$50 per day revisited

[Nords]

Dominguez & Dacyczyn

Many of you seem to enjoy taking shots at Dominguez and YMOYL. Yes, that lifestyle may not be something you want, but it was something that Dominguez wanted.

Before we turn him into a martyr, for the safety of the Young Dreamers let's remember that the man retired with absolutely zero inflation protection and "stayed the course" despite the erosive effects of inflation's ravages. Instead of moving more of his portfolio to equities (like the Terhorsts or Greaney) he elected to cut back on his lifestyle & expenses to the point where I wonder if his cancer was caused by his genetics-- or by his environment. I don't know.

Avoiding all volatility risk strikes me as especially odd for a man who retired from a Wall Street career. And I'm curious how much help his medical insurance was-- I don't even know if he had any.

Dominguez was the trailblazer with some good lifestyle habits-- living a frugal life (maybe not with all the tricks of the Frugal Zealot), spending less than he earned, tracking expenses, commuting by bicycle, and teaching others his skills.

But after his book received so much attention, I think he boxed himself into a corner on inflation protection and obstinately elected to try to live through it. I doubt he would have made it, although it would be interesting to hear his thoughts on I bonds & TIPS.

This Amy Dyzysacin (never could spell it), I'd get a job, before I'd go her route though! She is a Wacko!

She may have a lot of wacko ideas, but I bet she felt a lot of pressure to come up with more content for her newsletters & book tours. I'd love to see how much of that she still practices.

I don't use every word in the dictionary but I appreciate having the reference available when I need it, and I see Dacyczyn as just another reference. She acknowledges that she doesn't expect her kids to adopt her practices, but she feels better knowing that she's taught them how to do it if they NEED to.

But I do consider myself a dumpster diver par excellence.

 

[preben]

Believe Joe D. made an update to YMOYL investment advise on their homepage somewhere admitting that times had changed. Do not remember the details.

$50/day gives a great life in Thailand! Cheers, Ben

 

[John Galt]

For Nords...................I challenge you to a dumpster diving contest. From where I sit right now, I can see
an aluminum extension ladder, a deluxe dog house,
an antique (circa 1920s) oak desk, a set of rustic wood
furniture (mostly tables), entertainment center, telephone answering machine,
VCR, various tools, clothing and kitchen stuff, all free.
This does not include the stuff we sold off which included
a lawnmower, washer, dryer, refrigerator, rototiller,
etc, also all free. We also buy a lot of things for practically nothing to mostly resell.

For Cut_Throat..............based on what I know about Joe Domequez' lifestyle, if I was reduced to that I think
I would go back to work (real estate investing).
I can cut back a lot but that would be below even my
low tide of ER living. It's mostly my sense of style, but also a certain level of comfort that I require.

JG

 

[Nords]

For Nords...................I challenge you to a dumpster diving contest.

John, I guess we'd have to figure out how to compare apples to apples.

In our case: landfill, new front doors, kitchen sink, doorway "baby gates", a DVD player, and melamine storage closets. As far as the "reselling" part goes, we have a closet full of stuff but I just haven't bothered to start an eBay account yet.

The guy across the street is about to give away an old British MG sports car. Does that count?

 

[John Galt]

Hi Nords. Re. "MG sports car", I'd take it as long as there were at least some salvageable parts.

JG

 

[Nords]

I've wondered if this thing has any actual resale value or if it's just another tinkerer's trap. A neighbor up the street has four junkers in his driveway ICU that he's forever tweaking & selling, and I figure if the MG was worth anything then he'd be all over it. But hey, it actually runs. Although it's a convertible without a roof-- it's sitting in the driveway with a tarp over the cockpit.

But shipping to the West Coast would cost you over $1000. I know you don't fly, but you'll probably want to send someone over here to give it a test drive. Right after the next blizzard...

 

[panhead]

Hey Nords, where is this MG ?  I actually own two MGs.  If this guy is giving this car away, it's almost certainly a later model midget.  These cars aren't worth very much to start with, and rust extremely badly (read, "in half") quickly when driven in snow belt areas.  The drivetrain is worth a couple bucks, but truthfully, the whole car probably isn't worth more than $200-$300 if some of the parts are good.  
But then again, I'm in the northeast, if it's close, I'll go get her !

-Pan-

 

[Nords]

Hey Nords, where is this MG?

