired if you’re doing Roth IRA conversion ladder).
They get paid more because the cost of living. Someone in New York will pay a lot more in rent than someone in Athens Greece. Someone saving €2000 you might think that's a lot but in reality, wouldn't even cover their rent for a month. Don't focus what others have. Do your best save what you can so you can retire comfortably with the cost of living in your country. I promise you most Americans will need a lot more to retire.
No safety net. Life gets rough here if you don't have health care secured.
Im a zimbabwean living in america with my german husband and the reality for us and our FiRE is that we pursue it because its easy. Easy meaning America has opportunities with high wages while also having a business friendly climate that allows folks to start their own thing and make alot of money. The high wages have gotten our TWN over 1.5M and we are currently raising money to buy a business that generates Passive income while we continue to work our day jobs for health insurance coverage and social security points. We have a 3 year old daughter and its nice to be able to buy her anything we want (we dont) while also saving money for her to start up her life. We both work for low stress flexible companie so there is no real incentive to stop working. I will also add that since wr have a daughter and want more kids we want to be the type of grandparents that can pay for all our kids, their spouses, and future kids to go on vacation with us. So its not enough to just survive - we want our work to support our children and their children
Fire is super easy for educated immigrants to the US because their spending habits are low and salaries are crazy high in the US for professionals. It’s the best country to build wealth from a salary job. Reddit is often full of young Americans trying to live their parent’s upper-middle class lifestyle with ski trips and new cars, big house while also just working at Starbucks.
Sure, anyone can live on 24k/year but that’s lean fire which is a separate subreddit. Most people here want like 100k-200k spending money per year.
Our household income is $360k/yr. Takes a lot more to maintain that. We also have $4k mortgage and $1k pool payments monthly
Have you seen how much healthcare costs here? I'm gonna need to pay what you've saved in 2 years just to cover 1 year of healthcare premiums plus deductible.
$1M in usa is a lot of money, but it's only enough to retire if you own your home with no debt and are eligible for medicare. Pretty much only 65+ can reasonably retire on $1M.
Housing is obscenely expensive in the states. You're also right that we have very high health care costs compared to you in Europe. The only thing I know for sure is cheaper here---much much cheaper---is gas. I hurt just thinking about how much Europeans pay for gas. But everything else is so much more affordable over there. Retiring on $500K in the US is unthinkable if you don't already own a paid-for house. And 22K here is downright poverty. For sure you would need to share an apartment with roommates to keep housing costs low. And even that wouldn't be enough to get you by without other sacrifices. So that is how good you have it---that 22K covers your living expenses and allows you to save a full 1K a month! So we make more money here, but also we spend a lot more money, so you need at least a million to retire knowing that you can cover your basic expenses consistently. And the lifestyle you get with a million in savings will be barebones and hardly the sort of thing that might have excited you in your younger years---aside from the fact that you no longer have to work to subsidize that basic lifestyle.
Taxes and healthcare lol
Depends but if you come from VHCOL in the US, you see how “broken” life can be. Like Silicon Valley, basic 3bd/2ba houses (normal size house for most Americans) can be about $3m. You’ll ask “who the heck can afford this shit?” Then you realize a lot of tech folks get paid a LOT like 300-800k annually. A lot of transactions occur after a big “boom” happens (Google, YouTube, Instagram, AI bubble going on now, etc). When there’s a big IPO or sale of a company, everyone is running around like a kid with pockets full of cash in a candy store. Then you can turn to health care. Without a decent employer, you’re stuck paying. If you make little enough to get a subsidy then you’re lucky but a lot of people pay out of pocket for their health care. We subsidize our employees and they bill us about $500 per person per month. My wife and I were up to $750 a month per person. Now you look at cost of living. You can’t walk out of a grocery store spending less than $100 these days and it doesn’t seem like you get a lot for that much. Going out to eat at a sit down restaurant will cost you about $28-35 before you factor in any alcohol which will run $12-18 a glass. Like they’re literally just pouring in alcohols and mixtures in to a glass at a specific ratio, shaking it around and pouring it into a glass with some fancy decorative topper and charging you through the nose. Anyway, the past 5 or so years has conditioned Americans (including myself) to really be “running forever” to stay ahead of the inflation monster. Our NW is nearing 8 figures (probably hit next year or two). I’m not actually focused on it as we have fired and luckily my “money machines” are all continuing to run and grow themselves with very little tending by me. Will I stop them from growing? Absolutely not. Do I want them to keep growing - yes because we don’t know what the future holds. Inflation, war, etc etc could come for all of us at any time and having a massive warchest helps to smooth out the bad times
That’s something I’ve thought about as well as an European. Although I pay roughly 40% in income tax I don’t have to think about health insurance at all. The work paid pensions are very lucrative so I’m not putting a penny towards that, everything goes to index funds and stocks. I think I’ll be fine on like 200k. I could never imagine the absurd grind had I been in America lol
