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View Poll Results: $300k And You
I'm Doing Just Fine 8 6.56%
A Quarter Or Less 27 22.13%
Less Than Half 15 12.30%
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Old 03-16-2011, 06:33 PM   #61
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I could spend $300K the first year, subsequent years would probably be more difficult.
Is it because your stash would be getting low?

Or is it because your knees would become shaky, your teeth getting loose, the rest of your hair falling off, and your eyesight getting dim because of the indulgences?
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Old 03-16-2011, 06:57 PM   #62
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There was a time when I hoped I might make $300k in my life!

I think we could ramp up to it, but it would require some major rethinking about the value of "stuff". As it is we're very much aware that we have everything we need and almost everything we want. We're aware that a goodly portion of the world's population would be thrilled to have the storage shed in our back yard for a home.

That said, if we just had to spend $300k/year:

1. A Cessna 182. It's a single-engine four-place airplane that carries a good load, one with decent avionics would be ~$160k. Fixed ownership costs would be (I'm guessing) ~$10/year.

Where would we go with this airplane? Well, aside from Tangier Island for lunch:

2. Our condo in Florida. Prices on those are all over the map.

3. I guess we could make ourselves buy new vehicles every five years instead of every 15.

4. More steaks?

5. Clothes? Nah - we both hate shopping. We buy what we can online so we don't have to deal with stores. Besides, we're pretty much past the point of caring what anybody else thinks anyway.

6. Just for fun I could easily drop $30k or more on photography gear.

At the moment I'm at a loss to think of anything else.
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Old 03-16-2011, 07:49 PM   #63
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Is it because your stash would be getting low?

Or is it because your knees would become shaky, your teeth getting loose, the rest of your hair falling off, and your eyesight getting dim because of the indulgences?
Nah, just that I could probably play out of character only for a short time and spend the extra money during that first year on a (gently used) motorhome, maybe take a few extended vacations, upgrade my woodworking and metalworking tools, maybe a few other toys, then what? All of that together (and whatever the DW comes up with) probably wouldn't add up to 300K...We pretty much have everything we need to enjoy our LBYM lifestyle already; spending an additional 300K every year wouldn't significantly improve our quality of life... (though if we had the extra 300K every year we'd be able to do more in the way of targeted scholarship/philanthropic/political contributions and still sock a chunk of it away for our future health care issues...)

My bucket list, hobbies and retirement interests aren't cash-intensive.
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Old 03-16-2011, 07:52 PM   #64
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2. Our condo in Florida. Prices on those are all over the map.

Here you go Walt ! This condo is across from a beautiful beach and near a lot of nice restaurants .Plus easy access from Tampa airport .
Home for Sale at 1801 Gulf N Dr # 228 Bradenton Beach FL - Real Estate Listings - MLS #M5819328 - Realtor.comŽ
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Old 03-16-2011, 09:06 PM   #65
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I Say Walt 34, I think you are missing a "K"

1. A Cessna 182. It's a single-engine four-place airplane that carries a good load, one with decent avionics would be ~$160k. Fixed ownership costs would be (I'm guessing) ~$10/year.


Annual inspections etc.

Yeah that $300 Hamburger run.
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Old 03-16-2011, 09:45 PM   #66
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Yeah that $300 Hamburger run.
...that used to be the $100 hamburger run; one of the reasons I quit flying.
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Old 03-16-2011, 09:51 PM   #67
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Excluding expenses incurred because I w*rk and maintain a city residence, my wife and I live on less than 10% of our earned income. Proud of that. But let me show you how easy it can be to spend $300K a year:

$300K gross income
(100K) federal and state income taxes on gross income
200K subtotal -- feeling rich at this point?
(50K) one child in elite private university
(50K) second child in elite private university -- can't "cheat" the younger child
100K subtotal -- still feeling rich?
(36K) housing expense, including debt service, on one upper-middle class house
(20K) auto expense, including depreciation, for two luxury cars (not Ferraris)
(12K) groceries and other routine household purchases
(12K) healthcare ins. premiums per group plan, plus co-pays and uninsured costs
(10K) vacations and entertainment
(5K) utilities, including cell-phone plans and home office electronics
(3K) charity (Nota Bene: a mere 1% of gross income)
(2K) unbudgeted expenses
-0- savings and investments
-0- total -- still feeling rich?
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Old 03-16-2011, 10:03 PM   #68
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Hmm... But here's what some of us were thinking.

