# the FIRE Movement, can it get out of control?



## Tostig (Nov 18, 2020)

What could the long term detrimental effect on the entire economy be if too many people are able to retire early?

I've been thinking about this for a while, because, everything has its bubble right?

If a lot of people find themselves financially independent and are able to leave the workforce, that means they make room for a lot of other people to be employed into meaningful jobs - a least in jobs that pay enough for them to potentially save for early retirement too.

Unemployment goes down, the labour pool shrinks, salaries go up=> inflation?

But we've been there before. Currently, the target inflation is 2% and if governments can maintain that, it shouldn't be a problem.

Meanwhile, during times of recession, there's a lot of financially independent people who continue to spend thus keeping the economy going.

What can go wrong?

Your thoughts?


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## AltaRed (Jun 8, 2009)

The bigger issue is insufficient work force to do productive work and create GDP longer term. Workers are the big spenders. Retired folks are not.

That is why Canada's goal is for upwards of 1% (of our population) target for immigration. We are not breeding enough on our own. 

We need that immigration just to stay either even, or for some added real GDP growth. We are not getting it through productivity increases, i.e. behind a number of developed countries in terms of productivity per person. Risk of inflation is pretty small plus Bank of Canada is shifting their mandate some to work towards 2% inflation longer term rather than a ceiling. IOW, they are likely to let inflation move up some to get jobs and economy out of 1st gear.


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## Rusty O'Toole (Feb 1, 2012)

Since the big boys sent the manufacturing jobs overseas in the 70s and 80s there is a shortage of jobs not a shortage of workers. There are many thousands, possibly millions, on some form of disability, social assistance etc and others have been out of work so long they are no longer counted as unemployed. Not to mention those who are under employed, such as college graduates working part time at Starbucks.
If more people can become self employed or self supporting by their own efforts or investment it will be good for the country in many ways. Especially if their saving and investing goes into Canadian companies that will bring jobs back to Canada.
The idea that we need millions of immigrants from third world countries is pure hooey.


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## Gruff403 (Jan 30, 2019)

Many/most FIRE enthusiasts simply want to create flexibility in their lives. They want to be in a position where they can decide to work if they want instead of feeling like they must work at full time positions. They try to create a "work optional" opportunity. That's what I did and I'm one of those FI who continue to spend.


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## doctrine (Sep 30, 2011)

I seriously doubt enough people can pull this off to be statistically relevant. There is a lot of talk but not a lot of action. Life is expensive and the only way to really live financially independent for the vast majority is to accept a significant reduction in their living situations, and sometimes that doesn't even work.

I have some friends who have tried this at relatively early ages (35-40 after 15-20 year careers) and have to give up and go back to work after 5-10 years as the money runs out. Some cashed out big return of pension contributions and are now back at work at 45-50 and starting from scratch. Maybe they enjoyed their 10 year sabbatical, but they will likely be working for another 20 years.


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## james4beach (Nov 15, 2012)

doctrine said:


> I seriously doubt enough people can pull this off to be statistically relevant. There is a lot of talk but not a lot of action. Life is expensive and the only way to really live financially independent for the vast majority is to accept a significant reduction in their living situations, and sometimes that doesn't even work.


Totally agree. It's extremely rare that someone can pull this off, so the last thing we need to worry about is everyone retiring early in droves ... not going to happen.

What might happen is people seeking more work flexibility and adding more freedom and choice into their working lives, but that's not retirement and these people are still in the workforce. They still spend money, too.


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## Rusty O'Toole (Feb 1, 2012)

Imagine if everybody saved 10% of their income so they could retire early. Economists would freak out, fearing the economy would grind to a halt. That is because economists are nitwits. What do they suppose people do with their savings, burn them? NO they put them in the bank. Then the bank loans the money out or invests it, they get rid of the money as fast as they can because they have to pay interest on it and they don't make anything till they loan it out. So someone comes into the bank and borrows the money and hey presto it is back in circulation when they buy a new sofa, a car, a house, etc. After all nobody borrows money from a bank unless they want to buy something right away.
Even better would be if they loan the money to someone who is starting a business or buying new equipment and expanding or improving an old business. That way you not only get the money in circulation, you get new jobs created as well.
So now money is in circulation, new jobs being created, new products being made, debt being paid down, and people have money in the bank, financial security and are on their way to financial independence. But some half wit economists and politicians call this a disaster for the country. The only disaster is the bad management and extravagance of the economists and politicians. They would rather see everyone in debt up to their eyeballs being bled white by the interest payments and quivering on the brink of bankruptcy including the government


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## afulldeck (Mar 28, 2012)

Rusty O'Toole said:


> Even better would be if they loan the money to someone who is starting a business or buying new equipment and expanding or improving an old business. That way you not only get the money in circulation, you get new jobs created as well.


