Money Mustache Fires Back at Suze Orman ($500K to retire vs $5 Million)

[NW-Bound]

Hmmm... I guess they (he?) want to be sure that only devout followers who read every word or slogan on the forum or blog posts can gain entry to the forum.

Smart. Less opposition, fewer dissenters that way. You have to be a true believer to get to Nirvana. No troublemaker allowed.

 

[brewer12345]

They are both nuts.

 

[Fedup]

Hmmm... I guess they (he?) want to be sure that only devout followers who read every word or slogan on the forum or blog posts can gain entry to the forum.

Smart. Less opposition, fewer dissenters that way. You have to be a true believer to get to Nirvana. No troublemaker allowed.

It’s time to send a dead rat, virtual one.

 

[gauss]

No, It’s just an observation that back in 2000, the amount suggested for retirement from the media was $500K. The amount seems to be doubled every 7-8 years.

If you have $500K in 2000, at the low of 2002-2003, it dropped 40-50%, so your stash is halfed to about $300k.

Same with 2008, if you start out with $1million, after 2008-2009, it dropped 40-50%, your stash is halfed to about $500k.

I have no idea what’s suggested now, but I’m guessing it’s double 2008 level so that’s why the amount $2 million was suggested.

Okay. Well unless new mandatory expenses are being introduced into our lives over time (ie full price smartphones/contracts, for-profit colleges etc.), the rule of 72 would dictates that the doubling of an asset every 7-8 years would imply a 10% growth rate.

I am not sure what the assumptions are behind the media recommendations, but have seen nowhere near that level of increase in my expenses in my life.

I have categorized quicken spending/income data going back to 1995 and it was invaluable to me with regards to being able to RE when the conditions presented themselves.

Thanks
-gauss

 

[stepford]

I think $2 Million minimum is about right if you retire in California. My brothers and several friends live - it is way too expensive. I'm in N.C, where cost of living is much cheaper. And you can do fine with $1 Million.

If you include the cost of a house then that's probably so. Housing circumstances vary widely though. For someone arriving in coastal CA today $2M wouldn't be nearly enough, but for those who bought many years ago (or during the RE downturn of 2009-2012) then $2M or even considerably less can be quite comfortable even in nominally HCOL CA.

 

[Fedup]

Okay. Well unless new mandatory expenses are being introduced into our lives over time (ie full price smartphones/contracts, for-profit colleges etc.), the rule of 72 would dictates that the doubling of an asset every 7-8 years would imply a 10% growth rate.

I am not sure what the assumptions are behind the media recommendations, but have seen nowhere near that level of increase in my expenses in my life.

I have categorized quicken spending/income data going back to 1995 and it was invaluable to me with regards to being able to RE when the conditions presented themselves.

Thanks
-gauss

It’s not the 10% growth rate is the assumption, though it seems that way.

But would you feel comfortable living with $300k in 2002-2003 time frame. That would mean $12k of income. Even with a house paid, there’s property tax and health insurance. Back in 2003, I remember distinctly, gas price was $1.50 per gallon, Because I complained about it been expensive. I paid $250 per month for health insurance for a family of 4, that’s almost $3k per year. Doesn’t leave much to live on. I know I wouldn’t FIRE with that amount.

Same with 2008, with only $500k, that means $20K per year income. I wouldn’t FIRE with that amount either.

But my perspective is from living in California, not some low cost area. YMMV

 

[gauss]

^ Nope - I would not be comfortable with 12k of income.

 

[Fedup]

If you include the cost of a house then that's probably so. Housing circumstances vary widely though. For someone arriving in coastal CA today $2M wouldn't be nearly enough, but for those who bought many years ago (or during the RE downturn of 2009-2012) then $2M or even considerably less can be quite comfortable even in nominally HCOL CA.

So I bought a house in 1976, if I stay in that house, I would still need $40k minimum. So that’s about $1 Million. But I was a teenager then, but if I bought it at normal working age like 25 years old, I would be dead or close to dead by now. Which means maybe more healthcare cost.

 

[Teacher Terry]

Street, the rules must have changed since I joined)

 

[NW-Bound]

Some years ago, I learned about MMM from this forum as I do not get out much.

So, I went there to see what it was about. Nothing bad, as I recall. It was mostly about LBYM, frugality, and all that good stuff that I practiced all my life. I guess it's like most religions on the surface; I have not read about any religion that says you should steal, or commit murder or robbery, or seduce your neighbor's spouse or something like that. But in practice, well, it's a whole 'nother story.

So what is MMM about now? Is it getting cultish?

PS. Just went to their home page. It said "Join the Cult". Uh oh. That explains it.

 

[brucethebroker]

I remember my sister used to tell me back in year 2000, that with a house paid off, $500K is good enough to retire, at least that’s what the pundits were telling people. Now fast forward, it’s probably $2 million. Not for the Mr Mustachio crowd, but for the regular ER crowd.