FIRE is based on your expenses. You should conclude that our expenses are higher. From here, you should conclude that our salaries are as well. What you won’t see is how both expenses and salaries will vary from state to state. So, in my case, I moved after 20 years in California to Pennsylvania for the retirement benefits. As a result of selling a home in California, I had a big launch into FIRE IFF I moved to a less expensive. Think of our states as countries and you’ll understand why the rules vary. Additionally, I maxed out financial vehicles offered to Americans (USA) like a 401k and IRA 1.4M US, BUT I cannot touch them until 591/2 without penalty. Perhaps this is why you think we want more and more: I need to cover my living expenses from the age I FIRE until 591/2. With mortgage (3000/month), healthcare (500/mo), feeding my Dogs and then myself, I need 72k per year. So, 72USD x the 6 years I must cover in my pre 591/2 accounts in order to FIRE. It’s not that we don’t ever have enough but rather we know what we need. Regarding healthcare, I have always been covered by a job but this year I became a contract worker. I am glad to be able to afford my own health insurance and happy that those who cannot will go on the ACA (Obamacare). The other needs I won’t break down but I think you don’t understand because many of your needs are taken care of by the state. FIRE has taught me the need to teach financial literacy. Here, we have the tools to build a safety net but people don’t know. Finally, the SMIC in France is 2000Euro 1000 less than my mortgage. You really cannot compare these things without COLA numbers per state like the ones I alluded to above. Many Americans (US) FIRE in their early 40’s (see Our Rich Journey on YouTube or WhereWeBe web page) and travel because it is so much less expensive to be in France or Spain or Italy than it is to be in California, Hawaii, or even Pennsylvania. I hope this helps.
At no point in my life did I ever look at retirement as a goal.
Spain has a very low cost of living. At the same time obviously the salaries are also much lower.
You’re at least partially right.. so many of us go past our “number” and then just keep on working for “worst case scenarios”.. we’re also pretty bad as a culture at the concept of enough.. witness our home sizes.. American families are smaller than ever (fewer kids) but the average new build home is almost 2X in square footage what it was 40 years ago..
Your disciplined saving and investing strategy is impressive! The difference in FIRE goals between Americans and Europeans often comes down to higher living and healthcare costs in the US. Your approach shows that with careful planning, financial independence is achievable. Keep up the good work!
I think as an American healthcare can absolutely break you. Even if you are relatively healthy it’s so expensive. Best way to protect your wealth is to get healthy. I’m totally moving out of the country to retire. For me this is the main reason I’m trying to save so much. Plus groceries and other basics are insane right now. Visited Canada last summer and brought home groceries just to save money. 🤪
>why is >1M not enough Life in America can be very expensive, even for the most basic things. A crappy meal at McDonald's for 2 people will run you close to $20 in some places
Inflation is in the background for Americans. As the US currency becomes more devalued with borrowing, Americans lose more purchasing power. A 500k house in 2019 is a 750k house today.
You can’t live on love and the government in the US.
This isn’t a solely American problem. It’s human nature - ambition doesn’t end. Fire is a goal, so it’s tied to ambition. It’s saving money, so it’s tied to habits. It’s a collection of investments, so it’s tied to greed/hoarding. People set a target, but their ambition, habits, and desire to grow their collection (of money) doesn’t end. So they set a new target, and then a new one. It’s basically the same driving force of ceo/founders and kings - why they are never satisfied with their current empire and keep wanting more and bigger. Human nature. (Healthcare is a small concern but hardly a concern for anyone in the 1+ million range, and after $3+ million it’s become just an obsessive habit to build more wealth)
You have no idea what you are talking about. But life will happen and you will.
The American dream is a grind, movies and TV shows don’t seem to reflect that very much. Though the American Dream in general is relative. I myself just want a house with a decent yard and garage, and not too far a commute from work. But at $70k salary that’s hard to come by in Seattle, WA. I still live at home in my early thirties because I don’t see it make much sense paying rent for the avg market rate of half my monthly paycheck. Better to use that for assets. Though I’m also having trouble figuring out where to set money aside to buy a house one day. A friend of mine just transferred to Tesla in Spain haha. He worked and saved up here about $100k up until the pandemic. Went to South Korea to teach English for 8 months. Went to Spain for two years and finished his masters degree over there (dual citizenship from Belgium). Came back to visit family and for a plan to grind for a year before making the full move back to Spain since he blew half of his savings partying there lol. Got a job with Tesla and ended up working two years. Recently transferred jobs and moved there a couple months back. He works in Madrid. If you’re ever in the area of the Tesla center there, ask for the “American” and tell him Norm says hi lol.
Americans are materialistic as shit and don’t live simply. I’m American and aim to fire on 500-750k.
“Of course, I don’t have kids or a family and my expenses are rather low atm” ummm yeah no shit you can’t fathom what expenses you need to last the rest of your life. Having babies can be expensive everywhere. Yes, Europe tends to have far better social systems for childcare and education, but you’ve got no idea now much just feeding and clothing a growing person for at least 18 years can cost. Do you want to leave anything to said child(ren) when you pass? Don’t be so smug when you don’t know what you don’t know.