Oh, I couldn't agree more. In a parallel thought in "Can Canada afford a Liberal government" 


afulldeck said:


> ...You cannot stop the world at the border. This is why I believe entrepreneurship is the only way out of this dilemma. Canada workers need to walk away from the traditional/regular employment "of working for someone/megacorp" and created their own money making asset. Sounds easy, but it is not. Short term support by the government would be useful during that transition.


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## MrMatt (Dec 21, 2011)

Gruff403 said:


> Many/most FIRE enthusiasts simply want to create flexibility in their lives. They want to be in a position where they can decide to work if they want instead of feeling like they must work at full time positions. They try to create a "work optional" opportunity. That's what I did and I'm one of those FI who continue to spend.


That's the important part.

Look at Tim Ferris of the "4 Hour Work Week", or Sean DeSouza of the "3 month vacation".

It's all about being able to get the valuable work done, so you have freedom.

The thing is people need to work. It's a sad and depressing life when you do nothing of value.
I know people in their 80's and 90's who teach fitness classes, and have for decades.

Maybe it doesn't pay well, but both they and society benefit, even if there isn't a lot of money changing hands.


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## afulldeck (Mar 28, 2012)

Rusty O'Toole said:


> Economists would freak out, fearing the economy would grind to a halt. That is because economists are nitwits. What do they suppose people do with their savings, burn them?


Yes. Yes. Yes. Economist truly believe that-money should never rest-future use is irrelevant. That is just one of underlying messages that Michael Wolfson brought to Bill Morneau during his attack on CCPCs. 

So bringing this back to the OP's question "What could the long term detrimental effect on the entire economy be if too many people are able to retire early?" 

FIRE (Individual or CCPC owner) is just a method of changing Money velocity, but it will soon trickle out for good and services needed. It allows the FIRE individual to have different life engineer by themselves rather than forced by others. The effect on the economy will be miniscule.


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## MrMatt (Dec 21, 2011)

Okay, look at this hypothetically.
Lets take 100 working age people and pretend they're the whole economy.

100 people work. no problem
99 people work 1 person invests and retires fine, still lots of people to do the work.

Other extreme
100 people retired, nobody working, nothing gets done, investments don't pay any returns, they get back to work
Before that we'll have lots of retirees, and few workers, the few workers will demand high wages, reducing the investment returns until the retirees go back to work.

The only way this could be a problem is if someone artificially subsidizes the non-workers so they don't need to go back to work.
Some sort of "Basic income" could support the collapse, because it removes the "get back to work" incentive.


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## STech (Jun 7, 2016)

An unscientific poll found for every motivated, hard working, financially literate, goal driven and dedicated FIRE chaser, there are 40 to 50 lazy and uninspired people. So have no fear, this FIRE won't get out of control anytime soon.

My question is. Instead of FIRE and other cute acronyms, why not look for meaningful work that you enjoy waking up for? And a lifestyle within your budget so you're not killing yourself working??


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## cainvest (May 1, 2013)

Rusty O'Toole said:


> Imagine if everybody saved 10% of their income so they could retire early.


Actually this is a key metric and will likely show it can't happen. What percentage of ones income for even 50% of the working population would be required in order for FIRE? 

Sure the top 5% of earners might be able to pull off saving 10% over 20 years to be FIRE but for the masses what would that percentage be ... 25%,50%,75% of their yearly income?


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## MrMatt (Dec 21, 2011)

STech said:


> An unscientific poll found for every motivated, hard working, financially literate, goal driven and dedicated FIRE chaser, there are 40 to 50 lazy and uninspired people. So have no fear, this FIRE won't get out of control anytime soon.
> 
> My question is. Instead of FIRE and other cute acronyms, why not look for meaningful work that you enjoy waking up for? And a lifestyle within your budget so you're not killing yourself working??


