Afford Anything - Suze Orman Says $2 Million is Nothing; You Need $10 Million to Retire Early. Internet Explodes

Episode Date: October 5, 2018

#154: Want to retire early? You'll need at least $5 million, more likely $10 million, says famous financial personality Suze Orman. I should know. She said that to me, directly, on my podcast. I asked Suze for her opinion about a frugal, flexible person who wants to retire early with a $2 million portfolio. She warned that retiring would be a massive mistake. "Two million dollars is nothing," Suze said. "It's nothing. It's pennies in today's world, to tell you the truth." Wait, what? "Listen," she said. "If you have $20 [million], $40 [million], $50 [million] or $100 million dollars, be like me, okay. If you have that kind of money ... and you want to retire, fine." "But if you only have a few hundred thousand dollars, or a million, or $2 million, I'm here to tell you ... if a catastrophe happens ... what are you going to do? You are going to burn up alive." But what's wrong with retiring early on $2 million? Assuming it's invested 50/50 in equities and bonds and harvested at a 4 percent withdrawal rate, a portfolio of $2 million could create annual investment income of $80,000. Surely that's enough, right? *Riiiight?* Nope. Suze says that's not enough. "I think that in the long run, $80,000, especially after taxes and as you get older, is not going to be enough. You may think it's going to be enough, but it's just not," she told me on the Afford Anything podcast. "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." I asked her if a $3 million portfolio at a more conservative 3 percent withdrawal rate would be okay for an early retirement. She said no. "Think about it logically," she said. Supporting a disabled family member who needs full-time care could cost $250,000 per year, she said. Ordinary cost-of-living would cost another $100,000 per year. This means you'll need $350,000 per year after taxes to cover your costs, which is $500,000 per year before taxes, which at a 5 percent withdrawal rate means that you'd need a portfolio of $10 million. If you don't have at least $5 million or $10 million, don't retire early, Suze said. "Here's what the FIRE people, you are not thinking about, so I'm going to give it to you straight here now," she said. She described the possibility of getting sideswiped by massive taxes and catastrophic emergencies. What if your home gets destroyed by an earthquake or flood and insurance denies your claim? What if you're in a tragic car accident and you need full-time care? What if the U.S. experiences 25 percent unemployment, which means you won't be able to find another job if you wanted one? What if your investment income gets consumed by massive future tax hikes? "When you get older things happen," Suze said. "You're hit by a car, you fall down on the ice, you get sick, you get cancer. Things happen." "Alright, you can do it if you want to," she said. "I'm just telling you, you will get burned if you play with fire." For more, visit the show notes at http://affordanything.com/episode154 Learn more about your ad choices. Visit podcastchoices.com/adchoices

You can afford anything, but not everything. Every decision that you make is a trade-off against something else, and that doesn't just apply to your money. It applies to your time, your focus, your energy, your attention, anything in your life that's a scarce or limited resource. And so, the questions become twofold. Number one, what matters most? And number two, how do you align your daily decisions to reflect those priorities?

By the way, I'm just going to say, if you choose to spend money in one way, that means you are choosing not to spend time in a different way. You've heard the expression time is money, right? So you can trade time for money or you can trade money for time. And that is an underlying premise behind the concept of financial independence, which we're going to dive into in today's episode because there was an interesting precursor episode to this one. My name is Paula Pan.

I'm the host of the Afford Anything podcast. And if you haven't listened to the episode that came out a few days, days ago, I encourage that you actually stop listening to this one and go back and listen to that one instead, because that episode is the preamble for everything you're about to hear. Now, a few days ago in episode 153, I interviewed Personal Finance Guru, Susie Orman. Susie is one of the most famous names in the world of personal finance. From 2002 until 2015, she hosted the Susie Orman show on CNBC. One of the most famous aspects of that show is when callers would call in with a question, or suggestion, and she would oftentimes give it what she referred to as the Susie Smackdown.

Well, on the most recent episode, Episode 153, of this podcast, she gave the fire movement, the Susie Smackdown. So in today's episode, we're going to talk about what happened and processed through some thoughts that came about from that episode. Now, normally we're a weekly show. We release an episode once a week every Monday morning. But once a month, on the first Friday of the month, we release a first Friday bonus episode. And so the timing of the Susie Orman episode couldn't have been better. We released it Monday, October 1st, and this, just following four days on the heels of that, this is the first Friday bonus episode in which we review WTF. So here's what we're going to do in today's episode. First, if you haven't heard the interview, I'm going to

briefly summarize it. Then we're going to go over some of the community reaction to the interview. After that, I'll share my own personal experience and thought process around this. And finally, we'll close out with some more words from the community. Here we go. I launched into the interview by asking Susie if she was familiar with the fire movement, financial independence retire early. And this was her response. Have you heard of the fire movement?

Yes, yes, of course I have. And I hate it. Really? I hate it. I hate it. hate it and let me tell you why. Well, then, at that point, she explains why. And the following is her position.

