Early Retirement Extreme Forums

Is that money bath part of your Christmas tradition?

7w5, to compare you have to compare like to like. Two people who both do or do not get regular physical exercise for example with one having little or no money and the other having more than enough money to pay for what they need. You cannot suggest that everyone who has more money is not going to have and do all the things you list, just as someone without money could do. It is not a question of can someone be happy with little money. The person with more money can do all the things you list AND more. The person with little money is confined to those things which do not cost money.

I can do all the things you list AND afford to drink a bottle of expensive wine IF I want to. And please don't tell me you don't need to drink a bottle of expensive wine to be happy, it's an example of something money can buy IF you want it. Discretionary income simply adds to happiness. That really isn't debateable. https://www.google.ca/search?q=money+bu ... ss&ie=&oe=

C40, the picture represents the extreme of where piss poor planning can take someone IF their plan has a flaw. It is also a picture of where poor planning actually has taken people. I've met some. I consider anyone who FIREs based on a plan that provides them only the minimum they need financially to survive, has a piss poor plan. It's simply a warning to plan for more than you need. What do you see as your minimum required income to survive and what is the income level at which you plan to FIRE? If the second is double the first, I'd say it's a decent plan. If it's less than that, I'd say it's piss poor planning. I have a feeling though that many here are not planning to FIRE when they can generate a passive income of twice what they think they need to survive. They are leaving themselves with very little wiggle room.

Nor can you simply plan for a 'spending reduction' if required. You may need a spending increase. Why would you assume you might only need a reduction? Let's suppose the price of heating doubles. You can't heat less, so you will have to spend more. You might be able to 'rob Peter to pay Paul' from some other part of your budget but then again, you might not be able to. I don't know, you don't know. You may simply have to spend more.

It's really just a question of how big a 'hiccup' you can absorb with your strategy. If you have 10% of your total income as discretionary, you can absorb a small hiccup. But if you hit as an example a 25% hiccup such as I gave as an example above, then you have a real problem, as those who were in that position found out in Spain. Do you think they retired thinking, 'well I know I can't handle a hiccup'? Do you think that such a thing is unusual or unlikely to happen to you? I gave the example I did because I think it shows just how easily and how big a hiccup anyone could encounter. Over a period of 3 years, a 25% increase in the income needed to stand still.

It's a warning C40, that's all. Plan to have more income than you need and the more it is the better, as has been proven by others who have gone before you. I have been retired for a long time and have met a lot of others who have been retired in that time. I have met quite a few who were struggling financially for one reason or another. As I've said, a successful FIREing is not about do you or don't you FIRE, it is in do you continue to be FI over the long haul. So 'what do you want' from the financial viewpoint should be enough to STAY FI.

I really don't know what your issue is with that warning.

OldPro wrote: I can do all the things you list AND afford to drink a bottle of expensive wine IF I want to. And please don't tell me you don't need to drink a bottle of expensive wine to be happy, it's an example of something money can buy IF you want it. Discretionary income simply adds to happiness. That really isn't debateable. https://www.google.ca/search?q=money+bu ... ss&ie=&oe=

Those links all discuss how money buys time, experiences and the ability to give away. You don't need a lot of money (i.e. more than typical ERE assets) to do that. People here have time, and if they are not able to give monetarily, they are able to give their time. You are also discounting the fact that if someone is trying to truly become ERE it is much more antifragile than FI, even with lower monetary assets. While similar, ERE does NOT equal FIRE. So it really is debatable.

OldPro wrote: I can do all the things you list AND afford to drink a bottle of expensive wine IF I want to. And please don't tell me you don't need to drink a bottle of expensive wine to be happy, it's an example of something money can buy IF you want it. Discretionary income simply adds to happiness. That really isn't debateable. https://www.google.ca/search?q=money+bu ... ss&ie=&oe=

You know, this premise (discretionary income creates additive happiness in a simple way) is not well supported by this citation and is, in fact, refuted in many ways. You can start with the first article in the search, which explores the limits by which money can buy happiness:

http://www.wsj.com/articles/can-money-b ... 1415569538

In the end, the conclusion should be that money is a tool that may or may not be useful in improving well-being, depending upon how it is used. Hedonic adaptation is a very serious limitation, as is mimetic desire (wanting what others have/want/or to be like them). These are evolutionary traits that were great for propagation of the species, but not so useful for improving individual satisfaction in modern life.

The more interesting realization is the converse proposition -- that increased happiness/well-being is possible with less money if one can overcome the unconscious tendencies toward hedonic adaptation and mimetic desire. Which in some respects is why we are all gathered here around this campfire.

