The Money Mustache Community
General Discussion => Welcome and General Discussion => Topic started by: tooqk4u22 on March 24, 2021, 09:01:12 AM
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As the title says I used to feel that $100k was a lot of money (Still do I think) and while it is not ferraris and yacht kind of money it is an amount that should provide a fairly cush life meeting all needs and a lot of wants. $100k feels like it should be Fat FIRE but I am not sure. But then I think about it more and wonder if $200k is the new $100k?
It seems in the past the line of demarcation for tax policy was in the $200k (married) level but now it seems that has been moved to $400k, which really really used to think that was a shit ton of money, but maybe its not. I realize some of the latest policies are redistributive by agenda that is focusing mostly on taking back from the 1%, but it still seems like a really high threshold.
I guess I am feeling that if the government used draw the line at $200k to be the masses of middle class and below and now it is saying $400k then what does it mean for the $100k or Fat FIRE level, which again I am not sure what the zone of Fat FIRE actually is but $100k to me felt in the range (realizing could be location adjusted).
Guess I am asking, what level do you consider Fat FIRE and do you think the amounts have or are shifting hire to be Fat FIRE?
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I think Fat Fire would depend on the individual. I mean if you make or better yet spend 20K a year then maybe 50K is Fat Fire. If you spend 120K a year then FIRE at 100K means you have to make some adjustments. I guess what I am saying is I don't think there is a blanket answer here.
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I think Fat Fire would depend on the individual. I mean if you make or better yet spend 20K a year then maybe 50K is Fat Fire. If you spend 120K a year then FIRE at 100K means you have to make some adjustments. I guess what I am saying is I don't think there is a blanket answer here.
Housing is the big X-Factor. In a HCOL, you need to spend well north of $3k a month (36k/yr) to have what I would describe as a "nice but not fancy" house or apartment whereas in a lot of places, that would get you a McMansion with a pool.
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I think I'm fat FIREd by most definitions - using the 4% rule, we could withdraw over 100k. However, since my wife is still working, we haven't had to dip into our savings as yet. Also, I just posted some thoughts about this in my journal.
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[Spits out my water] Yes, in my mind $100k per year is clearly Fat FIRE.
You seem to take eligibility thresholds for certain government programs and conclude that anyone below that number is middle class. But I don't understand that logic. Has anyone ever actually considered $200k household as middle class? Because that seems like a huge stretch. I found a website using data from 2020 that stated, "The threshold to be in the top 10% of household incomes in 2020 in the United States was $200,968." If someone's definition of middle class includes the top 10%, it seems that definition is not very helpful.
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At $100k/year you can buy anything but not everything, which I think is a fair point to call FatFIRE. If the "thing" you choose to buy is living in a HCOL area you'll likely have to make some sacrifices in other areas like how nice a home you live in and large amounts of and/or luxury travel. If you choose to live in a LCOL area then you'll have to make few other sacrifices aside from things that the truly wealthy can do (like private jet owning, politician buying, private charitable foundation running wealthy) which I think is a different game from FIRE and shouldn't be compared. If you can spend $200-400k/year and still stay under the upper bounds of the current talk of "taxing the rich" then you're into obese FIRE or morbidly obese FIRE at which point you can live in a HCOL area and still do just about anything we mere mortals can imagine.
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I find the blanket numbers for lean and fat FIRE laughable. All that time trying to get people to consider their own expenses and these terms have come along to throw it out the window.
I consider lean FIRE to be 25x the minimum I think I can live on without hustling constantly, making my own soap and otherwise making cutting expenses a full time job. I consider fat FIRE to be 33x a little more than I have spent in a big year so far in my life.
It just depends on your definition of a yacht. Our expenses, with a 40' sailboat, average considerably under $100k, even including the year we purchased the boat and the year we bunched a number of big projects together.
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$100k/year is not a lot in terms of income when you are having to allocate it between spending and savings. But $100k/year is a ton for just spending. It may not be Ferraris and yacht money but it is Ferrari or yacht money.
