|
AreWeDrunkYet posted:To an extent, isn't that the point? Dropping your job once you can survive off capital income is great, but if you end up with additional income - whether it's ad hoc labor or excess capital returns - why not sink it into consumption? For me the fear is that increase in spending can begat a higher baseline, and if circumstances change it is hard to lower that baseline.
|
#
?
Apr 18, 2017 02:08
|
|
|
|
| # ? May 10, 2024 16:47 |
|
|
Mercury Ballistic posted:For me the fear is that increase in spending can begat a higher baseline, and if circumstances change it is hard to lower that baseline. That would depend on how you structure said excess consumption, no? If you're borrowing or leasing to buy [luxury] you're going to add fixed payments to your expenses, but if [luxury] is purchased in excess cash that otherwise leaves your models solvent that just seems like a matter of preference.
|
|
#
?
Apr 18, 2017 02:17
|
|
|
It's more psychological, trusting that a single indulgence does not become the norm. That's what I would fear, and self discipline is hard or this thread would be smaller.
|
|
#
?
Apr 18, 2017 03:19
|
|
|
Mercury Ballistic posted:That's what I would fear, and self discipline is hard or this thread would be smaller. Or larger, since there'd be more of us. As for the topic at hand, it is definitely a hard line to set. When is enough, enough? Personally I can see myself working in some capacity well past my FI threshold to fund excess consumption, similar to what MMM has done. I just don't think I have what it takes to live a super-simple lifestyle forever into the future. Especially if I have more time on my hands due to early retirement. Rick Rickshaw fucked around with this message at 11:50 on Apr 18, 2017 |
|
#
?
Apr 18, 2017 11:45
|
|
|
Yeah I got into his website right around the time he was starting to live like the millionaire he clearly has become, and I like that he's mellowed a little bit.
|
|
#
?
Apr 18, 2017 13:44
|
|
|
Rick Rickshaw posted:Personally I can see myself working in some capacity well past my FI threshold to fund excess consumption, similar to what MMM has done. I just don't think I have what it takes to live a super-simple lifestyle forever into the future. Especially if I have more time on my hands due to early retirement. I think for most FIers that is really the goal. Get to the point where you can occupy your time with whatever you really want to do, rather than keeping the full-time job. "Reaching FI" doesn't necessarily mean retirement as depicted in movies where you just lounge around all day. It's the independence and ability to structure your life how you want to. For instance, overall I quite like my job and it's better than most. But I still would rather not work a typical M-F 40hrs/wk. I'd love to reduce that to like 15-20 hours if possible, but trying to do that right now would put a damper on my savings rate and likely my career trajectory a little bit as well. If I had closer to my FI goal, I could try to work out a deal like that, or even jump into independent consulting/contracting. With the right career experience and a big FI war chest, I see that as being an entirely realistic goal in the medium-term future. Guinness fucked around with this message at 18:43 on Apr 18, 2017 |
|
#
?
Apr 18, 2017 18:41
|
|
|
The best thing about this process is watching people's reactions when you tell them what your plan for the future is. As soon as you tell people you want to retire early, they roll their eyes, try to hide a smile, and depict your future with all of its horrible sitting in a chair and experiencing various medical and financial emergencies.
|
|
#
?
Apr 18, 2017 19:39
|
|
|
GoGoGadgetChris posted:The best thing about this process is watching people's reactions when you tell them what your plan for the future is. As soon as you tell people you want to retire early, they roll their eyes, try to hide a smile, and depict your future with all of its horrible sitting in a chair and experiencing various medical and financial emergencies. My favorite is the slightly aware but BWM people who are like "well, you'd need at least 25x expenses to make that happen", and you just say "yep, that's right".
|
|
#
?