College tuition: None. Childless or kids already grown.
Housing expenses: Only taxes and maintenance, as mortgages already paid off.
Auto expenses: old clunkers or generic cars, also paid for.

That leaves income taxes, and health care costs. Income taxes? Were we talking $300K after tax or before tax, I do not remember.
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Old 03-16-2011, 10:28 PM   #69
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Were we talking $300K after tax or before tax, I do not remember.
Hypothetical taxes on hypothetical income.... hypthetically speaking, does it matter?
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Old 03-16-2011, 10:40 PM   #70
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Surely it does! The difference is another $100K that could be used for hedonic indulgences. If one has trouble spending the first $200K, that extra $100K means more hard work to empty one's pocket of it. And if one is a spendthrift, man, oh man, that extra $100K would still not be enough.

Recently, I learned of Louis XIII Cognac. Then, today, I ran across Louis XII Black Pearl on the Web.

That extra $100K may just mean one can get himself a bottle, but you'd better hurry. Supply is very limited.

PS. Following is a rave review of Louis XIII Rare Cask Cognac I happened to find on the Web. Is the magnificence real, or is it just BS?

There are up to 250 flavors throughout the century-old eau-de-vie, each flavor tasting unique through each progressive sip. I started with a note of fleur de tabac. And then tasted wild mushrooms, a promenade in an Autumnal forest full of wood fruits, prunes and scents of vanilla. Next came beeswax and gingerbread, and then a surprising afternote of fresh mint. It was an all-encompassing trip of tastes back and forward through the ages, a pure testament to the unpredictability of nature and the astounding talent of Trichet. To taste the Louis XIII Rare Cask is to experience a richness beyond anything you'd expect to find in a glass, as Trichet describes it, "as if experiencing the soul of Louis XIII himself."
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Old 03-16-2011, 11:12 PM   #71
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Sounds like you need a personal secretary.
Not interested in the kind of lifestyle that requires a personal secretary. That is my whole point!

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Old 03-16-2011, 11:16 PM   #72
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I've thought that I could use the money would reduce the hassle, not increase it.

Instead of looking for the best price on flights and hotels, I'd just get a first class ticket on the convenient flight and a one bedroom suite at a brand name I can trust. I'd buy a car from a dealer who assumes he provides a loaner (or pick up service) for any service work. I won't sweat whether the furnace needs to be replaced or whether we can get a few more years out of it, just tell the heating guy to put the new one in. .....
IMO you can easily get that with half the amount. But I guess it depends on where you live.

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Old 03-16-2011, 11:25 PM   #73
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Hmm... But here's what some of us were thinking.

College tuition: None. Childless or kids already grown.
Housing expenses: Only taxes and maintenance, as mortgages already paid off.
Auto expenses: old clunkers or generic cars, also paid for.

That leaves income taxes, and health care costs. Income taxes? Were we talking $300K after tax or before tax, I do not remember.
Yeah - that's one of the big divides. Folks still working, raising kids, needing to pay for college, paying for the larger family home in a good scool district, saving for retirement on top of all that, can easily spend a lot of money. But once you are retired with an empty (& smaller) nest and no mortgage, and a few big toys already paid for - big difference.

