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Old 01-06-2015, 04:04 PM   #61
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MMM is pretty good and the blog is well written if you like that style. He's pretty on par with Kiyosaki or Orman, but that is fine too if it helps.
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Old 01-06-2015, 04:21 PM   #62
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I like the blog, but take everything in it with a grain of salt.
This puzzles me. Why like something that is supposed to be informational, if the information content is so suspect that you must take it with a grain of salt?

Why not spend the time learning about WW1, or physics, or what women expect in a relationship? Any of these things can be useful

Ha
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Old 01-06-2015, 05:21 PM   #63
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I have trouble choking down too much of this "I live on acorns and tree moss" lifestyles when they are clearly making good money on blogging and book sales. After a point, describing opportunities and other approaches becomes more useful and justifies reading their blog. I am much more impressed when someone says "I took a leap of faith and retired. Now, after years without a real job I am still in great financial shape." Here's a link to John Greaney's latest article.

20-Year Update: Retired at Age 38 in 1994 -- Lessons Learned
Thanks for the link. I've got out of the habit of looking at Intrcst (Greany) page, since he updates so infrequently. He is after all retired...

May 1, will mark the end of my 15 years in retirement. I guess I should do a similar write up.
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Old 01-06-2015, 05:37 PM   #64
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2) The cost sharing feature of ACA for silver plans gets rid of a large portion of the out of pocket costs. It can bring a $6000 max out of pocket down to $1200 or even lower. Most people do not really understand cost sharing they only are thinking about the subsidy for the premium.
The scaling of ACA subsidies for those with low income is very appealing for ER folks. It has the nice property that if one needs to cut back due to bad market returns, the amount of subsidy increases to the point where premium + max OOP is basically nothing.

However, trying to ER on a 20k/year budget is betting that the subsidy won't change for the rest of your life. This is not something I'd care to count on as an early retiree. Even something as simple as an asset test would sink you.

Another issue is that some health conditions might require additional expenditures not covered by insurance. For example, the particular prescription drug that works best for you isn't covered (happened to my wife), you break your leg and can't drive/walk/bike to the grocery store, the specialist you need to see is 200 miles away, etc.
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Old 01-06-2015, 05:51 PM   #65
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You bet on everything, so why not bet on the ACA subsidy and cost sharing remaining substantially the same throughout your retirement?

When you realize that all things in life are a gamble, even life itself, then you place your bets and roll.

I assign probabilities to things, and the probability that a major social program which benefits millions of voters would get drastically changed is quite low IMO. None of the other programs have changed drastically (age bump here and there for SS, plus some taxing of benefits).

Asset testing would be a nightmare and unpopular as hell.
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Old 01-06-2015, 05:57 PM   #66
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I occasionally enjoy MMM. I really don't think most people want to live on that little, but I think overall his message is pretty good. Try to live a simple life and care about something other than yourself. What I take out of it is decide what is important to you and make it happen. I like his case stories which give advice based on peoples situation, sometimes his advice is extreme but they asked his advice, he didn't seek them out to give it. While he can come across as smug he seems to genuinely want to make the word a better place. this is seen in his advocacy for greener living. I don't want to pinch pennies but I think you can benefit from his blog and certainly can find useful information in the forum. Decide for yourself what works for you, not everyone is as fortunate as most of us are in this forum.
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Old 01-06-2015, 07:09 PM   #67
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In my view, MMM is kind of like Dave Ramsey - both have really awesome advise and encouragement to live a thrifty/fiscally sound lifestyle in the here and now, in order to have fiscal independence and strength down the road.

However, MMM's trumpeting of the 4%SWR is just as dangerous as Dave Ramsey's "you can save and assume 12% annual mutual fund returns" - or, perhaps even more dangers than Dave Ramsey. Also, IMO, MMM is more of a snake-oil salesman in his story not quite being a complete picture and adding up (for example, things like his Hawaii vacation where he provided construction labor in exchange for a place to stay - which, as one person pointed out, is in violation of IRS rules and regulations).

MMM has MANY young people on his forum drinking the 4% SWR kook-aid without realizing what exactly is in the brew, and convinced with unshakable faith that anyone can retire on 4% in their 30s on a budget of $12k-$15k/year, and many are locked in on doing just that. But what MMM (and even MMM's wife) have failed in is abusing the 4%SWR references.
If there were ever specifics listed on how this 4% was all going to work out initially, I never found it. Buy a $400K house and have one rental and retire forever? Or have one paid off house and $400K in the stock market and retire forever in your 30s with a house to maintain and a child to support and no concerns about of sequence of returns risk?

