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Old 08-11-2012, 11:33 PM   #21
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It's all about balance. And living life.
+1. I am also reminded that the matter of preference comes into play. For instance, I look at my retired siblings/relatives/friends and feel that some of them are too frugal and some too spendrift but I guess it is also about their preference of activities. I know some people who don't enjoy travelling or too much travelling and a cup of coffee with good reading material can be just as satisfying. I may not understand this but apparently it is not frugality that keeps them from travelling.
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Old 08-12-2012, 10:51 AM   #22
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The thing is that it is possible to be frugal to a fault. I think of my uncle and my now deceased aunt. They were always very frugal and lived very modestly and even on relatively small incomes saved quite a bit of money. So 50 years later they still lived in the same tiny house (which was fine) but then my aunt had health problems which ultimately resulted in amputations of both legs. Their house was not handicap friendly at all. It had one tiny bathroom that was not able to be used by someone in a wheelchair. They did eventually get in some help for a few hours of the day, but at night it was just my aunt and her husband (who was 90ish). My mother (in her mid-80s at the time) would go down there at night and she and my uncle would try to lift my aunt so you could go to the bathroom at night and it was very hard on everyone.

Ultimately my aunt had extremely uncomfortable last few years. She did take care of herself medically, but she lived in pain and deprivation when she and my uncle could have easily either moved to a more handicap friendly home or assisted living or could have even spent the money to try to convert their house to make it more handicap friendly. But she just couldn't stand to spend the money even though the money had been saved for "their old age."

The thing is that some people save money for "their old age" but when old age gets here and they need to spend some of it they are so used to not spending that they are just unable to spend it.
That's an excellent point. Depending upon how frugal (or cheap!) you have been over your life, spending that wealth in your later years may be difficult to do.

I really see this being the case for those that grew up or lived through the Great Depression. For those that are the children of those folks, people that never experienced the Great depression, there are a lot of people who after decades of living without, scrimping and saving, that they can't allow themselves to spend any money even when they need to. That's way beyond frugal IMO.

Like the poster that spent $2k on golfing equipment, there are things I will spend money on even if they seem questionable based upon the past or expenses of today. I don't buy gadgets just because they are new but if I think I need something I'll buy it. The best example is my rototiller. I bought it 10 or 11 years ago, cost was around $600, I use it 2 times a year, my garden is 1200 square feet so I could hand dig it over a day or two if I wanted to take my time but I viewed that purchase as something I needed despite the cost.

If I need something then I don't have a problem spending money. If it's unnecessary then I have a problem spending money on it and probably wouldn't. People that forgo medical attention, don't eat properly or allow their homes to deteriorate resulting in higher costs one day are not thinking clearly. Frugality has boundaries.

In the end the money is only worth something when you are alive, being the wealthiest corpse in your section of the cemetery is not a goal I aspire too achieve.
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Old 08-12-2012, 11:54 AM   #23
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Frugal people do not become less frugal after accumulating substantial savings and assets. It is hard to spend when one has spent a lifetime saving. That said, Mr. Ha's observation is one to keep in mind.

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The thing is that some people save money for "their old age" but when old age gets here and they need to spend some of it they are so used to not spending that they are just unable to spend it.
This is an important point. Not only are they unused to spending, they also may not recognize they have arrived at a time in their lives when there is no longer a risk of running out of money. They may also not be aware of what they are losing in quality of life by denying themselves.

I suspect that any choice made by seniors is easy to criticize as either too frugal or too wasteful.
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Old 08-12-2012, 12:39 PM   #24
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They essentially live in the dark because electricity costs money. At night the entire room is dark with one small light for whoever's reading. Lighting the whole room? Frivolous.
This one habit by itself doesn't seem that bad to me. I realize I quoted it completely out of context, and that there are other factors involved, but I read it last night while reading the forum with one recessed canister light over my easy chair turned on. So, it bugged me and I just want to address this one habit, even though it doesn't really respond to your assessment of your parents-in-law, which is probably quite correct.