Because it's easier to just vote for UBI.


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## MrMatt (Dec 21, 2011)

cainvest said:


> Actually this is a key metric and will likely show it can't happen. What percentage of ones income for even 50% of the working population would be required in order for FIRE?
> 
> Sure the top 5% of earners might be able to pull off saving 10% over 20 years to be FIRE but for the masses what would that percentage be ... 25%,50%,75% of their yearly income?


The wages will get bid up.

Right now about 1/3 of the country isn't working.


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## Retired Peasant (Apr 22, 2013)

I don't think 'a lot' of people are close to FIRE, what with so many two paycheques away from bankruptcy, or so the media keeps reporting.


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## sags (May 15, 2010)

Most people nearing retirement have $25,000 or less saved. Many have nothing and owe debts.

The statistics tell me that a "UBI" will continue to be paid to retirees in the current form of OAS/GIS benefits.

Under the current system, people qualify to collect GIS while keeping their assets and homes.

Maybe it is time to change the qualifications for the GIS from income to total net wealth and force people to spend their own money first.


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## MrMatt (Dec 21, 2011)

Retired Peasant said:


> I don't think 'a lot' of people are close to FIRE, what with so many two paycheques away from bankruptcy, or so the media keeps reporting.


I think there is a statistically insignificant number of FIRE.

There might be some who are sustainable and able to pursue other things, Mr Money Mustache is working a lot, despite "retiring".

That being said I think most people are financially and numerically illiterate.

One famous example is the Burger King 1/3rd pounder, which failed to beat the 1/4 pounder, focused groups said because 1/3 is less than 1/4.








Why No One Wanted A&W's Third-Pound Burger


A third-pound hamburger is better than a quarter-pound hamburger, right?




www.mentalfloss.com




.

That being said, you don't need fancy math to balance a budget.


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## Rusty O'Toole (Feb 1, 2012)

afulldeck said:


> Yes. Yes. Yes. Economist truly believe that-money should never rest-future use is irrelevant. That is just one of underlying messages that Michael Wolfson brought to Bill Morneau during his attack on CCPCs.
> 
> So bringing this back to the OP's question "What could the long term detrimental effect on the entire economy be if too many people are able to retire early?"
> 
> FIRE (Individual or CCPC owner) is just a method of changing Money velocity, but it will soon trickle out for good and services needed. It allows the FIRE individual to have different life engineer by themselves rather than forced by others. The effect on the economy will be miniscule.


But money never does rest, that is the point. Savings are not squirreled away in a hollow tree they are loaned out and spent as fast as any other money, and hopefully to better purpose. The more people retire early on their own resources, the more jobs available for the unemployed and the more money available for investment in new industries.

Imagine 2 parallel cases. Person A has a good job and a nice apartment, and every toy known to mankind. New furniture, stereo, guitars, radio control models, closets full of new clothes he hardly ever wears, fancy kitchen appliances, a $50,000 leased car and another $50,000 in credit card debt. He has a good job but can barely keep up by making minimum payments and he is used to a certain lifestyle - dining, dancing and drinking at expensive night spots every weekend for example.

Person B lives in an identical apartment next door, and makes the same amount of money. But he has no debt and $100,000 in savings. Comfortable furniture, likes making tasty home cooked meals, drives a 7 year old Toyota that is paid for.

Now imagine there is a recession and both lose their jobs. Which one is up **** creek without a paddle and which one regards it as a mild inconvenience? Both get unemployment insurance of about 60% of their usual wage, for 26 weeks.

What if Person A was regarded as normal, and was the most common situation while Person B was odd and unusual? Where would that leave the country in a recession?

Now imagine the opposite where Person B was the most common and normal one, while Person A was the oddball? Now would the country be better off or worse off in a recession?

I will go further. Imagine a country of savers where there is a continuous supply of money being reinvested in the most modern industry, vs a country of spendthrifts smothering in public and private debt that has been asset stripped for consumption and now depends on selling their natural resources and importing the necessities of life from foreign countries. Which would be more vulnerable to internal and external shocks?


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## Rusty O'Toole (Feb 1, 2012)

cainvest said:


> Actually this is a key metric and will likely show it can't happen. What percentage of ones income for even 50% of the working population would be required in order for FIRE?
> 
> Sure the top 5% of earners might be able to pull off saving 10% over 20 years to be FIRE but for the masses what would that percentage be ... 25%,50%,75% of their yearly income?


