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Going from Saving to Spending
Old 02-05-2011, 12:31 PM   #1
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Going from Saving to Spending

Forbes.com article by Mel over at Bogleheads.

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Changing a lifetime of habits doesn’t come easy. New retirees now need to switch gears and mentally prepare for perhaps 20 or more years of spending down their hard-won retirement fund.
Switching Gears at Retirement: Going from Savings to Spending Mode - The Bogleheads - Advice Inspired by Jack Bogle - Forbes
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Old 02-05-2011, 01:12 PM   #2
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It's all good advice, but it's amusing that Forbes is so desperate for content that they're reduced to having posters cut&paste the discussion board to their website.

Of course Forbes probably didn't pay much, if anything, for it.
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Old 02-05-2011, 01:19 PM   #3
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It's all good advice, but it's amusing that Forbes is so desperate for content that they're reduced to having posters cut&paste the discussion board to their website.
Hey, I resemble that remark (yes, Mel used one of my comments on how to use SPIA's in certain conditions, a few months ago)....

Heck, at least I made Forbes. I could have not done it without Mel's "help" ...
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Old 02-05-2011, 04:56 PM   #4
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Interesting link thanks.

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One point he made that really hit home was that after decades of saving, it can be hard to let go and reap the rewards. His advice was to use some of my savings to take a long trip,
This reminds me of my loose spending plan~ "If my cash reserves get too big, it's time to take a cruise."

We took one to Alaska a few years ago and, now that my bank account is screaming for relief, we are going on another 14 day cruise to the Panama Canal next month.
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Old 02-06-2011, 09:47 AM   #5
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Good problem to have! Enjoy.

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Interesting link thanks.



This reminds me of my loose spending plan~ "If my cash reserves get too big, it's time to take a cruise."

We took one to Alaska a few years ago and, now that my bank account is screaming for relief, we are going on another 14 day cruise to the Panama Canal next month.
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Old 02-06-2011, 09:59 AM   #6
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I"ve been doing well at spending more. I'll shell out about $1400 on piano lessons this year, our last electric bill was $73 instead of $50, and we've been running the furnace in the morning for a half-hour or so. We have crab every Thursday, and we've been going out to a great prime rib dinner at the local fancy casino restaurant frequently (admittedly only $25 total, 'cause it's the early bird special, and we split).
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Old 02-06-2011, 10:02 AM   #7
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I have admitted on this forum that going from saving to spending is hard. It's like driving a car where you immediately shift your foot from the accelerator pedal to the brake pedal. I choose to coast for a while. Have been working part-time which brings in roughly enough to live on, with no net savings in the last 4 years.

I am fortunate in that I enjoy my work, and have a bit of freedom in doing what I want. Working part-time like that is an option that I cannot see myself not exercising. Does that make sense to anybody?
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Old 02-06-2011, 10:07 AM   #8
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I"ve been doing well at spending more. I'll shell out about $1400 on piano lessons this year, our last electric bill was $73 instead of $50, and we've been running the furnace in the morning for a half-hour or so. We have crab every Thursday, and we've been going out to a great prime rib dinner at the local fancy casino restaurant frequently (admittedly only $25 total, 'cause it's the early bird special, and we split).
It's good to be a multi-millionaire, no Al?
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Old 02-06-2011, 10:27 AM   #9
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Receiving that last paycheck is a little intimidating. I had brief, fleeting thoughts such as "Will I survive? Will I starve to death? Was this a huge mistake?" The huge bounce-back of the stock market in 2010 was great reassurance and these thoughts are far behind me now.

One of the "Ah-ha! moments" of my first year of ER was when I realized that I can spend what I want, as long as it doesn't exceed what my plan says I can spend. If I have a little left over, that's OK - - there's nothing wrong with that. I can still put it in savings just like I would have done before ER. Maybe I will want to spend it on something special next year (or, life being as it is, maybe the plumbing will break! )
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Old 02-06-2011, 10:56 AM   #10
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Hey, I resemble that remark (yes, Mel used one of my comments on how to use SPIA's in certain conditions, a few months ago)....

