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Old 12-19-2012, 06:11 PM   #61
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To answer your question, as discussed in other threads, I am the medical director of a couple of missionary projects abroad. I like to keep busy but full time clinician is no longer for me - burnt out.

I also have a condo in Europe, very close to where I was born. I would like to spend some time there too, to speak my native tongue again after 25 years + away from my cultural roots.

And yes, I have tried to chill out but it often involves margaritas, pinas coladas or wine...
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Is there any way you can scale back at work and begin exploring what life after FIRE may hold for you? You can clearly afford to do lots more (outside of work) than you do today, but what? Alternatively, you may be one of us who thrives on chillaxing and doing pretty much nothing, but have you ever tried that to see?
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Old 12-19-2012, 06:22 PM   #62
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Thank you for your kind words as always.

No one is beating anyone else. It's not a race. You bring a very good point about costs when I volunteer abroad. Yes, I still pay for food, supplies, medicines, etc. These costs are about $5-10k a year on average I guess. However, one city in Guatemala has offered to give me a piece of land next to a lake in order to operate a small clinic whenever I want to. I love the idea !

As for healthcare, I have a couple of female colleagues who I have seen in the past - and they would be ok to help me now. I like United Healthcare Plan 100, maybe $5k maximum a year because I am very healthy, except for the occasional bouts of IBS.

A key issue is the rate of inflation over 48 years (I am planning until age = 95). My numbers look good because I use a low rate, but things can change rapidly for the worse if inflation does increase drastically.


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While I'm another frugal MD, I can't beat that. My personal expenses this year will total ~$50k. Then again, I'm in Canada, where stuff costs more. And that does include socking away $5k in my TFSA, plus some debt repayment.....hmmm. Must recalculate!

Anyhow, I'm wondering about a couple of things. First, do you own a vehicle? Living in Chicago you may not need one. After ER are you likely to take road trips or move to a suburban or rural location where a vehicle will be essential?

Second, you do a lot of volunteering in Central America. Are your travel and accommodations paid for? If you are away from home a lot and eating on someone else's dollar, your personal food budget will be low.

Third, as donheff said, how will you fill the time you now devote to work? After ER that time may go from a revenue center to an expense.

Fourth, what about the cost of health insurance in ER?

For all those reasons I would not assume that your personal expenses will remain so low when you ER.
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Old 12-19-2012, 06:27 PM   #63
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I could not have said it better. Exactly the way I feel. Thank you.
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While everyone is different, and some thrive on a self indulgent lifestyle, others will only find satisfaction in challenging themselves to be what they can be. No harm in either situation... but recognizing the need to be involved can provide more satisfaction over the long haul.

The difference between "work" and "satisfaction" is often a matter of relative freedom.

IMO, it is not necessary to make decisions, once one has financial independence, but to take the time to explore every possible area of interest, no matter what direction this exploration may take.
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Old 12-19-2012, 06:29 PM   #64
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I can't nor would I wish to compete with the low hands here. But I cover all my expenses, including income tax, within a 4% wr- but since I have some SS (so far anyway), I actually withdraw less from portfolio.

Other than emergencies, I will not spend money that is not provided by cash inflows, not including realized or unrealized capital gains.

The idea of getting poorer each year basically turns my stomach. And as I see it, that is what a person is doing who follows the portfolio liquidating approach to retirement expenses. It doesn't matter if quoted value of a portfolio is up or down in any given year. If you have to periodically sell securities to cover expenses, absent unusual luck, you are liquidating. This could be challenged, if Berkshire or similar is a big holding, and IF you bought it at a very good price.

IMO, best is a portfolio that will throw off currently adequate dividends and interest, even when the government is playing tricks. And this must be done with reasonably conservative investment choices, and some thought to increasing portfolio income over time.

Millenia ago men and women learned to milk cows, so they could get protein from their cattle without having to slaughter them. The Masai still do the same, plus periodic controlled bleeding of their cattle.

Ha
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Old 12-19-2012, 07:28 PM   #65
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...(snip)...
The idea of getting poorer each year basically turns my stomach. And as I see it, that is what a person is doing who follows the portfolio liquidating approach to retirement expenses. It doesn't matter if quoted value of a portfolio is up or down in any given year. If you have to periodically sell securities to cover expenses, absent unusual luck, you are liquidating. This could be challenged, if Berkshire or similar is a big holding, and IF you bought it at a very good price.
...
I'm not sure I understand what your thoughts are on this Ha. Do you mean that those FireCalc lines that go down some before turning up are to be completely avoided? Aren't most of us going to experience some years where the portfolio actually looses altitude? The year 2008 comes to mind. How do we know when it starts down that it will turn up eventually? What if the stock and bond markets did very poorly because of a major war? That was the case from 1938 to 1944 or so. If we had a 2008 followed by a major war ... oh boy.

