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Old 10-21-2018, 07:19 PM   #41
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Well yes and no. For many of us who had good salaries than replacing those salaries (say $200K) then yes on the surface you'd need $5 million.

But with lower taxes and no need for saving the actual income needs are lower.

But more importantly, even for really HCOL place like DC, SF Bay Area, or NYC. The median household income is $100-120K . Once you figure in the lower taxes and expense associated with retirement, a 2-3 million stash lets you have an average lifestyle. Maybe somewhat below average for $2 million. But really $2 million plus a paid off house is enough for middle-class lifestyle pretty much anywhere. But obviously middle class isn't enough for Suze Orman.
Had a great salary, but cut expenses by 60% with moving to FLA in order to FIRE. Still we are looking at ~110k yearly in a MCOL led by a 26k rent.
However the DGF is already receiving SSDI and other payments coming in currently cover 67k. This will drop in a few years.
We have less than 2mm without a paid off house, but believe in history/calculators with an ultimate WR% under 3.5% will last us through.
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Old 10-21-2018, 07:35 PM   #42
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I like that feeling, too. I wouldn't feel good retiring on a very low amount with no margin for error, but I'm okay with saving more than we might spend and having a cushion.
One condition of my being able to ER was that my ER budget would include a surplus, or cushion, to allow for the somewhat frequent, smaller, unforeseen expenses which can arise in a given month. If I g on a minor spending spree once in a while, I don't have to worry about my budget being unable to cover them. All that will happen is my surplus gets eaten up for that month, not a big deal.

I do have a larger "slush fund" to cover me in case there are larger, unforeseen expenses. It is a second-tier EF I can tap into once in a while.
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Old 10-21-2018, 08:35 PM   #43
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Eddie, they are using Medicaid and ACA , health ministries or going without.
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Old 10-21-2018, 08:36 PM   #44
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I have not listened to Suze O in years. I was liked to listen to her advise and took most of it as humor. LOL

I have tried to register on MMM but I couldn't pass the test of 2 or 3 questions to get excepted. LOL I tried to find the answer to the one question and couldn't find it so I never went back there to try again.
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Old 10-21-2018, 08:41 PM   #45
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I think $2 Million minimum is about right if you retire in California. My brothers and several friends live - it is way too expensive. I'm in N.C, where cost of living is much cheaper. And you can do fine with $1 Million.

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It also depends on the location of residence too. May not be possible in some HCOL in California.

But Iím thinking every 7 years, the amount that you need tend to double.
So in 2000, you need $500k, in 2008, you need $1 million, in 2018, that might be $2 million. Plus retiring in a bull market like 2000 and 2008, the amount might be reduced after the crash. So if you retire now, it might be reduced in the future.
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Old 10-21-2018, 08:48 PM   #46
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Street, what questions to get accepted? I don’t remember doing that.
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Old 10-21-2018, 08:51 PM   #47
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Hahaha...you have to pass the "test" eh?

Amazing.
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Old 10-21-2018, 09:12 PM   #48
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It also depends on the location of residence too. May not be possible in some HCOL in California.

But I’m thinking every 7 years, the amount that you need tend to double.

So in 2000, you need $500k, in 2008, you need $1 million, in 2018, that might be $2 million. Plus retiring in a bull market like 2000 and 2008, the amount might be reduced after the crash. So if you retire now, it might be reduced in the future.
Not sure if I am following this.

Are you suggesting 10% personal inflation rate?

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Old 10-21-2018, 09:22 PM   #49
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Not sure if I am following this.

Are you suggesting 10% personal inflation rate?

-gauss
No, It’s just an observation that back in 2000, the amount suggested for retirement from the media was $500K. The amount seems to be doubled every 7-8 years.

If you have $500K in 2000, at the low of 2002-2003, it dropped 40-50%, so your stash is halfed to about $300k.

Same with 2008, if you start out with $1million, after 2008-2009, it dropped 40-50%, your stash is halfed to about $500k.

I have no idea what’s suggested now, but I’m guessing it’s double 2008 level so that’s why the amount $2 million was suggested.
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Old 10-21-2018, 09:47 PM   #50
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Street, what questions to get accepted? I donít remember doing that.
LOL! I can't remember for sure but if I remember right one was "what was the first word on the first MMM forum board". Any way is was something like that.

I haven't been back there and it was over a year ago and I haven't bothered to even try.

I got the one question right because it is a saying of some sort that is right on their home page.

It seemed bizarre to me. LOL
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Old 10-21-2018, 09:50 PM   #51
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Hmmm... I guess they (he?) want to be sure that only devout followers who read every word or slogan on the forum or blog posts can gain entry to the forum.

