Awesome entry which I obviously missed in the past.
I've been fantasizing about the 5% rule in combination with a savings account.
I like the 5% rule because if I retire early and live long, my reasonable spending level isn't that much different that if I assume an infinite life span. So I just go ahead and assume that.
I'd start with maybe 5% or 10% of my retirement funds in a savings account. If stocks seem overpriced at retirement, I'd sell some to increase the savings account. From that point on, I'd take out the same percentage every month. If it was more than I needed, I'd put the extra into savings. If it was less than I needed, I'd take the extra from savings.
The difference is that in my fantasies, I'd be taking out 7% per year, not 5%. I decided this back when people felt the market averaged 10% returns and inflation averaged 3% thus leaving 7% to withdraw.
When I was younger I used to travel a lot. Since then I have settled in a couple of places. NY is my permanent home. However, I have friends n acquaintences all over the world including Bali n your beautiful Aussie land. Makes friends at all the places u want to see, all the countries I travel to I always let them know they r welcome to stay at my home in NY whenever they want to visit. So far, only about 8 have made it here. But I have certainly put many tacks on my world map without incurring the costs of hotels, car rentals n meals. It's not miserly, it's frugal n smart because my friends r welcome to do the same.
I think that people in general should be outraged by the difference in the income of their profession as well as others...
If you think about it, you can be BROKE and still be rich (like Donald Trumph) and you can have a huge income and still be BROKE (when you are living your lifestyle based on debt)...
So, the real question is not how much you make (which incidentally should be a social issue as to the gap between CEOS and polititians vs. regular hard working people) but, how much you need to support your lifestyle.
And to answer the specific question, YES, people are always surprised when I tell them that I have NO job and therefore NO steady income even though I have 3 bachellors degrees, one masters degree and two graduate certificates... However, I have NO debts, and I have a house and a car... I can manage...
"So a man should happily turn over his money for a relationship? There's a name for women that feel this way, they're even legal in Nevada."
Did you read my comment? I said meaningful relationships.
Whether being married is more expensive than being single is not the point. Anything worthwhile in life will cost you something, whether money, time, emotional investment, etc. No, I am not advocating handing over all your major credit cards to the first woman that comes along, but if you can't understand that to be in a worthwhile relationship will cost you something, then you truly are better off alone.
One of my friends likes to calculate where he can afford to retire. At first, he could only afford very poverty-stricken third-world countries.
Or you could think of the lifestyle you could afford. The person with $80,000 savings might be able to afford to retire as a homeless person who can get their food from a grocery store rather than dumpsters, get their clothes from thrift shops instead of dumpsters, buy all the ibuprofin and band-aids they need, and take an occasional bus ride. Or maybe live out of an old car and practice a little freganism.
Another point is that many people have a lot of expenses connected with employment (such as fancy clothes and dry cleaning expenses, office parties, and commuting expenses) that will disappear when they retire.
So glad somone posted on the negative aspects of mineral oil -- I've read research saying it also does something (depletes? blocks production of?) to vitamin D, osrry, don't remember the cite, so I haven't used any skin product with mineral oil in it for years. Glycerin is much better...unless someone knows a reason against it, as well? Frankly, I use almond oil.
My husband and I made very little money for a long time - both of us free-lance artists, and well, that kind of explains it. We said back then that if we were ever to make decent money, we would continue to live frugally and live way below our means. Over the last 5+ years we have made a very good income, and we stayed true to our initial thinking and we continue to live the same way. We just live very modestly - we have no stress over money-matters, and we are content and thankful for what we have. I hope that no matter what happens income-wise in the future, that we can continue to just be living in this fashion. I think it is a healthy way to go all the way around, and you will have more to give to others.
My husband and I made very little money for a long time - both of us free-lance artists, and well, that kind of explains it. We said back then that if we were ever to make decent money, we would continue to live frugally and live way below our means. Over the last 5+ years we have made a very good income, and we stayed true to our initial thinking and we continue to live the same way. We just live very modestly - we have no stress over money-matters, and we are content and thankful for what we have. I hope that no matter what happens income-wise in the future, that we can continue to just be living in this fashion. I think it is a healthy way to go all the way around, and you will have more to give to others.
