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Hello, my 2nd post here, on your way to early retirement, do you 'live' your..
Old 07-16-2008, 09:25 AM   #1
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Hello, my 2nd post here, on your way to early retirement, do you 'live' your..

...life?

I apologize if this question has been asked numerous times before, I'm new here. I want to get some insights what others are experiencing on their way to achieve FIRE (sorry, but what does this stand for?)

I'm a 34 yrs old, dreaming to retire early, but I hate the idea of penny-pinching. I still like my starbucks in the morning. I don't cook, always eat out, or take out. I like to travel. I mean really travel, at least 4-weeks, oversea, once a year. I spent my money on weekends, though not all weekends, maybe once a month. I like to buy cool gadgets, like the iphone, ps3 or wii. Go to theatres to see movies, though not all movies, just like The Dark Knight, Iron-man, Hulk, etc, etc, guy movies.

On the other side, I don't own a car. I live in a city where public transport is adequate. Never fond of cars, I just think they're a waste of resources. I don't plan to have kids.

I want to live my life now and also want to retire early. I want my cake and eat it too. You know what I mean?

So I'd like to hear your stories if you guys don't mind sharing your experience

Thanks
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Old 07-16-2008, 10:23 AM   #2
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Go back over the past year and determine what you spent your $$ on. How much did you spend in the last 12 months? Multiply that figure by 25 and you have a rough idea of what you'll need to retire early.
With your described lifestyle good luck.
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Old 07-16-2008, 10:23 AM   #3
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...life?

I want to live my life now and also want to retire early. I want my cake and eat it too. You know what I mean?

So I'd like to hear your stories if you guys don't mind sharing your experience
We bake our own cake. Then, we eat it. You know what I mean?

Some people here even grind their own flour. Surf around the forum. You will have fun.
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Old 07-16-2008, 10:48 AM   #4
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We definitely live our life. However, when we were at the start of our journey we were much more conservative.

You need to find a balance that works for you, as the process of FIREing is not a one size fits all deal. I think the key is you have to determine how much you need to be saving on a monthly basis to hit your target retirement date and after that feel free to indulge.

However, I would say that even though I recently semi-FIRED and DH should do the same in the next 2 years, we try to limit what we spend on Starbucks or movies. These for me are immediate gratification that are had and forgotten in 5 minutes. A new computer to camera on the other hand we feel to be an investment in our ongoing enjoyment.

Good luck.
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Old 07-16-2008, 10:49 AM   #5
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Checking out your yearly budget is probably the best way to see if you are living well AND if you have room to cut out things from your budget. When you do something small once or twice a week and then look at it as a yearly expense, it really adds up. I am not a coffee drinker, but would suspect that Starbucks daily costs about ($3 a day, 5 times a week, 52 weeks a years) about $750 a year. Starbucks could be great and the money worth it (not putting my judgement on your choices) but you could make homemade coffee or replace the caffeine by taking amphetamines everyday or something. (joke)
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Old 07-16-2008, 11:05 AM   #6
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Hello, Tempesta

I am also 34, also want to retire early and also like my toys (I have a wii, an iphone, I also like to travel overseas). I am married and have no kids (don't plan on having any). So is it possible? Yes it is. But... You have to make a lot of money AND live only on a fraction of what you make. My wife and I make roughly $160K gross a year but live on about $65K (we will save close to 60K this year). Are we penny pinching? I doesn't feel like it. Out of our $65K annual budget, only $38K are used to pay for essentials (including a mortgage, utilities, insurance, food, gas, home and car repairs, medical, etc...) which leaves us with more than $25K a year (or $2K a month) for fun stuff (electronics, vacation, dining out, etc...). In order to make it happen though, we've had to make choices that other people don't necessarily approve of. We thrive to keep our fixed costs down as much as we can, so we bought a smaller, cheaper house in a nice though not upscale neighborhood (we save on mortgage interests, property taxes, utilities, insurance and repair costs). We also drive older, smaller, non-luxury cars (no loan payments, lower insurance, lower gas consumption). And we eat out only rarely (we don't enjoy it that much anyways). Our parents and friends often don't understand why, with our income, we can't afford to live in a larger house and drive BMWs. The truth is we could, but it is not important to us.

