What if you can't go back to work?

[EdithKeeler]

why would I throw away every piece of floss unless it shreds or breaks ? Why not simply rinse it off with water and use it again ? Remember every little bit helps. lo

Not sure if “lol” means you’re joking about the floss, but it’s actually not a good idea to reuse dental floss. You could reintroduce yesterday’s bacteria under your gums. I’d pick something else to save on if it were me.

[NPV]

Saw this story on Quora and thought it was pretty relevant. I have two relatives who went through a very similar story, with largely the same main financial mistake: trying to save your failing business with your own cash rather than letting it die and cutting your losses. The main personal mistake seems to be in relationships with someone (in this case friends and wife) who were only with him because of money. Both this guy and my relatives had enough to be FI (in ERE sense; not rich) for the rest of their lives even if their core businesses failed - if they didn't start trying to bail it out with this FI money. All three lost it all and had negative net worth when the businesses they were trying to save finally failed. Both the Quora guy and one of my relatives were okay-ish eventually - once they recognized there was nothing worth salvaging and walked away from the failed businesses - but nowhere near FI. The other, who stuck with it for longest holding on to a dying dream, is still not even okay-ish decades later. So the story is not guaranteed to end well at all. If all of these three examples were familiar with ERE principles at that crucial decision point and thus held on to their savings, all three would have been in an incomparably better place financially and emotionally.

The Quora question is: "What does it feel like to become poor after being wealthy?"

It’s absolutely horrible. I was 50, had recently sold my very successful car washes, had a $1MM in my checking account, the big house, kids in private school and life was grand. I was focused on growing my other business (car wash equipment sales) when the manufacturer we represented lost a client that accounted 1/3 of our business, Hurricane Katrina hit (followed by several other hurricanes), and then the great recession. I had stopped taking a salary and started loaning the company money. I was determined to work through this. I even spent my retirement in a last attempt to turn things around. Fast forward, the company was broke, I was broke, and I couldn't pay the house mortgage. I had to give up the house and shut down the business. A personal bankruptcy soon followed, and then a separation from my wife of 30 years. The stress was unbearable, and I contemplated suicide. The only thing that stopped me was that my dad had taken his life when I was 26, and I knew first hand the pain that my loved ones would bear for my actions.

The worst part is the loss of self confidence and depression, followed by the loss of “friends”. It’s amazing how quickly they disappear! I will say that two friends stuck by me. One in particular would check on me and take me out to ride his motorcycles to help take my mind off of things. I moved into a friend’s rental property and I started looking for work. I had owned my own companies since college, was a past Entrepreneur of the Year finalist, and had never really worked for anyone. At the worst, I was working at a construction company repairing equipment in their yard, collecting food stamps and living alone.

Fast forward a couple of years. My wife and I got back together, we moved to Texas, and I took a job back in my industry (building car washes). We now rent a nice home, and were recently able to buy a nice used car. It gets better every day. I love my job, and I hope to get back into car wash ownership (with investors), while continuing to do what I do.

In summary, there are a couple of important lessons to take from this:

Good times don’t last; bad times don’t last.
Most of the people who claim to be your friend are only there for the good times.
Business associates that you’ve spent millions of dollars with over decades will instantly turn their back on you when the money stops.
Don’t ever stop taking care of yourself. Exercise is great for relieving the stress.
Face facts. Recognize when you have a losing hand and walk away. And if bankruptcy is inevitable, just do it. Don’t procrastinate and stick your head in the sand.
Do not EVER use your retirement money. I used mine to try and save the company, and I am now 60 years old and starting over.
Never stop believing in yourself.

Here is the whole Quora thread by the way: https://www.quora.com/What-does-it-feel ... ng-wealthy

[jacob]

Another lesson: https://www.youtube.com/watch?v=xdfeXqHFmPI

[NPV]

Absolutely. I think it's the same lesson actually - have that FI money and don't waste it.

[NPV]

Here is another story from the same Quora thread (I am still reading it, quite captivating) - with a bit more of an ERE touch:

My 68 years old uncle lost his job as a top manager in a British company in his 40s and was unable to find *any* job since.

When he was fired, he had accumulated quite a fortune that he estimated would have lasted him for all his remaining life (he never had kids or a spouse).

Due to medical emergencies, depression, bad friendships and decisions, he depleted his fortune in less than 20 years and he is now completely money less and lives an extremely frugal life as a retiree.

He is still resilient and upbeat, and I speak frequently with him about his life, what he would have done differently and what he misses the most of the good years.