Apr 19, 2017 00:39
|
|
|
I don't talk about it a lot. I spend more time encouraging being financially sensible and investing for retirement. Of those that I've discussed it with my poorer friends wish they could earn more, and my wealthier family, friends and clients are either already financially independent or retired. I have had a couple of comments that I'm too focused on money. Yet I'm more focused on my business, helping friends and socialising. My monetary processes are all automated or the decisions are planned so I don't need to think about them. I think it's more of a matter of people projecting onto me and are unable to see any other perspective than their own.
|
|
#
?
Apr 19, 2017 01:25
|
|
|
This is verging on the philosophical but I feel that FI shouldn't just be about trading off current consumption to maximize future consumption. It should be partially about the realization that a lot of poo poo that you think you want to consume, doesn't make you happier.
|
|
#
?
Apr 19, 2017 02:26
|
|
|
Semi-speaking of, here's a fun article on minimalism and how easily it can become a new form of Consumption. https://www.theguardian.com/lifeandstyle/2017/mar/04/minimalism-conspicuous-consumption-class Someone sent me that link when we were discussing this laughable garbage - http://www.gq.com/story/how-to-edit-your-wardrobe It's some guys triumphant tale of selling off his ludicrously indulgent clothing collection (and then also buying a new, smaller one)
|
|
#
?
Apr 19, 2017 02:29
|
|
|
GoGoGadgetChris posted:Semi-speaking of, here's a fun article on minimalism and how easily it can become a new form of Consumption. Marketing has embraced the latest movement. I do love this quote. quote:They all imply that they are in some way a moral upgrade from the life of “mindless consumerism”, and as a bonus, allow you to take on some of the desirable aesthetics and morality of poverty without ever having to be poor.
|
|
#
?
Apr 19, 2017 02:36
|
|
|
GoGoGadgetChris posted:Semi-speaking of, here's a fun article on minimalism and how easily it can become a new form of Consumption. I guess that's kind of minimalism? It's just spending just as much, or more, money on something fancy but not-to-fancy. In fact I don't see how it's minimalism at all.
|
|
#
?
Apr 19, 2017 02:50
|
|
|
GoGoGadgetChris posted:The best thing about this process is watching people's reactions when you tell them what your plan for the future is. As soon as you tell people you want to retire early, they roll their eyes, try to hide a smile, and depict your future with all of its horrible sitting in a chair and experiencing various medical and financial emergencies. Luckily most people seem envious rather than skeptical, but I think it's because our friends and family have already been watching us accomplish milestones along the way, like paying off a 40 year mortgage in 5 years or buying multiple properties and doing major home renovations ourselves. Though living in a nation with functional UHC and pensions probably helps alleviate those boogeymen. shrike82 posted:This is verging on the philosophical but I feel that FI shouldn't just be about trading off current consumption to maximize future consumption. This is a very good point too. I'd say half our FI plans relied on our higher than average earning power, but equally from our frugality and not trying to keep up with the Joneses in terms of materialism. It's interesting living in a world and discussing these topics where there are both groups of people earning far too little to think about the savings percentages necessary for FI, as well as people who could easily pursue FI but instead ratchet up their consumption to their income on completely unnecessary stuff. Sometimes these groups even intersect and it often sounds like poor shaming or conservatism to point out spending miss-matches. An example of a friend who earns far too little to consider FI even with good spending habits, buying luxury goods to replace functional older luxury goods - all on credit. Sure, frugality in this front wouldn't put them in the black, but it would put them a lot closer!
|
|
#
?
Apr 19, 2017 11:12
|
|
|
I'd be careful about suggesting that the working poor would be better off if they practiced FI because it's tone deaf and patronising, and more importantly it doesn't work.
|
|
#
?
