Lifestyle creep delays early retirement

[ExFlyBoy5]

I could only imagine what the folks over on MMM would say about all this...

Sent via mobile device. Please excuse any grammatical errors.

[rodi]

I'm still trying to wrap my head around the idea of a room just for comic books. I have to say - that qualifies as lifestyle creep. LOL.

Quote:

Originally Posted by Hamlet Renting generally means moving relatively often. I like to stay put. I like having a garden. I like having room to have fish tanks or a comic book room. My kids will like having a play set in the backyard to play on. I like being able to modify my living space to suit my needs. You save a lot of work by renting, but you give up a lot of control too.

[Hamlet]

Quote:

Originally Posted by rodi I'm still trying to wrap my head around the idea of a room just for comic books. I have to say - that qualifies as lifestyle creep. LOL.

I don't think it would necessarily be entirely dedicated to comic books, just that I would have a place I could put them besides under the bed and on my dresser. I was thinking there would be a couple shelving units. I'd just like a room I could lock to keep the 3-year old out of them.

[ivinsfan]

Quote:

Originally Posted by Hamlet I don't think it would necessarily be entirely dedicated to comic books, just that I would have a place I could put them besides under the bed and on my dresser. I was thinking there would be a couple shelving units. I'd just like a room I could lock to keep the 3-year old out of them.

It might not be a roomful now, but who knows in a few years. I've collected a few things myself and it seems easy to buy and harder to sell

[eta2020]

There are many things money can buy, but the most valuable of all is freedom.

[dadu007]

Desires change. It's okay to have a typical life in suburbia, Hamlet. I didn't meet my wife until I was 35. I have way less "freedom" now with a family to support. But I wouldn't go back to that barren bachelorhood even if it meant I would have to work unto death. What a miserable life that was. I'll take a wife and kids and a plump mortgage any day over that.

I am with you 110% about not having control as a renter. I hate it when I hear financial advisors recommending renting over owning. Are they or have they ever been renters, especially with children? Very doubtful.
And then it's the MMMers touting the same renter lifestyle. Do they have children? Usually not. I've been under the thumb of landlords. God please have mercy on me if I ever have to sell this house or rent again.

[Fedup]

Quote:

Originally Posted by dadu007 Desires change. It's okay to have a typical life in suburbia, Hamlet. I didn't meet my wife until I was 35. I have way less "freedom" now with a family to support. But I wouldn't go back to that barren bachelorhood even if it meant I would have to work unto death. What a miserable life that was. I'll take a wife and kids and a plump mortgage any day over that. I am with you 110% about not having control as a renter. I hate it when I hear financial advisors recommending renting over owning. Are they or have they ever been renters, especially with children? Very doubtful. And then it's the MMMers touting the same renter lifestyle. Do they have children? Usually not. I've been under the thumb of landlords. God please have mercy on me if I ever have to sell this house or rent again.

I have rented with children. I've always try to know the area before I buy anything. One of my kids didn't want to leave the rental house. Granted it was not as nice as the house we eventually bought but she liked the location. Closer to her friends. And all her friends have smaller or worse house than the house we rented. But there were limitations, of course.

[eta2020]

Quote:

Originally Posted by dadu007 I'll take a wife and kids and a plump mortgage any day over that.

But wife and kids do not have come with "plump" mortgage.

I will also take life with wife and kids over being single hands down, but personally I do not care about having plump mortgage. We bought house and payed it off in few years. That was long time ago

[Fedup]

Nothing wrong with plumb mortgage as long as you can afford it.

[eta2020]

Quote:

Originally Posted by Fedup Nothing wrong with plumb mortgage as long as you can afford it.

If you can afford it why do you have it? Why not pay in cash?

[ziggy29]

Quote:

Originally Posted by eta2020 If you can afford it why do you have it? Why not pay in cash?

It's a mindset.

Some people are happy to carry debt if they can get it at 3-4%, reasoning that most likely, long term, they can beat that investing. Other folks -- and I tend in this direction, though not to an extreme -- would rather get rid of (or avoid) the debt. Last year we got a new Honda HR-V for my wife as a "present" for her ordination. We could have had financing of about 4% but I preferred to pay the entire $18K, give or take after trade-in, with cash. I'm willing to leave some likely return on the table in exchange for feeling the security that being debt-free gives. Others aren't as risk-averse.

[purplesky]

Quote:

Originally Posted by Hamlet I've been on this board a long time. When I started on the path to FIRE, I was single, and sharing an apartment with a friend. My vision for having enough to FIRE was probably around a million dollars. I met the right woman and we bought a small 3-bedroom house out in the suburbs that increased our living expenses but not dramatically. Daughter #1 came along and added massive daycare costs and the desire to move into a better school district once she is school age. Daughter #2 came along and added insanely massive daycare costs and a compelling desire to get a bigger house. We spent the last two years or so looking at houses. We had a lot of criteria that made finding something that we considered "affordable" difficult. We finally found a house we like last week and are now in the process of purchasing it. I'm having a hard time wrapping my head around how expensive our lifestyle has become, and how much longer we will have to work before we can retire. My plans for FIRE at 45 have become plans for FIRE at 60. Anyone else in that position?

I know many coworkers who bought executive type homes and they are delaying their retirements because of the big house payment.

Seems like many people get to their early 50s and get new house fever.

I will probably move to another location so buying a expensive house doesn't make sense for my situation. But it is tempting.

I stay away from display homes. I cannot afford to get new house fever.

I constantly encourage my younger coworkers to max out their 401ks but most are all saving to buy a nice house so their 401k contribution rates are just too low.

