Low NW FIRE

[Teacher Terry]

BB: we have 200k equity in our home and 100k savings. No other debt besides tiny mortgage. We bought 2 cars before retiring and completely fixed up our house and replacing expensive items. We have many days neither car leaves the driveway so when 1 dies we will be fine with 1 car. Dh picks up consulting work occasionally. We have had 3 friends die in 50's & 60's so we are traveling now while we can.

 

[Music Lover]

Do you know anything about their stories? Could be interesting...

We should start a <$1M club here so it's easy to find inspiration from folks here who are living proof it can be done. I'd love to read their blog-style posts and see how they're doing.

I am happily retired on a pension that pays (net) less than $3k per month and live quite well with no money concerns at all. My total savings/investments would barely cover 3-4 years of expenses.

It's not that hard at all and I don't feel deprived in the slightest. What makes it work is that my house is paid off, I have solid DIY skills, friends/family in virtually every trade, and my hobbies are inexpensive.

 

[Blue Collar Guy]

We should start a <$1M club here so it's easy to find inspiration from folks here who are living proof it can be done. I'd love to read their blog-style posts and see how they're doing.

I agree, I think many live in the world of illusion. I yell when I see posts "you need 500 Thousand for medical care or you cant retire", or "I have 5 million I think I need to work 12 more years!" . Its crazy in here sometimes. I just found this article from 2 days ago, 80 % of retires have less than 700k That includes their house. 50 % have less than 100k , https://dqydj.com/the-net-worth-of-american-retirees-america-2013/

Or my travel budget is $47,272 a year, but If i tighten my belt I could go down to $44,000. really?! Most people are cool with a trip to Las Vegas, see a show and talk about it for the next 20 years. They dont break out the videos on their trip to the Pyramids in 2015, the Antarctic Glaciers in 2016 trip etc. I could go on a rant but I think most get my point,

 

[dvalley]

Right, a forum sub-section for <$1MM NW retired folks without pension or inheritance is what I meant. I have several similar threads bookmarked so I know there are several here who are living the good life on <$1MM but they don't post much likely because all the belt-suspender types tell them how they're doomed etc. So legitimizing their way of life by creating a sub-section here would generate a lot more interest from those of us who can't really relate to the $1.5M+ folks.

 

[brucethebroker]

It's a little complicated to sort out. Some say "it's the expenses, stupid" others say "it's the cash flow, stupid" still others discuss 3% vs 4%. Well, those who are not drawing down their savings don't need to consider withdrawal rates. If you have a pension, or SS check(s), or a PT job, or rental properties, or an annuity, net worth may not apply to you as a rule of thumb. And, you are not going to fit into the traditional box that financial writers in particular want to put you in. When you want to retire, or decide you are FI, it really is about cash flow and expenses. Not necessarily about net worth, unless most of your cash flow comes from drawing down net worth, or living off the cash being thrown off (dividends?).

 

[brucethebroker]

Right, a forum sub-section for <$1MM NW retired folks without pension or inheritance is what I meant. I have several similar threads bookmarked so I know there are several here who are living the good life on <$1MM but they don't post much likely because all the belt-suspender types tell them how they're doomed etc. So legitimizing their way of life by creating a sub-section here would generate a lot more interest from those of us who can't really relate to the $1.5M+ folks.

And I like your idea, BTW.

 

[brucethebroker]

BB: we have 200k equity in our home and 100k savings. No other debt besides tiny mortgage. We bought 2 cars before retiring and completely fixed up our house and replacing expensive items. We have many days neither car leaves the driveway so when 1 dies we will be fine with 1 car. Dh picks up consulting work occasionally. We have had 3 friends die in 50's & 60's so we are traveling now while we can.

Well done.

 

[marko]

People don't need a high NW to retire. Like most here have said it all comes down to your expenses. I know many people that aren't even close to 1M and are retired.

+1
And I know a few with 8 figures who couldn't afford to retire if their lives depended on it! It's all about expenses...

 

[Major Tom]

Right, a forum sub-section for <$1MM NW retired folks without pension or inheritance is what I meant. I have several similar threads bookmarked so I know there are several here who are living the good life on <$1MM but they don't post much likely because all the belt-suspender types tell them how they're doomed etc. So legitimizing their way of life by creating a sub-section here would generate a lot more interest from those of us who can't really relate to the $1.5M+ folks.