Listen, if you have $20, $30, $50 or $100 million, be like me, okay? If you have that kind of money and you want to retire, fine. But if you only have a few hundred thousand dollars or a million or $2 million, I'm here to tell you, I doubt highly that. when you no longer have a paycheck coming in and you've invested that money and maybe it's making some interest for you or dividends or whatever, if a catastrophe happens, if something goes wrong, what are you going to do? You are going to burn up alive because you won't have the money to do it. Oh, that's concerning. Okay, well, Susie gives many reasons why she believes that $2 million is insufficient. Those reasons are the following.

Number one, lack of long-term disability coverage. Susie is concerned that the high cost of disability care could exceed the passive income generated from an early retirees portfolio. So, for example, let's say that you retire at the age of 35 or 40 or 45, and you are no longer covered by a workplace long-term disability care plan. Your primary source of income in this hypothetical scenario are the withdrawals from your portfolio or rental property income. And as a result, you can no longer perform what's known in the insurance world as activities of daily living. So the ability to brush your teeth, put your shirt on, go to the toilet by yourself without

assistance, you can no longer do those things. And let's say in this example that you also don't have family that's able to step in and and take care of you. At least they can't be full-time caretakers around the clock 365 days a year. So you need to hire outside assistance to come take care of you, but you don't have any type of insurance coverage that could do that. Susie cites that as a reason why she is concerned about early retirement. But the answer is not just accumulating $2 million. $2 million is nothing. It's nothing. It's penny. It's penny. in today's world.

Particularly she's concerned that we may not have adequately considered the financial ramifications of extreme black swan events. Now, that example that I just shared, long-term disability, was one of the points that she brought up, but she also brought up other forms of catastrophic coverage. So that's point number two. Other catastrophic events that could take place include massive flooding, earthquakes, tornadoes, medical bills, all. of which, in theory, should be covered by insurance, but what happens if your insurance company

does not grant your claim? What if they deny your claim? Then what? I am telling you, don't be naive. Don't test fate. You should work as long as you possibly can in an area that you love so you don't feel that it's work. So that is the second point that Susie brings up in terms of her concern about the fire movement. The third point that she brings up, that an early retiree may not have the ability to sustain themselves via passive income alone in an extreme high tax environment. Here's what the fire people you are not thinking about. So I'm going to give it to you straight here now. Artificial intelligence is coming in big time. Do not be surprised if by the year 2030, there is a 25% unemployment rate.

And how that affects you is this. When people are no longer working because machines have replaced all of us, there is nobody paying into the tax structure. When nobody is paying into taxes, tax brackets will have no choice but to go up. According to Susie, she believes that artificial intelligence, AI, specifically might trigger a collapse in the workforce, which could lead to an extremely high-tax situation for everybody in the nation. And if the drawdown on a portfolio is 40,000 pre-taxed or 60,000 or 80,000, then if we live in a very extremely high-tax environment, those taxes

might be crippling to the point at which those portfolio withdrawals can no longer cover a basic cost of living. So that was point number three that Susie made. I'm telling you, especially if income tax brackets go up, if inflation comes back, if all these other things happen, $80,000, especially after taxes, and as you get older, is not going to be enough. And finally, point number four is that Susie voiced a concern about the ability of an early retiree to be able to find a job if that person did need to return to full-time paid work. Many moms and dads who exit the workforce face a stiff career penalty when they attempt to reinter the workforce. And early retirees, according to Susie, may face an even greater career penalty if their exit has been longer, if their exit has been decades. And so those four reasons, lack of long-term disability planning, lack of planning for other catastrophes, the ability to sustain yourself in a high-tax environment, and the ability to find a job.

if you do need to reenter the workforce, those four reasons, among others, are some of the concerns that Susie voiced around the notion of fire. Except, well, Susie didn't exactly voice it like that. Look at me today. When you're older is when you want 40, 50, 100 million dollars. Two million dollars when you're in your 30s, you may think that is a lot and you can live on 80,000 and you can have a good time for two years, three years, four years, five years, and hopefully nothing will go wrong. But I promise you, as things get older in your life, as hopefully you will, if you think $80,000 a year as you get older is going to make it for you before taxes, I have a bridge to sell you.

If I had said, hey, Susie, are you familiar with the fire movement? And she had replied, you know, I am, Paula. I am familiar with it, and I'm concerned that the people within this movement are not adequately mitigating risk. Okay, if she had said that, number one, that would have been a reasonable remark, because then the ensuing discussion could have been, all right, are we or are we not adequately planning for catastrophic or black swan events? And that would have been a perfectly reasonable conversation to have, and we could deep dive down that rabbit hole. But that's not what she said. what she said was, I hate it, I hate it, I hate it, and let me tell you why.

