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Old 12-19-2007, 05:52 PM   #41
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The big expenses in life, INMHO, are interest payments (mortgage, car, boat loan interest), depreciation, and the cost of raising and educating kids.

Whilst you can make savings on day to day living expenses such as food, the savings on those things will pale into insignificance compared with interest, depreciation and the cost of kids.

As an afterthought, I have also minimised transactional costs pretty well by living in the same house for 25 years and not trading in the old wife at any time over the past 32 years. (After all, she was the best that I could get with the car that I had!)
I agree with you on the big picture. Although I would say the cost of toys, fashion, and eating out, can rival car payments for many Americans.

I also find that many very frugal people have an aversion to risk when it comes to investing. They'll be justifably proud of saving $20 with coupons and smart shop on groceries each week, but may have $50,000 CD at 3.5% in their local bank, instead of getting a 6% CD a Pen Fed, or better yet having a Vanguard stock index fund.
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Old 12-20-2007, 12:54 AM   #42
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Tonight on the Dave Ramsey TV show,
he said when the top 400 wealthiest
people were asked what was their
number one wealth gathering advice...
the vast majority said: Stay out of debt !
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Old 12-20-2007, 01:02 AM   #43
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Again, don't get me wrong, I squeeze value out of every dollar I spend. But I think accumulating adequate dollars so as to not have to squeeze too hard is a very good thing. And it's possible to learn to spend less as you go along in RE, while it's too late to accumulate more wealth.


It is not too late to accumulate more wealth in retirement.

I am retired... have a very modest income... but am still able
to add more money to my nest egg by living a comfortable,
frugal lifestyle.
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Old 12-20-2007, 01:11 AM   #44
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I also find that many very frugal people have an aversion to risk when it comes to investing. They'll be justifably proud of saving $20 with coupons and smart shop on groceries each week, but may have $50,000 CD at 3.5% in their local bank, instead of getting a 6% CD a Pen Fed, or better yet having a Vanguard stock index fund.
You can't calculate your true net worth... until you cash out of the tulips
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Old 12-20-2007, 12:27 PM   #45
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Be very aware of recurring payments, they add up! In retirement, a 4% withdrawal rate means you need 300x a monthly payment in savings. Take an $80/month cell phone bill. You'll need $24,000 in savings in order to safely pay for that $80 per month.
I am much more wary of recurring payments, even small ones, than I am with one-time purchases.
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Old 12-20-2007, 01:50 PM   #46
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It is not too late to accumulate more wealth in retirement.

I am retired... have a very modest income... but am still able
to add more money to my nest egg by living a comfortable,
frugal lifestyle.
Know what ya mean Helen. DW and I enjoy first class world travel, McMansions, luxury cars, fancy electronics, pricey entertainment, giving generously, and leaving the lights on when we're away. But, we do it all frugally, but comfortably, and therefore need next to no income. We also enjoy seeing our portfolio double annually.
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Old 12-20-2007, 02:00 PM   #47
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I agree with you on the big picture. Although I would say the cost of toys, fashion, and eating out, can rival car payments for many Americans.

I also find that many very frugal people have an aversion to risk when it comes to investing. They'll be justifably proud of saving $20 with coupons and smart shop on groceries each week, but may have $50,000 CD at 3.5% in their local bank, instead of getting a 6% CD a Pen Fed, or better yet having a Vanguard stock index fund.
I thought Pen Fed was for govt workers and military vets, am I wrong?

Banks make a LOT of money off their depositor's ignorance. One time I showed a guy who just rolls CD's how much money he could have had in a balanced fund for 20 years when compared to the average 5% rate he got on the CD's.........and there was a LOT of silence........
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Old 12-20-2007, 02:49 PM   #48
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I thought Pen Fed was for govt workers and military vets, am I wrong?
You can join if you're a relative of a vet, so I qualify because my Dad was USAF. Failing that, you can pay $20 to join some organization -- NMFA, I think -- and then join PenFed.

They're a top notch organization. I've had a second mortgage and a credit card with them and been very happy.

2Cor521
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Old 12-20-2007, 02:55 PM   #49
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whoops, double post.
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Old 12-20-2007, 03:05 PM   #50
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DW and I enjoy first class world travel, McMansions, luxury cars, fancy electronics, pricey entertainment, giving generously, and leaving the lights on when we're away. But, we do it all frugally, but comfortably, and therefore need next to no income. We also enjoy seeing our portfolio double annually.
I am intrigued by your ideas and wish to subscribe to your newsletter...







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Old 12-20-2007, 03:10 PM   #51
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I am intrigued by your ideas and wish to subscribe to your newsletter...
He will be happy to oblige, but you must understand that he only does it as a hobby to entertain him between trips to hang out with Princess Caroline.

All proceeds will be donated to the Ray Kurzweil Institute of Eternal Life.

Ha
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Old 12-20-2007, 05:23 PM   #52
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Know what ya mean Helen. DW and I enjoy first class world travel, McMansions, luxury cars, fancy electronics, pricey entertainment, giving generously, and leaving the lights on when we're away. But, we do it all frugally, but comfortably, and therefore need next to no income. We also enjoy seeing our portfolio double annually.

