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Old 02-03-2011, 09:11 PM   #61
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Originally Posted by REWahoo View Post
I'm not saying most of us aren't frugal, but your belief "anyone here is at heart a big cheapskate" is incorrect - as in dead wrong. Check out the threads on owning multiple homes, traveling to exotic places and buying all the latest tech toys. Doesn't sound cheap to me...
Right, but you're spending less than you could. You might be spending on all those things, but you doing it with an eye towards doing it with as little cash outlay as can be done without interfering with the enjoyment of the over all endeavor. I myself go on 2 month ski vacations - but I'm sure most folks would think that they would need to spend more than $3K to do so (actually, I can do a 2 month trip is a little as $2K if I really wanted cheap out.)

The classic American financially toxic culture is to spend as much as possible as the bank will lend. Therefore, anyone who does not do such is de facto a cheapskate.

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Old 02-03-2011, 09:46 PM   #62
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Originally Posted by swampwiz View Post
I'd say that anyone here is at heart a big cheapskate. Really - it's the only way someone could make his way through our financially toxic culture to actually build up a nice nest egg before its time.
I think you're missing the fact that there's more than one path to ER. Sure, LBYM works more frequently than any other method, but others have been in high-income careers (law, medicine) while others have literally struck tech or Internet gold with stock options or startups.

Jeff Yeager got away with titling his book "Cheapskate", but I think the term is a shade pejorative in most connotations. It implies behavior like not buying the next round of drinks or not tipping the waiter. So I'd go with "frugal" or "LBYM".

Originally Posted by swampwiz View Post
I've never really understood the idea of empty nesting downsizing. Sure, I understand moving out away from an expensive close-in neighborhood to one out in the sticks that cheaper, etc., but not a pure downsize just for the sake of downsizing.
Do you have kids?
If you have kids, were you able to persuade them to move out?
If they moved out, did you see a reason to tempt them to move back home?
Do you want to have your progeny (and their progeny) "sharing" your personal space for the rest of your (surely shortened) life?


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Old 02-03-2011, 11:47 PM   #63
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Originally Posted by swampwiz View Post
I've never really understood the idea of empty nesting downsizing. Sure, I understand moving out away from an expensive close-in neighborhood to one out in the sticks that cheaper, etc., but not a pure downsize just for the sake of downsizing. As REWahoo has mentioned, sure after Generation +1 moved out, there was no need for more room, but then came Generation +2. And in any case, it seems that the costs of moving (i.e., moving expenses and real estate commission, both in cash outlay, but also in time and pain in the a--) is big amount that would take a long time of saving a few bucks here and there in mortgage or opportunity cost, and taxes and utilities to make up.
Well it depends. The house we are trying to sell roughly costs us $6k a month to live there and that assumes no particularly extreme repair costs (it includes say a $2k well repair cost but not replacing the septic system or the roof that is thankfully only a few years old). It is almost 4500 sf. The property is high maintenance (lots and lots of trees, pool). Taxes are relatively high due to the value of the house. Electric bill is high given its size.

And, once we are totally empty nest we will literally have no use for the upstairs at all...not even for guests as the property also has a guest house. As lovely as the house is and has useful as it was for the past several years (there were 6 of us living in it when we moved in), I just can't justify the ongoing cost and don't want the maintenance.

The land we own is 1 acre, few trees, and much lower maintenance and in a location that while not as beautiful I prefer. We plan to build a roughly 2500 sf house. Due to the fact our money is almost all in tax deferred accounts we will probably take out a mortgage on it. However, the house will be far more energy efficient and will have much lower utilities, taxes and ongoing maintenance. The costs will be less than a half of what we are spending now.

From our point of view, we only will have so much money during retirement. It just is not important to us to spend it on a house that is way bigger than we need or want. If we loved the big house and wanted to keep it then we could rearrange our budget to do it. But I don't really want to do that.
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Old 02-04-2011, 04:01 AM   #64
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Guess a dream home was always more of a means to end for us. I got tired of pullin stuff out so one SUP/sail board, 2 surf boards, 3 kites, 2 kiteboards, 5 crab pots, and one classic daysailor not shown. The wigwam itself was an afterthought
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Old 02-04-2011, 04:45 PM   #65
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Targa, nice sunset!
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Old 02-04-2011, 04:51 PM   #66
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For some schadenfreude, here's a story of some people losing their "dream homes" to foreclosure. It would interest you to know that the list includes the well-known actor Nicholas Cage and Veronica Hearst, the widow of newspaper heir Randolph Hearst and stepmother of Patricia Hearst, who was kidnapped by left-wing guerrillas in 1974.
"Old age is the most unexpected of all things that can happen to a man" -- Leo Tolstoy
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Old 02-04-2011, 05:44 PM   #67
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Do you have kids?
If you have kids, were you able to persuade them to move out?
If they moved out, did you see a reason to tempt them to move back home?
Do you want to have your progeny (and their progeny) "sharing" your personal space for the rest of your (surely shortened) life?[/QUOTE]

One thing about staying flexible is that some times it works out for everybody. Our huge house would be something that DW and I would consider selling even in this lousy market. However as time goes by it is a great home base for the family. Our oldest son moved back, paying rent and keeps the grounds in shape. Everybody else converges here for holidays and vacations. So much for the hard rules we made a few years ago.
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Old 02-05-2011, 02:26 PM   #68
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I'd like to add my experiences with home buying.

During the home shopping process, it is very easy to convince yourself you are interested in a larger home with additional amenities. I fell victim to this twice, as I bought too much how the first time, sold that and bought even more house (4750 sq ft). The entire buying process is filled with enablers, especially in my case where my parents convinced me homes are good investments. Not to mention realtors, etc.

Also while home shopping, I found myself envisioning all the entertaining I would be doing, but this is just not the real outcome. I even knew better the second time around, but still bought the place with the bar and entertaining spaces.

In the back of my mind, I always felt that having a large mostly empty house was a drag on my conscience. Recently, having stuffed my face into every financial planning and investing book worth reading, I've clearly made wrong decisions. I do not have regrets, because I will not be tempted by these things again in my life, so I consider it a lesson learned. I think without having gone through the experience of buying too much, you never really know the difference.

Another thing to keep in mind with home buying is that there have been many studies that relate home value to your spending habits. You will be largely better off living in as little a house as will make you comfortable. I myself and looking now at homes around 1500 - 2500 square foot, and even that is too much. I do not have kids, but I enjoy guest rooms for company. The funny thing about all of this is that people around me will probably think my financial condition has worsened, which couldn't be further from truth.

I know it is going to feel better to wake up everyday and know that I have more money working for me in the markets, and less tied up in an oversized home.

Recently my brother and sister-in-law purchased a builder home for $800k, and their settlement date is nearing. They are already stressed out about the purchase, and believe that they miscalculated their financial abilities. Although not initially the plan, they have resorted to borrowing from 401k just to make the down payment. It is a sad story unfolding, but they are just going to have to learn the hard way. At this point, I don't want to stress them out further or try to talk them out of it, their mind seems set. It is none of my business, I need to just watch on the sidelines.

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