I have awful habits of playing devil's advocate, and of not wanting to join any club that would have me, so bear these in mind when reading this post. I speak for myself only, of course, but although I retired with substantially less than $1M, don't feel out of place among the folk with higher NW's here. For me, knowing whether I could ER consisted of coming to terms with the following -

1) Knowing what my average monthly "bare minimum" expenses were, and how much padding I'd like for emergencies and that most essential of necessities - fun, and

2) Figuring out my tolerance for portfolio volatility and then calculating whether I had somewhere in the region of 25 - 50 times my annual expenses saved up, the actual multiplier depending on my tolerance for volatility - and accounting for future SS in that equation too.

Once I had come to terms with the above two points, I felt as if I was part of the "club" on this forum, regardless of the income levels, in dollar amounts, of the other members. Once you've spent some time here, you realize that quite a few folk are doing it on less than $1M. Nevertheless, I can see how some members might benefit from an arrangement that would make it easier for them to see posts from, and interact with, other members of the <$1M club.

 

[Blue Collar Guy]

2) Figuring out my tolerance for portfolio volatility and then calculating whether I had somewhere in the region of 25 - 50 times my annual expenses saved up, the actual multiplier depending on my tolerance for volatility - and accounting for future SS in that equation too.

.

I would say anyone with 25-50 times annual expenses saved up is in an exclusive club.

 

[daylatedollarshort]

Most people are cool with a trip to Las Vegas, see a show and talk about it for the next 20 years.

+1. I grew up in a blue collar area like that. I've been a few more places than Las Vegas, but I'm pretty happy to just not have to work these days or worry about money. Having some extra for plays, concerts and dining out is just icing on the cake.

 

[Jerry1]

I can see how some members might benefit from an arrangement that would make it easier for them to see posts from, and interact with, other members of the <$1M club.

I have asked this question a couple times and the answers have been very helpful. My questions centered around expenses. I don't really care what someone has for a NW or what they could spend, I love the stories of how people live on a certain amount of money. I think I asked about less than $75K. Of course, there's a lot of variability, but it helps a future RE dreamer come to grips with what kind of life is out there given certain income ranges.

So along with interacting with people with <$1M, I like to hear about people that live on $50K - $75K. It's easy for me to visualize meeting my essential needs, it's what kind of life one can have after that point that helps focus the reality of what early retirement will be like in my individual situation. In general, this forum has been very helpful in that regard and I assume many of the responses come from members who far exceed those parameters.

 

[Major Tom]

I would say anyone with 25-50 times annual expenses saved up is in an exclusive club.

Me too - and there are a lot of folk like that in this forum.

 

[marko]

Right, a forum sub-section for <$1MM NW retired folks without pension or inheritance is what I meant. I have several similar threads bookmarked so I know there are several here who are living the good life on <$1MM but they don't post much likely because all the belt-suspender types tell them how they're doomed etc. So legitimizing their way of life by creating a sub-section here would generate a lot more interest from those of us who can't really relate to the $1.5M+ folks.

I joined this forum to learn from others smarter than me, not to feel good. I also can't think of a better place to learn how to grow beyond the <$1MM NW group.

Remember that done right, you're not drawing down from a static NW; your starting point at RE is often lower than where you'll be 10 years from now. What you learn here could help you get there.

I'd hate to see folks wall themselves away from others just to 'legitimize their way of life'! What's the point of coming here then? The idea is to become "financially independent" (that's what the FI in FIRE stands for)

As far as others making one feel bad about their situation, I can't think of a more welcoming, friendly, non-judgmental place on the entire internet than right here. Really. But you're not going to get support from people here if you're only retirement plan is 'quit my job and hope for the best'.

 

[sturbridge]

I like to hear about people that live on $50K - $75K.

I'm not retired but I live on less than that now, typically 3500/month. No debt, no mortgage. Relatively HCOL (ie over 5K in real estate taxes on a smaller than median for the area house). I cook a lot from scratch, rarely go out for meals since mine is better. Cheap hobbies, local travel in modest hotels. Buy most clothes at consignment stores or on clearance.

I either need to get to >1.5 million to be comfortable retiring (assuming present lifestyle + taxes+ healthcare expense), get my expenses way down, or change my assumptions (ie add in SSN which I think will be reduced if its still there). Getting the 1.5 million would mean more years working than I want, bringing the expenses down further would likely mean doing without a lot of the basics or moving. So a little frustrating.

 

[daylatedollarshort]

I have asked this question a couple times and the answers have been very helpful. My questions centered around expenses. I don't really care what someone has for a NW or what they could spend, I love the stories of how people live on a certain amount of money. I think I asked about less than $75K. Of course, there's a lot of variability, but it helps a future RE dreamer come to grips with what kind of life is out there given certain income ranges.

