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Old 10-19-2019, 07:37 AM   #1
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Major Life Style Modifications

I am curious what people think about living your entire life accumulating enough to feel good about that passive income and suddenly see those amounts growing exponentially and exceeding your basic needs for your normal cushy life costs.

Having reserves for inflation, unplanned medical care, family help, or market meltdowns are a given, but what amount of excess is reasonable? 2x the need, 3x, 4x?

When I think about the very rich like Carnegie, or even Warren Buffet, it seems they gave a part of a huge amount that I assumed covered their fixed costs and much more.

I still have younger family we can help and I suppose I could gift a charity or two that I have supported in the past.

I'm curious about the spend the dough concept out there. Have any of you made abrupt and major changes like moving from a ranch house to your private island or traded in your VW bug for a Lear jet? And if so do you miss the old life?
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Old 10-19-2019, 07:45 AM   #2
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...or traded in your VW bug for a Lear jet?
I thought about it. Then I realized to have room to park it I'd be limited to spaces way too far from the entrance at Walmart for my liking, especially when the weather is bad.
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Old 10-19-2019, 07:52 AM   #3
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Depends upon your age. You say you have a younger family; I'd be hesitant to gift a huge amount to charity if you're looking at 40+ years of life ahead of you.

You never know what 'life modifications' might lie ahead that are out of your control. I suspect Buffett and Carnegie made those charitable choices much later in life but those guys are in a league of their own anyway.

I'd doubt many/any on this forum made super radical changes in their lifestyle upon FI or RE regardless of how fate smiled upon them; maybe some smaller luxuries like a new car or second home (but not on a private island).

I'd guess most here are happy to have maintained their original work lifestyle along with a few perks when RE came along.
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Old 10-19-2019, 08:02 AM   #4
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I thought about it. Then I realized to have room to park it I'd be limited to spaces way too far from the entrance at Walmart for my liking, especially when the weather is bad.
Now that is funny!
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Old 10-19-2019, 08:13 AM   #5
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Now that DW has joined me in ER, we have ticked up our spending and lifestyle a bit, and that includes plans to gift each of our 4 young grandkids each year.
But we remain conservative, . Both of our children are doing well, financially, so our gifting isn't critical.
Still, we let them know that to start we are giving on the lower side until we are sure what our retirement spending will be. We are also doing a bit more exotic travel, now, as well.
I don't use any formulaic multiple to feel comfortable. Rather, I know what our annual spending is, and our income and assets can easily support that spending with plenty to spare. As long as the amount to spare is "plenty" then we will continue our lifestyle.
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Old 10-19-2019, 08:14 AM   #6
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I’m not in that situation but if I found myself in it, I would gift the money upon death. I would make some minor gifts while alive and possibly larger as I age, but I’d make sure I had enough until the end before I’d give it away. Sure, I’d also blow some dough on the way but I wouldn’t change my life style that much. As was said, probably another house (snowbird) and nicer transportation but not much more. Then at the end, I’d probably set up a foundation to give something into perpetuity. For me, I’d probably focus on education.
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Old 10-19-2019, 08:16 AM   #7
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I get your drift.... we only spend about 2/3 of what we could reasonably spend and that 1/3 is just accumulating... but there is a back-of-the-mind worst case scenario short of total armegeddon that those funds would come in handy.

Besides, if we upgraded our lifestyle it might mean leaving our current friends of more modest means behind in exchange for new friends who might tend to be more snooty... we like our life as is but may splurge some more but not a whole notch up.

At the end of days, any excess will go to our two kids and charity.
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Old 10-19-2019, 08:24 AM   #8
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There are other ways to upgrade as well without completely changing your lifestyle or moving:

A second home (or third) - for vacations or winters perhaps, without worrying about the taxes or having to rent it out.
A (much) nicer car. DH would never buy one of those $100k audis but I know he likes the look of them
Step up vacations: Fly first/business always, travel more, get the suite and/or the best hotels - Five star properties usually have the best locations too

I could adapt to excess wealth with great ease!
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Old 10-19-2019, 08:28 AM   #9
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I just retired in June, and keep going over the numbers and looking at (but not applying for) part-time jobs. Gradually it’s sinking in that I am likely being excessively frugal. While far from the Lear jet (or even second home) class, I realize I can afford to relax quite a bit about my spending.

