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Old 02-05-2012, 01:16 PM   #41
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Originally Posted by Peter View Post
Yes, I wonder if all those passing judgment on the OP's spending habits would be quite so forthright in a face-to-face social setting.
No one appears to pass judgement on his spending habits but to point out that the required income/expense is not inline with the proceeds from the upcoming sales of business.
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Old 02-05-2012, 01:20 PM   #42
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IMHO- I thought Wilton was very direct in his question. I dont think he was trying to put the square peg into the round hole. He was just wanting to know if people thought a 7.7% expected return was reasonable. He clearly articulated what his required income level was needed. He wasnt asking for ways to reduce his expenses to fit his nest egg. He already commented he would continue to work if need be to support his lifestyle. Congrats on the business sale!
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Old 02-05-2012, 01:23 PM   #43
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Welcome to the board, WK.

I'm surprised that nobody has mentioned health insurance yet. (You're covered for your spouse's upcoming delivery, right?) Your premiums would probably start out pretty cheaply but you'd have to watch out for emerging issues. In about 25 years you'd have to address the long-term care insurance question.

You need to spend the next few months not just with your family, but teaching yourself about asset allocation and realistic investment returns. You're going to need to learn how to safely annuitize that $3M to provide about five decades of reliable after-tax after-inflation income without consuming the principal. For example, you could put it all in Vanguard's Wellesley and see if your budget would fit within those returns. None of your mentors have a clue how to simultaneously cover all the adjectives in front of the word "income", unless they're running endowments for private universities.

I've been ER'd for nearly 10 years since age 41, and I suspect that sometime during the next 30 years of your life you're going to find some sort of paying hobby or project consulting that will produce at least $25K/year. It might not happen until your kids leave the nest, but I'd say the odds of it happening are at least 60%.

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Originally Posted by WiltonKnight View Post
It's just that, while I want to teach my kids to be good with money, I also want them to have many of the things I didn't. I don't want to deprive them of stuff just because daddy didn't want to work.
You're inviting yourself to go on a self-imposed guilt trip. Kids that age don't give a rat's ass about the finer material possessions in life. They want you there to spend time with them. If you do a consistent job over the next decade then they still won't care about the finer material possession. They may whine about it, but they won't be deprived.

It's all too easy to spend money on a kid to inspire an entitlement attitude that leads right to affluenza.
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Old 02-05-2012, 01:53 PM   #44
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Please can you clarify from your two quotes below how much you need to retire. Is it 230k or 100k ? If the latter, I would consider ER. If the former, I would not.
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Bottom line: I need a "gross income" in retirement of $230,000 to retire.
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Originally Posted by rescueme View Post
In our case? Let's just say that it is upwards of $100k/year.
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Old 02-05-2012, 02:57 PM   #45
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Please can you clarify from your two quotes below how much you need to retire. Is it 230k or 100k ? If the latter, I would consider ER. If the former, I would not.
OP wrote $230k, someone else wrote $100k.
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Old 02-05-2012, 03:59 PM   #46
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Originally Posted by Nords View Post
You're inviting yourself to go on a self-imposed guilt trip. Kids that age don't give a rat's ass about the finer material possessions in life. They want you there to spend time with them. If you do a consistent job over the next decade then they still won't care about the finer material possession. They may whine about it, but they won't be deprived.

It's all too easy to spend money on a kid to inspire an entitlement attitude that leads right to affluenza.
+1
Our kids (now early 20s) knew lots of kids with affluenza, fortunately they didn't catch it.
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Old 02-05-2012, 04:14 PM   #47
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Originally Posted by WiltonKnight View Post
It's just that, while I want to teach my kids to be good with money, I also want them to have many of the things I didn't. I don't want to deprive them of stuff just because daddy didn't want to work.
Fair enough, but make sure not to deprive them of your time either.

EDIT: While I was writing this, looks like Nords beat me to it, with a more elegantly worded response to this issue.
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Old 02-05-2012, 04:22 PM   #48
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+1
Our kids (now early 20s) knew lots of kids with affluenza, fortunately they didn't catch it.
In our son's 1st year of High School (aged 14) a teacher had the class do an "affluenza" quiz, and asked the kids to take the quiz home and have their parents take it from the point in time they were aged 14.

It was a great exercise and eye opener for our son, not that he has ever complained about us depriving him of stuff.

I am very much in agreement that "time spent with" is much more important than "money spent on" your kids.
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Old 02-05-2012, 04:43 PM   #49
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We met our goal and don't expect anybody else to fund our desires; IMHO, that's all that counts ...
+1

You achieved the goals you set, and you aren't asking anyone to pay your bills. I won't enjoy your spending level when I'm retired but that's no one's fault but my own. Congrats!
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Old 02-05-2012, 06:33 PM   #50
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Originally Posted by Major Tom View Post
EDIT: While I was writing this, looks like Nords beat me to it, with a more elegantly worded response to this issue.
Lemme guess: was it my elegantly-worded use of the phrase "rat's ass"?