I kind of want to make that my ringtone. Okay, so we have established that Susie hates the fire movement, and I have to give her credit, Susie is a master of money media in the words of P.T. Philip Taylor, She knows that if she had phrased her concerns in a diplomatic and nuanced way, there wouldn't have been a major headline. If she had said it, she wouldn't have been Susie Orman, because she knows that, quote, Susie hates the fire movement, hates it, hates it, hates it, hates it,

is a much stronger headline. It's a much more clickbait headline than Susie questions our risk mitigation strategy. Now, in fairness, I realize that I have just given a, rather sympathetic account of what transpired in that interview because it would be equally accurate to say that Susie also threw out some prices and ideas and quote-unquote needs that were a little extreme. A child is also very expensive. It's not just the daycare when they're young and making sure they're okay, all of a sudden, are they going to go to a private school and are they healthy? Does anything go wrong with them?

Or are you going to send them to a public school? And if you're going to send them to a private school, now we're talking about $35,000, $50,000 a year, even for high schools and $10,000 or $20,000 a year for grammar schools. And then do you want to send them to college and do they want to go to Harvard? Do they want to go whatever? And now we're looking at $250,000 to go to a college right now, let alone later on. probably be for $500,000. She also talked about how the cost of caring for her aging mother came to $2.5 million.

And so when I asked her how much money a person might need in order to retire early, the ballpark estimate that she gave was somewhere around $10 to $20 million as a minimum, and she estimated that a person might need to plan to live on a property. approximately $300, $350,000 per year? Just think about it logically. Let's say you need help and everything. Remember, I took care of my mother and it cost me, like I said, it was $30,000 a month. $30,000 a month.

So you're talking about very possibly for full-time help and everything because good luck getting insurance and things to pay for it now. But it's, you know, so you're talking about maybe $300,000 a year. All right, so I'm wrong. You're talking about a quarter million dollars a year there. Now you have other expenses and food and everything. And let's just say you need another $100,000 a year to live because of other things that you need.

So now you need $350,000 a year after taxes. If you have money, even if you have a million dollars right now and you're getting a 4% yield, that's $40,000, right? Yeah, $40,000 a year. So you need at least $5 million, $6 million so that 5%, and that's before tax. So you need a 5% after-yield tax of municipal bonds to yield you $300,000. So really, you might need $10 million just so you're making, you know, 5% on that money and after tax you'll be fine without touching your principal. Naturally, those statements led to the obvious question, what about the vast majority of Americans who don't make six figures? How will they ever afford to exist?

And so I asked her about person A and person B. Person A is a traditional retiree with a 2 million portfolio. Person B is an early retiree with a 2 million portfolio. What is the difference between the two? According to Susie, the fact that person A continues working until the age of 65 or 70 means that they have greater insurance coverage throughout their career, including disability insurance, which covers them in the event of those extreme Black Swan scenarios. So it sounded to me from what I'm hearing as though Susie's criticism of the fire movement is lack of adequate insurance coverage. And if that is the crux of the concern, that's deal withable. You may or may not agree that that is actually a concern, and there's certainly a valid argument to be made that fear is expensive.

And perhaps we don't need to be as worried about that as Susie thinks that we should be. But regardless of where you fall on the too over-insure or not-to-over-insure question, the fundamental fact remains that a conversation that says, I have insurance-related concerns, is very different than a conversation that says, I personally think it is the biggest mistake, financially speaking, you will ever, ever make in your lifetime. So I invited the community to discuss this episode on social media and on the blog and on the podcast show notes. We got some amazing comments.

I want to share some many of those with you right now. My personal favorite came from Mr. Money Mustache who tweeted, OMG, listen to this prominent financial guru, hating on the idea of financial independence like a Disney villain. Major props to afford anything for capturing this classic moment in an interview. It's like getting your biggest foes to admit that they hate puppies. And then my favorite response to that was one of his followers tweeted the reply, Eat puppies.

Let's share some of the other comments. On Twitter, Senior Crown says, Work until your bank account looks like a phone number. I think that's basically what she says. Kubert, at Abandon Cubicle, says, I feel so small, Susie. Should I aim for $20 million? $200 million?

And Daniel Parker says, well, this is interesting. So work until we're old and can't enjoy it rather than taking a calculated risk. And Nate Fleisch chimes in with, based on all the examples Susie gave of bad things happening to her friends, I never want to be her friend. So the theme of a lot of the comments seems to be she is cherry-picking anecdotal examples of extreme black swan events to make it sound as though we need an impossible amount of money to be able to retire. And on Twitter, nomads with a vision said it very well when they said, Just listen to afford anything Susie Orman interview.

I agree that it's good to consider opposing opinions, but it's quite obvious that Susie has done little research into the fire movement and engages a straw man fallacy. Her argument has more holes than Swiss cheese. I think that's wonderfully said. It's great to listen to opposing viewpoints. It would make a stronger case if those opposing viewpoints were, A, delivered in a more diplomatic and rational manner, and B, if they followed a logical construct.

That's what I'm really looking for here. Can we have a conversation in which somebody comes on the show and says, all right, if A, then B, if B, then either C or D. and if D, then either GE or F. And if F, then you're f, right? If we were to have a conversation like that and we could trace the logical flow, then sure. We can talk about what might happen in the event that that set of circumstances unfolds. We can talk about expected value and risk of ruin.

