High Retirement Income Poll

[Danmar]

I find that there's sometimes a fine line between conveying one's financial situation and being pretentious, with either LBYM or conspicuous spending. Again, it may depend on one's perspective.

Agree. I often find it difficult to participate in financial discussions without appearing to be "bragging" or appearing smug or pretentious. Try my best not to.

 

[Fedup]

I still change my own oil. Not because it's cheaper (cheaper at one of those $19.95 places) but because it's easy and fast and I can do it at my leisure. Have ramps, drive car up ramps, set brake and done in 10 minutes.

My husband still changes oil on all our cars because he says he uses the best oil. At least he still can do it and has the satisfaction from doing it. He taught me to change brakes one time, but I never latched on to it.

 

[hesperus]

Agree. I often find it difficult to participate in financial discussions without appearing to be "bragging" or appearing smug or pretentious. Try my best not to.

I can understand that.

 

[RobbieB]

I post here about Wagyu beef and white truffles because they were new to me and I want to try all sorts of new things in my new adventure of retired life. It was exciting to try these things that I never had before and the flavor was simply wonderful. They brought me great joy that I wanted to share.

But I now see that I'm just a bragger spendthrift with no sensitivity to others frugal budgets so I won't anymore.

 

[Fedup]

I post here about Wagyu beef and white truffles because they were new to me and I want to try all sorts of new things in my new adventure of retired life. It was exciting to try these things that I never had before and the flavor was simply wonderful. They brought me great joy that I wanted to share.

But I now see that I'm just a bragger spendthrift with no sensitivity to others frugal budgets so I won't anymore.

I did learn from your food taste and purchased the real balsamic vinegar in Italy. Small bottle to try out. I'm a spendthrift myself, we need to stick together here.

 

[Moemg]

Hmm. I think your disconnect might be due to thinking in terms of budget instead of thinking in terms of what was actually spent the previous year.

But does thinking of what was actually spent, give any useful information? I think it does, perhaps much more useful than pie-in-the-sky budget information. Here's an example. I just got a new furnace and AC system last year. It cost a total of $7200. It will last about 20 years, which comes to $360/year. In the long run, $360/year would not be a very big impact to anyone's budget. But more importantly, since I spent more on the HVAC, I started feeling kind of poor and as a result I unintentionally cut back in other areas to replenish the costs. Actually (in reality), I ended up spending less last year than other years even though the HVAC was included, along with extensive dental work. So, overall it made no impact.


.

Here is what I do not understand . Did you subtract the $7200 from your yearly budget or the $360 ? I just purchased a new AC system including all new duct work for $9000 so my budget took a $9000 hit immediately .

 

[Nature Lover]

Personally I never get tired of hearing about EITHER. Hearing about someone's big budgets and purchases is great for inspiring pleasant daydreams about what one might do with a huge budget and for setting up goals of individual things or experiences one might want to have one day (even if one cannot afford everything one wants). And hearing about someone's tiny budget is great for inspiring one to cut back in some areas, so as to have more for the things one truly wants.

I get that, and agree. I find the bragging part boring... but not the part about the things people do to adjust, and how they allocate their budgets, and especially the things they do that lead to real satisfaction and enjoyment.

+1 to both of these comments. While having the largest ...or the smallest spend is of little interest to me, hearing about the variety of interests and approaches to a successful, happy ER is one of the reasons I like this group.

 

[daylatedollarshort]

Very well put; matches my feelings.

It usually doesn't bother me at all when others have tons more $$ than we do (even though we qualify as moderately affluent). We don't want a boat, lengthy cruises, country club etc. The only time it bugs me is when I look at real estate. The places we'd truly want to live are really only for the high rollers. OK I admit it: I want to live in San Francisco!

There are some places in the Bay Area where if you buy out in the suburbs and are interested in a townhouse or condo the prices are somewhat affordable. There is a good public transportation system to get into and around the city. It is a fun place to be retired - lots to do and nice weather most of the year. And once you have housing covered other expenses are often not more than any other major city.

