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Old 08-13-2012, 11:57 AM   #41
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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...
Well, while there is some truth here, I think living without running water and AC (Oklahoma is having a record heat wave this summer) is not rational when you can easily afford the alternative and you are endangering your health by not having them. Most public heath professionals consider heat waves to be the most dangerous weather. They kill a lot of elderly people. Hygene goes down the toilet (pun intended) when you have no running water. He has problem with recurrent kidney and skin infections, which I am convinced are related to hygiene.
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Old 08-13-2012, 12:01 PM   #42
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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.
+1
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Old 08-13-2012, 12:10 PM   #43
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Well, while there is some truth here, I think living without running water and AC (Oklahoma is having a record heat wave this summer) is not rational when you can easily afford the alternative and you are endangering your health by not having them. Most public heath professionals consider heat waves to be the most dangerous weather. They kill a lot of elderly people. Hygene goes down the toilet (pun intended) when you have no running water. He has problem with recurrent kidney and skin infections, which I am convinced are related to hygiene.

My sister lived in a run down trailer without running water or air conditioning for many years when she was in her 20s.... and she could afford to have them... not as easily, but she still could afford them...


Right now she has been without electricity at her house for over a year... she is now in her upper 50s... her and her DH do not have a lot of money, but they could afford to get the problem fixed if they really wanted to.... they do have running water as they do have electricity to their pump house... she does not have AC, but lives in Oregon and does not need it...

Do I think she is crazy... yes... is she incompetent Nope.... she is very smart and very competent...



Edit to add... about hygiene.... my mom lives in a condo and does not have to pay for her water.... yet when I go to her place I see she has not flushed the toilet to 'save water'..... she also takes 'spit bathes' to save water... even though at times she has skin problems... we keep telling her to not try and save, with zero results.... so even if he had water, it might not change what he does.... just sayin...
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Old 08-13-2012, 12:34 PM   #44
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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 , 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.
You are quite obsessed with this, W2R

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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 anomaly here is that the author makes the assumption that spending (up to one's ability) has intrinsic value. Of course, it may have economic value, but it does not always have value to the person doing the spending. The ability to choose to spend or not spend personal discretionary income arises from the fact that one's personal assets are private, and not a public good (at least in democratic societies).
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Old 08-13-2012, 12:46 PM   #45
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You are quite obsessed with this, W2R
maybe so! I think we have a lot of pressures in our society to spend beyond all reason, from Madison Avenue and elsewhere. This article is yet another such input. I do not like such pressures.

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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 anomaly here is that the author makes the assumption that spending (up to one's ability) has intrinsic value. Of course, it may have economic value, but it does not always have value to the person doing the spending. The ability to choose to spend or not spend personal discretionary income arises from the fact that one's personal assets are private, and not a public good (at least in democratic societies).
Exactly. I don't like the fact that the article implies there is something wrong with not spending every last cent up to the 99% success level and implying that that equates with not properly caring for one's physical or mental well being. Beyond a certain point, spending is work in itself and counterproductive, IMO. I would rather see the author imply that there is something wrong about not knowing when one is satisfied and happy, if there is anything wrong at all.
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Old 08-13-2012, 01:00 PM   #46
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I have always found the accumulation aspect of ER, easier than the dispersal side.
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Old 08-13-2012, 01:09 PM   #47
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Still cannot pull the trigger on a last great act of defiance - ? sports car or similar adult toy.
Get a 4-year-old MX-5/Miata - all the fun of the sports car and one of the cheapest cars to own you can find.
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Old 08-13-2012, 01:50 PM   #48
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Get a 4-year-old MX-5/Miata - all the fun of the sports car and one of the cheapest cars to own you can find.
+1 . When I went out shopping for a sports car ( a convertible ) I looked at bmw z3's , Audi Tt , Porsche boxster, etc, and discovered I liked the miata the best. It had better legroom than most of the others . Had all the power I cared to have and had the best price by far. 1 or 2 yr old pne's are easy to find since many people figure out they don't want a two seater after that amount of time.
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Old 08-13-2012, 03:15 PM   #49
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It's all relative. Some of our friends think DH and I are odd because we choose to live in a small house and drive old cars but could afford fancier stuff. We're frugal in many ways but don't scrimp on things that are important to our health or make us happy. Like Kubota tractors and Buffett tickets ;-)
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Old 08-13-2012, 05:46 PM   #50
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Suppose you run Firecalc and get the following result:


The Y-axis shows the failure rate. I haven't shown the X-axis numbers because we all have different numbers.



The question is:
What level do you feel safe spending at?

1) The 95% success rate level (black dashed arrow)
2) The 100% success rate level (red arrow) with no buffer
3) The 100% success rate level (green arrow) with a buffer
4) The 100% success rate level (blue arrow) with a big buffer

Personally I would go for the red arrow but monitor yearly. We have an unofficial priority list that seems to grow. DW always can find a new idea if I run out of them. So no problem finding things to spend on. We live in a nice house and try to enjoy ourselves without getting silly about spending.
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Old 08-13-2012, 05:56 PM   #51
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It's all relative. Some of our friends think DH and I are odd because we choose to live in a small house and drive old cars but could afford fancier stuff.
I agree. I think a lot of people would view the FIRE crowd as taking it too far.
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Old 08-13-2012, 08:11 PM   #52
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I know for a fact that anyone that spends more than I do is crazy and anyone that spends less is a miser
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Old 08-13-2012, 09:53 PM   #53
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If I had $10,000,000, I would still be cash flow constrained, not constrained by a lack of ideas for nice ways to improve my life.

