I just thought I would present a view of this income issue from a little different angle.I have run the numbers for my current lifestyle and I spend significantly more than 22K per year. I still live below my means, as I'm saving enough to conservatively retire early. In fact, I could retire VERY early. But I've made the decision to shoot for early (not VERY early), and here's why.There is no doubt in my mind that I want to retire early, and move from the day-to-day hassle that's corporate America. However, there will be a significant period of time (say, 10 years) between now and when I retire. I am going to wring every bit of "early retirement" out of this decade that I can, while still being employed.I watch where every dollar goes, and frivolous purchases are rare. The remainder goes toward funding my early retirement (yet to come), and my frequent mini-retirement (every chance I get).However...I estimate that I take 10 vacations a year. Most are inexpensive, and most are weekends. A few are out of state and even out of the country.And if I want the caffe mocha that's $3.50 just cuz it's there and it tastes great, I'm going to get it. Just not every day.To me, it's not worth moving the early retirement date in, at the expense of my peace of mind now. And by not sacrificing too much today for later rewards, I am able to maintain my quality of life while putting off freedom until such date as I can achieve the same level of comfort in retirement.There's a balance here... finding the right level of sacrifice now, while maintaining a high quality of life and providing for the future. Just my take.
Totally agree Ridin....there's also that dreaded "what if I get hit by a bus next Tuesday?" None of us know how long we're going to live and by the age of 50 or so most of us probably have had several friends or acquaintances our age that didn't make it. A sobering experience. LBYM is a really good idea, however....there's a happy medium here somewhere. Having "it all" at the expense of investment and savings makes no sense but prioritizing and using budgeted fun money wisely (it sounds like you're doing that) makes a lot of sense. Financial planning would be SO easy if you just knew how long you were going to live and what kind of resources you will need when you finally get sick! Many of us go crazy watching fairly affluent parents counting every dime at the age of 70 or so. Perfectly understandable when your options seem to be a nursing home, hospice or private duty nurses. The issues keep changing along with the decades. It's just exhausting. :-)
<<There is no doubt in my mind that I want to retire early, and move from the day-to-day hassle that's corporate America. However, there will be a significant period of time (say, 10 years) between now and when I retire. I am going to wring every bit of "early retirement" out of this decade that I can, while still being employed.>> Ooooh! Good point. Personally, I went through a twenty year period of maximizing my income, savings and investments. Now, I don't need to do that anymore. I am going to continue working, but on the terms that I wish to the greatest extent possible. It sounds as though you have options and flexibility in how you construct your word day, week, month and year. Taking advantage of that flexibility sounds like an interesting plan. Applying for a sabbatical, leaves of absence, stringing out maternity leaves, family leave and so on could probably be carried out to rather dramatic levels by a determined employee. (How an employer can ever keep track of Federally mandated family leave is more than I could understand.)I suppose you would risk losing favored job assignements and bonuses and such if you employed this strategy in a way that attracted the annoyance of the powers that be. But heck! If it became too stressful, you could get a note from a doctor and take an additional week or month off work until you felt better, I suppose.
There's a balance here... finding the right level of sacrifice now, while maintaining a high quality of life and providing for the future. Just my take.I feel the same way. Growing older and confronting one's mortality does put a new spin on appreciating the present. And if that and the mirror weren't enough of a reality check, having an 87 year old mother who regularly sings with sly gusto "enjoy yourself, it's later than you think" will impel one to try and keep somewhat on track.So with these forces as my tail wind, I do try, while attempting to secure my future, to make sure I experience and appreciate the even more elusive today.
To me, it's not worth moving the early retirement date in, at the expense of my peace of mind now. And by not sacrificing too much today for later rewards, I am able to maintain my quality of life while putting off freedom until such date as I can achieve the same level of comfort in retirement. There's a balance here... finding the right level of sacrifice now, while maintaining a high quality of life and providing for the future.I will be able to retire in a couple of months, at the age of 47 after a career spanning 26 years, by living a financial life similar to what you outline above (and some good fortune in the stock market). I always maxed out my 401(k) contributions, paid myself first, bought on sale, used coupons religiously, and traveled economy class. I've been on some incredible trips, drove decent, well maintained cars, lived in nice places, enjoyed dinner out at least once a week, happy hours with friends, and latte's at Starbucks on occasion, and even managed to raise a kid. I don't feel like I sacrificed a thing, I was just smart, and lived below my means. You're right, balance is the key.--kogrady
Ridin The Tide writes:"There's a balance here... finding the right level of sacrifice now, while maintaining a high quality of life and providing for the future. Just my take.Great post. Evidently you understand the industrial worl and corporations. Some of the response also show their understanding. Yes, if a large corporation offers a savings plan, or other where they contribute some funds as well as the employee - max it out. The company does not grant largesse willingly. They do it for the benefit of the executives first but must also give some to the grunts. Max out on every company plan.The following site may add some insight to working profitably to some of you.http://www.geocities.com/WallStreet/6057/career3.htmlDo not turn down a early retirement offer & spend your time profitably at the office.venny
RidinTheTide said:There's a balance here... finding the right level of sacrifice now, while maintaining a high quality of life and providing for the future.I have never quite understood why many of us as "Americans" feel that all our dreams and goals have to be the same. I don't know if it is rooted in Madison Avenue (so they can convince us to buy something to be "different") or in our religious heritage (Absolute truth means everyone should make the same decisions!). For most of us on the RE Board, "paint by number dreams" are not in our plans. RidinTheTide may value a few "luxuries" while I may want to retire a year or two earlier. From RidinTheWave's message, he has chosen his lifestyle, understands the impact, is content with the outcome, and isn't whining asking the government to regulate the price of mochas and subsidize vacations so he can retire 10 years earlier.For my part, I have chosen to live on less than $18,000 per year, understand new cars and expensive vacations are not in the plan (unless I work), content that I can spend over half the year traveling by foot (backpacking), don't whine when I have to be creative in meeting some of my desires. In both cases, we have put some thought into our dreams and goals and executed against them. I wish more of America did this.Grace & Peace,terrynor
My father always bought used cars and kept them for 10 years or more. His boat (he liked to fish) was 27 years old when he passed away. He put a few hundred $ in a growth mutual fund (Janus Fund was his largest holding) every month from 1971 until he died. Thanks Dad.
