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Investing in experiences...smart?
Old 12-31-2015, 11:42 AM   #1
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Investing in experiences...smart?

I had this thought the other day.

How do you value an experience you spent hard earned money on during your saving years compared to the alternate scenario where you invested that money?

Say that you took a trip to Europe in your 30s and it cost you $20,000 in lost work and actual money spent. You had a blast and saw many things that most do not see until they vacation during retirement. You were young and had the energy to really "see the world".

Now you are 60 and that $20,000 could have grown to $100,000 or more. But while you would have a higher net worth, your net experience worth would be lower. I question if even $100,000 could gain you the same level of experience as the $20,000 did, because of age factors and the 30 years that you were not able to reminisce about the trip.

Was the $20,000 actually a better investment? In some ways did it compound?

I think on these things when I read OMY posts and people saying they can reach 99.999075 in Firecalc if they just manage to save a bit longer.
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Old 12-31-2015, 12:01 PM   #2
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With some exceptions, I consider almost everything I spend money on to be a "quality of life" decision. Buy the best I can afford, knowing it will give me more satisfaction, or buy something cheaper? That's a simple decision for me.

I look back on some of those epic travel adventures of my younger days as providing wonderful, irreplaceable memories that were well worth the cost.
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Old 12-31-2015, 12:02 PM   #3
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Decided long ago, "moderation in all things." That extends even to squirreling money away. Thus, although our vacations have been shorter and less frequent than we'd like (hence, the desire to get rid of these jobs!), we've really not stinted on what we've done/experienced. In our early retired years, we may well retrace some of the journeys and see them with more experienced eyes; but we won't ever bemoan the lost compounding of the cost of, say, the ten days diving the Great Barrier Reef in our early 30s. :-)
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Old 12-31-2015, 12:09 PM   #4
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With some exceptions, I consider almost everything I spend money on to be a "quality of life" decision. Buy the best I can afford, knowing it will give me more satisfaction, or buy something cheaper? That's a simple decision for me.

I look back on some of those epic travel adventures of my younger days as providing wonderful, irreplaceable memories that were well worth the cost.
+1. Well said.
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Old 12-31-2015, 12:11 PM   #5
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The thing is, later in my career I was working too much to take adventure vacations. I was too tired to make plans and organize fun travel.

Fortunately I retired when young enough to furiously make up for some of those missed opportunities. We really did that the first few years. We set aside funds for travel for those first few years independent of the retirement portfolio, so that we could still splurge now that we were "free", regardless of market conditions.

We did a huge amount of travel 2000-2003. It's amazing how much more those same trips cost now, 12-15 years later. We also visited several parts of Mexico that are no longer safe to travel in.

I never think about how that money might have made our portfolio bigger today, nor regretted the funds sunk into a large motorhome for our full-time RV adventure.
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Old 12-31-2015, 12:33 PM   #6
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I think there's a balance. For me and my family we took nice traveling vacations while I was working but they were always too rushed for my liking. But we still enjoyed them and have great memories. The DD stills talks about them often. That's worth a lot more than the $$$$'s I spent. In those days we didn't really scrimp on the vacation cost but didn't go overboard either.

Now that I'm retired, I still enjoy "domestic" (US) travel but I don't have as much energy to get up and go anywhere, anytime, for as long as I like. When I was younger I had the energy but not the time. Things are reversed today. Although I'm spending a lot more on travel and entertainment than ever before. (Yes inflation has something to do with it) The last two years I know have spent somewhere between 90 and 100k just on travel, hotels, entertainment, etc, etc. It's my biggest single expense category next to my hobbies.
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Old 12-31-2015, 12:35 PM   #7
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We've always taken vacations. Went to Europe after grad school and bummed around. Didn't really know much history but it was enlightening. Did it on a student budget.

Nowadays we can plan more and I can read up on my history before going to Europe. Plus many exhibits in Europe are now in English and better done then in 1972.

For us, we spent a bit and enjoyed most of our earlier years. Maybe we lucked out with the 1980's to 1990's equity markets. But you can enjoy yourself at any age. Experiences don't have to be only about long distance travel. There is much more info now on everything and some travel can even be virtual ... sort of. Domestic travel can be adventurous too.
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Old 12-31-2015, 12:36 PM   #8
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Living a life without regrets is a goal for nearly everyone (IMO), and that goal of course would include minimizing regrets concerning when/how one spends one's nestegg.

Very few of our older retirees have expressed regrets as to how/when they chose to spend their nestegg throughout their lives, at least as far as I can recall. Maybe I'm wrong about that but that is my recollection.

I would speculate that perhaps the lack of miserable, tearful, heartbroken posts full of regrets related these matters, is due to our members thinking about their priorities in advance, and making conscious, purposeful decisions that are best suited to their own individual personalities, needs, and desires.

At any rate, I think it is important for all of us to think and re-think these decisions as we follow life's paths. While we should listen to and carefully consider what others have to say, it is important not to take the easy route of making knee jerk choices based on others' decisions.
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Old 12-31-2015, 12:42 PM   #9
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Feeling very lucky and blessed here. In the past 11 days, we went to Rome, Stuttgart, Tyrolia, and now back home in Germany. Things we do now, like hiking in the Alps with our 3 kids, walking all around Rome, etc., would be impossible if anyone was not in great health. I couldn't imagine being 65 and doing things like I can today at 42. And our kids will all remember it also. From a financial perspective, it is so much better to load up the Honda Odyssey for a trip on the Autobahn, than pay for tickets on XYZ airlines. Military isn't for everyone, but living, working, and playing in Europe sure is fun!

