How do you decide on ER vs buying/spending?

[REWahoo]

Originally Posted by TromboneAl

A 10K watch.

A watch that provides an annual summary report of a company's performance to the Securities and Exchange Commission?

Wow, that is some watch!

[Walt34]

DW and I are naturally frugal, we grew up that way. I was overhauling a car engine at 14 because we had to, she was babysitting to buy clothes at 13, so I think that's part of it. She is often more frugal and has better impulse control than me. When we ER'd and moved to a larger house I was the one ready to write a five-figure check for new furniture and she was the one who went apoplectic. The irony is not lost on me. First wife wanted to do all that on borrowed money and was content with a $0 bank balance.

$10K for a vacation is out of the question for us. We have the money if we wanted to, but the ROI for is not worth it. However;

Now we are having an intermittent discussion about a travel trailer. We have a nice big pickup truck with the tow package, an option I chose at purchase just for the extra cooling that comes with it. Now I'm looking at two to four year old small travel trailers on Ebay & craigslist - there are some really good deals on them - and I'd like to get one and take a few grand out of savings and "just head west". I've never seen the Grand Canyon, Yellowstone Nat. Park, the Pacific Ocean, or the Golden Gate bridge. Always too busy with other stuff. She doesn't want to spend the money and feels no need to travel. That's part of why I'm going back to work - I made some promises when she quit her job, and I could not stand myself if I went back on them. If I want it, then it's up to me to find the money. I think I could use the TT for a few years and then sell, and get back most of what I paid for it. Some RV site had a spreadsheet that calculated 27 "use days" is the break-even point for TT vs. hotels. Not gospel, but it sounds about right. Besides, hotels are gross. Trust me, you don't want to go through a hotel room with luminol and a UV light...

On the whole though, ER and the move was good for both of us as we are more relaxed than we were five years ago so no regrets on that.

In the meantime, I'm going to do what I did for cheap entertainment after the divorce; get a bicycle, find a local touring group, and go on day trips and such. And who knows; after a year of work maybe I'll decide I didn't really want that TT anyway...

[FIREdreamer]

Originally Posted by TromboneAl

A 10K watch.

Yeah I know not real LBYM! But I am partly responsible for her wanting such an expensive watch. The first time I took her with me to Europe (to meet my parents), she was glued to watch store fronts as soon as she stepped out of the airplane in Geneva. Plus you know in Switzerland, you gotta have a nice watch when you have a bit of money, it's almost a patriotic thing to do. And quite a few people in my family have Rolex watches, so she just feels like, heck why not me? Personally I am very happy with my $500 Tissot watch and I would never buy such an expensive one for myself, but I think she deserves it, so I'll break the bank.

[Marquette]

Originally Posted by rai-zero

Good thing both my wife and I are high earners so we can make up for bad spending.

She and I have different ideas of what we want. For example she would like a baby grand piano (for what I have no idea). I say that's silly but then she informs me she makes a good income and so she thinks she should be able to buy what she wants.

I appreciate the contributions she's making to stave off the recession. I guess one good way to look at it with large expenses is to think about how many hours it took to make the money for the item. I'm not sure what you're looking at in a piano, but the nice baby grands I played with were about $20k. If she makes $150k a year, then that's $75 gross. Is the piano worth ~260 hours of work? If she loves playing piano, then it probably would be. If she's just looking for something to fill that formal living room, then she may decide a nice piece of furniture will do just fine.

It's all personal... in my case, I'll work more now so I can check out early.

Originally Posted by rai-zero

It's hard to have one person saving for ER and have the wife spending for today.

Very, very true. Not to get up in your business (immediately followed by me getting up in your business) but I think it's worth spending a few hours to have a heart to heart discussion about goal setting. Where do you want to be in the following years. Where does she want to be. How can you blend those dreams together to come up with an outstanding future together. Marriage isn't just about co-habititating.

You both may very well find that you want to do certain things now, like $10k trips to Europe every year. And, you may find that some things are worth compromising on (she doesn't get the baby grand just yet, you get a used Infiniti instead of the new Lexus). Or, worst case, and maybe this is why a lot of people don't sit down and talk, you may find neither of you are on the same page.