 

[kcowan]

I still change my own oil. Not because it's cheaper (cheaper at one of those $19.95 places) but because it's easy and fast and I can do it at my leisure. Have ramps, drive car up ramps, set brake and done in 10 minutes.

When I stopped doing my own oil, there were no depositories for the used oil. That came later. By then I was addicted to the drive thru service.

 

[W2R]

Here is what I do not understand . Did you subtract the $7200 from your yearly budget or the $360 ? I just purchased a new AC system including all new duct work for $9000 so my budget took a $9000 hit immediately .

I included the $7,200 spending for that HVAC in my SPENDING total for 2016, because I spent it. I wrote a check, the money is gone, it's spent, I'll never see it again. So I couldn't feel right about doing anything else but adding the entire $7,200 to what I had spent, KWIM?

Believe me, I sympathize. It was quite a blow to see my spending going up $7,200 in one day. If I had kept spending the same amounts as always, it would have stayed $7,200 higher than most years.

So how did I get my spending back down to about where it had been the previous year? I cut back on other spending enough in 2016 to completely pay the $7,200. Luckily my spending is pretty flexible. I try to keep it that way, in preparation for the huge market crash that many of us feel might be on the way sometime in the future.

I don't have a budget. Never have, never will. What I like to do instead, is to keep very close track of what I am spending every single day, project what it may be at the end of the year, and just cut back as needed to reach my spending goals by the end of the year. I make sure that I am very aware of my spending; then I know what I need to do.

 

[Amethyst]

I think we all have our own ways of looking at things. As long as someone is spending less than they take in, it's LBYM to me.

Case in point: When discussing income, the income amount that we report to the IRS and State seems somehow "fake" to me. I think of our true income as being what's left over after taxes are paid. Same with net worth. I automatically deduct 1/3 of the amount on the screen, because that's about what I'd have to pay if I sell investments. I know not everybody (maybe not many) look at it this way, but that's how my brain works.

Yes, but there have been some cases of that, that I can recall.

It goes something like

LBYM-er: "Oh, I only spend $x annually".

Forum: "But what about that new roof, or new furnace"

LBYM-er: "Oh, that comes out of my emergency fund".

Forum: "It's still 'money/spend', and 'emergencies' like that pop up pretty regularly - we call them 'ongoing maintenance'. You have to budget for them".

And then they may go on about a separate 'car replacement budget' or something, that's not part of what they 'spend' each year.

There are other examples of what I'll call creative accounting, where people just seem to not want to face the 'money is fungible' view.

-ERD50

 

[NW-Bound]

...I missed the fact that BRK owns NetJets.

I thought so because your response to my post on the subject made no sense for you, a normally logical person, so I cut you some slack.

I thought everyone knew about Warren's follies! I follow the guy closely. Did you hear that Bezos has overtaken him as of Thursday close?

I do not follow anybody closely. Occasionally, I see a headline on the Web that looks interesting, and read the article to get more. And that's how I learn these tidbits about celebrities. About Buffett, I pay more attention, because I like to know what he is buying and selling.

And yes, I saw the headline about Bezos moving up several ranks.

I post here about Wagyu beef and white truffles because they were new to me and I want to try all sorts of new things in my new adventure of retired life. It was exciting to try these things that I never had before and the flavor was simply wonderful. They brought me great joy that I wanted to share.

But I now see that I'm just a bragger spendthrift with no sensitivity to others frugal budgets so I won't anymore.

No, Robbie, don't stop. I for one like to follow your food "adventure".

Don't worry about others thinking that you are showing off. To be frank, unless you brag about eating $100K worth of food each year, it is not showing off. It simply shows your preference for spending money. People choose to spend more money than the average consumer on different things. I spend money on travel, gift, and donations and other stuff. In the past 5 years, I have spent more on these discretionary categories together than what a top-of-the-line Tesla costs (won't say how much more ). I do not care for cars, but I do not think people who talk about buying a Tesla as showing off.

PS. Maybe you do eat more than $100K of food a year. Come on, Robbie, come clean.