Beware of booking with Spirit Airlines in general. I flew Spirit for work purposes and used my employer's credit card to book the trip back in May '08. I moved out of Florida eight months ago and now live 450 miles from an airport where Spirit flies. Spirit sent me an email a week ago stating that I joined their $9 fare club in July '09 and used the employer's credit card to do it. The former employer called curious to see why I've been charging airline club memberships to their account. I have no idea how that happened and would have never signed up for it voluntarily, especially with someone else's credit card which is not in my possession! Spirit still doesn't have a customer service center where you can report these things so I also spoke with someone located in India who was useless. DON'T BOOK WITH SPIRIT UNLESS YOU INTEND TO JOIN THE $9 FARE CLUB because Spirit will use your credit card later to do it for you. Crooks.
I probably earn more than others think I do. I consider my income to be private and won't disclose it unless absolutely necessary, but I tend to go super frugal in most of the things I do. My roommate once asked me if I was running out of money during a point in time when my savings rate was about as high as it has ever been.
Man, thats really taking it to the next level! Probably need a couple of shots of the strong stuff before you try that out. I've been looking for some at home tattoo removal cream. There's a lot out there and none of them are really cheap. Has anyone ever heard of TAT-Med? It looks like a complete scam. They've made a website called the Skin Health Association thats supposed to look unbiased and compare different fade away creams, but theres too much propaganda about themselves for it to be a real website. Of course, they rate themselves number one but their product doesn't even sound real when you read the ingredients list.
There are soo many applications to help you with your money (and time) management.
The ones I use are:
Grocery Gadget - (free and paid) allows you to create shopping lists on the go and while at a computer through their web portal. Instrumental when planning parties with friends - each gets their own list and we can see exactly what we need while at the store. I like that it'll keep track of the $ amount in the list AND in your cart, so you know exactly how much you are spending before you get to the check out!
Quicken online - (Free!) There's a bit of work/setup to do but on the go, you can get a snapshot of how your finances are looking and how far you've gotten on your goals. It also allows you to add in cash purchases right then and there, so you don't forget where that $5 went!
Road Trip - (free and paid) gas mileage, expense and trip manager. Great way to keep track of the $ you spend on gas, where you bought it, the miles/gallon (or km/liter) you get on your car. The premium version allows you to keep track of multiple cars too!
AppMiner - (free) save on those Applications! This will show you the up and coming applications, ones that recently went on sale and allow you to 'watch' those applications you really want to buy but do not want to spend money on.
I also use my calendar feature with Google Calendar to remind me when bills are due, anniversaries/birthdays are close, etc, so that I can keep ahead of things.
I would always talk about the "bargain" I got and compare couponing stories with my sister and mom and one day we were talking about a friend that was having serious money troubles. Then my sister said something that got me laughing. she told me that her friend's husband makes the same as me, approx. $60K ayear. I set the record straight that I make under $40K per year. Imagine her surprise that I make that amount and still pay my bills, get groceries, save money and add a little to my mortgage every month and payed my husband's medical bills!! I love shocking people with the news that you can live a "lifestyle" no matter how much or how little you make.
This is really good food for thought. But personally, I don't ever want to stop doing something that brings in the money... Because I want to end up having income from my passions. :) I know I'm a bit of an idealist, but it can't hurt just a bit, can it?
I agree with Kristen. We do this too. We go through so much water waiting for the hot to come up from the basement so we fill bottles and use it for the same kinds of things. I even save the water from the canning pot after I have canned a bunch of salsa or tomatoes and water the flowers /shrubs outside with it after it cools down. It actually SAVES me time not having to wait to fill up the watering can outside with the hose!