[RAE]

As several folks have said, it's all about choices, and you have obviously made some choices that have made you happy, so good for you. I must say, though, that the thought of a big mortgage for a $480K house later in life is awful scary (actually mind-boggling) for someone like me. I guess it all depends on location, though. We paid $56K some 16 years ago for (what I still consider to be) a very nice house (about 1900 sq. ft) for my wife and me, and her two kids, here in the Upper Midwest. I always had the goal of being basically debt-free by the time I retired, and we achieved that, which helps me sleep well at night. But everyone is different, with different priorities........

[gerntz]

Quote:

Originally Posted by Hamlet I've been on this board a long time. When I started on the path to FIRE, I was single, and sharing an apartment with a friend. My vision for having enough to FIRE was probably around a million dollars. I met the right woman and we bought a small 3-bedroom house out in the suburbs that increased our living expenses but not dramatically. Daughter #1 came along and added massive daycare costs and the desire to move into a better school district once she is school age. Daughter #2 came along and added insanely massive daycare costs and a compelling desire to get a bigger house. We spent the last two years or so looking at houses. We had a lot of criteria that made finding something that we considered "affordable" difficult. We finally found a house we like last week and are now in the process of purchasing it. I'm having a hard time wrapping my head around how expensive our lifestyle has become, and how much longer we will have to work before we can retire. My plans for FIRE at 45 have become plans for FIRE at 60. Anyone else in that position?

Many that aren't would be envious of your great life - great spouse & kids & ability to afford a big(ger) home. ER is secondary to those things. Congratulations on your success!

[purplesky]

Quote:

Originally Posted by RAE As several folks have said, it's all about choices, and you have obviously made some choices that have made you happy, so good for you. I must say, though, that the thought of a big mortgage for a $480K house later in life is awful scary (actually mind-boggling) for someone like me. I guess it all depends on location, though. We paid $56K some 16 years ago for (what I still consider to be) a very nice house (about 1900 sq. ft) for my wife and me, and her two kids, here in the Upper Midwest. I always had the goal of being basically debt-free by the time I retired, and we achieved that, which helps me sleep well at night. But everyone is different, with different priorities........

I am thinking I might be able to use my SS to pay for a house.

My pension and 401k and Roth IRA should cover everything else.

I have a recently retired friend who is doing this now. His SS check covers the mortgage payment.

Obviously the idea is to retire way earlier than 60 something but if you are in that boat buying a new house would be enjoyable.

[JonnyM]

I wouldn't think a Mortgage is significant to ER as long as the last one occurs one "Interval" before ER. For most isn't that about 15 years. So for example if 50 is your ER target age, you just have to be aware enough at age 35 to buy the last house then and there. Simple, ok not so much... Doesn't really matter how much is costs, the more the better, cause that's going to be an expense that goes away in ER, right?

[Hamlet]

Quote:

Originally Posted by ziggy29 It's a mindset. Some people are happy to carry debt if they can get it at 3-4%, reasoning that most likely, long term, they can beat that investing. Other folks -- and I tend in this direction, though not to an extreme -- would rather get rid of (or avoid) the debt. Last year we got a new Honda HR-V for my wife as a "present" for her ordination. We could have had financing of about 4% but I preferred to pay the entire $18K, give or take after trade-in, with cash. I'm willing to leave some likely return on the table in exchange for feeling the security that being debt-free gives. Others aren't as risk-averse.

I'm in the middle. We are putting 20% down, and getting a 30-year fixed at 3.625 for the rest. However, once we sell the old house, we will have about another 20% that we will plunk down to shorten the term.

Some people would keep that extra money in the market. Some would sell additional equities to pay down or even eliminate the mortgage entirely ( which we could almost do if we sold everything outside of retirement accounts).

At under 4% and deductible, I'm not going to aggressively pay it down until retirement.

[Fedup]

Quote:

Originally Posted by eta2020 If you can afford it why do you have it? Why not pay in cash?

Because you get deductions. Plus when the interest rate is ridiculously low, why pay it off. I still remember rate in the 10% when I bought my first house.

[Fedup]

Quote:

Originally Posted by Hamlet I'm in the middle. We are putting 20% down, and getting a 30-year fixed at 3.625 for the rest. However, once we sell the old house, we will have about another 20% that we will plunk down to shorten the term. Some people would keep that extra money in the market. Some would sell additional equities to pay down or even eliminate the mortgage entirely ( which we could almost do if we sold everything outside of retirement accounts). At under 4% and deductible, I'm not going to aggressively pay it down until retirement.

I put down much bigger than 20%, more lan 40%, but it's always wise to have some cash. My brother read somewhere that he needs to pay of his house before retirement, got a 15 year mortgage. Last I've heard he was not flush in cash. The whole thing is balance. Don't be ridiculous one way or the other. I don't like extreme either way. I mean the stock market returned 30% in 2013, my mortgage was 3.5%. Had I put all my money to pay down my mortgage, I would be SOL.

[eta2020]

Quote:

Originally Posted by Fedup Because you get deductions. Plus when the interest rate is ridiculously low, why pay it off. I still remember rate in the 10% when I bought my first house.

I was expecting you will say this

It turns out those deductions work perfectly for married couple earning around 300k.

They earn more and deductions are phased out. They earn less and tax bracket starts dropping down.

So majority of people support/pay mortgages (via taxation) of what one could call rich folks, but not too rich. Taxpayers who benefit the most from the mortgage deduction tend to be concentrated in high-cost metropolitan areas. IE Silicon Valley. New York, Boston.