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Old 08-16-2020, 07:40 AM   #101
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I'll be the first to admit, I checked were on those lists I/we are. When it comes down to it, I don't care what Bezos, Musk, Buffet, Gates or the guy next door have, or where on the list I might be as long as my needs and goals are met.
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Old 08-16-2020, 07:57 AM   #102
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We look at things in a different way;

Owning our home in our area saves us ~$5000 a month. OK it takes ~$$$$$ off our investment capital but still saves us $5k. Add that to one's monthly investment income and it is a lot of money. Then add SS (or Pension) and it adds up to a lot.

So if one has $$$$$$ pm in NW and $$$$$$ pm in income, add that to the $5k. and it is way above the average income in the US. Add the ability to buy pretty much anything we want (Private jets and Islands Not withstanding) and I would say one is pretty well off.

BTW we never sold our Rolexes when we retired, we still have them and they will probably last forever (Our forever that is).
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Old 08-16-2020, 08:10 AM   #103
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Originally Posted by ShokWaveRider View Post
We look at things in a different way;

Owning our home in our area saves us ~$5000 a month. OK it takes ~$$$$$ off our investment capital but still saves us $5k. Add that to one's monthly investment income and it is a lot of money. Then add SS (or Pension) and it adds up to a lot.

So if one has $$$$$$ pm in NW and $$$$$$ pm in income, add that to the $5k. and it is way above the average income in the US. Add the ability to buy pretty much anything we want (Private jets and Islands Not withstanding) and I would say one is pretty well off.

BTW we never sold our Rolexes when we retired, we still have them and they will probably last forever (Our forever that is).


I use home equity in overall net worth, too, because someday we think we’ll downsize and, when we do, I want some of the profit TBD to go into our portfolio. Right now I have a $100K conservative placeholder in the FIRE calculations.

Similarly, we project we’ll be getting $65K or so/year from SS in about 13 years at my FRA. If $65K was coming from an equivalent portfolio at 4% SWR, then $65K x 25 = a $1,625,000 addition to the portfolio. I don’t add the latter in net worth but it’s a mental trick that helps me sleep better.
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Old 08-16-2020, 11:30 AM   #104
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All my life I focused on long term financial freedom. It worked out so well, I stopped working at 45 and bought a Tesla (actually 2 of them).

Sometimes you can have both.
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Old 08-16-2020, 06:13 PM   #105
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I'll be the first to admit, I checked were on those lists I/we are. When it comes down to it, I don't care what Bezos, Musk, Buffet, Gates or the guy next door have, or where on the list I might be as long as my needs and goals are met.
+1000 Best post.

I am happy and quite content even though my standing on that list sure doesn't imply it. I don't care what the billionaires have because if I had it, it wouldn't do me any good.
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Old 08-16-2020, 06:18 PM   #106
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I'd like a billion. Just one please, I'm not greedy -
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Old 08-17-2020, 09:38 AM   #107
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This is a humbling exercise. No wonder we feel so good. Now if can just get rid of this Covid stuff so we can return to enjoying it fully.
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The National Study of Millionaires
Old 08-17-2020, 10:00 AM   #108
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The National Study of Millionaires

Of course, Dave Ramsey has something to say about this. Apparently largest study of millionaires +10,000. I like the 2 following quotes from the study:



“I’ve talked to a lot of millionaires, and most of them have average jobs with average pay, like teachers or firefighters. It just goes to show that how you spend and invest the money you make matters more than how much you actually bring home,” said Hogan.



“Anyone in America can build wealth. The only thing holding you back is you. Get out of debt. Save consistently. Keep your spending in check. Let time and compound interest do their magic. If you’re willing to work hard and keep the long-term goal in mind, you’ll reach the million-dollar milestone,” said Hogan.


https://www.daveramsey.com/research/...f-millionaires
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Old 08-17-2020, 11:18 AM   #109
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Whenever I see a "pensions are bankrupting us" article that singles out teachers and conveniently leaves out public safety employees I suspect a political agenda. Both groups typically have generous pension benefits (and both deserve what they earned), but they each usually represent opposite sides of the political spectrum. I guess it's harder to rabble rouse when one of your targets is revered by your audience.
I think there is room for reform in public pensions, which I generally support. While I feel that people should be able to retire and collect their pensions, I have issues with people retiring young (50-ish), collecting their public pension, and working in another public pension eligible position. If you continue to work full time, I feel that your pension might be rightfully withheld until you actually retire. Our fire chief just retired, is collecting a full time retirement salary, and is now in another pension eligible position as president of the State Fire Chief's association. Likewise, we had a superintendent retire and start collecting a pension from our school district, while transferring to another in-state school district for another pension eligible position.

