Join Early Retirement Today
Reply
 
Thread Tools Search this Thread Display Modes
Re: Ask the "Expert"
Old 07-06-2005, 11:43 PM   #41
Recycles dryer sheets
 
Join Date: Jul 2002
Posts: 420
Re: Ask the "Expert"

Good post eridanus!
For us non-Americans it is often chocking to see the numbers mentioned here being needed for FIRE! 2-3-4 mill$ - mind blowing..... I presume this board consists mostly of the "elite" of the US as no average American will even do traditionel retirement with more than half mill $!

As for Bush; he biked, he fell - so what? Cheers!
__________________

__________________
preben 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: Ask the "Expert"
Old 07-07-2005, 12:55 AM   #42
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
haha's Avatar
 
Join Date: Apr 2003
Location: Hooverville
Posts: 22,384
Re: Ask the "Expert"

Quote:
Originally Posted by eridanus
They sell their house. They buy another house in Topeka, free and clear, with $200,000 of their profit. They invest the other $300k. That brings their total income-producing assets to $1.35MM.

At 4%, that's $54,000. If they can't raise a family of 3 with $54,000, and no mortgage...how does the rest of the nation do it?
I am going to make the possibly generous assumption that this is a serious post, not just smoke blowing.

Comments- the rest of the nation for the most part do not have 3 kids; they are not buying health insurance; and they are not living what many educated people would consider a middle class life.

Two school teachers with a few years seniority make $80,000 or so, have excellent health, dental and retirement benefits. Most of them spend it without being in any way frivolous. Their salary income will increase each year, not topping out till they reach $120,000 or more in 2005 dollars. Unless one of them becomes a pricipal or administrator, in wich case they make more.* And, they have on average fewer than 2 children. This is a baseline middle class life.

Or, in your book are school teachers upper class?

Do the math, there just is no margin in the numbers you give. And don't forget, this Mom and Dad may look at a very considerable drawdown due to equity market weakness, even if they do eschew middle class life and live on the 4% you suggest.

So one evening they are sitting there* down to $850,000. They still have three young kids. Think maybe there may be some family tension at this point? Maybe it's OK for a single person to adopt voluntary poverty, but maybe not parents.

Many people here are single. Others are married with working spouses. Still others have good pensions either already paying out or on the way. Some are older, and feel positive about drawdowns, supplementing with junk picking, etc. And others are several of the above.

I think you will find that many of those who fit none of these categories tend to be more conservative when handing out advice and commentary.

I say avoid easily foreseeable problems, and work some more. For heavens sake, they are 42 and 34!

ha
__________________

__________________
"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: Ask the "Expert"
Old 07-07-2005, 01:06 AM   #43
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
haha's Avatar
 
Join Date: Apr 2003
Location: Hooverville
Posts: 22,384
Re: Ask the "Expert"

Quote:
Originally Posted by ben
For us non-Americans it is often chocking to see the numbers mentioned here being needed for FIRE! 2-3-4 mill$ - mind blowing..... I presume this board consists mostly of the "elite" of the US as no average American will even do traditionel retirement with more than half mill $!
Europeans buy a lot of security with their taxes. We buy wars, prisons, and non-middle class welfare. As to traditional retirement of average Americans, that is very different form ER. First, there is social security, maybe pension for at least half the population, no kids left, and not so long to live!

In your own case, you are in a low cost foreigh country. You like it, so that is great. But for many, cheap foreign retirement would be a type of economically motivated expatriation. Middle aged guys might like to hang around SE Asia, but I am not so sure about the average middle aged American wife.

Really, I don't care what anyone does. For something to argue about, though, it beats politics!

Ha
__________________
"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: Ask the "Expert"
Old 07-07-2005, 01:11 AM   #44
Recycles dryer sheets
 
Join Date: Jul 2002
Posts: 420
Re: Ask the "Expert"

Haha - I think the main issue here is the definition of "middle class" - spending $80k is middle class in the US!? I thought the median household income in the USA was around $30k?

State schools are not expensive - even with 3 kids. As for health insurance I am certainly not an expert but after what I have seen at the boards it can be held at a resonable level if on shops around and accepts a higher deductable.

As for the 4%; it is based on the worst scenario in history from an undiversified portfolio(US largecaps+bonds only) and blindly taking the 4%+infl nomatter WHAT happened in the market

All 3 * signal a place where we should be able to do better.

Cheers!


Quote:
Originally Posted by HaHa
I am going to make the possibly generous assumption that this is a serious post, not just smoke blowing.

Comments- the rest of the nation for the most part do not have 3 kids; they are not buying health insurance; and they are not living what many educated people would consider a middle class life.

