Blogger Joe Udo says 25x expenses not enough for early-retirees

[W2R]

There are number of blogging sites that are free to the user. Wordpress.com is the first one that comes to mind. I've had a blog there since 2009, about my hobby of ham radio. It hasn't cost me a penny.

As to your first point that nobody would read it, you might be surprised. I started my blog with the intention of simply keeping an online journal of my radio activities. There was no expectation - I simply wanted to enjoy the process of writing about, and documenting, my personal journey in the hobby. My first surprise was when I made some comment about maybe taking a break from blogging, and a popular and noted blogger in our world commented on it in his blog, "Seems like Tom is taking a break from blogging. We hope he'll come back soon" or something like that. "Holy cow!" I thought, "People who are actually somebody in this little hobby world of ours are reading my blog!" Slowly, my traffic grew, and I noticed that posts would get re-posted and blogged about on other sites too, some of them quite notable, such as the Make site, and Hackaday. I didn't ask for any of this attention - I just blogged.

So I guess what I'm saying is that as you obviously like to write, there is nothing stopping you from starting a (free) blog. Do it for the fun of it, and you might get some followers. Even if you don't get that many (but you probably will) it's still fun.

PS - there are lots of us here who will read it!

Wow!!!! Thank you! I had NO idea that it was that easy to set up a free blog and that somebody or other might actually read it. Wow, wow, wow.... now you have me thinking about it. I'll need to go check wordpress out.

 

[RobLJ]

I wasn't talking about economy of scale. If you want a housemate you can always get one. With adequate savings someone can not rely on the working spouse's income. Others can't. That makes the difference between retired and having a working spouse and stay-at-home parent having a working spouse.

I use semi-retired (or maybe alt-retired) since I'm still working 10-20 hours a week online from home in "modified employment." I could simply draw from retirement accounts, but the goal is to get the younger DW semi-retired ASAP. I don't think she'll quit working entirely, because she likes to feel useful.
It's good to have options--like dipping first toes, then the ankle, and perhaps the whole kneecap. "First Chill--then Stupor--then the letting go."

 

[ExFlyBoy5]

I use semi-retired (or maybe alt-retired) since I'm still working 10-20 hours a week online from home in "modified employment." I could simply draw from retirement accounts, but the goal is to get the younger DW semi-retired ASAP. I don't think she'll quit working entirely, because she likes to feel useful.
It's good to have options--like dipping first toes, then the ankle, and perhaps the whole kneecap. "First Chill--then Stupor--then the letting go."

Alt-retired, eh? I'm hearing this 'alt' prefix being used a lot lately.

Sent via mobile device. Please excuse any grammatical errors.

 

[RobLJ]

I suppose reducing from 50+ hours/week to 10-15 at my own schedule is working but it feels a lot more like alt-retired than "working." Alt-retired has more "truthiness."

 

[Fermion]

A lot of the people on MMM have made it past the 1st bend and some the 2nd bend in the SS earnings, even in their 40s (we have). A 4% WR drops down to about 2% for them at age 62 or 1% at age 70 when you factor SS. So really you are talking about someone age 45 needing just 17 years at 4% then the remaining at 2%. We are talking about people with spending in the $30k to $50k range, not $100k+ of course.

 

[ShokWaveRider]

We have found that inflation does not seem to affect us as much now we are retired. Of course it does in some cases such as; Home Prices (If we were moving) RE Taxes, Healthcare (The BIG One!). All the rest is really noise (to us). This is based on the amount we have spent in the last 5 years on an annual basis. I would average it out at about 1% pa MAX (with the exception of Healthcare) over that period based on OUR annual expanses.

 

[ExFlyBoy5]

I suppose reducing from 50+ hours/week to 10-15 at my own schedule is working but it feels a lot more like alt-retired than "working." Alt-retired has more "truthiness."

Fair enough...makes sense to me!

Sent via mobile device. Please excuse any grammatical errors.

