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Old 10-24-2008, 07:22 AM   #41
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Originally Posted by Dawg54 View Post
I said could.
Oh, OK!!! Good. I was about to take up a collection.

There are a lot of other things for a golf enthusiast to cut back on, other than golf, if they even need to cut back in the first place.

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Old 10-24-2008, 09:30 AM   #42
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Just a technical note on using Firecalc. Most people solve for a success rate of 95%, not 100%. The 5% failures have historically occurred in years when the market went down soon after retirement. Therefore, cutting spending is part of the "Firecalc Plan" if you think that the market results since you retired have been bad enough to suggest that your retirement date is in the worst 5% of the possible cases.

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Old 10-24-2008, 03:05 PM   #43
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Originally Posted by Want2retire View Post
Oh, OK!!! Good. I was about to take up a collection.
By all means start the process. I'm not opposed to sharing the wealth. Well....only if it means I'm on the receiving end.
Retired 3/31/2007@52
Full time wuss.......
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Old 10-25-2008, 04:13 PM   #44
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In essence, have you lowered your expenses by 30%? What had to go? Also, if you increased your expenses, we'd like to know that as well.
Craigslist sellers are desperately reducing possessions to pay down debt.
Our approach has always been more along the lines of increasing the ‘Lifestyle’ portion of Retire Early.

To us this means not necessarily cutting back or giving up but rather looking elsewhere for entertainment, and ways to make our lifestyle more satisfying.

Like Nords said, Craigslist is a rewarding place to look for bargains. I recently purchased 130 baby clothing items plus a never used crib set and a baby sling tote (used once), all in excellent and stain free condition for $60. This was for my niece who just had her first baby, and had I purchased these items new, it would easily have been hundreds of dollars.

Since I now have the skill of doing Thai massage, I do a significant amount of trading with others which has been very enriching. For example, I just recently received the services of a seamstress who made me 3 dresses in trade for massage.

We are currently living in Mexico, and with the peso/dollar exchange now, our living expenses simply dropped 25-30%. Our rent, food, utilities and entertainment options are all in pesos.

Along with having our ‘monthly nut’ pretty low (for the home we keep in the States) this allows us personal freedom to be creative.

Instead of cutting back, we create more options for ourselves and try to expand our benefits in ways that are ‘outside the box‘. It works for us. Plus we do a lot of volunteer work, so we don’t have the ‘craving for having’.

I would encourage you to look at what you already have, the experience and talents you already use, and see how you could utilize them in different ways to make your lifestyle more fun or satisfying. To me, it's more inspiring than the thought that 'I have to cut back'. Just a suggestion.

Be well,

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In 1991 Billy and Akaisha Kaderli retired at the age of 38. They have lived over 2 decades of this financially independent lifestyle, traveling the globe.
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Old 10-25-2008, 07:44 PM   #45
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I've always lived below my means. Comes from growing up poor. So, I guess we could eat out a little less, if necessary. House is paid for. Vehicles are paid up. Credit card is paid monthly; no interest. Medical is accounted for, thank you medicare and tricare. Pensions and SSAN pay for our everyday living expenses. Now I do like my wine. That ain't going; even if the market craters to zero. I know it's heresy here, but if things got really bad, why I'd go back to w***. There, I said it.
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Old 10-26-2008, 06:38 AM   #46
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Living below my means here as well, even though I've taken an income hit of 75k in 2007 and it looks like another 75k in 2008. Portfolio loss is also significant, but since I don't tap into it to pay expenses, I haven't had to really cut expenses. I've probably cut expenses about 10%
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Old 10-26-2008, 10:43 AM   #47
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Originally Posted by Bikerdude View Post
I will probably come in about 2% under budget this year. I am not going to add an inflation increase for next year. I will be fine as long as dividends hold up. However, I have no experience with how dividends will react in this type of market.

Anyone been through a prolonged market downturn living on their dividends? UncleMick?
One would have to be quite old to make that claim. In 2000-2002, the stocks that crashed paid little or no dividends. Many old economy stocks chugged along paying well with modest or variable price changes. I laid the foundation for my personal dividend investing during this time, with large purchases of MO and UST. These proceeded to scare the hell out of me by continuing to fall in an atmosphere of extreme legal harrassment. Once the states got on tobacco's payroll I felt I was safe though. I think to set up a dividend retirement one either has to accept some risk along the way, or save like mad, as there will not be any Dell or Amazon multibaggers.

You also cannot be the type of person who seeks consensus. I see questions on this board- "Some say this, some that". I'd say buy yo' mama a brand new hat. Becasue when the dust settles, at least she will have had that. If you listen to what people say, you are screwed as an investor.

Although I was retired during the 90 recession, I was doing intermediate term swing trading. I remember that time as being an excellent hunting season for financials. No clue how dividends fared, though I imagine not too badly across the board.

My grandmother lived through the 70s on dividends. As I remember from family chat, her blue chips sailed along fine, but there were income cuts from the smaller number of mutual funds that she owned. My guess is that redemptions caused the managers to make suboptimal decisions- selling the good dividend paying blue chips because they could be sold. Dividends actually increased steadily during the 70s recessions, as companies had considerable pricing power in that inflationary economy, prior to the onset of effective foreign competition in many industries.

One of my uncles managed her money, and I remember that he did put her on an allowance, which she was not very pleased about.


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