Heck, at least I made Forbes. I could have not done it without Mel's "help" ...
You can add "quoted in Forbe's magazine" to your resume.
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Old 02-06-2011, 11:05 AM   #11
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The huge bounce-back of the stock market in 2010 was great reassurance and these thoughts are far behind me now...
Are we done with the roller coaster ride now? Is it all smooth sailing from here? This person with 70% equity would like to know, so he may be going all in.
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Old 02-06-2011, 11:13 AM   #12
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Are we done with the roller coaster ride now? Is it all smooth sailing from here? This person with 70% equity would like to know, so he may be going all in.
We made it through the biggest crash since the Great Depression, so that was a pretty good test and confidence builder. In my case, I made it through with a 45:55 equities:fixed asset allocation, and that served me well. Therefore I am maintaining the same asset allocation. We are never done with the roller coaster ride, but we have learned how to surf the waves of market volatility and still fare nicely.
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Old 02-06-2011, 11:19 AM   #13
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We made it through the biggest crash since the Great Depression, so that was a pretty good test and confidence builder...
I certainly hope so, but we really do not know. Having survived 2 crashes in a period of less than 10 years, I do not know if I have learned to surf these waves any better. What if the next one is really the rogue wave, the real tsunami?

Have I scared anyone yet?
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Old 02-06-2011, 11:39 AM   #14
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I certainly hope so, but we really do not know. Having survived 2 crashes in a period of less than 10 years, I do not know if I have learned to surf these waves any better. What if the next one is really the rogue wave, the real tsunami?

Have I scared anyone yet?
Not me. I have been poor before, and although I don't want to ever be hungry again, I *do* know how to survive. I suspect you do, too. Life is like a huge casino. It's all a game of chance, but with a decent asset allocation the odds are on our side.
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Old 02-06-2011, 11:53 AM   #15
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We made a trip to Lowe's (just a couple of months after DH retired) and looked at flowers for our garden. I was looking at $4 plants and he was looking at $7 plants. I found myself almost getting in a twist because of the $3 difference. After all, we were living off our savings.

We went nuts and bought the $7 plants.

Old habits of saving money are sure hard to break.
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Old 02-06-2011, 12:14 PM   #16
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Well, I retired a month ago and admit to having to toss habits to the wind in order to stomach the amount of transitional spending that we encountered.

I put aside money to cover this transition since I knew the cost of moving across country would be high. I managed to break even on exchanging one paid-off house for another but the household goods and cars were not worth shipping.

I saved for several years in buckets named "new car", "household goods", etc. The last couple of years I was saving almost half my take-home income. I fell in love with the money that was in these buckets. So I had to "break up" with my lover to provide us with the bare essentials once we moved. The temporary up in the market has helped me psychologically as the gains in our investments has minimized the total dollar amount. (My spreadsheet is showing that the car purchase has almost disappeared.)

But soon I will apologize to and reunite with my former lover and become the frugal person again. Will my DH be able to revert back? This sucks because I feel like I can make decisions on big spending but I can't give him the same rights over our joint money. Something seriously has gone wrong with my brain. Maybe I should go back to work.
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Old 02-06-2011, 12:31 PM   #17
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... our last electric bill was $73 instead of $50, and we've been running the furnace in the morning for a half-hour or so.
Al, you flagrant hedonist!

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Are we done with the roller coaster ride now? Is it all smooth sailing from here? This person with 70% equity would like to know, so he may be going all in.
All I know is that W2R has been going around with UncleMick whispering "Psssst: wheee!"
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Old 02-06-2011, 12:58 PM   #18
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I look at as good thing I'm pretty much a LBYM person to begin with (that approach set me up so I could FIRE in the first place). Yet, there was/is some adjustment period. I remember the first weeks after retiring and closely going over my budget of what I really need or don't need. Chopping off expenses that I regularly paid for without thinking (monthly cell phone bills, monthly cable bills). I did "splurge" on a present for myself of a solar watch that I really liked -- since btw, is replaced with another one.

I still find myself going through the evaluating process of when I spend, I still spend on stuff I want, but is it really needed. For example, I was over at Menard's the other day and they had lots of big flat screen TV's. I'm assuming they were gearing up for the superbowl sale. They must have had extras. Had, I been still w*rking, I may have looked to buy low at this time. But since I've FIRE'd I throughly enjoy my flat screen (though a bit bulky) TV I got at Goodwill for only $25 .
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Old 02-06-2011, 06:22 PM   #19
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enjoy my flat screen (though a bit bulky) TV I got at Goodwill for only $25 .
Show off!!!
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Old 02-06-2011, 06:30 PM   #20
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You have a color TV? I am still watching my B&W, using the gummint provided converter to tune to off-the-air HDTV.
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