[TickTock]

Originally Posted by FIREdreamer

People call us tightwads because we don't spend money on what matters to them (expensive cars, big homes, brand name furniture and clothes, etc). But we are far from being tightwads. We just spend on what matters to US and diligently save the rest. It's a question of balance, choices and priorities.

This really hits home. DW and I have a reputation of being tightwads/miserly/depriving ourselves.

But we don't consider that we deprive ourselves. We spend money on what matters most to us.

For example, we spend less than average (for our income) on housing, food, vacations... yet when we went to Hawaii last year, we spent $600 on a helicopter tour! Of course, we also brought instant oatmeal over to cut down on meal expenses - but what do you remember after a year, the breakfast buffet or the experience of flying over the island?

[Animorph]

I've always tried to maintain a roughly equal balance of income while working and during retirement. Not an exact science, but you can at least plan for it. When you find a comfortable balance, you can spend the planned amount without worrying about it.

Retirement gives you a pretty stark example. Most of our basic expenses will come from SS, a pension, and retirement savings. But DW and I have separate investment accounts for our personal spending (including our own cars). That's just the way it ended up, even if it was a little strange. So I have $X to spend any way I want until I die, with no additional savings from income. It's enough to buy a Ferrari now and nothing in the future, or spend a few thousand each year (4% rule, not exactly a Ferrari lifestyle), or spend more now and less later, or leave it alone and let it grow. Probably a bad idea to blow it now in one shot (though the Ferrari has to have some resale value), but it's pretty much a personal decision how to spend it.

Dan

[aaronc879]

A $10K vacation is absolutely out of the question for me. In the 9 years i've been working full time I took 1 $3K vacation but only spent about $4K total in 9 years and am limiting myself to no more than $500 per year for at least the next decade. I will probably spend nothing at all. As for a $10K watch, the most i've ever spent on a watch for myself was $20. I did buy my dad a $500 gold watch for his 50th birthday. I was only 20 at the time and $500 was about 25% of my net worth. I would never spend that on myself. I spend virtualy nothing on myself ever. Anything i'm thinking about buying that costs more than a tank of gas I think about how many hours of manual labor in a factory i'll have to work to pay for it and I end up not buying it. I don't buy what I don't need. The total amount of money that I spent on everything that you'll find in my kitchen (other than food), dining room, bathroom,and living room combined is about $200.

[FIREdreamer]

Originally Posted by aaronc879

As for a $10K watch, the most i've ever spent on a watch for myself was $20. I did buy my dad a $500 gold watch for his 50th birthday. I was only 20 at the time and $500 was about 25% of my net worth. I would never spend that on myself. I spend virtualy nothing on myself ever.

I knew some people on this board would not understand some of our choices. So there it is. We are a young couple (33 years old) with no kids, living in the deep south and this year we will earn approximately $160K in a very low cost of living area. Our annual mandatory expenses are quite low and have amounted to $38K in the past 3 years (that includes everything, mortgage, property taxes, insurance, home repairs, gas, food... We live in a modest home and drive older cars). ---Cheapstakes should stop reading right here. Obscene material coming up.--- On top of that we have been spending another $20-25K a year on splurges (Last year for example we bought new computers, a new TV, we traveled to Europe, bought antique bedroom furniture, etc...). The watch will be paid out of that "splurge" budget. Yes I know it sounds bad to be spending so much money on "frivolities" when we could be investing the money instead. But even after all that, we still expect to save $60K+ this year and to be able to retire at age 45. So here is the question. Should we be living like monks and save $85K+ a year so that we can retire by the time we reach 40 years old or should we enjoy life a little along the way and still retire early at the age of 45? I think 45 is plenty young to retire. During our twenties my wife and I lived like monks (18-20K a year) and as our income increased such frugality became harder and harder to justify. We want to be able to enjoy some of our hard earned money today. And it's not like my wife wants to buy expensive watches every year. She knows it's a one time purchase that I hope will last her for the rest of her life.

[toofrugalformycat]

Originally Posted by FIREdreamer

I knew some people on this board would not understand some of our choices. So there it is. We are a young couple (33 years old) with no kids, living in the deep south and this year we will earn approximately $160K in a very low cost of living area. ....
So here is the question. Should we be living like monks and save $85K+ a year so that we can retire by the time we reach 40 years old or should we enjoy life a little along the way and still retire early at the age of 45?