A few weeks ago I was at a convention with my husband and we decided to meet some friends for dinner at a nice restaurant in the hotel. I had an injured foot and couldn't handle walking to one of the other restaurants downtown. When we arrived, we were told that they were only seating people with reservations and were turning away all the walk-up convention-goers. So... I went around the corner and got a reservation through the OpenTable app. When our friends arrived, we walked up again and said we were early. Of course, we were seated right away. :) To the iPhone and OpenTable - my foot thanks you!
I got RIFed in March & we moved back home (to Vermont). We are trying to sell our home in NY state (been under contract twice & will probably take another 6 months to sell). Now we live in a tiny furnished apt but after months of spreadsheets finally woke up & realized we could get a mortgage on a condo in a small town for less than half of our rent in the city. I'm retirement age (62) next year so will start SS ... we have become very frugal out of necessity. We've gone from a very comfortable 6 figure living where I was the main breadwinner to 30k a year and my severance pay which is ending this month (25 years w/ company). It's been such a huge change for both of us as far as roles within our relationship and our budget ... but we have always been frugal as far as carrying no debt (except for a mortgage). Once we do get the NY house sold we'll pay off the condo mortgage too and be really debt free ... then we'll really be able to say we live on next to nothing and surprise even ourselves. And with the new law in Vermont my spouse & I can finally get married after 20 years together. Nobody has any idea how much we made and how far we've dropped, from the outside our lifestyle wouldn't appear to have changed that much. But it did.
We live in a very exclusive township which used to be primarily an agricultural (read: "farmers") area. We bought our property (where my husband grew up) from my husband's mother for very little and proceeded to upgrade the two bedroom rancher to a 4 bedroom cape cod with a mother-in-law apartment with the money we realized from the sale of our former house. The house now fits the area as it is today. The only clue to our "lower than the neighbors" income that may be apparent is that we have not yet been able to install a great deal of landscaping. We drive reasonable vehicles which we keep in top condition. Our furniture is almost completely second-hand and I decorate with thrift shop finds. We maintain an extensive vegetable garden and I can almost everything we grow. I am an avid coupon user and buy meats almost exclusively from the reduced bin. We entertain at home mostly, but do eat out about once a month using coupons. I'm fairly sure our neighbors would be surprised to find out how much lower our income is than the average for the area.
I am kind of embarrassed at the amount of debt and our living arrangement, considering how much my husband and I make. I can't figure out where it all goes, or how other people live as well as they do making as much as we do. People would be surprised to know how much we make.
My co-worker and I do fundraising for non-profit organizations, employed by a non-profit. We're expected to present a professional appearance as we move among executives in our county, and we manage to do so - but it's an illusion. We shop at resale shops, deep discount stores and garage sales, barely making our monthly family expenses while helping relatives who are in more difficult straits that even we are. Most people we deal with would not believe it, but we qualify for many of the government and charitable services for which we are raising money, including free medical care (we have no benefit package on our job). We usually end each pay period with just a dollar or two in our pockets (sometimes from returning bottles to the grocery store or cashing in our saved loose change). Fortunately, we are dedicated to the work we do and would not change it for a bigger paycheck. We deal with people daily who are far worse off than we are, and it helps keep everything in perspective.
Philip--This is an oustanding post! The financial/investment industry has people needing millions to retire, but statistically, the vast majority of retirees will never come close to that! Does that mean their out of luck? Hardly!
The majority of people retired right now don't have seven figure retirement accounts, and I'd guess the majority don't have six figures either (statistically, this is true). But somehow they manage to survive.
So they lower their living costs and supplement their retirement incomes with employment income. Not the optimal situation of course, but who said life is ever perfect?
This post is encouraging to the many who don't have the fat retirement accounts. There's always hope!
Great post. I work in the financial sector of the business world and see a lot of immigrants that strive for the "American Dream" and fall in to the trap of being far in debt and overspending. This is a refreshing view that I really am in line with. My parents were frugal growing up and I take that with me in my adult life. Thanks again for the great perspective.
Awesome entry which I obviously missed in the past.
I've been fantasizing about the 5% rule in combination with a savings account.
