DanTien said:
You've made it.
You've left the work world.
You've reached your goal.
You've savored the feeling that comes from achieving your dream.
You're comfortable.
You're financially independent.
You've got more money than you need.
There aren't many things you want to buy anymore.
You feel there is more you can do in your life.
You have extra money - more than you need to take care of your everyday needs and to insure a secure future for you and your children.
What do you do with the extra money...
Well put, Dan-- a good twist on a perpetual thread.
I'm beginning to hate that question. It's an important question but it keeps forcing us to examine our "money issues".
Spouse and I are very good at tracking expenses, cutting the waste, finding bargains, and extracting value out of every purchase. We do this out of habit, to set a good example for our kid, and lately for entertainment. We don't lead a material existence. We have good pensions & healthcare. We invest aggressively. Achieving ER proves that we can manage the heck outta these aspects of our life.
But somewhere in the back of our psyches is a nagging fear that we'll need it all for "some emergency". I don't know what that crisis is-- even if it's "just" long-term care-- but it keeps us from loosening up the purse strings. Maybe it's just not wanting to burden our kid with our support, or anxiety about ending up in a Medicaid long-term care corral. If our parents dropped a $25K windfall on us tomorrow then we'd be much more inclined to sock it away than to donate it or to spend it.
We've taken baby steps:
- Any kid with the guts to ring our doorbell for a charity or a fundraiser is worthy of at least $10. Especially if they're selling coupons for Zippy's chili.
- At the end of the school year we give $100 cash to our kid's best teachers. Sadly this award has only been deemed worthy of presentation twice in the last four years.
- One year our Navy movers lost several boxes of my books. The pro-rated insurance settlement was only for $25 but if we "replaced" the books then we'd be reimbursed up to $500. I didn't want any more books so we took our elementary school librarian on a $500 shopping spree at the local Scholastic warehouse.
I've loosened up on the sports budget. Ironically the kid & I have concluded that the cheaper tae kwon do gear is actually of better quality & duration than the more expensive stuff. Even more ironically, the capital expense of clinics & camps is actually saving money. We're each paying $125 for this week's TKD camp-- four hours/day for five days of strategy & tactics-- but already I can see that the quality of the students & instructors will cut several tuition months off the time it takes us to pass our black-belt tests.
I've stopped budgeting for vacations. Our time is limited by the kid's school calendar and our travel is limited by her teenage interest in hanging out with the gang. We might as well spend it on making our vacations more pleasant, even if we end up paying (*gasp*) an extra $10
day for the full-size rental car. And next time my spouse travels to Bangkok, I'm checking the price list for business class or even first class. (This time I really mean it.) Ironically, once again, our most enjoyable vacations have been interisland cruises whose fares happened to be lower than hotel rates.
We (and probably most ERs!) could easily donate $1000/year to charity, yet somehow we never get around to doing it. Part of it is a reluctance to subsidize a corporate charity's "administrative" expenses. Another part of it is giving up the "personal touch"-- the opportunity to see exactly where our money goes and what it does. Another part of it is realizing that charity is much more effective when our donation is matched by other sources or contingent on the organization raising matching funds. A final part of it is wanting to reward good stewardship. We want to hand the money to someone who's already shown that they know how to extract maximum value from it-- that's why we enjoy giving those $100 envelopes to our kid's worthy teachers.
Another topic of discussion has been subsidizing college expenses for worthy kids in our neighborhood or on the island, but that discussion always bogs down in the execution mechanics. There's always our local Institute for Human Services or Habitat for Humanity, but again we never seem to get around to doing anything about it. Any other ideas?
We'll probably default to the Warren Buffett approach-- giving it all away after we're gone, and perhaps by putting our kid in charge of the Nords Family Foundation. Let her deal with it...