I do agree with the "getting poorer each year basically turns my stomach" comment. Sorry if I'm being a bit too provocative. Actually I'm pretty optimistic which is why I have a 65/35 AA right now.
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Old 12-19-2012, 09:13 PM   #66
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I'm not sure I understand what your thoughts are on this Ha. Do you mean that those FireCalc lines that go down some before turning up are to be completely avoided? Aren't most of us going to experience some years where the portfolio actually looses altitude? The year 2008 comes to mind. How do we know when it starts down that it will turn up eventually? What if the stock and bond markets did very poorly because of a major war? That was the case from 1938 to 1944 or so. If we had a 2008 followed by a major war ... oh boy.

I do agree with the "getting poorer each year basically turns my stomach" comment. Sorry if I'm being a bit too provocative. Actually I'm pretty optimistic which is why I have a 65/35 AA right now.
Well, as best I can tell, if you cannot live on current income, you are making several gambles on outcomes which depend very heavily on "path". May be fine, but this does not appeal to me.

All these plans have flaws, including the current income plan, which in fact has several dedicated critics on this forum. It's an area where we must make a choice.

Also, to try to answer one of your specific questions, one cannot avoid having the lines go down, unless he only invests in very high quality short duration debt, which isn't much income today. But if the portfolio throws off enough income without having to make sales, the investor would at least have a shot at survival during a downturn similar to what Japan has experience over the past 2 decades. If he needed to make regular sales, his portfolio would soon be weakened beyond any chance of recovery, given the ongoing drag from withdrawals.

Dividends are a more robust income source than capital gains.

Ha
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Old 12-19-2012, 11:14 PM   #67
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Thanks for your comments Ha. I'm not so sanguine about dividends, but you may be on the right track for your needs. I'm never sure of my own approach but have managed to survive and prosper so far. There are probably multiple paths to a happy and prosperous old age.
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Old 12-19-2012, 11:32 PM   #68
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My mantra for success is "earn a lot, save a lot and spend a little".

Post 65 I won't have to use my portfolio at all as all my spending will be covered by rental income, a small pension and social security checks from the US and the UK. I estimate they will total $65k....of course that assumes no change in SS benefits. But if that happens I can double my rental income by swapping flats or actually spend some dividends.
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Old 12-20-2012, 12:09 PM   #69
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Ours were $27,788 for normal monthly living expenses of utilities, car, life and home insurance, groceries, gas, medical deductibles and prescriptions, pocket cash, eating out and other misc. (minor home and car repairs, gifts, clothing, stuff, etc.)

1893 Utilities (elec, water, sewer, trash)
652 Internet
1165 DirecTV
574 Natural Gas
720 Savings for medical expenses
676 Car Insurance
816 Life Insurances on both
2400 Property Taxes
570 Homeowners Insurance
10117 Groceries (food, paper products, OTC pharm, pet, etc)
1421 Gasoline
3924 Other
1560 Pocket Cash
1300 Eating out

$27,788 Total monthly expenses

In addition we had some other expenses that don't fit in the monthly budget - a major dental repair for DH, replace a gas grill, a couple larger car repairs, a new chair and new TV. These items came to $2742. We put money in savings every month for things like these.

$30,530 Total for the year

We also had a once-every-30-year expense of a new roof and gutters and had to trim a tree before we did it. Total for that was $7926. We knew this was coming and had the money in savings.

$38,456 Total spent including the roof and gutters

Coming up for 2013 is a change in our retiree subsidized health insurance. Starting in January it will cost us $400/month for the 2 of us, so that's an additional $4800 for the year.

