Do I owe my early retirement success to the era I was in? This might be a touchy subject. There are certainly unprecedented events that we’re dealing with today that are very challenging. But I’m going there anyway. Putting the pandemic aside, if you still have your career intact is it harder now than it was in earlier decades to reach FIRE? Does believing that it’s harder now become an anti-FIRE mindset trap holding people back? I bring this up because of a recent reader’s comment to one of my FIRE journey posts stating that my lifestyle and path to FIRE is outdated, the result of luck and the era I was handed. 

I do get where they are coming from. There were many times when I felt the same way when I was younger and financially struggling to get ahead. I saw earlier generations and believed they caught all the breaks. Better benefits, higher pay scales in newly tiered pay systems, etc. It’s natural to go negative when things are difficult. There are certainly a lot of outside influences and changing dynamics that can hold us back. When experiencing setbacks, immediately faulting ourselves for our own decisions and actions isn’t the first diagnosis we enjoy coming to. When it comes to personal finance FIRE goals, the issue with having a then vs. now era thinking is it’s always an apples to oranges comparison. It offers no help, only excuses that won’t improve our situation.

Although things are different over time and eras, what remains common is the financial discipline needed to reach FIRE. 

That said, I wanted to take a snapshot to crunch some numbers during my financial journey to early retirement to get a feel for then vs. now. Just a simple attempt to quantify some of the differences and challenges. Also pose the question: Do other’s FIRE success stories and their efforts taken to get there have any merit or should their FIRE journey during a past era get all the credit?

Image Source

Are Generational Era Comparisons Valid Or Just An Anti- FIRE Mindset Trap?

My oldest daughter just turned 37 and after our lovely socially distanced backyard get-together I was triggered to consider this topic. Like most people today, she and her family have financial challenges. Especially now in a world full of uncertainty during the Coronavirus pandemic. I began to think where I was on my 37th birthday. A time as a father of three where I was struggling to make ends meet, three years before I contemplated what is known as FIRE today. It was 1995 and even back then the world chose winners and losers where life was turned upside down with uncertainty. It also marks a time in my life that brought many work and financial decisions. Hardly being handed a “then” lucky era of benefits. 

Work and Career

I was near my 17th year of a telecom career at a regional Bell Operating company in 1995 at the age of 37. My employer had a 14 state footprint in the west and midwest. It took me 13 years to climb the ranks from service representative to top level technician. Reaching this technical milestone was a long-time goal from the moment I started working there. I took a lot of evening college classes, correspondence courses, and company qualification testing over the years. Finally reaching a place where I loved my job, the work, and especially its good pay scale. 

I was only a few years into my dream job when in 1995 my company decided to go through mass centralization. Instead of having organizational presence in every state, they would be centralized in 2 locations. I was in Salt Lake City UT, now my job was moving to Denver CO. Because of seniority issues and how the centralization employment matters were worked out I either had to follow my job which meant moving my family from our home where all our extended family and support system was, drop to a lower paid non-technical position if one opened up, or face lay off. At that time good paying jobs were scarce in Salt Lake City.

I was not a fan of Denver. Neither were many people impacted from non-Colorado states. Many employees decided not to follow their jobs. That low acceptance rate created promotion opportunities and I was instead offered an engineer position to relocate. We reluctantly accepted given the job uncertainty of staying in our home. I spent my 37th birthday alone like many days and months that year in our near empty Colorado house while my family stayed behind in Salt Lake City until the end of our kid’s school year. 

An era handed benefit? I would disagree. 

It was a risky and life altering decision. Would I do it again if I went back in time and know what I know now. Not a chance. However, it did work out financially as far as my early retirement goes. My younger sister who also worked at the company chose not to follow her mid-level position and instead stayed in Salt Lake City. She ended up in a clerical position and was stuck at that lower paying level for the remaining 15 years of her career. That ultimately resulted in far less for her retirement. The era was not overly kind to her to overcome her decisions. Our decisions and actions during challenging times will impact outcomes.

The era money side comparison of this decision- 

I did some 1995 to 2020 money value conversions to show if I received any better era provided benefits. 