Didn't your mother tell you... mocking strangers is not nice.
Remember what the good book says about entertaining angels
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Old 12-20-2007, 06:15 PM   #53
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Didn't your mother tell you... mocking strangers is not nice.
Remember what the good book says about entertaining angels
Oh....... I'm sorrrrrry. Sometimes a little sarcasm just spills out!

DW and I, 19 months into RE, find ourselves to be more typical Americans than many of my comrades here on the Firecalc board. We have a very livable RE income, are enjoying RE a bunch and are grateful for what we have. But, we'd spend more if we could afford it. It seems like most things we enjoy, even outdoorsy things, cost money. And our FIRE portfolio all came the hard way, no inheritance, no big financial wins, no high paying jobs......just slow and steady over many years. So all this recent talk on the board (beyond this thread) where money comes easy and fun is cheap sometimes leaves me a little exasperated!

Helen, seriously, congratulations on enjoying retirement while spending modestly and even saving. We just can't do it........ Our withdrawal rate is conservative, and we're very disciplined about it, but if we had another $5k scheduled to spend in 2008, I'd be at travel web sites right now!

TickTock - I'd like to start a newsletter! I'd call it "Doing it the Hard Way!"
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Old 12-20-2007, 06:16 PM   #54
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POGO - we have met the enemy and we is them.

Hide from yourself - max every available tax deferred offered - preferably in broad based low expense index funds(500Index for me) plus a few taxible mutual funds - ON AUTO DEDUCT - don't look, don't fiddle or do any 'managing'.

Party till you puke (tongue in cheek - but I did live thirty years in New Orleans) - the creative soul(read cheap bastard) will find a way to boogie.

Dollar cost average over a long period of time - time in the market not market timing and all that there.

heh heh heh - isn't hindsight just wonderfull?
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Old 12-20-2007, 07:40 PM   #55
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I guess I made it to a comfortable FIRE through a variety of means including being "careful" about spending and staying out of debt. I would not say I have ever been frugal as defined by this board but I have seen some very tough times and still managed to get to FIRE.

I had a good job with a decent salary but I earned every penny of it. I lived below my means but was not frugal. I saved more each year and invested in many different places. I lost a bunch but I also made a bunch. I stepped up in housing and only lost once so far. Equity allows one to do that. I also moved some of this equity into "toys" which, don't make money but allow(ed) me to have fun despite some rough times in my life.

Being money wise is more the issue in my mind. Shop around for a good value; not just the lowest price. I still have many items I have purchased over the years because I bought the best I could afford at the time. Being cheap can actually cost you more in the long run when you have to replace an item over and over again. I usually keep cars 10 year or so and always pay cash for them. I shop every year on car and home insurance for the best value.

I pay more for satellite TV and other toys than the average Joe but I don't go out much so the monthly cost is acceptable to me. We do have a very nice RV we bought this year and while I know it is a hole in the road you throw money into, it is something we enjoy and I don't want to miss out on the things we enjoy because someday we won't be able to do them anymore.

We have a good income from our investments and we plan on spending a lot while we can do what we want to do. Soon enough we will be stuck around the house and not able to go and do things that make us happy. If we end up with a small portolio when we are 90 then who cares? I will most likely be dead before then anyway. We plan on living until we are 95 and our financial plan will allow it but we don't expect to ever see that age nor really want to with our various health issues.

Frugal is good if you don't have much income or if you want to stretch what you have for a long time. I don't care to be frugal...just money wise.
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Old 12-21-2007, 08:59 AM   #56
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You can join if you're a relative of a vet, so I qualify because my Dad was USAF. Failing that, you can pay $20 to join some organization -- NMFA, I think -- and then join PenFed.

They're a top notch organization. I've had a second mortgage and a credit card with them and been very happy.

2Cor521
My dad was also USAF. What do they need to verify that??
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Old 12-21-2007, 09:04 AM   #57
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FinanceDude, this tells you all there is to know about how to join PenFed CU...

https://www.penfed.org/howToJoin/overview.asp

(Full Disclosure: I posted this while wearing a playful smirk at the irony of providing a financial adviser with financial assistance. )
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Old 12-21-2007, 11:01 AM   #58
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FinanceDude, this tells you all there is to know about how to join PenFed CU...

https://www.penfed.org/howToJoin/overview.asp

(Full Disclosure: I posted this while wearing a playful smirk at the irony of providing a financial adviser with financial assistance. )
Shows you how much I invest in CD's.........well never.........plus, the fact I didn't serve has kept me from doing things such as this or joining the local VFW.......

Maybe it's a personal thing. Now ask me a question about UIT's or manged futures so I know I'm still an advisor..............
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Old 12-21-2007, 11:40 AM   #59
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Maybe it's a personal thing. Now ask me a question about UIT's or manged futures so I know I'm still an advisor..............
Hey, it's not personal! And you are anything you want to be...on the net!
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Old 12-21-2007, 02:08 PM   #60
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Hey, it's not personal! And you are anything you want to be...on the net!
Maybe I'll post my CRD number on here...........
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