Fat Fire-ees - are you out there?

[timemoveson]

My base expenses are $15K. Own your housing and car outright, get free or almost free ACA medical, watch food spending. I can't understand why people need $10k a month.

Then you'd have a hell of a time getting your head around how we spend $20-$25K per month (with no healthcare costs to speak of, and separate funding for university costs). All good!

 

[NW-Bound]

...I would love to find a way to live on $30K if only to understand how it's done. (assuming we're not talking about a single-wide at the end of a logging road)

Numbers are fine but I'd like to know the mechanics of such a lifestyle. Are we talking about some small town in the boonies, 2 hours from the nearest hospital, movies and restaurants?

Hey, you are talking about my high-country 2nd home in the boondocks. I used to think I would retire up there, but quickly changed mind once I owned it.

I paid more for that home than for my main home (it is now worth less than the main home after the housing bubble burst). The tax is based on the home value, so it does not matter that I get practically no service from the county (the road grader and snowplow turn around right at the corner of my lot).

The only grocery store in this unincorporated town has a meager selection, and the price can be as high as that in Alaska. It's only 1.5 hours one-way from a real grocery store in the nearby large town, not 2 hours, but driving that is a chore. That's also the distance you drive to your dentist, your doctor, your electronics store, etc... And I suspect that if you need some medical specialties, you will need to go to a larger city.

And speaking of the larger city, to travel by air, you drive 2.5 hours to the nearest international airport there. That's also where you go if you want to do some real shopping, like at Costco, Trader Joe's, Whole Food, IKEA, etc...

It costs more to live full-time in this boondocks home than in my metropolitan home! The only thing that saves you money is that if you are a spendthrift, you have no places to spend that money. Oh, I take that back. My neighbors up there who are full-timers buy online. FedEx and UPS still deliver there, and I see their trucks going down the road to their home all the time.

PS. I would save on electricity for air conditioning which is rarely needed at 7,000 ft. However, the cost of heating in the winter may more than offset that. I do not know how much because I do not spend the winter there. But I know it costs $120/month to keep the home at 45F in the winter.

 

[Freedom56]

Here is our 2018 budget:


You can call it Fat FIRE or whatever. We are running very lean given income level and untapped income streams such as IRAs and considering how much we are still saving annually after taxes.



Note we have a usufructuary with my FIL for rental income from our Swiss property. The rental income goes to him and property taxes, maintenance, improvements are covered by the rent. We do not include expenses related to this property in our budget as there is a net surplus from he rent.


Southern California Non-Discretionary Expenses:


Property taxes: $5600 (Prop 13 keeps it low)
Health Insurance: $7902
Health care copay: $234
Dental: $634
Home Insurance: $1532
Earthquake Insurance: $1122
Auto Insurance: $1150 (2 cars)
Auto Registration: $284
Home Electricity: -$220 (net surplus from photo-voltaic panels)
Home Gas: $240
Home Phone: $211 (Ooma premiere plus international calling)
Security Monitoring: $180
Cell Phones: $720 (2 phones with unlimited data and international calling)
Home Internet: $780
Home TV: $228 (condo subscriptions for cable TV + NETFLIX+CBS All-Access)
Home and Pool Maint.: $1200
Home Water: $1056 (includes water softening service and water consumption)
Food: $4200 (excludes dining out and for 7 months only)


South Florida Non-Discretionary Expenses:


Property taxes: $4400 (includes early payment discount)
Condo Fees: $6732 (includes maintenance, security, water, Internet, Cable TV)
Electricity $242
Food: $1800 (excludes dining out and for 3 months only)
Phone: $60 (Ooma basic)
Condo Insurance: $682 (portion not covered by condo fee)



Total Non-Discretionary Expenses:

California: $26,422
Florida: $13,916


Total: $40,388


Discretionary Expenses:


Travel Expenses: $27,323 (Mostly for airline tickets )
Hair stylist: $1200 ($800 for my wife $400 for me)
Clothing: $7300
Gifts: $2400
Dining out/Entertainment: $8300
Charity (cash donations): $2000
Hobbies: $2500
Auto Gas: $720
Spouse personal Care $8200 (facials, manicures, cosmetics, pedicures, whatever…)


Total non discretionary $59,943


Income Taxes:


Federal: $62393
State: $19378


Excess income from pension and taxable accounts: $127832 (annual slush fund rolled into savings)


Total Budget:


Non Discretionary: $40,388
Discretionary: $59,943
Slush Fund: $127,832

Income Taxes: $81,771


Total: $309,934


IRA withdrawal will be deferred to age 70.5. SS will start at 62 and Level income pension will be reduced accordingly. Second pension will start at age 62 from previous employer (additional $1440 per month). We are in our 4th year of retirement.