"For it is money that they have and peace that they lack."

OldPro wrote:If the second is double the first, I'd say it's a decent plan. If it's less than that, I'd say it's piss poor planning. I have a feeling though that many here are not planning to FIRE when they can generate a passive income of twice what they think they need to survive. They are leaving themselves with very little wiggle room.

OldPro wrote:As I've said, a successful FIREing is not about do you or don't you FIRE, it is in do you continue to be FI over the long haul.
I really don't know what your issue is with that warning.

My issue is the black/white nature of the argument and the unwillingness to entertain the idea, for instance, that people might define FI differently. Either follow this prescription or we're piss-poor idiots. It's not very much fun having a conversation when the issues are constantly divided with such sharp contrasts. Right/wrong. Good/bad. Smart/dumb. My plan/piss poor plan.

Though I must say, it is probably good for us to understand the risks we face in a long drawn-out early-retirement. I've danced around this in several somewhat related threads here recently. Some very important traits can be use-it-or-lose-it. Financial-Independence can buy a sort of indulgence from those around us and we can then lose the ability to think or speak with nuance.

I hope that was clear.

OldPro wrote:7w5, to compare you have to compare like to like. Two people who both do or do not get regular physical exercise for example with one having little or no money and the other having more than enough money to pay for what they need.

By definition this is not comparing "like to like". At some point the people must have done something different to have such different financial positions. Perhaps one learned how to do DIY instead of spending extra time earning more money at work, leaving them able to maintain their home at a significantly lower cost than the other.

OldPro wrote: I can do all the things you list AND afford to drink a bottle of expensive wine IF I want to. And please don't tell me you don't need to drink a bottle of expensive wine to be happy, it's an example of something money can buy IF you want it. Discretionary income simply adds to happiness. That really isn't debateable. https://www.google.ca/search?q=money+bu ... ss&ie=&oe=

That is dangerously close to this https://www.youtube.com/watch?v=U8Kum8OUTuk

OldPro wrote: C40, the picture represents the extreme of where piss poor planning can take someone IF their plan has a flaw. It is also a picture of where poor planning actually has taken people. I've met some. I consider anyone who FIREs based on a plan that provides them only the minimum they need financially to survive, has a piss poor plan. It's simply a warning to plan for more than you need. What do you see as your minimum required income to survive and what is the income level at which you plan to FIRE? If the second is double the first, I'd say it's a decent plan. If it's less than that, I'd say it's piss poor planning. I have a feeling though that many here are not planning to FIRE when they can generate a passive income of twice what they think they need to survive. They are leaving themselves with very little wiggle room.

OldPro wrote:
When I FIREd, I hoped to be able to live on less than $12k per year. I hoped to generate an income of $20k per year from a capital of $200k. Those numbers worked out fine initially for me.

Has your own "piss poor plan" worked out (at a 6% withdrawal rate)? If so, why would somebody whose plan requires a 3-4% withdrawal rate work out worse?

OldPro wrote: Nor can you simply plan for a 'spending reduction' if required. You may need a spending increase. Why would you assume you might only need a reduction? Let's suppose the price of heating doubles. You can't heat less, so you will have to spend more. You might be able to 'rob Peter to pay Paul' from some other part of your budget but then again, you might not be able to. I don't know, you don't know. You may simply have to spend more.

Why not? If you have budgeted for luxuries, these can be cut out. We don't need to drink expensive bottles of wine, even though we may have budgeted for them. Plenty of people live with neither heating nor air conditioning.

OldPro wrote:It's really just a question of how big a 'hiccup' you can absorb with your strategy. If you have 10% of your total income as discretionary, you can absorb a small hiccup. But if you hit as an example a 25% hiccup such as I gave as an example above, then you have a real problem, as those who were in that position found out in Spain. Do you think they retired thinking, 'well I know I can't handle a hiccup'? Do you think that such a thing is unusual or unlikely to happen to you? I gave the example I did because I think it shows just how easily and how big a hiccup anyone could encounter. Over a period of 3 years, a 25% increase in the income needed to stand still.


It's a warning C40, that's all. Plan to have more income than you need and the more it is the better, as has been proven by others who have gone before you. I have been retired for a long time and have met a lot of others who have been retired in that time. I have met quite a few who were struggling financially for one reason or another. As I've said, a successful FIREing is not about do you or don't you FIRE, it is in do you continue to be FI over the long haul. So 'what do you want' from the financial viewpoint should be enough to STAY FI.