I’ve been more relaxed in the past, when I had a high salary, and made some significant mistakes. The anxiety lingers. I still worry about “retiring into” a downturn or bear market. It’s difficult to find the optimal level of spending.

I’ll be taking SS in 3.5 years, and I’m hopeful that (1) it will be clearer what we can expect from the market and (2) the reduced need to withdraw from savings will settle these concerns. In the meantime, we just took a vacation (albeit a fairly frugal one - hiking in the White Mountains, staying at a reasonably-priced motel)! There have been far too few vacations, and that’s going to change. I need more hiking in my life.

P. S. Don’t believe the Appalachian Mountain Club’s guidebook when it says a trail is “mostly level, with a few ups and downs.” Translation: “You’re not actually climbing up to the peak, but be prepared to use both hands and feet as you struggle up and down rocky outcroppings and jagged boulders the size of an RV.”
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Old 10-19-2019, 09:56 AM   #10
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We downsized, and moved from LA with its taxes and politics to Ventura County. In looking at our liquid assets, we can loosen the purse strings quite a bit.
On our next cruise, for example, we will be in a suite instead of a balcony cabin. We have also committed to pay for our granddaughter's nursing education.
We are also generously gifting all 4 sons on their birthdays.
We also donate to a number of organizations.
My late mother's philosophy was to give it while you are alive, to get the satisfaction of helping.
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Old 10-19-2019, 10:45 AM   #11
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My late mother's philosophy was to give it while you are alive, to get the satisfaction of helping.
+1

Your mother was very wise.
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Old 10-19-2019, 11:12 AM   #12
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Well, we did get a new set of stainless steel saucepans.
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Old 10-19-2019, 11:31 AM   #13
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There are other ways to upgrade as well without completely changing your lifestyle or moving:

A second home (or third) - for vacations or winters perhaps, without worrying about the taxes or having to rent it out.
A (much) nicer car. DH would never buy one of those $100k audis but I know he likes the look of them
Step up vacations: Fly first/business always, travel more, get the suite and/or the best hotels - Five star properties usually have the best locations too

I could adapt to excess wealth with great ease!
Same here.
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Old 10-19-2019, 11:46 AM   #14
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I am curious what people think about living your entire life accumulating enough to feel good about that passive income and suddenly see those amounts growing exponentially and exceeding your basic needs for your normal cushy life costs.
I retired 13 years ago on a stock dividend based income stream when even historically bad results would leave me with enough cash flow. As disaster chose not to strike and the economy followed the center of the bell curve (or better) my dividend flow is currently passing thru the *2 level of normal spending. This was somewhat expected as the most likely path.

I have made no major lifestyle changes, but several minor ones. My last new car was 2 years old instead of 10, I remodeled a bathroom, and I go on more vacations. Mostly though, I enjoy the extra feeling of security it gives.
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Old 10-19-2019, 11:49 AM   #15
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One condition I put on myself as I was putting together my ER plan back in 2007-2008 was that there would be no changes to my day-to-day lifestyle. I wasn't going to relocate or downsize or do any of the other things some people do to save money when they retire (at any age). Furthermore, if I wanted to splurge once in a while, I built into my budget enough of a cushion or surplus so that I would be able to afford it and not worry about how I would need to offset it elsewhere in my budget.


As part of my longer-range ER budget, I split it into 2 parts. The first part is the tougher part, getting to age ~60 intact using only my taxable account which is about 2/3 of my total portfolio. After age ~60, I begin having access to the first of my "reinforcements" which are (a) unfettered access to my Rollover IRA,(b) my frozen company pension, and (c) SS. I am not worried about my finances after age ~60 because things only look even better than they do now, using less than my complete financial resources.
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Old 10-19-2019, 11:56 AM   #16
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Having reserves for inflation, unplanned medical care, family help, or market meltdowns are a given, but what amount of excess is reasonable? 2x the need, 3x, 4x?
I'd probably say somewhere around 2-3x is where I'd draw the line. IOW, if my net worth were to rise to a level where my SWR was nearly 3x what I thought I could ever reasonably need for any/all planned and unplanned expenses, then I would start to feel comfortable substantially upgrading my lifestyle in many ways.

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Have any of you made abrupt and major changes like moving from a ranch house to your private island or traded in your VW bug for a Lear jet? And if so do you miss the old life?
Definitely not. Don't think I'll ever be a "Lear jet" kind of guy, but I quite conceivably could become a frequent/regular first class flier if my SWR climbs north of, say, $200k.

