How much "dough can you blow"?

[Ronstar]

But, but, but..... Dream House! New recliner! Eating lunch out every day!

The level of comfort of one's recliner is inversely proportional to the amount of dough that one blows.

 

[marko]

Plans are to do some of the usual more active traveling sooner vs. later and enjoy some of the finer things in life, and while I have 4 kids and 1 granddaughter I can burn $$ on, I really wonder how sustainable this kind of spending is after the honeymoon wears off. Are any of you Fat Fire folks consistently keeping your burn rate at a high level after 5 - 10 years?

Perhaps I should ask it this way... Robbie - how many lobsters can you eat in 1 week?!

After an initial panic-induced cutback (involuntary RE in '05), we slowly drifted back to our standard spending post the '08 recovery.

Lobsters around here are fairly cheap however; just bought 4 lobsters last week for $30 from the fish monger; cheaper than steak!

Our annual fat spending includes our winter home in Florida, some pretty expensive overseas travel (3 this year but usually just once), a good sized sailboat, leases on 2 luxury cars, and DW's health insurance.

We also live in a HCOL area which doesn't help. We also renovated our kitchen last year and are aiming for a new bathroom this fall.

Thankfully, our nephew graduated college this year so no tuition to pay for him but the seven adult nieces and nephews still run us about $10K a year in out of pocket stuff.

As I'm writing this all down, I'm saying to myself 'holy crap!' The good news I suppose is that there are a lot of areas we could cut if we had to create some personal deflation.

 

[Pellice]

DawgMan, I am definitely NOT in the fatfire category, but if I had that money, I'd be spending it on long-term beautiful rentals in beautiful locations. I"m sure your spending will fall off though, so do make an effort to do some wonderful things now - and also support the non-profits you care about.

 

[Midpack]

Also not in the OP’s category, but our spending trend was the opposite. We were overly frugal with spending in the first few years, and we’ve gradually loosened the purse strings. Still spending conservatively relative to SWR, but significantly more than the early years in retirement. We just bought a bigger house in a higher COL area, so we’re committed to more spending.

 

[ckelly78z]

$300K is my current 401K level with 10 years until retirement, I can't imagine spending that yearly. My goal is to experience more events, and have good memories, rather than blowing that dough on material possessions, I am much more of a minimalist, and believe that simplicity of life clears the mind (and house) of useless clutter.

My BIL takes retail therapy to new, unhealthy levels, and is paying the mental price for having an expensive hoarder's castle, and unable to move it all when he retires.

 

[LRDave]

But, but, but..... Dream House! New recliner! Eating lunch out every day!

I would eat myself stupid if I lived in NOLA.

 

[Yoheadden]

I suppose I am posting this question to those of you in Fat Fire or those of you that retired after leaving a very lucrative income and standard of living. My "plan" has me retiring at the end of this year at 55. I have been fortunate to make a good living for many years while living significantly below my means. That said, I am planning for a min withdrawal of $300K/yr gross (underwriting 25% in taxes, but believe it will be much less with strategic acct withdrawals). I will most likely payoff my home mortgage the day I retire despite it being in the 3% range (still struggle with giving up the cheap money). As you can imagine, with no debt, this high of a withdrawal rate has a significant amount of discretionary spending. Plans are to do some of the usual more active traveling sooner vs. later and enjoy some of the finer things in life, and while I have 4 kids and 1 granddaughter I can burn $$ on, I really wonder how sustainable this kind of spending is after the honeymoon wears off. Are any of you Fat Fire folks consistently keeping your burn rate at a high level after 5 - 10 years? I know, 1st world problems, but more curious as to how long you kept your high withdrawal rate going before you slipped into your shorts and T-shirt and said that's all I need.

Perhaps I should ask it this way... Robbie - how many lobsters can you eat in 1 week?!

P.S. Haters don't hate...