So along with interacting with people with <$1M, I like to hear about people that live on $50K - $75K. It's easy for me to visualize meeting my essential needs, it's what kind of life one can have after that point that helps focus the reality of what early retirement will be like in my individual situation. In general, this forum has been very helpful in that regard and I assume many of the responses come from members who far exceed those parameters.

I've been spending more time on Reddit's financial independence sub forum these days. There are more posts about frugal and middle class living, which is what I'm interested in. Plus the posts there get voted on so the humble brags, the not so humble brags, and passive aggressive comments, "it so great you can live on only $75K but I require 89 times that to be happy" and "I'm so glad I don't have to skimp" kind of posts get downvoted into oblivion.

 

[Blue Collar Guy]

, "it so great you can live on only $75K but I require 89 times that to be happy" and "I'm so glad I don't have to skimp"....

, I scared the dog when I started to laugh at this

 

[citrine]

I semi-retired at the age of 35 with less than $75K, no debt, and did a career change. It has been the best thing ever! I am now 42, still semi-retired, got married, bought a house, sold a house, and have moved to NM from NJ and we have started two businesses here...my massage therapy practice which can be run from the house and my husband is a home inspector and will be working as a contractor with Vanguard who works with FEMA. Our NW now is a bit over $500K, no debt even after a very expensive cross country move with our four animals. Our expenses here are around $3200 which includes healthcare and we are living very well on that. We are both DIY'ers, do woodworking, have inexpensive hobbies, love to cook, and try to find the best deal. I remember when I had first joined this forum and had asked for advice if I could pull the plug on corporate with less than $75K, some members thought it was a horrible plan! There are many ways to finding your happiness...this has worked for me.

 

[Blue Collar Guy]

Most people move From NJ not to it. Im happy its working well for you 2 , and your 4 furry friends. This might be the first post I ever read from you, but just from this 1 post, I can tell your a survivor and will succeed in most situations.

 

[Mdlerth]

As far as others making one feel bad about their situation, I can't think of a more welcoming, friendly, non-judgmental place on the entire internet than right here. Really. But you're not going to get support from people here if you're only retirement plan is 'quit my job and hope for the best'.

+1

I've perused some of the other ER forums and they don't exhibit quite as much neighborliness I find here.

Of course, most of the discussion topics overlap, and the consensus advice regarding LBYM and index investing is similar everywhere. And it's true that commenters will voice concern when they sense a fellow poster is walking into a trap.

But I detect more encouragement and less confrontation at ER.org than with the heads/handlebars/katanas crowds. Props to the moderators here for keeping it positive.

 

[LRDave]

+1

But I detect more encouragement and less confrontation at ER.org than with the heads/handlebars/katanas crowds. Props to the moderators here for keeping it positive.

100% agree. One of the best on-line communities for sure.

 

[citrine]

Most people move From NJ not to it. Im happy its working well for you 2 , and your 4 furry friends. This might be the first post I ever read from you, but just from this 1 post, I can tell your a survivor and will succeed in most situations.

We moved from New Jersey to New Mexico. You cannot pay me enough to ever move back to the east coast!

 

[Blue Collar Guy]

We moved from New Jersey to New Mexico. You cannot pay me enough to ever move back to the east coast!

Hahahaha, Im dyslexic too. Well in that case, you also a smart survivor.

 

[someguy]

I've been thinking a lot about leanFIRE vs fatFIRE (and even "regular" FIRE). The biggest thing I keep coming to is the differing attitudes toward things like yard work, deal searching, couponing, etc. Same with spending a lot of time working on cars or going out of my way to save money on cars. I'll call this "retiree work".

If I spend 10-15 hours a week doing retiree work, that's a part time job as far as I'm concerned, and at something that I neither excel at nor particularly enjoy. So on enjoyment alone, I'd rather do my real work because it's so much more interesting and challenging. If I include money by considering my effective hourly rate at real work vs. the rate to hire retiree work out, it's even more in favor of doing the real work.

 

[gayl]

I am now well over that but when I initially FIREd 2/2004 I had 80k in 457 (after paying 66k shortage on my pension acct) + a house. Lived well but bored on my pension of 2300m. So I went to work PT and let it ride .... still living on my pension + acts are now 303k IRA, 305k legacy acct for grandkids, 60k Roth, 25k play investment account, 20k savings, properties. Last 13 yrs + compounding has been good to me. Still living on 60% of pension