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Re: Spending in early retirement
Old 07-23-2003, 04:55 AM   #21
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Re: Spending in early retirement

For those of you who may have wondered "How does he do that?"; here are some current real life
examples. I am sitting here dressed in clothing
which was either scrounged from a "free table" at my
wife's employer, or picked up at garage sales. We are
having our bathroom remodeled. The contractor needed
2 X 4s. I didn't buy them. My neighbor was cleaning
out her shed and offered any lumber if I would haul
it away. I also got a rototiller, an extension ladder,
and a whole pile of other stuff, all free. Other neighbors replaced their appliances and set out the
clothes dryer and fridge for anyone to haul off. I sold
those for $150.00. I just had my
truck into the body shop for some work. I scoured the
salvage yards for parts and paid about 25% of
new prices. Then I got 5 estimates including 2 from
the same shop with locations in 2 cities. One shop was
$60 lower but couldn't start until August 5. I talked them into giving me the lower price but doing it 2 weeks
earlier in the other shop. Anything which is sitting
around unused is converted to cash as quickly as possible. This may sound like work but it's so
ingrained now I hardly notice I am doing it. The rules:
No. 1 No lazy money. If it's not used, convert it to cash. No. 2 Negotiate everything. You'll be amazed
what people will agree to. No. 3 No impulse buying.
Think about every purchase beyond a cup of coffee or
an ice cream cone. No. 4 When you do buy something,
shop, shop, shop. I hate to shop but there is big money
to be saved.
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Re: Spending in early retirement
Old 07-23-2003, 08:47 PM   #22
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Re: Spending in early retirement

The rules:
No. 1 No lazy money. If it's not used, convert it to cash.
No. 2 Negotiate everything. You'll be amazed what people will agree to.
No. 3 No impulse buying. Think about every purchase beyond a cup of coffee or an ice cream cone.
No. 4 When you do buy something, shop, shop, shop.


Excellent advice, John. I know people who are into similar activities and the thrill of chasing down a real bargain only serves to spur them on to greater things. I tend to do the same thing only perhaps not to the same extent. Example: I wanted a big-screen TV. I shopped for a year and a half to find one that was "just right". Ended up with a great system and even saved $500 while I was at it. This is the first BIG item I've purchased since I bought a new Ford Ranger pickup in 1994. It's got 98,000 miles on it now and is still going strong. It too was a bargain thanks to Ford wanting to sell more 4-cyl. cars to make up their CAFE numbers for all the gas-guzzling V8s in their SUVs. Whatever... it worked out for me.
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Re: Spending in early retirement
Old 08-11-2003, 07:00 PM   #23
 
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Re: Spending in early retirement

<<<<<<<Am planning to ER in 15 months when I reach age 55. By then, we should have things pretty well lined out financially. Oh, yes... health insurance is a big problem for many but we have a handle on that as well. We can get a Kaiser HMO plan, just like we have had for the past 30 years and find reasonably good, for the two of us for $450/month and the company where I've worked for the last 29 years will pick up half of that. Assuming no major unforeseen probs between now and then, our plan looks to be on schedule. >>>>>>

ER will come in another year, and we will need that health insurance until SS can cover us. Where can I get good information on plans that would cover "snowbirds?
Is there a place that makes comparison shopping easier?
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Re: Spending in early retirement
Old 04-14-2004, 02:36 PM   #24
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Re: Spending in early retirement

Man, if I had to live like some of posters on this board I'd rather work till I drop. I enjoy life. Good wine, boating, fine cooking. My parents were very frugal all their lives, but not because they wanted to I don't think- they didn't have the bucks. I retired at 63 with a million in retirement funds. Not really a lot these days. I should be more careful with my spending, but I what the heck, for the next 15 years is prime time.
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Re: Spending in early retirement
Old 04-14-2004, 03:18 PM   #25
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Re: Spending in early retirement

I havent noticed anyone living a lousy life here.

About the only three things I dont do or do differently from my six and seven figure income days:

- I dont eat lunch out every day and dinner out most of the time. I cook better meals at home that cost a fraction as much, I have time to shop and cook, and I enjoy the heck out of it.

- I dont drink $25-40 dollar bottles of wine anymore. I found quality bottles under ten bucks and recently have found five dollar bottles that are almost as good. I can tell the difference and appreciate a more expensive bottle of wine, but I'd rather drink a ten dollar bottle and sleep until 10:30 every morning than work my butt off to gain a small edge in depth and concentration of some old grape juice. But man, I really did think I was SOMETHIN' whenever I pried open an expensive bottle

- I dont go on multiweek vacations to foreign lands. Been there, done that, and without the job I dont have the stress that calls for it. But I've been on one and two day driving trips to napa valley, muir woods, lake tahoe, alcatraz, marin headlands, point reyes, hearst castle, etc. Fun. Almost free.

