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Old 04-25-2015, 02:02 PM   #41
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Originally Posted by W2R View Post
Here's my take on the car buying issue.

When working people living off a paycheck want to buy a car, they often:

(1) get a loan for the car or
(2) save the money from excess take-home pay.

When retired people living off portfolio withdrawals want to buy a car, they often:

(1) get a loan for the car or
(2) save the money from excess withdrawal money.

In either case, if their base expenditures use up 100% there's a problem. If/when I buy another car, I will probably choose Door #2. Last year's excess would have covered more than I would spend on a car, for example. If that was not the case, I'd just use two or more years' combined excess.
For me it would depend on interest rates. For example, I am three months away from paying off my 36 month car loan at 0.99%. Meanwhile, the money I did not spend up front has gained a lot more than that in the markets. However, if a car loan was going to cost me 5%, I would have paid cash.
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Old 04-25-2015, 02:27 PM   #42
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The OP's statement definitely resonates with me, though it took me a few years after ER to come to that point of view. Now, when I see detailed plans, I just say to myself - "who are they kidding?" 30, 35, 45 years! Who knows what's going to happen? or what the world is going to look like.

Having said that, I think my new outlook arises from the fact that we are living on less than the "safe" withdrawal rate determined by many studies. Our budget is based on a percentage of portfolio value, not an inflation adjusted percentage of the original portfolio value that studies like Bengen's used. And, we haven't taken SS into account.

We also lived through '08-'09 and our portfolio was decimated enough, that we went back to work for nearly a year. I can't express in words how much that increased our confidence in ER. We proved to ourselves that we can be flexible and work if needed. If we need to go back to work in the future, we will earn only a fraction of what we made at the end of our careers, but if we have to do that, we know we can.

While we live on less than we could (going by SWR studies), we certainly have a good level of luxury in our lives and it will be hard to let that go if we had to. But we both came from families that struggled when we were young and know that we can do it if we had to - and still be happy.

Thanks for starting this discussion. This has been on my mind for a few months.
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Old 04-25-2015, 03:28 PM   #43
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We also lived through '08-'09 and our portfolio was decimated enough, that we went back to work for nearly a year. I can't express in words how much that increased our confidence in ER.
Respect. Big emotional step that must have been?
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