 

[nun]

We have found that inflation does not seem to affect us as much now we are retired. Of course it does in some cases such as; Home Prices (If we were moving) RE Taxes, Healthcare (The BIG One!). All the rest is really noise (to us). This is based on the amount we have spent in the last 5 years on an annual basis. I would average it out at about 1% pa MAX (with the exception of Healthcare) over that period based on OUR annual expanses.

I'm two years into ER and RE Taxes and Healthcare are the obvious areas of increase that I see. This year my RE quarterly taxes went from $1500 to $1700 and my health care increased from $509 to $529.....although I just started on official retiree healthcare and my premium has gone down to $100 so I'm not complaining.

Other areas I see increasing are cable charges, but an annual call gets the company to find some special rate for the next year, and phone plan costs.

 

[YVRRocketSurgery]

For the younger people on Mr. MM I wonder if they will get frugal fatigue after awhile. It is one thing to live frugal for awhile because of a goal, etc but as a way of life I think it would get old. Sure you have lots of time but your friends are working, etc. I was a SAHM until my youngest went to school and then I was bored and looked forward to working.

I've thought about that too; that it would be interesting to see how life has been over the course of a few decades after an early retirement extreme in their 30's. It's probably difficult to find a lot of examples but I did come across the blog of one couple (yes, another blog) who retired at age 38 in 1991 and have spent 25 years in retirement with quite a bit of travelling:
Retire Early Lifestyle

They're not as detailed with their finances but they indicate over the course of their 25 years in retirement, their average spend is about $22k-$24k USD per year. One key point is that they spend a lot of time in low cost countries. Yes, they have e-books for sale and their blog has a lot of adverts but I can't see how they could have earned a lot of income from these streams until 15 years into retirement when Internet businesses really became mainstream in the mid-2000's. If they can earn some cash by writing some books and articles on their own terms while retired, it's fine by my retirement definition.

They're obviously a success story. I'm sure it'd be harder to find longer term retirement stories to review that are less successful that discuss why. I'm initially hesitate to say failure because I suspect people can ramp down their retirement spend at least to start. But I'm sure early retirements could fail due to a variety of things like divorce and illness. I'm curious if the "I'm tired of being frugal" scenario is common.

 

[old woman]

In retirement you might have reduced expenses or increased income in the future. I have 23 years left on my mortgage and will get increased SS at 70 so in 23 years my income will be up about 1,500 a month and expenses down about 600. Taking 4% from investments now is fine even if I have some inflation on food and things. Also since I am 68 now my car may be my last car or I might get one more then about 80 lose the cost of owning a car, replace with uber or something.

 

[Markola]

If someone is different enough from the work-till-we-drop herd to put together assets totaling 25x annual expenses, they are probably scrappy enough to manage lifestyle and additional income sources later if things change. I doubt many of us cut from that cloth are too concerned about definitions that other people feel compelled to put on us, whether retired, semi-retired, not-really-retired, etc.


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[ExFlyBoy5]

I've thought about that too; that it would be interesting to see how life has been over the course of a few decades after an early retirement extreme in their 30's. It's probably difficult to find a lot of examples but I did come across the blog of one couple (yes, another blog) who retired at age 38 in 1991 and have spent 25 years in retirement with quite a bit of travelling:
Retire Early Lifestyle

Billy and his wife (from Retire Early Lifestyle) used to be active here...but not since 2014

Early Retirement & Financial Independence Community - View Profile: Billy

 

[REWahoo]

Billy and his wife (from Retire Early Lifestyle) used to be active here...but not since 2014

Yep, they would drop by a few times a year to promote their blog with the hopes someone would buy something to help support their "retirement".

Odds are E-R.org management put a stop to their free advertisement opportunity, which resulted in them losing interest in posting.

 

[MichaelB]

Yep, they would drop by a few times a year to promote their blog with the hopes someone would buy something to help support their "retirement".

