Join Early Retirement Today
Reply
 
Thread Tools Search this Thread Display Modes
Re: $50 a day? No way!
Old 12-14-2003, 01:50 PM   #61
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
 
Join Date: Jul 2003
Location: Kansas City
Posts: 7,409
Re: $50 a day? No way!

Food is second - behind my hobby stocks - we can always cut back on non essentials like utilities, get an older truck, etc.

$50/day is off the table when it comes to food.

P.S. Given my skill level we eat a lot of take out and Warren Buffet has nothing to worry about.
__________________

__________________
unclemick is offline   Reply With Quote
Join the #1 Early Retirement and Financial Independence Forum Today - It's Totally Free!

Are you planning to be financially independent as early as possible so you can live life on your own terms? Discuss successful investing strategies, asset allocation models, tax strategies and other related topics in our online forum community. Our members range from young folks just starting their journey to financial independence, military retirees and even multimillionaires. No matter where you fit in you'll find that Early-Retirement.org is a great community to join. Best of all it's totally FREE!

You are currently viewing our boards as a guest so you have limited access to our community. Please take the time to register and you will gain a lot of great new features including; the ability to participate in discussions, network with our members, see fewer ads, upload photographs, create a retirement blog, send private messages and so much, much more!

Re: $50 a day? No way!
Old 12-15-2003, 03:55 AM   #62
 
Posts: n/a
Re: $50 a day? No way!

Okay, I checked with my wife and she agrees with my
estimate of $500.00 per month for ALL food and grocery store type items (excluding eating out). And, even though she is a pretty
careful shopper, I believe that could be trimmed even
further without obvious reduction in quality of consumables. We get everything we want and plenty
of it for the $500 per month. BTW, that includes
feeding four (4) dogs.

John Galt
__________________
  Reply With Quote
Re: $50 a day? No way!
Old 12-15-2003, 09:19 AM   #63
Thinks s/he gets paid by the post
 
Join Date: Feb 2003
Location: Mesa
Posts: 3,588
Re: $50 a day? No way!

Quote:
John Galt:
Re: $50 a day discussion. *. . .
. . . *In any case, I figured out how to live on $50 a day. *My health care costs are running about ll,000 a year, added to the grocery costs, thats about $50 a day. *
Now that Saddam is no longer living in that cave, *we could move in there, and stick to the $50 a day budget.
Regards. Jarhead
Jarhead,

Good idea. And if Saddam happened to have left an extra suitcase full of US $100 bills, you might be able to chuck the old $50/day idea and live very comfortably.
__________________
sgeeeee is offline   Reply With Quote
Re: $50 a day? No way!
Old 12-17-2003, 05:07 AM   #64
 
Posts: n/a
Re: $50 a day? No way!

Here's the deal. From the age of 32 until I semiretired
in 1993, I was President of 4 (four) companies
and living large. Country clubs, Cadillacs, multiple
residences, expensive vacations, expensive restaurants,
etc etc. No plan for ER whatsoever and basically
spending everything that came in, almost right up to the ER
decision (around December 1992). I find the doubt expressed
about the $50.00 per day thing amusing. If fact,
millions are doing it, right here in the USA.
__________________
  Reply With Quote
Re: $50 a day? No way!
Old 12-17-2003, 05:45 AM   #65
 
Posts: n/a
Re: $50 a day? No way!

And here is more...................

No lazy money! Every dime has to pay it's way and
anything not being utilized is turned into cash in some way. Shop at resale shops, garage sales and auctions
for almost everything. Buy your groceries in bulk at bare bones stores. Clip coupons. Have a garden. Fish. Hunt. Drive old cars (ours are 13 and 6 years old). Buy the cheapest health insurance you can find or "go bare" and pray you don't get sick.
Looking around here, about the only durable assets
which were bought new were our computer, a 13 in. tv, my recliner and my motorcycle. Everything else in the house was purchased used and cheap. Never buy a
new book or magazine. Pick up freebees or go to the library. Find cheap phone service and dial down the heat and A/C to cut utilities. Feed the dogs cheap
generic food. When they get hungry enough, they will eat it. Give home made gifts or regift the stuff you
receive that you know you will never use.
When you travel, pack most of your food in advance.
Negotiate and/or ask for discounts on everything.
You will be amazed what people will agree to.


John Galt
__________________
  Reply With Quote
Re: $50 a day? No way!
Old 12-17-2003, 10:19 AM   #66
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
haha's Avatar
 
Join Date: Apr 2003
Location: Hooverville
Posts: 22,386
Re: $50 a day? No way!

