Will You Be Happier If You Work Till You Die?

Lately, this Suze Orman character, someone I’ve never heard of, started telling people they will be happier if they work till they die.  Not exactly in those words, but close enough. She does not think the average person can achieve FIRE. And to be honest, the normal person can’t if they were to live like her. Take her opinion on how much you would need to retire

“You need at least $5 million, or $6 million. … Really, you might need $10 million,” she said — short of that, it’s just not going to be enough for most people.”

If you could somehow amuse 10 million to retire with, and you retired at 30 years, 4% return and 1% inflation, you could withdraw more than $350,000 per year for your entire life and till have money left over.

Heck, if you even had 1 million at 30, 4% return and 1% inflation you could still withdraw more than the average NZ wage for the rest of your life.

Amassing the investment is the really hard part, but telling people that it’s not achievable may convince people not to even try. And I think that is the real shame about this story.

I don’t blame Suze Orman for her views on FIRE. I think they highlight how we all live in our own bubbles and where our spending, whatever it is, becomes the norm. Suze is used to spending large amounts of money and hence thinks the normal person cannot amass the amount of money needed to fund this. Which is probably true. But normal people don’t spend as much as here. The last time I check we were spending 60k per year. Using the 25 times rule we would need 1.5 million. But when you consider that most of that spend is for our mortgage which will be paid off in 8 years the spending value drops to below 30K.

I see Suze Orman’s view on FIRE on the internet all the time. Some people talk about FIREing with a number that I see and think, “How could anyone comfortably live on that small amount of money?” And other times I see someone posting a FIRE target and I reflexively think, “Holy cow, why does that person need that much money to be able to retire?”

The thing is that when someone asks us about FIRE we are going to colour it with our own experiences, which is what I think Suze Orman is doing here. Someone who’s very wealthy and has been for many years is going to have a hard time envisioning “enjoying” living a lifestyle that is a pittance to what they’re used to.

“You can do it if you want to. I personally think it is the biggest mistake, financially speaking, you will ever, ever make in your lifetime,” she said. “I think it’s just ridiculous. You will get burned if you play with FIRE.”

How can saving for retirement really be the biggest mistake of your life?

Sure if you die you might lose out on spending that money. If you take this approach you might as well not do anything, because there is a risk that you might die driving to work, or going on a plane to vacation. You might as well not go to work since you might die in a work-related accident.

If you take the attitude that you should spend everything that you earn as fast as you get it because one day you might die you will end up working all your life. Working to make money, spend all the money, go to work for more money, spend that money…

It’s a vicious cycle that will never end. And it’s easy to fall into this trap considering modern consumerism.

I’m gonna work till I die

But there is another way. You don’t have to work until you die. You just have to increase your savings rate. And over time you will have accumulated enough money to be able to stop working for money and work for the sake of enjoyment and fulfilment. You can continue to work at your current job if you love it, or you could find work you really enjoy doing, or you can retire from work altogether. Whichever you choose is fine as long as you have put in the sacrifice in your younger years.

The secret to early retirement

There is no secret to early retirement. People have been talking about it since 2012. It is all about your savings rate. You just need to save more than you spend and eventually you will retire.  And here is the trick, the higher your savings rate the faster you will reach a stage of financial independence. When your annual return on investments cover 100% of your expenses you are financially independent.

Forget about how much you earn!

It’s not about how much you earn, but how much of what you earn is saved. If you save 2% of your salary per year, it will take you 85 year until you can retire, which is the same as never. If you save 20% of your income it will take 36.7 years until you are financially independent. 50% savings rate, and it will take you 16.6 years until you can retire.

Savings rate vs how quickly you can retire- taken from networthify.com
Savings rate vs how quickly you can retire- taken from networthify.com

New Zealanders Savings Rate

Ok, so we have established that all you need to know to be able to retire is your savings rate. So how well do New Zealanders do when it comes to their savings? Well, looking from 2011 to 2017 the savings rate has been 0.05%. That is basically 0%. When you look back to 2003, there have only been 5 out of 15 years where the savings rate has been positive.

New Zealands saving rate from 2003 to 2017

Pretty scary to think about- peoples savings rate is negative and they are digging themselves even deeper year on year.


Your homework this week is to work out your saving rate.  How much are you putting away for your future? And let me know what your rate is. And if it’s positive, your doing better than the vast majority of the average household in NZ. Let me know in the comments!

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6 thoughts on “Will You Be Happier If You Work Till You Die?”

  1. I do think Suze lives in an ivory tower some times and spews some stuff that just does not reflect the average worker.

    Her statement that the minimum needed to retire is $5 million to FIRE seems outrageous as that amount should safely provide annual withdrawal of $200k/yr. Given 95%+ of the public make far far less than this makes it ridiculous that all of a sudden they need to bring in more money in retirement then they do with their actual job.

  2. Single income family with one kid (4 month old). Dad 28, Mum 25. Homeowner. Savings rate is 30% at the moment for financial year. Pretty keen to push further.

  3. 16% goes to investments (Simplicity Growth and NZ Share), but I own an apartment and am trying to pay that down too. If you include the principle portion of loan plus investment contributions it comes up to 39%.

    • That’s a great effort! Do you automate your investment payments with your paycheck? At 39% savings rate you can live on your investment return after 22 years. Imagine that!

      • Yes that would be ideal, but I expect that at some time in the future, in maybe 5 years, we may have kids. So for now I’m trying to get ahead, then will have to re-plan once that happens. Going through my financial planning I realised it is really life planning too.

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