 

[NW-Bound]

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 like the above. What is Fat depends on one's lifestyle. A budget of $1 million/year is very lean, no make it unthinkable, for a billionaire, but would require me to throw money away, no burn it, left and right.

From the above, counting from 0,

Top level is 10: More than you ever need.

Level 9: Wealth Asset annual cash flow covers current annual expenses, plus a few more life goals.

Level 8: Cash flow covers current annual expenses.

So, I guess I am at 9. FIRECalc says that I can spend a lot more, but I have not exceeded $100K the last couple of years. We have no expensive habits. My wife is very low maintenance (she even cuts her own hair), yet looks very fine for a woman her age (people think she's in her 40's).

Sure, we can spend more, but would that increase our happiness level? Seriously doubt it. I often have to drag my wife to a restaurant. She's happier cooking what she wants to eat, for example. We enjoy our recent RV trek to Alaska tremendously. Spending a lot of money on a luxury tour does not give us the same satisfaction as getting ourselves up on a glacier in a hike, for example.

It's all about what one has to do, or wants to, to be happy. And that does not always involve spending more money.

PS. Quicken says that the 3rd highest spending category for me is Donation/Gift for the last 6 years, ever since I retired. First category is housing costs, due to work on both homes. Second category is travel.

 

[Amethyst]

Also, a lot of the expenses (other than taxes) come with people's choice of where to live, and what kind of dwelling. We don't really have any business criticizing people's choice of where to live, unless they insist on dwellings they cannot afford.

Then you're not listening. Several posters have outlined they spend $15k on travel alone. We plan to spend $25k on travel each year. Maybe we are stupid.

 

[Teacher Terry]

We like to travel and eat out, go to festivals, events etc which add to our spending. We fly coach. Our regular budget is 60k/ with a additional 10k taking 2 trips a year. If we had more money we would spend more. Now is our time to enjoy and you never know when that will end. Our HC is expensive at 12k/year through my retiree coverage.

 

[Totoro]

Numbers are fine but I'd like to know the mechanics of such a lifestyle. Are we talking about some small town in the boonies, 2 hours from the nearest hospital, movies and restaurants?

I'm in Europe, live in Utrecht 10 minute bike ride from the central station (57 million yearly passengers), university hospital, several movie theaters, supermarkets and lots of restaurants in all types and sizes. Highway ramp is 1 minute away.

Apartment is newly built (now two years old), roughly 750 sq feet I believe. I rent, so no property taxes. Private sector, no rent control.

Utrecht is a central city, ~300k people. Nearest airports are Amsterdam or Eindhoven. Both about an hour away.

 

[NW-Bound]

A quick look at Utrecht as I have not been there, and Google suggests some 4-star hotels with prices as low as $71. Wow, a lot cheaper than in Amsterdam. Looks like a fine city to visit too.

 

[DawgMan]

Here is our 2018 budget:


You can call it Fat FIRE or whatever. We are running very lean given income level and untapped income streams such as IRAs and considering how much we are still saving annually after taxes.



Note we have a usufructuary with my FIL for rental income from our Swiss property. The rental income goes to him and property taxes, maintenance, improvements are covered by the rent. We do not include expenses related to this property in our budget as there is a net surplus from he rent.


Southern California Non-Discretionary Expenses:


Property taxes: $5600 (Prop 13 keeps it low)
Health Insurance: $7902
Health care copay: $234
Dental: $634
Home Insurance: $1532
Earthquake Insurance: $1122
Auto Insurance: $1150 (2 cars)
Auto Registration: $284
Home Electricity: -$220 (net surplus from photo-voltaic panels)
Home Gas: $240
Home Phone: $211 (Ooma premiere plus international calling)
Security Monitoring: $180
Cell Phones: $720 (2 phones with unlimited data and international calling)
Home Internet: $780
Home TV: $228 (condo subscriptions for cable TV + NETFLIX+CBS All-Access)
Home and Pool Maint.: $1200
Home Water: $1056 (includes water softening service and water consumption)
Food: $4200 (excludes dining out and for 7 months only)


South Florida Non-Discretionary Expenses:


Property taxes: $4400 (includes early payment discount)
Condo Fees: $6732 (includes maintenance, security, water, Internet, Cable TV)
Electricity $242
Food: $1800 (excludes dining out and for 3 months only)
Phone: $60 (Ooma basic)
Condo Insurance: $682 (portion not covered by condo fee)