I like the 5% rule because if I retire early and live long, my reasonable spending level isn't that much different that if I assume an infinite life span. So I just go ahead and assume that.
I'd start with maybe 5% or 10% of my retirement funds in a savings account. If stocks seem overpriced at retirement, I'd sell some to increase the savings account. From that point on, I'd take out the same percentage every month. If it was more than I needed, I'd put the extra into savings. If it was less than I needed, I'd take the extra from savings.
The difference is that in my fantasies, I'd be taking out 7% per year, not 5%. I decided this back when people felt the market averaged 10% returns and inflation averaged 3% thus leaving 7% to withdraw.
But five percent? Dang!
When I was younger I used to travel a lot. Since then I have settled in a couple of places. NY is my permanent home. However, I have friends n acquaintences all over the world including Bali n your beautiful Aussie land. Makes friends at all the places u want to see, all the countries I travel to I always let them know they r welcome to stay at my home in NY whenever they want to visit. So far, only about 8 have made it here. But I have certainly put many tacks on my world map without incurring the costs of hotels, car rentals n meals. It's not miserly, it's frugal n smart because my friends r welcome to do the same.
I think that people in general should be outraged by the difference in the income of their profession as well as others...
If you think about it, you can be BROKE and still be rich (like Donald Trumph) and you can have a huge income and still be BROKE (when you are living your lifestyle based on debt)...
So, the real question is not how much you make (which incidentally should be a social issue as to the gap between CEOS and polititians vs. regular hard working people) but, how much you need to support your lifestyle.
And to answer the specific question, YES, people are always surprised when I tell them that I have NO job and therefore NO steady income even though I have 3 bachellors degrees, one masters degree and two graduate certificates... However, I have NO debts, and I have a house and a car... I can manage...
@Guest
"So a man should happily turn over his money for a relationship? There's a name for women that feel this way, they're even legal in Nevada."
Did you read my comment? I said meaningful relationships.
Whether being married is more expensive than being single is not the point. Anything worthwhile in life will cost you something, whether money, time, emotional investment, etc. No, I am not advocating handing over all your major credit cards to the first woman that comes along, but if you can't understand that to be in a worthwhile relationship will cost you something, then you truly are better off alone.
Great article! Thanks for listing suggestion sites! No one does that and I have never heard of elance!
where is the nearest Walgreen that does refills that is closet to copperas cove
One of my friends likes to calculate where he can afford to retire. At first, he could only afford very poverty-stricken third-world countries.
Or you could think of the lifestyle you could afford. The person with $80,000 savings might be able to afford to retire as a homeless person who can get their food from a grocery store rather than dumpsters, get their clothes from thrift shops instead of dumpsters, buy all the ibuprofin and band-aids they need, and take an occasional bus ride. Or maybe live out of an old car and practice a little freganism.
Another point is that many people have a lot of expenses connected with employment (such as fancy clothes and dry cleaning expenses, office parties, and commuting expenses) that will disappear when they retire.
So glad somone posted on the negative aspects of mineral oil -- I've read research saying it also does something (depletes? blocks production of?) to vitamin D, osrry, don't remember the cite, so I haven't used any skin product with mineral oil in it for years. Glycerin is much better...unless someone knows a reason against it, as well? Frankly, I use almond oil.
If one had actually invested in the above, they would be sitting pretty now!
My husband and I made very little money for a long time - both of us free-lance artists, and well, that kind of explains it. We said back then that if we were ever to make decent money, we would continue to live frugally and live way below our means. Over the last 5+ years we have made a very good income, and we stayed true to our initial thinking and we continue to live the same way. We just live very modestly - we have no stress over money-matters, and we are content and thankful for what we have. I hope that no matter what happens income-wise in the future, that we can continue to just be living in this fashion. I think it is a healthy way to go all the way around, and you will have more to give to others.
