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Old 01-03-2014, 12:28 PM   #21
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When I was in my 20's and 30's I think the goal of achieving "rich" status was more important then achieving happiness because I thought money would make me happy. This changed in my 40's after realizing that money makes life easier but not happier. For me (now 50 w/ no kids) material stuff weighs me down and acts like anchors. I do not have $5M and if I did I think the only thing I would buy is a second house to get out of AZ during the summer time .. and I probably drive newer cars since all of ours are >10 old. I do not think I would like traveling more then we do now. Having just turned 50 I'm finding that I want to simply my life and having more stuff seems to complicate things. I would not turn down $5M if I won it in a lottery, but my goal is not to build more wealth in my retirement years. Only goal is to be happier then I was working at a MegaCorp. FIRECalc and other tools say we are good with a AA of 65/20/15....
True. If you not worried about money, you'll find something else to worry about. It could be worries about the choices your children would make, your health, whether you'll be around to enjoy your wealth, etc. Human beings tend to replace one worry with another. I've seen people with no money happy with whatever they've got and I've seen people with money terribly unhappy and always searching for the next adrenalin rush. It's just human nature.
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Old 01-03-2014, 12:34 PM   #22
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True. If you not worried about money, you'll find something else to worry about. It could be worries about the choices your children would make, your health, whether you'll be around to enjoy your wealth, etc. Human beings tend to replace one worry with another. I've seen people with no money happy with whatever they've got and I've seen people with money terribly unhappy and always searching for the next adrenalin rush. It's just human nature.
Supporting this is that there seem to be more ready smiles on third world faces than walking down any big city US street.
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Old 01-03-2014, 12:40 PM   #23
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Supporting this is that there seem to be more ready smiles on third world faces than walking down any big city US street.

That is absolutely true. Take it from me who have been to many third world countries. It's all about expectations. If you don't expect much, you don't have much to worry about.
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Old 01-03-2014, 12:58 PM   #24
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I spent a good deal of my working life in manufacturing - smiling was considered a sign of insanity or at least one needed to be checked out for a possible concussion. 'Smile - it scares the hell out of them' was an oft used cliche.

In ER I still practice the sheer joy of whining. Remember it's "Life, Liberty and the Pursuit of Happinese." I also practice catch and release.

heh heh heh - 60/40 1970 and 60/40 now - give or take. My old Pals at the IRS starting this month are taking their cut and giving me my RMD remainder to spend or hoard - as strikes my fancy.
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Old 01-03-2014, 01:09 PM   #25
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Apparently your definition of "has won the game" differs from that of others. My definition is having all the money/financial assets that I will ever need or want. In this case, why risk it for more (than you ever need) even with a pension that might be sufficient to fund your normal expenses. Further, there's no guarantee that a pension (either public or private) will always be there.

my 2 cents.
Yes, but I enjoy "playing the game" Agree there are virtually no iron clad guarantees, be it pensions, dividends, bond interest,etc. I am confident that the risks I have assumed are not too large. My WR is quite conservative. Besides I can think of lots of things to spend more money on even though I could easily spend less. Not the least of which is giving it away. Bill Gates and Warren Buffet are still mostly in equities I believe.
Equities got me where I am financially and I am very comfortable with equity risk.
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Old 01-03-2014, 01:18 PM   #26
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That is absolutely true. Take it from me who have been to many third world countries. It's all about expectations. If you don't expect much, you don't have much to worry about.
It is also cultural. Some cultures show their emotions more openly than others. Having said that, I think that once there is shelter, safety & food, money has a diminishing return on happiness.
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Old 01-03-2014, 01:21 PM   #27
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I went to visit my family for the holidays and this trip reminded me how rich we are already (a fact that sometimes gets lost after hanging out too much on ER.org). I make more money sitting on my tush all day than most people make while working 40+ hours a week at a job they loathe. That's already an incredible luxury that I intend to protect at all cost. Would it be fun to be even richer? Sure. But not if it means risking what we already have. We have no heirs and I do not feel compelled to potentially jeopardize my own financial wellbeing in order to make an outsize gift to some charitable organization down the road. And while we can afford many luxuries on our current income, we hardly spend any money on such things. So I doubt we'll develop a sudden taste for luxury later on. No, getting richer would only serve to make us feel even more financially secure, by lowering our WR.
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Old 01-03-2014, 01:56 PM   #28
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I went to visit my family for the holidays and this trip reminded me how rich we are already (a fact that sometimes gets lost after hanging out too much on ER.org). I make more money sitting on my tush all day than most people make while working 40+ hours a week at a job they loathe. That's already an incredible luxury that I intend to protect at all cost. Would it be fun to be even richer? Sure. But not if it means risking what we already have. We have no heirs and I do not feel compelled to potentially jeopardize my own financial wellbeing in order to make an outsize gift to some charitable organization down the road. And while we can afford many luxuries on our current income, we hardly spend any money on such things. So I doubt we'll develop a sudden taste for luxury later on. No, getting richer would only serve to make us feel even more financially secure, by lowering our WR.
+1. I happened to compare my average annual investment income from the 5 years I have been ERed versus the wage income from the 5 years I worked part-time (20 hours a week, not 12 hours) and saw that they were the same, around $44k. This means I have enough money to support my current ER lifestyle the way I did when I was working but without having the ordeal of working especially the awful commute (brought home, once again, by the recent snowstorm in the NY-NJ area I do not have to deal with any more)!