Smart. Less opposition, fewer dissenters that way. You have to be a true believer to get to Nirvana. No troublemaker allowed.
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Old 10-21-2018, 09:53 PM   #52
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They are both nuts.
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Old 10-21-2018, 09:57 PM   #53
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Hmmm... I guess they (he?) want to be sure that only devout followers who read every word or slogan on the forum or blog posts can gain entry to the forum.

Smart. Less opposition, fewer dissenters that way. You have to be a true believer to get to Nirvana. No troublemaker allowed.
Itís time to send a dead rat, virtual one.
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Old 10-21-2018, 10:08 PM   #54
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No, It’s just an observation that back in 2000, the amount suggested for retirement from the media was $500K. The amount seems to be doubled every 7-8 years.

If you have $500K in 2000, at the low of 2002-2003, it dropped 40-50%, so your stash is halfed to about $300k.

Same with 2008, if you start out with $1million, after 2008-2009, it dropped 40-50%, your stash is halfed to about $500k.

I have no idea what’s suggested now, but I’m guessing it’s double 2008 level so that’s why the amount $2 million was suggested.
Okay. Well unless new mandatory expenses are being introduced into our lives over time (ie full price smartphones/contracts, for-profit colleges etc.), the rule of 72 would dictates that the doubling of an asset every 7-8 years would imply a 10% growth rate.

I am not sure what the assumptions are behind the media recommendations, but have seen nowhere near that level of increase in my expenses in my life.

I have categorized quicken spending/income data going back to 1995 and it was invaluable to me with regards to being able to RE when the conditions presented themselves.

Thanks
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Old 10-21-2018, 10:19 PM   #55
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I think $2 Million minimum is about right if you retire in California. My brothers and several friends live - it is way too expensive. I'm in N.C, where cost of living is much cheaper. And you can do fine with $1 Million.

If you include the cost of a house then that's probably so. Housing circumstances vary widely though. For someone arriving in coastal CA today $2M wouldn't be nearly enough, but for those who bought many years ago (or during the RE downturn of 2009-2012) then $2M or even considerably less can be quite comfortable even in nominally HCOL CA.
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Old 10-21-2018, 10:21 PM   #56
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Okay. Well unless new mandatory expenses are being introduced into our lives over time (ie full price smartphones/contracts, for-profit colleges etc.), the rule of 72 would dictates that the doubling of an asset every 7-8 years would imply a 10% growth rate.

I am not sure what the assumptions are behind the media recommendations, but have seen nowhere near that level of increase in my expenses in my life.

I have categorized quicken spending/income data going back to 1995 and it was invaluable to me with regards to being able to RE when the conditions presented themselves.

Thanks
-gauss
It’s not the 10% growth rate is the assumption, though it seems that way.

But would you feel comfortable living with $300k in 2002-2003 time frame. That would mean $12k of income. Even with a house paid, there’s property tax and health insurance. Back in 2003, I remember distinctly, gas price was $1.50 per gallon, Because I complained about it been expensive. I paid $250 per month for health insurance for a family of 4, that’s almost $3k per year. Doesn’t leave much to live on. I know I wouldn’t FIRE with that amount.

Same with 2008, with only $500k, that means $20K per year income. I wouldn’t FIRE with that amount either.

But my perspective is from living in California, not some low cost area. YMMV
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Old 10-21-2018, 10:22 PM   #57
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^ Nope - I would not be comfortable with 12k of income.
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Old 10-21-2018, 10:35 PM   #58
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If you include the cost of a house then that's probably so. Housing circumstances vary widely though. For someone arriving in coastal CA today $2M wouldn't be nearly enough, but for those who bought many years ago (or during the RE downturn of 2009-2012) then $2M or even considerably less can be quite comfortable even in nominally HCOL CA.
So I bought a house in 1976, if I stay in that house, I would still need $40k minimum. So thatís about $1 Million. But I was a teenager then, but if I bought it at normal working age like 25 years old, I would be dead or close to dead by now. Which means maybe more healthcare cost.
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Old 10-21-2018, 10:57 PM   #59
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Street, the rules must have changed since I joined)
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Old 10-22-2018, 12:45 AM   #60
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Some years ago, I learned about MMM from this forum as I do not get out much.

So, I went there to see what it was about. Nothing bad, as I recall. It was mostly about LBYM, frugality, and all that good stuff that I practiced all my life. I guess it's like most religions on the surface; I have not read about any religion that says you should steal, or commit murder or robbery, or seduce your neighbor's spouse or something like that. But in practice, well, it's a whole 'nother story.

So what is MMM about now? Is it getting cultish?

PS. Just went to their home page. It said "Join the Cult". Uh oh. That explains it.
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