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Old 10-04-2012, 02:04 PM   #21
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Lake Austin flows by my land. So endless supply of H2O.

DW always wanted to keep at least 2.5 years of living expense in cash, and I always laughed at it. But seeing how much everybody here has readily on tap, I may agree on that.
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Old 10-04-2012, 02:24 PM   #22
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While I/DW are both retired and are pre-pension (she) and pre-SS (both) we jointly hold between 3-4 years of gross income (includes taxes due on pre-tax withdrawls). This is down from 4-5 years ago when I first retired, but now I/we feel comfortable with our current cash holdings. Of course, this does not include any bond holdings, which a lot of folks consider the same as cash.

As to the amount of cash? That's a much different story. In seven month's, DW's two small pensions will begin, which will reduce the amout of cash she actually holds. A year later, it will be reduced again as her SS starts and at the same time my cash will be reduced since I'll be claiming 50% of her SS.

The biggest reduction will be in just over five years, when my age 70 SS starts (assuming I live that long).

Regardless of where we are in our income streams, we will always have that 3-4 year target of cash (e.g. income) available to overcome any flux in the market. Today, it is a lot (in "volume"). After all our income sources come on-line, it will be greatly reduced.
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Old 10-04-2012, 02:25 PM   #23
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Not to brag here, but we have always had a lot of cash on hand, which is not really a good thing. Please let me explain.

From when we were 30 up to 45-year old, we were both working hard at our jobs and busy raising children too. And being LBYM'ers, we always underspent our income, though our pays were good but never that outrageous. And being a cautious guy, I did not want to put too much into the market, yet was too busy to even look into other investment opportunities.

So, while we were toiling our asses off, the money kept building up in the checking account, even though we already maxed out 401Ks, funded IRAs, etc... At the highest point, I had one year of the current living expenses in the checking account. And this was 15 or 20 years ago, when that money was worth a lot more. I cannot even tell what our expenses were back then. I simply did not know. As we LBYM'ed, there was never a need for budget! I only learn my budget recently, because I want to be at 3.5%WR.

All that money could have been invested better. If only I had paid more attention to my money than my work at the megacorp, I would do so much better now.

Anyway, my wife who has always taken care of the bills is used to seeing a lot of money sloshing around in the checking account. And now, since I have learned to move it at least to money markets or I-bonds to earn a bitty bit more, she does not get to see that cash. I keep having to assure her that I can transfer money for monthly expenses with just a click of the mouse.

I have been trying to tell my children that it is so much easier to sleep at night if one practices LBYM, but I do not know if they will follow.
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Old 10-04-2012, 02:31 PM   #24
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I keep about 2 years worth of living expenses. Replenished at start of year.
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Old 10-04-2012, 02:52 PM   #25
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Quote:
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Isn't it a little early to be hitting the sauce?
If your referring to med's, no.
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Old 10-04-2012, 03:01 PM   #26
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If your referring to med's, no.
Speaking of liquid meds...we have more this afternoon than we did this morning. Took a trip to the liquor store to replenish whiskey, tequila and rum. Had to buy a bottle of Bailey's while there. It's liquid but a bit on the thick side...

As far as the financial side goes, we retired on Total Net Funds only (which are obviously liquid) with no debt. Total Net Worth is a different story...just makes me grin to look at it.

To quote unclemick...heh heh heh
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Old 10-04-2012, 03:47 PM   #27
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No cash, 300 bottles of wine.
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Old 10-04-2012, 04:54 PM   #28
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Cash - enough for roughly 5 years , total liquid investments that I could sell on any given day- probably/maybe more than I'll need.
Not to brag but on top of that I have 11 cans of Miller Lite in the fridge.
Bad day - I'm down to 9 cans
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Old 10-04-2012, 05:10 PM   #29
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Not to brag but on top of that I have 11 cans of Miller Lite in the fridge.