You take me too literally. I know everyone will not be able to do this, I am suggesting that the modern obsession with consumption and going into debt public and private is NOT necessary to have a thriving economy, and in the long run can be counter productive. More saving and investing would have little or no ill effects in the short run and great benefits in the long run. Our country's greatest growth and progress was when we were a nation of savers and investors, the same is or was true of England, the US, Japan, China, Singapore and no doubt many other nations.


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## AltaRed (Jun 8, 2009)

Don't know about all that. It seems the economic multiplier is higher when consumers spend money at the retail level than money spent (loaned out) for commercial/corporate/mortgage loans. Hence why one of the key factors always being measured is consumer spending. There are statistics and economic studies that have been done to calculate economic multipliers for different groupings of our economy. The higher the multiplier the more GDP that dollar contributes. I think one would have to dig into that research to make informed opinions. All we have here is conjecture and armchair quarterbacking.


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## MrMatt (Dec 21, 2011)

AltaRed said:


> Don't know about all that. It seems the economic multiplier is higher when consumers spend money at the retail level than money spent (loaned out) for commercial/corporate/mortgage loans. Hence why one of the key factors always being measured is consumer spending. There are statistics and economic studies that have been done to calculate economic multipliers for different groupings of our economy. The higher the multiplier the more GDP that dollar contributes. I think one would have to dig into that research to make informed opinions. All we have here is conjecture and armchair quarterbacking.


I'd suggest that the higher economic multiplier is investment into new and improved products and processes.

Spending $100 on the next PS5 game isn't likley going to result in the amount of increased economic activity as buying a second monitor for your work PC.

Buying the game, someone gets some money.
Buy the TV, someone gets some money, and your productivity has been improved by some small measure.

Compounding benefits are amazing. That's what people do/don't understand about capitalism.


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## ian (Jun 18, 2016)

There is a skills challenge in Canada. some employers have been facing this for years. It has been made worse by our aging population.

We do need immigration....targeted immigration. If not, the skills challenge will hinder our economy.

This is not about manufacturing jobs per sae. It is about specialized trades such as those experienced in computerized tool and die work etc., specialists in the IT sector, and in some the professions.


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## AltaRed (Jun 8, 2009)

ian said:


> There is a skills challenge in Canada. some employers have been facing this for years. It has been made worse by our aging population.
> 
> We do need immigration....targeted immigration. If not, the skills challenge will hinder our economy.
> This is not about manufacturing jobs per sae. It is about specialized trades such as experienced tool and die workers etc., specialists in the IT sector, and some in the professions.


Plus manual labour to keep our agriculture sector going....and hence the move to develop a mechanism for long term TFWs to gain permanent residency. It was almost criminal in BC this year with rotting fruit and vegetables not being able to be picked because there was a shortage of labour.

Too many 'Canadians' get university degrees/college diplomas in useless fields and then obviously don't want to work picking strawberries. I agree we are also desperate for selective skilled trades in a number of sectors and there have been increased incentives and training spaces added in Okanagan to help fill the gap. That history degree isn't going to cut it.


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## Rusty O'Toole (Feb 1, 2012)

Interesting discussion on the question of pubic and private debt by former chief economist of the Bank for International Settlement that touches on this discussion.
"William White, former chief economist of the Bank for International Settlements, is taking central banks to task. Monetary policy over the past three decades has caused ever higher debt and ever greater instability in the financial system, says White. Fiscal policy must take over to deal with the current crisis. "
Link to full article here William White: Central Banks Keep Shooting Themselves in the Foot

He suggests that the current crisis should be used to rethink in order to build a more stable economic system, one in which fiscal policy plays a greater role and that relies more on productive investment.


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## Karlhungus (Oct 4, 2013)

doctrine said:


> I seriously doubt enough people can pull this off to be statistically relevant. There is a lot of talk but not a lot of action. Life is expensive and the only way to really live financially independent for the vast majority is to accept a significant reduction in their living situations, and sometimes that doesn't even work.
> 
> I have some friends who have tried this at relatively early ages (35-40 after 15-20 year careers) and have to give up and go back to work after 5-10 years as the money runs out. Some cashed out big return of pension contributions and are now back at work at 45-50 and starting from scratch. Maybe they enjoyed their 10 year sabbatical, but they will likely be working for another 20 years.