Our goal is to retire in our forties. I suppose that we could cut back on some of those "extravagant" expenses and retire even earlier, but like you we still want to enjoy the ride.
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Old 07-16-2008, 11:18 AM   #7
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We retired 6 years ago. We rent a penthouse and love eating in and hanging out there. Just sold the BMW convertible. Still have the 93 Explorer. Use public transit extensively. Walk to shopping. Travel extensively and have also had succcess with home swaps.

The most important advice we can offer is to establish what you need to retire and set a plan to get there. IOW your savings come first, then your essentials, then your "nice to haves". Include a target ROI for your accumulated savings.

Also spend some time on how to make your money work for you. This will continue to pay dividends long after your retire.
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Old 07-16-2008, 11:34 AM   #8
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We bake our own cake. Then, we eat it. You know what I mean?
Well said.

You can have some toys, and enjoy some luxuries - you just have to pick what's important to you.
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Old 07-16-2008, 12:11 PM   #9
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You like steak so you eat steak every day. At some point, you don't like steak so much because you're taking it for granted but you still eat it every day because you expect it. So, you throw in some lobster too. That's really good again. Vicious cycle.

If you stop eating steak for a while and then have it once a week after a hard day of yardwork, you'll like steak again.*



*note: who am I kidding, steak is always good.
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Old 07-16-2008, 12:17 PM   #10
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I am 34 also. Have two son ( 2 months and a 2 yo). Wife does not work. I will be FI within 3-5 years and have the option to RE.

I grew up poor and the oldest out of 7 siblings. I am very conscious about money and frugal. I was very good about saving money. I was able to pay my house off before I was 30 yo. No car debts – own two 2003 cars. Then I invested in real estate.

Now because of hard work and monetary discipline, I believe that I can live life comfortably and without worrying about money (if that is possible). Slowly but surely I am filling up my house with cool gadgets. In the past two years I been to Jamica ( 1 eek), Europe ( 3 weeks for me and 5 weeks for wife). I am hoping to visit Hong Kong next year, but that will depend on the kid. Not sure if I should take a one year old to HK?

I also enjoy the finer things in life too, so I saved and waited .. now I am able to not squeeze so tightly on the pennies.
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Old 07-16-2008, 02:35 PM   #11
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In the past two years I been to Jamica ( 1 eek),
As an immuno-suppressed person who was advised not to travel internationally (Advice which I heartily agree with), I would rate Jamaica as at least one eek!

Mike D.
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Old 07-16-2008, 04:17 PM   #12
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To each their own, but I don't necessarily define "living" as drinking Starbucks and eating out...

Crunch some numbers. Can you accumulate enough, given your current salary and current lifestyle, to retire early?

If not, something's gotta give... What'll it be?
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Old 07-16-2008, 05:06 PM   #13
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Hmmm - did mention that once upon a time, not too long ago I spent 30 years in er ahem - New Orleans. Not to give advice.

POGO - looking in the mirror - we have met the enemy and we are them.

My best strategy was to hide from myself - Max(I mean max) auto deduct from pay all availible tax deferred investment vehicles - Index or lifecycle natch.

Check out how the locals do it - and party til you puke/live to eat/etc.

heh heh heh - .
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Old 07-16-2008, 05:07 PM   #14
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Hello, Tempesta

I am also 34, also want to retire early and also like my toys (I have a wii, an iphone, I also like to travel overseas). I am married and have no kids (don't plan on having any). So is it possible? Yes it is. But... You have to make a lot of money AND live only on a fraction of what you make. My wife and I make roughly $160K gross a year but live on about $65K (we will save close to 60K this year). Are we penny pinching? I doesn't feel like it. Out of our $65K annual budget, only $38K are used to pay for essentials (including a mortgage, utilities, insurance, food, gas, home and car repairs, medical, etc...) which leaves us with more than $25K a year (or $2K a month) for fun stuff (electronics, vacation, dining out, etc...). In order to make it happen though, we've had to make choices that other people don't necessarily approve of. We thrive to keep our fixed costs down as much as we can, so we bought a smaller, cheaper house in a nice though not upscale neighborhood (we save on mortgage interests, property taxes, utilities, insurance and repair costs). We also drive older, smaller, non-luxury cars (no loan payments, lower insurance, lower gas consumption). And we eat out only rarely (we don't enjoy it that much anyways). Our parents and friends often don't understand why, with our income, we can't afford to live in a larger house and drive BMWs. The truth is we could, but it is not important to us.

