Don’t Tell Jason Fieber He Can’t Retire By Age 40, Professor

If you would listen to Rob Weagley tell it, it’s a foolish game to try and pursue early retirement. He was recently quoted in The St. Louis Post-Dispatch speaking approvingly of bloggers that encourage readers to get out of debt, but he took a needless shot at investors pursuing an early retirement. Here’s his full quote on the usefulness of the personal finance blogosphere:

“There are dozens of similar blogs on the Internet in which people who aren’t financial experts share stories and tips for dealing with money.

They are generally a good thing, because they motivate readers to improve their finances, says Rob Weagley, who chairs the department of personal financial planning at the University of Missouri-Columbia.

“I think these bloggers can sometimes get people excited, turn the switch on and get them to actually do something.”

That said, he notes that not all the advice is good. The kind of blog that promises too much, like retirement at age 40, is probably not helpful.”

That’s the dumbest thing I’ve ever heard—Mr. Weagley needs to check out Jason Fieber’s blog at www.dividendmantra.com and see a living, breathing case study on how to reach financial independence and retire early. There, Jason clearly chronicles his life goals, lives deliberately, and notes every stock purchase that he makes on the path to retiring by 40. He doesn’t have an extremely fortuitous $100,000+ salary either. Instead, he saves his money because he’d rather become an owner of businesses that generate stockpiles of cash that grow over time rather than blow his money on toys that are cool and fun in the moment, but provide short-term pleasure that prevents you from making optimal forward progress in your life.

Philosophically, this leads into a complaint I have about the typical personal finance philosophy that I encounter: generally, we cheer on and laud people that are trying to erase $100,000-$150,000 worth of debt. That is good, and there is nothing wrong with that. My problem is that the same generosity of spirit should extend towards people that are trying to go from $0 in net worth to $150,000 in net worth.

You know, I went to a private school. A lot of my friends graduated with $50,000+ debt. At least some of them are having to make debt payments in excess of $600 per month. It’s a grind, and definitely a burden, but they find a way to do it. But what is interesting though is that the fervor that many people have to go from –x to 0 does not equal the same fervor to go from 0 to +x. I’m guessing the people who find a way to pay $600 per month to tackle their student debts won’t have the money to buy $600 worth of Exxon, Procter & Gamble, and Johnson & Johnson each month. That’s a shame, because the payment of debt is often associated with paying off past deeds, when the building of wealth puts you in a position to own your time and create impressive future deeds.

It’s logically inconsistent to suggest that it is reasonable to write a blog dedicated to finding $800 per month to pay down existing debts, but it is suddenly unrealistic to suggest that someone with no binding debts can find a way to invest $800 per month. We have a schizophrenic relationship with wealth in this country—it’s perfectly okay and laudable for the person to discuss strategies and exact figures for paying down a $150,000 debt, but we suddenly get weird when it comes to flipping the conversation to building $150,000 in real wealth. Usually, the experts label the pursuit of wealth building as “unrealistic” not realizing that the same amounts of money it takes to build wealth rapidly is comparable to the amounts of money it takes to knock out an existing debt commitment.

I think it is crazy for Professor Weagley to label retirement by age 40 as “probably not helpful.” I find blogs like Jason Fieber’s to be the most helpful of all—he talks about his dream, he converts his end goal into a number, and then he reverse engineers the process so that he can calculate the amount of money he has to set aside each month to make it happen. And then he chronicles his journey on the “Dividend Mantra” website.

I think what Weagley was aiming to say is that most people won’t be in a position to retire by age 40. He’s probably right. But I hope you never think in those terms. It’s not about trying to be average. By reading about finance in the firstplace, you’re probably better than average, economically speaking. Instead of worrying about what most people do, you should ask the question: What do I want? From there, you should calculate the amount of necessary to make that happen. At that point, it’s just numbers. Find a way to meet them, and the dream is yours.

 

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10 thoughts on “Don’t Tell Jason Fieber He Can’t Retire By Age 40, Professor

  1. "That's the dumbest thing I've ever heard" – This is a very tough sentence!

    I like Jason Fieber very, very much!

    He works very hard, is extremely frugal (not stingy), and pursues his goal with an unbroken spirit! He is like a steam locomotive with a speed of 200 – I would not stand in his way.

    May be that most people think reduce the debt "is real" and build wealth is not real – for whatever reason!

    But: My personal goal is: to reduce debt to 0 (I've done) and then build up a property like Jason!

    16,000 EUR I already have and it goes on … Month after month!

    Best Regards – also to Jason if he reads this! 🙂

    D-S

  2. Al says:

    Hi Tim,

    Quick question – what is the cost effective way of buying $600 of JNJ? I know that P&G and XOM both have DRIPS that are free or cheap to start, but JNJ requires one share??

