Join Early Retirement Today
Reply
 
Thread Tools Search this Thread Display Modes
You Too Can Retire At or Near the Poverty Level . . .
Old 08-15-2016, 08:56 PM   #1
Recycles dryer sheets
 
Join Date: Aug 2013
Posts: 349
You Too Can Retire At or Near the Poverty Level . . .

. . . or say you are and pimp your blog. :-/

Quote:
Inspired by the idea of retiring early, the husband-wife duo with two kids vowed to build a portfolio of $1 million and no debt by February 2017. This would allow them to retire in 1,500 days at the ripe age of 43.
Quote:
The good news is, anyone can do the same and you don't have to be an investment banker raking in millions. All it takes is "smart decisions along with intelligent saving and investing," they write on their blog.


http://finance.yahoo.com/news/one-co...130858190.html
__________________

__________________
aim-high is offline   Reply With Quote
Join the #1 Early Retirement and Financial Independence Forum Today - It's Totally Free!

Are you planning to be financially independent as early as possible so you can live life on your own terms? Discuss successful investing strategies, asset allocation models, tax strategies and other related topics in our online forum community. Our members range from young folks just starting their journey to financial independence, military retirees and even multimillionaires. No matter where you fit in you'll find that Early-Retirement.org is a great community to join. Best of all it's totally FREE!

You are currently viewing our boards as a guest so you have limited access to our community. Please take the time to register and you will gain a lot of great new features including; the ability to participate in discussions, network with our members, see fewer ads, upload photographs, create a retirement blog, send private messages and so much, much more!

Old 08-15-2016, 11:07 PM   #2
Thinks s/he gets paid by the post
Sunset's Avatar
 
Join Date: Jul 2014
Location: Chicago
Posts: 3,611
What about just winning the lottery and retiring.
__________________

__________________
Sunset is offline   Reply With Quote
Old 08-15-2016, 11:45 PM   #3
Thinks s/he gets paid by the post
 
Join Date: Feb 2013
Posts: 4,891
They actually are both still working so I don't think they really will have to live at poverty level. But it is yet another blogtirement. I would have thought the market for these kinds of articles would have reached the saturation point by now.

It would be more interesting to me to read articles from people who have been able to live on $24K, through bear and bull markets, and have either paid or are paying for teenager grocery bills, braces, prom, sports, medical bills from sports injuries, clothes, car insurance and have college on the horizon. One $400 chemistry text book alone takes a big chunk out of a $24K annual spend rate for a family of four, let alone all the other costs that come with having kids, especially in the teenage years and beyond.
__________________
Even clouds seem bright and breezy, 'Cause the livin' is free and easy, See the rat race in a new way, Like you're wakin' up to a new day (Dr. Tarr and Professor Fether lyrics, Alan Parsons Project, based on an EA Poe story)
daylatedollarshort is offline   Reply With Quote
Old 08-16-2016, 02:04 AM   #4
Full time employment: Posting here.
 
Join Date: May 2008
Posts: 580
Agreed that $24k/yr is a little too optimistic for a family of four. A general rule of thumb is each child will cost $200k all the way up to college, that's 8k/year each right there. Even with serious cost costing (such as moving to a 1400 sq/ft house with children), only one child, and self-dependency, the couple will have quite a bit of trouble living on $16k. Of course, they do have $1.1m, even at 3% WR, that is still $33k/year, so they really have $25k/year to spend on themselves, with one child. That is just barely enough, and probably leaves them feeling a bit insecure, I'm not surprised they are earning some part-time income as an extra cushion.

Their retirement date isn't too far off though in view of their expenses, if they happen to have two children, they could have probably safely completely retired after another couple years of working.
__________________
plex is offline   Reply With Quote
Old 08-16-2016, 09:05 AM   #5
Thinks s/he gets paid by the post
 
Join Date: Aug 2005
Posts: 2,034
I think the article is a bit misleading. Reading the title, it can lead you to believe this couple saved up $1M in four short years, when the reality is they started with $570K sometime back in 2013, hit $1M in April of this year, and forecast $1.12M by February 2017.

Also, I wonder if that $1M they say they have is counting the equity in their current home. The article mentions they bought it for $176K and now estimate it to be worth $400K, so I wonder if that ~$224k is counted in that $1M figure. It would be interesting, as well, to know if they cleared any profit from selling that big lake house.

