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Re: Luxury Retirement Lifestyle
Old 08-27-2006, 12:23 PM   #41
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Re: Luxury Retirement Lifestyle

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Originally Posted by jclarksnakes
If we take 4% per year (plus COL adjustment) out of the portfolio we will have to boot our lifestyle up big time to spend enough. Those PICs of the Mcmansions are pretty but not anything I would want in life. It would be too much work to keep them clean and I would not be comfortable having paid help. I would feel silly wearing a Rolex. What are we going to do? When SS kicks in 12 to 17 years from now we are gonna really be behind the 8-ball. I may have to find a mistress or something to help spend the money. Life is tough.
Well, you could share that mistress idea with your spouse-- and all your current money "troubles" will pale in comparison to your new challenges!

But seriously, here's some ideas:
- Start a new self-insurance fund for LTC (may not apply to all if they're currently insured or otherwise covered)
- Invest in a long-term capital expense like a photovoltaic solar array for the house
- Get a second PV array to charge up your battery-powered Prius (if you get spouse approval for this, please tell me how)
- Turn your yard into a vegetable garden or an orchard, complete with an automated drip irrigation system
- Replace every light bulb in your house with a compact fluorescent
- Install the ultimate water conditioner/reverse osmosis system
- Buy Energy Star ceiling fans and a new refrigerator
- Every kid that has the guts to ring your doorbell for a fundraiser gets at least $10. Girl Scout cookies and Zippy's chili get at least $25.
- Drink only gourmet coffee
- Defer Social Security until you're 65... or even 70
- Spend a couple months in vacation condos every year
- Buy four gigabytes of high-speed RAM. What the heck, buy eight. Or ask Wab to design you the ultimate gamer's computer and buy one for each of you.
- Buy the textbooks for your favorite college student, or send your favorite school teacher to graduate school
- Give $500 to every sports league in your community-- Little League, AYSO, Pop Warner football, the Police Activities League, local basketball.
- Pay for a graffiti paint-out (coordinate with a local newspaper and neighborhood boards)
- Give $100 cash anonymously to each & every teacher in your local elementary school-- and don't tell the principal!
- Donate appreciated stock directly to Meals on Wheels, Habitat for Humanity, the local food bank, and wherever else your money doesn't pay for a bunch of administrative overhead
- Pay every kid in the neighborhood to do your chores. Never cut grass or shovel snow again.
- Start 529 funds for your grandkids.
- Gift your kids every year.
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Re: Luxury Retirement Lifestyle
Old 08-27-2006, 01:46 PM   #42
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Re: Luxury Retirement Lifestyle

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Originally Posted by SteveR
We are selling our money pit cabin in the woods
How did your cabin become a money pit? Upkeep? Property taxes?
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Re: Luxury Retirement Lifestyle
Old 08-27-2006, 02:21 PM   #43
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Re: Luxury Retirement Lifestyle

A cabin can very well be a luxury beyond time that people indulge in post retirement that they did not indulge in pre-retirement.

And it's one of those things that need not be expenditure, rather than investment.
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Re: Luxury Retirement Lifestyle
Old 08-27-2006, 02:25 PM   #44
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Re: Luxury Retirement Lifestyle

Quote:
Originally Posted by Nords

But seriously, here's some ideas:
Nords, *those are fabulous ideas! *It's not surprising that in a discussion group focused on accumulating wealth to enable ER, that there is a certain amount of self-centeredness and, frankly, greed. *I include myself. *Your suggestions are a refreshing change of pace. *
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Re: Luxury Retirement Lifestyle
Old 08-27-2006, 05:09 PM   #45
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Re: Luxury Retirement Lifestyle

We plan on spending more after we ER than before. We could ER now but would not be able to do all the traveling we want to do etc, and 3.5 years is not too far away to ER at 55 and achieve the top of the range of our target. (actually DW has already ER'd)

As for the kids, we have invested in them quite a bit already with college and will be here to help them buy an affordable house etc. (We believe in "the teach a man to fish" philosophy). There may be a decent sum for them to inherit, but they don't expect it, and one goal we do have is to not be a financial burden for them while we are living.
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Re: Luxury Retirement Lifestyle
Old 08-28-2006, 12:04 AM   #46
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Re: Luxury Retirement Lifestyle

Quote:
Originally Posted by perinova
How did your cabin become a money pit? Upkeep? Property taxes?
Upkeep, repairs, plowing fee increases every year, HOA fee increases, increasing taxes, but also time required to keep the cabin and 5 acres of property under some level of control in a hostile environment at 8000 ft. elevation in the Utah mountains with 500 plus inches of snow each year, etc. etc.

