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Five Years, Lord Willing

Posted: Mon Jan 30, 2017 9:49 am
by Jason
I want to thank ERE for this platform. I don't like to talk about myself, but I feel I need to in order to hear myself out in front of similarly minded people.

I am 51. My wife 57.

We have 365K in retirement savings. We owe 185K on our 265K house. We are DINKs. We should have more money but I don't need to explain why we don't. She will receive a pension of 1,500K per month when she retires. I will receive the amount of chocolate I can fit into my pockets when I leave the office my last day.

Last year we grossed 250K in income. We saved over 125K. I am a commercial real estate agent so my income fluctuates.

I want to be done in five years. I believe that with 500K, a paid off house and SS and this pension, we can retire somewhere in America. Where is the question. I believe I know how to get there - do not spend money.

That is all for now.

Re: Five Years, Lord Willing

Posted: Mon Jan 30, 2017 10:40 am
by Jason
I am a Christian. I am not here to evangelize or proselytize. I am hear to stuff my barns to the brim. Father, forgive me for my sin.

It seems to me ERE is about cutting, realizing what one doesn't need. For instance, I don't need to go to the office. I will never miss that. On that basis, I have that aspect of retirement down. I do not need to sit myself down in a room full of braggarts and blowhards.

If you ask me who I love most in life, I will say Jesus Christ. If you ask me who I hate the most, that would be Henry Ford. He started this aspirational, middle-class nonsense.

I am not Oliver Stone, but I do believe that the 1% invented the middle class to keep us out of their hair. Get everyone striving for the box to live in, the car(s) to put it in the box's driveway, and then the idiot box in the living room and then in all the other rooms. Now throw in medical, education and Steve Jobs and you have them trapped. Now Rockefeller, or Harriman or Bush or Koch can get down to (Oligarchical) business.

Jacob is obviously a genius but I personally cannot go full-blown Thoreau.

According to Fidelity Investments I will be living under a bridge in the future. According to Bloomberg, I will be eating nachos and enjoying Melville. If Melville can be enjoyed. I don't think that is asking for much.

My father died last year at 86. It's a game changer.

Re: Five Years, Lord Willing

Posted: Mon Jan 30, 2017 10:49 am
by Jason
The most important piece of advice someone gave me with regard to making money: Pray like it all depends on God, work like it all depends on you.

I am ready to die. That's not an issue. I'd go now. I would just rather do it on my couch than in my car. I just hope my wife goes first. I don't want her to be alone. Well, everyone is alone. I mean alone alone.

I have come to realize that my basic feeling is dread. I just want to distract myself from it with things besides work. Like reading, Netflix, fail videos.

My business partner is worried about the Joneses. That's like going to the beach and deciding to worry about a specific grain of sand.

Re: Five Years, Lord Willing

Posted: Mon Jan 30, 2017 10:51 am
by Gilberto de Piento
Welcome! Happy to have you here.
Last year we grossed 250K in income. We saved over 125K.
Have you figured out where the other $125,000 went?

Re: Five Years, Lord Willing

Posted: Mon Jan 30, 2017 11:56 am
by Jason
Thank you and that's the type of a question I need to hear. For what it's worth, I live in an extremely affluent area. I am a condo owner in a sea of McMansions. Average gross income is over $200k.

(1) Refinancing: Our condo has lost significant value. So when we went to refinance, we realized we were not at the requisite debt ratio. So I went beyond the requirement and brought it down from 207K to 183K. Our mortgage is now $1,350, HOA $325 and I could rent it for $1800-1900.

(2) New Car - I need a car as its my office. I can't bike around like MMM with some client on my handle bars. I put 10K down on 0% Finance deal of $28,000.00. Its a tax write off for what it is worth.

(3) Food shopping - As much as we have tried,for two people we cannot get under $600 a month here. Its insane. When I went to Illinois to do my parents shopping it came in at 50%. We don't buy anything processed and we make our own bread. We live in the second floor so we can't homestead. Supermarkets here are like buying food from The Sopranos.

(4) We had some consumer debt. I think.