But anyway - - unlike a certain un-named retired submariner here (ahem!) I may turn most of my lights off when unused to save money, but also I actually PAID GOOD MONEY for a painter to paint the interior of my house, including the ceilings. I did this rather than depriving myself of leisure time and knocking myself out for day after day after day on a ladder, risking a fall and great bodily harm by painting over my head like that un-named person (ahem!) did.

Aren't some of these frugal habits just a matter of choosing (a) over (b), perhaps? Is that un-named person depriving himself more than me, or me more than him? My vote is that neither of us is deprived, that we do make different choices, and that there is nothing wrong with that.

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I suspect that any choice made by seniors is easy to criticize as either too frugal or too wasteful.
Yes, what he said. +1
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Old 08-12-2012, 12:43 PM   #25
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This extreme reluctance to spend my savings is why I've elected to do some things in my ER life that are not necessarily the wisest choice from an entirely economic standpoint. For example, I have a tendency to think of money in my checking/ MM account as OK to spend, but not money in my stock/ bond investments and particularly not money in my tax deferred accounts.

To deal with this madness, I've decided not to convert to Roths because knowing myself, I would NEVER take money out of them. My plan is to leave the money in the IRA's then, once the guvment forces me into taking RMD's I'll think it's OK to spend it. I also direct all dividends and Cap Gains from my taxable accounts to my checking account for same reason the money is OK to spend then. Crazy I know.
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Old 08-12-2012, 12:54 PM   #26
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People will spend income more easily than dip into their savings. Perhaps one way to avoid a situation where people deprive themselves unnecessarily is to annuitize part of their savings and portfolio. Keep enough savings to pay for emergencies, turn the rest into spendable income.
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Old 08-12-2012, 12:58 PM   #27
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This extreme reluctance to spend my savings is why I've elected to do some things in my ER life that are not necessarily the wisest choice from an entirely economic standpoint. For example, I have a tendency to think of money in my checking/ MM account as OK to spend, but not money in my stock/ bond investments and particularly not money in my tax deferred accounts.

To deal with this madness, I've decided not to convert to Roths because knowing myself, I would NEVER take money out of them. My plan is to leave the money in the IRA's then, once the guvment forces me into taking RMD's I'll think it's OK to spend it. I also direct all dividends and Cap Gains from my taxable accounts to my checking account for same reason the money is OK to spend then. Crazy I know.
I don't think so. I believe we all have our idiosyncrasies with money. I am the opposite. I am still trying to add to my asset base, though in retirement. I tend to spend a bit so I stash my money in accounts that I cant readily access them. I have proven money in my checking and savings can be raided and isn't safe from myself, but when I have them in treasury direct and Vanguard I leave them alone.
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Old 08-12-2012, 01:44 PM   #28
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....I actually PAID GOOD MONEY for a painter to paint the interior of my house, including the ceilings. I did this rather than depriving myself of leisure time and knocking myself out for day after day after day on a ladder, risking a fall and great bodily harm by painting over my head....
Perfect example, better than my rototiller because that was just $600 whereas painting will cost thousands.

My house was painted by me and ex when it was built and in retrospect it was a waste of time. We saved money but used vacation time to do it. 1 coat of primer and 2 coats of good quality paint, the ceilings were sprayed with that popcorn stuff in the paint so we did not do them. 14 years later the paint looks like new but the living room/kitchen is looking like it needs to be done again. When I decide to paint it I assure you I am not climbing to the top of a 10' step ladder standing on the next to the last step to get to the edge of the wall with an edger! Rolling the rest of the walls with a roller would be easy but I know someone that'll do the whole job. Much easier, for this I'll spend the money.
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Old 08-12-2012, 01:45 PM   #29
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Then there's the other side.

A good friend of our family, single with no heirs, is in his mid 80's. He just bought a new BMW M3, replacing his maybe 5 year old BMW 335 i. Probably because he sold his house and had a big check burning a hole in his pocket. He's saving most of the rest. Luckily he's still a decent driver, so he'll make use of the new car. Not rich, as far as I know. He retired only about three years ago. Just using his money for fun.
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Old 08-12-2012, 02:33 PM   #30
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Then there's the other side.

