Die With Zero - Book

[Music Lover]

Good luck with that.

Extended good health is guaranteed to none.

I know. The only thing I have control over is keeping fit and eating healthy so that my remaining time has a higher quality of life.

 

[daylatedollarshort]

Retired at 55 with no where near that kinda money. If I worked till 70 I wouldn’t have that kinda money. Good thing my favorite steak is homemade Swissin my crockpot! And have absolutely no desire to be served by young waitress in bikinis on a private beach. Having free time to do what I want when I want for the past 12 years…priceless

If I had to do it over again I would have watched our expenses closer and retired in our forties instead of fifties. We're into simple living, more into tofu than steak and also not into bikini clad waitresses. If I was into that sort of thing, we have nude beaches here that are open to the public with spectacular scenery.

The big happiness factor for us has been not having to work and call each day our own. We've not only had friends and family die before they retired, but even our adult kids have had friends pass away unexpectedly. Life can be short. The time to enjoy it is now.

 

[2177V]

The point is...if you retire later (rather than early), your nest egg will likely be bigger.

For those who can retire early, have a portfolio of $3M to $5M and have a steak dinner life style, then good for them.

However, if you retire 10 years later, a $3M to $5M portfolio may compound and then grow to $6M to $10M because you are contributing money longer and you are not drawing from it.

I like to point out the difference between a $3M portfolio and a $6M portfolio for the sheer fun of it. Let's assume annual 7% market return and paying 35% tax:

$3M portfolio = $210K per year or $11,375 per month after paying federal taxes.
$6M portfolio = $420K per year or $22,750 per montb after paying federal taxes.

At first glance, your net income has doubled. HOWEVER, it is your "disposable income" after mandatory expenses that determines your standard of living.

My point: People does not realize that mandatory expenses such as property taxes, the sales taxes, the food expenditures, car payments, utility bills usually should not exactly double and is likely less than a factor of 2X. Note that the 35% federal tax bracket is $207K to $518K per year for tax year 2020 to 2021.

This means a retiree with a $6M portfolio will likely have $11,375 more money per month plus another $4,000 to $5,000. Having an extra disposeble income of $15,000 a month more than the $3M retiree is sufficient to hire a maid and/or butler whereas the retiree with only a $3M portfolio will likely struggle to hire servants.

The heck with a fancy car, fancy house, first class airline tickets...I prefer servants who can wash my cars, wash and fold my clothes, cook my steaks and do whatever I tell them to do legally in order to improve my life better. I had servants before but I do not have servants at the present time...but I am working on it. My next house will have an in-law unit. Not for my in-laws but for my servants.

This is the potential difference between retiring early or retiring 10 years later. I do respect people who do retire early...but be aware of the difference between disposable income versus net income. It is not a linear relationship.

 

[tmm99]

If I had to do it over again I would have watched our expenses closer and retired in our forties instead of fifties. We're into simple living, more into tofu than steak and also not into bikini clad waitresses. If I was into that sort of thing, we have nude beaches here that are open to the public with spectacular scenery.

This is off-topic, but when I lived in the south bay area, I used to go to SF a lot to just walk around and enjoy the city. I was with my then BF in SF one weekend and happened upon a beach, then we realized that nobody else was wearing their clothes... Everyone we encountered looked like they would look so much better with some clothes on!

 

[Dtail]

There is an article in bicycling magazine that states your real age is your performance age and not your biological age. In other words, if your biological age is 70 and you can still do things what a typical 50 years old person can do, then your real age is 50 and not 70. I am age 70 (biological) and my wife is 20 years younger than me and I just re-roofed my shingled house by myself without hiring a contractor or even a helper. This involved heavy lifting and hard work but heavy lifting and hard work makes me stay young. I suggest keeping fit to live longer. Too many people thinks life ends at 65 and the end is near. I am really enjoying my wealth and I will be hiring a maid to cook my steaks so that my young wife do not have to. This is because my young wife is a business owner with employees who depend on her. I also own a Cuddy boat and on my boat states: "Heaven is I fish Wife work."

Well you are switching your general comment to then how it applies to you.
I would never go up on my roof, because I am not comfortable at this age doing so, not because I am not physically capable.

I play competitive Pickleball 6x weekly for 3-4 hours a day in sometimes intense heat and can compete with others much younger at the same level.
So yes, I agree with you that one should clearly stay in shape as best as possible, but that has nothing to do with working to 65 to afford premium stuff.
James Fixx, father of modern running concepts died ~50 of a heart attack. Sometimes cancer and the sort just gets one even if they are in fantastic shape.
The sites' members in general for the most part prove the point of time>valuable than money (after reaching a certain point in their financial situation).