Two school teachers with a few years seniority make $80,000 or so, have excellent health, dental and retirement benefits. Most of them spend it without being in any way frivolous. Their salary income will increase each year, not topping out till they reach $120,000 or more in 2005 dollars. Unless one of them becomes a pricipal or administrator, in wich case they make more.* And, they have on average fewer than 2 children. This is a baseline middle class life.

Or, in your book are school teachers upper class?

Do the math, there just is no margin in the numbers you give. And don't forget, this Mom and Dad may look at a very considerable drawdown due to equity market weakness, even if they do eschew middle class life and live on the 4% you suggest.

So one evening they are sitting there* down to $850,000. They still have three young kids. Think maybe there may be some family tension at this point? Maybe it's OK for a single person to adopt voluntary poverty, but maybe not parents.

Many people here are single. Others are married with working spouses. Still others have good pensions either already paying out or on the way. Some are older, and feel positive about drawdowns, supplementing with junk picking, etc. And others are several of the above.

I think you will find that many of those who fit none of these categories tend to be more conservative when handing out advice and commentary.

I say avoid easily foreseeable problems, and work some more. For heavens sake, they are 42 and 34!

ha
__________________
preben is offline   Reply With Quote
Re: Ask the "Expert"
Old 07-07-2005, 01:15 AM   #45
Recycles dryer sheets
 
Join Date: Jul 2002
Posts: 420
Re: Ask the "Expert"

Good points haha - I do certainly not advocate cheap foreign retirement - that is for the few only. Personally I ALSO have my FIRE-base in my Scandinavien home country. I think many Americans could see themselves with 2 cheaper homes (of which one abroad in a sunny place) than one expensive.
The average middle aged American wife apparently prefer the Dominican republic after what I hear .
Cheers!

Quote:
Originally Posted by HaHa
Europeans buy a lot of security with their taxes. We buy wars, prisons, and non-middle class welfare. As to traditional retirement of average Americans, that is very different form ER. First, there is social security, maybe pension for at least half the population, no kids left, and not so long to live!

In your own case, you are in a low cost foreigh country. You like it, so that is great. But for many, cheap foreign retirement would be a type of economically motivated expatriation. Middle aged guys might like to hang around SE Asia, but I am not so sure about the average middle aged American wife.

Really, I don't care what anyone does. For something to argue about, though, it beats politics!

Ha
__________________
preben is offline   Reply With Quote
Re: Ask the "Expert"
Old 07-07-2005, 02:10 AM   #46
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
haha's Avatar
 
Join Date: Apr 2003
Location: Hooverville
Posts: 22,384
Re: Ask the "Expert"

Quote:
Originally Posted by ben
The average middle aged American wife apparently prefer the Dominican republic after what I hear* .
Cheers!
Right-or Cuba or Jamaica. Those gals like merengue, salsa and reggae!*

Ha
__________________
"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: Ask the "Expert"
Old 07-07-2005, 02:21 AM   #47
Recycles dryer sheets
 
Join Date: Jul 2002
Posts: 420
Re: Ask the "Expert"

Ariba! Caramba!

haha; as to your story (retirering too early with too little?) could you give a bit more info as to your experience? Stuff like:

Did you calculate the nos before or just jump? Did your expenses become much higher than planned? Why? Did you decide to send to kids to expensive schools? How was the emotional ride? What saved you? Did you take any cost cutting measures yourself? What was your estimated portfolio composition and return?

I think that the biggest FIRE worry is to run out of money and having to jump back into the hamster wheel after having tasted the ultimate freedom - so your experiences would be very usefull. Cheers!


Quote:
Originally Posted by HaHa
Right-or Cuba or Jamaica. Those gals like merengue, salsa and reggae!*

Ha
__________________
preben is offline   Reply With Quote
Re: Ask the "Expert"
Old 07-07-2005, 07:48 AM   #48
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
 
Join Date: Jul 2003
Location: Kansas City
Posts: 7,408
Re: Ask the "Expert"

Give a man a hammer. In the the modern age we are prisoners of spreadsheets. Experts, da media, and mere plebians who want to retire have to calc the best we can.

Below the radar - I live in a deliberately out of the way place where people raise families just fine on less than $50/day - not the stuff of media attention.

I visit a lot of people who - heh, heh - make 10 -20 k a year - but if you could transplant their house, scenery, piers, and docks to one of the bubble locations - RE wise they could sell and retire the rest of their lives. Since I'm talking commercial fishmen - I'll leave it up to your imagination - what is tied up in boats and equipment.

Unfortunately - gentrification has picked up in the last five years.

