Smelling the roses along the way

[JDARNELL]

Hi Folks,

I had an interesting discussion with a buddy of mine this weekend as we were able to slip off and ride motorcycles in the mtns. Due to different duty assignments we aren’t able to get together very often but we do talk every weekend. So this trip was the beginning of a ramp up to a cross country trail ride we intend to take together when he retires a couple of years after me in the 2013 time frame. The riding was fun but I really enjoyed just hanging out with him.

The discussion was about spending more money/time and/or doing more things along the way to FIRE and the overall impact on terminal portfolio value, having no debt, and the ability to RE. But for me the big question was did it really matter?

What got me to thinking about it is he has some long term health issues and is in his mid 30s. These issues may limit his time and ability to do things with his family and friends later on. I guess the underlying thought could apply to many situations such as wanting to spend time with kids before they were off to college etc.

At the end of the weekend more questions came out of it than answers and we both left with more to think about. It seems like many folks who are marching towards FIRE are good stewards of what they have and at the beginning is in an all or nothing mentality. I would think many put off spending/doing things today for the possibility of future consumption/time when they RE or the desire to leave something for heirs, favorite cause etc. No matter what the situation they must believe there is value in doing this or they wouldn’t do it. We see it posted here periodically where people have a hard time loosening up after they RE or being RE is not what they expected.

So what’s my point? I don’t know I guess. Just something on my mind as I get closer to RE. How do you strike the balance? Is there a balance? How much is enough? Etc.

Tomcat98

 

[MasterBlaster]

That's the big question, how much to save now so that we can live better lives later. What is the optimal lifetime savings/spending strategy ? Should I work for the man now to live better later ? Should I live now and pay that price later ?

You are right, saving money is deferring current consumption so that at some stage in the future you can (hopefully) enjoy even more consumption. If you save enough you can give up working for money and live off of your accumulated assets.

The questions you pose are for you alone to answer. There is no correct answer here.

 

[brewer12345]

Always a balancing act, and one I have not managed too successfully in the last several years.

I had a key insight recently: Once your portfolio is up to a certain size, the returns it generates over time far outweigh the effects of your additional contributions. To me, in my current situation, this is a big deal. It means that if I dialled back my efforts in my career and spent more time sniffing roses with my wife and kids, it would make only a small difference in when I get to check out for good.

I am preparing to act on this insight. Once I land a new job, I think I will have a bit of a challenge to get used to not running at full tilt in my career.

 

[hova22]

I agree this is a personal decision. Brewer, to me, that sounds great. I too do the nj/nyc daily grind. Eventually when I marry and start a family it's the same move I'd like to make. Best of luck in the transition.

 

[JDARNELL]

Understand its a personal decision but what other things should be considered?

Tomcat98

 

[MasterBlaster]

Consider that you may die young, or that you may live way longer than you think

Consider that the money you save as a young person is worth way more than the money you can save as an old person.

Consider, the aging process in that some things you can only do as an younger person. Also consider that some things put off for a few years no longer seem very important.

 

[MasterBlaster]

What is the greater tragedy... To die young with a large nest-egg, or to die old (miserable and cynical) eating cat-food cause you spent it all ?

What is the greater life lived... To live a full zestful and high consumption youth and then spend your later years toiling, or to live a nose-to-the grindstone youth and then live a long comfortable life free of money worries ?

 

[maddythebeagle]

It's probably best not to deny yourself....I think sometimes people confuse LBYM with eating ramen noodles...

 

[unclemick]

What is the greater tragedy... To die young with a large nest-egg, or to die old (miserable and cynical) eating cat-food cause you spent it all ?

What is the greater life lived... To live a full zestful and high consumption youth and then spend your later years toiling, or to live a nose-to-the grindstone youth and then live a long comfortable life free of money worries ?

Never never never turn down the chance to party! - the one thing I learned over thirty years in New Orleans. Put your savings on autopilot and learn to make do with the rest. Party is attitude - not necessarily spending money.

Live fast, love hard, die young. Remember the clock ticks twice - while time in the market helps, you are not getting any younger - kayak now (so to speak).

Here's to Second Line, Viagra, and Poorboys made from french fries and gravy. I figure by the time I get old - even a used Hoverround(if Lithium bats evolve)) will peel rubber in all four gears chasing those nursing assistants and drag racing with the boys.