Then they definitely didnt run the numbers right. If they followed the 4% rule and saved up 25X their expenses they should have been able to make it work


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## james4beach (Nov 15, 2012)

Karlhungus said:


> Then they definitely didnt run the numbers right. If they followed the 4% rule and saved up 25X their expenses they should have been able to make it work


Actually 4% is only considered a "safe" bet for a 30 year time horizon. SWR at 4% is considered successful if your portfolio balance ends at $0.01 at year 30.

Early retirement is especially challenging because of how long the money has to last. Someone might have 65 years ahead of them! According to my own modeling work, this requires a withdrawal rate of more like 3%, or even better, a variable withdrawal strategy like @AltaRed often talks about.

I am young and semi-retired. I continue to work and I have a pretty decent income at the moment, and I expect my withdrawals to be somewhere between 0% and 3.5% over the years. Currently it's 0% withdrawal. This should help preserve my capital much longer, though it isn't really retirement.

I'm not clear on whether I am considered "FIRE". In any case, my spending continues and in fact, I'm spending more money currently than in the past 2 years. I spent $3,000 this week on equipment related to my small business. I am not convinced that a FIRE movement would be bad for consumer spending.


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## sags (May 15, 2010)

Rusty O'Toole said:


> Interesting discussion on the question of pubic and private debt by former chief economist of the Bank for International Settlement that touches on this discussion.
> "William White, former chief economist of the Bank for International Settlements, is taking central banks to task. Monetary policy over the past three decades has caused ever higher debt and ever greater instability in the financial system, says White. Fiscal policy must take over to deal with the current crisis. "
> Link to full article here William White: Central Banks Keep Shooting Themselves in the Foot
> 
> He suggests that the current crisis should be used to rethink in order to build a more stable economic system, one in which fiscal policy plays a greater role and that relies more on productive investment.


Interesting how closely aligned his views and those of Finance Minister Chrystia Freeland and the Trudeau government appear to be.

As he defines "productive investment" as infrastructure spending, the proposed spending in alternative energies would appear to be on course.

Debt forgiveness.....would not be as popular a remedy, but in Canada the bankruptcy laws are relatviely consumer friendly, considering the alternative.

With a minority government, propped up by the NDP party it may be prudent for the Liberals to act while they are able to garner widespread support.

Conservatives have their beliefs deeply rooted in the "austerity measures" solution, which as discussed in the article is a failed policy. They will not support the kind of changes necessary for the government to implement.

So...there may be no better time than the present to begin implementation of the economic reset, lest the government fall and the Conservatives take control.


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## MrBlackhill (Jun 10, 2020)

MrMatt said:


> One famous example is the Burger King 1/3rd pounder, which failed to beat the 1/4 pounder, focused groups said because 1/3 is less than 1/4.


Nice, haha! Did A&W try to sell a 1/5 pounder at the same price after their conclusion? I think I'll open a fast food restaurant and sell 1/10 pounders at the same price. Everyone will come for that huge deal!


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## nathan79 (Feb 21, 2011)

Rusty O'Toole said:


> Interesting discussion on the question of pubic and private debt by former chief economist of the Bank for International Settlement that touches on this discussion.
> "William White, former chief economist of the Bank for International Settlements, is taking central banks to task. Monetary policy over the past three decades has caused ever higher debt and ever greater instability in the financial system, says White. Fiscal policy must take over to deal with the current crisis. "
> Link to full article here William White: Central Banks Keep Shooting Themselves in the Foot
> 
> He suggests that the current crisis should be used to rethink in order to build a more stable economic system, one in which fiscal policy plays a greater role and that relies more on productive investment.


Just think of all the dead money tied up in Canada's inflated RE market... imagine if that money was funneled into productive investments. The government and central bank seems more interested in propping up the RE bubble though.


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## Thal81 (Sep 5, 2017)

We'll never get to a point where FIRE becomes a problem for the economy. Why? Because it takes a special kind of long term commitment and determination that most people just can't achieve.

It's the same reason why so many people struggle with weight loss all their life. Weight loss is super simple: eat less calories than you burn. Yet most people can't do it for more than a short time. FIRE follows the same principle: spend less than you earn, invest the difference. So simple, yet so hard.