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In our son's 1st year of High School (aged 14) a teacher had the class do an "affluenza" quiz, and asked the kids to take the quiz home and have their parents take it from the point in time they were aged 14.
It was a great exercise and eye opener for our son, not that he has ever complained about us depriving him of stuff.
Do you happen to have a link or some memories that I could Google? I smell a blog post and a part of a book chapter in this...
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Old 02-05-2012, 08:10 PM   #51
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Do you happen to have a link or some memories that I could Google? I smell a blog post and a part of a book chapter in this...
It has been 15 years since he brought the quiz home. I have been searching the web on affluenza quizes for teenagers but just cannot find one specific to teenagers.

The quiz he brought home had much to do about what he owned and what was available to him in the home. I answered as when I was 14 (I was the oldest of 3 kids at the time).

Questions such as :

Do you have a cell phone?

Him: No
Me: The family did not have a phone in the house. There was a call box at the bottom of the street to call the doctor and such. (Doctors made house calls back then)

Do you share a bathroom with your parents or siblings?

Him: He shares a bathroom with his sister.
Me: We had no bathroom in the house, we had to use a toilet at the end of the yard. We had a sink and cold water tap in the kitchen. A free standing copper gas fired boiler was in the kitchen. Every Sunday we would lift in the metal bathtub from its nail on a wall in the yard and put in front of the coal fire in the living room where it would be filled with buckets of hot water. 3 kids were then bathed in the same water

How do you get to school?

Him: School bus even though Mom and Dad have a car.
Me: The family did not have a car so I was given the bus fare each week but chose to walk 2.5 miles each way and keep the money. If we lived more than 3 miles away we would have received a free bus pass.

Do you have a TV in your room?

Him: No
Me: No, we only had a small black and white TV for the whole family even though color TVs were readily available.

There were a few other questions but you get the general idea. I'm sure you can think of a few more.
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Old 02-05-2012, 08:38 PM   #52
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Excellent, thanks!

Whatever I write will have to include a link to the Four Yorkshiremen...
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Old 02-05-2012, 08:43 PM   #53
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Whatever I write will have to include a link to the Four Yorkshiremen...
Definitely
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Old 02-06-2012, 11:52 AM   #54
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You might want to become part of the 10 percenters and get out of Dodge!
1. You could get the returns you require (for foreseeable future).
2. Equal lifestyle for a lower cost. (increase the pot)
3. Better education available
4. choose your climate
5. Broaden yours and your families horizons.
6. Return if/when opportunity returns.

Jus say'in!
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FAIR questions, re my spending.
Old 02-06-2012, 02:36 PM   #55
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FAIR questions, re my spending.

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Originally Posted by Aiming_4_55 View Post
Congrats on the pending sale of your business.

While 230k gross is nice, do you really have working knowledge of your true needs and expenses? Don't be a Lotto winner one day and be broke in a few years.

We are a family of 4 with a SAHM, eat out, have nice things, no debt, and can live fine on less than 75k.

Maybe take some time off and get a better understanding of your expenses and create a budget.
I readily admit that my spending is MUCH higher than the norm. I guess it's all relative....to many people, $230k seems crazy high. BUT, I know more than enough people who would consider $230k somewhat of a failure.

Sadly, I operate on the notion that due to decaying culture, AND fracked up government, things are going to get tough in America, and sometimes only money will help one 'opt out' of the crap:


1.)HEALTH INSURANCE: Budgeting $1,000 per month insurance. Also another $850 in co-pays, deductibles, AND a concierge-doctor retainer fee. I think health care is gonna get VERY crowded in the future, and boutique doctors will be the way to avoid long wait times. $1850 health monthly.

2.)EDUCATION: Budgeting $2500 monthly private schools. Don't know if my kids will have the aptitude, and I KNOW that private schools aren't perfect....but all I know is that my local "high rated" school is starting to teach "self esteem" over the basics, and there's just too many backwards-hat-wearing-trash-talking students I see daily. Private school has some of that, but less.

Right there is $52,200 in yearly spending. So pre-tax I'd need to make $69,000 per year. And while these expenses are not "vital", I don't look on them as vanity via buying designer jeans or something like that.


As said before, I've been fortunate and lived a wonderful lifestyle.I have NO problem with "accepting less" if I HAD to. But I'm uneasy about giving my family less because I WANTED to watch reruns instead of dealing with business life. Some things I've grown used to:


*CARS: A current 12-year perk for me is a new car every 6 months. Certainly that's not sustainable....but I'd like to have 2 nice cars (paid off, of course). But gas-insurance-property taxes means total $1,500 a month.

*FOOD: We love eating out often (3-4 times/week). Never at fancy places, but I like being able to order appetizers, etc without worrying about cost. Ditto grocery: I'd get smarter with Cost-Co, waste, and coupons....but same thing, I'm used to just buying what we want, no worries.


*TRAVEL: Ok, don't need to be at the Four Seasons forever....but I'd like to keep staying at above-average hotels, be able to do all the Disney stuff, etc.
Yearly budget would be around $22,000.


