Levels of FI

[purplesky]

I can almost guarantee he would like to interview you. Last Christmas, I did some work with his charity (Clark's Kids) and had the opportunity to chat with him for a little while. Of course the subject of frugality and early retirement came up and he was interested in doing an interview with me. Since I do value my privacy (and I don't think my story is that remarkable) I politely declined.

Or maybe not. Since you are clearly a FERB and not REALLY retired.

It is interesting when Clark Howard talks about the Mr. Money mustache crowd.

Clark Howard totally gets it and understands the lifestyle but you can hear it in his voice that he knows his audience for the most part isn't going to be able to do it
So he's very careful when he talks about it,it's kind of interesting.

You can hear the skepticism in his voice but obviously Clark Howard knows it can be done.

 

[FUEGO]

I was under the impression that your lifestyle requires a budget?

If you are able to travel just about anywhere for three months with a family of five you must have a pretty large travel budget ?

The travel budget is $10,000 right now but we have flexibility to move more funds to that line item in most years. Add in a good bit of travel hacking and think of that as $15000 to $25000 if you want. And we can't handle 3 full months. School gets out mid-June and starts back at the end of August but we also want a week or two of free time before/after school starts. So think 8-9 weeks max.

I think ~$1500-2000/wk is plenty to travel to just about anywhere in the world assuming we're doing our typical slow travel (1+ week in most places; local transit, cook some meals at our airbnb which we get a discount on because we rent by the week).

As an example, we spent $4500 for 7.5 weeks in Mexico (not including some free flights). A summer in Europe (most expensive continent in the world??) would probably see us in cities with costs of living at 50% (Budapest, Prague, Ljubljana ) to 250% (anywhere in Switzerland lol) more than that of Mexico. Let's say 200% more, for the sake of argument. That's $13,500 if we scale up our Mexico expenses. And I'm not sure if the costs scale linearly, since there are tons of budget airlines and cheap trains and buses in Europe, often cheaper than in Mexico! Grocery store food also appears very reasonable in much of Europe.

Can we spend 3 months in Zurich at a nice hotel and dine out every day? No! Can we spend 8-9 weeks traveling around Europe in a mix of low, medium and some high cost locales? Pretty sure we can but won't find out till we do it next year.

And we are unlikely to spend every summer in Europe. I'd like to spend summers going forward (in no order): road trip across US; Latin America (Peru? Columbia? Guatemala?); Mexico (again). None of those places will require >$10,000 spending plus many thousands of dollars in travel hacking. I expect we'll have a surplus in most years (like we will this year, only spending $5000-6000 or so for 3.5 weeks road trip and 3 Caribbean cruises).

 

[FUEGO]

It is interesting when Clark Howard talks about the Mr. Money mustache crowd.

Clark Howard totally gets it and understands the lifestyle but you can hear it in his voice that he knows his audience for the most part isn't going to be able to do it
So he's very careful when he talks about it,it's kind of interesting.

You can hear the skepticism in his voice but obviously Clark Howard knows it can be done.

I attend a local "Mr Money Mustache" meetup every few months. I don't think a single person subscribes to the "retire on $30k per year with $800,000 in the portfolio" philosophy. So even his most diehard followers don't buy it. I could certainly get by on $30k per year and have done so for several years, but it isn't something I'd want to be locked into for 4-5 more decades. The consensus among real life people that have thought about this for a while seems to agree with my sentiments.

 

[purplesky]

The travel budget is $10,000 right now but we have flexibility to move more funds to that line item in most years. Add in a good bit of travel hacking and think of that as $15000 to $25000 if you want. And we can't handle 3 full months. School gets out mid-June and starts back at the end of August but we also want a week or two of free time before/after school starts. So think 8-9 weeks max.

I think ~$1500-2000/wk is plenty to travel to just about anywhere in the world assuming we're doing our typical slow travel (1+ week in most places; local transit, cook some meals at our airbnb which we get a discount on because we rent by the week).

As an example, we spent $4500 for 7.5 weeks in Mexico (not including some free flights). A summer in Europe (most expensive continent in the world??) would probably see us in cities with costs of living at 50% (Budapest, Prague, Ljubljana ) to 250% (anywhere in Switzerland lol) more than that of Mexico. Let's say 200% more, for the sake of argument. That's $13,500 if we scale up our Mexico expenses. And I'm not sure if the costs scale linearly, since there are tons of budget airlines and cheap trains and buses in Europe, often cheaper than in Mexico! Grocery store food also appears very reasonable in much of Europe.