I really don't know what your issue is with that warning.

Rather than lecturing people on how inadequately they are planning at 3-4% withdrawal rates, how about you tell us what safeguards were in place to provide this cushion with your 6% withdrawal rate (with no healthcare consideration)? Experiences such as your post retirement printing business and bar investments illustrating that post-FI income does not necessarily have to come from savings/investments are invaluable.

Many people on here are planning on retiring with incomes similar to that I currently earn. That is at 3% withdrawal rates (my income, although not massive, is well above the country's average). I doubt I will be able to significantly increase my earnings in the near future, so other methods of providing security in retirement are of great interest to me, and no doubt to others. However, I also do not want to spend much longer than I have to working 40+ hours per week. I think the risk that money gets tight is less serious than the risk of never taking the chance to have more freedom with how I spend my time. THAT is what I want.

skintstudent wrote:
That is dangerously close to this https://www.youtube.com/watch?v=U8Kum8OUTuk

Priceless!

Dragline said: Is that money bath part of your Christmas tradition?

Unfortunately, on my income I can only afford a foot basin full of pennies..(sigh)


@OldPro: What everybody else said. And...

One thing you don't seem to be understanding is that many or most of the people on this forum regard frugality to be a sort of fun sport that they are good at. Different people on this forum are better or worse at different aspects of this "sport", or approach it from different perspectives, but that is pretty much the whole point of the "extreme" in ERE. I absolutely do not believe that most people could live as well on less than $10,000/year as I do because I am practiced at the sport or art of frugality. I am also a self-aware, slothful sensualist. I rarely deny myself anything. If I wanted to drink a fine bottle of wine on a regular basis, I would figure out how to best afford that without spending very much money. First off, I would assume that with wine, as most things, quality and expense don't always go hand in hand, and I could educate myself in that regard. Second, I would ask myself if there was anything I could barter for fine wine, and the answer would be maybe some fresh heirloom variety produce from my garden, or maybe the pleasure of my company over dinner. Third, I would try to examine and break down what it is I am really craving when I think "very fine wine", maybe what I really want is something like "alcoholic beverage I have never before sampled." IOW, what I am truly craving is something that will give me a bit of a warm, glow buzz combined with the enjoyment of novel experience. So, then my much less expensive solution might be to dig around in my used cookbook archive for a cocktail recipe from the 1930s. Next, if I was really a bit of a wino and wanted it very frequently in rather large quantity, I might consider in what situation fine wine might end up on the discard market. My answer would be that maybe at very upscale eateries fine wine is regularly discarded, and I would consider getting some sort of part-time job at such an establishment, because the opportunity to collect dregs might be worth even more to me than the tips. Etc. etc. etc. Maybe the ability to walk into some chi-chi market and pay full price for a bottle of fine wine is a win in the competitive sport of "pile up the most money" (which I admittedly suck at-lol- part of the reason I joined this forum was I want to get better at this) , but it is a solid lose in the creative sport of frugality.

If I believed that I could render myself significantly happier by spending more money, then I would do it. As I mentioned above, I currently keep track of the factors that influence my happiness on a daily basis. The least happy day I had in the last month was a 2.2 on a 4.0 scale. My unhappiness was due to the fact that I agreed to care for my sister's 3 spoiled-rotten dogs simultaneous with agreeing to teach kindergarten 3 days in a row, and I suffered sleep deprivation. More money would not have fixed my poor planning and weak boundaries that resulted in this unhappiness. My three happiest days in the last month, registered over 3.75, so solidly in the "crazy ass" zone, and my notes for those days on my spreadsheet include "jumped rope with children", "danced" , "figured out how to fix greenhouse", "lounged about", "wrecking ball sex" ,"worked on karakuri model", "six people said "Hi" to me on the way to the store", "watched very interesting film" and "lovely note from lover." More money would not have much improved or influenced any of these factors for me.

OldPro wrote: It's a warning C40, that's all. .... I really don't know what your issue is with that warning.

It's annoying because it's the kind of objection that ignorant people make out of cognitive dissonance. The kind of objection that people who don't understand ERE make on news comment sections. I hope for better from people who participate on the forum and who should understand ERE better.

A realistic warning would be something like this: http://www.arnoldsofficefurniture.com/w ... ubicle.jpg

The worst that will happen to people 'fail' at ER/FI is that they go back to work. That's it. They aren't going to spend their last cent and become homelss. For most people here, even if they did spend all their money, they could get almost any job and cover their expenses. ERE'ers are possibly the least to end up homeless compared to any other group of people.