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## ian (Jun 18, 2016)

Given the amount of debt in this country, and the (pre covid) growing debt of those over 55, I do not think we have to worry terribly about those who select early retirement. Our domestic spend went down considerably. Our foreign spend went up. But our cash gifts to our children in Canada have more than made up for the decline in our personal spend. There will always be those that save and those that spend.

The real issue may not be spend, but skill retention/replacement in the workforce. I suspect that will have a greater impact on some sectors than the potential decrease in spend by those who opt for early retirement.


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## MrMatt (Dec 21, 2011)

ian said:


> Given the amount of debt in this country, and the (pre covid) growing debt of those over 55, I do not think we have to worry terribly about those who select early retirement. Our domestic spend went down considerably. Our foreign spend went up. But our cash gifts to our children in Canada have more than made up for the decline in our personal spend. There will always be those that save and those that spend.
> 
> The real issue may not be spend, but skill retention/replacement in the workforce. I suspect that will have a greater impact on some sectors than the potential decrease in spend by those who opt for early retirement.


I personally think the high skill people tend to keep working or dabbling even once they officially "retire".

I took several masters courses at University taught by professor emeritus that wouldn't otherwise run. Simply because the professor loved the work.

There is simply no economic justification to get a an advanced course being taught to 5 people by a world expert, unless they had the freedom to indulge their passion.


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## nathan79 (Feb 21, 2011)

It will never be a problem for the simple fact that the government will allow as many immigrants as necessary to make up any shortfall. This will also guarantee an oversupply of workers so that wages remain low. Tech companies like Amazon love this and are increasing their presence in Canada where they can pay significantly less than the same position would pay in the US.


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## james4beach (Nov 15, 2012)

nathan79 said:


> It will never be a problem for the simple fact that the government will allow as many immigrants as necessary to make up any shortfall. This will also guarantee an oversupply of workers so that wages remain low. Tech companies like Amazon love this and are increasing their presence in Canada where they can pay significantly less than the same position would pay in the US.


While in the US, I was involved in hiring people for high-skilled (specialized) technical roles at our company. We struggled to find qualified Americans for the roles we needed. This is what pushed us to find people from outside the country. If instead we left those roles unfilled, our company would have suffered... we needed immigrants and foreigners.

However I should add that while I'm talking about a genuine shortage of skilled workers, the large companies (e.g. Royal Bank) do this purely for cost savings. Sometimes they lie and say it's because of a skilled labour shortage, but really it's a money issue, and they don't want to pay Canadian wages. In fact I was once laid off due to something like this. Our domestic office was slowly stripped down to a skeleton crew and outsourced to overseas.

So I've seen both versions of this first hand. Genuine shortage of skilled labour, AND companies just being cheap and looking for lower cost centers.


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## afulldeck (Mar 28, 2012)

james4beach said:


> While in the US, I was involved in hiring people for high-skilled (specialized) technical roles at our company. We struggled to find qualified Americans for the roles we needed. This is what pushed us to find people from outside the country. If instead we left those roles unfilled, our company would have suffered... we needed immigrants and foreigners.


How about providing some training? Technical roles change quickly and in some cases unexpectedly. Training also lead to loyalty. Great concept, worked in the 60's....


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## james4beach (Nov 15, 2012)

afulldeck said:


> How about providing some training? Technical roles change quickly and in some cases unexpectedly. Training also lead to loyalty. Great concept, worked in the 60's....


For the roles we needed, there was a certain prerequisite: a minimum Masters degree in Computer Science or Computer Engineering, with at least a couple of years of work experience.

We occasionally were approached by people who had lower level degrees, but it's just not close enough to what we need. The bridge can't be patched with just a few courses or training. Degree qualifications exist for a reason.

Technical roles may change quickly, in details, but these particular degrees have some very important foundations which haven't changed much since the 1970s and 1980s. Even a computer scientist who is today in their 60s could have worked in the roles we were filling. The problem is that they were either all employed, already, or not looking for work.