Still, it seems like they're doing pretty well, and on the right track, with downsizing, reducing costs, moving to a cheaper area etc. I think I'd be a bit leery about retiring with that amount though, at a relatively young age and with kids. I wonder if they'll get cold feet as they get closer to that milestone?
__________________
Andre1969 is offline   Reply With Quote
Old 08-16-2016, 09:14 AM   #6
Thinks s/he gets paid by the post
 
Join Date: Sep 2012
Location: Seattle
Posts: 2,510
$1M gives you $40,000 at a 4% SWR, which in all likelihood is good for a 25 to 30 year retirement...at the very least it gets them to age 70 SS, which would drop their SWR down to 2% or so depending on what they have left in the portfolio.

$40k is what a majority of Americans have as take home pay with two kids, so I guess the whole country is in poverty.
__________________
Fermion is online now   Reply With Quote
Old 08-16-2016, 09:15 AM   #7
Full time employment: Posting here.
 
Join Date: Jun 2014
Posts: 921
Quote:
Originally Posted by Andre1969 View Post
I think the article is a bit misleading. Reading the title, it can lead you to believe this couple saved up $1M in four short years, when the reality is they started with $570K sometime back in 2013, hit $1M in April of this year, and forecast $1.12M by February 2017.

Also, I wonder if that $1M they say they have is counting the equity in their current home. The article mentions they bought it for $176K and now estimate it to be worth $400K, so I wonder if that ~$224k is counted in that $1M figure. It would be interesting, as well, to know if they cleared any profit from selling that big lake house.

Still, it seems like they're doing pretty well, and on the right track, with downsizing, reducing costs, moving to a cheaper area etc. I think I'd be a bit leery about retiring with that amount though, at a relatively young age and with kids. I wonder if they'll get cold feet as they get closer to that milestone?

Not to mention the facebook bet. These people are the types that might buy a cheap home a couple blocks back from the beach, have a hurricane come through and make their home the new beach front property, then call themselves sophisticated property investors. But at least they are saving and investing.


Sent from my iPhone using Early Retirement Forum
__________________
dallas27 is offline   Reply With Quote
Old 08-16-2016, 10:15 AM   #8
Administrator
W2R's Avatar
 
Join Date: Jan 2007
Location: New Orleans
Posts: 37,126
They started with $570K, so they only had $430K to go.

HOME: It is heavily implied that he considers his home to be an investment, and he is assuming that his $176K investment is now worth $400K, so that's $224K right there. Taking that into account, he only had $206K to go.

DIVIDENDS: The original $570K will probably generate around $15K/year in dividends, thus an additional $75K saved over five years. I say "five years" instead of four, because he started this at age 38 and plans to retire at age 43, so they are rounding down by an unspecified amount. Taking this into account, he only has an additional $131K to go.

So, without saving a penny he would already have $869K in five years.

BULL MARKET: To meet his goal he needs to come up with around $26K/year, minus whatever increases the long term strong bull market provided to him. Bear in mind that $26K is around 4.6% of the initial $570K, which is growing all the time.

I think nearly any of us could manage to do that.

Bet his blog is clickbait.
__________________
Fairy tales are more than true: not because they tell us that dragons exist, but because they tell us that dragons can be beaten.

― N. Gaiman (2002)








W2R is online now   Reply With Quote
Old 08-16-2016, 11:02 AM   #9
Thinks s/he gets paid by the post
 
Join Date: Jun 2014
Posts: 1,032
I knew 2 people distantly that retired young on what was enough at the time. Now in their 60's they are unhappy with their quality of life, inability to travel, etc. People don't think about what their life will look like in the future.
__________________
Teacher Terry is online now   Reply With Quote
Old 08-16-2016, 11:11 AM   #10
Thinks s/he gets paid by the post
 
Join Date: Aug 2005
Posts: 2,034
Just out of curiosity, I checked my own records from roughly that timeframe.

I started 2013 with $747,831 in investable assets (no home equity factored in). As of April 29, 2016, I was at $1,050,321. Actually, to make this easier, as of last night I was at $1,125,875. So, over the past 3 years, 7 months, and 16 days I'm up $378,044.

Now, on to additional investments. In 2013, I actually took out more than I put in, as I pulled some money out to pay down the mortgage, and that was more than I added. I took out a net of $17,811. In 2014 I added $35,570. In 2015 I added $25,838, and so far this year I added $14,772. So overall, I've added $58,369 to that amount.