We can discuss risk mitigation. We can discuss probabilities. We can talk logic. I would be so happy to have that conversation. that is very different than an emotionally charged argument that uses fear in order to make slash distract from what might otherwise be valid points. Because remember, you can own your home outright and it can be blown away by a hurricane, by a flood, and a lot of these houses that you see now that are suffering flood damage because of the hurricane, do you think they're covered

with flood insurance? Or do you think they have lost all of the money that they had in their home? Uh-huh. You better think about that. Because when the floodwaters go away, mold comes in and now your house has to be destroyed and most of your policies will not cover you for mold. But then it's all right. You're part of the fire movement. You don't have to worry about it, do you? Another member of our community on Twitter, Brandon Hill, says, I thought it was a great interview. and I really hope your listeners keep an open mind. While I am striving for fire, and while she likely overstated how much money people need,

it serves as a good reminder to build in a margin of safety in one's financial life. Brandon, that is such a mature response. It's such a grown-up response, and it's one of many. I was incredibly impressed by this community at how so many people within this community were able to cut through the noise and find the nuggets of wisdom within her interview that were easily buried by an intentionally incendiary delivery.

I was incredibly impressed with the intellectual caliber of this audience. Afford anything has attracted an impressively smart community. And many of you have the wisdom to be able to put your own emotional reactivity aside, zoom out and focus on the bigger picture and ask yourself, okay, what is she really saying? And can I learn from this? Can I find any kernel of truth within this? I was extremely impressed by the maturity of the responses.

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Blingist.com slash Paula to start your free trial or get three months off your yearly plan. Blinkist.com slash Paula. Let's go through a few more responses. At Luna Whisper says, as someone who has a fairly expensive chronic condition, I can really appreciate that she pushed the health care and catastrophic, unforeseen issues that could arise with such a big time frame with fire. I don't agree with everything she said, but she had a good point. Thank you, Luna, for sharing that.

Mr. Prairie Fire from Canada says, I found it interesting, little disappointed with the ad hominem attacks of Susie Orman, instead of challenging her arguments. Kudos to afford anything for the interview and the guts to put this out there. Once again, she does the fire community a great service. Thank you, Mr. Prairie Fire. Ms. Money Nerd says, I really enjoyed this interview

and how it challenged a lot of the ideas the fire community takes for granted. I don't agree with everything said, but I do think there is something in the unexpected costs that come with age, which are often underestimated and the perspective after 60. Do you see what I mean, how impressed I am

about the intellectual caliber of this audience? I mean, you were able to take this. I hate it. I hate it. I hate it. I hate it. You were able to look past that and find the kernel of truth, find the wisdom underneath it, as hard as that might be to dig up. That is the mark of a wise, mature, intelligent community. I'm so impressed with this community. In fact, if I have one key takeaway from this entire episode, it's that you guys are awesome. Let's cover more of the feedback.

This one comes from Graham Dursley on Facebook, who says, She does have a decent point about the ultra fruglists, retiring at 30, with 600,000, and planning to live indefinitely off of 20K. Not a lot of room there for error. But I also agree with Paula. It seems Susie does not have a nuanced understanding of fire. She definitely contradicted herself when she said an early retiree would struggle to get on 80K, but then was very optimistic about the 60K a year laborer doing just fine as long as they

work until age 70. Yeah, I agree there was a massive contradiction in her person A compared to person B example. On one hand, she was cautioning that you can't retire with anything less than $10 to $20 million. And then on the other hand, she was also stating that you could be a laborer and have a median U.S. income, and as long as you live below your means, you'll be okay. Like, the two ideas just did not jive. How is it that the blue-collar worker who lives below their means can have a secure retirement, but the early retiree needs $500,000 in case the floods come?

Anyway, I'm editorializing, so let's take it back to community responses, community reaction. Here's one that came on the podcast show notes from Mary, who says, as awesome podcast, Paula. Thanks for taking a risk and bringing on a contrarian to the fire movement. Is it just me? Or did it sound like Susie agrees

with many of the tenants of fire? I heard her say things like, be sure to max out your retirement savings vehicles. Do something you love. Consider unexpected expenses. Consider disability insurance and long-term care and how those things may affect your finances. All of the points she made

were things that I take carefully into consideration when planning a fire number and date. I will say, the fearmongering was laid on a bit thick. But she does have her own brand and product to promote, and I do appreciate the added insight from someone who is not only at a different point in her own life, but has had the opportunity to hear from so many others. Having said all this, the podcast has had an effect on me. I will definitely continue to grow assets beyond fire. Mary, thank you. Do you see why I'm so impressed with this community?

Also on the podcast show notes, AJ says, quote, I am the money matriarch of the world. I used to watch her show every week, and I've read one of her books. She definitely wasn't my favorite money person, but I liked her show enough to watch it. I didn't like the book. But she just seemed completely, completely out of touch and full of herself in this interview.

