Why take a much smaller SWR than you can??

[calmloki]

We have a fair portion of our net worth in rental property. To make apples-to-apples year to year net worth comparisons we just use the tax man's "real market value" each year. We were closing in on an arbitrary net worth dollar goal and hoping to reach it this year.

Property tax statements are out and we owe tens of thousands in taxes, which will drop our current net worth. Bummer. On the good side, we have an all new list of "real market values", which kicks our net worth over the goal - plus 2%! Time to celebrate, and we've got our treat all picked out: a bag of Fritos Scoops corn chips. Time for a new goal. I like reaching more than sustaining.

 

[sengsational]

Spending takes time only because you do not have enough. When you are rich enough, you do not have to face the difficult choice between Audi, BMW, or Mercedes. Get one of each, and the best they have. You do not have a garage large enough, nor care to have so many cars? Drive one for 6 months to see if you like it, and switch to the next.

I read somewhere that Steve Jobs, being as OCD as he was, got bent out-of-shape if his car got a small dent or a scratch. He would get a new car to get that damaged good out of his sight. Do you imagine he had to drive to a dealership to get a new car? Or did he just call the dealer and tell them to bring a new car to him ASAP, and take the existing car off his garage.

But, as illogical as it sounds, I'll spend as much time analysing a $4 purchase as a $400 one. It's a character flaw, I suppose.

 

[NW-Bound]

I do that often. It's not because of the $4, but if I get the wrong thing and it does not work as I thought, it's a hassle to get a replacement and going through the cycle again of trying it out. A damned $4 part can cost you a lot more than $4 in wasted time and effort.

So, back on spending, more can be less. Nowadays, if something works, I just leave it alone and not look to replace it. Consumables are of course different.

 

[Elbata]

I guess I started this thread because I was just curious. My parents did the ultra low WR and ended up giving us kids all the dough. But they overdid it in my opinion, never giving themselves even a small treat now and then. I think my father rather begrudged it as he really loosened the purse strings after my mother passed. But by then he was 95 and really couldn't spend much anyway. At least he splurged on some nice shoes that were actually comfortable.


I worked 2, sometimes 2.5 jobs, scrimped on eating out, vacations, cars, you name it. Now that I basically "won" the game, I have no trouble at all spending a SWR on trips for my kids, going out to theater, dining, travel, etc.


I saw that my mom and dad couldn't take it with them, so have no desire to follow their example.

I'm glad you started this thread and have enjoyed reading all the responses. Thanks for posting.

In regards to your dad, here's a related story: A friend lived with his step-dad towards the end of his step-dad's life. The step-dad's two pleasures were watching programs on an old cathode TV and going to the dog races once/week. While at the dog races he'd have his caddy washed and polished. He bragged that he was still able to save money.

Sadly, I'm somewhat in his way of thinking, but yes, to be miserly when one has lots of money is .... My friend didn't have any problem spending it ($400 a pop) at girly bars.

 

[RobbieB]

I do that often. It's not because of the $4, but if I get the wrong thing and it does not work as I thought, it's a hassle to get a replacement and going through the cycle again of trying it out. A damned $4 part can cost you a lot more than $4 in wasted time and effort.

When the $4 part fails I toss it inna trash and just buy the right one. Not worth the refund.

 

[daylatedollarshort]

I post as well on the Reddit fire forum and it is interesting because there is generally more of a sustainable living, lower consumption, happiness isn't from consumers goods or spending kind of vibe there. The posters tend to be younger and many are working in tech hubs, saving for FIRE but most are not there yet, so I don't know if the differences are more generational or geographic or a bit of both. A comment I might post on both forums on price shopping and continuing to live below our means in retirement might be met with a snide remark or two here and then a similar post over there will get 50 - 100 upvotes.

 

[NW-Bound]

When the $4 part fails I toss it inna trash and just buy the right one. Not worth the refund.

When I said "replacement", I meant looking for something else to replace the thing that did not work, and not about getting the same thing again or getting a refund. And it may not be because the part fails, but because it does not work as I thought. So, if I spent the time to get the right part, I would avoid the hassle.

But as Sengsational said, it takes time to look for the right thing. If something takes too much time, maybe it's not worth the trouble. A lot of the home automation gizmos and electronic toys fall in this category, I am afraid.

 

[Mdlerth]

Can I get you some onion dip, Mr Rockefeller?

Property tax statements are out and we owe tens of thousands in taxes, which will drop our current net worth. Bummer. On the good side, we have an all new list of "real market values", which kicks our net worth over the goal - plus 2%! Time to celebrate, and we've got our treat all picked out: a bag of Fritos Scoops corn chips.

Whoa! Time to move this post to the Blow That Dough thread!

 

[Rustic23]

Having cash in the bank makes me happy! It gives me comfort to know I can buy whatever I want, whenever. Knowing that I think the question is like 'Why does a billionaire not spend more?" My answer would be because he enjoys his lifestyle at the level it is, and spending more will not increase that enjoyment.

 

[sengsational]

When I said "replacement", I meant looking for something else to replace the thing that did not work, and not about getting the same thing again or getting a refund. And it may not be because the part fails, but because it does not work as I thought. So, if I spent the time to get the right part, I would avoid the hassle.

But as Sengsational said, it takes time to look for the right thing. If something takes too much time, maybe it's not worth the trouble. A lot of the home automation gizmos and electronic toys fall in this category, I am afraid.

I'm going through this right now with a build out of an ADS-B ground station. I'm thinking of NOT using anything I already have and paying a premium for the kit. On one hand, I'll have a high likelihood of being up and running quickly, but there can be entertainment value and reward in engineering a bit of it myself. But frustrations abound if some connector is wrong, and crap like that.