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Old 12-31-2015, 12:43 PM   #10
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You don't want to put off everything until you are older. I'm kind of the poster child for that mistake. Yesterday I walked a whopping two and a half miles; today I'm limping. I'm glad that I was thrifty when I was younger, but there are some experiences that are now beyond my reach. However, the travel that I did do when younger is treasured.
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Old 12-31-2015, 01:04 PM   #11
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Feeling very lucky and blessed here. In the past 11 days, we went to Rome, Stuttgart, Tyrolia, and now back home in Germany. Things we do now, like hiking in the Alps with our 3 kids, walking all around Rome, etc., would be impossible if anyone was not in great health. I couldn't imagine being 65 and doing things like I can today at 42. ...
Maybe we are exceptions but we are just over 65 and were in Italy in September for a month. Walked all over the place and probably logged at least 6 miles per day. In Rome it was more walking then that. Life doesn't have to get bad as you age, but yes at 42 you probably have more energy and less wisdom.
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Old 12-31-2015, 01:08 PM   #12
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You don't want to put off everything until you are older. I'm kind of the poster child for that mistake. Yesterday I walked a whopping two and a half miles; today I'm limping. I'm glad that I was thrifty when I was younger, but there are some experiences that are now beyond my reach. However, the travel that I did do when younger is treasured.
A lot depends on one's health. Assuming decent health, there is a sensible ramp rate to exercise. As we age that ramp rate should be slower.

Maybe consider doing every other day exercise for some months and ramp up at maybe 10% more per week. In a few months you will be up there, why hurry. Hurrying can lead to overuse injuries.
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Old 12-31-2015, 01:10 PM   #13
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I have always put a lot of effort into saving for the future and LBYM. Despite that, while most vacations were low cost family visits, during my first couple working decades my DW and I took advantage of travel awards to visit Britain 3 times, Hawaii, California, and Alaska. Since being empty nested at age 50, we decided that we should travel even more before we were not physically able to do what we like, such as day hiking. In that time we have been to Europe several times, a few places in Canada, and many western US national parks, with plans for a Caribbean cruise and Norway in 2016. We spend more now on travel than ever before, and I have always found travel to be very rewarding.
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Old 12-31-2015, 01:26 PM   #14
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I think its pretty much a given that travel is physically easier the younger you are (up to a point). The reason I'm glad we travelled earlier in life is it changed our world view when we did it. We became a little more... I don't know....sophisticated? when we saw other cultures and ways of living. It certainly opens your eyes to alternative ways of doing things.

My husband just retired the beginning of the month at 58. Frankly, I'm not all that interested in continuing the quest for adventure. I'm glad we spent the money when we did. We don't really miss the maybe $100,000 total difference in our investments.
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Old 12-31-2015, 01:33 PM   #15
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I had this thought the other day.

How do you value an experience you spent hard earned money on during your saving years compared to the alternate scenario where you invested that money?

Say that you took a trip to Europe in your 30s and it cost you $20,000 in lost work and actual money spent. You had a blast and saw many things that most do not see until they vacation during retirement. You were young and had the energy to really "see the world".

Now you are 60 and that $20,000 could have grown to $100,000 or more. But while you would have a higher net worth, your net experience worth would be lower. I question if even $100,000 could gain you the same level of experience as the $20,000 did, because of age factors and the 30 years that you were not able to reminisce about the trip.

Was the $20,000 actually a better investment? In some ways did it compound?

I think on these things when I read OMY posts and people saying they can reach 99.999075 in Firecalc if they just manage to save a bit longer.
My Rainier climbs didn't cost me much at three summits by the age of 30, but I doubt I would even attempt it now. Stuff I did spend money on early is not regretted, everywhere looks different and largely "7/11'ed" compared to the 70's and 80's. You can't squint that stuff out of the picture. Physical capability of youth is also a huge factor, don't waste it for a few more coins, imo.
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Old 12-31-2015, 01:44 PM   #16
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A lot depends on how you save/invest the rest of your earning years. Context is very impoprtant.

If that $100k means you have $130k when you retire instead of $30k, I would say the money is more important.

If it means you have $3.1m instead of $3m, I would prefer the experience.
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Old 12-31-2015, 01:57 PM   #17
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Experiences can be other than travel. For DH's 50th birthday I got him a 'fighter pilot' experience.

It was about $500and he said it was worth every penny.

We've also done the Richard Petty race car experience which we both did a couple of years ago on the Las Vegas race track. Neither of us are NASCAR fans but driving that car 140 mph on a real race track was a blast!
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Old 12-31-2015, 02:04 PM   #18
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Experiences are great, but life involves tradeoffs. DW traveled extensively in her youth - several years wandering the world after college having wonderful irreplaceable experiences that she in no way regrets. That said, the result was delaying the beginning of her career by a number of years, which in turn will delay her retirement - a situation which now causes her some vexation.

TANSTAAFL
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Old 12-31-2015, 02:43 PM   #19
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I'm not into travel that much. For me, the best ever return on investment was spending $1000 on a guitar, amp, and music lessons when I was 18. 35 years later that original expenditure continues to pay off daily. I've had a lifetime of musical enjoyment and made several new friends due to musical connections, and it all began with that initial investment.
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Old 12-31-2015, 02:59 PM   #20
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+1. Well said.
Ditto.
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