(5) I have a bad habit of buying my wife jewelry. We agreed she has enough.

(6) We can live here for $60-70K which is my wife's salary. So all my money should be saved.

(7) Due to my father's illness (and death) we traveled half way across the country three times.

I no longer eat lunch out nor buy coffee. I pay John Bogel like if I don't, he will send someone from Vangard to break my thumbs.

When I read Jacob (which I do frequently), I weep.

I appreciate your response.

Re: Five Years, Lord Willing

Posted: Mon Jan 30, 2017 12:23 pm
by Jason
Oh man. I spent 125K.

Re: Five Years, Lord Willing

Posted: Mon Jan 30, 2017 1:15 pm
by BeyondtheWrap
Gilberto de Piento wrote:
Last year we grossed 250K in income. We saved over 125K.
Have you figured out where the other $125,000 went?
I'm guessing most of that went to taxes.

Re: Five Years, Lord Willing

Posted: Mon Jan 30, 2017 1:26 pm
by Jason
I maxed out my SEP Iras approx 30k to knock down taxable income. I pay quarterly which I float in ETF's.

So taxes were paid - hoping enough.

Re: Five Years, Lord Willing

Posted: Mon Jan 30, 2017 2:25 pm
by Hankaroundtheworld
Are you and your wife ready to change life, basically change from an affluent - keep up with the Joneses - community towards living smart, free from social pressure and the consumer lifestyle. Like Gilberto was hinting at, if you know exactly how you spent your money, then you can start analyzing how to improve it.

Re: Five Years, Lord Willing

Posted: Mon Jan 30, 2017 2:38 pm
by Jason
Our jobs are tethered to the area.

250k for us was like receiving a 100k windfall based upon our usual earnings.

We own 265k real estate in Multimillionaire neighborhood. My job requires a car but I bought a Subaru not a BMW. We don't eat out. We travel by car when we go away and stay at Inns. So we are, contextually speaking, trying to be frugal.

I know to many of you it seems as though we are living extravagantly . But in all honesty we are not.

Re: Five Years, Lord Willing

Posted: Mon Jan 30, 2017 3:07 pm
by George the original one
> Our mortgage is now $1,350, HOA $325
> Food shopping - As much as we have tried,for two people we cannot get under $600 a month here.
> 0% Finance deal of $28,000
> We can live here for $60-70K which is my wife's salary.

So your running costs should be:
Housing: $1625/mo
Food & sundries: $800/mo
Car loan & car insurance: $700/mo
Utilities: $300/mo ???

Total: ~ $3425/mo
Wife's takehome: ~ $3750/mo

Conclusion: examine your car loan and insurance plus the luxury items (cable TV? cellphones? magazine/newspaper subscriptions? dry cleaning?) for biggest immediate savings on recurring expenses. I know it's hard to quibble with a 0% loan, but it does require you to carry more insurance than you might otherwise have. If you want the home paid off in 5 years, step up your repayment schedule!

Comment: new Subarus start at around $20k... how did you end up with a $28k car? Are you really getting an extra $8k of value from it? Did you really buy a $38k car after a $10k downpayment?

Re: Five Years, Lord Willing

Posted: Mon Jan 30, 2017 3:40 pm
by steveo73
Jason wrote:My business partner is worried about the Joneses. That's like going to the beach and deciding to worry about a specific grain of sand.
I like this line a lot.

Re: Five Years, Lord Willing

Posted: Mon Jan 30, 2017 3:41 pm
by steveo73
Jason wrote:Oh man. I spent 125K.
That is a lot of money. Does this include taxes or is it post tax.

Re: Five Years, Lord Willing

Posted: Mon Jan 30, 2017 5:45 pm
by Jason
George the original one wrote:> Our mortgage is now $1,350, HOA $325
> Food shopping - As much as we have tried,for two people we cannot get under $600 a month here.
> 0% Finance deal of $28,000
> We can live here for $60-70K which is my wife's salary.

So your running costs should be:
Housing: $1625/mo
Food & sundries: $800/mo
Car loan & car insurance: $700/mo
Utilities: $300/mo ???