We don't seem to find the time to really enjoy it much any more and would rather use the money for travel rather than stay in one place. It is too small to live in full time so I end up taking care of two houses year round plus the expenses of two houses. Water, power, gas, etc.

We just want to take out our equity and some gain over the past 5 years and simplify our lives and our expenses.
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Re: Luxury Retirement Lifestyle
Old 08-28-2006, 11:38 AM   #47
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Re: Luxury Retirement Lifestyle

Quote:
How did your cabin become a money pit? Upkeep? Property taxes?
Quote:
Upkeep, repairs, plowing fee increases every year, HOA fee increases, increasing taxes, but also time required to keep the cabin and 5 acres of property under some level of control... We just want to take out our equity and some gain over the past 5 years and simplify our lives and our expenses.
On this same note, a quote from The Cost of Working: "A recent Wall Street Journal study found that "the cost of keeping a typical home up to current standards for 30 years is almost four times the purchase price." The sobering conclusion, according to the Journal: "Almost every house, no matter how recently or expertly built, is a money pit." It's enough to make the "Home Sweet Home" sign in the kitchen shudder right off the walls." http://www.retireearlylifestyle.com/cost_of_working.htm

There's a lot to be said for simplifying one's life and infrastructure... 8)

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Re: Luxury Retirement Lifestyle
Old 08-28-2006, 12:39 PM   #48
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Re: Luxury Retirement Lifestyle

Quote:
Originally Posted by Billy

On this same note, a quote from The Cost of Working: "A recent Wall Street Journal study found that "the cost of keeping a typical home up to current standards for 30 years is almost four times the purchase price." The sobering conclusion, according to the Journal: "Almost every house, no matter how recently or expertly built, is a money pit." It's enough to make the "Home Sweet Home" sign in the kitchen shudder right off the walls." http://www.retireearlylifestyle.com/cost_of_working.htm
I read that article and I couldn't figure out if they indexed the cash flows so that they were comparable, or OTOH if a $15,000 improvement you made in 2005 was measured in the same dollar that you paid $85,000 to buy the house in 1985.

Anyone who felt they could decode this?

Ha
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Re: Luxury Retirement Lifestyle
Old 08-28-2006, 04:14 PM   #49
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Re: Luxury Retirement Lifestyle

Here is the link to the original article: http://www.realestatejournal.com/bui...-fletcher.html

I think your question is a valid one, however... the point is that homes (and vehicles and our tax structures) cost us more than what most people want to consider.

Having a home and several vehicles and a certain income has become a way of life that we don't like to question too much.

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Re: Luxury Retirement Lifestyle
Old 08-28-2006, 04:51 PM   #50
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Re: Luxury Retirement Lifestyle

Quote:
Originally Posted by Billy
Here is the link to the original article: http://www.realestatejournal.com/bui...-fletcher.html

I think your question is a valid one, however... the point is that homes (and vehicles and our tax structures) cost us more than what most people want to consider.
Maybe so, but that is a pretty broad brush point. Given enough time between the purchase price and the improvements it could be meaningless.

Thanks for repeating the link.

Ha
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Re: Luxury Retirement Lifestyle
Old 08-28-2006, 05:19 PM   #51
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Re: Luxury Retirement Lifestyle

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Maybe so, but that is a pretty broad brush point. Given enough time between the purchase price and the improvements it could be meaningless.
I'm not sure I agree, unless we are disputing how it is they figure out that 'purchase price amount.'

If you purchase a house for $100K, and 30 years later you have $400K into it with interest expenses, repairs, room additions, gardening, insurance etc., I would not consider that 'meaningless.'*

However, if they consider 'purchase price' to be 'no money down'* or $20K and 30 years later you have $80K into it, then, yeah, I would agree it's 'meaningless.'

