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Old 02-27-2013, 02:46 PM   #121
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Just an alternate (less inexpensive thought.)

We only pay 300-350/kid for sports... but we also pay about $1500/year/kid for piano lessons. That's definitely a bigger hit on the budget. But it was absolutely a CHOICE we made... not mandatory. Our kids would grow to adults just fine, without piano lessons. But we chose to give them musical training to round out their brains/learning. No future Julliard grads - but they'll be able to impress the girls with their piano playing when they are teenagers.
HSV, saving time, this is what Rodi wrote--that the piano was optional. So if they hadn't put that in their budget, it wouldn't be something the kids would be doing.

Fuego is going to make the same kind of choices, and if his kids want something specific that isn't currently on his radar, he'll have to make the decision then. But I suspect his kids will have expectations that are reasonable to the amount of money and time expended.
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Old 02-27-2013, 02:53 PM   #122
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HSV, saving time, this is what Rodi wrote--that the piano was optional. So if they hadn't put that in their budget, it wouldn't be something the kids would be doing.
Sarah, of course all kids activities are optional. But FUEGO has asked for reasonable estimates and Rodi's, mine, and others experiences are showing what these numbers are.
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Old 02-27-2013, 02:55 PM   #123
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My vote is for learning to play guitar, by the way, at least for the boys.
Especially when they get to be teenagers.

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Old 02-27-2013, 03:49 PM   #124
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HSV - you specifically mentioned sports. I addressed sports. And the choices we made there that are less than you and DayLate suggested.

I then volunteered that we have another activity (by choice) that is not sports related.
Most of our friends don't have their kids in music programs outside of school. (School instrumental music starts at grade 5 in our district). Since we chose (there's that word again) to have them learn Piano - we spend the money. But they could be learning violin, viola, cello, saxaphone, trumpet, trombone, etc... for free. If we'd chosen that.

There are options to not spend as much. There are options to spend a whole heck of a lot more. It's about choosing what's right for your family.

I'm confident that the Fuego family could have their kids in plenty of activities for a small budget... if that's their choice.

But I don't see any reason to continue this line of discussion. We're talking past each other.
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Old 02-28-2013, 12:48 PM   #125
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But I don't see any reason to continue this line of discussion. We're talking past each other.
I appreciate the discussion and I see both of your points. Sports can be very inexpensive as you have illustrated, and other extracurriculars can be very expensive (like your piano lessons). So one can spend thousands per kid, or one can spend a couple hundred per kid, depending on one's choices.

I doubt we would ever spend $1500/yr on music lessons, for example, but there will probably be a few activities that are more in the $100-200 range (per year or season).

Reflecting back on my childhood, I spent a lot of time in Boy Scouts up to around age 15 or so (topped out at Eagle Scout). And spent a few years in taekwondo in middle school and high school. I remember boy scouts being very inexpensive for all the time we spent on it (couple dozen bucks a year in annual dues, and $10-20 or so for weekend camping, maybe a couple hundred for overnight summer camp or long weekend high adventure stuff). Taekwondo was more expensive at a couple thousand per year for the whole family, but that is about the same as what you would pay for gym memberships or a Y family membership.

We do have a $6000 line item in the budget for vacations/fun expenses. Maybe we lean more towards expending this amount on kids extracurriculars instead of vacations in their tween and teen years. The kids will have input to some extent. More vacations vs more after school stuff?

I guess I should make clear - we aren't trying to live an upper middle class lifestyle with lots of expensive organized extracurricular activities. I'm not too worried about building the kids' resumes so they can get into an elite undergraduate school. I am more interested in establishing an environment where the kids can pursue the interests they want while also doing well academically in school without setting overly stressful expectations on their performance. In other words, I don't care if they don't ever letter in anything or become first chair or have a 4.0 (or 6.0), as long as they are happy, reasonably successful and intelligent.