Wrecking ball sex!!?? Is that just an adjective? Or something specific? I searched and all I found was this: http://www.urbandictionary.com/define.p ... cking+ball

7w5, why did your comment, "or maybe the pleasure of my company over dinner", come as no surprise to me. Do you really need to include the fact that you are willing to trade yourself for some benefit, in every discussion?

C40, how do you know, "The worst that will happen to people 'fail' at ER/FI is that they go back to work. That's it. They aren't going to spend their last cent and become homelss. For most people here, even if they did spend all their money, they could get almost any job and cover their expenses. ERE'ers are possibly the least to end up homeless compared to any other group of people."

On what evidence/personal experience or knowledge do you base that statement? How many people have you met who failed at ER? I've met a dozen or so. Consider age alone. Suppose someone ERs at 30 and finds themselves in trouble at 70. What work is it you expect them to be able to go back to? I know that the chances of my being able to go back into the workforce at the kind of work I used to do are as close to zero as you could get. I suppose I might get a job as a Walmart greeter but I hear competition is stiff for those jobs with all the retirees who can't make ends meet. Sometimes I think that people posting here only think in the short term. Sure if you ER at 30 and need to go back to work at 35, it's quite likely you will be able to do so. Try it at 70. Sure if someone lives frugally they can get by on $6k per year, try earning it when you are no longer physically able to work though. What then? You will HOPEFULLY get older C40.

All I am saying is that if you plan to have more income than you need, you have a better chance of long term success. I have seen first hand what can happen to people who do not. That's real evidence even if anecdotal, not wishful thinking that, 'the wost that will happen is they go back to work.' A few years ago there was a post on a travel forum I frequent where a guy posted that after many years of travel and living in foreign countries, he found himself in a country broke and having to steal vegetables from farmer's fields to eat. He didn't plan on that happening but it did. He had no way to get the money to even return to his home country and go on welfare there. Did you know your Embassy will NOT pay to send you home in a case like that?

I can only guess that what really annoys yourself and others is the idea that if you need to plan for more income, it means you need to wait longer to ER and that thought isn't pleasant to contemplate. I understand ER better than most I would say C40. I've lived it for 26 years. I am pretty frugal and do not live beyond my means at all but I can envision very easily circumstances under which I could go broke quite quickly and be UNABLE to go back to work. I think my warning is quite realistic. I'm not saying you can guarantee 100% success but I am saying you can improve your odds by having more income than you need.

I only made it through reading a couple sentences of your post. Since you're taking the all too common troll tactic of demanding evidence for the obvious, I'll ask you this: of all the people you know who retired early, what % of them ended up homeless?

All sounds rather heated. I agree with OldPro that more is better. Of course it is. ERE (not ER) is just a tool, to me. It allows for an early exit and freedom, if you are skilled enough and that is what you want.

Many are not, or have other goals.

It also provides an intellectual framework and, through these forums, a support structure that helps you take big decisions about your time, career and assets that might otherwise seem impossible. At least for me they did.

OldPro may have had the opportunity, brains and times to sock away 3 times as much as he needed. I did not as it turns out. I was done. I may well have less cash than I need to live off the returns in every possible situation.

Luckily for me though, doing this has freed my time up and reduced my stress levels to the point where I would be happy to earn a bob or two in a way that suits.

As for being broke at 70, well I will cross that bridge when I come to it. And to be honest I think 70 year olds are better at needing little than 40 year olds, as they tend to be happy sitting in the one place. So an inability to earn at that stage should work out fine.

Ok, I made it through your entire post.. The thing is, you're talking to people here like you think they are idiots.

Everyone here already understands that having a wider safety margin between income and spending means a higher success rate.

And, be nice to 7wanabe5 please. We like having her around here and I like hearing about her relationships and sexual adventures.

A reasoned response Did and a more appropriate second response C40.

I would comment though Did that your expectations of what a 70 year old does or does not want to do or is capable of doing is not necessarily so. I need as much or more at 70 as I did at 40 and am not happy sitting in one place to any real appreciable degree greater than I was at 40. I would say that I am more intolerant of things like air travel though. ie. I now hate the thought of the airport hassle and having to sit in a plane to get somewhere. At 40 I was more tolerant about things like that. In fact, it's a good example of why a 70 year old may not need less money. Where at 40 I was willing to take some indirect route or sit through a couple of stopovers, I no longer am. I want A to B, direct, non-stop and am willing to pay more to get it. That same principle applies to other things as well.

