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Old 04-17-2011, 06:25 AM   #41
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Yes.

Seriously, been LBYM since I finished college and this old dog is slow to learn new tricks. Between global economic uncertainty, the value of the dollar and it's exchange rate with the Thai Baht I see no reason to splurge. Though now that I'm back into photography after many years I'm beginning to turn my lust for a DSLR into semi-rational reasons why it would be good for me.
I do believe most of in this forum have LBYM. However, as for me, during my ER if there are surplus available, I intend to splurge. I have never flown first class oversea. I have flown first class domestically couple of time from cheap upgrade but I would like to flow first class to Thailand or Philippines if I have surplus during my ER. I have to get to ER first but that's another story.
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Old 04-17-2011, 08:00 AM   #42
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It makes no sense to let the principal grow for those of us without DW / DH or heirs. Unless you plan to leave some money for non profit organizations or some of your close friends...
I want to leave money to a couple of theaters and my nieces. Another reason for LBYM in ER is to ensure 100% success for my ER financing plan.
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Old 04-17-2011, 09:47 AM   #43
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I want to leave money to a couple of theaters and my nieces. Another reason for LBYM in ER is to ensure 100% success for my ER financing plan.
Maybe this is a definitional issue but I don't see what you are doing as LBYM. I view it as simply having a different assessment of what your SWR is and setting aside some funds for a favourite cause.
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Old 04-17-2011, 11:23 AM   #44
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That sounds suspiciously like either "extreme ER" or "work until you drop".

I wouldn't hesitate to spend a little principal if it'd improve our lives... or someone else's. But sorry, we're no longer taking applications.

I'm in that situation.
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Old 04-17-2011, 11:32 AM   #45
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It makes no sense to let the principal grow for those of us without DW / DH or heirs...
Perhaps it does not, in a world of absolute predictability. In our world, it makes sense, especially if it does not truly pinch you.


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Old 04-17-2011, 04:24 PM   #46
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I must be hardwired for LBYM because I still try to LBYM even tho I can afford to not do so as my pensions, SS, and investments more than cover our needs. Last month I went over by about $5000 or so (oops!) do to a cruise we went on. I'm still not bankrupt...
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Old 04-17-2011, 05:08 PM   #47
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So far I have not had to tap my portfolio to supplement my pension since I retired almost 4 years ago except for a small amount to help pay off my mortgage last year. Now that my mortgage is paid off, I am actually saving between $700 to $1100 a month so I am actually accumulating in retirement which I wasn't before I paid it off. This is really required as I spent all my cash and taxable accounts in paying off the mortgage (in year 7 of a 30 year fixed) so I need to replenish my cash reserves.

I really LBYM, always have so it is not a hardship to me. I'm not sure at what point I'll have to start taking distributions if at all until RMD's are required. I am conflicted about RMD, on one hand I feel I should take distributions each year to the top of the 15% bracket to help with RMD one day but then there's the issue of paying the taxes now. I guess the taxes will be due when I have to take the RMD so maybe it is better to start drawing it down now, this is something I can't get a good handle on. I think it is personal preference whether to pay taxes now vs later, I've read pros and cons to this.

I'd have no qualms taking distributions and spending it if I have to. It is important to me to leave as much as I can for my heirs so I am not trying to blow it all before I kick the bucket.
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Old 04-17-2011, 05:35 PM   #48
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I think it depends on what you mean by "means" and "live."

If I look at our long term plan which includes self-insuring for LTC, sending 3 grand-youngin's to post secondary school, providing for a grandchild with special needs and a few other life goals, then we're not LBYM. But as far as what we spend on a daily basis today, it's less than our SS, pensions and portfolio earnings. FIRE'd for 5 years, our net worth is a little higher today (in real dollars) than when we left work. But income is either being spent or there's plans for where it's going.

Put another way, our spending plan calls for the FIRE portfolio to be growing today. So, even though current expenditures are less than current income, I don't consider us LBYM.
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Old 04-17-2011, 05:46 PM   #49
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I hope my children will be self-sufficient before too long. One already flew the coop, and one more to go.

I have a certain lifestyle that I am comfortable with, and it has been the same for a long time. Yet, as my net worth increased over the years, we have taken a few new indulgences, like a 2nd home and some travels. An RV was my last toy, and I do not need anything more. No need or use for expensive, fast or luxurious cars. No boats, no planes, no motorcycles, except for some cheap dirt bikes which I already have for riding the forest trails.