__________________
unclemick is offline   Reply With Quote
Re: Ask the "Expert"
Old 07-07-2005, 08:20 AM   #49
Moderator Emeritus
Martha's Avatar
 
Join Date: Feb 2004
Location: minnesota
Posts: 13,212
Re: Ask the "Expert"

I'm with HaHa on the couple waiting to retire. They are young with three children. This substantially increases their risks. It is hard to compare a family making a $54,000 wage with one getting $54,000 off of investments. One example is college. The $54,000 wage earner will probably get good financial aid. The familiy with the million plus in assets might not. What if there is a divorce down the road? What about the issues involved in buying health insurance? What if one of the kids has asthma or another chronic disease? This could bust the budget pretty fast. Too many variables, too many chances of something going wrong. And the longer they are out of the job market, the tougher it will be to get back in.

__________________
.


No more lawyer stuff, no more political stuff, so no more CYA

Martha is offline   Reply With Quote
Re: Ask the "Expert"
Old 07-07-2005, 08:33 AM   #50
Dryer sheet aficionado
 
Join Date: Jun 2005
Posts: 38
Re: Ask the "Expert"

I guess that I am much poorer than I thought. My family seemed middle class to me and my parents have never had a combined income over $50k. I went to college on scholarships and student loans, as are my younger borthers currently. My fiance and I are making $65k combined, which is almost twice the median HHI in this county, and we are actually living on less than $25k/year after taxes and saving, and I don't feel poor.
__________________
Sal
Sillysal is offline   Reply With Quote
Re: Ask the "Expert"
Old 07-07-2005, 08:39 AM   #51
Thinks s/he gets paid by the post
wildcat's Avatar
 
Join Date: Feb 2005
Location: Lou-evil
Posts: 2,025
Re: Ask the "Expert"

Sillysal it is all relative
__________________
"These walls are kind of funny. First you hate 'em, then you get used to 'em. Enough time passes, gets so you depend on them"
wildcat is offline   Reply With Quote
Re: Ask the "Expert"
Old 07-07-2005, 09:33 AM   #52
Thinks s/he gets paid by the post
 
Join Date: Dec 2003
Posts: 1,375
Re: Ask the "Expert"

Just wanted to jump in here, and agree with Ha Ha on this one. (I also agree that this topic is a lot more productive than mud-slinging politics. )

First of all, there is a helluva lot of difference, between being single with no responsibilities, except to yourself, and being married with 3 small children. (Kind of like apples, and oranges)

With this young guys assets, if he were single, I'd be first in line to say "why not".

However if our young poster with 3 small children were to bail out with an investment climate much less kind than the last 20 years or so has been, he would probably look back on his decision to "pull the pin" as pretty darn irresponsible.

On the flip side of this poster, we have a recent age 55 poster that is single, has over $2,000,000 in liquid assetts and is worried that he hasn't enough. (You can lead a horse to water but you can't force him to drink it.)

Raising children is not an easy job under the best of circumstances, but to do it with the additional worry about finances, and not knowing what -hit storm is next on the horizon,
makes no sense to me.

Just my .02 worth.









__________________
Jarhead* is offline   Reply With Quote
Re: Ask the "Expert"
Old 07-07-2005, 10:18 AM   #53
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
cute fuzzy bunny's Avatar
 
Join Date: Dec 2003
Location: Losing my whump
Posts: 22,697
Re: Ask the "Expert"

Quote:
Originally Posted by REWahoo!
OAP, th, if I didn't know better I might think you guys were doing a little trolling regarding "W". Surely not.

REW
Moi? Now if I said something like how ridiculous it is to have a president who cant pronounce 'nuclear' or 'abu ghraib' (come on george, its 'grape' with a 'b' at the end instead of a 'p'), who is embarrassingly clumsy, chokes on snack foods and talks with a texas accent even though he's from new england...I guess the hard core republicans would call it trolling while the libs would consider it gospel.

But I just said he's clumsy. You KNOW gerry ford is somewhere pumping his fist yelling "YEAHHH! Now when its "clumsy presidents" in jeopardy, that jennings guy cant just hit the buzzer and yell out 'gerald ford!'!!!"
__________________
Be fearful when others are greedy, and greedy when others are fearful. Just another form of "buy low, sell high" for those who have trouble with things. This rule is not universal. Do not buy a 1973 Pinto because everyone else is afraid of it.
cute fuzzy bunny is offline   Reply With Quote
Re: Ask the "Expert"
Old 07-07-2005, 10:33 AM   #54
Give me a museum and I'll fill it. (Picasso) Give me a forum ...
REWahoo's Avatar
 
Join Date: Jun 2002
Location: Texas Hill Country
Posts: 42,094
Re: Ask the "Expert"