    Al

  3. What a great post Tim. My buddy, a financial planner, sent me this article (he knows I blog). I shared the exact same feelings as you while reading it. Everyone is to be celebrated for getting out of debt, but becomes afterthoughts once they are debt free. Let's explore the rest of the story and celebrate those in a position to save and invest. There is a reason I don't have a debt payoff blog. That isn't something I'm challenged with. However, that doesn't mean I shouldn't celebrate.

    Perhaps there is an alternative to make folks happy… Perhaps we should all come up with some "million dollar debt" we are paying off… "Celebrate with us as we pay off a million bucks!" "I'm compounding my payments for the next 15 years until they hit 40k per year!"

    Again, thanks for the great post.

  4. I expect the sort of reaction that Mr. Weagley had from those that still struggle with their personal finances, but from an "authority" figure that's pretty strange. Why wouldn't you want to recommend that everyone that has to dig out of debt then take the next logical step and put themselves in a position to not have to rely on debt in the future. While I agree that most people won't be able to retire by 40, especially those that have to spend years or decades working their way out from under the burden of debt, is it really such a bad thing for them to improve their financial situation? Isn't that why they started paying down their debt in the first place? To improve their lot in life? And even if you can't get to the situation to retire by 40, is that such a horrible goal to have? Even if you fail and it takes you 10 or 15 more years, you're still getting freedom between 5-20 years earlier than most Americans.

  5. Tim,

    Thanks so much for the kind words and the inclusion of my story in your article. It's much appreciated coming from someone as thoughtful as yourself.

    As far as the message goes, I couldn't agree more. It seems that this celebratory attitude towards getting out of debt with the simultaneous disdain towards taking action to build real wealth is widespread, even at the very top of personal finance. Dave Ramsay, for instance, is fairly popular for his concepts and lessons on how to get out of debt, but equally so seems to lack any real interest in getting his followers to build substantial wealth. It seems there is this attitude with all of these personal finance "gurus" that once you get out of debt you can freely spend and live close to your means. It's the "reward" that seems to entice these readers and fans into following their strategies and buying their products, without any worthwhile substance once the debt is gone. Instead of "rewarding" yourself you should be saying "Now the real work begins!". Instead, the war is over before it even starts. It's a shame.

    Thanks for the article. Great topic!

    Best wishes.

  6. Edward says:

    I retired at 43 so I suppose Rob is right:) Granted I didn't have a silver spoon, but long before the advent of Blogs I was fortunate enough to read "The Millionaire Next Door". When I left my job some folks predicted I'd be back in 5 years and my boss offered to hire me back when I did. Well it's 9 years and we are certainly not suffering. Although having to pack for our 4 month winter vacation in Florida is a pain:)

  7. Waterbuffalo says:

    I think that the "retire by 40" websites can be helpful if you are trying to retire by 40. If that is your goal, then that's the goal, and it can be reached, but even with the "extremely fortuitous $100,000+ salary" retirement by 40 would still very likely equate to a life of some sacrifices. (I have run the numbers). You would still need to be somewhat frugal for the next 40-50 years after you retire at 40 and (contrary to popular belief) you would still need to worry about money to some extent.

    BUT, you would be free of wage slavery at age 40! An impressive and worthy goal.

    Its about goals, and what's yours. As for my own self, with one of those fortuitous salaries, Im shooting for some time between 48-55 to retire. That is because I don't want to chain myself to self-imposed austerity today, but I don't want to be a wage slave forever either. I figure early 50s is when my grandkids will be discovering the world, so I will have better things to do at that time than going to work for a pay check. But also, I have set up my life to have a 6-figure passive income by my mid 50s. If I were to retire at 40, not so much – and I'd have to cut down on the lifestyle a little bit.

    On the topic of why people are quick to praise someone going from -$150,000 to $0, but not someone trying to go from $0-$150,000, that is an interesting observation. I certainly don't have an answer, but it might have something to do with the (sad) reality that more people have a negative net worth than a positive one.

    1. Tim McAleenan says:

      That's my theory. Most people engage in "anchoring" when they make moral judgments. They find getting out of debt more relatable than building wealth. Statistically, the oft-mentioned average American is going to be likely to consider someone trying to get out of debt an "us" but consider someone trying to build wealth a "them." The good news is, the opinions of other people don't matter for the most part (except to the extent that someone without wealth may favor increased capital gains taxes on stockowners, and this may in turn influence populist politicians into action).

      We know that the ownership of excellent companies, acquired over time, makes life a lot less stressful and more fun when you have predictable money showing up. Most people understand pensions and crave the dependable monthly income they provide. It's a shame that it's not as readily understood that buying Exxon, Coca-Cola, Colgate-Palmolive, Johnson & Johnson, and Procter & Gamble can simulate the same experience, and likely give you raises you wouldn't get with a pension.

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