Total: ~ $3425/mo
Wife's takehome: ~ $3750/mo

Conclusion: examine your car loan and insurance plus the luxury items (cable TV? cellphones? magazine/newspaper subscriptions? dry cleaning?) for biggest immediate savings on recurring expenses. I know it's hard to quibble with a 0% loan, but it does require you to carry more insurance than you might otherwise have. If you want the home paid off in 5 years, step up your repayment schedule!

Comment: new Subarus start at around $20k... how did you end up with a $28k car? Are you really getting an extra $8k of value from it? Did you really buy a $38k car after a $10k downpayment?
As I mentioned, we put 24K additional into house. Since we refinanced in September, the 30 year is now a 28 year.
We have Netflix/Hulu - $25.00
No magazine, dry cleaning etc.
Cell Phone is $176.00 per month and I could not figure a way out to reduce it.
I bought a Forester. It was 28K. I have to drive clients around. I can't do that in a beater or little car. It has to be safe and respectable transport. My wife negotiated and she is a killer negotiator. She should work for the CIA.

Thank you for the math. That is why I came here. You guys are great. I really appreciate it.

When I retire, in honor of Jacob, I will buy each and everyone of you absolutely nothing.

Re: Five Years, Lord Willing

Posted: Mon Jan 30, 2017 5:49 pm
by Jason
steveo73 wrote:
Jason wrote:Oh man. I spent 125K.
That is a lot of money. Does this include taxes or is it post tax.
Includes quarterly tax payments which I hope were sufficient for this year's income. I put aside a "I hope I don't have to send this money to Uncle Sam" fund.

My pet peeve is the Roth IRA. For the first time, our income exceeded contribution limits. However, over our lifetimes, we have been below it, so I was limited to SEP IRA. It should be based on average.

Based on last poster's back of the napkin math, we are going to live on wife's salary. 125K is ridiculous.

Re: Five Years, Lord Willing

Posted: Mon Jan 30, 2017 6:43 pm
by steveo73
Jason wrote:125K is ridiculous.
To put this in perspective. We spend about $40k AUD but we own our house. That is for a family of 5.

Re: Five Years, Lord Willing

Posted: Tue Jan 31, 2017 4:08 am
by FBeyer
Jason wrote:...When I retire, in honor of Jacob, I will buy each and everyone of you absolutely nothing.
Getting nothing for my birthday is now one of my absolute favorite things. I love it when I don't have to worry about where to put my brand new 'nothing'. They take up so little space, and they require absolute ZERO maintenance.

Aaaaaaaah the joys of nothing are almost boundless.

Re: Five Years, Lord Willing

Posted: Tue Jan 31, 2017 6:16 am
by Jason
steveo73 wrote:
Jason wrote:125K is ridiculous.
To put this in perspective. We spend about $40k AUD but we own our house. That is for a family of 5.
Thanks for making me feel even worse about this.

Re: Five Years, Lord Willing

Posted: Tue Jan 31, 2017 6:19 am
by Jason
FBeyer wrote:
Jason wrote:...When I retire, in honor of Jacob, I will buy each and everyone of you absolutely nothing.
Getting nothing for my birthday is now one of my absolute favorite things. I love it when I don't have to worry about where to put my brand new 'nothing'. They take up so little space, and they require absolute ZERO maintenance.

Aaaaaaaah the joys of nothing are almost boundless.
MMM blog about weddings and gift giving made me reevaluate this. My wife comes from a culture where there is a log of gift giving at Christmas/Birthdays. We sat down and said the greatest gift is not having to work and having money. We agreed to make it a nominal transaction.

Re: Five Years, Lord Willing

Posted: Wed Feb 01, 2017 12:14 am
by steveo73
Jason wrote:
steveo73 wrote:
Jason wrote:125K is ridiculous.
To put this in perspective. We spend about $40k AUD but we own our house. That is for a family of 5.
Thanks for making me feel even worse about this.
I didn't mean to make you feel bad but at the same time I'm sure you can cut this back so much it's not funny.