Please don't get the wrong idea of me. I'm not a show-off-yuppy type. Heck, NONE of my neighbors know of our financial success, and we conceal most of our "splurges" from friends. While I have been enjoying luxuries, they've been paid for in-cash, and I've been saving money also so I've never tapped credit to spend frivolously.
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Old 02-06-2012, 02:42 PM   #56
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I agree with much you say here

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Assuming that you were NOT born with a silver spoon in your mouth, I don't think your kids would be deprived at a family spending of $100-120k a year.

More importantly, Dad would be around a lot to go to sports and other activities that your kids end up doing, perhaps volunteering as a coach or whatever and that is worth a bunch in a kid's mind.

No, no silver spoon here. Son of immigrant parents who worked hard. They bought the smallest houses in the best school districts. So i was the only kid with "K Mart" clothes while everyone else had Reeboks and the latest video games. I was picked on every single day by the rich kids....all my life. Never even went to a school dance or football game.

I guess that's a fear of mine. I like living in an upscale suburb with good schools, and while I hate the snobbery that goes with it, I decided that I'd rather raise my kids around snobs than around the backward-hat-wearing crowd.

I don't want to teach my kids that they MUST have expensive clothes to be accepted, but I also don't want to send them to nice schools without ANY of the stuff that the other kids have...hence my higher spending projections.

It's a tightrope. I don't want my kids "entitled", but I refuse to let them be picked on by rich kids for 15 years the way I was. So I'm hoping to "split the difference"....in that I'd buy them SOME of the stuff, but not all. I'd also want them, from a young age to learn budgeting, saving, couponing, etc. I'll insist they do chores, and then real jobs otherwise I'll cut the money off quickly. I'm praying to God almighty that this way, my kids will 'fit in', but also understand what working and planning and saving is about.
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Old 02-06-2012, 02:45 PM   #57
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Short answer, I wouldn't want to plan on 7.7% annual returns over a 50-year period.

Also, does the $230k include savings for college for the kids?

I would think about what will make you happy, as well as provide an acceptable lifestyle for your children. It may not be as much as you think. You may find that your children will value time with you more than certain "high-end" material things.

I'm not sure I could have retired in your situation, given your age and the age of your children. I am now ten years older than you with teenagers and I am FIRE'ing this month.
Yes, $230k includes college in that there's a $3,000 monthly education budget worked in to it. Not enough, I know...but when the time comes I thought I'd just take another $500,000 out of my nest-egg and augment the college budget.
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Old 02-06-2012, 02:46 PM   #58
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I readily admit that my spending is MUCH higher than the norm. I guess it's all relative....to many people, $230k seems crazy high. BUT, I know more than enough people who would consider $230k somewhat of a failure.

Sadly, I operate on the notion that due to decaying culture, AND fracked up government, things are going to get tough in America, and sometimes only money will help one 'opt out' of the crap:
Good luck to you Wilton. I've got no advice for you that you'd care to hear.
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Old 02-06-2012, 02:55 PM   #59
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THANK YOU everyone for your replies, keep them coming! You are all very mature, seasoned and wise and it's enriching for me to hear your viewpoints.

For now, I'm not ready to part with the 'lifestyle' forever, so here's what I'm leaning towards. It required relocating which breaks our heart....but I think the pay off is worth it.

1.)Take risk off table. I'm SCARED these days. I'm worried that in event of severe crash, gas crisis, whatever....my business won't make it and then I'm what's called screwed. I've got about $1 mill in the bank, but owe $300 on the house so really I have $700k.

Selling the business pays off mortgage, buys cars, and clears $3 million.

My point is, my $3 million is cash in bank and conservative investments, and easier to safeguard.


2.)There's another (similar) business for sale that I THINK I can get very shortly.

WHY sell my business just to buy another one? Simple.........I'd start out as 30% of the new business.

I'd put $600,000 down to "buy-in". Now, I'd get most of the income and perks I'm used to and sustain the lifestyle......BUT now I'd have $2.4 million in real money for myself. So JUST in case business went to hell.....at least I got $2.4 million instead of food stamps.

3.)Yes, it sucks to have to keep working....but I guess I gotta do that if I want the lifestyle. In the meantime, I can work on investing the $2.4 million for future growth (stocks, real estate, etc)

I don't get the retirement. BUT, I alleviate risk, continue a decent income, and have one hell of a nest-egg.

4.)If I succeed with the new biz, i'd fully own it in 6 years and sell it, then retirement would be more realistic.

IF the new biz didn't materialize, I could take 1-2 years off, hunt for a new business to leverage myself into and for the next few years, I can keep my expenses to a more realistic level and not crush the nest-egg too much.


So I guess in a nutshell, my reason to sell the business is to remove most of the risk from my life, build a nice nest-egg overnight, and be able to leverage into a new business without being "all in" vis a vis personal savings.


Grrrr why can't there me a nice dot-com bubble building now? When most morons could make 20% a year ?
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Old 02-06-2012, 02:56 PM   #60
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Good luck to you Wilton. I've got no advice for you that you'd care to hear.

Cool, but please note I've eagerly listened to all advice and critique.

If you've got evidence as to why our economic picture is going to get better, why school quality and health quality is going to improve, I'm all ears.

But I remember reading somewhere that taxes are going up, and things are eventually gonna be more austere, public spending-wise.
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