Even condescending. And as someone else already pointed out, she was using fear as a motivator and was just generally pushing her brand and self the whole interview. AJ continues, while I agree that one needs to be prepared for such things in life and that unexpected things will happen, parentheses,

I have chronic illness and a disabled sibling, so I get it. that fear shouldn't rule your life. And life isn't all about money. My health problems are actually one of the reasons we are into fire. I know I may not always be able to work full-time. And that led to my husband and I not wanting to be dependent on our incomes. I still want to work, of course, and plan to.

But I want the security of knowing we'll be okay if I can't for a while or if I need to cut back. So I think she's got it completely backwards. A lot of fire people have absolutely thought of those things. Had I not had health issues, I seriously doubt we would have gone down this path. Other motivators for me are being able to have children and actually spend time with them. And to be able to help my disabled sibling and be there for him. And I would guess that most people that are into fire have similar reasons and stressors that pushed them to wanting financial freedom.

AJ, that was so beautifully said. Thank you. Thank you. Meanwhile, Peter G. says, Paula, I've been listening to your show for a while, and I thought I loved it. Boy, was I wrong. I had no idea that matriarch of money was out there. She is now my queen, and she will surely lead me to the promised land.

Don't get me wrong, your show's cute. But her friends have billions and billions and billions. millions of dollars. I will buy her books as soon as I stop typing. I will brand my chest with an S for Susie. My new aim in life is to find her and lick her toes. That, I gathered from the show, is what she expects from your old listeners, her new readers. All jokes aside, I really enjoyed this episode. Thanks to Susie for coming on the show, something I'd love to ask her is what dollar value she would put on a year of her life in her 20s. If she could buy back a year of 25-year-old health, would she? And for how much? Peter, that was amazing. I'm giving you a high five through

the airwaves right now, the highest of fives. Also on the podcast show notes, Dave, at accidental fire, says, so for people who have two million saved and want to retire early, things happen, and you won't be ready for it. But, The median net worth of those people, age 45 to 55, is about $100,000. So what about those folks? Well, I'll tell you, Susie, FI folks are 20 times better able to handle that disaster. So what she's saying is that everyone might not be prepared when disaster happens. Well, life is risk, Susie.

Every time you get in a car on the road, you are seriously risking your life. Should we not drive? On Instagram, Becky Newbauer says, Paula, thanks for asking good questions and for keeping the conversation going. I can see how this interview might have been a tough one for you. I actually said wow out loud at the same time as you after one of her particularly strongly worded points. I did want to point out the hypocrisy of her adamantly stating,

anything can happen, you just don't know, you could get hit by a bus tomorrow, but also vehemently arguing that it is a waste of time for anyone to take time off in their 20s to take a trip or learn about themselves when they should be working hard and saving. I feel the opposite. If I could get hit by a bus tomorrow, I don't want to spend today chained to a cubicle hating every second of my life. I'd rather actually live because, as Susie says, you never know what's going to happen. Like your two favorite quotes, Paula, life is short and life is long. In the end, I think, it all comes down to balance.

Becky, that's a great insight because Susie did make both of those statements. She did say anything can happen. A catastrophe can strike at any moment. And she also said, don't travel in your 20s or 30s. Don't go live in a van and tour the national parks. Don't go backpacking around the world. Don't go do all of these things that you really want to do because it's more important to work and save

and compile a bunch of compounding interest. That's true. She made both of those statements. A few other comments that I'd like to share. On Facebook, William Dwight says, I'm halfway through it and, uh... Wow. I'll say peacock feathers.

Paula does a masterful job of conducting this interview with calm respect. On the other hand, there's Susie. Not sure if I've heard anyone come off so condescending, close-minded, conceded, and pessimistic. The irony is that so many of the habits Susie extols are perfectly consistent with fire. Susie raises some good food for thought around disability and health insurance. Otherwise, you'd think she'd embrace the values of the fire movement.

It's pretty sad. It's definitely good radio, but morning, you may find yourself punching your radio while listening. On Twitter, Mr. Burrito Bowl, which by the way is an awesome Twitter name, Mr. Burrito Bowl says, Afford Anything did a great job at not losing her cool at Susie Orman's condescending tone. Yes, she made good points about health insurance, etc. But she acted like she's the first one to think of that. literally everyone pursuing F.I. has thought about health care costs, which is an excellent point. And being determined on Twitter also echoed that by saying,

I think Paula explained very well what the fire movement is all about at the end of the show. What I heard from Susie Orman is that she doesn't understand how the fire advocates manage risk at every stage of their lives. That's absolutely true. And that includes, as somebody pointed out earlier, that includes managing the risk of not being able to live the life you want in your 60s due to either family obligations or health considerations. We are, or due to the risk that some of us might not make it to our 60s. By virtue of living in the way that we want today, we are managing the risk of the complete unknown of the tomorrow. No, risk isn't only monetary. You can do anything but not everything. And that includes your time, your focus, your attention. So I absolutely agree with Susie about the importance of managing risk. And that includes the risk that our future is unknown. We might not make it to the age at which we hope to make it to. That's why I often say, that I believe in retiring both early and often.