First off, Congrats on being soon retired. You did the work, put the time in and now it’s time to enjoy the fruits of your labor.
While this may not answer your initial question (my invite to that club was lost in the mail ;-) ) I have come to see & learn that while material hinges only offer limited joy. It’s the life experiences that give us the most satisfaction. We are all different and a lavish lifestyle (cars, houses, private transportation, exotic travel, etc.) could probably eat up the money you are looking to spend. I would suggest to earmark a % for charitable donations. I’m sure there are local volunteer Fire and/or Ambulance Associations that would love to help you spend some of your $. Charity Navigator is an excellent source to see how efficient some of the larger charities are run. Also, check out CharityBuzz.com. Then u can combine the benefit of giving to a Charity, while also enjoying some unique and first rate experiences.

 

[H2ODude]

I'd guess our available discretionary is about 100k annual using very conservative estimations. Didn't get there without having a LBYM mindset that puts a value on a buck. But, recognize that at this rate the kids will get large inheritances they really don't need, both doing well.

We're doing 2-3 overseas trips a year and frankly I'm about done with long flights and busy travel. Cars are up to date and even the 2015 435 BMW makes me a bit self conscious. Sometimes I long for the Cayman S I had but just don't want to look like I'm trying to impress (let's face it, unless you take them to the track, which I have, cars like this are simply a waste of performance driven on the street legally). I went halves on a 34' sailboat with a friend who wanted to upgrade, I've since walked away from my part and left it to him. It's been for sale for two years and I just don't care. I have NO interest in a second home, we scratch that itch by renting a huge house for the family once a year at the beach. Pay two women to come in and clean every other week and I think it's waste but DW thinks it's essential, I'm fine with that. Food? Don't care about the cost and have done Robbie meals but if I'm going to keep my BMI acceptable I can only blow dough on steak and lobster once in a while. Eating out? It's OK once in a while but get tired of even what are some great places around here. Splurged on a mtn bike $5k and try to wear it out but it's winning; wearing me out. OK, splurged on a new helmet finally for $150 (with a go pro mount even!) to replace the one I banged up several years ago. Hmm, DW did have some ah, elective surgery.

Just starting to ramble there, but I've written before, if it doesn't have value to me, I'm not going to spend it just because....I can. So, look for causes that matter and let it grow for the family. Not inclined to fund the 6 grandchildren's education yet (oldest is 7 years away) but when time comes will help there. Our lives now center around staying healthy (both 68) and enjoying that we have been very fortunate in many ways. If we find expensive things we'd like to do we're all in. OK, gotta go get some exercise.

 

[ckelly78z]

^^^Totally agree with the charitable spending, you will not believe the self satisfaction of helping the under privileged, and come to understand that you will get as much out of it as they do. I also like the idea of making my children, and grandchildren's lives easier while I am still alive to witness it.

 

[euro]

If I were in that range, I'd be focusing on where to place my considerable donations

This!!!!!

 

[kgtest]

After an initial panic-induced cutback (involuntary RE in '05), we slowly drifted back to our standard spending post the '08 recovery.

Lobsters around here are fairly cheap however; just bought 4 lobsters last week for $30 from the fish monger; cheaper than steak!

Our annual fat spending includes our winter home in Florida, some pretty expensive overseas travel (3 this year but usually just once), a good sized sailboat, leases on 2 luxury cars, and DW's health insurance.

We also live in a HCOL area which doesn't help. We also renovated our kitchen last year and are aiming for a new bathroom this fall.

Thankfully, our nephew graduated college this year so no tuition to pay for him but the seven adult nieces and nephews still run us about $10K a year in out of pocket stuff.

As I'm writing this all down, I'm saying to myself 'holy crap!' The good news I suppose is that there are a lot of areas we could cut if we had to create some personal deflation.

You are generous. My FIL is a Dr, DF a multi millionaire...and my sisters... hhahah! I would love to see them spend 10k on there family members YEAH RIGHT! They give about $20-30 for xmas and the kid's bday's.

