Here's a few of my guesses........
1. Not including the value of employer provided services, such as health insurance, as an expense.
2. Convenient amnesia about automobile expenses. No memory of the new tires, alignment and brake job you needed two years ago. Good memory of last year where you got by with only a couple of oil changes.
3. Assuming expensive items such as houses, automobiles, home electronics, etc., are all in place.
4. Not counting the value of entertainment, dinners, etc., provided by others such as a SO.
5. No hobbies or activities that consume much money. For example, we bought a camper and kayaks over the past couple of years. Sounds like cheap entertainment until I add up the expenses of driving, pulling the camper, over 6,000 miles in 2011 plus campground fees, tourist activities, fishing licenses in 5 states, etc. We love it and plan on even more in 2012, but it is a significant budget line item!
I admire everyone who can live wonderfully on very close to zero. But despite never throwing money around (modest home, seldom dine out, older cars, few would guess we're FIRE by our appearance and lifestyle), we just couldn't live the life we want on those extreme low figures.
Just a character flaw I guess........
1. If it's automatically taken out of my paycheck (parking, contribution to health insurance) I don't track it as an expense. To me, those are just a reduction of my salary and when I ER I gain nothing (revenue) by eliminating the parking expense. I am fully aware I will incur an additional expense if I obtain a health insurance plan that exceeds the $2700 my employer will be contributing to that efffort.
2. I track everything when it comes to my auto expenses -- tires, inspection, registration, insurance, maintenance. In the annual account I posted above, I included the new tires and oil changes in the discretionary account only because I was too lazy to break each expense out individually.
3. House has been paid off for 7 years years. I had it built for $170,000 to my specification 10 years ago. i.e. I paid it off in 3 years.
Like my special account set aside to fund future health insurance needs, I also have a separate account that will allow me at least 2 replacement of my car, replace all major appliances at least twice, and put two more roofs on the house.
4. I admit to showing up at my parent's house on Saturday and Sunday and raiding their refrigerator.
5. Tons of hobbies. All accounted for in discretionary expenses -- gardening, golf, travel, crafts, skiing (downhill and cross country), photography. When I retire in 17 months, I will be able to fund at least 4 trips (one per season) each year if I choose to do so. Granted, they will be domestic trips that I'm budgeting $2,500 towards each.
I will retire at 55 years of age. Twenty-seven years ago I set out to LBYM when when I turned 25. Between then and now 53 (soon to be 54) I have taken 2 trips per year (domestically and internationally) which by are more than my friends and coworkers; I am fortunately to have a nicer home and newer car. Granted I am on the cheap side when it comes to gifting/donation. I wear the same pair of shoes to work every day and replace them once the water starts leaking in. I own one pair of earrings. When I lose one, I buy the exact same pair so I have an extra. I own one gold necklace.
At the age of 27 I also purchased my first home for $21,000 by paying cash for it. It was a flat owned by my mom and uncles. So I got it at a good price and was able to recoup some expenses by renting the upstairs to my sister.
I will actually have more money to spend once I retire than what I am currently living on. And very much looking forward to it!!
I live in northwestern Pennsylvania; have worked at the same non-profit for 32 years; and my salary has averaged $35,000 over those years. No inheritance or lottery winnings.
Its all about the point of reference I guess.
