Early Retirement Extreme Forums

I just tallied our 2018 expenditures. In at about 1.34 JAFI per human. Considering we had year with some international travel We went to Cape Cod in August with a known lobster addict(DH). We insure a teen driver . We drink too much craft beer .. All in all mindful/reasonably frugal but not particularly restrictive.

I'm thinking maybe this metric should be rescaled using the modified OECD scale. In that case 1JAFI (2019) = 8432*2/sqrt(2) = $11924/yr baseline. That way it can be used and account fairly for all size households, like, if it's a 3 person household, 1 JAFI would be 11924*sqrt(3) = $20652/yr total. (If this does not make sense, click the link.)

PS: I spend about 0.85 JAFI.

Add: It just occurred to me that if the original JAFI is based on a pre-2005 number when I was living alone, then it should not be corrected with sqrt(2).

So we are at 1.34 if you just multiple JAFI by 4.
We are at 1.69 using the modified OECD.

I think for someone who is ERE, expenses shouldn't increase linearly with inflation, but less (infact jacob has 0.85 JAFI). Since many needs would be satisfied by DIY (gardening, building instead of buying), physical abilities (bike instead of car) and social capital.

Regarding spending money flowing into the general economy: it seems to me that if you make money and you do anything with it outside of putting it under your mattress, it would flow into the economy.

Let's say I make 10k and now I need to decide what to do with it. I can:

1) Invest it. The money can either go to a) the business I'm investing in, or b) another investor selling their shares. In the case of a), the business then spends the 10k, injecting it into the economy and eventually becoming "average consumer" spending. In the case of b), the investor who just sold their shares now has 10k, and starts at step 1 again. Eventually, the money "leaks" into the economy, either through a business (option 1a) or a person using the money for non-investments (options 2-4), becoming "average consumer" spending.
2) Save it (by putting it in a bank). Due to the fractional banking system, the bank can now loan (let's say) 10x that money out. So now I've amplified my 10k into 100k of actual "average consumer" spending.
3) Spend it. As has been discussed, this becomes "average consumer"-type spending eventually.
4) Save it (by putting it under my mattress). The money is now out of the economy.

My conclusion from this is that by simply exchanging your goods/services for money results in a cash flow into the generic economy, thus impacting the environment as an average consumer spending $10000 would. Unless you put it in a bank, in which case it becomes even worse. The only way to not [edit: excessively] impact the environment is to a) only generate the amount of money you need to live and not any extra, or b) remove your money from the economy, e.g., by putting it in a safe deposit box.

Is my logic sound here?

2019: $8647 JAFI *

*estimated, with latest data from July 2019

For UK people.

2019: $8647 JAFI = £6902

That is mind-blowing.

CS wrote: ↑

Mon Sep 03, 2018 2:37 pm

It looked like regular folks. They were shocked. At least one local congress person wanted to change the rules to eliminate that, but I'm not sure if anything ever happened. https://www.twincities.com/2016/02/15/m ... -care-act/

This was changed in 2016, in case anyone living in MN reads this and gets concerned. Also it was originally targeting people age 55 and older who were on MA.

2019 $8,631 JAFI (final)

This leaves me at 0.8JAFI for 2019.

We have a lot of room for improvement @ 1.93 JAFI/pp for 2019.

1.48 JAFI pp for 2019. I wonder what exchange rate is best to use - average for the year, year-end, current, or yet something else?

I'm late to this discussion (and I'm also really, really bad at math), but where does the .3 for additional kids and .5 for additional adults for the modified OECD come from? My experience is, if anything, these numbers should be flipped. The adults in our household "cost" a fraction of what our kids "cost." Admittedly, we fall victim to many of the "modern parenting" pitfalls (https://www.nytimes.com/2018/12/25/upsh ... nting.html); but short of a scenario where you're running a family farm and homeschooling your kids (with free educational materials handed down from previous generations, I guess), I can't imagine a scenario in which kids would cost 1/3 of what an adult costs. See also: https://www.amazon.com/Two-Income-Trap- ... 0465090907 (not a political endorsement, but a helluva good book).

In order to compare it with my € annual spending, I use year-end exchange rate and cost-of-living adjustment based on https://www.numbeo.com/cost-of-living/r ... ountry.jsp

Using Wolf's logic I'm at 2.25 JAFI

2.07 JAFI

1,53 JAFI Just summarized expenses for 2019 and am happy with this number. Below 4%
SWR as well so it has a chance to work long term now in “retirement”.

I was calculating my TTM spending as a multiple of JAFI this morning, and wondered.......is it possible that the 2020 JAFI figure will be lower than 2019 (deflation)?

there was this topic where jacob provided role models more extreme than him.

friendship with jacob ended.

money is limit only in your brain :-DDD

1.63 JAFI which is not as bad as I thought it was going to be although room for improvement.