Odds are E-R.org management put a stop to their free advertisement opportunity, which resulted in them losing interest in posting.

One thing I've always suspected is that blogging for money may be lucrative in the short term, but over a longer period is very challenging. The barriers to entry are almost non-existent, so competition must be fierce. Like other low barrier professions, only the very top performers can make money on a regular basis over long periods of time.

Whether blogging for ER is a contradiction or not is a matter of opinion, and I'll let others figure that out. I wonder how long it will support even the most successful candidates.

 

[ExFlyBoy5]

Yep, they would drop by a few times a year to promote their blog with the hopes someone would buy something to help support their "retirement".

Odds are E-R.org management put a stop to their free advertisement opportunity, which resulted in them losing interest in posting.

Interesting. I *tried* looking at their blog, but it was just an assault on my eyes; too many ads and the layout looks like something from 1998 (remember Geocites?) Their *books* appear to be overpriced as well, so I don't know that they are making a whole pile of $$$ with their product.

Edit: It appears the site gets about 600 unique page views a day w/ an estimated ad revenue of $2 a day. MMM has 16,000 unique page views a day and an estimated ad revenue of $53 a day. Note that these estimates do not figure in any referral links that I know MMM uses extensively.

 

[dunkelblau]

I've thought about that too; that it would be interesting to see how life has been over the course of a few decades after an early retirement extreme in their 30's. It's probably difficult to find a lot of examples but I did come across the blog of one couple (yes, another blog) who retired at age 38 in 1991 and have spent 25 years in retirement with quite a bit of travelling:
Retire Early Lifestyle

It was the story of the Terhorsts in Money magazine that opened my eyes to the possibilities shortly after I started working. IIRC they stopped working in 1984 at age 35 with a half million in net worth and lived in several low cost countries afterwards. Here's a followup from the editor who commissioned that article: 30 Years Ago They Retired at 35: An Update - Next Avenue

 

[YVRRocketSurgery]

Billy and his wife (from Retire Early Lifestyle) used to be active here...but not since 2014

Early Retirement & Financial Independence Community - View Profile: Billy

Should have guessed!
Too bad they aren't as active on this site any more. I would have loved to have read some of their insights on things. I suppose I can try to dig up some old threads.

It was the story of the Terhorsts in Money magazine that opened my eyes to the possibilities shortly after I started working. IIRC they stopped working in 1984 at age 35 with a half million in net worth and lived in several low cost countries afterwards. Here's a followup from the editor who commissioned that article: 30 Years Ago They Retired at 35: An Update - Next Avenue

Thanks for the link! Will give it a read in a bit.

 

[ExFlyBoy5]

It was the story of the Terhorsts in Money magazine that opened my eyes to the possibilities shortly after I started working. IIRC they stopped working in 1984 at age 35 with a half million in net worth and lived in several low cost countries afterwards. Here's a followup from the editor who commissioned that article: 30 Years Ago They Retired at 35: An Update - Next Avenue

Good article! They touch on several areas..being expats, health care and taking SS at 62.

It appears as though they also have a blog (I don't think it's monetized though; bonus!) that could be a good read.

Sent via mobile device. Please excuse any grammatical errors.

 

[nun]

I was not comfortable with using the standard SWR model (initial % withdrawal adjusted for inflation) when we ER'd in our late 40s.

That's why we (and a number of others on this forum) went with a withdrawal model that takes a fixed percentage of the current portfolio value each year - and that percentage is less than 4%. Our AA is 60/40 stock/bond.

I started ER at 53...two years before I could start collecting my pension. I've lived off my bank account (starting balance $35k) and $1200/month rent for that last 2 years. My goal is to reinvest all dividends and have 0% withdrawals.

This month I will get my first pension payment of $1800 and add that to the $1200/month rental income and the plan will be coming together nicely.

 

[Major Tom]

Wow!!!! Thank you! I had NO idea that it was that easy to set up a free blog and that somebody or other might actually read it. Wow, wow, wow.... now you have me thinking about it. I'll need to go check wordpress out.