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The collapse of most local newspapers and other regional media has moved much more of the political discussions that frame things like "what is a middle class income" to a couple of newspapers based in HCOL cities (New York Times, Wall Street Journal, Washington Post) and the "personalities" on 24/7 cable news networks who are often based in the same cities. Because the people who write the news live in extremely high cost of living cities and are surrounded by people who make enough to afford to live in those cities, they develop a skewed sense of what is normal which is reflected in their writing. Because the politicians who pass the laws read those papers and what those television shows, they pick up the same skewed version of what "normal" income are.
Were you following politics back in 2008? I still remember when Charlie Gibson, moderated a presidential debate:
In the ABC debate in January, he upbraided Clinton by suggesting that a typical New Hampshire "family of two professors" with a joint income "in the $200,000 [MF's note: $250k in today's dollars] category" would be unjustly penalized by her plan to roll back the Bush tax cuts for the wealthiest Americans. He seemed oblivious not merely to typical academic salaries but to the fact that his hypothetical household would be among America's wealthiest (only 3.4 percent earn more).
TL;DR Don't base your views of what a reasonable annual spend is on what you read in the paper or what comes out of DC.
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Yes it's a lot. No it's not FatFIRE. I would call it ChubbyFIRE. But obviously just one person's opinion, there is no standard definition and depends on location and blah blah blah
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I consider lean FIRE to be 25x the minimum I think I can live on without hustling constantly, making my own soap and otherwise making cutting expenses a full time job. I consider fat FIRE to be 33x a little more than I have spent in a big year so far in my life.
I like your lean FIRE definition (enough that you probably don't need earned income if you stay focused on minimizing expenses) a lot. Your fat FIRE definition depends a lot on how spendypants you have been in the past; although I guess it is based on how YOU would feel about your finances - you can be as spendypants as YOU have ever been without worrying about needing to earn more money.
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@tooqk4u22 , please check your calendar. You posted this 8 days too early.
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100k a year is definitely Ferrari territory if you don't have debts. Probably even an older yacht depending on what else someone has going on.
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I also look at it more as a % withdraw (or number of X your budget you have saved)
regular FIRE = 4% (or 25X expenses)
lean FIRE = >4% (<25X expenses) May need to work a little on the side if markets don't play nice
fat FIRE = 3.5% or less (better than 29X expenses)
Looking at it this way makes it location independent. However, those who plan for FIRE in a HCOL area have an additional safety margin because they could move to a lower cost of living area.
Some budgets definitely have more "Fat" in them so it's hard to make these comparisons just based on withdraw rate. One person might have a paid for home, lifetime healthcare, ignore SS and budget $15K/year for travel while saying they have a 4% withdraw rate. Someone else may be at 3.5% but have none of those safety margins. The one with all the safety margins might actually be safer. Each situation is unique.
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$100k/year is a ton for just spending. It may not be Ferraris and yacht money but it is Ferrari or yacht money.
I really like this answer!
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100k a year is definitely Ferrari territory if you don't have debts. Probably even an older yacht depending on what else someone has going on.
+1
You might not have as much left over to spend on everything else but with $100K to spend you could definitely buy a nice Ferrari or a pretty nice boat. Yacht's have larger ongoing expenses so it's going to be a smaller/older yacht but still possible.
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100k a year is definitely Ferrari territory if you don't have debts. Probably even an older yacht depending on what else someone has going on.
I think the causality works in the other direction: You can spend $100k per year because you don't have a boat or a Ferrari :-)
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@tooqk4u22 , please check your calendar. You posted this 8 days too early.
Hahaha!
The answer is that you're looking for love in all the wrong places. The answer is a multiple of your spending. What do you need to build the post-FIRE lifestyle you want? If you have no idea, love 'em or hate 'em, The Frugalwoods Uber Frugal Month is a great tool to figure this out. You can start it any time you want. Build a barebones budget, then add bits and bobs until it feels just right. Then use the multipliers (25x, 33x, whatever). Boom, there's your number.
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Variables like location or single/couple/family make a difference and are hard to reconcile across the board obviously. I don't think using WR is a good measure as it is more a measure of risk and certainty, possibly wealth too, but not so much spending. I mean if I have a 3% WR and spend $20k I am pretty sure most would not consider that fat fire (spartana excluded), at least not in the US.
Maybe WR would be indicative if it was based on just discretionary spending or something like of my 4% WR about 75% is for discretionary.
