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Old 01-20-2013, 01:50 PM   #21
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Thank you, everyone, for taking the time to respond to my friend, the hypothetical man. He will have a lot to think about, I'm sure.

Please do accept my sincerest thanks for the education you provide.
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Old 01-21-2013, 07:36 AM   #22
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Quote:
Originally Posted by Eyesman View Post
Edit: Hypothetical man decided to take a vacation.
Looks like he's got the hypothetical bucks to afford a nice one:

Quote:
Originally Posted by Eyesman

Hi all, I have just recently discovered this forum, and it is quite interesting and exciting. I am learning a lot by reading a number of the most recent and past threads. I feel that part of learning is to put yourself in different positions and determine "what would you do?" if you were in this particular position.

So here goes: Let's say you were hypothetically a 40 year old married man, with two young kids (ages 5 and 2), and you were fortunate enough to have a job that pays you an average of $2 million per year for the last four years. Your job is not too bad, let's say working about a 35-40 hour work week and take about 8 weeks vacation per year. You have a house worth $1.2 million that is paid off, you have about $1 million in pretax retirement funds, about $3 million in post tax investments, and about $700k to 1 million in cash. With your current spending habits, you are technically LBYM, saving a lot, but you are also not shy about spending. You go out to eat anytime you want, take nice vacations (especially with 8 weeks off a year), pay for private school, decent cars, watches, etc. Let's say you annual spending habits are to the tune of $400-500k per year.

So given the above hypothetical premise (somewhat far-fetched but just humor me), what would you do? I suppose you could technically cut down your spending to $100-150k per year, and then retire now, and live off current savings. But with that, you feel somewhat restricted where you can't eat out whenever and wherever you want, can't take super nice trips, etc. Or you can continue to work (it is not too unpleasant, you are paid nicely, with good hours and ample vacation time) and continue to save relatively a lot of money per year, while living a lifestyle where you feel you can do whatever you want, buy whatever you want, to the tastes of spending $400-500k per year? If you work for another 5 to 10 years at this pace, with your savings rate, you could easily bump up that nest egg to the $12-15m range or more, and then really be in a position where you continue this lifestyle in retirement. I know there are many more options that encompass the whole scale of extremes, but what would you do if you were in this hypothetical situation? Would you feel obligated to you kids that with just a few more years of work, you can technically set them up for life (hopefully they can continue to abide by the relative LBYM mentality)?

Thanks in advance for humoring me about the above hypothetical premise. And please just don't blow it off as being far-fetched and silly. For me, changing the parameters of things and seeing what you gurus would do in different situations would be very educational.
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Old 01-25-2013, 02:32 AM   #23
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Join Date: Nov 2012
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Holy smokes, REWahoo!!

Hypothetical man thought he was on permanent vacation and disappeared into the sunset, and you created a portal and yanked him away from his vacation. You revived his story from the grave for all to see in eternity.

You have some amazing magical powers!

It's a good thing my hypothetical distant friend lives in a made up scenario. I will tell him all the words of wisdom you guys have imparted to him on this thread. My guess is he may not be ready to retire yet for at least two to five years. Or was it that his wife wouldn't allow him to retire yet? Oh well, I suppose he will hypothetically plug along, for now at least.

Thanks again, everyone!
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Old 01-25-2013, 05:50 AM   #24
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Originally Posted by Eyesman View Post
Holy smokes, REWahoo!!

Hypothetical man thought he was on permanent vacation and disappeared into the sunset, and you created a portal and yanked him away from his vacation. You revived his story from the grave for all to see in eternity.

You have some amazing magical powers!

It's a good thing my hypothetical distant friend lives in a made up scenario. I will tell him all the words of wisdom you guys have imparted to him on this thread. My guess is he may not be ready to retire yet for at least two to five years. Or was it that his wife wouldn't allow him to retire yet? Oh well, I suppose he will hypothetically plug along, for now at least.

Thanks again, everyone!
You're hypothetically welcome.

In addition to some good advice you got from well-intending members you have learned some new and valuable lessons. The Internet, like Facebook, remembers everything. Also, you cannot rewrite history. Hope your hypothetical friend appreciates this. Not many get so much and pay so little.
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