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## Karlhungus (Oct 4, 2013)

james4beach said:


> Actually 4% is only considered a "safe" bet for a 30 year time horizon. SWR at 4% is considered successful if your portfolio balance ends at $0.01 at year 30.
> 
> Early retirement is especially challenging because of how long the money has to last. Someone might have 65 years ahead of them! According to my own modeling work, this requires a withdrawal rate of more like 3%, or even better, a variable withdrawal strategy like @AltaRed often talks about.
> 
> ...


Theres not a whole lot of difference between a 30 year retirement and 60 year retirement in terms of surviving your money. Yes I understand that its considered successful if you end up with $.01, however, the majority of the time you will end up with more money then what you started with withdrawing 4%.


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## Karlhungus (Oct 4, 2013)

james4beach said:


> Actually 4% is only considered a "safe" bet for a 30 year time horizon. SWR at 4% is considered successful if your portfolio balance ends at $0.01 at year 30.
> 
> Early retirement is especially challenging because of how long the money has to last. Someone might have 65 years ahead of them! According to my own modeling work, this requires a withdrawal rate of more like 3%, or even better, a variable withdrawal strategy like @AltaRed often talks about.
> 
> ...


More importantly, if they ran out of money within 5-10 years, then they DEFINITELY did it wrong.


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## rl1983 (Jun 17, 2015)

james4beach said:


> While in the US, I was involved in hiring people for high-skilled (specialized) technical roles at our company. We struggled to find qualified Americans for the roles we needed. This is what pushed us to find people from outside the country. If instead we left those roles unfilled, our company would have suffered... we needed immigrants and foreigners.
> 
> However I should add that while I'm talking about a genuine shortage of skilled workers, the large companies (e.g. Royal Bank) do this purely for cost savings. Sometimes they lie and say it's because of a skilled labour shortage, but really it's a money issue, and they don't want to pay Canadian wages. In fact I was once laid off due to something like this. Our domestic office was slowly stripped down to a skeleton crew and outsourced to overseas.
> 
> So I've seen both versions of this first hand. Genuine shortage of skilled labour, AND companies just being cheap and looking for lower cost centers.


There isn't a shortage of qualified trades people. What there is a shortage of, is decent pay for a decent days work. We were getting there in the oil fields, but when that dried up, I just didn't have it in me to go back to wiring houses at break neck speeds again at poor wages. So I left it. 

The oil companies towards the end were lying to government about lack of qualified Canadians to work up there. There was already a bunch of TFWs ( with poor English skills and questionable trade qualifications ) there and the wages from what the others were telling me were $10/hr less than what they were 5 years prior.


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## MrMatt (Dec 21, 2011)

rl1983 said:


> There isn't a shortage of qualified trades people. What there is a shortage of, is decent pay for a decent days work. We were getting there in the oil fields, but when that dried up, I just didn't have it in me to go back to wiring houses at break neck speeds again at poor wages. So I left it.
> 
> The oil companies towards the end were lying to government about lack of qualified Canadians to work up there. There was already a bunch of TFWs ( with poor English skills and questionable trade qualifications ) there and the wages from what the others were telling me were $10/hr less than what they were 5 years prior.


What is "decent pay for decent days work".

$100/day, $500/day, $1k/day?

It always seems people want a lot of money for not very much work, then they complain about it.
Like you pointed out, there are jobs, you just don't want them.


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## sags (May 15, 2010)

rl1983 said:


> There isn't a shortage of qualified trades people. What there is a shortage of, is decent pay for a decent days work. We were getting there in the oil fields, but when that dried up, I just didn't have it in me to go back to wiring houses at break neck speeds again at poor wages. So I left it.
> 
> The oil companies towards the end were lying to government about lack of qualified Canadians to work up there. There was already a bunch of TFWs ( with poor English skills and questionable trade qualifications ) there and the wages from what the others were telling me were $10/hr less than what they were 5 years prior.


We have free market wage discovery until the owners don't want to pay the cost.

Then they want the government to intervene in the labor market.


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## MrMatt (Dec 21, 2011)

sags said:


> We have free market wage discovery until the owners don't want to pay the cost.
> 
> Then they want the government to intervene in the labor market.


I agree, government intervention generally makes things worse.


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## rl1983 (Jun 17, 2015)

MrMatt said:


> What is "decent pay for decent days work".
> 
> $100/day, $500/day, $1k/day?
> 
> ...


$500/day is in line with what a journeyman tradesperson should make up there. Given the industrial environment and extreme weather.


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