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

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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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