Likewise, there are a number of techniques to top-load pension amounts. Many contracts allow pension amounts to be based on the single highest year salary, and eligible employees are allowed to work overtime, multiple positions and salaries, or cash out unused sick and vacation time from long careers to boost their salary in one year to bring their COLA pension to a level higher than their highest base salary. A few years ago I remember a survey of salaries in Madison Wisconsin found the highest paid employee in the city was a bus driver who had been working doubles for a full year (1.5x hourly for 40+ and 2x hourly for 60+ hours). This bus driver with a very average salary was working one year to boost his pension calculation to a base over 200,000.

As I led into this with, I support public employees and public pensions, but I think that there is room for improvement and reform in the system. In general I never imagined that there would be strategies to "boost" your base pension to a number beyond your actually salary. Likewise, I was surprised to learn that you can continue working in the same job, next town over, while collecting a pension for your last position in the same job. That leaves a bad taste in my mouth.
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Old 08-17-2020, 04:37 PM   #110
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I think there is room for reform in public pensions, which I generally support. While I feel that people should be able to retire and collect their pensions, I have issues with people retiring young (50-ish), collecting their public pension, and working in another public pension eligible position. If you continue to work full time, I feel that your pension might be rightfully withheld until you actually retire. Our fire chief just retired, is collecting a full time retirement salary, and is now in another pension eligible position as president of the State Fire Chief's association. Likewise, we had a superintendent retire and start collecting a pension from our school district, while transferring to another in-state school district for another pension eligible position.

Likewise, there are a number of techniques to top-load pension amounts. Many contracts allow pension amounts to be based on the single highest year salary, and eligible employees are allowed to work overtime, multiple positions and salaries, or cash out unused sick and vacation time from long careers to boost their salary in one year to bring their COLA pension to a level higher than their highest base salary. A few years ago I remember a survey of salaries in Madison Wisconsin found the highest paid employee in the city was a bus driver who had been working doubles for a full year (1.5x hourly for 40+ and 2x hourly for 60+ hours). This bus driver with a very average salary was working one year to boost his pension calculation to a base over 200,000.

As I led into this with, I support public employees and public pensions, but I think that there is room for improvement and reform in the system. In general I never imagined that there would be strategies to "boost" your base pension to a number beyond your actually salary. Likewise, I was surprised to learn that you can continue working in the same job, next town over, while collecting a pension for your last position in the same job. That leaves a bad taste in my mouth.
My position on that,
I hate that double dipping crap!
Especially on the back of taxpayers.
I hope I didn't waste any words.
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Old 08-17-2020, 05:32 PM   #111
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The only only pension I’m eligible for is SS and this double dipping concern does not bother me. I admire modest income people, like the bus driver, who are financially aware enough to work the system legally for their own benefit. Keeping in mind that we live in a country in which hedge fund managers pay lower tax rates than the rest of us (carried interest) and real estate developers (ahem) usually pay zero income tax, due to accelerated depreciation, I guess I have a question for those who seem bothered:

Does it stir the same hard feelings when the example is a military veteran, who may or may not have seen combat, collects a pension after 20 years of service and then takes federal pension-eligible job for which they got highly-preferred consideration, just because they were a vet, and they’ll also get SS? To play Devil’s Advocate, it kinda seems smart and strategic to me in the context of an unequal country unfairly tilted to the very rich.
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Old 08-17-2020, 06:03 PM   #112
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I won't deny anything to the guys in the armed forces. Some never leave the office, but others die in the dirt. Or come back missing things. Arms, legs, brains.

Double dip all you want, you've more than earned it. Like I had to carry a rifle and shoot people while avoiding being shot.
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Old 08-17-2020, 06:34 PM   #113
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My position on that,
I hate that double dipping crap!
Especially on the back of taxpayers.
I hope I didn't waste any words.
so what's the solution? a guy who serves his 20 in the military and then goes to work for a govt. agency for 20+ years shouldn't collect both pensions? what about this? a police chief in another nearby town put in 35-years with that dept. and then retired. he was subsequently appointed as director of public safety overseeing the police and fire in the same town. unsworn position. different pension system for that position vs his police pension. what about him? i understand what you're saying and i even agree..to. point. but how to do we write the rule?
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Old 08-17-2020, 06:39 PM   #114
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Comfortable VS Wealthy.... In Schwab's opinion...

https://www.usatoday.com/story/money...re/5521307002/

"They now believe that, on average, it takes $655,000 to be financially comfortable, down from $934,000 in January, according to Charles Schwab’s 2020 Modern Wealth survey. And they think the minimum benchmark to be considered wealthy is $2 million, down from $2.6 million in January. The survey of 1,000 Americans was conducted for Schwab by Logica Research June 25-July 2."
Depends on where you live. $2 million in SF, NY, or LA doesn't goes as far as it does in other parts of the country.
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Old 08-17-2020, 06:52 PM   #115
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...I was not going to be doing the "ER at 45, or even 55" thing, and decided then I was not going to live like a pauper now, to live like a king later. Who wants to live like a king at 70 and beyond when you can least enjoy it. We are not living like kings now by any means, but we are living a good life at mid to upper 50's while we can enjoy it and our kids/grandkids.
As a LBYM person, I've been saving 49%. But I've also traveled and done most of what I wanted to do. At 54, I've had enough, and have enough, that I'm done living in a small apartment and am moving to my ER house with a pool. While I could have afforded a house and nice cars and more travel earlier, I chose deferred spending, and that sacrifice means that I'm now in the position of being able to more than double my spending and enjoy a nice house and travel (pose-Covid). As my tagline says...
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Old 08-17-2020, 09:13 PM   #116
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This is the data I saw before .. and more realistic than the OPs data.

