This ER Group and Bell Curve

[scrabbler1]

Hit the nail on the head.

Beyond junior high, I don't understand the need to feel like you have everything the cool kids have. Maybe because I got used to it back then (blue-collar family in a white-collar neighborhood) it doesn't bother me now.

I have always been an outlier in so many ways before I became an ER. So, becoming an ER was simply another way I was being an outlier.

 

[marko]

Beyond junior high, I don't understand the need to feel like you have everything the cool kids have.

But now as an ER, YOU are the cool kid!

 

[Totoro]

My wifes dead broke uncle, with his soc sec and food stamps is in the top 8.66 % of the world, without the food stamps he is in the top 12.8 %

Perspective.

Average SS is $1300 or so? $15k a year is above the average GDP per capita of Poland, Argentina, Chile, Costa Rica etc .. world average is about $10k. Of course, that's nominal.

That linky puts you in the top half already if you have any assets any at all .. bear in mind it's designed to make you feel rich so you donate to charity

 

[cooch96]

I think your assumption would be a little off, and most here would have yearly spend below $100K shifting the Bell Curve downwards.

+1

I pay nearly $80k/annum in mortgage and various (mostly income) taxes. Including those casts, I'm over $100k, but nowhere near $200k. I expect both of these costs to be small fractions once I RE. I think my spending, in a suburb of Tacoma, will be close to $35k. If I spend more, it'll be for extravagant traveling like African safaris and such.

 

[Sunnymar]

Also, so often their lives can be tragic in many other ways. Divorce, father working so hard they never see him, boarding schools, nannies... oh man, I have heard of so many heart-breaking situations casually mentioned by people like that, that I really do think that there is no way to get through life without troubles of one kind or another.

No one gets through life without troubles of one kind or another, money isn't a factor. Lower income people don't usually have boarding schools or nannies, but divorce, absent fathers, yep.

Just tells us, money doesn't determine our "success". Contentment is important.

 

[marko]

My wifes dead broke uncle, with his soc sec and food stamps is in the top 8.66 % of the world, without the food stamps he is in the top 12.8 %

Average SS is $1300 or so? $15k a year is above the average GDP per capita of Poland, Argentina, Chile, Costa Rica etc .. world average is about $10k. Of course, that's nominal.

To me this is an intellectually dishonest argument or at least a misleading viewpoint.

Down in the trenches, I doubt someone in the US making $15K a year actually sits around saying, "Well, I can't complain! I'm in the top 10% of world income".

It's an interesting data point for sure, but at the practical level I'm not sure if it means anything.

Imagine having your boss tell you "You don't need a raise, you're already making $30K and you're among the richest people in the world!"

 

[Curmudgeon]

This is likely true if someone is ruled by envy.

Otherwise, it makes no sense to me.

Ha

It's not about envy. It's more about what we use as a reference point when forming an opinion about something.

If we're trying to figure out what is a 'reasonable' amount to spend on groceries, or what is a sustainable withdrawal rate, or how much sleep is 'enough', we tend to look around us. I think that is the basis for many of the polls on this site. If you're spending $1000/month on groceries and everyone else is getting by on $500, it makes you think you might be overspending a bit. Similarly, if you drive a late-model economy car and all you neighbors are driving 15-year old junkers, it tends to make you feel - even subconsciously - that you're not doing so bad.

There's a somewhat related study that asks people to write down the last two digits of their phone number, and then asks them to estimate how many African countries are members of the UN. Interestingly, people's estimate for question #2 was correlated to their answer for question #1: If the last two digits of their phone number was a large number, this tended to set (subconsciously) a high baseline in their mind, which caused them to estimate a higher number of countries in the UN. No envy involved.

 

[GrayHare]

I don't believe comparing income numbers alone yields an accurate picture. Where income is higher, typically the cost of living is also higher. This effect happens both across different countries as well as within one country. A "top" level income in central, rural USA is likely to not be top in NYC or high cost-of-living areas of California.

 

[ElizabethT]

I lived in northern California for 6 years, and in southern California for 6 years. I could be wrong, but my sense of it is that many Californians do not fully realize how much they are spending every year just for location. Despite the location expense, it seemed to me like conspicuous consumption was part of the lifestyle in Southern California. Maybe that was just among those I knew at the time. Still, I feel that living in urban coastal California is very different than living in the rest of the country in these respects and personally, I am far happier living elsewhere, away from that madness. YMMV and I know it does for many, but then again maybe this is why you feel a sense of lacking.

These are interesting observations in that we've just joined the urban coastal crowd in S. California, and are most definitely aware of how much we'll be spending for that privilege. I think it's key that we recognize that now that we're here we can relax and enjoy what nature is providing for free - amazing year round temps, the ocean and all that that brings, the surrounding canyons replete with hiking trails, plus non-stop city-sponsored free activities to bring in the tourists. As long as we can resist trying to keep up with those folks that clearly have far more money than we do, we should be able to enjoy the amenities having a well heeled community brings without having to pony up for it ourselves. And nicely, two of our new neighbors were out working on their own yards this morning, a rarity here, so that was very encouraging to see.