In 1995 after a decade plus slow slog to becoming a happy technician in Salt Lake City I was making $36,000 a year. That converts to $61,205 in 2020 dollars. A great salary in Salt Lake City, not as good in higher cost of living Denver. I was given a salary increase around 10% for accepting the engineering position to $40,000 which equates to $67,663 in today’s dollars. I would have most likely only landed a mid-range non-technical lower salaried position of around $28,000 ($47,364 today) had I not followed my job. These numbers are either seen as great numbers, mediocre, or bad. It’s all subjective to where you live, how you live, and what you do for a living. It does provide a snapshot of career and financial decisions from a past era. 

Then vs Now Housing Numbers

We never considered renting in 1995 after relocating. We had spent 17 years in our first starter home located in a less desirable part of Salt Lake City. It was 980 square feet and I had finished the basement to double that living space over the years. We sold our Salt Lake City home in 1995 for $85,000 which converts to $143,784 today. We bought our nearly same sized Colorado home for $157,000 which when 2020 dollar converted is $265,578. 

I never bought our homes as investments but more a hedge against inflation.

For the first years of our home ownership the house payment ate an entire paycheck. As time goes and pay increases the house payment remains nearly the same while hopefully income increases. Rent over those years certainly did go up. However, both homes did appreciate as an investment and appraise today for more than the 2020 converted dollars calculated above. 

Era handed benefits? I not only paid more for a house, but the biggest hit came in monthly payments.

Our inflation hedged home in Salt Lake City was $321 a month or $543 in today’s dollars. Compare that to our Colorado home’s $1,180 payment which converts to $1,996 in 2020 dollars. That and other higher living costs ate a big chunk of my 10% increased salary. I was once again where my house payment took an entire paycheck.

We had an 8% FHA loan that we began in 1978 in Salt Lake City. New mortgage interest rates were even higher in 1995. We used some of our home sales money to buy down points to get the Colorado loan at 8% too. That’s where apples and oranges come in. Houses do cost more today. As mentioned, my own home is valued higher than straight dollar conversions. But payment wise things are more aligned with today’s era. 

Today’s Interest Rate Smoothes Some Era Housing Differences

My youngest daughter spent the pandemic lockdown with her daughter and 2 dogs in a 2 bedroom rented townhome at $2,100 a month. Once the lockdown lifted she took advantage of the 30 year <3% mortgage loan rates and just bought a home for $383,000. Her payment is $2,200 which includes tax/insurance/PMI. Nearly equal to what she was paying in rent. But it also tracks fairly close with my converted 1995 era monthly house payment amount of $1,996. Even her salary tracks closely to my 1995 to 2020 dollar converted engineer salary. 

Yes, one can say that I benefited from a slight era advantage in housing of around $200 a month. And that doesn’t include any of her cost to handle any repairs. Hardly enough to support the it was easier then than now anti-FIRE mindset trap unless we go down the higher loan payoff numbers. But what I see is that in this era, my daughter hopefully has an appreciating asset for about what she paid in rent. With keeping nearly the same monthly housing cost she also has the opportunity to continue saving and investing for the future.

This Era’s Advantages – Now vs Then

All I wanted to do when I started what turned into a 31 year telecom career was to get a job as a technician working alone high up on telephone poles. It never happened, I still ended up a tech but on the software side of things. I started as an entry level service representative answering phones and before I knew it, as opportunities for advancement opened up, I realized the importance of a 30 year pension and retirement health benefits. A definite benefit of the era I was in. But even a lot of that disappeared because I was on the tail end of that era. It became more and more age and service restricted with every executive change. What was first promised and a key point for sticking it out was diminished over the years. The rules and reasons for decisions changed.

Those who started in the era just before me had all the guarantees and protections. I did think that they caught all the breaks but didn’t let it hold me back. It required adjusting my plans within the confines of what my era provided and do what I could to meet my financial goals. I see many opportunities in this current era, not less. But they are only opportunities if taken.