So how much house did he have and how much in investable assets and what were they invested in when they were both retired in their 30s forever? (This was pre-ACA as well).

I think those numbers are really key to make a credible retirement plan but I never found any details on that. So maybe I am just not a careful enough reader and I didn't understand how the net worth was allocated between stocks, a rental house, a personal residence and any other asset classes. Does anyone else know?
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Old 01-06-2015, 07:31 PM   #68
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So how much house did he have and how much in investable assets and what were they invested in when they were both retired in their 30s forever? (This was pre-ACA as well).

I think those numbers are really key to make a credible retirement plan but I never found any details on that. So maybe I am just not a careful enough reader and I didn't understand how the net worth was allocated between stocks, a rental house, a personal residence and any other asset classes. Does anyone else know?
I want to say he had $800k saved in mostly S&P Vanguard index fund plus the rental house. I think the $800k has grown over the years (market returns+adding more from side hustle income like carpentry/home improvement stuff). He said he plans to use the $$ from the blog (which is probably six figures each year) for charity. That's his claim, not mine.
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Old 01-06-2015, 07:39 PM   #69
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You bet on everything, so why not bet on the ACA subsidy and cost sharing remaining substantially the same throughout your retirement?

When you realize that all things in life are a gamble, even life itself, then you place your bets and roll.

I assign probabilities to things, and the probability that a major social program which benefits millions of voters would get drastically changed is quite low IMO. None of the other programs have changed drastically (age bump here and there for SS, plus some taxing of benefits).
Then, assuming a highly negative personal outcome for any changes to SS, ACA, Medicare, etc factor in that the great majority of time series returns for your portfolio will be highly positive (even after withdrawing 3-4%).

Assuming long term market returns and drastic reductions in social spending (SS, medicare, ACA) are independent events (no correlation between them), then the cumulative probability of having a highly detrimental change in social programs AND really bad long term market returns is pretty low.
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Old 01-06-2015, 07:46 PM   #70
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My term for them is super silver plan with cheese. For low budget early retirees they are key.

We may have to look into last minute cruises when we ER this year. While having a bigger budget than Fred, I was not planning on spending more than about $5,000 a year on vacations. If I could get a one week cruise for two people for $1000 I might risk the viruses
I don't know what the cruise market is like near Seattle, but here in the southeast US we can drive to local ports in FL in 7 to 11 hours (Charleston is only 4-5 hrs for us). Really cuts down on transport costs vs. flying, and no worries about last minute flight prices.

From tracking cruise prices, the cheapest ones right now are from Los Angeles (Long Beach) at about $26-28/nt+taxes+gratuities. FL based cruises are just a little more at $32-33/nt++.

Our last two cruises worked out to $67/nt including cruise fare, taxes, gratuities, port parking, and gas to/from the port.
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Old 01-06-2015, 07:46 PM   #71
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I have trouble choking down too much of this "I live on acorns and tree moss" lifestyles when they are clearly making good money on blogging and book sales. After a point, describing opportunities and other approaches becomes more useful and justifies reading their blog. I am much more impressed when someone says "I took a leap of faith and retired. Now, after years without a real job I am still in great financial shape." Here's a link to John Greaney's latest article.

20-Year Update: Retired at Age 38 in 1994 -- Lessons Learned
Thank you for the link, 2B. John is the person who set the light bulb off in my head. I am please to see that he moved to my neck of the woods. I hope to meet him someday, I'd love to buy him a beer.
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Old 01-06-2015, 08:24 PM   #72
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I think they are big into environmentalism. I doubt they really care about saving the couple of bucks of gas it takes to cruise around town to dinner and movies. It's the pounds of CO, CO2, NOX, etc pumped into the air and damage done to Mother Earth from extracting oil and refining it into gas.



I don't personally care a whole lot about the environmental side of things. I would care more about spending a few bucks and all the time wasted driving around when I could do dinner and a movie at home for nearly free and to my exact preferences.

Not to mention that it's about 12 degrees outside right now, at least where I live.


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Old 01-06-2015, 08:26 PM   #73
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I want to say he had $800k saved in mostly S&P Vanguard index fund plus the rental house. I think the $800k has grown over the years (market returns+adding more from side hustle income like carpentry/home improvement stuff). He said he plans to use the $$ from the blog (which is probably six figures each year) for charity. That's his claim, not mine.
Okay, I looked just now. $800K net worth in year 10. Initially one house and two rentals, then one $400K house and "eventually both rentals were sold and the gains were put elsewhere."