My husband and I made very little money for a long time - both of us free-lance artists, and well, that kind of explains it. We said back then that if we were ever to make decent money, we would continue to live frugally and live way below our means. Over the last 5+ years we have made a very good income, and we stayed true to our initial thinking and we continue to live the same way. We just live very modestly - we have no stress over money-matters, and we are content and thankful for what we have. I hope that no matter what happens income-wise in the future, that we can continue to just be living in this fashion. I think it is a healthy way to go all the way around, and you will have more to give to others.
Beware of booking with Spirit Airlines in general. I flew Spirit for work purposes and used my employer's credit card to book the trip back in May '08. I moved out of Florida eight months ago and now live 450 miles from an airport where Spirit flies. Spirit sent me an email a week ago stating that I joined their $9 fare club in July '09 and used the employer's credit card to do it. The former employer called curious to see why I've been charging airline club memberships to their account. I have no idea how that happened and would have never signed up for it voluntarily, especially with someone else's credit card which is not in my possession! Spirit still doesn't have a customer service center where you can report these things so I also spoke with someone located in India who was useless. DON'T BOOK WITH SPIRIT UNLESS YOU INTEND TO JOIN THE $9 FARE CLUB because Spirit will use your credit card later to do it for you. Crooks.
I probably earn more than others think I do. I consider my income to be private and won't disclose it unless absolutely necessary, but I tend to go super frugal in most of the things I do. My roommate once asked me if I was running out of money during a point in time when my savings rate was about as high as it has ever been.
Man, thats really taking it to the next level! Probably need a couple of shots of the strong stuff before you try that out. I've been looking for some at home tattoo removal cream. There's a lot out there and none of them are really cheap. Has anyone ever heard of TAT-Med? It looks like a complete scam. They've made a website called the Skin Health Association thats supposed to look unbiased and compare different fade away creams, but theres too much propaganda about themselves for it to be a real website. Of course, they rate themselves number one but their product doesn't even sound real when you read the ingredients list.
Have a look for yourselves and let me know what you guys think.
http://skinhealthassociation.com/products/tat-med.html
There are soo many applications to help you with your money (and time) management.
The ones I use are:
Grocery Gadget - (free and paid) allows you to create shopping lists on the go and while at a computer through their web portal. Instrumental when planning parties with friends - each gets their own list and we can see exactly what we need while at the store. I like that it'll keep track of the $ amount in the list AND in your cart, so you know exactly how much you are spending before you get to the check out!
Quicken online - (Free!) There's a bit of work/setup to do but on the go, you can get a snapshot of how your finances are looking and how far you've gotten on your goals. It also allows you to add in cash purchases right then and there, so you don't forget where that $5 went!
Road Trip - (free and paid) gas mileage, expense and trip manager. Great way to keep track of the $ you spend on gas, where you bought it, the miles/gallon (or km/liter) you get on your car. The premium version allows you to keep track of multiple cars too!
AppMiner - (free) save on those Applications! This will show you the up and coming applications, ones that recently went on sale and allow you to 'watch' those applications you really want to buy but do not want to spend money on.
I also use my calendar feature with Google Calendar to remind me when bills are due, anniversaries/birthdays are close, etc, so that I can keep ahead of things.
I would always talk about the "bargain" I got and compare couponing stories with my sister and mom and one day we were talking about a friend that was having serious money troubles. Then my sister said something that got me laughing. she told me that her friend's husband makes the same as me, approx. $60K ayear. I set the record straight that I make under $40K per year. Imagine her surprise that I make that amount and still pay my bills, get groceries, save money and add a little to my mortgage every month and payed my husband's medical bills!! I love shocking people with the news that you can live a "lifestyle" no matter how much or how little you make.
This is really good food for thought. But personally, I don't ever want to stop doing something that brings in the money... Because I want to end up having income from my passions. :) I know I'm a bit of an idealist, but it can't hurt just a bit, can it?
I agree with Kristen. We do this too. We go through so much water waiting for the hot to come up from the basement so we fill bottles and use it for the same kinds of things. I even save the water from the canning pot after I have canned a bunch of salsa or tomatoes and water the flowers /shrubs outside with it after it cools down. It actually SAVES me time not having to wait to fill up the watering can outside with the hose!
