Beyond FI but before RE - Increase experience spending?

[Toocold]

I recently updated my quarterly financial spreadsheet and found that I am now way beyond FI. Given my target spending, my investments cover the next 71 years of spend, i.e. I'd need to withdraw at a rate of ~1.4% of my investments to cover my expenses. And my investments are rapidly going up because of the huge difference between my income and baseline expenses.

While I sometimes contemplate quitting my job at megacorp to run off to some foreign lands, I actually like my job, so will continue to maintain course until something changes or even better I get fired! and get a nice package out dance.

At this point, I'm feeling that I'm going to leave my kids too much legacy money, and I have no passion around any particular cause to donate to.

Has anybody else been in this situation? What did you guys do? I'm thinking about increasing my experience spend from now to when I finally RE, and then adjust down to my target RE expenses, after I finally pull the trigger.

 

[Danmar]

Seems pretty obvious? Save less, spend/give more. You may need to cultivate other interests to make the spending/giving part work. I increased spending/giving to match my resources in retirement. How old are you?

 

[Spanky]

Start spending and enjoy life.

 

[Toocold]

Seems pretty obvious? Save less, spend/give more. You may need to cultivate other interests to make the spending/giving part work. I increased spending/giving to match my resources in retirement. How old are you?

DW and I are mid 40s. We live in a LCOL upper midwest town, have our house paid off, and live off of $60k a year. This amount is plenty for us to live a very comfortable, happy "upper middle class" life.

I make a high income, and with recent run ups on my company's stock price, I'll be making mid-to-upper mid 6 figures over the next several years. So as I drink my coffee this morning, I'm thinking that we can easily spend $200k-300k a year, while keeping our investment totals flat. This feels so counter to how we've lived.

Historically, the gap between income and spending helped fuel FI, but now we're beyond it, and wondering whether we should adjust our "normal" spending levels.

I know it's an awesome problem to have and I'm grateful to have it, but it'd feel very odd to increase our spending so much, but there will be some utility from it.

 

[Danmar]

DW and I are mid 40s. We live in a LCOL upper midwest town, have our house paid off, and live off of $60k a year. This amount is plenty for us to live a very comfortable, happy "upper middle class" life.

I make a high income, and with recent run ups on my company's stock price, I'll be making mid-to-upper mid 6 figures over the next several years. So as I drink my coffee this morning, I'm thinking that we can easily spend $200k-300k a year, while keeping our investment totals flat. This feels so counter to how we've lived.

Historically, the gap between income and spending helped fuel FI, but now we're beyond it, and wondering whether we should adjust our "normal" spending levels.

I know it's an awesome problem to have and I'm grateful to have it, but it'd feel very odd to increase our spending so much, but there will be some utility from it.

It takes a while to get comfortable with your new-found FI/wealth. Did for me. I went from zero to mid eight figures in about a decade. Gradually you'll find ways to increase your spending/giving. Remember you can only spend it or give it away, now or later.

 

[Toocold]

It takes a while to get comfortable with your new-found FI/wealth. Did for me. I went from zero to mid eight figures in less than a decade. Gradually you'll find ways to increase your spending/giving. Remember you can only spend it or give it away, now or later.

Your last statement hit it on the nail on what my issue is (and I presume it'll get worse as we get later in life), so thank you. It's an interesting problem that I never thought I'd have. I think I need to find more things to do.

 

[kcowan]

We get much pleasure out of our spending on a European trip every year. It helps that we can spend a month away. We also enjoy selected charitable giving.

One thing you should deal with is your desire to stay home. That will,restrict your retirement experience. We have only been truly free since 2008 even though retired since 2002.

 

[Spanky]

making mid-to-upper mid 6 figures over the next several years.

went from zero to mid eight figures in about a decade.

You guys are champs of wealth creation!

 

[dunkelblau]

My nut has been in overrun mode for many years, and I'm still working full time. Annual expenses (excluding income taxes) are still less than 10% of AGI even though net worth crossed 100x a decade ago. No kids to leave anything to, and like you I'm not inclined to support any particular cause.

As for experiences what gets me a buzz doesn't involve spending, actually money moves in the opposite direction. So some of the excess goes into costs incurred trying to beat the market and falling short; for me this beats traveling to Vegas to play the tables.