One big requirement of ER was that I could maintain my day-to-day lifestyle which does not include any really extravagant things but I know that if I want to splurge on something once in a while I can do so without fear of busting my budget.
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Old 01-03-2014, 02:21 PM   #29
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I want to be both safe and rich.

I consider myself relatively safe in that I have the three pillars of (pending) retirement assets: pension, investments, and social security. Because I am very frugal, any one of these assets will be able to independently cover my needed retirement expenses and much more. If I retired today at age 54, my pension would provide about 5 times my expenses (ignoring income taxes), my investments would provide about 6 times my expenses (at a 4% SWR), and social security would provide about 2 times my expenses beginning at age 70. These ratios should continue to rise since I plan to remain in the accumulation phase after retirement. So my safety margin is large, baring some sort of economic armageddon.

While my investments are not 100% in equities, they are 70/30 with no immediate plans to change. The most likely scenario is that I will live off my pension for the rest of my life and let the investments "ride." In addition, I will continue to add new money to my investments using unspent pension and eventually unused social security funds. So I should be rich using the definition provided by the OP.

While money may not buy happiness, having a sense of financial security is and will continue to be a big step in that direction. Having the option to splurge on big activities (e.g., summit Mt. Everest, sub-orbital flight) will bring satisfaction regardless of whether these activities are actually realized. I will have no regrets about leaving the money to charity when I die.
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Old 01-03-2014, 02:36 PM   #30
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I went to visit my family for the holidays and this trip reminded me how rich we are already (a fact that sometimes gets lost after hanging out too much on ER.org). ............
I also visited family over the holidays and was similarly reminded. I also couldn't help but notice that they spent every extra dime they had and will never enjoy the freedom that I earned by being frugal.
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Old 01-03-2014, 02:46 PM   #31
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I can predict that the responses will be typically " don't need any more money, very happy spending what I do". or "money doesn't buy happiness and i am already very happy". These views are valid and certainly reflect the LBYM mind set prevalent on this site.
Me on the other hand already meet your wealth criteria several times over nevertheless am 100% in equities if you ignore our pensions. Basically we are still playing the "game" that some people would say we have already won.. So I can say that I agree with you! I think.
Yes we do, in fact I was thinking of you when I wrote the post. IIRC soon after you joined the forum somebody asked you this question. You already won game why are you keeping playing? Nords would say why are you running up the score?

Correct me if I am wrong, while I know you accumulated much of your wealth from the sale of business you owned. I suspect that you've also made substantial amount of money in the market?

I understand the reasoning behind the question. But I also understand why coaches run up the score, unless it against a clearly overmatched team. It is more fun to win big than just win. Also if you are up 28-0 in the third quarter, you are very likely going to win the game. I don't know the statistics but I suspect that more passing teams lose the game by switching to a running game at that point than lose cause their star QB throws lots of interception.

The equivalent in investing is becoming too conservative. Looking at FIRECalc roughly as many aggressive portfolio fail in the 30s due to the stock market crash as conservative investments fail in the 70s and early 80s due to the ravages of decade worth of high inflation.

To me once you get to 100% on Firecalc, a more aggressive portfolio is like spend $5 a week playing the lotto. If you lose the $5 a week isn't going to matter. Most of the fun of playing the lotto is dreaming of winning. If the great depression hits tomorrow Danmar or myself isn't going to be starving.

A large part of that is because we did invest aggressively.
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Old 01-03-2014, 03:19 PM   #32
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I want to be both safe and rich.

I consider myself relatively safe in that I have the three pillars of (pending) retirement assets: pension, investments, and social security. Because I am very frugal, any one of these assets will be able to independently cover my needed retirement expenses and much more. If I retired today at age 54, my pension would provide about 5 times my expenses (ignoring income taxes), my investments would provide about 6 times my expenses (at a 4% SWR), and social security would provide about 2 times my expenses beginning at age 70. These ratios should continue to rise since I plan to remain in the accumulation phase after retirement. So my safety margin is large, baring some sort of economic armageddon.