Now that's what I'm talkin' about!
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Old 10-04-2012, 05:13 PM   #30
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Lake Austin flows by my land. So endless supply of H2O.
I used to really enjoy fishing & boating on Lake Austin. I lived in Austin & Bastrop through all of the 80's & most of the 90's.
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Old 10-04-2012, 05:28 PM   #31
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Probably 1/2 year's living expenses in cash. Maybe less - We have been going through a lot of house and rental repairs of late.
Liquid: Mr. A's 100-bottle wine collection, which we consider a "liquid investment" - let me explain: His upper limit is $10.00 per bottle and has been for years - he researches the "best buys" in wine magazines, articles, etc.
As soon as we consume 15% of it, he replenishes. We just finished off the 2006 reds. There is a significant quality bump when inexpensive wine is kept in the dark for 6 years...thus, a "liquid investment"

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Old 10-04-2012, 05:44 PM   #32
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Six months cash. Only about a week's worth of liquid (beer).
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Old 10-04-2012, 05:51 PM   #33
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The 'bond component' of our AA is in 'cash equivalents' rather than bonds. When our bonds matured we didn't buy more. At today's rates, I'd rather use CDs. Anyway, it's about 10 years of expenses.
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Old 10-04-2012, 05:51 PM   #34
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Hmm... Aging inexpensive wine to improve its quality... Sounds like a worthwhile and rewarding pastime for a retiree.

Lemme see... I usually drink 2 bottles per week. To age them 6 years, that's 52*2*6 = 624 bottles. I can keep them up in the boonies home, where it's cooler.

Heh heh heh... So many things to do... Heh heh heh...
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Old 10-04-2012, 06:12 PM   #35
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As far as cash/near cash is concerned about 8 years of living expenses ( I consider my short term bond fund as being near cash). As for liquid assets, my well is only 25 gpm which seems to be ample for our needs but my neighbors well is 100 gpm so I guess he is the wealthier one by far (although he's still working ?).
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Old 10-04-2012, 06:13 PM   #36
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We drink ~ 1 bottle per week (use box wine for sangria, etc.). Somehow it has evened out to 100 bottles of various vintages at any given time; naturally, we drink the oldest first, and are into our 2007's now. Some weeks we drink newer whites instead, so the reds "pile up" so to speak.

If the boonies house doesn't get too hot in summer, or has a root cellar, you've got a great stash spot...just make sure nothing shows where tramps, etc. might discover it. You will go into your carefully preserved "wine cellar" and find only empties!

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Hmm... Aging inexpensive wine to improve its quality... Sounds like a worthwhile and rewarding pastime for a retiree.

Lemme see... I usually drink 2 bottles per week. To age them 6 years, that's 52*2*6 = 624 bottles. I can keep them up in the boonies home, where it's cooler.

Heh heh heh... So many things to do... Heh heh heh...
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Old 10-04-2012, 06:22 PM   #37
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Boonies home is up at 7,000 ft. Cool in summer, and cold in winter. Even the closet under the stairs stays cool year-round. But 50 cases of wine take a bit of room. Imagine if my wife also drinks (she's a teetotaler). Maybe hide them in the basement, which is not too easily accessible through a trap door.

About tramps discovering the stash, oh man! I have been very discreet about my hideout place "up in the mountain", and will have to be more secretive, now that the whole world knows about the booze deal.
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Old 10-04-2012, 07:08 PM   #38
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We intend to keep at least two years worth of living expenses in cash/near cash at all times once we retire. Currently, we have about three years.

As far as serious liquidity is concerned, I have built up a small collection of Bordeaux, Burgandy and Rhone wines kept in a bonded warehouse in the UK. I keep telling DW that they are an investment in future drinking and help to diversify the portfolio.
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Old 10-04-2012, 07:08 PM   #39
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Lake Austin flows by my land. So endless supply of H2O.

DW always wanted to keep at least 2.5 years of living expense in cash, and I always laughed at it. But seeing how much everybody here has readily on tap, I may agree on that.
Not sure about Lake Austin, but the LCRA has started enforcing permits on Lake Travis for drawing water from the lake. When all is said and done, it's no longer less expensive to utilize lake water for irrigation purposes. I have a bit of a problem with that, because I've given LCRA an easement to store water on my property (thus "lakefront") but I can't sip a little thru a straw for my lawn?

Sorry to stray off topic........
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Old 10-04-2012, 07:16 PM   #40
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Originally Posted by LakeTravis

Not sure about Lake Austin, but the LCRA has started enforcing permits on Lake Travis for drawing water from the lake. When all is said and done, it's no longer less expensive to utilize lake water for irrigation purposes. I have a bit of a problem with that, because I've given LCRA an easement to store water on my property (thus "lakefront") but I can't sip a little thru a straw for my lawn?

Sorry to stray off topic........
There'a a topic?

I've thought about starting a small wine "cellar", but would need a wine fridge. No basements around here.
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