Sunday I went down to the beach with my friend. Having espresso at a shady spot, looking at the glistening water. We walked by an open house at a waterfront condo building.


"Waterfront living in Seattle's finest neighborhood! Sweeping view of Lake Wash. from the balcony of this light & bright 2-Bed, 1.75-Bath condo. Freshly remodeled with new kitchen, designer colors, slab granite counters and more!! Go swimming or tie up your friend's boat on the private dock. Sunny deck, wood fireplace, exercise room, sauna & much more. Just a few blocks from Madison Beach/Park and all of the vibrant shops, restaurants and amenities this lakeside community has to offer."


Now I really like my condo and my neighborhood. But would I consider this place an upgrade? Do you have to ask?

Every material thing in life can be upgraded. Would I prefer a BMI M3 to my Subaru?

Would I like to be able to buy whatever seafood for every dinner?

Would I prefer to eat at Canlis, or at Red Robin?

And best of all, I would have excellent services at all times. I would never fly other than 1st class.

Ha
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Old 08-14-2012, 02:32 AM   #54
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These "frugality" threads always stir up a lively discussion. Once people develop frugal habits over a long period of saving for FI, it seems some have difficulty loosening the purse strings once retired. Often the discussion centers around what kind of car they drive(BMW's usually cited as the biggest waste of money imaginable), or how they travel, or if they dine out, etc. I know people who continue to save money in retirement but I don't get it. After all you can only do two things with money-spend it or give it away. I have been very fortunate and now find myself quite wealthy but it wasn't always this way. As I realized my wealth was building, I gradually spent more. Wasn't that difficult (along the lines mentioned by Ha). My spending would be very high by most measures. No one has ever called my frugal, at least for a long time. Could I spend more? You bet! Do I worry about it? Nope. Once retired LBYM doesn't make much sense to me. Obviously you need to live within your means. Frugality, IMHO, is simply a means to FI. Once you make FI how you spend you money depends on your tastes and personal utility function. I don't view frugality as a moral issue but rather a prctical technique that can be very useful at certain times of your life. I suspect others here may have a different opinion.
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Old 08-14-2012, 09:04 AM   #55
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I like the way you framed it.

LBYM as one tool of achieving FI

Once FI is achieved, then LWYM
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Old 08-14-2012, 09:21 AM   #56
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I like the way you framed it.

LBYM as one tool of achieving FI

Once FI is achieved, then LWYM
+1

We are currently planning next year's long vacation, to Ireland, England, France, Norwegian or Icelandic cruise, and maybe a week elsewhere. It is great to not have to consider saving for the future, but simply to ensure that it is within our budget. I like the acronym LWYM, as that describes the phase of life we are now in.
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Old 08-14-2012, 09:59 AM   #57
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We are currently planning next year's long vacation, to Ireland, England, France, Norwegian or Icelandic cruise, and maybe a week elsewhere. It is great to not have to consider saving for the future, but simply to ensure that it is within our budget. I like the acronym LWYM, as that describes the phase of life we are now in.
Have to mention LWYM to DW. I'm sure I'll get a puzzled look.

We are talking about going to England, Wales and Scotland next year too. How long are you going to be going for Alan? Got to make sure we keep up with the Alan's .
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Old 08-14-2012, 10:09 AM   #58
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Originally Posted by Lsbcal View Post
Suppose you run Firecalc and get the following result:


The Y-axis shows the failure rate. I haven't shown the X-axis numbers because we all have different numbers.



The question is:
What level do you feel safe spending at?

1) The 95% success rate level (black dashed arrow)
2) The 100% success rate level (red arrow) with no buffer
3) The 100% success rate level (green arrow) with a buffer
4) The 100% success rate level (blue arrow) with a big buffer

Personally I would go for the red arrow but monitor yearly. We have an unofficial priority list that seems to grow. DW always can find a new idea if I run out of them. So no problem finding things to spend on. We live in a nice house and try to enjoy ourselves without getting silly about spending.

In all likelyhood, there is no difference between the black and red... IOW, going from 95% to 100% is not going to be a real difference... if the market went kaput, you would probably be making adjustments along the way in either case... so, no real difference...

Now, the other two with bufferes.... that would give you some room to ignore a lot more noise than you could with less reserve....

With me, I would feel comfortable spending at any of these levels... I would just spend what I would want up to the point of the max, but if I were way under... no big deal....
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Old 08-14-2012, 10:31 AM   #59
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I guess the fear of running out of money can cause some people to be very conservative in their spending. This may be confused with LBYM in retirement I guess? I personally view these as two different questions. I want to spend as much as I can without running out or short changing my heir. A balancing act for sure.
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Old 08-14-2012, 10:34 AM   #60
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Hi Texas Proud, interesting comments. I should add that the X-Axis extra dollars between each set of arrows would pay for a very nice vacation for us. So maybe the bad time consequences would not be that big between the black dashed arrow and red, but the lifestyle issues are immediate.

I'm wondering if this would be a good thing to put in a poll here? Any thoughts?
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