Only you can answer that question, and you shouldn't care if people on this board disagree.
I'm frugal, but I'm glad I took time off work and did some adventuring when I was younger, because there's some things your body can do in its 20s and 30s that it can't do in its 50s and higher. I enjoy my early retirement but I'd enjoy it less if I'd achieved it by denying myself enjoyment of my youth.
Personally, it's mindless wasteful spending that drives me bats, not all spending.

[chris2008]

Our first financial priority is to continue our saving plan. So this money is leaving our account regularly, first thing every month.
For the "spending money" we carefully consider how much satisfaction a certain purchase would bring, in contrast to finding other ways to do the job.
Example: Once in a while a visit at a nice restaurant is well invested. But when we go too often it looses the appeal. So we do a lot of home cooking, have several great books on cooking, cook in great batches and freeze for convenience on days when we do not feel like cooking from scratch.
We love to go on vacations, but enjoy the biking tours from hostel to hostel as much as the big and expensive ones like 14 days at african camps in nature resorts.
It is important how much of a wish is based on a need and how much of it is driven by the marketing industry...
For us it is not ER versus spending but to find balance and to explore our wants.
After all, we need to enjoy our life till ER, too.

[FIREdreamer]

Originally Posted by toofrugalformycat

Only you can answer that question, and you shouldn't care if people on this board disagree.

My question was purely rhetorical. And my answer was: I think 45 is plenty young to ER, meaning I would rather delay ER until I am 45 and enjoy life a bit until then rather than live like a monk for the next 7 years and retire at 40.

[figner]

Originally Posted by FIREdreamer

My question was purely rhetorical. And my answer was: I think 45 is plenty young to ER, meaning I would rather delay ER until I am 45 and enjoy life a bit until then rather than live like a monk for the next 7 years and retire at 40.

Sounds like you're comfortable with your life choices.

To me, it's a matter of priorities. I have no interest in expensive watches or cars, but am spending $4-5k on a 4-week vacation for myself this year. About $3k of that is tuition for a class. I'm sure it will be worth it.

[rai-zero]

I'm 42.5 years old and plan on retireing at age 53-55 (ish). If we both saved like mad we could probably retire 49-50 (ish) but I figure a year or two this way or the other won't kill me.

One of my favorite activities is cars. I read all the mags, am always on car forums, been to exotic car driving events (etc.) one idea of a great thing to do would be a European Delivery for a BMW or Porsche (etc.) don't have to but it's something I think I'd love to experience.

I'm 42 but just this past 2-3 years got into saving a significant amount, before I saved some but not on an ER pace. We were paying off school loans, home down payments etc..

As the loans and such went down we were able to sock more into savings so we live well below our means as our pay has gone up these past 8-10 years.

[Fireup2025]

I don't go hog wild in my spending, but there is no guarantee I will make it to retirement. Planning on retiring early (50 or 55) - but also having fun today (but of course that, too is budgeted!) Get on with your bad self Firedreamer - enjoy life!

[Animorph]

rai-zero,

I did a factory delivery for my 1984 Porsche 944 Turbo (not the 911 Turbo). I would have bought it anyway, but got a discount for tourist delivery and joined a Porsche club tour that included a visit to the factory and a ride on the test track. We drove on the Autobahn (136 MPH limit for break-in) and over to Switzerland. The car insurance while there was outrageous, but the rest was great. It's different now, but should still be more fun than a normal vacation.

Dan

[HFWR]

Originally Posted by TromboneAl

A 10K watch.

What if you only run 5k? Or 15k? What good is your watch then?

[Midpack]

The richer your friends are, the more it will cost you.
I'm quoting from a recent ER book I read, but I don't recall who originated the quote.

[SLC Tortfeasor]

My fiance and I will spend about $10K on our two-week honeymoon in Europe this August. We're starting in Chamonix, France, and hiking for five days over glaciers to Zermatt, Switzerland. Then we're renting a car and driving through northern Italy. It will be an incredible experience and, even though now is certainly a very expensive time to travel in Europe, I think it's going to be well worth the money.

I've spent boatloads of money on travel over the past 15 years. I have no regrets.

[maddythebeagle]

Another point of view that some might consider is saving more prior to age 35 (you know the best savings years) and loosening up more after that once you get a nice base....