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Old 03-23-2011, 07:43 PM   #21
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My parents never made a lot of money but they were big savers and paid off their house many years early. Alas, as a child of the depression, my mom was never comfortable with any type of risk in saving. Her sole investments her entire life (she is 87) were CDs and government savings bond. They weren't sophisticated and didn't really understand any other type of investment and still dont. My mom (dad died 10 years ago) grasps the concept that equities can go down but she can't grasp inflation risk.

That said when they retired (early 60s) they mostly had SS each and my mom has a couple of tiny pensions (total $4k a year or so).

They did have savings. However, here's the thing. For years and years they never spent any of the savings. The SS was enough. After my dad died, my mom has spent some of the savings but mostly lives on SS and the tiny pensions and is fine. (Not the lifestyle I want but it works for her).
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Old 03-23-2011, 09:40 PM   #22
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Hmm...

I only look at the 1st picture shown on that Web link, but it surely does not portray a serene lifestyle like I imagine on Walden Pond.

Something is wrong here!

PS. This is more what I am talking about here!

Note: picture linked in from Andy Baird's Web site (Upgrade frenzy)

Now that's more my speed too! If and when I do the camper thing, I'm thinking about a Roadtrek.

That Yahoo group I posted has a lot of members who seem to be living in vans either from economic necessity, or are doing it for the lifestyle but on a limited income, such as SS only. It's interesting reading their stories.
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Old 03-23-2011, 09:50 PM   #23
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When researching the Web for info on RV'ing, I ran across a blog by a man who calls himself a "mobile kodger". Seach for that term if you are curious. He is a real traveler, and a really good story teller.

From his blog, I have learned about this lifestyle similar to your Yahoo group. Some people enjoy it. Quite a few appears to do it out of necessity, although I believe that they can have a better living condition if they would "work for the man" as most people do.
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Old 03-24-2011, 12:36 AM   #24
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When researching the Web for info on RV'ing, I ran across a blog by a man who calls himself a "mobile kodger". Seach for that term if you are curious. He is a real traveler, and a really good story teller.

From his blog, I have learned about this lifestyle similar to your Yahoo group. Some people enjoy it. Quite a few appears to do it out of necessity, although I believe that they can have a better living condition if they would "work for the man" as most people do.
I follow his site and agree - he is a true adventurer and excellent storyteller. He is very much the protagonist in his own journey of mobile exploration and discovery.

As far as "working for the man" goes, I have never had a problem with this as I know you don't, though some do seem to. Employment is a blindingly simple contract as far I'm concerned; I do what my employer wants me to do (within reason of course) and in return I get paid. End of story. It's what you do when you want money.
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Old 03-24-2011, 06:46 AM   #25
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Employment is a blindingly simple contract as far I'm concerned; I do what my employer wants me to do (within reason of course) and in return I get paid. End of story. It's what you do when you want money.
It's amazing how many people don't understand that simple fact. They make more out of a j*b than what it really is...
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Old 03-24-2011, 06:53 AM   #26
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The article is better than most in that it at least recognizes that low income people need less money to continue their current spending.

I guess the question is "If I were earning $30k per year at a job that I didn't like, I had saved $250k (which is 8x may annual income), and I were 65, would I continue to work?"

That's a different view of what's "enough".
The meta-question is, how do you save $250k earning $30k a year?
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Old 03-24-2011, 06:58 AM   #27
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The meta-question is, how do you save $250k earning $30k a year?
Game show. Lottery. Inheritance. Law suit.
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Old 03-24-2011, 07:04 AM   #28
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Game show. Lottery. Inheritance. Law suit.
Many actually have those as strategies.

The obvious way is to earn $150k and live on $30k. Then you can save enough to support that LBYM lifestyle.......unfortunately most people don't earn enough and if they do they don't save enough
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Old 03-24-2011, 08:06 AM   #29
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The AGE of our retiree plays a major role ... mom is making it work on ~240k with dad's pension and SS. Says she wants to "live a little" so I am scrubbing the numbers to determine a decent burn rate of her assests.

I am thinking 10% (she's 72 and in excellent health ... her mother died at 89). A reverse mortgage is the last line of defense. She jokes about her check bouncing at the funeral home.

OK fire away!
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Old 03-24-2011, 08:28 AM   #30
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I am scrubbing the numbers to determine a decent burn rate of her assests.

I am thinking 10%
As compared to what? What is the current rate of asset withdrawl?

Are we talking a 9% gap (assuming a 1% currenet withdrawl) or are they already at 8%?

It makes a difference...
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Old 03-24-2011, 08:33 AM   #31
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Many actually have those as strategies.

The obvious way is to earn $150k and live on $30k. Then you can save enough to support that LBYM lifestyle.......unfortunately most people don't earn enough and if they do they don't save enough
A simplistic modeling of how one would save $250k over a 30yr "career":
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File Type: jpg savings.JPG (10.0 KB, 21 views)
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Old 03-24-2011, 08:42 AM   #32
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As compared to what? What is the current rate of asset withdrawl?
She's been at 5%. So I am looking at doubling the withdrawl rate. As she slows down she won't be able to spend as much. Probably gift it to the kids to shelter what's left.
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Old 03-24-2011, 08:49 AM   #33
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Hmm...