Maybe an easier more broad approach is to base it on some % of median household income for one's area. Median for my town is $95k so would $100k make my family fat fire (or should I base it more on my neighborhood that has a med hh Inc of $150ish) On one hand, I wouldn't have to pay payroll taxes or set money aside for retirement but I wouldn't have an employer picking up a good chunk of my health care. Also, fed/state taxes could be less if more from dividends and cap gains and principle drawdown or higher if all from 401k/non-roth IRA, which also impacts Healthcare.
Maybe 1 to 1.5x median household income for where you live is Fat FIRE
Maybe a multiple of one's location median household income is determinant
>1.5x is hoggish fire
1.0 to 1.5x is fat fire
0.5x to 1.0x is reg fire
< 0.5x is lean fire
A couple at or above the med hh income spending level iwithout work feels pretty fat. And if doing that in a HCOL then there is the add flex to go to lower COL and be fatter.
IDK, just a thought experiment, as I said I think $100k is a lot but maybe I have it wrong or right.
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Yes.
I spent $24,400 last year on necessary living expenses living in Boston which is one of the most expensive cities in the USA. I also have a car so if you remove that (it's not necessary to live a good life in a world-class city), I would have only spent $20,000. This is for just me, my wife is not included in here and I have no kids.
I can basically do whatever I feel like and am happily living a relatively simple life.
If you need at least 4-5x this then yes that is FATfire.
Maybe tack on $10K for each dependant?
Also keep in mind you will probably earn some income outside investments after your FIRE.
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100k a year is definitely Ferrari territory if you don't have debts. Probably even an older yacht depending on what else someone has going on.
100% If I make it to 100k passive land, I may just pick up a used Lambo... It'd be sufficient funds to support the ownership of one AND continue doing everything else I do.
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Maybe an easier more broad approach is to base it on some % of median household income for one's area. Median for my town is $95k so would $100k make my family fat fire (or should I base it more on my neighborhood that has a med hh Inc of $150ish) On one hand, I wouldn't have to pay payroll taxes or set money aside for retirement but I wouldn't have an employer picking up a good chunk of my health care. Also, fed/state taxes could be less if more from dividends and cap gains and principle drawdown or higher if all from 401k/non-roth IRA, which also impacts Healthcare.
Presumably those making the median income have a house payment, too. If you're spending $100k without a mortgage or rent, you're definitely in obese fire.
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I will have about $100k/year in retirement. I live in a MHCOL area, high property taxes, and I have a mortgage. I will have to pay full cost for an ACA plan. At my age, I expect healthcare costs in the range of $20-24k all told. Cannot arrange my finances to qualify for ACA subsidies.
I expect my standard of living to be comfortable but not lavish. I will be able to buy organic groceries, whatever I need, and have a little left over to play around with for wants.
This all goes back to the various responses saying whether $100k is fat or not. it's situational. And it depends on what you consider a comfortable life.
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[Spits out my water] Yes, in my mind $100k per year is clearly Fat FIRE.
Not gonna lie, that was my reaction too. I can't even imagine what I'd have to be doing to spend upwards of 100k a year. Maybe if I decided to eat out for lobster & steak every meal, travel internationally every other month, buy a McMansion AND a Tesla AND idk a flock of exotic birds?
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It is not much if you live anywhere near the Loss Angeles/ HELL A area. Avoid this area like the plague--good advice for anyone!!
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Definitely not in my area. Depending on what link you chose, 81k is the average salary in Seattle so 100k puts you barely above average.
https://www.payscale.com/research/US/Location=Seattle-WA/Salary
Housing is also absurd here, 1+ Mil for a free standing house in Seattle proper with more than 2 bedrooms. So taxes alone are going to be 15k in this region.
That in mind, I'd say 150k draw is more like fatfire to me. 100k is still pretty lean since 30k for income taxes, 15k for property taxes (assuming you own your home outright), leaving barely 50k for spending.
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Definitely not in my area. Depending on what link you chose, 81k is the average salary in Seattle so 100k puts you barely above average.
https://www.payscale.com/research/US/Location=Seattle-WA/Salary
Housing is also absurd here, 1+ Mil for a free standing house in Seattle proper with more than 2 bedrooms. So taxes alone are going to be 15k in this region.