Anybody who told you that you can't party while you DCA into balanced index- sold you a bill of goods.

heh heh heh - just came back from Walmart(the lowest around here) with the Halloween candy - being careful to select only the kinds I like - just in case there are not enough kids this year. Didn't happen last year so again this year I will sample some - you know to make sure it tastes ok.

 

[Nords]

Understand its a personal decision but what other things should be considered?

Great thread. I think it's the difference between full-on retirement and Bob Clyatt's early semi-retirement.

Some may have jobs that allow cutting back the hours, others are willing to bail on a bigbucks megacareer for a job with fewer hours. My personal regret was not realizing how I could leave active duty for the Reserves with hardly a noticeable change in pay (when on orders) yet a huge difference in quality of life. But we figured out the right answer a few years later when my spouse was confronted with a similar unrefusable offer.

The board already has a lot of threads on the boundary between frugality/simple living and stark [-]raving mad[/-] deprivation. As for working, I'd say that if you're clenching your jaw so hard that your teeth are grinding, then it's probably time to get out of the current job (big bucks or not) and find a way to cut back. Even a year off would be better than dancing a [-]coronary[/-] duet with the Grim Reaper.

 

[clifp]

.

I had a key insight recently: Once your portfolio is up to a certain size, the returns it generates over time far outweigh the effects of your additional contributions. To me, in my current situation, this is a big deal. It means that if I dialled back my efforts in my career and spent more time sniffing roses with my wife and kids, it would make only a small difference in when I get to check out for good.

I am preparing to act on this insight. Once I land a new job, I think I will have a bit of a challenge to get used to not running at full tilt in my career.

Even before your portfolio hits this point that contributions are no longer a significant contributor to your long wealth, people should shift some of their focus from their career to their investments. Take the case of a professional at MegaCorp earning $150K. A average performer might get a 4% raise while good performer might get 6%. The incremental income is $3K per year. It may require an extra 10 hours of week to earn that top performer rating. On the other hand if the person has 300K in financial assets a 1% increase in portfolio performance will also earn $3K per year and the work required is a lot less than 10 hours a week.

I was constantly amazed at the number of my collegues with assets approaching or exceeding $1 million, who would put in 10-12 hour days, but wouldn't devote 10-12 hours a year to their investments. Now this is probably not the case for Brewer because his career is involved with money management

 

[JDARNELL]

After I started this thread I went in and plugged in my own personal numbers as they stand today just to verify the FI side of the equation. As I suspected we have enough already to go when the time comes. Its just the impact to the cushion if we do more. But the more I think about it it really doesn't matter to much in the grand scheme of things. We aren't hardcore LBYMs people and we actually do a lot of things. I would hate to get to the end and wish I had done more. Although right now we are pretty happy. Its good to hear other views though.

Tomcat98

 

[unclemick]

I keep going back and harping on the the 'mental' aspect cause that's what seemed to change most - with the help of hindsight.

Even when I saw it - I didn't believe it - until I decided I 'really' saw it/got it.

As a jobshopper doing a Clyatt making the big bucks as a temp without 'full benefits' I was mentally 'underemployed' even though two yrs into ER I kinda 'knew' I was FI and didn't really have to work/had a good handle on expenses, etc.

I suspect there are a variety of ways each ER 'gets it', gets there - makes the mental adjustment.

heh heh heh - If I hadn't been canned/layed off at 49 - a part of me has a real strong hunch - my early retirement would have been age 63, 2006.

 

[Achiever51]

After I started this thread I went in and plugged in my own personal numbers as they stand today just to verify the FI side of the equation. As I suspected we have enough already to go when the time comes. Its just the impact to the cushion if we do more. But the more I think about it it really doesn't matter to much in the grand scheme of things. We aren't hardcore LBYMs people and we actually do a lot of things. I would hate to get to the end and wish I had done more. Although right now we are pretty happy. Its good to hear other views though.

Tomcat98

DH and I have always saved 15% of our income -- it became such a habit we didn't even miss it in our expense budget. DHs best friend and wife (who lived two time zones away) were in a similar situation. We used to talk about taking great trips with them once we were all retired.

Several years ago, we and they decided -- pretty much on a whim fueled by a couple of bottles of good wine over dinner -- to take our kids and go to Ireland for three weeks...not an inexpensive trip by any means. While we were planning the trip, we had several talks about how much this was going to cost and how it probably was going to cut into our retirement planning, etc., but we decided to do it nonetheless. "Retirement be damned...book those first class tickets!"

The seven of us had more fun than I can even describe. We traveled all over the Republic of Ireland -- kissing the Blarney Stone, driving the Ring of Fire, meeting fabulous people, eating wonderful food, and making memories to last a lifetime.