For 2013 I'm planning on between $33,000 and $35,000.
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Old 12-20-2012, 12:11 PM   #70
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Yes $12K/yr in total spending isn't much but I have barely a 6-figure portfolio at age 33 and am unemployed with no job prospects so it's necessary to keep the spending at that level.
Aaron,
you say unemployed - what about pizza delivery?
Any news on the government job you were planning to apply?
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Old 12-20-2012, 12:35 PM   #71
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Some of you are really amazing. I've got 3 months left before my April 1 departure from the work place. There is no way we can live on what you guys are living on.
1. Health Insurance. Premiums will be right at $9,000 a year, with a pretty big deductibe. We don't see doctors often, but we're budgeting $12,000.
2. Property taxes on 2 homes. Almost $11,000 a year. No mortgages.
3. Homeowner insurance. $5,000 a year.
4. Car insurance. $1500 a year for 3 cars. But, no car loans.
5. HOA dues are about $3,000 a year.
6. Electricity on 1 house is about $400 a year, but over $3,000 on the Florida house. We plan on reducing that $3,000 signficantly by leaving Florida during the hot months and setting the thermostat up much higher than is comfortable when we're here in the summer. But still, it's going to be $2500 or so a year.
7. That puts us at about $35,000 without spending any money for food, clothing, entertainment, auto expense, etc.
8. For budgeting purposes, we have budgeted $10,000 a month spending but really think we will spend a good bit less once we get settled into retirement life. But it isn't going to be $30,000 or $50,000, so I am very impressed by you guys who get by on so little. I guess we could do that if we consolidated to the smaller, cheaper to run house and got rid of a couple of cars. It costs less than $5,000 a year to run that house, including taxes, electricity, gas, etc.

It's really inspiring to hear your stories.
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Old 12-20-2012, 12:58 PM   #72
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Aaron,
you say unemployed - what about pizza delivery?
Any news on the government job you were planning to apply?
Or on the trucking job you were considering?
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Old 12-20-2012, 01:00 PM   #73
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There is no way we can live on what you guys are living on.
+1
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Old 12-20-2012, 01:05 PM   #74
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Some of you are really amazing. I've got 3 months left before my April 1 departure from the work place. There is no way we can live on what you guys are living on.
There are some us who don't aspire to live as frugally as we can, especially now that we are retired. I've checked the Community Rules and that isn't a requirement for membership on the site

This year, excluding income taxes, we've spent ~$74k.
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Old 12-20-2012, 01:06 PM   #75
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Aaron,
you say unemployed - what about pizza delivery?
Any news on the government job you were planning to apply?
I quit that job. I don't know if drivers have gotten worse since I last did the job over 10 years ago or if my tolerance for bad drivers is less but either way I can't take the stress of the job. It would be much worse now with over a foot of snow coming down today. After the new year i'll go back to the unemployment agency and take any manufacturing/warehouse job I can get. Probably no more than $10/hr. As for the government job, they wouldn't even give me an in person interview for the lowest position.
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Old 12-20-2012, 01:10 PM   #76
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Or on the trucking job you were considering?
Before you can start hands on training you have to get your CDL learners permit. There are 3 tests they require you to pass. After a lot of studying I went and took the tests and failed all 3 of them, badly. Clearly not a good option for me.
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Old 12-20-2012, 01:14 PM   #77
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I do not remember from your past posts if you would consider moving to another state where job opportunities are better. I know that you have your own place, and that's a limit to your mobility, but perhaps a big change may be what you need.

Again, I do not know if the job situation is limited to just your area or not, as I do not follow the job market. However, here in the SW, I do not have any relative or acquaintance who is unemployed.
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Old 12-20-2012, 01:28 PM   #78
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I do not remember from your past posts if you would consider moving to another state where job opportunities are better. I know that you have your own place, and that's a limit to your mobility, but perhaps a big change may be what you need.

Again, I do not know if the job situation is limited to just your area or not, as I do not follow the job market. However, here in the SW, I do not have any relative or acquaintance who is unemployed.
I tried to sell my condo earlier this year and didn't get a single offer in 6 months even though it was priced quite low. Therefore moving isn't really an option right now. I think that manufacturing type jobs are probably available in greater numbers right here than in any other area i'd move to. So I probably won't move anytime soon.

I don't know a lot of people but know several who are unemployed. All are under 40 and have no college degree-same as me.
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Old 12-20-2012, 01:47 PM   #79
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That's too bad about not being able to sell your place. But about manufacturing jobs, they are available in all places. The difference is that these may be light manufacturing such as electronics or warehousing operations, not the heavy work that requires smoke stacks like in the mid west or north east. You would like these better anyway.

And about unemployment, new college graduates had a tough time too. And I am talking about engineering and computer college graduates, not just liberal art majors. A personal anecdote is my own son. He did not want to relocate, hence limited his search to just this metropolitan area with a population of more than 5 millions. It took him a few months to get a job.

PS. I just recall a story about Menard (a hardware store chain) having to fly workers weekly from Wisconsin to staff ND stores. So, I searched and found it: Menard to fly Wis. workers in to staff ND store.
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Old 12-20-2012, 01:51 PM   #80
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There are some us who don't aspire to live as frugally as we can, especially now that we are retired. I've checked the Community Rules and that isn't a requirement for membership on the site

This year, excluding income taxes, we've spent ~$74k.
Now I can sleep well. At least we're in the same neighborhood (budget wise ).
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