That in mind, I'd say 150k draw is more like fatfire to me. 100k is still pretty lean since 30k for income taxes, 15k for property taxes (assuming you own your home outright), leaving barely 50k for spending.
Above average and you don't have to worry about retirement savings anymore...
We spent $50k last year including rent, in a city with a similar COL to Seattle. It really is all in the eye of the beholder.
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What the fucking fuck?
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This is an impossible question to answer, die-hards like MMM and others on this thread would scoff and call $100k preposterous. I and others would say $100k may not be enough. it all depends on your circumstances (single, couple, kids, HCOL vs LCOL) and where/how you want to live.
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This is an impossible question to answer, die-hards like MMM and others on this thread would scoff and call $100k preposterous. I and others would say $100k may not be enough. it all depends on your circumstances (single, couple, kids, HCOL vs LCOL) and where/how you want to live.
100K spend may not be enough depending on the lifestyle one chooses, but even in a VHCOL, 100K *spending* is A LOT. Is it an unreasonable amount? No, not if someone wants that lifestyle, but there's no convincing me it's not a luxurious lifestyle. Having the financial ability to live in a VHCOL area in a nice home *is* a luxury.
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This is an impossible question to answer, die-hards like MMM and others on this thread would scoff and call $100k preposterous. I and others would say $100k may not be enough. it all depends on your circumstances (single, couple, kids, HCOL vs LCOL) and where/how you want to live.
100K spend may not be enough depending on the lifestyle one chooses, but even in a VHCOL, 100K *spending* is A LOT. Is it an unreasonable amount? No, not if someone wants that lifestyle, but there's no convincing me it's not a luxurious lifestyle. Having the financial ability to live in a VHCOL area in a nice home *is* a luxury.
I agree with everything you said, many can FIRE with way less and some folks want more than $100k per year to spend, everyone's different. the race from $2-$4 million thread is 93 pages long so plenty of folks want to spend more in retirement or really like what they do
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... the race from $2-$4 million thread is 93 pages long so plenty of folks want to spend more in retirement or really like what they do
or are super nervous about the future and caught up in One More Year syndrome to get a really low withdraw rate.
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This is an impossible question to answer, die-hards like MMM and others on this thread would scoff and call $100k preposterous. I and others would say $100k may not be enough. it all depends on your circumstances (single, couple, kids, HCOL vs LCOL) and where/how you want to live.
100K spend may not be enough depending on the lifestyle one chooses, but even in a VHCOL, 100K *spending* is A LOT. Is it an unreasonable amount? No, not if someone wants that lifestyle, but there's no convincing me it's not a luxurious lifestyle. Having the financial ability to live in a VHCOL area in a nice home *is* a luxury.
I'm going with this. Our expenses in FIRE will be at around around $100k, with 40% of that tied up in property taxes. Of course, we could live somewhere cheaper. Opting to pay that type of property taxes is a luxury choice in and of itself.
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This is an impossible question to answer, die-hards like MMM and others on this thread would scoff and call $100k preposterous. I and others would say $100k may not be enough. it all depends on your circumstances (single, couple, kids, HCOL vs LCOL) and where/how you want to live.
100K spend may not be enough depending on the lifestyle one chooses, but even in a VHCOL, 100K *spending* is A LOT. Is it an unreasonable amount? No, not if someone wants that lifestyle, but there's no convincing me it's not a luxurious lifestyle. Having the financial ability to live in a VHCOL area in a nice home *is* a luxury.
I'm going with this. Our expenses in FIRE will be at around around $100k, with 40% of that tied up in property taxes. Of course, we could live somewhere cheaper. Opting to pay that type of property taxes is a luxury choice in and of itself.
40k in property taxes?
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Fat FIRE is definitely completely subjective and location specific, but look at it from the perspective of a person in the median household in the area. The average person would consider being able to spend $100k a year pretty well-off. Then add to it the fact you can spend that without even having a job. If you can live fancier FIREd than most people who are having to work for it, I'd say that's Fat FIRE.
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@jehovasfitness23 - yes. Bay Area
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@jehovasfitness23 - yes. Bay Area
$40k/yr for property taxes? holeeee shit
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Too many here have conflated spending with earnings, and pre-FIRE budgets with post.
