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No. of Recommendations: 12
<All this talk about retirement calculators and performance of indexes seems irrelevant for someone who really wants to retire early. What people who want to retire should be focused on is how to beat the market by at least 20% per year. That involves understanding businesses, judging risk accurately, and a lot of effort in picking stocks.>


Your post implies that with some hard work everyone can beat the market by 20% per year. Producing individuals who have managed to do that does not prove the point for a larger pool of people. I will grant you that someone focused on FIRE should fare better than almost all of the rest of the general population over the long haul. I will also grant you that there will always be individuals who take on a lot of risk and manage to hit Barry Bonds type home runs.

I really think you are talking about a small subset of FIRE types. Some of these types may get their nest egg up to 50k or 100k and decide to put it all into 1 or 2 companies that they think will really pay off for them. If they are right, they won't have to worry about beating the averages each year. If they are wrong they have to be mentally tough enough to start at the bottom of the hill again.

I could be wrong, but it is my perception that most FIRE people are their most agressive in socking away as much as they can while keeping a firm handle on their expenses. Knowing all of the hard work that goes into pursuing a goal of FI, they are usually reluctant to "let it all ride" even on a story or company they strongly believe in. That is not to say they cannot be agressive in their investment strategies. It merely shows that steady measurable progress towards a goal is often preferred over double or nothing strategies. I think there is a big difference in risk assessment between those two branches of FI people. For every startup that has become a grand slam home run, there are lots of strikeouts, even for very promising ideas. Most of us are looking for the singles and doubles with the hope of hitting one over the fence every once in a while.


BRG
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