I do agree we should all cross our bridges when we come to them and not before, but that does not mean we cannot try to plan to not have to cross certain bridges. I can assure you that the idea of going broke at 70 is far scarier to a 70 year old than it is to a 40 year old who sees that as the far distant future. You 'can't see there from here', as the saying goes, I can.

C40, I suppose I am showing my personal disgust with 7w5's personal preferences. I don't like hearing about how she sells sex for benefits. We can agree to disagree on that one. My mind just goes immediately to 'gold digger', no doubt influenced by previous personal experience during my earlier ER years. But to be fair, 7w5 may not be a gold digger at all. She may as she says enter in to mutually understood arrangements between adults. That of course just leaves me feeling pity for the men who need to enter into such arrangements to get sex. They justify themselves by saying the only difference between a wife who gets a diamond bracelet and a mistress, is the second is more honest about it.

7w5, stop hanging out with losers like that.

OldPro wrote:At 40 I was more tolerant about things like that. In fact, it's a good example of why a 70 year old may not need less money. Where at 40 I was willing to take some indirect route or sit through a couple of stopovers, I no longer am. I want A to B, direct, non-stop and am willing to pay more to get it. That same principle applies to other things as well.

Is it possible that the opposite might be true for other people? That is, while you've become more fragile as you age, might others use their years to exercise a wide variety of "muscles" that allow them to continually decrease their need for comfort and increase their tolerance of discomfort?

And if so, is it possible you became more fragile because you could? In other words, have you been spending your financial independence buying insulation from the very hardships and challenges that would have created the callouses and strengths needed to endure a less-insulated life? The example you gave above seems to indicate this is true, but I could be wrong.

Some look at aging and believe this is the inevitable result....
https://vimeo.com/142997373

I think not. And since the title of this thread is "What do YOU want?", I want not. I have some experience dealing with old people and my experiences backs up my beliefs. That is but one possible result. Not inevitable.

But, again, I could be wrong.

@oldpro - I think I can speak for 7wb when I say that she is not trading sex for things. It sounds like she enjoys the sex every bit as much as they do. It also sounds like she only spends time with men who are fun for her to be around (mentally stimulating, good looking, in good shape, etc.). She's not spending time and having sex with men that she doesn't already want to. I agree with you that it is strange that so many men will "spend" so much money "on" women. I think doing that creates a strange dynamic where it seems like (and actually be true that) sex is something being traded for.

If the tables were turned - if there were a lot of women who wanted to have sex with me and buy me a bunch of things without expecting me to buy things for them, I would let it happen too.

(The forum has had actual sex workers as regular members, and has been 100% accepting of them)

I would rather risk intermittent work or return work in my 60's than become bitter in my 40's or institutionalized in my 50's. At the very least, right now I'd have 20+ years of healthy retirement. Heck, I would commit suicide if life became a burden as I would have lived a full and rich life.

YOU can plan for "forever", I'll plan for 70ish.

Ultimately this may fit better in the privilege thread, but once we've collected our stash in such a typically conservative way that we're going to have more than we would ever want to spend, it comes to down to what we want that money can't buy.

This could be such things as love, passion, happiness, lack of physical discomfort, etc. but ultimately, this thread has made me realize that I'd rather aim the guarantee/preserve something more fundamental. Especially as I get older, I want to get ever closer to the following goals and not further away from them.

* I want to be able to quickly recognize when I'm surrounded by people smarter than me. This way I won't make a fool out of myself by continuing to act like a know-it-all.

* I want to have the empathy with people who are nicer than me even if I disagree with their behavior or values---especially when such have no relevance to my own life. This way I won't be acting like a jerk.

* I want to be able to entertain a thought without accepting it---I don't want to feel compelled to reject or ignore every concept I don't understand and obstinately insist on replacing them with my own. This way I might learn something new.

jacob wrote: Especially as I get older, I want to get ever closer to the following goals and not further away from them.

* I want to be able to quickly recognize when I'm surrounded by people smarter than me. This way I won't make a fool out of myself by continuing to act like a know-it-all.

* I want to have the empathy with people who are nicer than me even if I disagree with their behavior or values---especially when such have no relevance to my own life. This way I won't be acting like a jerk.

* I want to be able to entertain a thought without accepting it---I don't want to feel compelled to reject or ignore every concept I don't understand and obstinately insist on replacing them with my own. This way I might learn something new.

Oooh, that's going straight into my journal as today's wisdom. Thanks.