In the meanwhile I live in a nearly new very nice home in a slightly upper middle class neighborhood, drive a nearly new very nice car, and get 10 hours of good sleep a day like clockwork. Oh yeah, all my neigbors own boats of varying type and size, so thats pretty much covered...the best kind of boat after all is someone elses...
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Re: Spending in early retirement
Old 04-14-2004, 03:51 PM   #26
 
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Re: Spending in early retirement

TH,

I think what oldcrow may have done is taken the Dryer Sheet thing literally.

There are a few folks out there like Amy Draczizzzz (can't spell her last name) - Frugal something or another that suggests things that are truly morbid. If that were my choices I would go back to work in a heartbeat.
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Re: Spending in early retirement
Old 04-14-2004, 04:11 PM   #27
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Re: Spending in early retirement

33% That's my story - got me to join this forum. We peaked around 100k - his and hers before ER and in ten years are slowly drifting up towards 33. My personal best was 12k for one year early in ER but that was overkill - frugal wise.
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Re: Spending in early retirement
Old 04-14-2004, 04:13 PM   #28
 
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Re: Spending in early retirement

Hey Cut-throat...........I recall her name rhymes with
"decision", even though I have not read the book.
It's a bit tedious having all of the answers, as there
is very little left for you to learn.

John Galt
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Re:  References
Old 04-14-2004, 06:11 PM   #29
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Re:  References

"Don't save sex for old age." -- Warren Buffett

Amy Dacyczyn, "The Frugal Zealot".

I don't religiously practice her preaching, although it's good to have the skills if they're needed. But yesterday HGTV ran a special on running a frugal household and our kid was appalled to see that we're already doing EVERYTHING that they featured on the "new" show. Now she's sure that she's the most deprived kid in the world...

Hey, OldCrow, it's not whether we can afford the experience-- it's whether or not it has value. That's always a personal decision.

I think that there's always more left to learn, if we survive the experience. Frankly I've had enough travel experiences, although I enjoy checking out the changes to places where I've already been. As always it's the arduous travel to get there that sucks all the fun out of it...
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Re: Spending in early retirement
Old 04-14-2004, 08:16 PM   #30
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Re: Spending in early retirement

Quote:
Man, if I had to live like some of posters on this board I'd rather work till I drop.
That may be true for you, but not for everyone.

It would depend upon what kind of work you're talking about. Some people despise their jobs and would rather be boiled in oil than continue. It would be nothing for these folks to give up a few luxuries in exchange for their freedom.

It would also depend upon the individual's lifestyle history. Those who become accustomed to high living may suffer by being forced down a notch or two. Those who have managed to live modestly all along will likely have a much easier go of it.

So someone who dislikes their job and hasn't become used to the high life would see things quite differently.

I read an interesting book a few years back called "The Pursuit of Happiness: Who Is Happy - and Why?" by David G. Myers. Luxuries hardly appeared on the radar screen.
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Re: Spending in early retirement
Old 04-15-2004, 06:11 AM   #31
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Re: Spending in early retirement

Yep. It's a lifestyle thing. I LIKE CHEAP. Have a backup clothes line and bag of pins in case the price of generic dryer sheets gets too high.

According to Firecalc and ORP at 7% return our ER portfolio's are underspending by 40-50%. Spending more now foolishly would make me irratible and unhappy. Unless something shows up adult toy or otherwise - we'll stay in our 'cheap' comfort zone.
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Re: Spending in early retirement
Old 04-15-2004, 07:50 AM   #32
 
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Re: Spending in early retirement

Hi folks! I am desperately searching for a thread I found a week or two ago that discussed the living expense drop-off many retirees have experienced. I've run a few searches and have not been able to find it. Any ideas? Thanks.

Williams406
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Re: Spending in early retirement
Old 04-15-2004, 08:07 AM   #33
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Re: Spending in early retirement

The 33% thread?

http://early-retirement.org/cgi-bin/...num=1033641894
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Re: Spending in early retirement
Old 04-15-2004, 12:04 PM   #34
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Re: Spending in early retirement

Quote:
Have a backup clothes line and bag of pins in case the price of generic dryer sheets gets too high.
Come to the dark side Mick...

I'm actually enjoying the heck out of my clothesline, never used one before.