Er, Oahu Hawaii. But, hey, lemme know your shipper and I'll help get it down to the terminal.

The owner left the car (and the island) a couple weeks ago. I think the title is now held by his former church, and I don't think the church's board has gotten around to it (or doesn't know what to do with it).

Dang it, now I'm curious about looking up the VIN on CarFax and the value on Edmunds/Kelly.

 

[Hyperborea]

Believe Joe D. made an update to YMOYL investment advise on their homepage somewhere admitting that times had changed. Do not remember the details.

Problem was that times didn't really change just his understanding of them (though I hadn't heard of his retraction before). A 100% government bond portfolio will not generate the income that most of us want or need.

$50/day gives a great life in Thailand! Cheers, Ben

That it will. Heck, even just getting out of the US and having your health care provided anywhere else will cut your cost of living.

 

[BUM]

rampant workaholism

JG,

A terrible addiction. I know. I worked all the time. Finally took my family on a (work related) vacation to Disney World. The kids were 20 years old by then. I'm improving with age my motto is no longer TGIM

BUM

 

[Pete]

The impression I got from YMOYL was that Joe had an insight into ONE of the factors that drive inflation, and somehow talked himself into believing that it was the ONLY factor.

I haven't looked into the situation in the states, but the bank of Canada freely admits that its inflation figures are overstated: http://www.bankofcanada.ca/en/backgrounders/bg-i5.htm

There is a tendancy for improved quality of goods to be overlooked in the figures, and ther is a tendancy for new goods and services to be included in the CPI that no one has ever needed before, but society has now decided are a basic necessity. At the time YMOYL was written, the inflation figures could easily have been over-stated by 20-30% or more if you were content to buy the same (and the same quality) goods year after year.

Of course, that doesn't mean there isn't any inflation, just less than it looks like.

I think the authors would have been in favour of TIPS... you get your return adjusted not only for real inflation, but also for the Jones' lifestyle inflation. If you're not playing the same game, you can pocket the difference.

That said, my money's in the stock market where it belongs

 

[JOhn Galt]

Hello BUM and all! BUM reminded me of one of the
symptoms of my workaholism. We took vacations,
but I was continuously thinking "Jeez, we're going to be close to____________. As long as we are in the area
I should stop by". The result was that we almost never
(maybe literally never) had a 100% "non-working"
vacation. The upside is that it made a lot of the traveling tax deductible. Anyway, my former wife used
to complain bitterly about me making sales calls on family vacations. It made perfect sense to me at the time.

JG

 

[Hyperborea]

I haven't looked into the situation in the states, but the bank of Canada freely admits that its inflation figures are overstated

Yes, they are trying to use the "hedonic" argument in the US too.

There is a tendancy for improved quality of goods to be overlooked in the figures, and ther is a tendancy for new goods and services to be included in the CPI that no one has ever needed before, but society has now decided are a basic necessity.

Two problems that I can see with this off the top of my head.  First is that if you do live to a hedonically adjusted inflation rate you are essentially consigning yourself to live with whatever is available at the time you retire.  If you retired at 40 in 1975 do you want to continue living at that lifestyle?  That means of course that computers aren't in your household budget and you're not here on this board.

The second is that you can't always buy the same things anymore.  A dental procedure that was "fine" when you retired may have been replaced because it was unsafe with another more costly but more effective procedure.  Where are you going to find a dentist to do the older procedure?  Sure you could probably go to Mexico but unless you live on the border you've got to factor the trip cost into your dental expenses.

I think the authors would have been in favour of TIPS... you get your return adjusted not only for real inflation, but also for the Jones' lifestyle inflation. If you're not playing the same game, you can pocket the difference.

That won't work.  If the government is using the hedonically adjusted inflation rate then you are getting less than the real rate of inflation.  This may even be the driving factor for using such an inflation rate - it keeps down the amount the government has to pay on those inflation adjusted bonds and on social security too.

 

[haha]

I believe that if we are going to have hedonic adjustments foisted on us, they should also give us "anti-hedonic adjustments. So when we are stuck with buying a tomato that has all the taste of a red baseball, one pound should be counted as one-half pound. If a tomato with taste cost $1.50 last year, and our new red basball this year also costs $1.50, that should be counted as 100% inflation on tomatoes.

It's only fair.

Mikey