Our goal is to retire in our forties. I suppose that we could cut back on some of those "extravagant" expenses and retire even earlier, but like you we still want to enjoy the ride.
I think FIREdreamer's answer contains a lot of wisdom, Tempesta. If you can keep those regular expenses down, so you're not paying too much for housing and transportation, you can afford the occassional splurge while still keeping your investment in your retirement going.

Coach
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Old 07-16-2008, 05:53 PM   #15
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Yep, like others have said...

Quick & Dirty advice: First, save what you need to FIRE or "financially independent retire(d) early" as soon as you get paid. Spend the rest. In a while, you probably won't miss it. My wife and I don't miss it.

It all depends on what you think "retiring early" is. 40's, 50's, 60's, etc. That'll determine how tight you have to pinch the pennies. If you only want to work 6 more years, better start pinching. If you have 26 more years to go, it'll probably be relatively painless.

-CC
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Old 07-16-2008, 07:28 PM   #16
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As Dr.Phil would say " How's that working for you " . Have you been able to save a lot of money with this lifestyle ? If not forget early retirement !
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Old 07-17-2008, 08:13 AM   #17
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Based on your other post, you have a net worth around 300k CAD between savings and real estate. Plus you're supporting family from your income. It sounds like you're doing really well. Your stated goal of retiring at 55 certainly seems reasonable, even with your high-expense lifestyle.

I'd say keep going with what you're doing. For what purpose would you be depriving yourself? Retiring at 50 instead of 55? As long as you make a conscious decision that you'd rather work longer in order to continue doing what you enjoy, I've got no problem with that.

And within 15 years, maybe you'll have discovered that you've been to the places you wanted to go to. Or you have 3 kids you want to send to college and you haven't travelled in the previous 10 years. Things change. Don't sweat it.
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Old 07-17-2008, 08:29 AM   #18
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Put a reasonable amount into retirement and other savings. Basically, pay yourself first before spending on fun. You need to have some fun money too though. Very few people are happy just running up the score (amount of savings) and not having any day to day fun.

-Raymond
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Old 07-17-2008, 08:45 AM   #19
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Hello,

thanks for all the responses/advises/stories.

Yeah I guess I'm doing OK for my age/situation/lifestyle. To justify my lifestyle, I just think since I don't want to have any kids, I could indulge myself a bit more. But definitely, there's lots improvements can be made. Often I was a victim of impulse buy/spending, like the gadgets or weekend night-outs. Just last weekend, I had no plan to go out, but the next thing I knew, I was at the bar spending frivolously. This is the area I really want to improve on.
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Old 07-20-2008, 11:40 AM   #20
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Tempesta,

You're a little further along the path that I am, but here's what worked for me to help curb expenses and work more towards FI:

Keep yourself poor by 'hiding' your money in investments, or mortgage payments or a separate bank account.

What I realized very early in my 20's was that when I went to the cash machine and it told me my balance was $100 I would be really careful how I spent that $100. The amount I keep in my account now is more than that, but it's still quite low. When I get paid - the money is automatically transferred out into a 'holding' account that I can't get to with my debit card. Psychologically my account is always low on funds. It could be argued that this creates a 'poverty mindset' but in terms of saving money - it's great.

It's impossible to make a large impulse buy because there just isn't any money to make it. If you really want the <insert cool gadget here> I will have to take at least 24h to think about it, shuffle money around so I can make the purchase.

This may sound like I'm depriving myself, but really about the only time I feel a bit deprived is when I see co-workers blowing their paycheque at the bar. But really... the next day while they're hung over, I'm usually productive and at that point, I almost feel ahead, not just in $$, but also in lifestyle.

Minimize credit card spending and don't carry your CC in your wallet. This again limits your ability to impulse buy. The only time I personally use my CC is for online purchase like Amazon etc.

Set savings goals with splurge rewards. Depending on what you can save, set a goal, and put a cool gadget with that. Maybe your goal is to save 10k starting today... and your reward is that new laptop you've been wanting. Once you hit your goal, then grab that toy - you put in the hard work, and now it's time to enjoy the reward.

Best of luck to you!

Mitch
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