Quote:
I find the doubt expressed
about the $50.00 per day thing amusing. If fact,
millions are doing it, right here in the USA.
That is true. I see a number of them sleeping on the street, enjoying the bracing Seattle winters. They sure turned down the heat! A cop friend of mine told about an older man who has $450 a month in Army disability. The cop tried to get him to move into a hotel, to get out of the rain. No-way he said, that $450 makes him street royalty. Whatever he wants, he gets it, and with service. He wants a bottle of Thunderbird, some flunky fetched it for him. He doesn't even really have to tip- just the knowledge that he can, and will occasionally do so keeps his minions hopping.

Another benefit- he has his own private security force. When he bites it, there goes his cash flow. So a number of people want to keep him alive. One more advantage of annuities.

For sure, there is more than one way to skin a cat. It's just that not all of us enjoy cat, skinned or otherwise.

Mikey


__________________
"As a general rule, the more dangerous or inappropriate a conversation, the more interesting it is."-Scott Adams
haha is offline   Reply With Quote
Re: $50 a day? No way!
Old 12-17-2003, 01:21 PM   #67
 
Posts: n/a
Re: $50 a day? No way!

Hey Mikey, get a grip! We're not doing it
($50.00 per day) and don't intend to. But, we could
and so could everyone else if they were sufficiently
motivated (except maybe cut-throat .

Seriously, not only do many achieve this level of
economical living, but many enjoy it and don't feel
the least bit deprived. As proof, I offer this. My ER pretax income has hovered around 10% of my peak earning years, and I don't feel like I am missing anything. The folks that tell you that you need 70% or 80% of your working income to retire are nuts,
IMHO.

John Galt
__________________
  Reply With Quote
Re: $50 a day? No way!
Old 12-17-2003, 02:54 PM   #68
Thinks s/he gets paid by the post
 
Join Date: Dec 2003
Posts: 1,375
Re: $50 a day? No way!

Hello John Galt:

I have read a number of your posts, and while I would not want to hustle, the way that you apparantly do, whether self imposed, or by neccissity, I totally agree that anybody that says it requires 70 to 80% of your income to retire on is probably someone who has an axe to grind. (Financial individual who wants a commission on what you are willing to save). Have been retired for 16 years, and have never had a better lifestyle than our current one, and no where near close to 50% of our previous income.
Regards, and continue to enjoy your retirement.
__________________
Jarhead* is offline   Reply With Quote
Re: $50 a day? No way!
Old 12-17-2003, 03:04 PM   #69
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
 
Join Date: Jul 2003
Location: Kansas City
Posts: 7,409
Re: $50 a day? No way!

When I ran across Dory 36's - 33% that's my story post back in july 03 - it rang so true, I joined this forum. Also the INTJ bit on the ER homepage.
__________________
unclemick is offline   Reply With Quote
Re: $50 a day? No way!
Old 12-17-2003, 04:03 PM   #70
Thinks s/he gets paid by the post
wabmester's Avatar
 
Join Date: Dec 2003
Posts: 4,459
Re: $50 a day? No way!

Quote:
When I ran across Dory 36's - 33% that's my story post back in july 03 - it rang so true, I joined this forum. Also the INTJ bit on the ER homepage.
I'll bite -- what's INTJ?

Also just read the thread on 33% pre-ER gross, and I'm curious about one point everybody seemed to agree on. Why does everybody think paying off a mortgage is a good idea in retirement?

I refi'd with a 15-yr fixed rate at around 5%. After tax, that's below 4%. It's relatively easy to get a better yield than 4% on an investment with a 15-yr horizon, and that's why I decided to keep a mortgage. Am I missing something?
__________________
wabmester is offline   Reply With Quote
Re: $50 a day? No way!
Old 12-17-2003, 04:30 PM   #71
Thinks s/he gets paid by the post
 
Join Date: Feb 2003
Location: Mesa
Posts: 3,588
Re: $50 a day? No way!

Quote:

. . . Why does everybody think paying off a mortgage is a good idea in retirement?

I refi'd with a 15-yr fixed rate at around 5%. *After tax, that's below 4%. *It's relatively easy to get a better yield than 4% on an investment with a 15-yr horizon, and that's why I decided to keep a mortgage. *Am I missing something?
I'm with you, Wabmester. I ran the numbers a few years ago and decided it made a lot more sense to keep making low interest, partially tax deductible, non-inflationary mortgage payments than it did to pay it off. Risk is actually very low that you wouldn't come out ahead financially over the life of the loan and the extra investment dollars have the potential to help defray the cost of inflation.
__________________
sgeeeee is offline   Reply With Quote
Re: $50 a day? No way!
Old 12-17-2003, 05:10 PM   #72
 
Posts: n/a
Re: $50 a day? No way!