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For me this depends on whether there is a paid-off house, and where they are living. In a VHCOL area and without a paid off house, that's not fat FIRE, IMO As has been pointed out, living in a VHCOL area is a choice one is buying during FIRE, so I suppose there is an argument to be made surrounding that.
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It is not much if you live anywhere near the Loss Angeles/ HELL A area. Avoid this area like the plague--good advice for anyone!!
I'd say the VAST majority of people who live in the Los Angeles/SoCal area spend much much less than 100k a year and somehow manage to survive, me included.
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It is not much if you live anywhere near the Loss Angeles/ HELL A area. Avoid this area like the plague--good advice for anyone!!
I'd say the VAST majority of people who live in the Los Angeles/SoCal area spend much much less than 100k a year and somehow manage to survive, me included.
Median household income in LA county is $68,044 according to the US census bureau. Do yeah, $100k in spending is far more than the overwhelming majority.
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I lived in the San Francisco metro area (not SF proper) on $24k/year. Even saved a little (not a lot). Mostly socialized and hung out with people spending the same amount. It wasn't a bad life at all.
Now I live somewhere else that doesn't have as restaurants or public transit, but a mortgage that costs less than my rent back then. It's all about the trade offs different people are willing to make and accept.
I believe the real danger is surrounding yourself with people who do spend $100k/year and getting sucked into doing the same yourself not because that level of spending is the right trade off for you but because your social circle makes it feel "normal." Whether you are living in Memphis or Manhattan there are social circles where $100k/year will seem normal, and others social circles where $100k/year will seem austere.
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... the race from $2-$4 million thread is 93 pages long so plenty of folks want to spend more in retirement or really like what they do
or are super nervous about the future and caught up in One More Year syndrome to get a really low withdraw rate.
I think that describes me... Contingency plan on top of contingency plan, AND still doing OMY. Having grown up poor I don't want to end up there again.
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I've sketched a tentative budget for post-FIRE, and it comes to $38k, not including taxes. That's right around the poverty line for a family my size. Which goes to show that expense levels are not a good measure of poverty: there's nothing poor or miserable about my life.
But I've always thought of my situation as "fat-FIRE". My definition is that I am not forced by finances to live simply. I can, and I will, but I don't have to. The 4% rule will allow me $100k per year. So I'm "fat" in the sense that I really don't ever have to think about money again.
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I lived in the San Francisco metro area (not SF proper) on $24k/year. Even saved a little (not a lot). Mostly socialized and hung out with people spending the same amount. It wasn't a bad life at all.
Now I live somewhere else that doesn't have as restaurants or public transit, but a mortgage that costs less than my rent back then. It's all about the trade offs different people are willing to make and accept.
I believe the real danger is surrounding yourself with people who do spend $100k/year and getting sucked into doing the same yourself not because that level of spending is the right trade off for you but because your social circle makes it feel "normal." Whether you are living in Memphis or Manhattan there are social circles where $100k/year will seem normal, and others social circles where $100k/year will seem austere.
I agree. I'm surrounded by people who would go bankrupt if they only had $100K to spend each year. It's far more normal in my circle to not be able to pay the bills on only $100K of spending than to find that a lot of money.
...that doesn't mean it's not a lot of money.
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It's a lot of money, but it wouldn't be FatFIRE for us, b/c of our particular circumstance, mostly supporting a parent, and partly supporting another parent.
We consider 'scraping' FIRE in our LCOL area 70K/year (given our extenuating circumstances), but we are aiming for 100-130K/year b/c we want to live in a higher cost of living area.
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It's a lot of money, but it wouldn't be FatFIRE for us, b/c of our particular circumstance, mostly supporting a parent, and partly supporting another parent.
We consider 'scraping' FIRE in our LCOL area 70K/year (given our extenuating circumstances), but we are aiming for 100-130K/year b/c we want to live in a higher cost of living area.
I consider being able to support your parent to be a huge luxury.
We have our regular FIRE amount, and then we have our fat "help support my parents" FIRE amount.
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It's a lot of money, but it wouldn't be FatFIRE for us, b/c of our particular circumstance, mostly supporting a parent, and partly supporting another parent.