I cannot tell you how happy we all were to have taken this trip. Less than a year later, our dear friend was diagnosed with a rare form of cancer that killed him ninety-three days after diagnosis. Fortunately we were able to spend a few days with him before he died, and we spent most of our time together reliving those Irish memories.

Bottom line? The cost of the trip was little more than a blip in our overall portfolio, but what it provided couldn't be replaced.

Like the others have said, it's all about balance -- and what makes sense for you, not necessarily what is right for someone else.

 

[FIREd]

My wife and I approached this problem with a different prospective: sacrifice a lot of comsumption in the first few years, and then progressively loosen up. At 33, and with many good years still ahead of us, we have already saved enough money so that we could stop contributing to our retirement accounts, let the money compound at 7-8% a year for the next 30 years and retire comfortably at age 63. As other mentioned, the money you save during your early years is the one with the most compounding potential. So now we have choices: either continue saving aggressively and retire in our forties, OR stop saving and enjoy life more today (well if spending a lot more money really translates in enjoying our life more, which I doubt) and retire in our sixties, or take the middle road: spend a bit more but continue saving to be able to retire in our fifties. As we were already quite satisfied with our lifestyle and did not feel the need to spend considerably more money to be happier, we have decided to loosen up our budget just a bit while still saving a relatively high percentage of our income and we are now looking at retiring in our early 50s.

 

[donheff]

I have often thought some of the posters here seem to overweight the RE side of the equation. It would certainly be a shame to skip by life while you save for retirement. I saw the trailer for the "Bucket List" the other day. Morgan Freeman and Jack Nicholson meet in the hospital (cancer ward I assume) and the rich Nicholson character makes a pact to take Freeman's character around the world to complete their "bucket lists:" stuff they always wanted to do before they kick the bucket. Looks like a good, feel-good movie. At any rate, as I watched the exciting stuff they were doing I realized that I had done a lot of that stuff. I don't really have a bucket list and am glad for it. If I get interested in something I tried to work in in when I could. Why wait until FIRE?

 

[Sandy]

There are also some of us who always put current lifestyle first. I have consistently turned down j*bs that required long hours and/or extensive travel - regardless of $$, because that was a lifestyle I was unwilling to pursue (even before kids).

On the other hand, my DH never gave much thought to $$ until I convinced him of the soundness of FIRE. Now, his current j*b is clearly a hostile work environment, and I have been encouraging him to find something else for 2 years. He did not want to because of various $$ incentives and our plans. This weekend he said enough. Today he arranged a resignation for 2 months from now with time off in between, but doesn't have anything lined up yet. I expect it will work out, but it is unlikely he will completely make up the finanicial shortfall. Hopefully it will not delay FIRE plans, but if it does, that is ok, I would rather have him here and happy than stressed and stroked.

 

[Bigritchie]

I think it depends on your age alot too. I sacrificed almost everything from 18-30.

To me it is well worth it being able to retire at 30. Was it rough? yep.

I have the rest of my life to catch up though.

Now if I had just woken up at 30, then I think it would be much harder.

 

[ladelfina]

The cost of the trip was little more than a blip in our overall portfolio, but what it provided couldn't be replaced.

Achiever51.. how lucky you both were to've been able to take that great trip!

We aren't hardcore LBYMs people and we actually do a lot of things. I would hate to get to the end and wish I had done more. Although right now we are pretty happy.

Tomcat.. I think it's just a matter of looking at and assessing what the "lot of things" that you do ARE and whether they are just notches on a belt or whether they give you the same satisfaction as the simple motorcycle ride with your friend or the important memories of Achiever51's trip. Also, what is the "more" that you might wish for? Is it stuff, time, experiences?

I notice there are a lot of credit card ads that encourage people to [-]mortgage their futures[/-] expand their horizons with lists of exotic adventures and acquisitions to make "before you die". I can't imagine myself wanting nearly any of them and, anyway, that way lies madness. There will always be something MORE exotic or expensive that you don't have, and they'll keep making those lists to give you ever-more-high-octane suggestions!

In another thread I brought up mindFUL consumption and I think that's where you and your friend sound like you may want to focus. Does "not being hardcore LBYM" mean you might be spending in ways that don't really increase your happiness? It's not only about cutting spending, but -most often- finding ways to cut out stuff you really don't need in order to spend it on things with a better happiness "yield". But those decisions are highly personal.