Yeah, I agree too, also having crunched the numbers.
But, in my case with very low pretax income, the mortgage related
deductions are not important. Also, there is some
psychological benefit to being 100% debt free.
I have revisited this a number of times, considering
whether to mortgage our place with rates so low.
Never made sense for me, but I can see the appeal for
others.

John Galt
__________________
  Reply With Quote
Re: $50 a day? No way!
Old 12-17-2003, 05:39 PM   #73
 
Posts: n/a
Re: $50 a day? No way!

Quote:
Am I missing something?
wabmaster,

Well, I was in a similar situation last summer, 10 years on a 5% Mortgage.

Stock Market ran up - got over valued. Took some profits. *Everyone trying to find where to park their money at 2% -

Hey - I can get 5% with no risk!!


A little diversification now. Zero debt!! - Feels good! - Sleep better etc. That's what I was missing. 8)

Plus a lot of folks/experts are saying that the Market may not go anywhere in the next 10 years.

So, my question is where do you put you money to get better than 5%? * - I'm listening *- I'm still 50% Cash and 50% Stocks!

Hey - Unclemick - I believe I was INTJ also - I heard that this was the designation most likely to retire early!
__________________
  Reply With Quote
Re: $50 a day? No way!
Old 12-17-2003, 06:10 PM   #74
 
Posts: n/a
Re: $50 a day? No way!

Quote:
So, my question is where do you put you money to get better than 5%? * - I'm listening *- I'm still 50% Cash and 50% Stocks!
I tend to agree with you on the peace-of-mind argument, but you decided to retire early, so you implicitly decided to take on risk associated with replacing "safe" income with investment income.

5% is a low return for a 15-yr (or even 10-yr in your case) horizon, historically speaking. You can get close to that now with AAA muni's (tax-equiv) or AAA corporate bonds, but it sort of defeats the purpose to simply exchange low-interest debt with low-interest income.

Given your equity stake, I would assume you believe the pundits who conservatively estimate that stocks should return an annualized return > 6% over the long term, so that would be one way to play it.

Personally, I'm willing to bet interest rates will rise in the next couple years, so I'd start with short-term bonds and extend duration once rates rise above your long-term fixed mortgage rate.

If you expect inflation to rise (another safe bet, I think), then TIPs would also be a way to play it.
__________________
  Reply With Quote
Re: $50 a day? No way!
Old 12-17-2003, 07:27 PM   #75
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
haha's Avatar
 
Join Date: Apr 2003
Location: Hooverville
Posts: 22,386
Re: $50 a day? No way!

Quote:
Besides if I borrow at 5-6% and invest, I can't make the mortgage payment on a 4% SWR of that investment. * Sooo, paying off one's mortgage(or any debt at rates higher than SWR) should reduce your SWR needed to meet your retirement expenses. *
GDER, this is an intersting and subtle point. However, it ignores one thing. If you offset the mortgage with federal government bonds matched for maturity with the morgage note, all you have to do is get a positive after tax spread. Since the mortgae note will be fixed, there is no need to allow for inflation in your offsetting investment. So your SWR, 4% or otherwise, is not relevant.

Mikey
__________________
"As a general rule, the more dangerous or inappropriate a conversation, the more interesting it is."-Scott Adams
haha is offline   Reply With Quote
Re: $50 a day? No way!
Old 12-17-2003, 07:30 PM   #76
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
haha's Avatar
 
Join Date: Apr 2003
Location: Hooverville
Posts: 22,386
Re: $50 a day? No way!

Quote:
Hey Mikey, get a grip! *We're not doing it
($50.00 per day) and don't intend to. *But, we could
and so could everyone else if they were sufficiently
motivated
Hi John,
I admit I am having a bit of fun with this $50 a day business. I can't help it- I regard it as delusional.

Mikey
__________________
"As a general rule, the more dangerous or inappropriate a conversation, the more interesting it is."-Scott Adams
haha is offline   Reply With Quote
Re: $50 a day? No way!
Old 12-17-2003, 09:40 PM   #77
Thinks s/he gets paid by the post
 
Join Date: Feb 2003
Location: Mesa
Posts: 3,588
Re: $50 a day? No way!

Quote:
. . . Besides if I borrow at 5-6% and invest, I can't make the mortgage payment on a 4% SWR of that investment. * Sooo, paying off one's mortgage(or any debt at rates higher than SWR) should reduce your SWR needed to meet your retirement expenses. *
Applying a 4% SWR on a fixed mortgage doesn't make sense. The mortgage does not inflate so your safe withdrawal rate is higher than for expenses that do inflate.

You can look at your odds of beating the payoff using FIRECalc. Put in the principle as your nest egg, your annual payments as the initial withdrawal rate and check none for the inflation index. As an example, for a $100,000 30 year loan at 5%, you have an 85% chance of outperforming the payoff option if you use an investment mix of 60% equities, 40% TIPS. Those are pretty good odds, but you also have to consider what is at risk . . .