PPS. Maybe I did read about BRK owning NetJets. I prefer to think that I did not. To think that I read and forget means my "superior memory" is slipping. Can't admit something like that.

 

[Moemg]

I included the $7,200 spending for that HVAC in my SPENDING total for 2016, because I spent it. I wrote a check, the money is gone, it's spent, I'll never see it again. So I couldn't feel right about doing anything else but adding the entire $7,200 to what I had spent, KWIM?

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That makes sense . I have a budget but with a lot of padding so those home maintenance things do not really bother me . Believe me I know about crashes my stash took an almost 40% hit in the last one but the good news is having survived that I know I can handle another .

 

[Moemg]

I post here about Wagyu beef and white truffles because they were new to me and I want to try all sorts of new things in my new adventure of retired life. It was exciting to try these things that I never had before and the flavor was simply wonderful. They brought me great joy that I wanted to share.

But I now see that I'm just a bragger spendthrift with no sensitivity to others frugal budgets so I won't anymore.

Don't stop ! I enjoy your culinary treats .

 

[kcowan]

We love living in Puerto Vallarta for 6 months because of the people. They are from all over, mostly Canada/US but we have neighbors from France, Italy, Australia, even the UK.

They stay for between 4 and 12 months. When we return to Vancouver, we find that the people are not experiencing life like we are and so have little in common.

I think it is something about people that choose Mexico in spite of all the bad press. Maybe a bit more adventurous? So I understand the draw of the LA bowl versus SF. We have friends from LA and points south in PV. Not as many from SF area. Of course some are native Mexican-American. Our best friends from SF are originally from Nicaragua and Canada before becoming American.

But there is no doubt that the cosmopolitan nature of the mix is attractive. One set of good friends in Canada are from Dallas originally. But they don't travel for long periods because of their cats.

 

[W2R]

That makes sense . I have a budget but with a lot of padding so those home maintenance things do not really bother me .

If one can handle these things, it seems silly to me to put them in a budget at all; if they genuinely aren't a problem, then I think there is no need to be saving up for them. I prefer to just pay them and be done with it.

Believe me I know about crashes my stash took an almost 40% hit in the last one but the good news is having survived that I know I can handle another .

I am so glad you survived and that you feel you can handle another. I remember exactly what your reactions were during the last crash, and completely understand and sympathize with how upset you (and many of us) were, and for good reason. It was a hideous, awful, frightening time. But as you know, as long as we don't sell anything while the market is low, everything should work out eventually. And if we try to buy low we might even make some money from it.

That's where my idea of keeping my spending flexible comes in; if we can spend less and have plenty of discretionary money to invest when there is "blood in the streets" (as the saying goes), maybe we will make some extra $$$ by buying low.

 

[W2R]

Don't stop ! I enjoy your culinary treats .

+1

I enjoy your exuberance when you find something expensive that you really love to eat and can now afford, Robbie.

 

[NW-Bound]

Speaking of spending money on food, I like to cook more than to eat. Maybe my palate is getting dull with age, and I do not see myself spending a lot of money at fancy restaurants that I do not appreciate the costs. I prefer to take the challenge of cooking a dish myself.

Now, about my palate not being good, I was recently humbled by my son. After a recent holiday meal, we were sitting outside, in my brother's courtyard sipping from different French XO bottles. I had found a bottle of French brandy (not labeled Cognac), but also of XO age and a lower price than a typical brand name XO. I thought it was pretty good. So, we decided to do some blind tests between different bottles.

Everybody agreed that the different XO bottles were far better than the VSOP grade. I could not tell which XO bottles I liked better, but my son could. And he said the least expensive bottle was the worse.

Dubious, I challenged him to another blind test. He could pick out my bargain find right away, saying that he could tell there was added caramel (to add a dark color and to make it taste less astringent). Son of a gun!

Now, my son was also the one who told me earlier of an American brandy that he found tasted pretty good, and he brought a bottle for me to try. There was no way that that inexpensive bottle could be as good as the lesser French brandy that cost more, but we did not have that bottle of American brandy there to compare.