There's a balance here... finding the right level of sacrifice now, while maintaining a high quality of life and providing for the future. Just my take.Absolutely. Enjoy the now AND save a little for later. Just like the Mexican fisherman--- (I can't take credit for the story, its been bouncing around awhile)*****An American investment banker was at the pier of a small coastal Mexican village when a small boat with just one fisherman docked. Inside the small boat were several large yellow fin tuna. The American complimented the Mexican on the quality of his fish and asked how long it took to catch them.The Mexican replied "only a little while".The American then asked why didn't he stay out longer and catch more fish?The Mexican said he had enough to support his family's immediate needs.The American then asked, "but what do you do with the rest of your time?"The Mexican fisherman said, "I sleep late, fish a little, play with my children, take siesta with my wife Maria, stroll into the village each evening where I sip wine and play guitar with my amigos, I have a full and busy life."The American scoffed, "I am a Harvard MBA and could help you. You should spend more time fishing and with the proceeds, buy a bigger boat. With the proceeds from the bigger boat you could buy several boats. Eventually you would have a fleet of fishing boats. Instead of selling your catch to a middleman you would sell directly to the processor, eventually opening yourown cannery. You would control the product, processing and distribution. You would need to leave this small coastal fishing village and move to Mexico City, then LA and eventually NYC where you will run your expandingenterprise."The Mexican fisherman asked, "But, how long will all this take?"To which the American replied, "15-20 years.""But what then?"The American laughed and said that's the best part. "When the time is right you would announce an IPO and sell your company stock to the public andbecome very rich, you would make millions.""Millions.. Then what?"The American said, "Then you would retire. Move to a small coastal fishing village where you would sleep late, fish a little, play with your kids, takesiesta with your wife, stroll to the village in the evenings where you could sip wine and play your guitar with your amigos."Enough said! ;)
thank you Jackson Browne :)
I have never quite understood why many of us as "Americans" feel that all our dreams and goals have to be the same.Good point. I was just talking about this to my daughter. I was trying to help her see that I had dreams, many of which are pretty wild, and others that are fairly normal. I set goals in my life to accomplish the steps that lead me to those dreams. The goals are simple, measurable, and achievable, and once they are reached, I move on to the next goal. Some of my dreams are low enough priority that I will never achieve them. But if I want to achieve them, they will be accomplished by reaching the goals I develop as steps along the way. I don't think it's just Americans that have this problem, although I do think our TV and image based society helps people confuse the two. It's the same process by which people confuse what they think they are owed with what they have earned through their own effort. Harley
TBosh wrote:thank you Jackson Browne :) Thanks! At least someone noticed.terrynor"The Pretender"
venny,Great article and so true (sad but true).I did a brief stint in Silicon Valley.The "norm" was to come into the office at around 10:00, take lunch and stay until about 8:00PM every night.That schedule did not work for me with a young son in school. So, I would get in about 7:30, skip lunch and leave at 5:00PM to get my son and go home.On the evenings when I did stay late, I noticed the boss and sometimes the bosses boss would stroll by the offices. Seemed to me they were checking on who was in and "working hard."Needless to say, I was not perceived as working hard because I was there (early) when no one else was around and I was not there when the bosses were checking to see who was dedicated.Guess I am not much of a show-horse.With the same company, I did get lucky however. For the past several years, I have been on a team that is spread out all over the world. My boss is in a different county and scrutinizes results over anything else. I like it!Cheers.
sherron62 writes,Needless to say, I was not perceived as working hard because I was there (early) when no one else was around and I was not there when the bosses were checking to see who was dedicated.venny's experiences in playing the "corporate game" mirror my own.In my first job out of college, one of the senior engineers advised me "Saying you came in on Saturday is as good as being here -- the boss never comes in on the weekend."No sense working on Saturday if you don't get "credit" for it.intercst
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