I believe in enjoying little mini-retirements before you're financially independent. Take sabbaticals, take breaks before you reach FI. Take mini-retirements on your way to an early retirement. Because if you're starting your FI journey today, well, guess what, 10 years from now, everything might be different. It's funny because when Susie says that, it does come off sounding to many people, like fear mongering, when I say it, I mean it as a message of hope. We truly do not know how much time we've been granted.

And that means that it is critical that we enjoy our today's. Enjoy the journey to FI. FI is not a destination. Enjoy the entire unfolding of it. Enjoy the process. When you go hiking, you don't slog through the entire hike just so you can make it to the mountain top, you enjoy the whole hike. You enjoy every step that gets you there. The fact that you happen to summit, you happen to reach the peak, is nice. But if you

had to turn around before you reach the mountain top, you would still have enjoyed the hike. That's the journey to FI. And that is the journey through life. So please, retire early, retire often. The fact is that the future is unknown, and that can either be a cause for fear or an inspiration to celebrate. I'd like to share with you a quote that I read yesterday. It's a quote from a 76-year-old novelist named Erica Zhang. She says, if you don't risk anything, you risk even more. If you don't risk anything, you risk even more. That is my answer to Susie's position about risk mitigation.

I agree. Let's manage some risk. We'll come back to this episode in just a minute, but first. Do you run a small business? If so, you probably know that payroll and benefits are hard, especially for small businesses. You don't have the time to become an expert in things like taxes and regulations, and old school payroll providers aren't built for the way that you work. Gusto is making payroll benefits in HR easy for small businesses.

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So try it for yourself and save $20 on your lenses by going to simplecontacts.com slash Paula 20 or entering the code Paula 20 at checkout. Now, I want to mention that this is not a replacement for your periodic full eye health exam. You still need those occasionally, but it is a convenient way to renew a prescription and reorder your contacts if your vision hasn't changed. So again, get $20 off at simplecontacts.com slash paula 20 or intercode paula 20 at checkout. Simplecontacts.com slash Paula 20 or intercode Paula 20 at checkout. As an interviewer, there are a few notes and observations that I've made during this experience. Number one, according to the feedback that I got, about 98% of the feedback I received was praise from people who said that they liked my calm, professional, and patient manner. In fact, I got a great tweet from a Twitter feed called International Podcast Day that said, wow, want to see a podcast host navigate a difficult situation?

Check out Afford Anything's latest episode. Amazing work, Paula. hashtag podcasting. Thank you. So 98% of the remarks that I got were people saying, thank you for handling it in such a calm manner, in such a professional manner, thank you for being patient. But I did get some feedback from people who said,

I would have liked it if you had argued with her. I wanted a debate. I did not want mere facilitation. There were people who said that they wanted me to explain slash debate, fire with Susie. I get that. I get the desire for a debate. I get that that is what is most commonly done on a lot of cable news shows. That's not me. I don't like to interrupt people. I don't like to cut people off. And rather than debate somebody, I like to ask probing questions. Remember, I'm a journalist. My background is a newspaper reporter. I like to ask questions.

and listen, I don't like to fight, I would prefer to deeply understand another person's perspective. And one observation that I've made as a result of this interview is that fame and power can give a person carte blanche to act in ways that a different person could not. And I realize that sounds like it's like straight from the school of duh. Like, oh, gee, Paula, you're saying fame and power give people a person. Additional privileges? Fascinating. Tell me more. But if you think about it, the tone, the tenor of Susie's remarks about the fire community were made more acceptable by the fact that she's one of the most well-known personal finance voices on the planet. There are very few people more famous than her

in the world of personal finance and money management. And that gives her the power to come on a podcast and speak in a tone that would not be tolerated by a lot of other people. Imagine if Emma, who was a previous guest on this podcast, imagine if she came on the podcast and spoke in that tone. That wouldn't fly. If a lesser-known person says that they hate the fire movement, that's trolling. but when a celebrity does it, that's a headline. So in reflecting on the week, that was one thing that struck me. And that leads to an observation that my friend J.D. Roth made.

Here's what he wrote on his blog Get Rich Slowly in response to the interview. And I'm quoting, quote, while a lot of folks are focusing on the content of Susie's comments, what I find fascinating is what her comments represent, Why do you think Susie hates the fire movement? Somebody asked me last Thursday night. Parentheses. A few of us knew this interview was coming,

and we knew what was going to be said. We could guess what the audience reaction would be. I think she feels threatened, I said. Susie represents not only the old financial media, but also the world of traditional financial advice. The fire movement is an organic thing, one that's being led by bloggers and podcasters and YouTubers and a big part of our platform is that you can do this yourself,

that you don't need help from the Susie Ormonds of the world. End quote. And so what he's saying there in that snippet from his blog post is that possibly the fire movement might be threatening to the establishment. I don't know. I don't know if it is. I'm not going to speculate. I'm not going to put thoughts or ideas into people's heads. again, I'm a, I'm a question asker because that's where learning comes from.