Apr 19, 2017 12:22
|
|
|
GoGoGadgetChris posted:The best thing about this process is watching people's reactions when you tell them what your plan for the future is. As soon as you tell people you want to retire early, they roll their eyes, try to hide a smile, and depict your future with all of its horrible sitting in a chair and experiencing various medical and financial emergencies. Oh, I don't ever plan to use the word "retirement", except maybe when I actually get there. Like when I quit my job, or scale back hours, I might then consider saying I'm "semi-retiring". Not going to lie, the only reason I would use that word would probably be to humble-brag a little. But I would be very careful when I use it. It's such a loaded word that causes all sorts of problems when you use it. shrike82 posted:This is verging on the philosophical but I feel that FI shouldn't just be about trading off current consumption to maximize future consumption. Put more simply, I think FI should largely be about controlling the natural human tendency for ever-increasing levels of consumption to match increasing levels of income. Rick Rickshaw fucked around with this message at 12:27 on Apr 19, 2017 |
|
#
?
Apr 19, 2017 12:23
|
|
|
shrike82 posted:I'd be careful about suggesting that the working poor would be better off if they practiced FI because it's tone deaf and patronising, and more importantly it doesn't work. The more I play the game, the more grateful I become for the set of circumstances I ended up in. My cohorts might be capable of putting themselves in similar positions, but a great many people aren't and never will be. If our time were limitless, maybe. FI principles apply to a specific subset of folks who've already effectively won the environmental lottery, and that win doesn't look like much until you see people without it.
|
|
#
?
Apr 19, 2017 12:49
|
|
|
shrike82 posted:I'd be careful about suggesting that the working poor would be better off if they practiced FI because it's tone deaf and patronising, and more importantly it doesn't work. I find this funny coming from you, personally, but I put the required caveats in my post. I understand it's patronizing and doesn't work.
|
|
#
?
Apr 19, 2017 14:58
|
|
|
quote:http://www.gq.com/story/how-to-edit-your-wardrobe  My jeans get covered in mud, grease, drug excipients at work, salsa, etc etc. The mere idea of spending $210 on a pair of pants I know are going to be wrecked within 6 months is astounding. Jeans aren't (or shouldn't be) fashion statements in my opinion.
|
|
#
?
Apr 19, 2017 19:34
|
|
|
Dude still netted 9k in his wardrobe change, I'd say he can afford a couple of stupidly expensive pairs
|
|
#
?
Apr 19, 2017 19:42
|
|
|
Sort of... It's still implied that he took a serious bath overall. He says he spent $25,000 in one year alone! Like... If I sell my 25k car for 20k and buy a 15k car, I didn't "net" 5k.
|
|
#
?
Apr 19, 2017 20:49
|
|
|
GoGoGadgetChris posted:Sort of... It's still implied that he took a serious bath overall. He says he spent $25,000 in one year alone! Okay yeah I missed that part, my bad. I didn't feel like reading about him jerking off over clothes for five pages and skipped to the figures part. Although yes I would say you netted 5k in that scenario starting from the status quo of you owning the 25k car outright, and if the 15k car is going to have the same or less in maintenance costs.
|
|
#
?
Apr 19, 2017 20:58
|
|
|
Sundae posted:
That's crazy - I take care of things I own so they don't fall to poo poo and I have to replace them.
|
|
#
?
Apr 19, 2017 21:39
|
|
|
Vomik posted:That's crazy - I take care of things I own so they don't fall to poo poo and I have to replace them.
|
|
#
?
Apr 19, 2017 21:41
|
|
|
Don't blue collar and white collar both have "clothes for work" in addition to "clothes for outside of work"?
|
|
#
?
Apr 19, 2017 21:45
|
|
|
GoGoGadgetChris posted:Don't blue collar and white collar both have "clothes for work" in addition to "clothes for outside of work"?
|
|
#
?
Apr 19, 2017 22:08
|
|
|
I don't mean to have any subtext in my post at all. I'm sure my $40 J Crew pants are ridiculous opulence to some and hilarious bargain basement to others. My point is... you can have clothes for different purposes. Not all your pants have to be ready to fight off mud, grease and (lol) salsa, for the same reasons that my boots aren't good for swimming and my swimsuit doesn't have to look good with a tie.
|
|
#
?
