Fat Fire-ees - are you out there?

[RobbieB]

I think spending will decline big time when you hit 80. Hard to spend a lot of dough watching TV all day.

 

[HI Bill]

I think spending will decline big time when you hit 80. Hard to spend a lot of dough watching TV all day.

Maybe, maybe not. My dad's 80.5, and is going to Greece around his 81st birthday. He'd be doing a lot more travel than he is, if he had more funds! He's on this second serious girlfriend since the divorce about 9 years ago!

 

[Totoro]

I read an article yesterday, written by a young millenial 'finance writer' on Yahoo! Finance. It defined FAT FIRE as someone who's planning to bring in >$75K annually from their investments. LEAN FIRE was <$40K, and Barista Fires is <$30K, still working gig jobs. The writer clearly doesn't understand what the FI in FIRE means!

After the five stages of grief, we apparently now have the 11 stages of wealth.


The 11 Stages of Wealth: Which Stage of Wealth are You at?

 

[corn18]

After the five stages of grief, we apparently now have the 11 stages of wealth.


The 11 Stages of Wealth: Which Stage of Wealth are You at?

I'm at 7 right now.

 

[Freedom56]

We are entering our 4th year of early retirement. Our situation is different from yours in that we currently have a pension that pays our $9256 per month until age 62 after which it will be reduced by the amount from SS. We get almost 2x that in interest income from taxable accounts. We are not touching our IRAs where a large part of our weath is until 70.5. We also have sizable inheritances coming from both sides of the family. In 2017 our largest expense was income taxes, about $83k for state and federal. We own 3 residences and have zero debt. Our next largest expense was travel, followed by health insurance and property taxes. But these are a small fraction of our income taxes. Our total expenses were under $180K in 2017. To get to $300K per year, we would need a drug and gambling addiction, or eat dinner 3 times a week at the French Laundry or charter private jets. And no we don't fly coach or eat at crummy restaurants or stay at sh!thole hotels. You need to recheck your numbers.

 

[ShokWaveRider]

We are probably about a 9, but act like a 7. I simply cannot be extravagant no matter how hard I try. We probably have 3 x our annual expenses available to be tapped, but only use about 1.5. I know....

 

[hilltide]

I did not read all the responses but I am familiar with the term. If my memory serves me correct FAT FI is NET Worth being 30x your annual expenses and above.


I have two goals on my spread sheet. FI @ 25x and FAT FI @ 30X. Either one will do just fine. The only thing I have accomplished so far is FAT. lol.

 

[marko]

So my question is really after you live it up for a number of years, do many of the FatFires hit a wall in all that discretionary spending and see their spend go down significantly?

No. Except for our 2-3 year hiatus immediately following my involuntary and permanent work stoppage, our spending and lifestyle is pretty much the same as it was for the previous 25 years.

After we got over it and figured it out, we slowly ramp'd back up and live the way we always did, which is on the fairly high end. Our one big concession was to move our boat from a very expensive marina (DW hated the people and vibe there anyway) to a mooring --which we can see from our kitchen window.

 

[RockDoctor]

I think spending will decline big time when you hit 80. Hard to spend a lot of dough watching TV all day.

My in-laws were still up for road trips with us which included some tent camping when they were in their 80s.

 

[flintnational]

Ways to Fat Fire (So, the answer is, "It depends")

Individual 1 ($2M investable assets)

Lean Fire 2% WR
Fire 4% WR
Fat Fire 5%+ WR

Individual 2 ($80k annual budget)

Lean Fire San Francisco
Fire Atlanta
Fat Fire Kansas City

Individual 3 (6 ft. male)

Lean Fire 160 lbs.
Fire 180 lbs.
Fat Fire 200+lbs.

Edit to add: IMHO and YMMV

 

[Amethyst]

Have been experimenting with spending quite a lot on travel and entertainment.

It has been fun, but there's an empty feeling, too. I was so used to insisting on value for every dollar, and it surely does not feel as if we get 3X the value and enjoyment in return for spending 3X as much. First class airline seats are maybe 5 inches wider than coach, with a few more legroom inches; and so what if they hand you a premade meal instead of asking for $10.00? Even the faster boarding time isn't all that...when they decide to deplane everybody in the opposite direction, so Row No. 1 is last off the plane!

 

[marko]

In 2017 our largest expense was income taxes, about $83k for state and federal. We own 3 residences and have zero debt. Our next largest expense was travel, followed by health insurance and property taxes. But these are a small fraction of our income taxes. Our total expenses were under $180K in 2017. To get to $300K per year, we would need a drug and gambling addiction, or eat dinner 3 times a week at the French Laundry or charter private jets. And no we don't fly coach or eat at crummy restaurants or stay at sh!thole hotels. You need to recheck your numbers.

Again, I think it depends upon where one lives and how one defines "Fat".

Unless I read it incorrectly, if $83K of your $180K spent is taxes that leaves you with less than ~$90K (after health insurance) living in an LA suburb.

WADR it just sounds a bit lean to me but maybe I'm missing something.

 

[corn18]

Again, I think it depends upon where one lives and how one defines "Fat".

Unless I read it incorrectly, if $83K of your $180K spent is taxes that leaves you with less than ~$90K (after health insurance) living in an LA suburb.

WADR it just sounds a bit lean to me but maybe I'm missing something.

His income is $300k / year. $83k taxes, $180k expenses. So he has some left over each year.

 

[Freedom56]

Again, I think it depends upon where one lives and how one defines "Fat".