Quote:
Originally Posted by Just not
I guess the hard core republicans would call it trolling while the libs would consider it gospel.
Just for the record, I scored a solid 20 on the Red/Blue test. Yep, I came down squarely on both sides of the fence. Maybe I should consider running for office... :P

REW
__________________
Numbers is hard

When I hit 70, it hit back

Retired in 2005 at age 58, no pension
REWahoo is offline   Reply With Quote
Re: Ask the "Expert"
Old 07-07-2005, 10:33 AM   #55
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
cute fuzzy bunny's Avatar
 
Join Date: Dec 2003
Location: Losing my whump
Posts: 22,697
Re: Ask the "Expert"

Flip flopper!
__________________
Be fearful when others are greedy, and greedy when others are fearful. Just another form of "buy low, sell high" for those who have trouble with things. This rule is not universal. Do not buy a 1973 Pinto because everyone else is afraid of it.
cute fuzzy bunny is offline   Reply With Quote
Re: Ask the "Expert"
Old 07-07-2005, 10:34 AM   #56
Give me a museum and I'll fill it. (Picasso) Give me a forum ...
REWahoo's Avatar
 
Join Date: Jun 2002
Location: Texas Hill Country
Posts: 42,094
Re: Ask the "Expert"

Quote:
Originally Posted by Just not
Flip flopper!
Is that a "yes"?
__________________
Numbers is hard

When I hit 70, it hit back

Retired in 2005 at age 58, no pension
REWahoo is offline   Reply With Quote
Re: Ask the "Expert"
Old 07-07-2005, 10:37 AM   #57
Recycles dryer sheets
 
Join Date: Oct 2004
Posts: 214
Re: Ask the "Expert"

This debate is interesting so I'll jump in too...I also feel that ER with three kids on 54K per yr is pretty tight. I dont doubt that it is doable (since many live on less with no paid for house) but there is little margin for error. It is one thing to do it because that is all the income you have, and another thing to choose it when you have other options available.

On the other hand I must disagree with Haha about what constitutes a "base line middle class life".
All the statistics I have seen put median household income in the 40-50K range so by definition half the population is living on less than that. Millions of families would be thrilled to earn 80K let alone 120K!

Anyway, there seems to be a rift in philosophy among posters on this board...the ER purists advocate 35K budgets and believe the 4% SWR is graven in stone. The conservative types see such numbers as unrealisticly risky and tend toward financial overkill. Me, I'm somewhere in between
__________________
RockMiner is offline   Reply With Quote
Re: Ask the "Expert"
Old 07-07-2005, 10:52 AM   #58
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
cute fuzzy bunny's Avatar
 
Join Date: Dec 2003
Location: Losing my whump
Posts: 22,697
Re: Ask the "Expert"

Quote:
Originally Posted by REWahoo!
Is that a "yes"?
If I said yes, then you wouldnt run, if I say no, you will. Because you're a FLIP FLOPPER!
__________________
Be fearful when others are greedy, and greedy when others are fearful. Just another form of "buy low, sell high" for those who have trouble with things. This rule is not universal. Do not buy a 1973 Pinto because everyone else is afraid of it.
cute fuzzy bunny is offline   Reply With Quote
Re: Ask the "Expert"
Old 07-07-2005, 10:57 AM   #59
Give me a museum and I'll fill it. (Picasso) Give me a forum ...
REWahoo's Avatar
 
Join Date: Jun 2002
Location: Texas Hill Country
Posts: 42,094
Re: Ask the "Expert"

Quote:
Originally Posted by Just not
If I said yes, then you wouldnt run, if I say no, you will. Because you're a FLIP FLOPPER!
That is absolutely, positively incorrect. But get back to me in a day or two. I may reconsider.

__________________
Numbers is hard

When I hit 70, it hit back

Retired in 2005 at age 58, no pension
REWahoo is offline   Reply With Quote
Re: Ask the "Expert"
Old 07-07-2005, 11:33 AM   #60
Dryer sheet aficionado
 
Join Date: Jun 2005
Posts: 38
Re: Ask the "Expert"

So...back to the original subject...

These people are living in one of the most expensive areas of the country AND saving enough for a $1mil+ portfolio. I would say they have the frugal living part down, and coupling that with moving to a less expensive area - I just think it's entirely possible for them to retire. Plus - if it starts to look like things aren't going well, they are young enough to jump back in the workforce later.

I wonder how the extra time the parents can devote to being involved with their childrens' lives will affect the quality of their life?
__________________

__________________
Sal
Sillysal is offline   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


 

 
All times are GMT -6. The time now is 02:49 AM.
 
Powered by vBulletin® Version 3.8.8 Beta 1
Copyright ©2000 - 2017, vBulletin Solutions, Inc.