A few weeks ago I was at a convention with my husband and we decided to meet some friends for dinner at a nice restaurant in the hotel. I had an injured foot and couldn't handle walking to one of the other restaurants downtown. When we arrived, we were told that they were only seating people with reservations and were turning away all the walk-up convention-goers. So... I went around the corner and got a reservation through the OpenTable app. When our friends arrived, we walked up again and said we were early. Of course, we were seated right away. :) To the iPhone and OpenTable - my foot thanks you!
I got RIFed in March & we moved back home (to Vermont). We are trying to sell our home in NY state (been under contract twice & will probably take another 6 months to sell). Now we live in a tiny furnished apt but after months of spreadsheets finally woke up & realized we could get a mortgage on a condo in a small town for less than half of our rent in the city. I'm retirement age (62) next year so will start SS ... we have become very frugal out of necessity. We've gone from a very comfortable 6 figure living where I was the main breadwinner to 30k a year and my severance pay which is ending this month (25 years w/ company). It's been such a huge change for both of us as far as roles within our relationship and our budget ... but we have always been frugal as far as carrying no debt (except for a mortgage). Once we do get the NY house sold we'll pay off the condo mortgage too and be really debt free ... then we'll really be able to say we live on next to nothing and surprise even ourselves. And with the new law in Vermont my spouse & I can finally get married after 20 years together. Nobody has any idea how much we made and how far we've dropped, from the outside our lifestyle wouldn't appear to have changed that much. But it did.
We live in a very exclusive township which used to be primarily an agricultural (read: "farmers") area. We bought our property (where my husband grew up) from my husband's mother for very little and proceeded to upgrade the two bedroom rancher to a 4 bedroom cape cod with a mother-in-law apartment with the money we realized from the sale of our former house. The house now fits the area as it is today. The only clue to our "lower than the neighbors" income that may be apparent is that we have not yet been able to install a great deal of landscaping. We drive reasonable vehicles which we keep in top condition. Our furniture is almost completely second-hand and I decorate with thrift shop finds. We maintain an extensive vegetable garden and I can almost everything we grow. I am an avid coupon user and buy meats almost exclusively from the reduced bin. We entertain at home mostly, but do eat out about once a month using coupons. I'm fairly sure our neighbors would be surprised to find out how much lower our income is than the average for the area.
I am kind of embarrassed at the amount of debt and our living arrangement, considering how much my husband and I make. I can't figure out where it all goes, or how other people live as well as they do making as much as we do. People would be surprised to know how much we make.
My co-worker and I do fundraising for non-profit organizations, employed by a non-profit. We're expected to present a professional appearance as we move among executives in our county, and we manage to do so - but it's an illusion. We shop at resale shops, deep discount stores and garage sales, barely making our monthly family expenses while helping relatives who are in more difficult straits that even we are. Most people we deal with would not believe it, but we qualify for many of the government and charitable services for which we are raising money, including free medical care (we have no benefit package on our job). We usually end each pay period with just a dollar or two in our pockets (sometimes from returning bottles to the grocery store or cashing in our saved loose change). Fortunately, we are dedicated to the work we do and would not change it for a bigger paycheck. We deal with people daily who are far worse off than we are, and it helps keep everything in perspective.
Philip--This is an oustanding post! The financial/investment industry has people needing millions to retire, but statistically, the vast majority of retirees will never come close to that! Does that mean their out of luck? Hardly!
The majority of people retired right now don't have seven figure retirement accounts, and I'd guess the majority don't have six figures either (statistically, this is true). But somehow they manage to survive.
So they lower their living costs and supplement their retirement incomes with employment income. Not the optimal situation of course, but who said life is ever perfect?
This post is encouraging to the many who don't have the fat retirement accounts. There's always hope!
Great post. I work in the financial sector of the business world and see a lot of immigrants that strive for the "American Dream" and fall in to the trap of being far in debt and overspending. This is a refreshing view that I really am in line with. My parents were frugal growing up and I take that with me in my adult life. Thanks again for the great perspective.