If they can meet those goals, then I don't think they will have a problem getting into and graduating from a decent university and launching into the real world. If university is the smart thing to do for the kids in another 10-18 years.
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Old 02-28-2013, 03:06 PM   #126
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I guess I should make clear - we aren't trying to live an upper middle class lifestyle with lots of expensive organized extracurricular activities. I'm not too worried about building the kids' resumes so they can get into an elite undergraduate school. I am more interested in establishing an environment where the kids can pursue the interests they want while also doing well academically in school without setting overly stressful expectations on their performance. In other words, I don't care if they don't ever letter in anything or become first chair or have a 4.0 (or 6.0), as long as they are happy, reasonably successful and intelligent.
Then I think you are on the right track living in the neighborhood you do. In our area even Scouts can be very expensive - probably several thousand a year if you signed your kid up for all the camps and trips. If I had to do it over I would have lived in an area where the other households had similar spending habits, not similar incomes - a total Milionaire Next Door lifestyle.
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Old 02-28-2013, 03:11 PM   #127
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I guess I should make clear - we aren't trying to live an upper middle class lifestyle with lots of expensive organized extracurricular activities. I'm not too worried about building the kids' resumes so they can get into an elite undergraduate school. I am more interested in establishing an environment where the kids can pursue the interests they want while also doing well academically in school without setting overly stressful expectations on their performance. In other words, I don't care if they don't ever letter in anything or become first chair or have a 4.0 (or 6.0), as long as they are happy, reasonably successful and intelligent.
Excellent post. Sounds like my childhood. I played outside, rode bikes, went to afterschool gym activities up through High School. I started working at 16 and paid for my own college education (with help from scholarships and grants). I lived at home through college and I have no regrets about that. I graduated with zero debt and I have a very paying job and I'm looking at retiring in the next 1 - 3 years which, to me, means I've been pretty successful and pretty smart. FUEGOs kids can (and I highly suspect will) do the same. It takes is a level headed parent and guidance to move in the right direction, which FUEGO seems to provide.
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Old 02-28-2013, 03:12 PM   #128
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Then I think you are on the right track living in the neighborhood you do. In our area even Scouts can be very expensive - probably several thousand a year if you signed your kid up for all the camps and trips. If I had to do it over I would have lived in an area where the other households had similar spending habits, not similar incomes - a total Milionaire Next Door lifestyle.
I think we do actually have millionaires a few doors down (I would almost bet a million bucks they are - they own six rental houses mostly free and clear in the neighborhood). And some that aren't millionaires but probably pretty well off based on education, profession, and employer. And then there is the lady next door that is a hair stylist and gets by just fine.

We're pretty happy with the neighborhood and it is easy to not spend a ton of money on stuff just to not stick out too much.
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Old 03-12-2013, 12:33 AM   #129
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Keep working.
+1001

Work until you do not need to include 'free medical and dental care' in your retirement plan. They are not 'free', the rest of us her pay for them.

OP should be titled "How to Game the System so You Will pay for Things I should Pay For So I Can Call Myself 'RETIRED'"!

ER should not be at the expense of others.
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Old 03-12-2013, 08:23 AM   #130
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I think we do actually have millionaires a few doors down (I would almost bet a million bucks they are - they own six rental houses mostly free and clear in the neighborhood). And some that aren't millionaires but probably pretty well off based on education, profession, and employer. And then there is the lady next door that is a hair stylist and gets by just fine.

We're pretty happy with the neighborhood and it is easy to not spend a ton of money on stuff just to not stick out too much.
I was just talking to my sister this morning, who has three kids in the tween age group. I think that they've done a good job of explaining the family's finances to their kids as they've raised them, so they have reasonable expectations of what they can do.

One interesting story is that the oldest (a girl) saved up her babysitting money all last year to go to a fairly expensive summer camp. Now the second child, a boy, wants to go, but it is much harder for him to make money than her. But they are holding firm that if he wants to go to the camp, he'll have to earn the money (although they do it as matching funds--the kids have to pay half).

I like to see this kind of parenting. And fortunately, their neighborhood seems well matched to the same spending.
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Old 03-12-2013, 10:41 AM   #131
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This is 100% spot on. I have read 2 of the millionaire next door books, and I definitely see myself in the books with respect to spending patterns.

I'm not sure that we are quite the Joneses, because some in the neighborhood do have flashier cars (well, almost everyone...) and better maintained yards and houses. But we aren't out of place here. We mow our own grass, work in the yard, on the house, and under the hood. We cook at home. A play date can be playing in the backyard or an afternoon at the park or an evening at the $1 roller-skating rink. The neighbors aren't in to conspicuous consumption, even though there is a wide mix of families that earn $30k/yr to $150k+. Not hard to keep up in this neighborhood if you're one of the $150K+ families (which we aren't quite yet).

There is certainly a financial arms race among the school age kids, but not so much at our kids' school (it is one of the relatively high poverty schools in the overall great district). I have heard horror stories from other schools about all the bling these kids have and how it is expected. I'm not really interested in getting that entitlement mentality formed in my 6 and 7 year olds. They seem really happy now and are doing well academically, behaviorally, and socially so no worries.