Our goal is to keep our home-related run rate the same as it was prior to our move to our pricier digs, other than the increase in property taxes moving up generated. I'm thinking we'll be successful as long as we resist trying to keep up, and simply focus on the aforementioned points.

I have to say that so far, however, living coastal is beyond sublime, particularly now that summer is here.

 

[Sunset]

I think your assumption would be a little off, and most here would have yearly spend below $100K shifting the Bell Curve downwards.

Yep, we are no where near spending $100K/yr.
But when you are debt free and no mortgage in a modest (small) house, it's pretty easy to live well on much less.

 

[Scuba]

These are interesting observations in that we've just joined the urban coastal crowd in S. California, and are most definitely aware of how much we'll be spending for that privilege. I think it's key that we recognize that now that we're here we can relax and enjoy what nature is providing for free - amazing year round temps, the ocean and all that that brings, the surrounding canyons replete with hiking trails, plus non-stop city-sponsored free activities to bring in the tourists. As long as we can resist trying to keep up with those folks that clearly have far more money than we do, we should be able to enjoy the amenities having a well heeled community brings without having to pony up for it ourselves. And nicely, two of our new neighbors were out working on their own yards this morning, a rarity here, so that was very encouraging to see.



Our goal is to keep our home-related run rate the same as it was prior to our move to our pricier digs, other than the increase in property taxes moving up generated. I'm thinking we'll be successful as long as we resist trying to keep up, and simply focus on the aforementioned points.



I have to say that so far, however, living coastal is beyond sublime, particularly now that summer is here.

+1 for coastal So CA living. There are many here who focus on the free or very inexpensive things to do outdoors. We feel no need to "keep up with the Jones" as we made a conscious decision to ER and accept a less lavish lifestyle than we could have had in exchange for earlier freedom to spend our time as we choose.

We considered moving to a lower COL area but couldn't find one that had the combination of scenic beauty, great weather most of the year, and diversity of things to do. YMMV

 

[kcowan]

When we first retired, we cut back on all excess expenses. MagicJack for all long distance, just 3 credit cards, each with a partner card, no purchases unless something was being retired, cheap flip phones for mobile, etc.

Gradually we eased up, because we realized that our means were much more resilient than originally thought. Now we have few constraints as we realize that we can't outspend our nut.

It is a great feeling of freedom but now we struggle with how and when to divest.

 

[eytonxav]

Very well put.

I'm still not sure what the OP was driving at, beyond a temporary bout of house envy.

House envy I thought he was referring to homes near the beaches in California. Many of those multi-million dollar homes would be nothing more than shacks in many other parts of the country. While I can appreciate the weather and the beach, paying so much for that location would constantly be tempting me to sell and move elsewhere.

 

[Ready]

We live in one of those beach front Orange County homes, and we still think about ER and LBYM just like everyone else on the forum. While the homes have risen in value substantially, we actually bought the land for under $400K almost 20 years ago now and have been very fortunate to have seen the values rise over the years. And yes, Prop 13 has been a huge benefit to us as we pay 1/3 of the taxes that our neighbors who bought around 2005 pay.

But while our home is definitely a luxury to us, we are very frugal in other areas, like vacations and restaurants. We just happen to really enjoy living in a nice home and a nice neighborhood. And we both worked very hard during our career to pay off our mortgage and put away our retirement savings. No inherited wealth, no tech stocks, no lottery winnings.

While selling and downsizing may sound appealing, the taxes and sales commissions would exceed $500K if we did sell, and we have no desire to throw away $500K like that. So we're perfectly content to stay put.

 

[haha]

It's not about envy. It's more about what we use as a reference point when forming an opinion about something.

If we're trying to figure out what is a 'reasonable' amount to spend on groceries, or what is a sustainable withdrawal rate, or how much sleep is 'enough', we tend to look around us. I think that is the basis for many of the polls on this site. If you're spending $1000/month on groceries and everyone else is getting by on $500, it makes you think you might be overspending a bit. Similarly, if you drive a late-model economy car and all you neighbors are driving 15-year old junkers, it tends to make you feel - even subconsciously - that you're not doing so bad.

Do you remember a very popular book by Vance Packard named The Status Seekers? Published 1969, this book introduced what the author thought was a new thing in America, people he called "other directed". What you describe, deciding what to spend on food or whatever is the MO of an other-directed person. Many people, including most people here I believe work from the ground up, rather than from a survey of others. But as always, ymmv!

Ha

 

[haha]

We considered moving to a lower COL area but couldn't find one that had the combination of scenic beauty, great weather most of the year, and diversity of things to do. YMMV

And there is none! Once you leave, you would risk never going back. I left, and my life is elsewhere, and many things keep me where I am, but Santa Barbara to Mexico within a few blocks of the beach cannot be matched anywhere else.

Ha