One 'investment' I made that I'm happy with was getting a special arrangement of work conditions in exchange for giving up raises and promotions. Being able to jettison the parts of my job I didn't like and focusing solely on my niche was well worth the price of entry IMO. ER was a great motivator to get me to FI, but it's irrelevant at this point.

One thing, I've never pulled off 'adjusting expenses down' in my life, my expenses have always been low but they've always been rising. I expect them to rise faster during RE.

 

[Toocold]

One thing you should deal with is your desire to stay home. That will,restrict your retirement experience. We have only been truly free since 2008 even though retired since 2002.

That's what I'm contemplating as "experience" spending. I'm thinking that we keep our base expenses flat at $60k and start spending $20-40k a year on travel -- to go to Europe, Caribbean, Hawaii, Asia. DW and I love traveling so rather than waiting for RE, we start spending on vacations. And because I no longer am trying to get ahead in the corporate environment, I can finally take some 2 week vacations

Being able to jettison the parts of my job I didn't like and focusing solely on my niche was well worth the price of entry IMO.

I recently downshifted my responsibilities from managing a sizeable business unit to more of a staff/functional role, which significantly reduced my responsibilities to hit the numbers, and work-life balance has been good ever since.

 

[Ready]

I think your situation is quite common on this forum actually. We have had a similar experience. Firecalc says we can spend 4X our current spend level and still gives us 100% success for the next 40 years. But spending that kind of money after a lifetime of LBYM is just not that easy for us.

We don't get much enjoyment from material items, so there is little desire to go buy new cars, boats, planes, or other toys. They actually just add stress to our lives because we have to take care of them.

What being FI has provided for us is the pleasure of a stress free lifestyle, at least as it relates to money. If the water heater breaks, or we need a new roof, or a new A/C unit, no big deal. We buy the best that money can buy and never sweat the expense. That is a true luxury for us.

We keep promising to upgrade to first class next time we fly long distance. But as other have said, spending $2,500 for a first class ticket when coach is $400 is not easy to do even if we can afford it.

Our neighbors buy a new car every six months. It seems to be an obsession with them. I don't begrudge them because they obviously enjoy it, but it just doesn't interest us. I get more enjoyment from walking than driving, because it means more exercise for me and it's very soothing.

Perhaps things will change over time and we will find other uses for the money. But we are in no rush and don't give that much thought to it.

 

[Blue Collar Guy]

You guys are champs of wealth creation!

+1 I had to think what mid 8 figures was! 15 million thats the wow factor in my brain. UPDATE: After thinking more about this wow factor, I just realized mid 8 figures means 50 million. Fuhgeddaboudit !

 

[pb4uski]

Toocold, have you considered downshifting to part-time? Perhaps 80%(4 days a week to start)... every week is a 3 day weekend!

Or perhaps a weekend or vacation get-away place? We purchased a lakeside home in 2005 that was about 35 minutes from our then main home. Initially used it just weekends... then used it as a summer home... later demolished it and rebuilt a year round retirement home and sold our main home and retired.

 

[Danmar]

Or perhaps a weekend or vacation get-away place? We purchased a lakeside home in 2005 that was about 35 minutes from our then main home. Initially used it just weekends... then used it as a summer home... later demolished it and rebuilt a year round retirement home and sold our main home and retired.

I can attest that multiple homes is a good way to "soak up" some of your excess. If that appeals to you.

 

[youbet]

+1 I had to think what mid 8 figures was! 15 million thats the wow factor in my brain.

Actually, Danmar said " I went from zero to mid eight figures in about a decade." That would imply somewhere in the $50 million range, not $15 million.

Well done Danmar!

One of the fun and interesting things about this forum is the huge disparity between the financial situations of the participants. On one thread, we have participants mentioning FIRE portfolios worth tens of millions. In another, participants are explaining how they live happily and comfortably on extremely meager spend levels. It's all fascinating.

 

[Toocold]

have you considered downshifting to part-time? Perhaps 80%(4 days a week to start)... every week is a 3 day weekend! Or perhaps a weekend or vacation get-away place?