In laws are the exception...they spend $200 on xmas and we get a $200 check for our bday's. I just put them into 529 since we don't need the dough...but damn I would take that 10k...send some our way!

Come to think of it, not a single sibling on either side has ever offered up anything extra beyond just bday gifts and xmas. You are an awesome Human!

 

[unclemick]

I would eat myself stupid if I lived in NOLA.

193 lbs. 400 cholesterol. Post Katrina my 1st Doc in Missouri was from Metaire.
Had to take pills and lose weight to shape up for BBQ.

heh heh heh - still +25 lbs higher than I'd like.

P.S. When DW's older Brother passed the Farm had five outbuildings plus a sawmill of 30 plus years of 'blow that dough'. Now after a farm auction the 'empty' buildings are magically accumulating more 'stuff'. I think there is an old comedy routine that covers that. ?George Carlin?

 

[Travelwanted]

DawgMan,

I am supposed to be ER now but was asked to stay on a bit longer while they find my replacement. Our numbers support 300+k/yr incl. tax. Yet I am budgeting far less at around 180-200k. I just don't feel comfortable spending that much but perhaps as I gain more confidence that will change.

1-I think my frugal (not cheap) and conservative ways will prevent me from ever hitting 300k/year on a regular basis.

2- Definitely consider a Donor Advised Fund if you are so inclined. I plan to open one this year. It is better if you do it pre-retirement so you can take advantage of being in a higher tax bracket.

3- I plan to splurge by taking the family on epic trips: Galapagos, Bali, Patagonia, African safari, Oceania, etc. I am a big believer in experiences are where it makes the most sense to go big. Memories with loved ones is priceless! The older I get "things" aren't as important to me - probably because I've had many of the fancy things.

4- If you are a Dawg fan as your handle suggests - go for club level seats or trips to away games in first class. (I assume you already have season tickets)

5- Do small, nice gestures for friends and family: pick up the tab, buy them a bigger gift than usual, send someone a nice surprise just because. Spending it on others will likely be very rewarding to you emotionally.

Let us know how you do it!

 

[NW-Bound]

I would eat myself stupid if I lived in NOLA.

193 lbs. 400 cholesterol. Post Katrina my 1st Doc in Missouri was from Metaire.
Had to take pills and lose weight to shape up for BBQ.

heh heh heh - still +25 lbs higher than I'd like.

When does pleasure become pain?

It takes some experimentation to find the right level.

 

[Mdlerth]

Consider blowing your dough on more investments

Let me be the voice of one crying in the wilderness: if you don't spend all your money, that does NOT mean it was wasted!

If you've got 300k burning a hole in your pocket, it's okay to just leave some of it there in the portfolio. Econ 101 will tell you that every minute of every day, somebody is benefitting from your accumulated capital.

All the money you leave out there in play in equities and bonds and CDs and REITs... all that dough is busy making the world a better place. It's what funds the building of factories and ships. It's what pays for the w*rkers who make the pipe to build the pumping stations to bring clean water to people who live in remote corners of the world. It's what hires the researchers who develop medical miracles and green energy.

Okay, I'm done preaching and about to start meddling. Three hundred large is a tidy allowance, but it's by no means infinite. Plenty of celebrities manage to spend as much and more without breaking a sweat. Most of them are cement-heads. Don't emulate them. Whatever you spend, do it wisely.

Good luck, and enjoy your FatFIRE.

 

[Midpack]

^^^Totally agree with the charitable spending, you will not believe the self satisfaction of helping the under privileged, and come to understand that you will get as much out of it as they do. I also like the idea of making my children, and grandchildren's lives easier while I am still alive to witness it.

I agree completely but...