Regardless of how much I ever manage to (or get lucky enough to) accumulate, I'm pretty sure any lifestyle upgrades I embark upon will be incremental... not huge quantum leaps. That's just my nature as a cautious LBYM type of guy.
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Old 10-19-2019, 11:58 AM   #17
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I thought about it. Then I realized to have room to park it I'd be limited to spaces way too far from the entrance at Walmart for my liking, especially when the weather is bad.


I sold my old home four years ago, and for 119% of what I got for it, I bought my Dream Home. With some extensive outdoor improvement including landscaping, concrete work, and grading, it was perfect for me. The interior needed nothing.

Honestly, that is as far as my dreams have ever extended. I always wanted a nice home just like this one, and I could not be happier. I have zero desire for a private island. I am having fun living right here in New Orleans.

I don't like travel, so I don't need boats/planes/RVs to travel in, much less a Lear jet or a second house to travel to and from. I have set money aside for a new SUV, but have had a hard time finding one that I would like more than my 2009 Venza.

As many here know, I love getting a new laptop computer and setting it up, so I let myself do that every couple of years whether I really need one or not. I have Amazon Prime, Amazon Prime Pantry, and I subscribe to the online version of Consumer Reports. I would never have done any of that a decade or two ago. I have a lawn guy who does all of my yard work since I don't like to do it myself. I eat whatever healthy food I like that fits into my calorie budget, which sadly decreases the older I get. I have no desire for fancy clothes to decorate this ancient body, but I do buy many multiples of the comfortable, durable clothing that I prefer.

I have seen the extreme ups and downs of luck or fortune that life brings to us, and therefore I see zero sense in gifting what I have to charities or relatives until I croak (when there is no possibility that I could ever be in tough circumstances again where I might need it). They will enjoy it just as much in a decade or two as they would today.

No Lear jets, no private islands, but life is pretty good in the W2R Dream Home.
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Old 10-19-2019, 12:21 PM   #18
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After a lifetime of beer budget, still have not developed the champagne taste.
Done all the traveling by the time I was thirty five that I ever care to do. Most of it was living out of a duffle bag.

Still grumble about paying school taxes. Never had kids, so consider it a total waste of $$$, since I owned houses since I was age 23. Never mind telling me a bout social benefits of it, bunch of Hogwash. Have three types of vehicles. All work well, can't seem to find a need for a newer Cadillac, or a suburban or a pickup truck. Maybe next year. Don't want high priced sports car, I like sleepers, like Caddy CTS V, looks like fuddy duddy car but has power and handling.

Just got rid of my failed Hot tub, could have fixed it for $50.- just was not interested. Maybe next will be an outdoor Sauna.

The house has been paid for looong ago.

Perhaps the place to splurge is fancy restaurants with lady friend. Though there are very few worthy of the prices they charge within reasonable driving distance.

The stress is: I have no intention of making my nieces or their kids filthy rich. Decisions decisions, WIll think of something to blow the dough on, any day now.....

No planes or boats, been there done that too.
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Old 10-19-2019, 12:54 PM   #19
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I'm curious about the spend the dough concept out there. Have any of you made abrupt and major changes like moving from a ranch house to your private island or traded in your VW bug for a Lear jet? And if so do you miss the old life?
We are in our 70's...

We moved to a single level house in anticipation of when stairs will be a "problem".

I bought a sports car and will continue to have as much fun until I can't. That may be another decade or so.

As far as the children/grandchildren, we "helped out" along the way, but anything else (financially) will come to them after we attempt to spend it all and can't see well enough to sign the checks.
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Old 10-19-2019, 12:55 PM   #20
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As part of my longer-range ER budget, I split it into 2 parts. The first part is the tougher part, getting to age ~60 intact using only my taxable account which is about 2/3 of my total portfolio. After age ~60, I begin having access to the first of my "reinforcements" which are (a) unfettered access to my Rollover IRA,(b) my frozen company pension, and (c) SS. I am not worried about my finances after age ~60 because things only look even better than they do now, using less than my complete financial resources.
Have you ever thought about trying to calculate an integrated plan that would allow you to spend more now based on reinforcements arriving later?

For example, either doing the Roth conversion ladder or a 72(t) to get access to some of that Rollover IRA now instead of later?
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