Can we spend 3 months in Zurich at a nice hotel and dine out every day? No! Can we spend 8-9 weeks traveling around Europe in a mix of low, medium and some high cost locales? Pretty sure we can but won't find out till we do it next year.

And we are unlikely to spend every summer in Europe. I'd like to spend summers going forward (in no order): road trip across US; Latin America (Peru? Columbia? Guatemala?); Mexico (again). None of those places will require >$10,000 spending plus many thousands of dollars in travel hacking. I expect we'll have a surplus in most years (like we will this year, only spending $5000-6000 or so for 3.5 weeks road trip and 3 Caribbean cruises).

So I guess your overall total spending for everything in life annual budget is a lot higher than I thought?

Your travel cost projections for a family of five seem a bit unrealistic to me but I guess anything is possible .

 

[FUEGO]

So I guess your overall total spending for everything in life annual budget is a lot higher than I thought?

Your travel cost projections for a family of five seem a bit unrealistic to me but I guess anything is possible .

We budget $40k per year right now. Last two years we spent $25k and $33k (incl. almost $9k for major exterior renovation). We are on track to come in under the $40k budget this year in spite of spending $8000 on a new (to us) minivan and taking 4 international vacations. I don't know. Somehow we make it work. We probably live like a family earning $60-80k, except our taxes are almost zero, we have no mortgage and no work-related expenses. And I'm good at saving money.

As for travel, I'm not sure why it seems unrealistic. $10-15k (plus free flights to/from Europe - thanks United!) for a summer in Europe that's slow travel and not exclusively London/Paris/Switzerland.

1 week:
$700 for airbnb rental
$150 groceries
$200 dining out (1 meal most days; basic places; some take out)
$300 intercity train tix plus some local transit/uber; rental car 1-2 days/wk
$300 sightseeing; admission fees

That's $15000 for 9 weeks and I'm sure most weeks we won't spend that much. Lots of family discounts on the train tix and for admissions.

 

[purplesky]

We budget $40k per year right now. Last two years we spent $25k and $33k (incl. almost $9k for major exterior renovation). We are on track to come in under the $40k budget this year in spite of spending $8000 on a new (to us) minivan and taking 4 international vacations. I don't know. Somehow we make it work. We probably live like a family earning $60-80k, except our taxes are almost zero, we have no mortgage and no work-related expenses. And I'm good at saving money.

As for travel, I'm not sure why it seems unrealistic. $10-15k (plus free flights to/from Europe - thanks United!) for a summer in Europe that's slow travel and not exclusively London/Paris/Switzerland.

1 week:
$700 for airbnb rental
$150 groceries
$200 dining out (1 meal most days; basic places; some take out)
$300 intercity train tix plus some local transit/uber; rental car 1-2 days/wk
$300 sightseeing; admission fees

That's $15000 for 9 weeks and I'm sure most weeks we won't spend that much. Lots of family discounts on the train tix and for admissions.

If you can make those European traveler money numbers work. More power to you.

It just seems a bit optimistic to me.

 

[Teacher Terry]

WE took a caribbean cruise last year which was cheaper then most because it was a re-positioning cruise and the basic cost was 3k before any island trips, extras on the boat, flights, etc so no clue how you are doing 3 cruises for 5 people plus long road trip for 6k?

 

[FUEGO]

WE took a caribbean cruise last year which was cheaper then most because it was a re-positioning cruise and the basic cost was 3k before any island trips, extras on the boat, flights, etc so no clue how you are doing 3 cruises for 5 people plus long road trip for 6k?

$1000 road trip. Hotel pts, we drove, a couple of airbnb discount codes (we were cancelled on; gift card from credit card signup, etc). Ate out about 1x per day, cooked at the airbnb (which was amazing for $70/nt!!), invited friends over for lunch one day.