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Old 03-17-2011, 01:03 AM   #74
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Excluding expenses incurred because I w*rk and maintain a city residence, my wife and I live on less than 10% of our earned income. Proud of that. But let me show you how easy it can be to spend $300K a year:

$300K gross income
(100K) federal and state income taxes on gross income actually about 72k considering the itemized deductions and exemptions
200K subtotal -- feeling rich at this point? 228k
(50K) one child in elite private university this is the fastest way to try and make your point but i find this very unrealistic. even if it is realistic it is only for 4 years
(50K) second child in elite private university -- can't "cheat" the younger child same comment as above plus, unless they are twins, these two expenses wont always happen in the same years
100K subtotal -- still feeling rich? 128k - 228k
(36K) housing expense, including debt service, on one upper-middle class house
(20K) auto expense, including depreciation, for two luxury cars (not Ferraris)
(12K) groceries and other routine household purchases
(12K) healthcare ins. premiums per group plan, plus co-pays and uninsured costs
(10K) vacations and entertainment
(5K) utilities, including cell-phone plans and home office electronics
(3K) charity (Nota Bene: a mere 1% of gross income)
(2K) unbudgeted expenses
-0- savings and investments 28k-128k or
-0- total -- still feeling rich? 28k-128k or some combination

my goodness this reminds me of the whining i read in that article about being poor while having a 250k/yr income. geeezzzz, how do people ever get by on anything less? yet lots of people on this board have actually been able to save for and achieve retirement on less (much less in some cases). all you did was make the point that rich people can blow money and arent necessarily LBYMers (thus violating 1 of the premises of this thread).
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Old 03-17-2011, 03:41 AM   #75
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That didn't seem to me to be any kind of self defensive justification for having to spend everything in that example, just an example of how easy it can be. And I don't doubt it; everything from The Millionaire Next Door and Financial Peace and however many other places that gather the numbers, that people tend to spend what they make and upgrade their lives as their income increases. So $50k a year got you the Camaro and the public school for your kids, and $300k got you the Mercedes and BMW and private schools.

I still can't wrap my head around the expenses, but that's a lack of familiarity. It strikes me as funny though, because at 16 before I held any kind of real job I was imagining the fast cars and yachts and lived in the DuPont Registry. It never occurred to me that all that money could go toward something that didn't have an engine or wasn't donations to charities or repeated expensive vacation packages.
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Old 03-17-2011, 06:16 AM   #76
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...that used to be the $100 hamburger run; one of the reasons I quit flying.
It was $100 when I quit flying also. Actually, if I resumed flying I could probably get to 300K without to much work, throw in a new Tesla every 3 years and I guess I get to 300K by buying toys.

I've noticed that toys don't bring much pleasure lately so I don't really think about purchasing them, but change my answer to yes. Heck maybe Danmar will adopt me and I'll have a chance to find out.
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Old 03-17-2011, 06:56 AM   #77
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Surely it does! The difference is another $100K that could be used for hedonic indulgences. If one has trouble spending the first $200K, that extra $100K means more hard work to empty one's pocket of it. And if one is a spendthrift, man, oh man, that extra $100K would still not be enough.

Recently, I learned of Louis XIII Cognac. Then, today, I ran across Louis XII Black Pearl on the Web.

That extra $100K may just mean one can get himself a bottle, but you'd better hurry. Supply is very limited.

PS. Following is a rave review of Louis XIII Rare Cask Cognac I happened to find on the Web. Is the magnificence real, or is it just BS?

There are up to 250 flavors throughout the century-old eau-de-vie, each flavor tasting unique through each progressive sip. I started with a note of fleur de tabac. And then tasted wild mushrooms, a promenade in an Autumnal forest full of wood fruits, prunes and scents of vanilla. Next came beeswax and gingerbread, and then a surprising afternote of fresh mint. It was an all-encompassing trip of tastes back and forward through the ages, a pure testament to the unpredictability of nature and the astounding talent of Trichet. To taste the Louis XIII Rare Cask is to experience a richness beyond anything you'd expect to find in a glass, as Trichet describes it, "as if experiencing the soul of Louis XIII himself."
Sounds like the purest tissue of horsesh!t. I would love to hear the results of a blind tasting conducted by a trained tester in lab conditions. "What is this? Paint thinner?"
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Old 03-17-2011, 07:53 AM   #78
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all you did was make the point that rich people can blow money and arent necessarily LBYMers (thus violating 1 of the premises of this thread).
I agree with your second point here, which was actually "my point" if you will re-read what I said, but I don't agree with your first one. None of the expenses that I identified are "wasted" or "blown money," other than the tax expenses -- and those aren't discretionary. (Those who think they get value for their tax dollar will disagree with me, but such people are fewer in number every day. And the dwindling people who disagree with me about that one tend to be on the receiving end of our tax dollars.)