As for rate of return, I saw an appreciation of $170,815 in 2013, $51,546 in 2014, $15,575 in 2015, and $81,561 so far this year. Or $319,497 total. So I've seen a gain of around 39.6% in that timeframe (1,125,875/(747,831+58,369)).

I'm actually glad I did this calculation...I've been whining about the stock market return as of late, especially as mediocre as 2014 and 2015 were. But, this puts it in check. 39.6% ain't bad, so I'll stop whining now.
__________________
Andre1969 is offline   Reply With Quote
Old 08-16-2016, 11:44 AM   #11
Dryer sheet wannabe
 
Join Date: Aug 2016
Posts: 13
The article definitely is click bait-I bit last night. I bet most of us here have invested more over the last few years. They are doing much better than most Americans and deserve some kudos. What I liked the best was reading the comments, most called out the million in 4 years as false but many said the couple were not doing anything special because they had good paying jobs and side income. They don't see that they could do the same thing if they just had the desire.
__________________
You get what you inspect, not what you expect.
2Pizzas is offline   Reply With Quote
Old 08-16-2016, 01:39 PM   #12
Full time employment: Posting here.
ESRwannabe's Avatar
 
Join Date: Mar 2010
Posts: 608
Quote:
Originally Posted by daylatedollarshort View Post
They actually are both still working so I don't think they really will have to live at poverty level. But it is yet another blogtirement. I would have thought the market for these kinds of articles would have reached the saturation point by now.

It would be more interesting to me to read articles from people who have been able to live on $24K, through bear and bull markets, and have either paid or are paying for teenager grocery bills, braces, prom, sports, medical bills from sports injuries, clothes, car insurance and have college on the horizon. One $400 chemistry text book alone takes a big chunk out of a $24K annual spend rate for a family of four, let alone all the other costs that come with having kids, especially in the teenage years and beyond.

I live easily on $28k a year. My life style isn't that much different from college 20 years ago... I'm single and have no kids. I don't take vacations. My hobbies are all relatively cheap (surfing web, reading, netflix, video games). Where I fail at frugality is, I rent a one bedroom apt instead of buying a house, and I eat out a lot. I also may lease a car soon as my last one just died on me, or might buy a used one that I have a good deal on due to who owns it now. I make $65k on w-2. So I live on less than half.

Could your typical family of four do this? No.
__________________
ESRwannabe is offline   Reply With Quote
Old 08-16-2016, 03:24 PM   #13
Full time employment: Posting here.
 
Join Date: Jan 2013
Posts: 762
Before you bash these folks too much, remember this forum's very own Fuego is doing the same thing. Yes, he's making some money blogging about it now, but that's a recent addition to the income streams. Two adults, three kids on $28k a year. Trying to raise the spending to $40k without success so far. It CAN be done if you have the basics in place - a paid off house, low taxes, and decent health care.
__________________
Another Reader is offline   Reply With Quote
Old 08-16-2016, 03:31 PM   #14
Thinks s/he gets paid by the post
 
Join Date: Jun 2014
Posts: 1,032
Low taxes and low cost health insurance are 2 key components. WE have the first but not the second. No one is bashing but people do change overtime and can end up sorry by the choices they made earlier in their lives. Also you may not want to do traveling with the comfort things when young but that definitely changes when older.
__________________
Teacher Terry is online now   Reply With Quote
Old 08-16-2016, 03:33 PM   #15
Recycles dryer sheets
CaliKid's Avatar
 
Join Date: Apr 2016
Location: Cali
Posts: 386
That picture appears to be on Oahu. I can't imagine too many trips to Hawaii in their future on $30k a year for a family of 4!?
__________________
______________________
Hoping to get out around September 1, 2022... I hope, I hope, I hope. Until then off to work I go....
CaliKid is offline   Reply With Quote
Old 08-16-2016, 03:49 PM   #16
Thinks s/he gets paid by the post
 
Join Date: Jan 2006
Posts: 2,861
Quote:
Originally Posted by Fermion View Post
$40k is what a majority of Americans have as take home pay with two kids, so I guess the whole country is in poverty.
$40K/yr for a family of 4 isn't poverty. It's well above the poverty level of $24K for a family of 4. Outside of cities with high housing costs, $40K/yr provides a very decent living for a family.
__________________
aaronc879 is offline   Reply With Quote
Old 08-16-2016, 04:12 PM   #17
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
haha's Avatar
 
Join Date: Apr 2003
Location: Hooverville
Posts: 22,073
Quote:
Originally Posted by CaliKid View Post
That picture appears to be on Oahu. I can't imagine too many trips to Hawaii in their future on $30k a year for a family of 4!?
With enough creative accounting all things are possible-at least in the telling.