 

[Dtail]

I like to point out the difference between a $3M portfolio and a $6M portfolio for the sheer fun of it. Let's assume annual 7% market return and paying 35% tax:

$3M portfolio = $210K per year or $11,375 per month after paying federal taxes.
$6M portfolio = $420K per year or $22,750 per montb after paying federal taxes.

At first glance, your net income has doubled. HOWEVER, it is your "disposable income" after mandatory expenses that determines your standard of living.

My point: People does not realize that mandatory expenses such as property taxes, the sales taxes, the food expenditures, car payments, utility bills usually should not exactly double and is likely less than a factor of 2X. Note that the 35% federal tax bracket is $207K to $518K per year for tax year 2020 to 2021.

This means a retiree with a $6M portfolio will likely have $11,375 more money per month plus another $4,000 to $5,000. Having an extra disposeble income of $15,000 a month more than the $3M retiree is sufficient to hire a maid and/or butler whereas the retiree with only a $3M portfolio will likely struggle to hire servants.

The heck with a fancy car, fancy house, first class airline tickets...I prefer servants who can wash my cars, wash and fold my clothes, cook my steaks and do whatever I tell them to do legally in order to improve my life better. I had servants before but I do not have servants at the present time...but I am working on it. My next house will have an in-law unit. Not for my in-laws but for my servants.

This is the potential difference between retiring early or retiring 10 years later. I do respect people who do retire early...but be aware of the difference between disposable income versus net income. It is not a linear relationship.

Many folks here hire out some of their undesirable stuff, but haven't heard many who aspire to have servants and that includes the 6m+ posters.

 

[tb001]

Yes, I would be mortified to have ‘servants’. And would absolutely hate having someone in our space all the time. We do however have a housekeeper, pool guy, landscaper and part time nanny. We also hire out most repairs. I try to have everyone here on one day and make that my day to be gone.

DH would prefer to continue working and let assets build. I would much prefer time. His sister died at 63, so those extra years are meaningful, imo.

 

[daylatedollarshort]

This is off-topic, but when I lived in the south bay area, I used to go to SF a lot to just walk around and enjoy the city. I was with my then BF in SF one weekend and happened upon a beach, then we realized that nobody else was wearing their clothes... Everyone we encountered looked like they would look so much better with some clothes on!

I haven't been there but DH stumbled upon Baker Beach accidentally while taking some out of town guests sightseeing. He says he agrees with your assessment!

 

[daylatedollarshort]

Yes, I would be mortified to have ‘servants’. And would absolutely hate having someone in our space all the time. We do however have a housekeeper, pool guy, landscaper and part time nanny. We also hire out most repairs. I try to have everyone here on one day and make that my day to be gone.

DH would prefer to continue working and let assets build. I would much prefer time. His sister died at 63, so those extra years are meaningful, imo.

It seems like hiring out individual services would accomplish the same goals of freeing up your time at a much lower cost and with less hassle than a live in servant that came with housing expenses and payroll taxes. Plus you don't have to worry about having to evict your weekly housekeeping or landscaping service - California couple says they can't get rid of their live-in nanny - CBS News

To add to your list are grocery services like Amazon Fresh and restaurant / meal prep delivery services. We just signed up for an organic farm delivery service that also delivers gourmet restaurant meals right to the customers' doorsteps. I don't use the restaurant part but if I didn't like cooking it would still be a lot cheaper and less hassle than a full-time servant.

 

[ncbill]

There is an article in bicycling magazine that states your real age is your performance age and not your biological age. In other words, if your biological age is 70 and you can still do things what a typical 50 years old person can do, then your real age is 50 and not 70. I am age 70 (biological) and my wife is 20 years younger than me and I just re-roofed my shingled house by myself without hiring a contractor or even a helper. This involved heavy lifting and hard work but heavy lifting and hard work makes me stay young. I suggest keeping fit to live longer. Too many people thinks life ends at 65 and the end is near. I am really enjoying my wealth and I will be hiring a maid to cook my steaks so that my young wife do not have to. This is because my young wife is a business owner with employees who depend on her. I also own a Cuddy boat and on my boat states: "Heaven is I fish Wife work."

Your high lifetime level of physical activity means you will likely have much less physical disability as you age.

But I've seen no credible independent studies that such has a statistically significant effect on one's remaining life expectancy.

So, my message is that in general, the earlier one can retire, especially for guys, the better chance that they will have for that 30 full years in retirement.