Cruises: from memory, we paid $1400 for a five nighter for 5 of us in Jan 2016. $800 for 5 nighter for 3 of us (2 oldest kids are stuck in school, ha ha suckas!!). $1600 for 7 nighter (2 kids sail free in our balcony room; grandma going with, and 1 kid in her cabin got a discounted rate). Add in $200-300 for tips per cruise plus gas plus parking (we park off site for 0-50% of the port fees; drive down instead of fly - it's 4.5-11 hours to Charleston, Jacksonville, FLL, or Miami). We rarely do excursions and instead explore whatever port on foot, use local transit, or stay on the ship. So cruise + tips + parking + gas is all we pay for.

I guess that all adds up to closer to $6k, but we got 2x $500 reimbursements from credit card signups (Barclay Arrival Plus card). Lots of free hotel nights in the mix too (Starwood Preferred Guest credit card sign up bonus).

We stretch the travel budget pretty far.

 

[FUEGO]

If you can make those European traveler money numbers work. More power to you.

It just seems a bit optimistic to me.

I may be wildly off base (never been to Europe!), but I've done enough research to think I'm in the ballbark. Looks like decent $100/nt airbnb rentals in just about every place we're visiting. Some places have rates half that if you negotiate and get a weekly discount. Train tix can be very affordable for families (kids ride free in some places; Germany Bahn seems to have €19-39 euro advance ticket sales for every route). Vienna transit tix are free for kids during mid-july and August.

Also keep in mind we're doing this budget travel style. Lunch might be a picnic some days. We aren't staying in 5 star hotels. We might skip some castles/museums if admissions are €100+ for the family (gotta fight castle/museum fatigue because kids are involved).

We enjoy free/cheap/authentic stuff like walking the city, finding parks, letting the kids take a dip, street music/performers (I often google "free things to do in [insert city name here]). This may come as a surprise, but there's often a cheap/free alternative to the busier, expensive tourist attractions.

YMMV of course. Budget travel IS a slight sacrifice that enables long term world travel for our family while the adults are still in their 30's and the kids are still living at home with us. The alternative would be to work another decade or two to enable first class luxury travel without any regard to costs. No thanks!

 

[EastWest Gal]

I may be wildly off base (never been to Europe!), but I've done enough research to think I'm in the ballbark. Looks like decent $100/nt airbnb rentals in just about every place we're visiting. Some places have rates half that if you negotiate and get a weekly discount. Train tix can be very affordable for families (kids ride free in some places; Germany Bahn seems to have €19-39 euro advance ticket sales for every route). Vienna transit tix are free for kids during mid-july and August.

Also keep in mind we're doing this budget travel style. Lunch might be a picnic some days. We aren't staying in 5 star hotels. We might skip some castles/museums if admissions are €100+ for the family (gotta fight castle/museum fatigue because kids are involved).

We enjoy free/cheap/authentic stuff like walking the city, finding parks, letting the kids take a dip, street music/performers (I often google "free things to do in [insert city name here]). This may come as a surprise, but there's often a cheap/free alternative to the busier, expensive tourist attractions.

YMMV of course. Budget travel IS a slight sacrifice that enables long term world travel for our family while the adults are still in their 30's and the kids are still living at home with us. The alternative would be to work another decade or two to enable first class luxury travel without any regard to costs. No thanks!

Budget travel is healthier and more real life. It's not about luxury, it's about experiencing the local lifestyle.

I went to Italy this year. My best memories were walking around, seeing Roman ruins underneath Alba, a wine tasting tour with a translator and private driver (68 Euros per person) and just seeing the relaxed lifestyle of small town Italy.

Travel is about seeing places where people don't speak English and don't care.

There is no sacrifice in budget travel.


Sent from my iPhone using Early Retirement Forum

 

[Teacher Terry]

Fuego: so what cruise lines are you getting the deals for and how are you finding them? We love to cruise but find it expensive. We also do a ton of walking when we travel. We love to walk and do not do excursions at every port. A cheap beautiful place to visit in Europe is Poland. My DIL is from there. Krakow is really nice. YOur $ goes a long way there because they are not on the Euro. For example a beer is a dollar and we had filet mignon for 8.00.

 

[purplesky]

I may be wildly off base (never been to Europe!), but I've done enough research to think I'm in the ballbark. Looks like decent $100/nt airbnb rentals in just about every place we're visiting. Some places have rates half that if you negotiate and get a weekly discount. Train tix can be very affordable for families (kids ride free in some places; Germany Bahn seems to have €19-39 euro advance ticket sales for every route). Vienna transit tix are free for kids during mid-july and August.

