So you think YOU LBYM???

[Moemg]

Martha ,
You are so right .LBYM is a choice for us at any time we can give it up & live high on the hog .These people don't have the choce .

 

[kcowan]

I think using income as an indicator can be misleading. Since retiring, my tax paid has been:
2002 - 14%
2003-5 - 0%
2006 - 14%

in fact, one of my investments generated a -7.6% rate in 2004. I guess I am statistically part of the non-working poor most years. How do I do it? Cash in some big capital gains and keep all my income/dividend generating holdings in our registered accounts. Keep enough proceeds from CG in Cash to finance the in-between years.

There are programs that can help you with such after tax planning. But if you want a high ratio of income-producing holdings, it may not be possible.

On the subject of LYBM, we have been reducing our monthly nut every year since retiring in 2002. 2007 looks to be breaking the trend so I am bit concerned about inflation at the moment. I think the steps we have already taken may have just established a new lower baseline that we now might follow.

BTW David Rockefeller and David Letterman have both qualified for farm subsidies.

 

[maddythebeagle]

BTW David Rockefeller and David Letterman have both qualified for farm subsidies.

Yes, but subsidies encourage stable prices for food...err, or reward certain farm states to move forward other legislation....

 

[CuppaJoe]

My cleaning lady drives a car and I do not. Some of my expense categories as as low as possible while I go hog wild in other categories. I'm constantly re-setting priorities. But even so I do live well below my net income, so yes, I LBMM.

 

[Texas Proud]

Just now I was infected with a bad case of "I LBYM more than you do, nyah nyah!" I was sure that the amount I live on was so low, that I was even living below the federal poverty guidelines.

So, I looked up what the federal poverty guidelines are for 2007.

Poverty for a household of 1 (like me) in the 48 contiguous states or D.C. is defined as an income of $10,210 per year, or less. After taxes, take home pay on that might be $680.67/month.

$680.67/month? YIKES!!!

I can't even begin to imagine how I could get by on that. Poor people have to pay rent out of that, too.

Guess my LBYM skills are not as good as I thought.

Uh.... I think you are taking out more taxes than they would have to pay... and they might even get back some money as credits from the fed...

I bet it is closer to $780 per month... and maybe more...

 

[cute fuzzy bunny]

Wow. When I was in my early 20's and got myself into too much credit debt, I took on a couple of extra jobs, consolidated the debt and put myself on a very strict budget.

Excluding my rent and utilities, I had $9 per day for everything else...gas to get to work, food, clothes, etc.

That figures, inflation adjusted, to about $580 a month in todays dollars.

That was some pretty meager living. Lots of ramen noodles, and when a mouse got into my ramen stash and of course nibbled a little bit out of each and every one, I cut off the nibbled part and ate the rest. I turned off the heat in the winter and sponged some heat through the walls and the ceiling from the other apartments, and slept in a coat and wool hat. I dont think it was ever over 50 degrees in there.

Even with subsidies, food stamps, cheapo utilities and so forth, I cant imagine living on $680 a month INCLUDING the rent/utilities.

You'd have to get creative indeed.

 

[Nords]

I bet it is closer to $780 per month... and maybe more...

Whew, well then that's much better!

 

[Sam]

Whew, well then that's much better!

Don't be so sarcastic, Nords. Do you know how many nights you can rent that highway overpass with the extra monthly $100?

 

[Spanky]

Even with subsidies, food stamps, cheapo utilities and so forth, I cant imagine living on $680 a month INCLUDING the rent/utilities.

You'd have to get creative indeed.

In general, it's touch (if not impossible) to live on $680 per month. The only way is to share expenses with few more people. It's too much uncommon that 4 or more people live in an appointment or a house. My MIL receives a monthly check of $600 and manages to save a couple hundred dollars. She lives with two of her sons in a house that's already paid for. The expenses are relatively low -- property tax, insurance and utility bills are less than $500 per month. The sons pay the bills, however. She uses her money for grocery and do not have any other expenses.

It's true that her situation is unique, but it shows that it's possible to live on a piny budget.