My 100K allocation for taxes was rounded but is pretty accurate if the taxpayer is self-employed and lives in a high-tax (city and) state.

The amounts for education, which you challenged, are actually low, not high: Freshman-year expenses at my alma mater, where I volunteer (so I know whereof I speak), are about $60K. And you seem to think it's only four years per child when it can be seven, eight or more, for two or more degrees. In addition, I was conservative in estimating only two children. My wife and her three siblings were enrolled in the same elite private university at the same time, and none had any kind of financial aid.

In my haste I omitted any expenses for clothing, or dining out, or clubs or toys (other than the cars). I probably omitted other expenses as well. As you can see, in this accounting there is "zero" for savings and investment.

There is no complaining in my accounting, and no advocacy, either. I'm just showing you how easily a married couple with UMC attributes, including ambition for their (two) young-adult children, can blow through what "sounds" like a "big" income. Most of the people who work for me earn $300K a year, or more, and many of them have little or no savings outside their IRAs and modest 401Ks.

Taxes are the real killer. The way I make this point to my government school-teacher brother is by observing that I spent more on income tax last year than he earned, cumulatively, for the first fifteen years of his career. He doesn't know what my income or expenses are, but I know my conclusion is correct because his income is a matter of public record.
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Old 03-17-2011, 09:05 AM   #79
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I got into a debate over just this on another forum. I argued that $7.5M would give you about $225K per year at a 3% SWR, or $300K per year at a 4% SWR, and that I really don't consider that wealthy.

I guess the reason I don't think it's a lot of money is because my Mom and stepdad combined made about $180-190K per year at their peak (Mom recently retired, and stepdad is burning out and may take an early out). I hardly consider my Mom and stepdad to live what I'd consider a "wealthy" lifestyle, and $225K per year isn't that far ahead of $180-190K, IMO.

Now, my Mom and stepdad do have two houses, but neither one is a mansion. One's a 24x48 modular (the type that looks like a real house, not a glammed up double-wide) on about 4.5 acres, and is about 30 years old. The other is a rancher near Orlando, Florida, maybe 1800 square feet. They wanted to retire down there, but having second thoughts now. And it's worth less than what they paid for it, 9 or so years ago.

My Mom and stepdad are what I'd call "comfortable", but I just don't call that rich. Now, I should also point out that with that $180-190K per year, they weren't blowing everything they made; that was also funding part of their retirement accounts. They both get pensions...Mom at 80%, but my stepdad will only get around 30% if he quits now. And the houses are on 15 year mortgages, and they put a good amount down. I think both mortgages combined are about $1500/mo.

Personally, I don't think I could blow through $300,000 per year. I might be able to do it once or twice, such as if I bought a house or made some other really huge purchase. But I just don't think I could keep it up, year after year.

Now, that $300K per year is going to be less than that because of taxes. But I don't think I could even blow through $150K per year on a consistent basis. At $150K I'd probably just pay down the mortgage really quick, or if I bought another house, come up with a big down payment and then accelerate the mortgage...unless the interest rate was too good to be true!
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Old 03-17-2011, 09:06 AM   #80
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Loop: I'm with you. By the way LBYM has two components. I live below my means but spend multiples of $300k (after tax). Take my word for it, it isn't difficult to do (if you can and want to).
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