Unfortunately, a guy postponing retirement until age 65 to upscale their retirement lifestyle means statistically their retirement will be much closer to 20 years than 30.

And by age 65 most will be much more limited in what they can do physically versus back in their 50s.

BTW, if I wanted servants without the stigma some here have attached I'd relocate south of the border where such are normal even for the nationals.

 

[Markola]

I’m half through he book and am enjoying the author’s fresh perspectives.

I’m 55 and he’s making me feel better about our existing plan to spend down assets about 75% in our go go years until they are projected to start increasing again in our early 70s - the classic retiree smile shape portfolio. I haven’t loved that prospect but I guess we are doing exactly what he advocates by retiring early while we’re healthy and can enjoy it vs. reflexively OMYing to pile up more, more, more that we would not enjoy as much in the coming slow go years, if we’re lucky enough to make it that far.

 

[2177V]

Your high lifetime level of physical activity means you will likely have much less physical disability as you age.

But I've seen no credible independent studies that such has a statistically significant effect on one's remaining life expectancy.

So, my message is that in general, the earlier one can retire, especially for guys, the better chance that they will have for that 30 full years in retirement.

FYI....Here is a credible independent study on physical activity extending your life expectancy.

https://www.ncbi.nlm.nih.gov/pmc/articles/PMC3395188/

The study's conclusion:

"In conclusion, while regular physical activity increases life expectancy, it remains unclear if high-intensity sports activities further increase life expectancy".

Should be common sense that physical exercise will extend your life. I do not do high intensity exercise but enough exercise to extend my life.

Since I retired at age 65 with a higher quality of life. I will extend my life by following the recommendations by such studies. This includes physical activity, enjoying the finer things in life, and being positive. Thinking that you only have 20 years of life remaining at age 65 is thinking negatively.

I do know one thing: Happy people tend to live longer because they have a purpose in life. Grandkids, overseas vacations, cruises, first class travel, and having extra money to spend, etc. People take cruises and check in first class hotels because staff treated them well. When my servants or my staff treat me well at home, I am happier and this will translate to a longer life. Without extra money to spend, your happiest level is not as high compared to a person with much more money to spend.

Here is a study that demonstrated people with more money live longer.

https://www.nytimes.com/2020/01/16/science/rich-people-longer-life-study.html

People are thinking in terms of a general life span after age 65 for "everyone" in general...without looking into how a higher quality of life can extend your life. People should google: Does rich people live longer?

 

[Yipper]

Very true. I've always thought that if you can do at 65 what you did at 40, then you really didn't do much at 40.

Busy working... busy raising a family... not enough TIME to do those things at 40 and now at 65, have the time.

 

[Dtail]

FYI....Here is a credible independent study on physical activity extending your life expectancy.

https://www.ncbi.nlm.nih.gov/pmc/articles/PMC3395188/

The study's conclusion:

"In conclusion, while regular physical activity increases life expectancy, it remains unclear if high-intensity sports activities further increase life expectancy".

Should be common sense that physical exercise will extend your life. I do not do high intensity exercise but enough exercise to extend my life.

Since I retired at age 65 with a higher quality of life. I will extend my life by following the recommendations by such studies. This includes physical activity, enjoying the finer things in life, and being positive. Thinking that you only have 20 years of life remaining at age 65 is thinking negatively.

I do know one thing: Happy people tend to live longer because they have a purpose in life. Grandkids, overseas vacations, cruises, first class travel, and having extra money to spend, etc. People take cruises and check in first class hotels because staff treated them well. When my servants or my staff treat me well at home, I am happier and this will translate to a longer life. Without extra money to spend, your happiest level is not as high compared to a person with much more money to spend.

Here is a study that demonstrated people with more money live longer.

https://www.nytimes.com/2020/01/16/science/rich-people-longer-life-study.html

People are thinking in terms of a general life span after age 65 for "everyone" in general...without looking into how a higher quality of life can extend your life. People should google: Does rich people live longer?

Richer folks have more access to a higher quality healthcare, which can be at least as important as higher spending.
There are many folks on this site who spend way less than 100k for example who appear to be quite happy.
Not everyone needs to spend a lot to have a longer lasting fulfilling life.

Perhaps indirectly you are trying to justify retiring at 65, versus the many folks here who retired way earlier, but are just as happy as you are.

 

[Koolau]

V
Perhaps indirectly you are trying to justify retiring at 65, versus the many folks here who retired way earlier, but are just as happy as you are.

Though this IS the Early Retirement forum, I won't tell anyone else what age early is. Thankfully, no one suggested 58 wasn't early in my case (and IIRC, that's just about the median for the group.) Any way, vchan2177 doesn't need to justify his/her retirement age to us.