Ha
__________________
haha is offline   Reply With Quote
Old 08-16-2016, 05:28 PM   #18
Thinks s/he gets paid by the post
 
Join Date: Jun 2014
Posts: 1,032
If 4 people are living on 40k they are not taking nice vacations, etc which is fine. I never got to go somewhere besides things in the same state with cheap motels and camping until my kids were grown up and gone. I think once most people get in their 50's and 60's they would like some nice vacations, eating out, etc. These are often the things you can't afford to do while raising the kids, saving for retirement, etc.
__________________
Teacher Terry is online now   Reply With Quote
Old 08-16-2016, 11:10 PM   #19
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
 
Join Date: Nov 2007
Posts: 7,366
Quote:
Originally Posted by Another Reader View Post
Before you bash these folks too much, remember this forum's very own Fuego is doing the same thing. Yes, he's making some money blogging about it now, but that's a recent addition to the income streams. Two adults, three kids on $28k a year. Trying to raise the spending to $40k without success so far.
You had to bring me up. Stop trying to slip facts into the argument. It muddles the groupthink.

Quote:
It CAN be done if you have the basics in place - a paid off house, low taxes, and decent health care.
Quote:
Originally Posted by aaronc879 View Post
$40K/yr for a family of 4 isn't poverty. It's well above the poverty level of $24K for a family of 4. Outside of cities with high housing costs, $40K/yr provides a very decent living for a family.
A paid off house plus $40k of very lightly taxed income is likely way more than double the poverty level income when you consider that FIREd folks pay nothing for child care or after school care nor work-related costs like commuting and professional attire.
__________________
Retired in 2013 at age 33. Keeping busy reading, blogging, relaxing, gaming, and enjoying the outdoors with my wife and 3 kids (5, 10, and 12).
FUEGO is offline   Reply With Quote
Old 08-17-2016, 05:19 PM   #20
Thinks s/he gets paid by the post
Koolau's Avatar
 
Join Date: Jul 2008
Location: Leeward Oahu
Posts: 2,554
Quote:
Originally Posted by CaliKid View Post
That picture appears to be on Oahu. I can't imagine too many trips to Hawaii in their future on $30k a year for a family of 4!?
Heh, heh, I noticed that too. We do have friends who spent less than a grand each on airfare and stayed with us for "free". So a Hawaii vacation can be had for very little if you know the right folks.

Not bashing these folks at all, but I don't think their particular "route" to FIRE is possible for most folks - especially those who take a more "blue collar" route (for want of a more accurate term) or even a more traditional "white collar" route. Some life-styles (and w*rk styles) are more likely to lead to the ability to save more. Earning most of your money from your home computer w*rk station is MUCH less costly than the hour and a half commute to a mill or even a 20 minute bus ride to your downtown office (with the required "duds", etc.). I congratulate these folks for figuring out something that works for them - it's just not for too many of us, IMO. YMMV
__________________

__________________
Ko'olau's Law -

Anything which can be used can be misused. Anything which can be misused will be.
Koolau is offline   Reply With Quote
Reply


Currently Active Users Viewing This Thread: 1 (0 members and 1 guests)
 
Thread Tools Search this Thread
Search this Thread:

Advanced Search
Display Modes

Posting Rules
You may not post new threads
You may not post replies
You may not post attachments
You may not edit your posts

BB code is On
Smilies are On
[IMG] code is On
HTML code is Off
Trackbacks are Off
Pingbacks are Off
Refbacks are Off


Similar Threads
Thread Thread Starter Forum Replies Last Post
Too old to retire young, but too young to retire Schutzie Hi, I am... 4 07-25-2014 10:52 AM
2013 Federal Poverty Level Chart Buckeye Health and Early Retirement 0 10-08-2013 07:29 PM
From poverty to private plane twaddle FIRE and Money 4 08-11-2007 02:42 PM
Scott Burns: Stave off old-age poverty Nords FIRE and Money 29 05-05-2006 09:42 PM
Book report: The End of Poverty Nords Other topics 11 10-24-2005 09:20 AM

 

 
All times are GMT -6. The time now is 12:46 PM.
 
Powered by vBulletin® Version 3.8.8 Beta 1
Copyright ©2000 - 2017, vBulletin Solutions, Inc.