I used to go out with a guy who wore a T-shirt: "He who dies with the most toys wins". I think that's a common feeling. I don't know your situation so I'm not saying that's you.. but I think it's a good example of an anti-FIRE mentality.

In contrast, I think your XC trip is an awesome idea and here's to 2013!

 

[maddythebeagle]

My wife and I approached this problem with a different prospective: sacrifice a lot of comsumption in the first few years, and then progressively loosen up. So now we have choices: either continue saving aggressively and retire in our forties, OR stop saving and enjoy life more today (well if spending a lot more money really translates in enjoying our life more, which I doubt) and retire in our sixties, or take the middle road: spend a bit more but continue saving to be able to retire in our fifties. As we were already quite satisfied with our lifestyle and did not feel the need to spend considerably more money to be happier, we have decided to loosen up our budget just a bit while still saving a relatively high percentage of our income and we are now looking at retiring in our early 50s.

Good points and good to have options....I have thought about this also....You know..."Your best savings years are before 35"...and after that use savings more for tax breaks and continue some form of work and increase consumption a bit....

 

[Chonder]

My DW and I are taking a calculated view also. We have saved in our tax deferred accounts pretty aggressively and if continued would be able to retire with extra in 12 years or so.
But...we recently decided to save for just a few more years and then one of us RE (ME) to have a stay-at-home parent for our kids (16 month-old and one on the way). Our accounts will have enough that even without contributions we should still have enough growth to retire before I hit 55.
She is 11 years younger than I, so I will probably become the house-hubby while she explores her career further. Any retirement savings we get from her future employment will just be extra. Thus I will be FIRED in less than 5 years when we pay off our retirement house, and are debt-free. She will follow in 5-10 years or so depending on other variables.
If necessary, once the kids are in school, I may return to w*rk for a while to bump things up....BUT PROBABLY WON'T!!!
Family First.

 

[MikeD]

It's probably best not to deny yourself....I think sometimes people confuse LBYM with eating ramen noodles...

Hey, I *like* ramen noodles. I add beaten eggs and sesame oil to them after cooking. Makes a good weekend lunch.

My fave:

 

[JDARNELL]

I used to go out with a guy who wore a T-shirt: "He who dies with the most toys wins". I think that's a common feeling. I don't know your situation so I'm not saying that's you.. but I think it's a good example of an anti-FIRE mentality.

In contrast, I think your XC trip is an awesome idea and here's to 2013!

I do have a list of things I want to do when I have time. Most are for the experience such as hiking the appalachian trail, XC motorcycle trail, taking my boys backpacking through Europe, etc. And I am certainly not the "He who has the most toys wins" person but I do have nice toys. As for LYBM we basically live as we want and don't skimp, but really don't make impulse decisions. The reality is I could just about RE today but am waiting another couple of years til I have 20 yrs of military service completed. What I am running into now is the possibility of staying a little longer (aka the just one more year syndrome). Economist by trade so its hard to leave stuff on the table. OTOH you can't turn back time. For me it has never really been about the FI part of FIRE but the thought process and mental decisions. Of course it all works out in the end and worrying is a lot of wasted energy.

I think of the things I want to do and experience as does my buddy and lately I have been thinking about alternatives but still in the lane of the origional intent. That seems like a good compromise at least it does right now. So for me until I make some definitive decisions it status quo, stay within the broad lanes to keep going forward and try to avoid the big mistake decisions.

Tomcat98

 

[laurence]

When I first found this site, I was aggresively pursuing FIRE by 45. DW and I were doing maximum legal limit on all retirement vehicles. Then we had kids, and while we could have done the daycare thing and both continued to work full time and continued mega-savings, we decided DW would stay home, I'd dial back the contributions, and we'd save a lot less but live a little. I made the decision to push off FIRE to 55, a huge difference. But that early money has made 55 a no brainer and not only is DW home, we are enjoying life a little more.

DW surprised me with a Nintendo Wii yesterday, and Tori picked up her first spare in bowling with Wii sports that night! Priceless!

 

[donheff]

When I first found this site, I was aggresively pursuing FIRE by 45. DW and I were doing maximum legal limit on all retirement vehicles. Then we had kids...

Kids can make a huge difference. So can other things, like age. With every passing year my tastes change. Activities I thought I would always love no longer hold my attention. New interests have come up that I would never have imagined I would like. I think it is great that some posters achieve FIRE in their 30s or 40s. I suspect many others who were interested in doing so may find their goals morphing as their life changes - nothing wrong with that.