We had "small nest eggs and retired topic" posted a year or so ago here. Many have retired on much less than 1 M. here at the forum. So many variables: low cost of living locales, paid off mortgage, no debt, LBYM. It can still be done on $500k of investable assets in many parts of the country.

 

[ER Eddie]

If they don’t have much income HI is free isn’t it, well almost.

Oh that's true. Forgot about the subsidies.

 

[Maenad]

PS. Just went to their home page. It said "Join the Cult". Uh oh. That explains it.

That's a joke, son. #FoghornLeghorn

But hey, if all y'all want to just trash the folks on the MMM forums, knock yourselves right out, though there are a significant number of posters who regularly post on both. *cough, cough*

 

[street]

^ I don't beleive anyone is bashing/trashing that is just not true. Lighten up some it is nothing more then having some fun.

Everything that I read here is true nothing bad or insulting about the site of MMM.

 

[exnavynuke]

Hmmm... I guess they (he?) want to be sure that only devout followers who read every word or slogan on the forum or blog posts can gain entry to the forum.

Smart. Less opposition, fewer dissenters that way. You have to be a true believer to get to Nirvana. No troublemaker allowed.

When I signed up the question(s?) were just pretty much "google the MMM article/post on this and fill in the blank". Took seconds to find and was easy, but too hard for a bot to pull off.

MMM himself doesn't really bother me, other than the working multiple jobs including running a 6-figure blog/store/forum and calling himself retired.

Many of his followers, on the other hand, have taken "LBYM" and "get value for what you spend, don't just spend" to an extreme level and think their interpretation of it is the only acceptable one. If you spend more than "$XYZ" then you're a terrible person and don't belong on "their forums".

 

[catotx]

Kool Aid comes to mind ...

 

[bclover]

MMM seems too quick to set priorities for other people.

That's the same problem I have with Suze. But it's like the economic prognosticators - the surer they sound the more eye balls they get. The more eyeballs they get, the even more eyeballs they get.
Thought with an explanation of how it could be different gets you no where.

Best answer of the day.

 

[Choices]

I am one of those who wasn’t smart enuff to figure out to “join” MMM. I do read the forum every weekend. The stories of fights over inheritances and dumb money moves make me feel smart.

 

[Fedup]

That's a joke, son. #FoghornLeghorn

But hey, if all y'all want to just trash the folks on the MMM forums, knock yourselves right out, though there are a significant number of posters who regularly post on both. *cough, cough*

We need to out them, shameful, just kidding. I have not had coffee yet.

 

[Fedup]

We had "small nest eggs and retired topic" posted a year or so ago here. Many have retired on much less than 1 M. here at the forum. So many variables: low cost of living locales, paid off mortgage, no debt, LBYM. It can still be done on $500k of investable assets in many parts of the country.

I’m sure there are many who retired with $500K investable assets, but maybe they are closer to SS age then at MMM age.

 

[Fedup]

I am one of those who wasn’t smart enuff to figure out to “join” MMM. I do read the forum every weekend. The stories of fights over inheritances and dumb money moves make me feel smart.

Interesting, they fight over inheritance, what happens to the motto you don’t need much money to live or retire.

 

[Music Lover]

Interesting, they fight over inheritance, what happens to the motto you don’t need much money to live or retire.

Most of those stories are about other people fighting over an inheritance or blowing one, not about them fighting over one.

 

[Teacher Terry]

There is a lot of good advice on there. Some people take things to the extreme of course. I think MM was as surprised as anyone how much money the blog has made. The 300k he made he donated to charity. I admire that. Basically what he is teaching is how people used to live before easy credit came along. There are some really high earners on there so they can save boatloads of money in a short amount of time. I consider myself retired yet work part time at stuff I love doing and wouldn’t be as happy if I wasn’t doing it and I am much older than him. Choosing to work at something you love is much different than having to work.

 

[gauss]

I’m sure there are many who retired with $500K investable assets, but maybe they are closer to SS age then at MMM age.

+1
I think Fidelity only recommend 10x savings to retire if you do so at your SS full retirement age.

So this would be 500k for a 50k income. Of course this is not as appropriate for someone retiring "early".

-gauss

 

[Fedup]

There is a lot of good advice on there. Some people take things to the extreme of course. I think MM was as surprised as anyone how much money the blog has made. The 300k he made he donated to charity. I admire that. Basically what he is teaching is how people used to live before easy credit came along. There are some really high earners on there so they can save boatloads of money in a short amount of time. I consider myself retired yet work part time at stuff I love doing and wouldn’t be as happy if I wasn’t doing it and I am much older than him. Choosing to work at something you love is much different than having to work.

While it’s nice to find something you love to do, but the majority of people have to work at things that they don’t necssary aspire too. Tell that to the people who work at Waste Management and the trash will pile up. It’s not practical.