Apr 19, 2017 22:21
|
|
|
If you're willing to buy used you can get nice (at least by my standards, I would never buy $400 jeans) clothes for very cheap, maybe 1/3 the cost of buying new. The downside is that digging through the racks at used clothing stores to find something that's decent takes a lot of time. I've seen a couple online stores popping up though, my girlfriend has had good luck getting dresses that way. Even if something doesn't fit every once in a while you still come out way ahead of buying new.
|
|
#
?
Apr 19, 2017 23:21
|
|
|
GoGoGadgetChris posted:Don't blue collar and white collar both have "clothes for work" in addition to "clothes for outside of work"? They're basically the same for me, excluding a pair of pajama pants. You can fit all my clothes into two dresser drawers (excluding my suit). quote:If you're willing to buy used you can get nice (at least by my standards, I would never buy $400 jeans) clothes for very cheap, maybe 1/3 the cost of buying new. The downside is that digging through the racks at used clothing stores to find something that's decent takes a lot of time. I've seen a couple online stores popping up though, my girlfriend has had good luck getting dresses that way. Even if something doesn't fit every once in a while you still come out way ahead of buying new. Agreed here. Goodwill tends to be more miss than hit for men's clothing, but I don't think I've purchased a shirt that wasn't from Goodwill in the last two or three years. I'd never buy socks and underwear there and men's jeans are usually too worn out to be worth buying used, but you can typically find 1-2 decent things whenever you go even for men.
|
|
#
?
Apr 20, 2017 00:28
|
|
|
I found a brand of jeans that I like but they cost $160 so BWM, except I wear them literally every day and don't wash them so they last forever so total on pants in the last 6 years I've spent $490 (I spent $10 repairing the crotch of one of my three pairs). (all three pairs are still in the rotation). Your mileage is gonna vary. I think you can have nice stuff if it's stuff you intend to own for a long time and use into the ground, and sometimes that's nice. I think it's okay to buy a nice car if you have to drive in the car to work every day and I even think it's okay to spend a lot of money on it, provided you're okay committing to driving it into the ground. We're in the middle of this thinking now because I think we need to make some minor major renovations on our house (replacing carpet throughout the main floor with vinyl, maybe paint, maybe hire somebody to paint) and we're making the decision about whether or not to spend the money or "just live with it." I try not to agonize too much about what the cost of $3,000 of vinyl flooring would do compounded over the 30 years we have until retirement, and just let it happen. EAT FASTER!!!!!! fucked around with this message at 02:38 on Apr 20, 2017 |
|
#
?
Apr 20, 2017 02:28
|
|
|
Hoodwinker posted:I, too, work in a white collar environment. I'm pretty sure a pair of denim used by a rancher / farmer lasts a whole hell of a lot longer than 6 months. I realize being a farmer is probably not as hard on clothes as eating tortilla chips and changing your own oil, but it has to at least be somewhat comparable. Vomik fucked around with this message at 02:37 on Apr 20, 2017 |
|
#
?
Apr 20, 2017 02:33
|
|
|
Sundae posted:
|
|
#
?
Apr 22, 2017 17:43
|
|
|
When does it make sense to STOP putting money into retirement accounts? I've quit working and am down to probably 30-40k in passive income which will decrease sharply in the next few years. Would you keep contributing to HSAs/IRAs at this point? Right now we have a bunch of cash reserves (like $100k) and I'm not sure what makes the most sense or what I should be taking into account when deciding where this passive income should go. It doesn't make sense to shove that into an IRA if I'm just going to be pulling money out of my brokerage account, right?
|
|
#
?