None of us can know how our nest egg will hold up at the end - many, many years from now for most here I presume. Odds are we still have 25-30 years before we both go poof, possibly more. So we give as much as we dare, and it's personally rewarding, but we don't give as much (or spend in general for the matter) as SWR says we could. We'd love to give more. The whole spending question is a big crap shoot for anyone who's not mostly/all SIRE.

 

[F4mandolin]

Boat.....horse.....child......all the same. For me.....golf and junk food.

 

[pacergal]

Dawgman--Congratulations on your upcoming retirement! If this is significantly above your normal spending, you may have a harder time, especially if you are already wondering.

Set your budget, enjoy your retirement, travel, have fun, donate to charity. You don't have to spend money just to spend it, do what you want because you want too and it brings joy to your life.

 

[kcowan]

Dawg
I think if you have to ask, you are overthinking it.

My advice:

Spend without regard to costs for a couple of years, then do a lookback and see how you did. Adjust accordingly.

And like others have said, look at contributions that might give you pleasure. Our friends established a million dollar scholarship and got an honourary PhD in return plus many other props.

 

[GrayHare]

A full time butler/maid/personal assistant should be able to help solve an excess cash situation.

 

[marko]

You are generous.

Come to think of it, not a single sibling on either side has ever offered up anything extra beyond just bday gifts and xmas. You are an awesome Human!

Thanks, but no. I'm a sap. What turned out to be a 'bit of help' for 3 out of the 7 nieces/nephews has evolved over the past 30 years into pure and simple enabling.

We thought we'd be done with the handouts by now but DN has just announced she's preggers (again) so off we go to the next generation of neediness.

We did cover the nephew's tuition which has turned out (so far) to have been money well spent.

The other 4 (from the other family) never asked for and never needed anything from us and are successful, delightful and self sufficient people. Goes to show.......

 

[Sojourner]

I have been fortunate to make a good living for many years while living significantly below my means. That said, I am planning for a min withdrawal of $300K/yr gross

You have said you LBYM while working, but since I don't know what you made or spent, I guess my first question is: does the $300k/yr represent a huge increase in what you have been spending, or is it close to you normal spend while working.

I think this is the key question. Since you were living "significantly below your means" for many years prior to ER, you may find that you are naturally quite frugal and thus won't be able to spend $300k/year very comfortably. I know this is the case with me, even though my numbers are only about half of what yours appear to be. My LBYM nature just doesn't lend itself to spending the full amount that FIRECalc and other tools/calculators say that I can. Yet I'm quite content and don't really want for anything. Sometimes I splurge on an expensive bottle of wine or upgraded seats on airplanes or nicer hotel rooms, but generally I'm a bargain hunter and get more pleasure out of finding a good deal. Shifting suddenly from a long-standing, frugal, LBYM lifestyle to a "fat FIRE" lifestyle filled with the proverbial champagne, caviar, and lobsters is usually not straightforward or easy for us FIRE types. My advice would be: Don't force it, just spend what feels natural and doesn't make you anxious, and see how it goes.

 

[W2R]

But, but, but..... Dream House! New recliner! Eating lunch out every day!

The level of comfort of one's recliner is inversely proportional to the amount of dough that one blows.

NOW they tell me! And yes, my $599 recliner is sooooooo comfortable... But I thought that was a lot of dough to blow on a recliner.

I would eat myself stupid if I lived in NOLA.

I would do that too, except that if I did my weight problem would be even worse than it already is. Such a dilemma. What I do is try to eat wisely most of the time, and go nuts once in while but not too often. At least when I go nuts it's not on processed junkfood like Twinkies and Ho-Ho's. It's on things like chicken breast parmigiana, étouffée, gumbo, or something like that.

Today for lunch I had a small caesar side salad, with plain water to drink. As a big treat I had them add a little grilled chicken on top. Ah....!!!

 

[Dtail]

But, but, but..... Dream House! New recliner! Eating lunch out every day!

Time to start eating out dinner.

 

[W2R]

Time to start eating out dinner.

Now there's a possibility!