W2R
Moderator Emeritus
Every day in every way, life is getting better.
Ha
But are you choosing to LBYM these days?
Every day in every way, life is getting better.
Ha
I've been fully finding a Roth each year out of my pension earnings and will continue to do so until my DW retires in 5 years. I have not wanted for anything - in fact I spend more freely now than before I retired.
Although pension income is not, he can contribute based on the spouse's earnings.
A portfolio that is mainly dependent on dividends from quality companies which are able to grow their well covered dividends will usually show an increasing income, and over time an increasing priciple value, even if you spend every dollar of dividends.Most folks will have to add money to their "principal" in order to have it keep up with inflation. If you are spending all your gains annually on average, then you are probably not problem-free unless you are old. Of course, "gains" is more than just dividends and interest in a portfolio with at least some equities. And "gains" could be "losses" in 1/4th to 1/3rd of the years on average.
Most folks will have to add money to their "principal" in order to have it keep up with inflation. If you are spending all your gains annually on average, then you are probably not problem-free unless you are old. Of course, "gains" is more than just dividends and interest in a portfolio with at least some equities. And "gains" could be "losses" in 1/4th to 1/3rd of the years on average.
In fact you add to that principal each year so it grows.
I do believe most of in this forum have LBYM. However, as for me, during my ER if there are surplus available, I intend to splurge. I have never flown first class oversea. I have flown first class domestically couple of time from cheap upgrade but I would like to flow first class to Thailand or Philippines if I have surplus during my ER. I have to get to ER first but that's another story.Yes.
Seriously, been LBYM since I finished college and this old dog is slow to learn new tricks. Between global economic uncertainty, the value of the dollar and it's exchange rate with the Thai Baht I see no reason to splurge. Though now that I'm back into photography after many years I'm beginning to turn my lust for a DSLR into semi-rational reasons why it would be good for me.
It makes no sense to let the principal grow for those of us without DW / DH or heirs. Unless you plan to leave some money for non profit organizations or some of your close friends...
I want to leave money to a couple of theaters and my nieces. Another reason for LBYM in ER is to ensure 100% success for my ER financing plan.
That sounds suspiciously like either "extreme ER" or "work until you drop".
I wouldn't hesitate to spend a little principal if it'd improve our lives... or someone else's. But sorry, we're no longer taking applications.
Perhaps it does not, in a world of absolute predictability. In our world, it makes sense, especially if it does not truly pinch you.It makes no sense to let the principal grow for those of us without DW / DH or heirs...