I only look at the 1st picture shown on that Web link, but it surely does not portray a serene lifestyle like I imagine on Walden Pond.

Something is wrong here!

PS. This is more what I am talking about here!

Note: picture linked in from Andy Baird's Web site (Upgrade frenzy)

More thread hijack - my mom lived in a motor home for years - we as a family (before parents divorced) lived in a Winnebago for a few months. I love his solar panels and it looks really nice - just enough room and amenities...not bad at all!
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Old 03-24-2011, 12:03 PM   #34
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The AGE of our retiree plays a major role ... mom is making it work on ~240k with dad's pension and SS. Says she wants to "live a little" so I am scrubbing the numbers to determine a decent burn rate of her assests.

I am thinking 10% (she's 72 and in excellent health ... her mother died at 89). A reverse mortgage is the last line of defense. She jokes about her check bouncing at the funeral home.

OK fire away!
Not as a criticism, but an observation. Say she lives as long as her mother, that gives her another 17 years. With today's conditions, it would be very hard to get any real, after tax return (even if she pays no income tax) on reasonably safe assets. ( I wanted to say risk-free assets, but then someone will remind me that such a thing does not exist, there is always inflation..... Who knew?)

So she is almost sure to run out of money, possibly fairly early in the game. You could find some higher yielding assets that would produce more income in the best case, but if things go wrong you may find yourself as cleanup batter. If that might be OK, there are possibilities.

Ha
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Old 03-24-2011, 12:30 PM   #35
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A simplistic modeling of how one would save $250k over a 30yr "career":
Working from your monthly $313 number and 5% return. If you earn $30k a year you might take home $1800 a month. So that $313 is 17% of your take home pay before you've paid for housing, medical, car, food etc. Saving 17% of income for high earners is relatively easy....but on $30k a year it would be difficult.
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Old 03-24-2011, 12:37 PM   #36
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The title of the article is somewhat misleading.

The gist of the quoted article was that it would be possible to retire with only $250K in savings. Note the key word is to retire, and not to retire early, which means such retirees expect to draw on some pensions or at least SS. Then, it would make more sense. Some of the $250K of savings may be in the form of a residence owned clear of mortgages. Even then it is still tough.

I know elderly people who have even less than $250K, who have to rely on their children for support. Most of the time, it is in the form of their offsprings giving them free room and board, which frees the SS for their entire discretionary spending.

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More thread hijack - my mom lived in a motor home for years - we as a family (before parents divorced) lived in a Winnebago for a few months. I love his solar panels and it looks really nice - just enough room and amenities...not bad at all!
It is still related to the thread, as a possible way to live on $250K, is it not?

Though I do not need to live like this out of necessity, the adventurous aspect of this lifestyle interests me (just out of curiosity, as I like my "stuff" too much and it would not fit in any RV). So, I have been following the blogs of some full-time RV'ers, particularly the people with smaller rigs and not quarter-million diesel pushers. Some people reported their expenses, and they ran in the mid $20K. And their little comfortable rigs still cost some initial money.

So, without any income, one still needs more than a $250K portfolio to live comfortably as a vagabond.
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Old 03-24-2011, 01:29 PM   #37
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NW-Bound - I was in the middle of sending you this as a PM so as not to disturb the flow of the thread too much, then saw your previous post and figured that - hey - the RV'ing life is related to the discussion of being able to retire on 250K.

Thanks very much for posting that link to Andy Baird's site. I've only just begun reading it but it looks like it's going to be very inspiring. It has already opened me up to the possibility of a Lazy Daze motorhome; up until yesterday, I was convinced that only a Roadtrek would work for me.

And now back to our regularly scheduled programming.....
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Old 03-24-2011, 01:34 PM   #38
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So she is almost sure to run out of money, possibly fairly early in the game. You could find some higher yielding assets that would produce more income in the best case, but if things go wrong you may find yourself as cleanup batter. If that might be OK, there are possibilities.
Running out of the 240k in 10 years is acceptable ... but not preffered. If I can get 15 years out of it, it's a homerun (but 1/15 vice 1/20 isn't going to change her life much). She still has SS and pension ($2400/mo total) and a house for a reverse mortgage (assuming a nursing home doesn't get it).

At some point it becomes "use it or loose it" (to a nursing home). Just not sure if 72 is that point (in great health) ...
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Old 03-24-2011, 01:37 PM   #39
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I have a friend who is 55. She was amazed that a few of her peers at the table at a social gathering no longer had a mortgage. (She works for the PO and makes a decent income, but has to recent due to a recent foreclosure and bankruptcy due to poor management). I've always wondered how much money she thinks we have since we retired at 52 and have no pensions and buy our own insurance.

This topic reminds me of a cruise I took over 20 years ago. The waiter was hoping to retire early by 30 by saving $100,000. Obviously, 100K was worth more 20 years ago than it is now, but still not enough for 50+ years of retirement, especially in his country (Israel, with high cost of living). But probably fun for him to dream....
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Old 03-24-2011, 01:43 PM   #40
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The meta-question is, how do you save $250k earning $30k a year?
Excellent question. Put away $3,000 per year for 40 years, and have the money (on average) double during that time? Then recognize that your retirement income goal can be $3,000 less because you weren't spending that.

I wouldn't be surprised that a fair number of the people who said $250k would be enough aren't on track to have $250k.
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