Also keep in mind we're doing this budget travel style. Lunch might be a picnic some days. We aren't staying in 5 star hotels. We might skip some castles/museums if admissions are €100+ for the family (gotta fight castle/museum fatigue because kids are involved).

We enjoy free/cheap/authentic stuff like walking the city, finding parks, letting the kids take a dip, street music/performers (I often google "free things to do in [insert city name here]). This may come as a surprise, but there's often a cheap/free alternative to the busier, expensive tourist attractions.

YMMV of course. Budget travel IS a slight sacrifice that enables long term world travel for our family while the adults are still in their 30's and the kids are still living at home with us. The alternative would be to work another decade or two to enable first class luxury travel without any regard to costs. No thanks!

I am a three-star traveler so I definitely know about sacrifice

 

[sailor]

A cheap beautiful place to visit in Europe is Poland. My DIL is from there. Krakow is really nice. YOur $ goes a long way there because they are not on the Euro. For example a beer is a dollar and we had filet mignon for 8.00.

But why go for filet mignon in Poland? Why not $1.50 barszcz soup and $3 pierogi like locals do?

Also: FUEGO's number for European travels are close to our family of 5, except that we spend more on entry fees and slightly more on food (our kids eat way more than his girls )

If you are patient (I treat is as a hobby) travel deals are to be found.
In two weeks I'm leaving for my "6 European Capitals for $600 airfare trip" and I'm planning to spend less than $400 for 3 weeks there (CPH->VNO->TLL->RYG->WAW->KRK)

 

[CardsFan]

Budget travel is healthier and more real life. It's not about luxury, it's about experiencing the local lifestyle.

Agreed! When our son was about 12 we did the National Lampoon European Vacation. 3 weeks, 6 countries, Eurorail passes, toting too many bags. But my son, who is now in his mid-30's, still talks the most about the 5 days in northern Italy, in the town where his grandfather was born. We stayed with extended family, walked the hills to to the different villages, and just enjoyed the slower paced lifestyle.

 

[Teacher Terry]

Sailer: we took my DIL's parents to the fanciest restaurant in their town and they had never eaten there because of the cost. The filet mignon was the most expensive thing on the menu. They cooked a lot for us and we wanted to treat them. We love the local food and the people. Fuego: I don't doubt your numbers-I am just trying to copy you.

 

[purplesky]

Budget travel is healthier and more real life. It's not about luxury, it's about experiencing the local lifestyle.

I went to Italy this year. My best memories were walking around, seeing Roman ruins underneath Alba, a wine tasting tour with a translator and private driver (68 Euros per person) and just seeing the relaxed lifestyle of small town Italy.

Travel is about seeing places where people don't speak English and don't care.

There is no sacrifice in budget travel.


Sent from my iPhone using Early Retirement Forum

I don't think anybody's talking about luxury travel.

fuego has a tight budget. So it's assumed it's going to be budget travel.

There's nothing wrong with sacrifice. Fuegos Life is based on sacrifice.

 

[FUEGO]

Fuego: so what cruise lines are you getting the deals for and how are you finding them? We love to cruise but find it expensive. We also do a ton of walking when we travel. We love to walk and do not do excursions at every port. A cheap beautiful place to visit in Europe is Poland. My DIL is from there. Krakow is really nice. YOur $ goes a long way there because they are not on the Euro. For example a beer is a dollar and we had filet mignon for 8.00.

Lately we've been on Carnival a lot. They are the only line that routinely cruises out of Charleston and Jacksonville (easy drives down and back along I-95). In December we're on the MSC Divina (relatively new ship; looks AMAZING; mixed reviews on food and service because it's a European cruise line and Americans have certain expectations apparently). I go to travelocity/expedia and sort by "price per night" to see if there are any good deals. Right now a "good deal" is anything around $40/nt and under. On the MSC Divina, we saw they were offering kids sail free, so that saved us almost half off the regular fare (but we had to pay an extra $100 for the balcony upgrade to get kids free other than $100/tax per kid). We usually do the carnival cruises last minute (which means about 1-3 months before sail date). This is prime time of year for cheap cruises. Now during hurricane season and through January-February. Nothing better than paying rock bottom prices for a cruise somewhere warm in the middle of a freezing January (did that past 2 years). Driving to the ports saves tons of $ and I generally dislike flying so it's also a quality thing for me.