A good friend of our family, single with no heirs, is in his mid 80's. He just bought a new BMW M3, replacing his maybe 5 year old BMW 335 i. Probably because he sold his house and had a big check burning a hole in his pocket. He's saving most of the rest. Luckily he's still a decent driver, so he'll make use of the new car. Not rich, as far as I know. He retired only about three years ago. Just using his money for fun.
Rats! Just don't have the nerve. Time and money yes.

Heh heh heh - Maybe after my Chevy crosses 200k miles(140 now). Then again there is that frugal thought again. .
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Old 08-13-2012, 01:19 AM   #31
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Aren't some of these frugal habits just a matter of choosing (a) over (b), perhaps? Is that un-named person depriving himself more than me, or me more than him? My vote is that neither of us is deprived, that we do make different choices, and that there is nothing wrong with that.
All good points. In my FIL's case I think he crossed the line from frugality to deprivation several decades ago and never looked back.

It'd be more amusing if it didn't cause so many arguments between FIL & MIL, and if it hadn't scarred spouse so much. Luckily I had plenty of warning before I got sucked into the black hole.

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Then there's the other side.
A good friend of our family, single with no heirs, is in his mid 80's. He just bought a new BMW M3, replacing his maybe 5 year old BMW 335 i. Probably because he sold his house and had a big check burning a hole in his pocket. He's saving most of the rest. Luckily he's still a decent driver, so he'll make use of the new car. Not rich, as far as I know. He retired only about three years ago. Just using his money for fun.
I think you owe it to the single females on this board (and perhaps to the married females and the single/married men as well) to provide name, address, and phone number...
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Old 08-13-2012, 06:21 AM   #32
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The thing is that some people save money for "their old age" but when old age gets here and they need to spend some of it they are so used to not spending that they are just unable to spend it.
+1!

I had some relatives like this.
When I offered that they should use their savings to enjoy life more they replied that knowing about their savings is the utmost joy for them - no purchase could beat that.

An aunt literally hoarded money in her desk, in addition to significant bank accounts. She said: "When I feel sad it is so nice to look at it and see that I am not a poor old lady." The accounts, though high, could not provide this feeling.

"I have all I want and need" was their typical statement.
Getting older I use this statement more frequently, too .
Should I worry?
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Old 08-13-2012, 06:25 AM   #33
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My grandad waaaaay underspent. His children and grandchildren are having a ball! Thanks pop!
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Old 08-13-2012, 10:11 AM   #34
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I think people are missing the mental illness part of this. My father, a disable vet, pays no taxes of any kind, and no medical bills. He lives in Oklahoma where disabled vets pay no sales tax (they get a tax free card) or property tax. The VA pays 100% of his medical bills, no copays or deductibles. He get 50K/year in various benefits (disability, SS and pension), and has about $500K in assets. His remaining life expectancy is about 12 years.

He lives in a run down trailer in the middle of nowhere with no neighbors (he was able to get the land for 10K, the cheapest he could find). He has no working AC (the part to fix it would cost $50 and he thinks that is too expensive), no running water in the trailer (the pipes froze and the plumber charges too much), buys expired food at the scratch and dent, and cannot hear because he will not spend money on decent hearing aids (the VA ones are free, why would he spend his money?).

If you met him, you would think he was a very personable and normal person. He is not mentally incompetent except for his living situation. There is no way I could get his declared incompetent, we have discussed this with a local attorney.

He is clearly mentally ill, but you cannot force treatment anymore. What to do? I do not know. Unfortunately, I am waiting for the phone call that he was found dead in his trailer.
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Old 08-13-2012, 10:19 AM   #35
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Sorry for you situation with your dad. I sounds like you have done as much as you can to help him.

You make a good point that in some cases mental illness plays a part. Perhaps certain dysfunctional extreme frugality is a symptom. Might be the case with my great uncle too.
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Old 08-13-2012, 10:43 AM   #36
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"I have all I want and need" was their typical statement.
Getting older I use this statement more frequently, too .
Should I worry?
Like a lot of things in life...it depends.