Disappearing Retirement Benefits- Healthcare

The hardest thing I ever did in my life was force myself to stay at my company over 3 decades just to get promised retirement benefits. I put up with a lot to keep going after so many years invested. Later when new hires were paid more than us we were constantly reminded that our pay was lower because of that benefit. In the end they either diminished or they ended them. It was definitely a golden handcuffs situation and the company knew it. There was a lot of dirty corporate crap pulled on people of my era. 

I retired early at the age of 51 in 2009. I depended on getting retirement health insurance so that I could finally do my thing. There was no Obamacare-ACA then. Now one could carefully structure their retirement portfolio to produce income below the ACA income thresholds and get affordable health insurance. Seems like a benefit of this “now” era as long as ACA supporting people continue to get voted into office. I am still allowed to buy into my ex-employer’s health plan. For the year 2020 retirement health benefit I pay $1,334 a month.  

The all and powerful Internet

In 1995 as I reported to work at my relocation work cubicle I saw what was to be the internet for the first time. But it was the Intranet then. All within our own servers. Even if you wanted to go outside into the big www world there was mostly only porn. 1995 was a time when it was the only business model making money with it. Although one could access the internet from home, 1995 was still a slow going dial-up modem era with limited content available.

Centralization and relocation is far more limited now with the internet.

Sure, corporate headquarters will still move and force employee relocation. But I know that my job could have been done remotely. Some of my peers were even allowed to remote report before I retired and most do today within that same organization. Even if stung with the same relocation circumstances today, the internet would make finding a new job easier if I had decided to stay put. Our house search was a pain without the internet as we know it now. Finding a Job, house, research, you name it, all relied on getting hard copy paper by newspaper, a book, or sent materials. More information and data means being able to make better decisions.

The internet era has also provided the ability to invest without having a huge portfolio with a broker.

In 1995 we were only a couple of years into 401K investment options beyond the limited investment choices of cash or our employer’s company stock. For most of my working era it was a single 401K savings choice. There are so many investment opportunities from research to actually investing available today.

Education is expensive

I grew up low-income. Without a scholarship I was unable to afford college after high school. As soon as I turned 18 I had to start paying rent. Even if qualified, my parents wouldn’t consider cosigning on a student loan. I was a high school honor student and college was just financially out of reach. I worked and used work related tuition aid to attend night classes when I could. All course studies had to be aligned with my employer’s work related qualifications. 

Many people of today’s era start out in the hole.

They go right from high school to University degree programs. Then student debt rides their backs for decades if not managed or never attaining a suitable salary to manage it. I’m sure this is where a lot of the anti-FIRE mindset trap of “it’s harder now” comes from. Student debt is a real problem of this era. But it’s even more a problem for people with huge student debt and a degree that doesn’t offer a higher paying career worthy of it. 

In my era I ran into the same high education costs dilemma although I know they were smaller numbers. I haven’t any cost examples because I could never afford to pull that trigger without incurring heavy debt. Debt during a high interest rate era wasn’t something I could do. I also had little time to commit to it. Once we started having kids, the era shared condition of childcare costs made it cost prohibitive for my wife to work. I worked 2 jobs which lasted 13 years. For me, my era and socioeconomic status only offered the slow slog of work gained experience, university night classes when I could, and correspondence courses.

Every Era Has Its Benefits and Challenges

It doesn’t matter what era we are in, FIRE is not going to be easy. One era isn’t necessarily easier, they’re different. I’m sure nothing I detail here will change many folk’s minds regarding whether it was easier then vs. now to reach FIRE. Especially anyone going through job loss, severely high student debt, or lives in an expensive region of the world. Every life’s era has its periods of uncertainty and the impacts of decisions we made earlier. What matters is what we do about it. I read something in the book The Wealthy Gardener that stuck with me- You either change what you are doing or accept what you have. 

Being able to reach a chosen level of financial independence is and has been hard during any era. That’s why so few get there automatically. It takes concentrated effort. Ditch thinking that other people’s FIRE success stories are outdated era handed lucky paths to financial freedom. They are valid examples of strategies that worked for them. Their stories were never intended to be a solution but to generate FIRE ideas that will work for you in this current era within your unique situation.