As for Poland, it's tempting. We already whittled down 4 countries from our original plan (Portugal, France, Spain, Belgium) but added another one recently (Slovenia - man that place looks beautiful!!). Scope creep will make our trip a National Lampoons Vacation too if we aren't careful. We have a 4 year old so have to pace our travels accordingly.

I am a three-star traveler so I definitely know about sacrifice

We all have to sacrifice. Would you keep on working forever and saving to afford 5-6 star places?

But why go for filet mignon in Poland? Why not $1.50 barszcz soup and $3 pierogi like locals do?

That's more our speed right there. You can get a halfway decent filet mignon anywhere.

Also: FUEGO's number for European travels are close to our family of 5, except that we spend more on entry fees and slightly more on food (our kids eat way more than his girls )

If you are patient (I treat is as a hobby) travel deals are to be found.
In two weeks I'm leaving for my "6 European Capitals for $600 airfare trip" and I'm planning to spend less than $400 for 3 weeks there (CPH->VNO->TLL->RYG->WAW->KRK)

Good to hear we're in the ballpark on costs. I had a dream that I was grossly underestimating all the costs (because "OMG Europe is expensive" as if it's a single homogeneous city). I've cruised around the airbnb listings and while I know I'm looking at shoulder season rates in Sept/Oct, even if they are 20-30% higher in summer I think we'll still be able to come in at $100/nt for mostly 2 BR apartments.

Our kids eat plenty, but we tend to do more of the local foods wherever we are. Especially when it's cheap and delicious. Mexico was like a nonstop smorgasbord in that regard.

That 6 European Capitals (though it's 5 + Krakow, no? ) sounds like a nice trip. We'll probably end up hitting 6-8 cities for about a week and then some random 1-3 night stays here and there.

Agreed! When our son was about 12 we did the National Lampoon European Vacation. 3 weeks, 6 countries, Eurorail passes, toting too many bags. But my son, who is now in his mid-30's, still talks the most about the 5 days in northern Italy, in the town where his grandfather was born. We stayed with extended family, walked the hills to to the different villages, and just enjoyed the slower paced lifestyle.

My plan is to take regular size bookbags for the 8-9 week trip. We did this in Mexico and it worked out perfectly. No checked luggage. No lost luggage. Not sure if we'll do 3 days of clothes or 4 (how common are the wash/dry/fold places in mid to big city Europe?). Also hope to get a $500 ish lightweight laptop or two before we go to shave a few pounds off.

 

[Teacher Terry]

Thanks for the tips-I appreciate it.

 

[FUEGO]

Thanks for the tips-I appreciate it.

Glad to share. I've picked up plenty of tips here before, and hope to pick up more once I put up my "Summer 2017 - Grand European Vacation" thread. Still educating myself before I post.

 

[RockyMtn]

My favorite hobby is hunting down wines which cost less than $10.

Cap,

Love to see your list of great $10 wines. I find that I can not really tell a great deal of difference in a $10 bottle and a $40 bottle. Now get me into a $140 bottle and I can tell. Cheers

 

[rodi]

I may be wildly off base (never been to Europe!), but I've done enough research to think I'm in the ballbark. Looks like decent $100/nt airbnb rentals in just about every place we're visiting. Some places have rates half that if you negotiate and get a weekly discount. Train tix can be very affordable for families (kids ride free in some places; Germany Bahn seems to have €19-39 euro advance ticket sales for every route). Vienna transit tix are free for kids during mid-july and August.

Also keep in mind we're doing this budget travel style. Lunch might be a picnic some days. We aren't staying in 5 star hotels. We might skip some castles/museums if admissions are €100+ for the family (gotta fight castle/museum fatigue because kids are involved).

We enjoy free/cheap/authentic stuff like walking the city, finding parks, letting the kids take a dip, street music/performers (I often google "free things to do in [insert city name here]). This may come as a surprise, but there's often a cheap/free alternative to the busier, expensive tourist attractions.