Here is a short list of what my uncle misses of his “good years”:

Girlfriends: as long as my uncle was rich he always had an amazing touch with women. He maintained a bit of this touch even after he was not rich anymore but obviously now he cannot do with these girls all the things he did before. In particular, when he was rich he was traveling a lot with a series of girlfriends scattered among Europe. These trips started in the 70s and he still remembers amazing hotels in Capri, Venice, London, Prague, Budapest, Paris which he visited with these girls and made amazing memories with.
Most of his friends: when he was rich he was surrounded with friends (particularly in Venice, Italy). My uncle was in particular friend of the late Emilio Vedova[1] and his circle of artists of the Informal Wave at the Venice Biennale. He fondly remembers the fantastic adventures, dinners, anecdotes with these friends. Once he ran out of money and slipped into depression: at the same time some of these friends died or had troubles with their families and thus the group dissolved. As far as I am aware, he does not have more than 1 or 2 friends now and his social activity is close to zero.
Eating out: my uncle still knows by name basically all the most important restaurant in Italy. If I tell him that I will go to visit a new city, he invariably would tell me where to go and eat and what to order there. His eyes sparkling of renewed vitality just at the thought. He was eating out all the time in probably the best restaurants in Italy and I am conscious he misses this dearly.
Cars: my uncle always loved fast German cars. In 2002 he had a bad accident (a truck driver crashed on his car, almost killing him) and had to go through serious heart surgery. The doctors did not allow him to drive for almost 2 years after surgery due to some complications (his driving license was revoked). Eventually, because of bad lifestyle choices (he was never able to downscale), unlucky investments and subsequent drying up resources he had to sell his cars and now (happily) drives a 12 years old Renault Megane that my parents gifted him a few months ago.
Healthcare: my uncle cannot afford to go to dentist when a tooth is painful. He had to wait 16 months to have an hernia fixed as he cannot afford to go to a private doctor.
His Persian carpets: when money started finishing, my uncle had to sell one by one all his amazing Persian carpets which he had at home in Venice. When only the last two carpets remained, my uncle gifted one to me and one to my parents rather than selling them for peanuts to loan-sharks.

[NPV]

And some nice stories from "did it right" side:
https://www.quora.com/What-is-it-like-t ... ly-wealthy

I’m low-end wealthy with a net worth of over four million (USA) dollars. That's not "rich" to many people, but it suits me.

I love being a stealth millionaire. I live in a home that I purchased for $240,000 cash. My neighborhood is very middle-class. I drive a Nissan, and my wife drives a Honda. We buy our cars new (also with cash), but we keep them for approximately ten years. Not a soul, other than my wife, knows what we have. When we die, our children will very likely be quite shocked.

I fix virtually everything that breaks. I rotate my own tires. I have a garage full of tools, because over the years, I always bought the special tools to repair things, rather than paying someone outrageous prices to “fix” it. The tools have saved many, many thousands of dollars.

We shop at the Dollar store for things like detergents and cleaners. Our favorite restaurant is In-N-Out. Ninety percent of the time, I wear jeans and a black "polo" shirt (non-branded). People have actually commented on my limited wardrobe (shockingly rude), but I don't care -- because a couple of these commentators likely had a negative net worth!

OK, now here's the fun part. I never worry about money. I can buy anything I want (except jets, yachts, and ridiculous houses, I feel). Luckily, I enjoy a $10 purchase as much as many people enjoy their $10,000 purchases -- probably a lot more, because I'm not worried about making payments. Everyday expenses, utility bills, insurance, gasoline costs, and medical bills don't concern me. Though I do carefully compare prices - even on things like toilet paper.

I have never worried about whether I could pay a bill. If I need $500,000 in cash tomorrow, I can literally get it out of the bank. I enjoy walking into a car dealership every ten years, and writing a $27,000 check for a middling car. Their jaws drop, their eyes get wide - because they don’t think I have twenty bucks in my Walmart jeans, and they see my ten-year-old compact car sitting outside…(the one I'll sell myself, not trade in).

Travel costs don't concern me - and we travel a lot. We might sometimes splurge up to a “Premium Economy” seat. People wonder "where-do-you-get-the-money-because-you-don't-look-rich."

Luckily, I don’t have a thing for Maserati’s, wooden yachts, or jewelry. In addition to travel, I spend money on guitars, sound equipment, books, computers, and decent transportation. My wife likes needlework, not Dior. Our hobbies are inexpensive, in the overall scheme of how much money we’re talking about.

I grew up in a lower middle-class family, delivered newspapers for five years, and enlisted in the military (E-1) after high school. So much for my “privilege.” I achieved my wealth by working in non-managerial positions (as a scientist) in corporations for 29 years. While I was paid well, I never made more than $130,000 until the last four years of my career (I'm retired now). I used the tortoise approach to accumulate wealth.

I read so many questions where people ask how to "get rich quick." The key for me was frugal living, a decent education, careful saving and investing, and total avoidance of get-rich-quick schemes. All very boring, but it can work for you too.

There is a contingent of people (not usually nasty - but sometimes snarky) on Quora who believe you have to inherit money, or "get lucky" in some way in order to become financially independent. Or, being greedy, they spend their time scheming about a quick billion, when a million or so might work (almost) as well. They think all rich people live like basketball stars, when in fact, the vast majority of self-made millionaires don't live anything like that.