Learning comes from asking questions. And as I've stated before on this podcast, my purpose in life is to learn. The more you're talking, the less you're listening, which I realize is an ironic thing to say after you've been talking to yourself into a microphone in an empty room for an hour, but you get my drift. You know, to be perfectly honest, when I got off that Skype call, I was shaking. My hands were literally shaking. And I was so full of adrenaline that I didn't know what to do.

I got up and I paced around my condo like, kind of like a dog that really needs to go for a walk. I was just pacing in circles around my living room. And I texted Joe from stacking Benjamins. And then I went on Facebook and I wrote a post that was almost incoherent. It was basically just me writing into Facebook the word, over and over like 50 times where I was like, wow, this interview, I just recorded it. And wow, oh my goodness, I want to release this. I don't have anything to say because I just, wow.

I wrote this incredibly incoherent Facebook post and then put that down and continued shaking and pacing around my condo. It was hard to record. It was, sometimes it is really hard to ask questions with an open mind. It's a value of mine. but values are sometimes different than actions. You know, I know that for many of you, it was hard to listen to. Elena left a comment on the blog that said,

that was rough. I made it halfway through the interview and I couldn't listen anymore. Elena, thank you. I completely understand. Susan at FI Ideas says, Paula, I applaud you and your patience for hosting someone that most of us disagree with. I find that refreshing in our divisive world. You were so kind, I could not have had the discipline to not pounce.

And yet, I believe you simply gave her enough rope to hang herself. Living on an island, clearly she is clueless of the true genius of the shared ideas in the FI community. We are so aware of the pitfalls and possible emergencies in our future and are acting much, much more responsibly than most other people in society. Yes, I absolutely agree with that. I think one of the most refreshing things about the FI community is how deliberately we think through our finances and our lives.

Samantha Cook says, Hi, Paula. Thanks for having the courage to have a dissenting viewpoint on your podcast. I, like most other fire peeps, disagree vociferously with Susie's under-informed take on the fire movement

and also found her relentless self-aggrandizing, off-putting. However, I agree that it's important for us to listen to viewpoints like hers because some of it echoes very strongly the most common fears

that keep others from embracing the sense of hope and empowerment that will lead them to fire. Her most salient, and maybe really her only point, is the very real possibility of long-term illness or catastrophic injury, whether it be to ourselves, to our loved ones, or to our families. I have to admit, that does worry me somewhat as I look to create safety margins in my nest egg. Maybe we could have discussions about those things, because as long as we live in the U.S., that is something we need to plan for. However, I was a gawk at some of the figures she dropped. $30,000 a month for her mother's care?

Where is she putting her up? Canyon Ranch? $20,000 for a new roof? Sheesh! Obviously, she's not economizing the way a seasoned fire person would, which takes a lot of credibility out of her claims. Still, we all know that nursing home and long-term care costs can run up very high, very high, very good.

quickly. It's a shame that she doesn't understand that fire people are not necessarily looking to spend 50 plus years on the couch. Her short period of retirement seems to have a lot in common with that of regular F.I. Folk. Well, man is the friggin' private island, of course. A few years or months or whatever of rest, rejuvenation and soul searching, and then back into something that you now know for certain you want to do. That's the whole point, really. to have the choice whether to make money or not, to have the time to figure yourself out and decide what is truly important to you?

Susie got to do that. Why can't the rest of us? Thank you, Samantha. Excellent, just beautiful point. Thank you. One of my favorite remarks comes from B.K., who brought up a point that I almost brought up in the outro of the Susie Ormond episode

At the last minute, I didn't want to include quotes in the outro of that episode, in the key takeaways wrap up. But if I had, this is what I would have brought up. And BK. brings this up in the comments on my blog. BK. I especially loved a question you posed near the end after almost an hour of Susie going off about how crazy fire is. And BK quotes it here, but I'm just going to play this quote for you because it's so perfect. How do you know when you're secure?

You're secure when you really don't have to worry about if you have a job or you don't have a job, you're absolutely fine no matter what can happen in your life. When you're out of debt, when you own your home outright, when you're fine no matter what catastrophe comes your way. So based on that quote, is she in support of FI after all? Because that sure sounds an awful lot like FI, doesn't it? BK pointed that out and thank you for pointing it out because I was smiling when she said that. Finally, I'd like to close out with this incredibly heartfelt note from a member of our community named B.N. Way to go, Paula. This couldn't have been easy, and yet you maintained with all the calm professionalism we would have liked to hear from Susie. Susie's point to prepare for the worst is not a terrible one to begin a conversation,

and to that end, I appreciate that Paula sees that diverse opinions can be valuable and publish the episode. Well, my own parents, who are her age, did everything Susie's way. It still didn't work. Dad worked his working years in a psychologically demanding career. Long hours. Never saw his kids. only taking one vacation with us over 30-plus years, and spent every summer taking on long, 24-hour overtime shifts.