Unless I read it incorrectly, if $83K of your $180K spent is taxes that leaves you with less than ~$90K (after health insurance) living in an LA suburb.

WADR it just sounds a bit lean to me but maybe I'm missing something.

Yes we have about 90k left over for living in an LA suburb, Downtown West Palm Beach FL, and Lausanne Switzerland where we are now. We are saving about $127k annually in our taxable accounts. The number one expense for most households where we have our residences is mortgage (P&I), which we don't have. We have talked about stepping up our spending but we just don't want more material possessions. We have three homes full of them.

 

[JoeWras]

Have been experimenting with spending quite a lot on travel and entertainment.

Our current experiment is going with Hampton Inn instead of Super 8 or Comfort Inn.

I don't think I'll go back. If that makes my trip Fat, I'm all in. We're talking average cost (after taxes) of $140 instead of $80. Life is too short for bed bugs and cold showers.

 

[Freedom56]

His income is $300k / year. $83k taxes, $180k expenses. So he has some left over each year.

Our taxable income was over $300k. 2017 was the last year of our SALT deduction. We saved the balance and reinvested. Our net taxes will be higher in 2018.

 

[JoeWras]

I'm estimating $120k per year, which includes charitable giving and taxes. I guess that makes me FAT?

 

[corn18]

Yes we have about 90k left over for living in an LA suburb, Downtown West Palm Beach FL, and Lausanne Switzerland where we are now. We are saving about $127k annually in our taxable accounts. The number one expense for most households where we have our residences is mortgage (P&I), which we don't have. We have talked about stepping up our spending but we just don't want more material possessions. We have three homes full of them.

How is the cost of living in Switzerland? My wife and I would love to get a home there.

 

[Golden sunsets]

Dawgman; I’ve taken note of your numerous threads started over the last several months. You’re obviously on the cusp, trying to figure out if you can serenely keep up your run rate once you transition from W-2 to drawing on your own assets in similar amounts to your recent spending levels.

I can only offer my own experience. Our spend rate is significant (in most recent years $180,000-$220,000 including taxes). I’ve never been able to convince myself to spend more than that despite many years where income was between two to four times that spend rate. Now that I am RE(2017) calculators indicate that we could spend in excess of$300,000/yr indefinitely, but we just can’t bring ourselves to do it.

After decades of LBYM, even fat [emoji91] is on a diet[emoji4]

 

[audreyh1]

So my question is really after you live it up for a number of years, do many of the FatFires hit a wall in all that discretionary spending and see their spend go down significantly?

Hope that clears it up. Now go out there and lose some weight Fatty!!!

It did for us. We deliberately set aside up a slush fund for excess travel when we retired. This was because we had a serious pent up demand for travel, plus we didn’t want to be distracted by market volatility making us feel like we should cut back starting out. That was a good thing, as we retired in 1999!

2000-2002 we traveled a LOT (and ignored the bear market). 2003 our travel expenses dropped because we were ready to travel more on our own, which was much less expensive, and we starting RVing, which is also an inexpensive way to travel. We also didn’t leave the continental US for 10 years.

So for amount the next decade our living expenses were quite a bit lower than when we started. But around 2013 or so, we started traveling more extensively again, particularly to Europe annually. And a few years ago we finally exceeded our initial retirement spending (not inflation adjusted either). Part of the motivation here was that our income had increased a lot, so we deliberately increased spending on gifting/charity and travel - upgrading a lot on travel.

 

[Freedom56]

How is the cost of living in Switzerland? My wife and I would love to get a home there.

Very high cost of living but very low income and property taxes. My father-in-law gave us the home a few years after we married. He was trying to get me to move there but that never happened. Put it this way, San Francisco is a bargain compared to Lausanne and Geneva Switzerland.

We are finishing up some work inside this week, I'll post some pictures this weekend after we clear the construction mess so you can get an idea of what you can expect here.

 

[Dtail]

Our current experiment is going with Hampton Inn instead of Super 8 or Comfort Inn.

I don't think I'll go back. If that makes my trip Fat, I'm all in. We're talking average cost (after taxes) of $140 instead of $80. Life is too short for bed bugs and cold showers.

There you go.
Hampton Inn is our go to hotel.

 

[Retch The Grate]

Hmm, I like the stages outlined in the article, I'm definitely past 7, arguably past 8, for myself. DW complicates matters a bit (though I also don't expect her to be aiming for FIRE anytime soon, she loves working). Of course we are in the Bay Area, living in Mountain View, so if we moved to somewhere rural we're almost certainly in 8 already...

My target models seem to hit the FatFIRE threshold ($120-180k a year for me, $240k for both of us), but we're not there yet so I don't have any spending insights.

 

[Bigdawg]

After the five stages of grief, we apparently now have the 11 stages of wealth.


The 11 Stages of Wealth: Which Stage of Wealth are You at?

I'm a nowhere near an English Major but had to stop reading that article. English as his/her 3rd language maybe?

 

[karen1972]

There you go.
Hampton Inn is our go to hotel.

Ironically I've had nothing but bad experiences at Hampton Inns, including turning on the heat setting off the fire alarm and them yelling at us and then telling us if we needed heat they would have to disable the smoke detectors... or maybe clean the radiator so it wasn't so dusty?

At the same time I"ve had lots of good experiences at Comfort Inns, though usually from the reviews I can tell which ones were "bought out" from some other chain and those I skip.

I'm using up miles this month so 2 nights will cost me a whole $10.88 so I can deal with minor issues as long as its clean and I've been at this one before and it is.