It's funny you mention a vacation house. When I updated my DW about our financials, she also mentioned buying a vacation home (in hawaii no less). I had a visceral reaction against it, because I dislike buying anything that causes us to incur ongoing "base" expenses. As Ready points out, I think this is common here.

Now I started lecturing her about what's happening with Johnny Depp and 40 or so people he employees to support his lifestyle and the dangers of the hedonic treadmill. I do think I need to chill a bit.

I may downshift in the future, but I truly don't mind the work situation right now.

 

[pb4uski]

While you don't mind the work situation right now, what if every day could be a Saturday?

 

[Meadbh]

+1 I had to think what mid 8 figures was! 15 million thats the wow factor in my brain. UPDATE: After thinking more about this wow factor, I just realized mid 8 figures means 50 million. Fuhgeddaboudit !

Yes, but those are Canadian dollars, eh!

 

[Blue Collar Guy]

Actually, Danmar said " I went from zero to mid eight figures in about a decade." That would imply somewhere in the $50 million range, not $15 million.

Well done Danmar!

One of the fun and interesting things about this forum is the huge disparity between the financial situations of the participants. One one thread, we have participants mentioning FIRE portfolios worth tens of millions. In another, participants are explaining how the live happily and comfortably on extremely meager spend levels. It's all fascinating.

Yeah, I posted an update before I read you correction. My mind couldnt even handle that number. Reminds me of a story(go figure I have a story). My mom called us up around 2005, She saw a new house near her being built. It was $130,000. I said wow thanks mom, we will come over later and look .Hot houses at hot prices dont last. Turns out the house was $1,130,000. These kind of numbers are what my late father used to call telephone numbers.

 

[Koolau]

It takes a while to get comfortable with your new-found FI/wealth. Did for me. I went from zero to mid eight figures in about a decade. Gradually you'll find ways to increase your spending/giving. Remember you can only spend it or give it away, now or later.

So was it you, Danmar or was it Sophie Tucker who said "I've been rich and I've been poor. Rich is better"?

 

[Ready]

While you don't mind the work situation right now, what if every day could be a Saturday?

I don't like Saturdays at all. Everything is crowded on the weekends and too chaotic. I can't wait for Monday to roll around so everyone goes back to work and gets out of my way. And that's true for me even though I still work part time.

 

[Walt34]

Once in a blue moon I or DW will buy a lottery ticket for the entertainment value of a day or two of daydreams, "What would we do if...."

We finally concluded that we probably wouldn't do much differently and would end up giving most of it away, keeping enough to pay for in-home LTC and maybe replacing vehicles a little more often, say every five years instead of wearing them out. But she would see to it that the grandnieces and grandnephews were spoiled rotten.

But it would be fun to do something like charter an airliner and fly the entire family to Hawaii for a vacation in February!

 

[kcowan]

So was it you, Danmar or was it Sophie Tucker who said "I've been rich and I've been poor. Rich is better"?

I think the thing with Danmar is that his pattern was well-developed before the riches came upon him. So he is a regular guy who is thankful rather than being one who thinks he walks on water.

Although he is a fellow Canuck, I have never met him but I know I would like him!

(Danmar's story:
He worked at a bank in Toronto and lived in a nice home.
He bought a cottage in Muskoka (Doesn't everyone?).
He retired.
He decided that living in Alberta, he would pay much less in taxes. So he bought a place in Canmore, one of the most beautiful places where you can own property in the mountains. He downsized Toronto to a condo (Pied a terre) around that time.
He decided that winters can get a bit much even in Canmore so bought a place in Arizona.)

Pretty simple evolution and not at all pretentious!

 

[Meadbh]

I think the thing with Danmar is that his pattern was well-developed before the riches came upon him. So he is a regular guy who is thankful rather than being one who thinks he walks on water.

Although he is a fellow Canuck, I have never met him but I know I would like him!

+1
Danmar sounds like a nice normal Canadian who worked hard and had great career success working up to the C-suite of one of Canada's big six profitable (stable and boring) banks. Would love to have a beer with him sometime.

 

[DrRoy]

I just saw that the as revised flight plan for Apollo 13 is going up for auction on July 20. You can buy it for me.