So, to sustain the current lifestyle, I am going to need less than 3% WR. If the economy does not go in the toilet again, and my stash keeps on growing, will I spend more? Maybe, maybe not. I like to count my money, and checking its growth with Quicken is fun too. Call me Scrooge.
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Old 04-17-2011, 06:19 PM   #50
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Yes, I'm expecting to build principle during retirement by around $1k/month. I don't have any specific idea about what I'll do with it (I have no heirs of any consequence), but possibilities are compensating for inflation, or paying for some catastrophic illness. Or just nursing home care for me or my wife, or both of us. As I'm sure you all know, a very nice thing about money is that there are so very many things you can spend it on.
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Old 04-17-2011, 06:24 PM   #51
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.......... I have never flown first class oversea. I have flown first class domestically couple of time from cheap upgrade but I would like to flow first class to Thailand or Philippines if I have surplus during my ER............
I agree, that if there is one thing I'd like to splurge on it is first class airfare, especially on long flights. I look at those magazine ads of those cozy bed seats and dream.
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Old 04-17-2011, 06:40 PM   #52
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I have been giving away a lot of stuff & cash. I'm working on the 'die broke' future.
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Old 04-17-2011, 07:31 PM   #53
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I like to count my money, and checking its growth with Quicken is fun too. Call me Scrooge.
Scrooge
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Old 04-17-2011, 07:34 PM   #54
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Hey, thanks! I pride myself on being honest to myself, and also hate to be a hypocrite.
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Old 04-17-2011, 08:15 PM   #55
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Hey, thanks! I pride myself on being honest to myself, and also hate to be a hypocrite.
I also strive to be honest with myself and in that spirit, I admit that I sometimes come very close to being one of those folk who know the price of everything and the value of nothing - but I don't quite go over that line.
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Old 04-17-2011, 08:30 PM   #56
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I like to count my money, and checking its growth with Quicken is fun too. Call me Scrooge.
NW-Bound, I am the same way too. I think it is because I was so poor at one time in my life. When I am counting it, I'm thinking, "Yep! Whew! It is all there again this morning, thank heavens. Praise heaven, I'm still not poor today."

Counting money and checking its growth can be very reassuring.
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Old 04-17-2011, 09:32 PM   #57
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I enjoyed reading books by Andrew Tobias, who prides himself on being frugal, but not cheap. I have mentioned this before, but this is worth repeating. Tobias gave the following examples. Not giving a waiter his deserved tip is cheap. Not buying the expensive stuff in a hotel minibar is frugal, not cheap. When going out for lunch with friends and paying with a single bill, not putting in what's fair for one's share is cheap, not frugal. Not going to a posh restaurant is frugal, not cheap.

I was just half-joking about calling myself Scroogey. Generally, frugal is how one treats himself, not towards others. I never short change anyone, and am fairly generous with my kids, relatives, and friends.

At this point in life, I have enough to live comfortably, and in fact have more than most people in the US, a rich country in the world. I am grateful for my fortune, that I have a chance to work to get it. And I do have enough. A fancy car would not bring me that much pleasure, hence I do not covet one. In fact, an expensive car may just cause me some anguish if some idiots scrape it or ding its doors in a parking lot. I get much more enjoyment out of driving my generic motor home into the boondocks.
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Old 04-17-2011, 10:38 PM   #58
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I have mentioned this before, but this is worth repeating. Tobias gave the following examples. Not giving a waiter his deserved tip is cheap.
When you describe the tip as "deserved", this assumes you owe him the tip. So he "deserves" it. It might at first seem like an ethical statement, but really, it's just playing semantic games.
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Old 04-17-2011, 10:45 PM   #59
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In the US, waiters' wages are so low because it is a tradition that a big part of their compensation comes from tips. In Europe or elsewhere, it is not true. So, if a waiter or waitress in the US does his/her job, I do feel I "owe" him or her a tip.
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Old 04-18-2011, 12:18 AM   #60
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.....Not giving a waiter his deserved tip is cheap. Not buying the expensive stuff in a hotel minibar is frugal, not cheap. When going out for lunch with friends and paying with a single bill, not putting in what's fair for one's share is cheap, not frugal. Not going to a posh restaurant is frugal, not cheap....A fancy car would not bring me that much pleasure, hence I do not covet one. In fact, an expensive car may just cause me some anguish if some idiots scrape it or ding its doors in a parking lot....
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