And the figures for owning cars is pretty clear... From Retire to Simplicity: "The Department of Labor's Bureau of Labor Statistics calculates that car-ownership costs are the second-largest household expense in the United States. In fact, people in the average household spend almost as much on their cars as they do on food and health care combined for their entire family -- about $600 per month." http://www.retireearlylifestyle.com/...simplicity.htm

And from Cost of Working:* "Your second car costs you about $7,200 per year, and assuming state and federal taxes take 30% of your income, you'll need to earn $10,300 just to cover the costs of car ownership. A daunting thought indeed." http://www.retireearlylifestyle.com/cost_of_working.htm

Everything has a trade off...* 8)

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Re: Luxury Retirement Lifestyle
Old 08-28-2006, 05:47 PM   #52
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Re: Luxury Retirement Lifestyle

Quote:
Originally Posted by Billy
If you purchase a house for $100K, and 30 years later you have $400K into it with interest expenses, repairs, room additions, gardening, insurance etc., I would not consider that 'meaningless.'*

However, if they consider 'purchase price' to be 'no money down'* or $20K and 30 years later you have $80K into it, then, yeah, I would agree it's 'meaningless.'
I am not really disputing anything with you. I appreciate your pointing out this article. All I am saying is that it is very hard to figure out what it means.

The only way I can think of to figure out if you have a real gain or loss on a house is the cash flow method.

Make a spreadsheet, then enter the CPI adjusted cash flows for every year you own the place, including the year you prepare for sale. I would enter all flows (mortgage payments, taxes, repairs, assessments etc) as negative, and offset them by what it would have cost you to rent the house in each year, a positive number.

Upon sale, take all cash you clear at closing, and enter that as a positive flow.

Use your IRR function to see how you did in real dollars! It may often indeed be a negative number, but it is probably often positive also.

Ha
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Re: Luxury Retirement Lifestyle
Old 08-28-2006, 06:19 PM   #53
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Re: Luxury Retirement Lifestyle

About 400% in 30 years is really high but that compares with the value of the house at the purchase. Assuming the house value doubles every 10 years (accuracy?) the 400% becomes 50% not too far away (actually about twice as much) from the often assumed 1% of current value.

Of course when the maintenance is done matters in the computation (due to CPI and all) but we are talking about averages here so...

Since I never owned a home I am not sure if this one percent guideline is correct.
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Re: Luxury Retirement Lifestyle
Old 08-28-2006, 06:30 PM   #54
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Re: Luxury Retirement Lifestyle

Quote:
Originally Posted by Billy
Here is the link to the original article: http://www.realestatejournal.com/bui...-fletcher.html

I think your question is a valid one, however... the point is that homes (and vehicles and our tax structures) cost us more than what most people want to consider.

Having a home and several vehicles and a certain income has become a way of life that we don't like to question too much.

Akaisha
Author, The Adventurer's Guide to Early Retirement
Thanks for the link, Akaisha. *I certainly agree that it is important to understand that it makes no sense to buy a house if you don't take care of that investment. *And taking care of a house and yard costs money.

I can't help but notice that about $100,000 of the over $140,000 listed as 30 year costs are for "updates" to kitchen, bathroom . . . *These items really are discretionary and controllable. *I've kept track of my own homeowner expenses for over 20 years and can tell you that my extrapolated 30 year non-recurring homeowner expenses are less than 25% of the value presented in the article. *

I also wonder what the author thinks the option is? *Renting doesn't eliminate these expenses, it only hides them from you and smoothes them out. *
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Re: Luxury Retirement Lifestyle
Old 08-29-2006, 09:22 AM   #55
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Re: Luxury Retirement Lifestyle

Quote:
Originally Posted by Billy

...Having a home and several vehicles and a certain income has become a way of life that we don't like to question too much.

Akaisha
Author, The Adventurer's Guide to Early Retirement
This is also part of the "upkeep" costs on the cabin. I have 2 ATVs, 2 snowmobiles, a trailer and a truck that is mostly for getting up to the cabin and hauling stuff up there and back and for pulling the trailer for taking the toys to get them fixed or serviced. Each are paid for so no interest payments or loans but the insurance, repairs, gas, registration, taxes etc. all add up on an annul basis.