He stashed all the extra, maxed out his retirement funds, investments, pension, health insurance, paid off the house, all the stuff she says to do. He worked endlessly, but never reached her 20 million. A few brief years post-retirement, he was diagnosed with all sides. When he ends up on full-time care, that'll run a smooth $10,000 a month added to their current expenses, since mom has to live somewhere, too, in the current family home. Needless to say, all those brutal years working and saving for the golden years didn't pay off, playing it safe, doing everything Susie would have suggested. Once they start paying for full-time care, their accounts would dwinds.

the loway. Trying to be open-minded, I listen to this episode thinking, number one, she's right that anything can happen. And it does. My family is living proof. The longer you live, the bigger chance that something unexpected rattles the best-laid plans. Number two. However, in all honesty, dad's the reason why I do strive for ever.

FI. I've learned a lot through him about the value of time and quality of life. I refuse to work like he did out of fear of not having enough and then not having enough anyway. B.N., thank you for sharing that with the community because it so perfectly highlights exactly why fire matters. It highlights that what we are doing is, perhaps the most meaningful pursuit that anyone could possibly chase because what is more meaningful than recapturing the hours of your one precious, short but long, but short life. Thank you so much for joining me on this podcast. My name is Paula Pan. If you enjoyed this episode, would you please do me a really big favor? Do you remember that disclaimer that I gave at the

beginning of the Susie Orman episode when I said, please don't leave us a one-star review because you disagree with Susie? Well, at least one person did. I gave this whole disclaimer and somebody gave us a one-star review. And the review says, first of all, Susie Orman scammed the poor middle class with her credit card deal. Only $3 a month. Give me a break. Now she says work until 70. What a crock. So yeah, show got a one-star review because somebody didn't like Susie Orman. Fortunately, thank you, thank you, thank you, thank you, thank you, thank you. That was outweighed by six people who gave us five-star reviews because they heard that disclaimer and they knew that for every one-star we need to counterbalance it with five-five stars so that we, so that the average doesn't get brought down and so that new people who are coming to this community who are scrolling through the reviews don't get misled. So please, would you do me a favor?

if you have not done so yet, please go to iTunes and leave us a review. Here's a great review from Rich Schmidt, who says, I've been listening since the beginning, and it just keeps getting better. Paula does a great job of helping listeners learn about finance and about life in general. Keep up the good work, Paula. Thank you, Rich. I really, I appreciate that. And I know you've been reading Afford Anything since the beginning.

You've been a blog reader since before I launched this podcast, so I really appreciate you being part of this community for so many years. Menlo Guy says, I'm a long-time listener and just heard the podcast with Susie Orman. Paula mentioned that some users might completely disagree with Orman and give her a one-star review, which, funnily enough happened right after he said that. So I'm doing the opposite and giving the podcast a five-star review. Afford anything as honest.

They don't tell you life is easy and that get-rich-quick schemes exist. Instead, it teaches time-tested principles, like budgeting, saving, diversifying, and due diligence. Its content is primarily interviews with financial experts, and there are lots of episodes on real estate investing, since Paula has a lot of experience in that area. One thing I really appreciate is that Paula and her staff are empathetic to their listeners. They ask what we want. They answer user-submitted questions. On one podcast, they even ask. for permission to play certain kinds of ads,

hoping users wouldn't be turned off by ads. This showed me they care. I'm a big fan and will continue listening to Afford Anything. Thank you so much, Manlo Guy. Thank you. So thank you so much to everybody who's left to review. And if you have not, please head to iTunes. You can go to afford anything.com slash iTunes. That will redirect you to the page on the Apple Podcast website

where you can leave this show a review. Or if you're listening to this on Stitcher or on Spotify, please leave us a review in your favorite podcast app. Thank you again for being part of this community, for being part of this journey. And thanks for hanging out with us in our Friday bonus episode, which we air once a month on the first Friday of the month.

My name is Paula Pant. You can join in the conversation at afford anything.com and you can subscribe to the show notes at Podcast. dot afford anything.com. Remember to subscribe to this show in your favorite podcast player so that you catch all of our awesome upcoming episodes. In a couple of weeks, I'll be chatting with James Clear about how to make stronger, better habits.

So make sure you don't miss that one that's an amazing conversation. Subscribe to this show in your favorite podcast player, whether you're using Apple, Stitcher, any of the Google Play app, Spotify, whatever it is that you use, hit that subscribe button. Thank you so much for tuning in. And I will catch you on Monday. Take care. I hate it.

I hate it. I hate it. And let me tell you why. I seriously want to make this a ringtone. Does anyone know how to turn this into a ringtone? Is that even a viable idea? If you know anything about that, please reach out to me because I would love to turn that into a ringtone and give it away for free to the whole community. That would be hilarious.