If they (and you) are able to really meet needs and are enjoying life then I think that is fine.

For example, if you are comfortable in your house and don't turn on the AC then...fair enough. On the other hand if you are in danger of dying from extreme heat and refuse to turn on the AC when you could easily pay for it then...not so much.
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Old 08-13-2012, 11:01 AM   #37
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I think people are missing the mental illness part of this. My father, a disable vet, pays no taxes of any kind, and no medical bills. He lives in Oklahoma where disabled vets pay no sales tax (they get a tax free card) or property tax. The VA pays 100% of his medical bills, no copays or deductibles. He get 50K/year in various benefits (disability, SS and pension), and has about $500K in assets. His remaining life expectancy is about 12 years.

He lives in a run down trailer in the middle of nowhere with no neighbors (he was able to get the land for 10K, the cheapest he could find). He has no working AC (the part to fix it would cost $50 and he thinks that is too expensive), no running water in the trailer (the pipes froze and the plumber charges too much), buys expired food at the scratch and dent, and cannot hear because he will not spend money on decent hearing aids (the VA ones are free, why would he spend his money?).

If you met him, you would think he was a very personable and normal person. He is not mentally incompetent except for his living situation. There is no way I could get his declared incompetent, we have discussed this with a local attorney.

He is clearly mentally ill, but you cannot force treatment anymore. What to do? I do not know. Unfortunately, I am waiting for the phone call that he was found dead in his trailer.

The reason you can not get him declared incompetent is that he is not incompetent...

He clearly is making rational decisions.... just ones that you would not make. Unless there are other things that he does that show he is irrational, you have to live with his decisions...
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Old 08-13-2012, 11:10 AM   #38
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I just have a general statement, not responding to anybody's post really.

From the article (again):
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My definition of under-spending: Expenditures that are significantly less than the amount you could conservatively dispense annually, and still have a 99% chance of never running out of money.
I'll bet that if Bill Gates, Prince Charles, or almost any random billionaire ran their numbers through FIRECalc, they'd come out with 100% chance of never running out of money and dying broke.

Does that mean that they are under-spending and should spend more?
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Old 08-13-2012, 11:19 AM   #39
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I'll bet that if Bill Gates, Prince Charles, or almost any random billionaire ran their numbers through FIRECalc, they'd come out with 100% chance of never running out of money and dying broke.

Does that mean that they are under-spending and should spend more?
I don't think so. It seems to me that there are really two different situations that seem relevant:

Situation 1 - One spends the amount of money that one is content with and spends enough money to meet one's reasonable needs and enough to meet one's individual wants commensurate with funds available. So the person who could spend, say, $100,000 a year who is perfectly happy with spending $50,000 a year and is not depriving oneself and is living a healthy life is fine. And, that person is fine even if that person could spend $1,000,000 a year.

Situation 2 - Same person who could spend, say, $100,000 a year with no danger to the portfolio. That person, however, is in a situation that represents deprivation and hardship and actual pain and negative health effects. That seems different and is miserly and can be actual mental illness.
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Old 08-13-2012, 11:30 AM   #40
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Exactly, Katsmeow. I think that for many of us there is a huge difference between not spending enough to properly care for oneself and meet basic human needs, and simply allowing for 100% probability of not dying broke.

And yet, most of us are not mentally ill or likely to not meet our own basic needs. But IMO the author uses extreme examples to illustrate why we should spend, spend, spend, even if we don't need to do so in order to live a normal and happy life.

Perhaps instead of defining underspending as
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My definition of under-spending: Expenditures that are significantly less than the amount you could conservatively dispense annually, and still have a 99% chance of never running out of money
, the author should have simply defined it as not spending money on taking care of our own bodies and spirits, and in doing so, engaging in a form of self-abuse. Now that, I agree is repugnant.

I don't agree with the author that it is necessarily a bad thing if a billionaire feels he has already bought enough yachts and castles and decides to put some reasonable limits on his own spending.
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