Of course 80+ degrees and almost no humidity means my that by the time I'm done hanging, the stuff I hung first is already almost dry. I dont even need pins!
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Re: Spending in early retirement
Old 04-16-2004, 09:01 AM   #35
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Re: Spending in early retirement

I've loved it the times we've lived where I could use a clothesline! They come out nicer when they dry in the sun instead of a dryer (and it's better for the clothes, which last longer). It's pleasant to go outside and get some fresh air while doing an ordinary household chore.
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Re: Spending in early retirement
Old 04-16-2004, 02:40 PM   #36
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Re: Spending in early retirement

On a more serious note, when people talk about blowing away their SWR and living on 12k a year, are you counting the cost of depreciation on your car (or do you just bike!?), do you have health insurance, do you own a home (that may need paint some day and needs homeowners insurance?) and do you count the costs of money management fees properly? Do you count any fed/state income taxes in your annual budget? All these things are actually part of annual expenses (unless your Monte Carlo specifically uses after-fee returns, it is giving you an SWR assuming that your US Large Stocks or whatever earn their historical returns which data generally does not have fees deducted from it. Even so, almost none of us includes the right amount for trading costs/brokerage costs the fund incurs and hides away just nicking its return slightly and making us think we are really getting the return due to that asset class when in fact we are getting less, thus reducing our SWR by that amount).

Self-insuring is a huge risk to the Portfolio that is a necessary cost of having a life or a house, and if we choose to self-insure rather than insure through an insurance company, we should be setting aside the same amount of premium (more actually since we are a very small risk pool) in some separate fund to pay for the eventual costs of lawsuit, tree through the roof, or appendicitis when it eventually comes along. (A lifetime is a long time, and this sort of thing will eventually happen to you.)

It is not that I am trying to be a wet blanket, but I would not want some of the ER Planners on this board to go in and tell the Boss to take this job and shove it Monday morning thinking their 300k portfolio will throw of 1,000 a month for living expenses and forget about all these other costs that should properly be part of their annual budget and ER planning.
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Re: Spending in early retirement
Old 04-16-2004, 04:44 PM   #37
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Re: Spending in early retirement

Hey ESRBob, those are very good points. I've said it here before, but I wouldn't even consider retiring without knowing with 100% certainty what ALL my costs are now - including all those not-so-obvious costs that will most certainly rear their ugly heads down the road. Right now my total expenses (including me footing 100% of health care) comes to $41,500 per year. That includes setting aside (annually) funds for such things as house repairs, car purchases, root canals, household appliances, and on and on. I know this with a certainty that comes from tracking every cent for more than 10 years, and thoroughly examining the expense side of the equation from every conceivable angle. I've beat it to death. I also know that I can cut back some, and I'm in the process of determining how far I can cut if I must. This is for a family of 3 (me, wife, & son) living in a relatively low cost area.

I would add one more item to your list - long term care. I had three grandparents who really needed that assistance for many years. I've known many others who have as well.
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Re: Spending in early retirement
Old 04-16-2004, 05:16 PM   #38
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Re: Spending in early retirement

Hi Bob Smith:

Regarding your answer to poster that said he would rather work until he dropped, than live like some of the posters do.
If as TH calls it, you"re a show horse, you might find it more difficult.
Your answer was a bullseye, as far as I am concerned.
Most early retirees do so without an inheritence, or large pension, so they are already pre-conditioned to living below their means, or they wouldn"t even be able to consider early retirement.
We have been retired for l7 years, and it has been a very easy transition for us. More so, the last 17 years has given us a wonderful opportunity, to actually have the time to do things we would have never done if we would have waited.
By the way, in your other post, you talked about your expenses being about $41,000 annually. That is very close to ours. We also have had to pay for our own medical and dental. (No company contribution).
Actually, mine is slightly higher, but part of the reason for that is a situation that I hope isn't long term. One of my daughters has hit a rough patch, and we"ve been helping her out.
Anyway, Bob, you answered that better than I could have. (The luxury of independence is worth a lot of new cars and keeping up with the Joneses)
Regards, Jarhead
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Re: Spending in early retirement
Old 04-16-2004, 05:58 PM   #39
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Re: Spending in early retirement

Amen guys

Cheap is really fun - if you have sufficent reserves to buy a whole case of brand name dryer sheets when the need to get frivolous strikes. Plenty of posters have shown ways to work the 'core or basic' part of budget to maximize the fun(as defined by each ER) part - not just $, but the luxury of time to savor and enjoy.
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Re: Spending in early retirement
Old 04-16-2004, 06:40 PM   #40
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Re: Spending in early retirement

Hey Jarhead! The poster who said he'd rather work till he dropped than live like the people here... He must not have read much on this site before posting. I've never seen any group of people who express more satisfaction with their lives than the people here. And you've been doing it for 17 years already - what an accomplishment! I hope to follow in your steps before too long.
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