So, I think that unless one's palate is very fine, he needs an A/B test to tell the difference. And in my case, I still could not tell the difference between a $150 bottle and one for $50 in a side-by-side comparison. I thought I used to be able to, but my palate is now dull. So, why should I spend the difference?

 

[meierlde]

Here is what I do not understand . Did you subtract the $7200 from your yearly budget or the $360 ? I just purchased a new AC system including all new duct work for $9000 so my budget took a $9000 hit immediately .

Ah the difference between cash basis accounting and accrual based accounting shows up. I suspect most folks use cash basis accounting, because it is simpler.Actually having just bought a car for cash, I did the totals for last with and without the car to provide comparisons from year to year.

 

[NW-Bound]

The last few years, I kept having large unexpected expenses. It would be easy to dismiss them as "non-recurrent" or try to amortize them, but I am too lazy. Besides, if they take turn recurring, then there's something very wrong with me or my lifestyle.

I'd rather book these expenses, than try to weasel out of it.

 

[W2R]

The last few years, I kept having large unexpected expenses. It would be easy to dismiss them as "non-recurrent" or try to amortize them, but I am too lazy. Besides, if they take turn recurring, then there's something very wrong with me or my lifestyle.

I'd rather book these expenses, than try to weasel out of it.

Yeah, and then when you see that you have already spent some huge amount that year, LBYM mode just sort of automatically kicks in and stays in place until it compensates for the huge expense.

Unlike meieride and others, personally I know NOTHING about accounting, nada, zip, zero. Some label me as sort of a math whiz, though, and even better I know what kind of approach interfaces with my own psychology the best. So, I "wing it". I find debt to be especially repugnant, and when I have a big unusual expense like that I regard it as borrowing money from myself. The reason this works for me is that I even find THAT kind of debt to be distasteful enough that I will work quite surprisingly hard in my LBYM efforts to save enough money, that I can feel like I have paid it back to myself.


Yeah, too much Puritan heritage I guess.

 

[Fedup]

I'm glad I don't have a Puritan heritage. Just black sheep heritage, whatever that means, I try to sound like Prince Charles.

 

[NW-Bound]

We are getting away from high-income discussion, but I do not think there is anything wrong with accrual method. If you just spend a big chunk for a car, there's nothing wrong with saying that this new car will last you another 5 or 10 years, whatever period you choose, and amortize it that way.

My problem is that I would need to be thorough with this method. I would have to figure out the replacement cost for my roofs, exterior repainting, swimming pool replastering, tree removal, etc... and plan for them. It's too much work, and I am not good at itemizing all these things.

So, I just book expenses as they occur, and if over something like 5 years, find out that I spend way too much, then I need to take corrective action to make sure I am not going broke. Can't be complacent that way.

This year should see me spending less than the previous 5, but something just happens that may see me spend an unexpected $25K. Darn it! I am keeping my finger crossed. It would still be way less than FIRECalc and iorp say I can spend, but I do not like unplanned expenses like this.

 

[Moemg]

I am so glad you survived and that you feel you can handle another. I remember exactly what your reactions were during the last crash, and completely understand and sympathize with how upset you (and many of us) were, and for good reason. It was a hideous, awful, frightening time. But as you know, as long as we don't sell anything while the market is low, everything should work out eventually. And if we try to buy low we might even make some money from it.

I panicked during 2009 since I had recently retired and feared that I would have to return to work . I also remember that you got an inheritance at that point so you could buy low . Of course it is always sad to get an inheritance .

 

[W2R]

I panicked during 2009 since I had recently retired and feared that I would have to return to work . I also remember that you got an inheritance at that point so you could buy low . Of course it is always sad to get an inheritance .

Are you feeling OK? I noticed on the ER Forum get together thread that you are having some health issues. I hope you are all right. I worry. If you don't feel well then take care, chicken soup, lots of rest and sleep, and I hope you feel better in the morning.

I am sorry I can not make it . I had other plans but then ended up with a tiny health crisis that needs to be resolved .Have a great time !