Total Non-Discretionary Expenses:

California: $26,422
Florida: $13,916


Total: $40,388


Discretionary Expenses:


Travel Expenses: $27,323 (Mostly for airline tickets )
Hair stylist: $1200 ($800 for my wife $400 for me)
Clothing: $7300
Gifts: $2400
Dining out/Entertainment: $8300
Charity (cash donations): $2000
Hobbies: $2500
Auto Gas: $720
Spouse personal Care $8200 (facials, manicures, cosmetics, pedicures, whatever…)


Total non discretionary $59,943


Income Taxes:


Federal: $62393
State: $19378


Excess income from pension and taxable accounts: $127832 (annual slush fund rolled into savings)


Total Budget:


Non Discretionary: $40,388
Discretionary: $59,943
Slush Fund: $127,832

Income Taxes: $81,771


Total: $309,934


IRA withdrawal will be deferred to age 70.5. SS will start at 62 and Level income pension will be reduced accordingly. Second pension will start at age 62 from previous employer (additional $1440 per month). We are in our 4th year of retirement.

It took a while, but I knew there were other Fat Fire-ees out there!

Thanks for the breakdown. While my bottom-line budget matches up, it's interesting to see where a fellow Fatty spends his/her $$.

 

[DawgMan]

Always intrigued by folks getting by comfortably on $20-$40K.
We spend that on taxes alone!

I would love to find a way to live on $30K if only to understand how it's done. (assuming we're not talking about a single-wide at the end of a logging road)

Numbers are fine but I'd like to know the mechanics of such a lifestyle. Are we talking about some small town in the boonies, 2 hours from the nearest hospital, movies and restaurants?

There are low COL areas but where I live you can't rent a garage for $10K a year let alone an apartment.

+1

I heard many stories from my days tooling around MMM's site (i.e making your own TP, riding bikes), but frankly, have a hard time getting my arms around the math, particularly if that supports 2 adults. My assumption would be that most retiring at this spending level were probably living this way prior so there is no real adjustment. I suppose that is the rub for most of us... we get used to a certain standard of living prior to RE and don't want to give up much if we don't have to.

 

[Dtail]

Kind of surprised that many fatfire retirees responded, but very pleased to see. I am not fatfire or thinfire, but enjoying the range of the posts.

 

[aja8888]

Great thread and thanks for the budget disclosures.

Reading this makes me realize I took a wrong turn in my career somewhere along the way, and was also born to the wrong parents for starters. But I am here anyway, but not a FatFire member!

 

[ychuck46]

Using the 4% rule then technically we might qualify as Fat FIREs. But since we only spend something like 1-2% of our assets per year, and we travel extensively, we have no need to reach for the 4% level of spending. I enjoy being conservative in our spending but still living life on fairly good terms.

 

[HI Bill]

Reading this makes me realize I took a wrong turn in my career somewhere along the way, and was also born to the wrong parents for starters. But I am here anyway, but not a FatFire member!

Congrats! Overcoming adversity and a wobbly start in life counts for a lot! If my parents had been less liberal, and taught me the value of money, and what it can do for you (freedom, safety, travel, experience), rather than almost demonizing it, I'd have retired 7 years ago, getting a much earlier start!

 

[laurence]

Congrats! Overcoming adversity and a wobbly start in life counts for a lot! If my parents had been less liberal, and taught me the value of money, and what it can do for you (freedom, safety, travel, experience), rather than almost demonizing it, I'd have retired 7 years ago, getting a much earlier start!

Good lord, my parents are liberal and knew the value of money and have plenty of it. Lots of liberals on this board friend. I see you want to brag but leave the political trash talk at the door.

 

[daylatedollarshort]

Spending a lot of money on a luxury tour does not give us the same satisfaction as getting ourselves up on a glacier in a hike, for example.

It's all about what one has to do, or wants to, to be happy. And that does not always involve spending more money.

We pretty much feel the same. This year I have annual passes I bought with senior discounts for national, state and two regional park systems so there's thousand of miles of hiking trails and nice scenery with quite a bit of it all within an hour or two drive from our house for $120 a year (plus the $80 lifetime national parks pass). Add in seat filler tickets, museum and garden passes, college events, Groupons, etc. and we feel like we do a lot of fun events most days without spending a fortune.

 

[imoldernu]

W2R said:

Believe me, I understand about taxes! No matter how frugal someone is, they still have to pay taxes.

Without including income taxes (or unexpected big expenses), my projected spending for this year is $21,573. I live in a fairly urban setting in an inner New Orleans suburb, with movies and restaurants within walking distance and the best hospital around is 2 miles away. BUT - - I don't travel, and my house and car are paid off, this is not an unusually HCOL area, no boats/planes/RVs, no desire to attend expensive concerts or sporting events, and this is just for one person with no dependents.