I submit that the argument seems to be about "more" vs "enough." I am certain many folks would vote for "more." I vote for "enough." Nothing wrong with "more" but "enough" makes early retirement possible faster for some of us. It just depends on what you want and what you are willing to "pay" for it. As always, YMMV.

 

[Yipper]

Though this IS the Early Retirement forum, I won't tell anyone else what age early is. Thankfully, no one suggested 58 wasn't early in my case (and IIRC, that's just about the median for the group.) Any way, vchan2177 doesn't need to justify his/her retirement age to us.

I submit that the argument seems to be about "more" vs "enough." I am certain many folks would vote for "more." I vote for "enough." Nothing wrong with "more" but "enough" makes early retirement possible faster for some of us. It just depends on what you want and what you are willing to "pay" for it. As always, YMMV.

I'd tend to think most in this community would not classify 65 as "early". When considering "enough" and "more" there's always the question of "how much more is enough".

For some people... enough is never actually enough.

 

[2177V]

Richer folks have more access to a higher quality healthcare, which can be at least as important as higher spending.
There are many folks on this site who spend way less than 100k for example who appear to be quite happy.
Not everyone needs to spend a lot to have a longer lasting fulfilling life.

Perhaps indirectly you are trying to justify retiring at 65, versus the many folks here who retired way earlier, but are just as happy as you are.

There are people who retire early because they hated their job or are in poor health. I get that. I respect that decision. On the other hand there are people who loves their job, are in excellent health and then decided to retire later. Some early retirement people do not get that.... nor do they understand the financial impact of early retirement.

Remember that a portfolio double in value after 10 years assuming 7.5% annual growth return. I am happier with a portfolio that is twice as much as if I had retired 10 years earlier. You can claim that a person with a retirement portfolio of only 50% of a portfolio of another person...is just as happy. That is your prerogative.

Last year, I had a older waiter served me coffee at a cafe and he admitted to me that he had retired early and later could not make ends meet. He ended up getting a retirement job to supplement his income. Ironic that he retired early and I retired late and he was the one who ended up serving me coffee.

There are some people who are forced to work after retirement because they had no financial margin of safety. They decided that their $4,000 a month or so of retirement income is sufficient but never account for an extra margin of financial safety. In my case, my financial margin of safety is a factor of 2. People who are determined to retire early should estimate their margin of financial safety to avoid being a waiter at a cafe or a greeter at WalMart.

 

[braumeister]

There are some people who are forced to work after retirement because they had no financial margin of safety. They decided that their $4,000 a month or so of retirement income is sufficient but never account for an extra margin of financial safety. In my case, my financial margin of safety is a factor of 2. People who are determined to retire early should estimate their margin of financial safety to avoid being a waiter at a cafe or a greeter at WalMart.

I think most of us here understand that.

But I'm curious exactly what you mean by "my financial margin of safety is a factor of 2." As a guess, I'd say maybe it means FIRECalc says you could spend twice as much as you do, but what is your definition?

 

[daylatedollarshort]

Richer folks have more access to a higher quality healthcare, which can be at least as important as higher spending.
There are many folks on this site who spend way less than 100k for example who appear to be quite happy.
Not everyone needs to spend a lot to have a longer lasting fulfilling life.

Perhaps indirectly you are trying to justify retiring at 65, versus the many folks here who retired way earlier, but are just as happy as you are.

+1. The happiest person in the world, at least according to brain wave studies, is a Tibetan monk. "The secret to his success in achieving bliss? Meditation, he claims. Meditating is like lifting weights or exercising for the mind, Ricard told the Daily News. Anyone can be happy by simply training their brain, he says."

In numerous other studies, excess materialism is linked to depression and lowered life satisfaction.

 

[daylatedollarshort]

There are people who retire early because they hated their job or are in poor health. I get that. I respect that decision. On the other hand there are people who loves their job, are in excellent health and then decided to retire later. Some early retirement people do not get that.... nor do they understand the financial impact of early retirement.

Remember that a portfolio double in value after 10 years assuming 7.5% annual growth return. I am happier with a portfolio that is twice as much as if I had retired 10 years earlier. You can claim that a person with a retirement portfolio of only 50% of a portfolio of another person...is just as happy. That is your prerogative.

Last year, I had a older waiter served me coffee at a cafe and he admitted to me that he had retired early and later could not make ends meet. He ended up getting a retirement job to supplement his income. Ironic that he retired early and I retired late and he was the one who ended up serving me coffee.