So a $400K house and $400K in investments and no more paying into Social Security since there is no need to work. Even at 4% real and no bad sequence of returns outcomes that is still only $16K a year. Medicare and other health related costs for those 65+ alone for two people are around $10K a year. I guess I have bad math and budgeting skills as I wouldn't know how to retire forever in my 30s, or even come close to it, on those kind of numbers, even if I did ride my bike more and had a cheaper cell phone plan.

We've had much more than $16K in medical bills and premiums alone in a single year.
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Old 01-06-2015, 08:52 PM   #74
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You bet on everything, so why not bet on the ACA subsidy and cost sharing remaining substantially the same throughout your retirement?
Obviously everyone must make this decision for themselves but for me this is simply an unnecessary bet to make and I have no need to take this risk. We had relatively high earnings during our work years and so the marginal gain in retirement duration by pulling the plug even earlier would have been inconsequential.


Quote:
When you realize that all things in life are a gamble, even life itself, then you place your bets and roll.
Did you take (or plan to take) this bet yourself -- i.e. do your own retirement plans require ACA subsidies staying in place? or will you be ok without them?

I'm happy to have ACA subsidies but they were not required for us maintain our desired standard of living in FIRE.

Quote:
I assign probabilities to things, and the probability that a major social program which benefits millions of voters would get drastically changed is quite low IMO. None of the other programs have changed drastically (age bump here and there for SS, plus some taxing of benefits).
I'm a great believer in probability as the basis for decision making but I also realize that humans (especially myself) are notoriously bad at estimating probabilities and tend to treat "unlikely" as "impossible". Stuff happens (not just with healthcare) and having an asset buffer or room to cut back expenses may help tremendously with a wide variety of bad events.
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Old 01-06-2015, 10:08 PM   #75
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Did you take (or plan to take) this bet yourself -- i.e. do your own retirement plans require ACA subsidies staying in place? or will you be ok without them?

I'm happy to have ACA subsidies but they were not required for us maintain our desired standard of living in FIRE.

I am probably at 3% SWR if we can depend on ACA subsidies and 4% SWR without them.

If we lose ACA subsidies but can go back to catastrophic healthcare plans that don't cover things like pregnancy, addictions, etc. as in the old days, then I would be ok. If I am forced into the new era of healthcare plans I want the subsidy that goes with it.
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Old 01-07-2015, 04:33 PM   #76
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I think many of the people looking to retire young are saving a lot of $ to do so. Many of them are very high earning people in professional positions. When someone talks about retiring with very little $ many posters warn them not too. Also for many of these couples only 1 person wants to retire & they get their expenses to the level that they can live on 1 spouse's wages easily. Sure you find some real extremes on MM but I don't the majority are.
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Old 01-08-2015, 11:50 PM   #77
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...

May 1, will mark the end of my 15 years in retirement. I guess I should do a similar write up.
Please do. We learn best from those who have gone before.
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Old 01-09-2015, 11:09 PM   #78
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I occasionally enjoy MMM. I really don't think most people want to live on that little, but I think overall his message is pretty good. Try to live a simple life and care about something other than yourself. What I take out of it is decide what is important to you and make it happen. I like his case stories which give advice based on peoples situation, sometimes his advice is extreme but they asked his advice, he didn't seek them out to give it. While he can come across as smug he seems to genuinely want to make the word a better place. this is seen in his advocacy for greener living. I don't want to pinch pennies but I think you can benefit from his blog and certainly can find useful information in the forum. Decide for yourself what works for you, not everyone is as fortunate as most of us are in this forum.
This looks the life of a priest to me.
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Old 01-10-2015, 08:11 AM   #79
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MMM is moderate compared to earlyretirementextreme.com

I look at sites like these to make me lose my worries about retirement. If they can get by on that little I should be living the life of luxury!

What both sites do well is make us rethink what we need to retire. I live a short walk from the library (2 if you count the nearby college) and downtown. Really, if I can maintain my home and food supply I will live better than most people on this planet. Everything else is luxury.

Counting down the last months to retirement and the idea of having time to go to the library, pick out a book, and read it without interruption sounds like the life of a king!
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Old 01-10-2015, 10:50 AM   #80
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Thanks 2B for posting that link... I was aware of Pfau's work and was looking at 3 vs. 4%, but didn't catch the 1% fee assumption which is not applicable for me. That gives me a little bit more confidence in The Plan.
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