Also, the unexpected big expenses (like dental implants or that HVAC replacement when it cratered a couple of years ago) seem to come up fairly regularly and usually seem to add $5K-$10K to the total. Whatever is going to happen this year to mess up my projected spending, just hasn't happened yet.

To repeat the often remembered quote by Robert Burns: “The best laid schemes o' mice an' men gang aft a-gley.” In other words, something always seems to add to what we actually end up spending, no matter how carefully we plan.

Ditto this:

100% retired since 2009 (1989) and never plan to work for anybody ever again, paid or not. Retirement funded by Social Security, and investments. Debt free with no mortgage and over-the-moon happy to be retired.

Thank you... saved me a long post. Very close to our (Jeanie and I) situation. Could not be happier, and never worry about money any more. Assets since retirement in 1989 remain the same and we don't feel like we missed out on anything. Only difference is that we haven't had to pay any taxes, even when depleting our IRA's during the early years.

Thank Social Security, IBonds, Liberty Village, reasonably good health and good educations.

Happy 23rd Birthday to our 96 Cadillac SLS... Still looks and drives brand new!

 

[PoF]

I plan to fatFIRE next year.

Some like to define it as having a really low withdrawal rate, but to me it makes more sense to define fatFIRE as having an above-average spending rate.

I think I'll qualify under either definition, planning on a budget that could approach six figures, depending on healthcare costs, while having a withdrawal rate under 3.5%.

Having retirement assets of $2.5 Million and the ability to spend $100,000 without violating the 4% rule should be good enough for fatFIRE in most locales.

Cheers!
-PoF

 

[2lhasas]

Physicians on Fire (blog and Facebook group) hosts a FatFIRE Facebook group. They define it as follows:

FIRE = Financial Independence. Retire Early.
leanFIRE = FIRE on a shoestring budget.
fatFIRE = FIRE on a generous budget.

Most aspiring to fatFIRE have a target of $2.5 Million or more or the equivalent annual budget of $100,000 or more based on a 4% withdrawal rate.

https://www.facebook.com/groups/fatfire/

https://www.physicianonfire.com/fatfire/

The Facebook group is quite active and those of you aspiring to FatFIRE might consider joining.

 

[EdL3]

Here is our 2018 budget:


You can call it Fat FIRE or whatever. We are running very lean given income level and untapped income streams such as IRAs and considering how much we are still saving annually after taxes.



Note we have a usufructuary with my FIL for rental income from our Swiss property. The rental income goes to him and property taxes, maintenance, improvements are covered by the rent. We do not include expenses related to this property in our budget as there is a net surplus from he rent.


Southern California Non-Discretionary Expenses:


Property taxes: $5600 (Prop 13 keeps it low)
Health Insurance: $7902
Health care copay: $234
Dental: $634
Home Insurance: $1532
Earthquake Insurance: $1122
Auto Insurance: $1150 (2 cars)
Auto Registration: $284
Home Electricity: -$220 (net surplus from photo-voltaic panels)
Home Gas: $240
Home Phone: $211 (Ooma premiere plus international calling)
Security Monitoring: $180
Cell Phones: $720 (2 phones with unlimited data and international calling)
Home Internet: $780
Home TV: $228 (condo subscriptions for cable TV + NETFLIX+CBS All-Access)
Home and Pool Maint.: $1200
Home Water: $1056 (includes water softening service and water consumption)
Food: $4200 (excludes dining out and for 7 months only)


South Florida Non-Discretionary Expenses:


Property taxes: $4400 (includes early payment discount)
Condo Fees: $6732 (includes maintenance, security, water, Internet, Cable TV)
Electricity $242
Food: $1800 (excludes dining out and for 3 months only)
Phone: $60 (Ooma basic)
Condo Insurance: $682 (portion not covered by condo fee)



Total Non-Discretionary Expenses:

California: $26,422
Florida: $13,916


Total: $40,388


Discretionary Expenses:


Travel Expenses: $27,323 (Mostly for airline tickets )
Hair stylist: $1200 ($800 for my wife $400 for me)
Clothing: $7300
Gifts: $2400
Dining out/Entertainment: $8300
Charity (cash donations): $2000
Hobbies: $2500
Auto Gas: $720
Spouse personal Care $8200 (facials, manicures, cosmetics, pedicures, whatever…)


Total non discretionary $59,943


Income Taxes:


Federal: $62393
State: $19378


Excess income from pension and taxable accounts: $127832 (annual slush fund rolled into savings)


Total Budget:


Non Discretionary: $40,388
Discretionary: $59,943
Slush Fund: $127,832

Income Taxes: $81,771


Total: $309,934


IRA withdrawal will be deferred to age 70.5. SS will start at 62 and Level income pension will be reduced accordingly. Second pension will start at age 62 from previous employer (additional $1440 per month). We are in our 4th year of retirement.