I would much rather use this $$$ to travel and have less "stuff" to maintain. I would estimate that just the toys costs me $2000/year. These will be put up for sale soon too.

Simplify! Sounds good to me.
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Re: Luxury Retirement Lifestyle
Old 09-02-2006, 10:19 AM   #56
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Re: Luxury Retirement Lifestyle

Talking about how much a home and vehicles are costing us is important, in my opinion.

Repairs are not just the cost of the screw or replacement part. It's the cost of your time standing in line, the gas in traffic, the distraction from what you would rather be doing (even if it is 'nothing.') and so on.

Yes, I love having a home base. OTOH, is there ever really only a ten minute repair? It's my bet that even in keeping these spread sheets, no one ever factors in their own time at any wage...*

And if we love to garden (as I do) the replacement plants, fertilizers, fencing and so on.... simply add up.

Everything has a trade off.* We can't escape it!

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Re: Luxury Retirement Lifestyle
Old 09-09-2006, 04:22 PM   #57
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Re: Luxury Retirement Lifestyle

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Originally Posted by Cut-Throat
Well, you just have to be creative! - A 2nd home on the Itailian Riveria overlooking the Mediterranean would be a joy to visit for a month two each winter.

A nice Ranch outside of Jackson Hole with a view of the Grand Tetons would be an ideal place to summer. Private jet to get in and out as well.

I could get into it. They are lots of folks that have this kind of $$$$ and spend it exactly like this. Jackson Hole Wyoming is full of them.

Here is a nice 'little' cabin in Jackson Hole for about $20 Million. On a private trout Stream.

In the future, please stay off my property! Trying to ER in peace!
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Re: Luxury Retirement Lifestyle
Old 09-09-2006, 10:20 PM   #58
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Re: Luxury Retirement Lifestyle

Great photo... superb.

I do have a question though* Does anyone else feel pressure by owning so much? I mean running a household with all the vehicles, maintenance, yard work, the jet to and from, the scheduling of the servants, dog walkers and so on...

Sitting down to pay the bills must take a good few hours every week - and how do you decide what to wear to the next social event?

It seems like such a dream lifestyle. I wonder if I am 'weird' by feeling the pressure of taking up so much room, using so many resources on a daily basis, etc. Are the servants just like 'members of the family?'

I'm not being facetious here.. but maybe I am simply 'small fry.' I am comfortable with my needs being modest. I feel more self determined and less likely to be bought off somehow.. Am I off the mark?

I know.. everyone is different!*

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Re: Luxury Retirement Lifestyle
Old 09-10-2006, 06:21 AM   #59
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Re: Luxury Retirement Lifestyle

Yep

At what point does the ownership of 'stuff' reverse and the 'stuff owns you'.

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Re: Luxury Retirement Lifestyle
Old 09-10-2006, 08:14 AM   #60
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Re: Luxury Retirement Lifestyle

Well, George Carlin pontificated about this years ago.

http://www.writers-free-reference.co...y/story085.htm

quote:* A house is just a pile of stuff with a cover on it. You can see that when you're taking off in an airplane. You look down, you see everybody's got a little pile of stuff. All the little piles of stuff. And when you leave your house, you gotta lock it up. Wouldn't want somebody to come by and take some of your stuff. They always take the good stuff. They never bother with that crap you're saving. All they want is the shiny stuff. That's what your house is, a place to keep your stuff while you go out and get...more stuff!


and

Sometimes you gotta move, gotta get a bigger house. Why? No room for your stuff anymore. Did you ever notice when you go to somebody else's house, you never quite feel a hundred percent at home? You know why? No room for your stuff. Somebody else's stuff is all over the go***mn place! And if you stay overnight, unexpectedly, they give you a little bedroom to sleep in. Bedroom they haven't used in about eleven years. Someone died in it, eleven years ago. And they haven't moved any of his stuff! Right next to the bed there's usually a dresser or a bureau of some kind, and there's NO ROOM for your stuff on it. Somebody else's sh** is on the dresser.

Have you noticed that their stuff is sh** and your sh** is stuff? God! And you say, "Get that sh** offa there and let me put my stuff down!"
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