While my investments are not 100% in equities, they are 70/30 with no immediate plans to change. The most likely scenario is that I will live off my pension for the rest of my life and let the investments "ride." In addition, I will continue to add new money to my investments using unspent pension and eventually unused social security funds. So I should be rich using the definition provided by the OP.

While money may not buy happiness, having a sense of financial security is and will continue to be a big step in that direction. Having the option to splurge on big activities (e.g., summit Mt. Everest, sub-orbital flight) will bring satisfaction regardless of whether these activities are actually realized. I will have no regrets about leaving the money to charity when I die.
I don't know if should envy (for having more than enough) or pity you (for "leaving the money to charity when I die"). But, hey, if you are contend with it, nothing wrong with it.
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Old 01-03-2014, 03:23 PM   #33
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I don't know if should envy (for having more than enough) or pity you (for "leaving the money to charity when I die"). But, hey, if you are contend with it, nothing wrong with it.
One doesn't know how much money they need until they are dead. I'd love to be able to be able to afford in-home nursing care vs being stuck in some nursing home, should I need it. If I leave money on the table, so be it.
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Old 01-03-2014, 03:42 PM   #34
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One doesn't know how much money they need until they are dead. I'd love to be able to be able to afford in-home nursing care vs being stuck in some nursing home, should I need it. If I leave money on the table, so be it.
Nothing wrong with that. I will do the same. But in Shawn's case, he looks like he can cover that (in-home nursing care and other unexpected things) and then some (much, much more). But, hey, I understand that for some people, accumulating wealth is the goal in life.
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Old 01-03-2014, 03:59 PM   #35
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Nothing wrong with that. I will do the same. But in Shawn's case, he looks like he can cover that (in-home nursing care and other unexpected things) and then some (much, much more). But, hey, I understand that for some people, accumulating wealth is the goal in life.
Yea, if SS provides 2x his expenses, he is living pretty inexpensively.
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Old 01-03-2014, 04:09 PM   #36
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One of my uncles who is universally disliked will boast (when he's drunk) about having $600k cash hoarded in his house. That same man will complain about his DD's wedding guests b/c some of them didn't bring enough cash gift to cover his food/person expense. And the guests are his own brothers and close relatives. He's a real life Mr. Scrooge and an example to many of his relatives on what NOT to do.
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Old 01-03-2014, 04:15 PM   #37
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I want to live to be old. Rich would be a nice side benefit.

Steve Jobs died at 56
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Old 01-03-2014, 04:21 PM   #38
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One of my uncles who is universally disliked will boast (when he's drunk) about having $600k cash hoarded in his house. That same man will complain about his DD's wedding guests b/c some of them didn't bring enough cash gift to cover his food/person expense. And the guests are his own brothers and close relatives. He's a real life Mr. Scrooge and an example to many of his relatives on what NOT to do.
Yep. Drinking to excess isn't cool.
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Old 01-03-2014, 04:31 PM   #39
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I do not think I will change my AA. Perhaps I will make use of ETFs more in the future than individual stocks, but why do I change something that has worked for me up to this point, even after a couple of bad recessions?

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... One doesn't need $5M to spend $100k...
I do not have $5M right now. But my expenses can go up to $100K easily if I do not watch out. I have spent more than that when my kids were in school, but back then I still had part-time income.

And I want more like $10M. I like to see that extra digit. Hope I will live long enough to see that. That extra digit would just please this scroogy guy by showing up on his Quicken screen.

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...
Correct me if I am wrong, while I know you accumulated much of your wealth from the sale of business you owned. I suspect that you've also made substantial amount of money in the market?...
Sorry but you are wrong.

My superior memory tells me that Danmar was a CFO at a bank, and got rich from mucho stock options.
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Old 01-03-2014, 04:54 PM   #40
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One doesn't know how much money they need until they are dead. I'd love to be able to be able to afford in-home nursing care vs being stuck in some nursing home, should I need it. If I leave money on the table, so be it.
I am also a strong believer in this approach. As I've been accumulating, there have been a few times when my expenses seemed to take a quick jump. Whether it was a simple change in lifestyle, or inflation in something my spending pattern was especially sensitive to, it does make me cautious. Should such an inflation shock happen while I am retired, I'd want to be able to absorb it in stride. Likewise, having options for in-home care, other household help, increased need for transportation help or other services I might need as I age, are all attractively possible if I have a portfolio with enough more than my current basic living expenses requires.

I like the idea of easing up once I have won the game, but since so much of the game will be played after I retire, I do want a very comfortable lead before I stop playing.
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