There are some people who are forced to work after retirement because they had no financial margin of safety. They decided that their $4,000 a month or so of retirement income is sufficient but never account for an extra margin of financial safety. In my case, my financial margin of safety is a factor of 2. People who are determined to retire early should estimate their margin of financial safety to avoid being a waiter at a cafe or a greeter at WalMart.

If you look through the threads here, many posters here have that margin of safety or even much more, but many accomplish the same goal simply with less NW but much lower expenses than you require to be happy.

Most people here likely get the math you like to point out or else we wouldn't have been able to retire 10 or more years early. It isn't a math issue it is just a different mindset of what is "enough".

 

[Yipper]

If you look through the threads here, many posters here have that margin of safety or even much more, but many accomplish the same goal simply with less NW but much lower expenses than you require to be happy.

Most people here likely get the math you like to point out or else we wouldn't have been able to retire 10 or more years early. It isn't a math issue it is just a different mindset of what is "enough".

Very well said. This *IS* the “Early Retirement” community after all. [emoji4]

 

[Music Lover]

There are people who retire early because they hated their job or are in poor health. I get that. I respect that decision. On the other hand there are people who loves their job, are in excellent health and then decided to retire later. Some early retirement people do not get that.... nor do they understand the financial impact of early retirement.

Remember that a portfolio double in value after 10 years assuming 7.5% annual growth return. I am happier with a portfolio that is twice as much as if I had retired 10 years earlier. You can claim that a person with a retirement portfolio of only 50% of a portfolio of another person...is just as happy. That is your prerogative.

Last year, I had a older waiter served me coffee at a cafe and he admitted to me that he had retired early and later could not make ends meet. He ended up getting a retirement job to supplement his income. Ironic that he retired early and I retired late and he was the one who ended up serving me coffee.

There are some people who are forced to work after retirement because they had no financial margin of safety. They decided that their $4,000 a month or so of retirement income is sufficient but never account for an extra margin of financial safety. In my case, my financial margin of safety is a factor of 2. People who are determined to retire early should estimate their margin of financial safety to avoid being a waiter at a cafe or a greeter at WalMart.

Almost no one on this site has a problem making ends meet or even living very comfortably. I had a modest paying govt job...no chance to double my portfolio unless I lived to be 100. In fact, staying 5 years longer would have meant maybe $100 more a month in my pension because I had maxed out the years and the only increase would have been the 5-year average of my salary.

You might have millions, but I only have thousands. However, the one advantage I had over you is that once I reached the magic number I was able to retire with no regrets. And since I left just before turning 54 I might be lucky enough to enjoy 30 years of retirement. You retiring at 65 might only get 20 years so theoretically my retirement could be 50% longer than yours.

 

[Dtail]

Though this IS the Early Retirement forum, I won't tell anyone else what age early is. Thankfully, no one suggested 58 wasn't early in my case (and IIRC, that's just about the median for the group.) Any way, vchan2177 doesn't need to justify his/her retirement age to us.

I submit that the argument seems to be about "more" vs "enough." I am certain many folks would vote for "more." I vote for "enough." Nothing wrong with "more" but "enough" makes early retirement possible faster for some of us. It just depends on what you want and what you are willing to "pay" for it. As always, YMMV.

The first paragraph above was not the gist of my post.
Check out post #220. She gets it.

 

[free2020]

At 71, the book inspired me to take my daughter this fall on a big trip to Bhutan. Expensive, but the memories we’ll share are worth more than leaving an inheritance. I know that I can tighten my belt when necessary if it comes to that, even to the extent of moving offshore.

Inspiring. thanks for sharing. Money is not everything!

 

[2177V]

I think most of us here understand that.

But I'm curious exactly what you mean by "my financial margin of safety is a factor of 2." As a guess, I'd say maybe it means FIRECalc says you could spend twice as much as you do, but what is your definition?

As I explained earlier, a portfolio double in value after 10 years assuming 7.5% annual return. A factor of 2 means I have double the income compared to if I had retired 10 years earlier. For example: a retirement income of $10K a month at age 55 versus a retirement income of $20K a month at age 65. Perhaps it was a misnomer.

As a side issue…since I am an engineer who likes to play with numbers…a guy who retires at 55 and lives 30 years translate to 30 x 12 x $10K = $3.6M. A guy who retires at 65 and lives 20 years translate to 20 x 12 x $20K = $4.8M. Hence early retiree loses $1.2M of higher quality of life in this example.

Granted people has more free time when they retire early but remember that people do get vacation time when working 10 years longer. Due to seniority my vacation time was 25 vacation days per year which was sufficient for me to increase my quality of life by $1M.