Update 9–11–2016:

My father recently passed away. He was 89. Just like my kids who know nothing of my financial situation, I knew nothing of his. He grew up in the worst of the Depression. He had a 9th grade education. He worked hard all his life (with the most horrible on-call hours) as a maintenance worker. He raised 5 kids on his meager salary. Even though he was frugal, he immensely enjoyed every second of his retirement, which lasted thirty years. He bought an RV, traveled extensively, and always had a newer Camry — which I supposed was his “treat.” He told me that he got so sick of fixing cars during his working years that he now only wanted cars that were under warranty.

We went to sort out his affairs after the funeral. To everyone’s surprise, we found out that Dad had a net worth north of $800K. He never looked or acted “rich”…far from it. But, he was. The current American median net worth for his age group is $150K. Dad was actually in the 82nd percentile. Thus, Dad would certainly be considered wealthy by his peers.

He was just one more example of a stealthy near-millionaire. He would not meet many people’s idea of wealthy, but he was certainly financially independent, with no financial concerns. That’s what really counts.

I am not trying to say that everyone can do what I did, as some comments have implied. I know full well that I am an outlier. However, too many people give up before they start, saying that “things have changed” - that the good old days are over. Of course things have changed - but some things have gotten worse, and some things have gotten better. Everyone should work towards financial independence for themselves - whatever their means - and you don’t need four million to be independent. Start as soon as you can, and keep at it. Dependence on government is an alarming trend (this is certainly something that has gotten worse). We owe it to ourselves and to our fellow citizens to be as self-sufficient as possible.

Update 02–07–2017:

I have gotten some comments suggesting that my life is not “high quality,” because I am perceived as not spending enough money at a fast enough rate.

Some people may think that just because we have X million dollars, we are not enjoying life unless we spend it at a higher rate than can be sustained. Or, that we should have already spent it.

For one thing, I can’t show up at the Skeet Club driving a Mercedes. It might make some perfectly wonderful guys down there feel different, or treat me different. I guess I could get new friends and a new club, but it would be a lot easier and a lot more fun to just keep driving the Nissan, and stick with the buds I know. No need to stock up on a new Orvis wardrobe, either.

Each person has a different idea of what constitutes a "high quality of life." I always think of our personal lives as pretty high quality -- certainly in terms of material things. We've traveled extensively all over the world, we buy new cars with cash, and we live in a home that, in our area, would be judged upper middle class. That's a high quality of life by most definitions.

We now have sufficient means to live out our years on a comfortable income, and to maintain an economic lifestyle that 99.9% of the world would envy. While we don’t overspend, we also don’t worry about running short. Being satisfied with what you have enhances the quality of your life.

Even more important: My wife and I have been married 40 years. Our children are successful professionals with no criminal records, illegitimate children, or drug habits. We are all well educated and well read. We don't depend on the government for anything, and we would have to be starving before we would. Many people would give anything for this particular form of quality of life.

Most retired people are not dead yet; they still enjoy laughing and having fun, they still dig sex even if things don’t always work out as planned, and they are nowhere near ready to check out. They might not move quite as fast, and they may drive a little slower. However, there is some perception that anyone who builds up a nice nest egg should just give their money away (the children can make better use of it), then jump into their own graves — because they surely can’t be enjoying life.

Our age must be taken into consideration. Yet, this subtle point is often overlooked. My wife and I have been at this a long time. For a young person, four million dollars may seem beyond comprehension. Why would anyone need that much? For a person of my age (60+), it is not unreasonable at all. It's just a sad fact that very few people have managed to achieve anything remotely near it, as most people are woefully unprepared for retirement. By the time they start to think about planning, it is already way too late. The median net worth of Americans at age 60 is $172,000. For many people, retirement is going to require a big step down.

Most people want to maintain the same lifestyle after they finish their working career. No one wants to run out of money in retirement. Especially, people do not want to be dependent on their children. If you’re intentionally living a life that may make you dependent on someone else in the future, then you are living the wrong life.

After many careful calculations using different methods, and considering that our families are long-lived, we have determined that $140,000 a year is the maximum amount we can safely spend. We have no pensions, so we are totally dependent on our nest egg.

This puts everything in a different perspective. If we start spending in excess of our self-allotted amount, it will put our entire future in jeopardy. Most people would agree that our yearly income of $140,000 would be very fine and nice - plenty for a very comfortable retirement. But, it puts us a very long way from a basketball-star lifestyle. And, I really don’t need that Mercedes.

[Laura Ingalls]

I am trying to have enough earned income to earn four Social Security credits each year and have some years where we are eligible for the EITC (some years we will have sell some stocks and we will have too many capital gains.)

I have let my professional credentials lapse but continued eligibility for social security disability is a security blanket for me. I have someone in my social circle that is mid 40’s with significant physical and mental health concerns and so little recent work history that he is not eligible. I also think that some of the things that make our ER work require a fair degree of physical and mental health.