Thanks so much, this breakdown is helpful for someone with an upcoming 4/2/2019 retirement date. I’ll be 59 1/2 and living on $144k excluding investments, no mortgage. Dream is to buy a house in a southern tax friendly state, install Tesla solar shingles and battery storage, electric car, and travel the world for a few years.

EdL3

 

[Safe Harbour]

I guess I would say we FatFire'd 9 years ago age 53 with no debt. Withdrawals starting at about $144K after taxes (4.8% including taxes). We spend summers in another country. That causes extra expenses that don't stop when you leave for 3 months. We also have a $1000/month club dues. We have had "extra" expense come along for a kids wedding and two buy a couple of cars. Plan to drive the ones we have for quite sometime. Also decided not to build a house addition. But instead have helped 2 kids with first houses ($60-100K). We bring our kids families together at least twice a year, our treat. We've increased our distribution to $180K after taxes (only 3.3% now including taxes) and more than covering inflation ($168K). But our taxes have gone way down. With nothing but dividends and capital gains on a stable portfolio the rate has gone from 35% to only 9.3% (Fed and State). Of course, the market has been generous since retiring in 2009. But we are far enough ahead now that I really don't worry about money, however, we are always thoughtful and conservative. Bottom line our expenses went up slower than inflation, portfolio growth exceeded inflation, especially as taxes plummeted, so the rate of burn dropped.

 

[esterhazy]

I guess I'm probably fatFIRE, so here's our annual budget:

Note: I do not live in America! I live in Southeast Asia, where this is definitely fat.

$4,000: Her daily stuff (coffee with friends, eating when I'm not around, make up, etc)
$3,600: His daily stuff (includes "toys" like new video games, camera stuff, books)
$2,500: classes (gym, foreign languages, etc)
$900: utilities (including internet, phones, etc)
$2,500: groceries (including pet supplies, shampoo, etc)
$4,200: restaurants
$2,500: entertainment (bars, movies, theatre, etc)
$1,500: health insurance
$1,500: vehicle replacement (averaged out over several years)

I have no mortgage, property taxes, or income taxes to pay.

So our "core spending" is only about $24,000 a year.

However, we also spend

$10,000 a year on interest on margin loans
$6,000 a year on home renovations, new furniture, etc
$25,000+ on travel

So "core spending" of $24,000 and another $40,000 on discretionary things for around $70,000 total.

In another year or two -- depending on portfolio growth -- I'll start gifting my brother $30,000 a year to pay off his mortgage faster. That'll take the total up to $100,000+ at least for a while. I also expect that sometime in the next few years we'll start supporting my partner's family more, so figure another $5,000-10,000 there. So by 2020 I expect it'll be more like $110,000.

 

[Freedom56]

Thanks so much, this breakdown is helpful for someone with an upcoming 4/2/2019 retirement date. I’ll be 59 1/2 and living on $144k excluding investments, no mortgage. Dream is to buy a house in a southern tax friendly state, install Tesla solar shingles and battery storage, electric car, and travel the world for a few years.

EdL3

I would skip the solar shingles and battery storage and stick to high quality panels such as Kyocera. Our 5.38 KW array with net metering, wiped out a $4K per year electricity bill that would be $5k per year today. It paid for itself in just over 4.5 years. Adding a few extra panels to cover car charging makes sense. Our next cars are likely to be electric or hybrid. With the daily commuting gone, we drive a fraction of what we used to. I'm waiting for Honda and Toyota to commercialize solid state batteries.

 

[Freedom56]

O
BTW,for folks with reasonable access to Canadian intl hubs check out buying in Can$ at 25% off--Exchange rates very favorable.

You are correct. I have used YYZ and YUL as a hub to get to Europe on business class. They have nice pod seating on Air Canada 787 Dreamliners.

 

[Freedom56]

It took a while, but I knew there were other Fat Fire-ees out there!

Thanks for the breakdown. While my bottom-line budget matches up, it's interesting to see where a fellow Fatty spends his/her $$.

But what will you call it at age 70.5 when a large income stream from IRAs turns on and the income exceeds $550K per year if not more? Super-Fat FIRE?