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This seems a considerable underestimate of household net worth.

The Fed released 2016 data which showed the 90th percentile at almost 1 million (952000), but as I recall from past breakdown of the top 10%, median networth in the top 10% goes up steeply from that point.
Sorry, I can't find the top 10% breakdown tables anymore.


https://www.census.gov/library/publi...p70br-166.html


However, I think this source is using those original tables (a guess) and here goes, for 2016/17:


Net Worth Percentile2016 Dollar Cutoff
90.0%$1,182,390
95.0%$2,377,985.22
99.0%$10,374,030.10
99.5%$16,115,373.00
99.9%$43,090,281.00



https://dqydj.com/net-worth-brackets...s-one-percent/


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Old 08-18-2020, 07:36 AM   #117
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so what's the solution? a guy who serves his 20 in the military and then goes to work for a govt. agency for 20+ years shouldn't collect both pensions?... but how to do we write the rule?
I can't say I know the solution.

For the bus driver and many of the salary weighted folks: I think averaging multiple years (3 highest paid years for example) would be a partial solution to make long term pensions affordable. These people would certainly get rewarded for the extra effort, but it would be much like social security as a 30 year average of salary. Our local news has run a number of stories about local governments, park districts, etc. that allow "close to retirement" employees take on 2 titles in their final year (or month, or even few weeks) with 2 salaries, while still working 40 hours a week, keep their work issued vehicle, and cash out sick and vacation days, because they have a COLA pension based on a single final paycheck. Retirement should realistically be based on your real world earnings.

For the double pensions, I'm not sure there is a solution. Most veterans make modest pensions, and after a second 20 years at the post office for example. My own experience with MC pension systems is that they cut and keep on cutting. I left a pension eligible position a few years back and then they froze it, eliminating COLA. It would have been worth far less, had I stuck around, but still would have been something. I do think the example of the police chief moving between positions (in the same city government) being allowed to collect a pension while working in a pension eligible position seems absurd... the dollars are all coming out of the city budget. You're paying for retirement, while paying a salary and promising retirement. The city is simultaneously paying someone to work and be retired.
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Old 08-18-2020, 07:57 AM   #118
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It used to be the case here that someone could work for the state, retire when eligible, then continue to work for the state. The pension was fixed as of the date of retirement and the person could not gain additional years service or change the reference salary (avg of 3 highest years) by continuing to work. The financial benefit to the state was that the pension liability to that person was fixed and the state did not need to continue putting money in the pension fund for that person.

In my view, that situation was a win/win. The state gets to keep a qualified employee to do that job at a lower price than they were paying. The alternative is that the person retires, starts collecting a state pension and goes to work in the private sector. The state then has to hire someone to fill the position and that new someone is accruing a pension benefit for which the state must set aside money. In either case, the state is paying a pension and paying an active duty employee. But, of course, people whined about "double dipping" so now a retiree can only come back for 180 days. It is costing the state more money this way.
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Old 08-18-2020, 08:58 AM   #119
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As a LBYM person, I've been saving 49%. But I've also traveled and done most of what I wanted to do. At 54, I've had enough, and have enough, that I'm done living in a small apartment and am moving to my ER house with a pool. While I could have afforded a house and nice cars and more travel earlier, I chose deferred spending, and that sacrifice means that I'm now in the position of being able to more than double my spending and enjoy a nice house and travel (pose-Covid). As my tagline says...
That's great for you. As I said in what you didn't quote, it was obvious after losing everything I would not be doing the Early part of ER, so decided a different route that would allow me some enjoyment before my body is worn out.
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Old 08-18-2020, 09:21 AM   #120
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It's an interesting question but I would have thought that pensions were seen as part of the compensation package. I know people who choose to work full-time hours in a 'part-time' position in order to take home higher pay today because they do not have to make pension (and other) contributions. My initial factory job had a pension associated, when I left I had the option of letting the money ride in their pension system or taking it as a lump sum. My next real job was with a university, same situation. In both cases I took the lump sum and invested and managed it myself. My next job had no pension, other than SS, associated with it but it could have been another pension job. All of these positions would have let me choose when to start receiving my pension money. So is it really 'double' (or triple or quadruple) dipping if I continue to work while starting to take some of this money. To me pensions seem more like the equivalent of 'deferred income' with an associated tax deferral. Yes some jobs have very nice pension plans but in my mind, kudos to the people who negotiated them. Pretty much anyone could have chosen to join the armed forces, likewise police, fire fighting, teaching, government are far from closed shops.
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