 

[HFWR]

I post as well on the Reddit fire forum and it is interesting because there is generally more of a sustainable living, lower consumption, happiness isn't from consumers goods or spending kind of vibe there. The posters tend to be younger and many are working in tech hubs, saving for FIRE but most are not there yet, so I don't know if the differences are more generational or geographic or a bit of both. A comment I might post on both forums on price shopping and continuing to live below our means in retirement might be met with a snide remark or two here and then a similar post over there will get 50 - 100 upvotes.

Can’t say that I care, or give it much thought, but it is a bit of an eye roller when I read about someone with 7 or 8 or more figure portfolio fretting over whether they can “afford” to retire, but then maintaining multiple homes, multiple high-end vehicles, and flying first-class at $10k a pop ain’t cheap!

 

[38Chevy454]

As the old saying goes "You never see a Brinks truck in a funeral procession"

 

[Dtail]

I post as well on the Reddit fire forum and it is interesting because there is generally more of a sustainable living, lower consumption, happiness isn't from consumers goods or spending kind of vibe there. The posters tend to be younger and many are working in tech hubs, saving for FIRE but most are not there yet, so I don't know if the differences are more generational or geographic or a bit of both. A comment I might post on both forums on price shopping and continuing to live below our means in retirement might be met with a snide remark or two here and then a similar post over there will get 50 - 100 upvotes.

Well I for one appreciate your posts about varying savings on entertainment, etc, even though we were not the "classic" LBYM people.

 

[travelover]

As the old saying goes "You never see a Brinks truck in a funeral procession"

Of course not. The widow puts a check in the casket.

 

[NW-Bound]

If the market keeps going down like it has been doing for the last 2 weeks, my WR will increase without me having to try. Nice!

 

[dtbach]

If the market keeps going down like it has been doing for the last 2 weeks, my WR will increase without me having to try. Nice!

Lets hope its just a correction

 

[HI Bill]

If I eventually find that my assets have increased so much that we'll never be at risk of running out, while spending more than 4-5%, I'll consider upping the spending.

Once travel is over, it will be much harder. I'll probably buy some new Klipsch speakers, a sports car, and maybe a new house. After that, the only way to spend a lot extra would be through chartible giving. I don't see the need to buy jewelry in our 80s.

 

[gayl]

Some want to leave a legacy me thinks.

I don't have any children, so I'm gonna Blow That Dough!

Not only am I leaving a legacy but I'm self funding assisted living or home health rather than being warehoused should it come to that so I'm taking a 0.5% WR.

 

[davebarnes]

1. Fear of the future.
2. Brain washing by parents who lived thru the Great Depression.
3. Want to leave million$ to our daughter.

 

[hudibras]

Every time I see a post on this thread like:
"I have a 2% withdrawal rate but I'm happy and don't feel the need to increase it. *shrug*",

I read it as:
"I didn't plan out my retirement spending well and ended up working for 8 years longer than I needed to.*shrug*"

There's obviously nothing you can do now if you're already retired and have too large of a nest egg, but the whole point of a larger SWR is to allow you to retire earlier than you otherwise could.

 

[Dtail]

Every time I see a post on this thread like:
"I have a 2% withdrawal rate but I'm happy and don't feel the need to increase it. *shrug*",

I read it as:
"I didn't plan out my retirement spending well and ended up working for 8 years longer than I needed to.*shrug*"

There's obviously nothing you can do now if you're already retired and have too large of a nest egg, but the whole point of a larger SWR is to allow you to retire earlier than you otherwise could.

Nice 1st post.

 

[Walt34]

I read it as:
"I didn't plan out my retirement spending well and ended up working for 8 years longer than I needed to.*shrug*"

I read it as being aware that very often things don't turn out anywhere near the way one predicted so they wisely leave a big fat cushion in case we get an event like October 1929 again.

 

[travelover]

Every time I see a post on this thread like:
"I have a 2% withdrawal rate but I'm happy and don't feel the need to increase it. *shrug*",

I read it as:
"I didn't plan out my retirement spending well and ended up working for 8 years longer than I needed to.*shrug*"

There's obviously nothing you can do now if you're already retired and have too large of a nest egg, but the whole point of a larger SWR is to allow you to retire earlier than you otherwise could.

It is not that simple. I did not expect my employer to pay out my pension and was not all that sure about Social Security being around. Ditto for my DW, so we saved and invested to make sure we'd be OK if others' promises were not met. And unlike you, we are unable to predict the market. In the end we lucked out and don't need to take 4%, but it is nice knowing we can.

*shrug*

 

[HI Bill]

...I'm self funding assisted living or home health rather than being warehoused should it come to that so I'm taking a 0.5% WR.

I hope you will have an advocate who can help you find qualified home health care providers and help you with finances when the time comes.

My mom resisted, and fired two home health care workers I hired for her. She said she didn't need any help.

In the rural California town where she lived, it was tough to find providers, especially, when it gets to 24 hr/day need. At $18-24/hr, that could work out to $210K/yr. I really hope you don't need it!

 

[audreyh1]

Every time I see a post on this thread like:
"I have a 2% withdrawal rate but I'm happy and don't feel the need to increase it. *shrug*",

I read it as:
"I didn't plan out my retirement spending well and ended up working for 8 years longer than I needed to.*shrug*"

There's obviously nothing you can do now if you're already retired and have too large of a nest egg, but the whole point of a larger SWR is to allow you to retire earlier than you otherwise could.

The thing is, when you retire you don't know if you are going to have a run of good years or bad years. So most people pad a bit.

Then if you end up with a string of good years, your safe income from your retirement assets starts to exceeds your spending, and keeps growing. But when you retired you had to plan for the opposite to happen.

Me, I'm trying to put more money to good use while I'm living.... ramping up gradually.