Blogger.com will give you a free blogging site too, and you can enable it to carry ads and provide income, through Google AdSense. I went with Wordpress.com though, because I think their layout and templates look much nicer, and making money from a blog was not of much interest to me.

I'm working on a draft of a new blog-post right now, actually. It's fun, sitting with my morning cuppa coffee and slice of sweetbread, and doing some writing and editing. It's a lengthy and detailed post, which will require a fair amount of proofreading and editing before I can publish it (probably in a week or two), but it's a fun way to spend the time, and to share my hobby with others.

I think you'd have fun blogging, W2R!

PS - About 6 years ago, I started a blog on blogger.com about RV'ing. I didn't get very far with it, and abandoned it after 5 rather lame posts. They were along the lines of, "I'd love to live in an RV, and here's a picture of one I like!" Another post was about some walkie talkies I had bought on eBay which I thought could be useful for RV'ing. I lost interest soon after. It's a seriously lame blog. The funny thing is that it has sat there for nearly 6 years, with very few page views and a grand total of 1 follower, and it has earned me $48! I thought about my other blog - the one I actually maintain, and figured out what it would earn me if it were monetized (which you can't do on Wordpress.com). The total wasn't a whole lot, but it would keep me in groceries, which is not bad considering I only add 1 new post about every 3 - 6 months!

Anyway, I'm not bothered about earning money on the blog - it's not the reason I do it.

I hope this has given you some food for thought. If nothing else, you could play around a bit on Wordpress.com, try out the different templates, and see what your blog would look like. Fun!

 

[purplesky]

If someone is different enough from the work-till-we-drop herd to put together assets totaling 25x annual expenses, they are probably scrappy enough to manage lifestyle and additional income sources later if things change. I doubt many of us cut from that cloth are too concerned about definitions that other people feel compelled to put on us, whether retired, semi-retired, not-really-retired, etc.


Sent from my iPad using Early Retirement Forum

I don't think the retirement definition is the real issue.

Its really about how scrappy and frugal do you want and need to be? For a lifetime. What is truly realistic ? True financial freedom where the math is solid.

The retireby40 couple are not going to stop their accumulation phase until they hit their comfort income producing spot .

They are approaching the $2 million area so 80k to 100kper year seems reasonable. Based on their working income and lifestyle. And they have been max savers making great income.

I really doubt this couple cares if people read their blog and don't agree with their definition of being retired.

 

[ExFlyBoy5]

I don't think the retirement definition is the real issue.

Its really about how scrappy and frugal do you want and need to be? For a lifetime. What is truly realistic ? True financial freedom where the math is solid.

The retireby40 couple are not going to stop their accumulation phase until they hit their comfort income producing spot .

They are approaching the $2 million area so 80k to 100kper year seems reasonable. Based on their working income and lifestyle. And they have been max savers making great income.

I really doubt this couple cares if people read their blog and don't agree with their definition of being retired.

I think he's made mention a couple of times about the "internet police" and not really giving a darn about it.

 

[Big_Hitter]

they clearly aren't "retired"

 

[kgtest]

I can't relate...is he retired, I know she isn't.

I've managed a few websites and it 'aint no picnic, especially if you have to upgrade web servers and patch security holes, then create the content yourself and manage the front end UI including the whole advertising process...because after all that hard work you wanna get paid.

I vision retirement without the need for a "passive" income stream which is what bloggers sometimes lie to themselves about...IMHO its an active job, nothing passive...people want to be engaged or you go stale.

Now he does make a great statement about the fact that Schaller's PE is a bit high which has historically related to lower returns, and then suggests the lowest annualized rate below 8.6% which is essentially the climax to his argument.

Based on that, then his title of the 25x is not enough would seem probable to me.

 

[purplesky]

I think he's made mention a couple of times about the "internet police" and not really giving a darn about it.

People on here are really sensitive about the retirement definition.