May 7, 2017 20:13
|
|
|
moana posted:When does it make sense to STOP putting money into retirement accounts? I've quit working and am down to probably 30-40k in passive income which will decrease sharply in the next few years. Would you keep contributing to HSAs/IRAs at this point? Right now we have a bunch of cash reserves (like $100k) and I'm not sure what makes the most sense or what I should be taking into account when deciding where this passive income should go. It doesn't make sense to shove that into an IRA if I'm just going to be pulling money out of my brokerage account, right? I would certainly always fund the HSA since you can eventually never pay tax on that money instead of just deferring tax like the IRA does. Whether to fund the IRA is a lot more complicated - you can eventually get the money out penalty free using the SEPP withdrawal rules, but that has limits. Whether I would continue to fund a traditional IRA/401K in your situation would depend on a lot of information that isn't available, such as how much you currently have in each kind of account, whether you ever intend to move out of California, whether you intend to work again when your kids are in school, what your husbands income is like compared to your expenses, how much capital gain tax you'd have to pay to come up with brokerage money, etc. You could probably make a reasonable argument either way.
|
|
#
?
May 7, 2017 20:33
|
|
|
moana posted:When does it make sense to STOP putting money into retirement accounts? I've quit working and am down to probably 30-40k in passive income which will decrease sharply in the next few years. Would you keep contributing to HSAs/IRAs at this point? Right now we have a bunch of cash reserves (like $100k) and I'm not sure what makes the most sense or what I should be taking into account when deciding where this passive income should go. It doesn't make sense to shove that into an IRA if I'm just going to be pulling money out of my brokerage account, right? I would always take advantage of IRA contributions, the withdrawal rules are flexible enough that IMO you can almost never gently caress yourself over by contributing. Remember that if you make Roth contributions you can always take your principal back without penalty if needed, since you paid taxes on it.
|
|
#
?
May 7, 2017 21:37
|
|
|
Since we're on the topic of HSAs, I've got a big (more than $1,000) bill coming up. Should I pay for it using my HSA (currently has about $3,000) or out of pocket? My state taxes add up to 10% and my federal taxes add up to 30%, so it seems like I would be getting a very good discount if I paid with HSA money rather than with post-tax money.
|
|
#
?
May 8, 2017 15:33
|
|
|
The conventional wisdom on HSA is if you can pay for it out of pocket, do so, because (assuming you're maxing it) you'll never be able to replace that money and get tax-free gains on it. Of course, over $1000 is a lot for a lot of people. Even though I theoretically could pay for that out of pocket, it'd be hard to swallow in practice. edit: this has reminded me to finally invest some drat money in my HSA as I have 8k in there...my custodian charges $7.50 (plus 9 basis points per $1000) each quarter which really sucks. But at least I can dump 5k in a Vanguard target fund and pay a little under a 1% premium effectively. If I ever get up to 15k or so in the investment portion, it'll only be about as usurious as a 401k!  I wonder how many people invest before the 5k threshold in this plan...even at 5k - 0.96% custodian fees annually - it's pretty bad. At 1k, it'd be 3.36% 
Nail Rat fucked around with this message at 16:12 on May 8, 2017 |
|
#
?
May 8, 2017 15:42
|
|
|
Most HSA plans require a certain cash balance before you can invest any money, specifically so people will use them as intended (paying your medical bills). I'd be surprised if conventional wisdom was really to pay medical bills out of pocket when you've got an HSA available. Isn't paying with pretax money like getting a solid, instant 25% discount?
|
|
#
?
May 8, 2017 17:44
|
|
|
GoGoGadgetChris posted:I'd be surprised if conventional wisdom was really to pay medical bills out of pocket when you've got an HSA available. Isn't paying with pretax money like getting a solid, instant 25% discount? The idea is you pay out of pocket now and claim the deduction 30 years from now (or the last tax year before they close the loophole).
|
|
#
?
May 8, 2017 17:50
|
|
|
|
| # ? May 10, 2024 16:47 |
|
|
When I say conventional wisdom, I mean of the BFC/Bogleheads variety, as the money will have grown considerably by retirement - as will your healthcare costs.
|
|
#
?
May 8, 2017 17:57
|
|