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  #31  
Old 05-17-2018, 05:34 PM
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I'm not that conservative. Fairly middle of the road. I naturally don't spend tons of money - my lifestyle never inflated to Benzes and expensive trips. Spending more than $1000 on a TV just doesn't occur. No kids - talk about depreciating assets.

Even the loveseat I just bought was like $300. I guess I could have bought a $2000 one? Why?
From a budget perspective, if you're doing the 401k/IRA/HSA thing at levels you're comfortable with, and at the end of every month you have some money you didn't spend, then I'd say you're doing pretty damn well.

Could you sharpen the pencil and retire a few years earlier? Sure, but if retiring at 40 or 50 isn't huge on your priorities and you don't like managing to a budget all the time, I think we could still be friends.
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  #32  
Old 05-18-2018, 12:13 AM
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Yeah I'm amazed there are people with my income who struggle. In benefits consulting I heard 1/3 of people needing financial counseling were of decent means.

Maybe a better way to put it is I innately know the diminishing returns on my spending. Frankly I don't "want" anything right now. I get the most mileage out of daily coffee and lunches. I'll spend on dates but meals alone not as much.

Helps not having a big house and needing lots of shit to fill it.
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  #33  
Old 05-18-2018, 08:24 AM
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yeah, for the people MM is talking about, living within your means should be a thing
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  #34  
Old 05-18-2018, 11:32 AM
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Equity appreciation - 8%, but I often sensitivity test other values
Pay increases - 2%, hopefully conservative
Inflation - 3%, hopefully conservative

Post working healthcare costs are assumed to be an ACA quote I got for premiums + the OOP Max, both indexed to my general inflation assumption. Hopefully that's conservative.

I also assume immortality, and consider it a conservative assumption.

I've built some stochastic models to simulate equity returns, but I haven't put them into my main model yet.
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  #35  
Old 05-18-2018, 12:02 PM
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Originally Posted by mathmajor View Post
Yeah I'm amazed there are people with my income who struggle. In benefits consulting I heard 1/3 of people needing financial counseling were of decent means.

Maybe a better way to put it is I innately know the diminishing returns on my spending. Frankly I don't "want" anything right now. I get the most mileage out of daily coffee and lunches. I'll spend on dates but meals alone not as much.

Helps not having a big house and needing lots of shit to fill it.
some people didnt get the "want vs need" speech as a kid. I know a lot of actuaries who bought the big house and nice car when they got letters. Id say buying too much house is the biggest issue for most people. The housing market is well designed to oversell and many people fall into the trap. gotta "keep up with the Joneses"

If you live in a house/condo that you can easily afford, then the rest of personal finance gets a lot easier.
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  #36  
Old 05-18-2018, 12:29 PM
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Originally Posted by DataDan View Post
some people didnt get the "want vs need" speech as a kid. I know a lot of actuaries who bought the big house and nice car when they got letters. Id say buying too much house is the biggest issue for most people. The housing market is well designed to oversell and many people fall into the trap. gotta "keep up with the Joneses"

If you live in a house/condo that you can easily afford, then the rest of personal finance gets a lot easier.


I always behave like my job could be lost right now, and might never find another one. I have less than 18K in TOTAL expenses a year I am sure there are people who have me beat. I should add 40% of this is taxes

Last edited by snakeroberts; 05-18-2018 at 12:37 PM..
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  #37  
Old 05-18-2018, 12:45 PM
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I always behave like my job could be lost right now, and might never find another one. I have less than 18K in TOTAL expenses a year I am sure there are people who have me beat. I should add 40% of this is taxes
Less than $10.8K not including taxes? That's pretty remarkable. Are you living with parents or something?

Looking at my model, the lowest number I could reasonably say would be ~$16K a year. And even that involves a good bit of cheating (counts money that pays down my home loan as "savings" instead of "spending. nixes my restaurant and vacation spending. Divides total number by two since gf splits expenses with me)
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  #38  
Old 05-18-2018, 12:46 PM
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I assume 6% returns on equity. At age 60 suppose I have $2M, then at a 4% withdrawal rate I have $80,000/yr to spend. Maybe SS provides another $25,000 so that's $105,000/yr. Now I have to ask myself is that enough, and I guess I could discount it by 3%/yr for inflation (0.68 factor), so that would be $71,500.

Could I live on $71,500? Ya sure ya betcha. I probably live on less than that now after you ignore substantial savings, mortgage payments, and charitable contributions.

4% withdrawal rate carries with it a bit of risk, so I could go down to 3.5% if I wanted to. That leaves me with $64,600

SS 50% haircut? $62,900

I don't have a problem with any of these amounts once my house is paid off. If my Aspergers kids continue to live with us indefinitely they will pay their share of all the main expenses. Furthermore, I will probably tutor and teach part-time in my retirement, generating $10K-$15K. The big unknown is of course healthcare costs.
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Last edited by Klaymen; 05-18-2018 at 12:49 PM..
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  #39  
Old 05-18-2018, 01:31 PM
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I prefer a keep-it-simple approach, and pull out expected inflation from income, expenses, investment returns, etc.
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  #40  
Old 05-18-2018, 02:06 PM
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Originally Posted by redprinceton View Post
Less than $10.8K not including taxes? That's pretty remarkable. Are you living with parents or something?

Looking at my model, the lowest number I could reasonably say would be ~$16K a year. And even that involves a good bit of cheating (counts money that pays down my home loan as "savings" instead of "spending. nixes my restaurant and vacation spending. Divides total number by two since gf splits expenses with me)
I own a home with no mortgage. Only 4% of people are wealthier than me according to those Net worth by age calculators. I guess most of those 4% are trust fund babies, or inheritances or super risk takers. The only way I could cut expenses more would be to bring lunch from home,use regular gas, and cut cable.
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