I hear about other parents scrambling to keep up with all these activities their kids are in and it sounds insane. Almost every afternoon filled with something, then travel sports almost every weekend. That isn't what we are looking for at all.
We live in a similar neighborhood and I'm thankful (we bought here before children were even on our radar). Frankly, I'm not sure why people without sufficient means stretch themselves for the "best" school district. IMO, the kids will do better where they aren't on the bottom rung of the social ladder.
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Old 03-12-2013, 11:30 AM   #132
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You have gotten a boatload of suggestions already, but I will point out what I hope is obvious: all these plan assume the historical worst case outcomes. There is an excellent chance that the outcome will in fact be better than the worst historical one. If that proves to be the case (and you will likely know in 5 or 10 years), you will have a ton of fat to play with.
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Old 03-12-2013, 03:06 PM   #133
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You have gotten a boatload of suggestions already, but I will point out what I hope is obvious: all these plan assume the historical worst case outcomes. There is an excellent chance that the outcome will in fact be better than the worst historical one. If that proves to be the case (and you will likely know in 5 or 10 years), you will have a ton of fat to play with.
That is totally the plan! I'm okay with a somewhat stochastic outcome to my life. Something like a 5-10% chance we'll be living on a budget for the rest of our lives. 30% chance that our real income will slowly creep up, and we'll have a very comfortable last few decades of life. And a 55-60% chance in 5-10 years, we'll know we made the right choice and have more money than we will need and be able to up the spending relatively soon.
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Old 03-12-2013, 04:57 PM   #134
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And you still have the option of consulting, part time work, or a hobby business to make up any shortfall.
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Old 03-14-2013, 12:59 PM   #135
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all these plan assume the historical worst case outcomes. There is an excellent chance that the outcome will in fact be better than the worst historical one. If that proves to be the case (and you will likely know in 5 or 10 years), you will have a ton of fat to play with.
This is a good point, but for my curiosity, what kind of the worst cases are assumed? All I want is to compare to the current opinions of 'experts'. I've read recently that the most reasonable growth after inflation we can expect for the next three decades is probably 2%. That definitely depressed me.
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Old 03-14-2013, 01:08 PM   #136
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It's a great great thread thread that I read with interest. Of course, I wouldn't be brave enough to pull the plug this young, but it's very educational for anyone's planning purposes.
I admire about attitude about parenting and how you parent your children. I wish more parents nowadays did at least half-way you do, then there would be fewer parents writing to child psychologist (whose column I read once in a while in our local newspaper) asking for advise how to deal with their out-of-control teenagers.

Great job and good luck.
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Old 03-14-2013, 01:19 PM   #137
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This is a good point, but for my curiosity, what kind of the worst cases are assumed? All I want is to compare to the current opinions of 'experts'. I've read recently that the most reasonable growth after inflation we can expect for the next three decades is probably 2%. That definitely depressed me.
If you are basing your plans on what firecalc spits out, it just takes your numbers and runs them through a series of historical what ifs. So the worst case is equal to what would have happened to you with your numbers if you had retired at the exact worst time in US financial history since the late 1800s.

I would not lose any sleep over what some jackhole talking head says about teh future. They have no idea and neither do we. I think recorded US financial history is a reasonable yardstick, and I think it is prudent to have plan B and plan C thought out if things go worse than that. But beyond that, there is really little you can do. You wanna work the rest of your life? Not me.
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Old 03-14-2013, 09:06 PM   #138
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It's a great great thread thread that I read with interest. Of course, I wouldn't be brave enough to pull the plug this young, but it's very educational for anyone's planning purposes.
I admire about attitude about parenting and how you parent your children. I wish more parents nowadays did at least half-way you do, then there would be fewer parents writing to child psychologist (whose column I read once in a while in our local newspaper) asking for advise how to deal with their out-of-control teenagers.

Great job and good luck.
Thanks for the kind words! I hope our parenting pays off by having the teenage years go a little easier than some have it. So far so good, with our oldest currently 7 going on 17...
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Old 03-15-2013, 08:49 AM   #139
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FUEGO, when I read a post about SS and its disability benefits, I thought that topic also relates to your plans: How does stopping work early affect Social Security?

Have you researched it and if so what conclusions did you make for yourself and your DW?
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Old 03-15-2013, 10:34 AM   #140
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FUEGO, when I read a post about SS and its disability benefits, I thought that topic also relates to your plans: How does stopping work early affect Social Security?

Have you researched it and if so what conclusions did you make for yourself and your DW?
I haven't really considered qualifying for disability in the context of ER. I figured once we are FI, the need for disability insurance (provided by SS) as a replacement of earned income goes away totally. I suppose there could be some (possibly significant) increases in medical expenses and other expenses to cope with a disability (home and/or vehicle modifications, hiring out household chores and repairs, etc).

From reading the eligibility rules, we would be eligible for disability benefits for the first five years after we ER, since you must have worked for 5 of the last 10 years when you are age 31+.

Right now while we are working, I do count on the disability and survivor benefits of SS. Last I checked we would qualify for around $36000-40000 per year for survivor benefits if either me or DW kicks the bucket by virtue of having 3 qualifying kids and assuming the other spouse is the caretaker. This would be ample to live on (based on our current spending) and the surviving spouse could quit working immediately. The next egg would continue to grow untouched until the kids start aging out of SS survivor benefits eligibility.
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