LBYMers, Could You Spend $300k A Year?

[brewer12345]

I must admit that I have never noticed the "crap" or the "hassle" that you are worried about. Maybe at some point?

Remember, Audrey was a fulltime RVer for several years and now still spend several months a year on the road. That puts a certain brutal discipline into your desire and capacity for "stuff."

 

[MichaelB]

$300K is easy to spend. But it's also not so easy.

It's not about the money, it's about the people spending it. And it's not about how much they have, it's about their sense of self-worth.

 

[freebird5825]

I voted half.
$150K is approximately the gross income I was used to living on when I was married.
The rest I would invest.

 

[JmfromTx]

I would hire someone to cut my grass for sure.

 

[Danmar]

I do not think you sound elitist just someone who worked hard and made a lot of money to enjoy ! Congratulations !

You are very kind. I apologize if I am going overboard on this. I checked one of my spreadsheets (of which I have many), and determined that we didn't start spending over $300k/year (excluding alimony and divorce lawyers) until I retired in 2006. Ramped up abruptly then once we had more time and bought another property and finalized the divorce.

 

[Danmar]

Remember, Audrey was a fulltime RVer for several years and now still spend several months a year on the road. That puts a certain brutal discipline into your desire and capacity for "stuff."

OK That makes sense.

 

[MasterBlaster]

If anyone is troubled as to how to spend a mere $300k per year...

Just think how Charlie Sheen would spend it.

 

[bbbamI]

I've frugaled myself.

Ooooooh...that sounds interesting.........

 

[Westernskies]

I could spend $300K the first year, subsequent years would probably be more difficult.

 

[Sea Kayaker]

I need to build a cottage on my Gulf Islands property here in B.C.... figure its gonna cost 200k minimum - 300k wouldn't be a stretch at all.

DW and I live very well on 36k per year (with a mortgage) so its gonna be tough for us to start writing big cheques for our cottage in a few years.

 

[NW-Bound]

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?

 

[Walt34]

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.

 

[Westernskies]

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.

 

[Moemg]

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.com®

 

[ls99]

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.

 

[Westernskies]

Yeah that $300 Hamburger run.

...that used to be the $100 hamburger run; one of the reasons I quit flying.

 

[Loop Lawyer]

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?

 

[NW-Bound]

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.

 

[Westernskies]

Were we talking $300K after tax or before tax, I do not remember.

Hypothetical taxes on hypothetical income.... hypthetically speaking, does it matter?

 

[NW-Bound]

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."​

 

[audreyh1]

Sounds like you need a personal secretary.

Not interested in the kind of lifestyle that requires a personal secretary. That is my whole point!

Audrey

 

[audreyh1]

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.

Audrey

 

[audreyh1]

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.

Audrey

 

[jdw_fire]

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).

 

[RetiredGypsy]

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.