YMMV of course. Budget travel IS a slight sacrifice that enables long term world travel for our family while the adults are still in their 30's and the kids are still living at home with us. The alternative would be to work another decade or two to enable first class luxury travel without any regard to costs. No thanks!

Like Sailer - my teenage boys probably eat a lot more than your younger kids... but other than that you are spot on. Some of my favorite vacation memories are when the kids were little - spending time in a park/playground in San Gimingiano, Italy - kids running around, swinging on the swings, etc... Then walking over to buy a gelato. And as far as the kids getting museum'd out... It happens... but you can use gelato as a motivator to keep going and not whine... We got through the Vatican Museums with a 4yo and 6yo with the promise of gelato at the other end.

We spent $23k for our landed costs in Europe last summer (9.5 weeks, 11 cities in 7 countries, train travel between locations.)... We ate great food, stayed in very nice, centrally located apartments, hung out with rich people on the beach in southern France, saw a musical in London... even ate at a Michelin rated restaurant one night. We did not feel deprived or suffering.

If we'd skipped London and Paris our budget would have been even cheaper since both cities blew the lodging budget. Next time we'll just tack on a few more weeks elsewhere.

 

[rodi]

My plan is to take regular size bookbags for the 8-9 week trip. We did this in Mexico and it worked out perfectly. No checked luggage. No lost luggage. Not sure if we'll do 3 days of clothes or 4 (how common are the wash/dry/fold places in mid to big city Europe?). Also hope to get a $500 ish lightweight laptop or two before we go to shave a few pounds off.

We did our trip with carry on size rollers and a book bag each. One of my criteria for apartment rentals was that they have a washing machine. I did laundry pretty much every day... but that's ok. The book bags didn't have clothes - they actually had books. We'd bought a bunch of cheap used books at the library book sale and passed them around between us.

 

[FUEGO]

Like Sailer - my teenage boys probably eat a lot more than your younger kids... but other than that you are spot on. Some of my favorite vacation memories are when the kids were little - spending time in a park/playground in San Gimingiano, Italy - kids running around, swinging on the swings, etc... Then walking over to buy a gelato. And as far as the kids getting museum'd out... It happens... but you can use gelato as a motivator to keep going and not whine... We got through the Vatican Museums with a 4yo and 6yo with the promise of gelato at the other end.

We spent $23k for our landed costs in Europe last summer (9.5 weeks, 11 cities in 7 countries, train travel between locations.)... We ate great food, stayed in very nice, centrally located apartments, hung out with rich people on the beach in southern France, saw a musical in London... even ate at a Michelin rated restaurant one night. We did not feel deprived or suffering.

If we'd skipped London and Paris our budget would have been even cheaper since both cities blew the lodging budget. Next time we'll just tack on a few more weeks elsewhere.

We are skipping London and 99% sure we're skipping Paris. Most expensive cities will probably be Munich Germany, Milan Italy, Venice (though I think we're staying free in Padua at a Starwood hotel on points). Particularly cheap places are Budapest, Prague and Ljubljana, so overall we are staying in fairly low to moderate cost cities.

We did our trip with carry on size rollers and a book bag each. One of my criteria for apartment rentals was that they have a washing machine. I did laundry pretty much every day... but that's ok. The book bags didn't have clothes - they actually had books. We'd bought a bunch of cheap used books at the library book sale and passed them around between us.

Books? That's what the 12 ounce tablets are for. Otherwise we would have an extra bag each, too.

 

[LitGal]

I think people find their personal level of FI when Time becomes more valuable than Money.

X 5

Annual SS + 2 pensions= ~$55K, with retiree healthcare. 0% withdrawal rate on healthy nest egg. (Don't need it right now.) Downsized to condo, and put remaining equity into bank until I activate pre-residency agreement to move into local CCRC at age 75.

Because of careful planning and LBOM with DH, plus living in a modest COL area, I have no temptation to return to work. Have only been retired four years, and only two of those years could DH and I enjoy together (before his decline and passing). If anything, I wish we had retired sooner, so we could have spent more years together enjoying the fruits of our labors.

 

[2017ish]

Cap,

Love to see your list of great $10 wines. I find that I can not really tell a great deal of difference in a $10 bottle and a $40 bottle. Now get me into a $140 bottle and I can tell. Cheers

This is why I strive to keep DW away from $140 wines!