The worst case risk situation is found by looking for the 100% SWR for the $100,000 loan. You'll find that the amount at risk (by choosing investment over payoff) is about $2, 250 per year. So under the historical worst case situation, your $100,000 investment would produce an average of $2,250 per year less than you need to make loan payments. Of course you could choose to pay off the loan at any time if you decided you didn't like the way your investments were going -- thereby reducing your downside potential.

Also, you would be getting some tax advantage by making house payments which makes the situation slightly better than the example shows.
__________________
sgeeeee is offline   Reply With Quote
Re: $50 a day? No way!
Old 12-18-2003, 03:24 AM   #78
Early-Retirement.org Founder
Developer of FIRECalc
dory36's Avatar
 
Join Date: Jun 2002
Posts: 1,826
Re: $50 a day? No way!

The biggest problem with the mortgage (or other debt) is that it is NOT volatile, while the investment returns are.

What drives the whole SWR issue is volatility -- you need to take out a much smaller percentage of the nest egg than the typical market returns suggest you might be able to, solely to limit the risk created by the threat of a market decline in the first few years of retirement.

We KNOW the market will decline sooner or later, and based on history, we have a pretty good idea of how much it could decline. The only question is WHEN.

If the market goes up the first few years and then declines, no big deal because your portfolio has already grown enough to withstand such a loss.

The debt payment is guaranteed. You have to make those payments.

The income is hoped for.

The hundreds of messages on this topic years ago all boiled down to roughly this: if you can get a loan and pay roughly half the interest rate that you believe you can make on the money you'd otherwise use to pay off the debt, then it's a good thing. Otherwise, it's too risky, based on the collective judgements of the dozens of contributors to the discussion and the fairly thorough research they all did.

Or as Granny used to say -- a bird in the hand is worth two in the bush.

Dory36
__________________
Often uninformed, seldom undecided.

Twenty years from now you will be more disappointed by the things you didn't do than by the ones you did do. So throw off the bowlines. Sail away from the safe harbor. Catch the trade winds in your sails. Explore. Dream. Discover. Mark Twain
dory36 is offline   Reply With Quote
Re: $50 a day? No way!
Old 12-18-2003, 03:57 AM   #79
 
Posts: n/a
Re: $50 a day? No way!

This is mostly for mikey! I'm having some fun with the
"$50 per day thing too. I'm not doing it and have no plans to start. I also agree that your average
American would find it extremely difficult to do.
It would add a new meaning to "bare bones lifestyle".
However, I know people personally who live on less
(my son being one - much less in his case) and we
have had posts on this site confirming that it's still
possible. I'm not motivated to look it up, but I'll bet
you a bottle of "Old Stumpknocker" that the government
has stats confirming my assertions vis-a-vis the
$50 per day thing. Any of you doubting Thomases
should look it up. BTW, for me it would be relatively easy to accomplish. I just don't want to.

John Galt
__________________
  Reply With Quote
Re: $50 a day? No way!
Old 12-18-2003, 05:29 AM   #80
 
Posts: n/a
Re: $50 a day? No way!

wab mester,

I believe that no one aswered your question on INTJ. This is a personality predicter with only 4 questions. takes about 5 minutes.

http://www.haleonline.com/psych/

If you go the the Retire Early Home Page. All of the types and descriptions are listed in one one links there.

BTW - unclemick - I did the test again and remembered that I was not an INTJ - I am an ESTJ all the way!
__________________
  Reply With Quote
Reply


Currently Active Users Viewing This Thread: 1 (0 members and 1 guests)
 
Thread Tools Search this Thread
Search this Thread:

Advanced Search
Display Modes

Posting Rules
You may not post new threads
You may not post replies
You may not post attachments
You may not edit your posts

BB code is On
Smilies are On
[IMG] code is On
HTML code is Off
Trackbacks are Off
Pingbacks are Off
Refbacks are Off


Similar Threads
Thread Thread Starter Forum Replies Last Post
Glass of Wine a Day Fights Dementia Eagle43 Health and Early Retirement 9 05-24-2007 02:50 PM
For RE, we all work for pennies a day? dimwit FIRE and Money 19 06-21-2005 09:37 AM
This company pays 1% per day 365 days a year! powercash FIRE and Money 3 02-28-2005 04:33 PM
$50 per day revisited John Galt FIRE and Money 88 02-08-2005 09:31 AM
Your day to do it dex Other topics 7 08-26-2004 12:19 AM

 

 
All times are GMT -6. The time now is 06:19 AM.
 
Powered by vBulletin® Version 3.8.8 Beta 1
Copyright ©2000 - 2017, vBulletin Solutions, Inc.