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The story
An article describing a 55-year-old company employee’s bewilderment after a friend of 30 years quit his job last month and announced he’d “FIRE’d” (Financially Independent, Retire Early) went viral on 5ch. The friend reportedly plans to live off roughly ¥45 million in assets, drawing it down at 7% a year. What really lit up the thread wasn’t the narrator’s struggle to say a genuine “congratulations,” but a full-blown argument over whether this financial plan actually holds up. Posters clashed over the difference between nominal and real returns, the so-called “4% rule,” and confusion about when pension payments actually start — with the exchange eventually devolving into people calling each other “idiots.”
“…Actually, I quit my job last month.”
Ikegami-san froze, chopsticks halfway to his mouth.
“Wait, what? Quit? Why?”
Source: news.yahoo.co.jp / Read the original article here
What people said
But if he's just withdrawing 7% of the principal every single year, that's only 15 years' worth.
By 70 all he'll have left is his pension (five years' worth untouched).
It says right there that he's still investing it.
Honestly, the people in FIRE threads claiming you need ¥100 million or ¥200 million are the ones who can't do the math.
They probably just can't afford it themselves, so they jack the bar up sky-high to feel better about it lol
You and the people saying that are just working off different assumptions.
That 7% average return is nominal. Subtract 2% for inflation and you get a real return of 5%.
Subtract another ~20% for capital gains/dividend tax and you're down to 4%.
That's the so-called "4% rule" for index investing.
If you're relying purely on dividends and price gains without ever touching the principal, even ¥100 million only gets you about ¥4 million a year.
Money must've been rolling in, because he redid the kitchen with a ¥5 million German-made sink.
Never paid a cent toward my college tuition, though.
That's just called "retirement," buddy (＾ω＾)
That's called retiring at the normal age.
It literally says he's withdrawing 7% a year.
While still investing it, though.
If he's withdrawing 7%, realistically the principal is just going to keep shrinking.
Why's that?
Are you just taking the 4% rule at face value?
If you don't mention the amount, you won't lose them lol
You think getting sick costs ¥10 million or something?
Assuming you'll pull in 8%+ returns every single year without fail is way too optimistic.
Ever heard the term "sequence of returns risk"?
Exactly this.
With both spouses' pensions combined he should be fine — that's like ¥200,000 a month, and he seems like the frugal type.
Even over 10 years that's not much different…
Hard to say, it depends on how much the wife worked.
If she was a stay-at-home housewife, she'd only get the basic pension portion.
Even at ¥150,000 for the husband and ¥60,000 for the wife, that's plenty.
You single or something?
If anything, that mindset is the single person's one.
Whether it's owned or rented, you've still got regular maintenance costs or rent either way.
Most of that money gets eaten up right there, leaving just enough to barely scrape by.
It's less "living" and more "just not dead yet."
Honestly, who cares about some made-up family's finances anyway.
It's not my household lol
Go ahead and nitpick it all you want, lololol
and yet choosing a "just not dead yet" existence on that tight of an income seems kind of dumb.
I'm not knocking FIRE-by-investing itself, but the guy in the original post (Re: #1) is a different story.
He just can't do basic math.
They must get great engagement, since they rehash them every single time.
Background and Key Points of the Debate
The “4% rule” often cited around FIRE is a rule of thumb based on the U.S. Trinity Study, representing the real withdrawal rate left after subtracting inflation and taxes from the average (nominal) rate of return. What split the thread was how to read the setup of “withdrawing 7% a year” from ¥45 million: as a nominal rate of return earned while staying invested, or as a withdrawal rate that eats straight into the principal every year. Under the first reading, the assets could theoretically be sustained; under the second, the math works out to running dry in about 15 years — and that mismatch in interpretation is a big reason the back-and-forth never quite connected. Some also pushed back on the assumption that “a 7%+ return every single year” is realistic, pointing out that a downturn hitting right when withdrawals are being made can drastically shorten how long the money lasts — a factor known as “sequence of returns risk,” one often overlooked in FIRE planning. There was also some disagreement over the age pension payments begin (in principle, 65 for Japan’s Employees’ Pension), but the article’s central focus remains the complicated feelings of watching someone close to you FIRE, and the ensuing argument over just how realistic that friend’s plan really is.
*This article is excerpted and summarized from the 5ch (“Nandemo Jikkyō G” board) thread “A 30-Year Friend Just FIRE’d Out of Nowhere — Why a 55-Year-Old Office Worker Couldn’t Bring Himself to Say ‘Congratulations’.”
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