We consider 'scraping' FIRE in our LCOL area 70K/year (given our extenuating circumstances), but we are aiming for 100-130K/year b/c we want to live in a higher cost of living area.
I consider being able to support your parent to be a huge luxury.
We have our regular FIRE amount, and then we have our fat "help support my parents" FIRE amount.
I agree, and it is an expense that a not insignificant number of people deal with, or partly deal with.
If it were JUST the two of us, 100K would seem like quite a lot. We currently spend ~70K/year with our situation (two houses) in a LCOL area. We currently don't spend much on anything fun, and would like to spend MORE in retirement between increased recreation, increased medical cost, increased taxes (when we eventually move), and increased housing costs (when we eventually move).
I'm not interested in leanFIRE...I would be anxiety ridden the entire time. We COULD retire on 70K/year, but I know myself and I don't want to be penny pinching and anxious. ~2 million in cash + a pension is more my comfort level. Mileage will definitely vary by personality and situation, as it should.
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I don’t think “LeanFIRE” or “FatFIRE” is based on a singular dollar amount.
To me - LeanFIRE and FatFIRE are entirely dependent on ones spending and net worth at retirement in relation to the 4% rule.
For example... FIRE is typically planning based on the 4% rule. I would consider FatFIRE the 1-3% withdrawal rate and LeanFIRE more along the lines of 5%+ withdrawal rate.
For reference, my wife and I spent $100k-$200k for multiple years and it’s really not that hard to do.. Granted, I have a 2020 F250 with about $15k in aftermarket parts, a 2020 Corolla, a offroad camping trailer with around $40k, just dropped $8k on a home gym..
That being said - in those last 3 years while buying these items and spending this money, our savings/investments has grown from $225k to $900k.. That doesn’t include net worth of our other “toys” that we own/have bought..
My spending largely helps make up for the stress of my career. I enjoy my life outside (workout frequently, travel and enjoy things with my life) but buying things that will follow me into FIRE is fine.. I’d rather do it now than when I FIRE.. I’ll still prefer the $350k income and stress induced spending vs a $100k job that’s a breeze...
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Definitely not in my area. Depending on what link you chose, 81k is the average salary in Seattle so 100k puts you barely above average.
https://www.payscale.com/research/US/Location=Seattle-WA/Salary
Housing is also absurd here, 1+ Mil for a free standing house in Seattle proper with more than 2 bedrooms. So taxes alone are going to be 15k in this region.
That in mind, I'd say 150k draw is more like fatfire to me. 100k is still pretty lean since 30k for income taxes, 15k for property taxes (assuming you own your home outright), leaving barely 50k for spending.
Again, you confused retirement spending with work salary. If you make $150k a year, you should probably spend less than $75k a year, with 401k saving, FICA taxes, child education, etc..
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We average 56k/yr spending now for family of 4 in a somewhat LCOL city. Our "big" ticket items are already set low - inexpensive house, public schools, older used cars - so we'd really have trouble spending 100k/year. It would definitely be a fatfire.
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@jehovasfitness23 - yes. Bay Area
$40k/yr for property taxes? holeeee shit
If their property taxes in Calif are that high then they have a hugely expensive house since Prop 13 sets the tax basis at 1% of the purchase price and it only goes up a relatively small fixed amount each year regardless of increases in value. There are lots of people here in Calif who own homes worth a million plus but only pay a few hundred or a few thousand in prop taxes. I live in coastal SoCal (Orange County) and Fired here with a paid off house and paid less then $2000/year on a house who's value increased greatly inn a few years. Even if my house were to be worth over a million bucks, I'd still only be paying around $2k/year. So at $40k a year in prop taxes the poster must have spend a couple million or more. Very luxurious even for the Bay area.
I wish NJ would do that...my property tax has gone up nearly 5% in the last couple of years and the tax basis was originally over 3% of purchase price.
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If their property taxes in Calif are that high then they have a hugely expensive house since Prop 13 sets the tax basis at 1% of the purchase price and it only goes up a relatively small fixed amount each year regardless of increases in value. There are lots of people here in Calif who own homes worth a million plus but only pay a few hundred or a few thousand in prop taxes. I live in coastal SoCal (Orange County) and Fired here with a paid off house and paid less then $2000/year on a house who's value increased greatly inn a few years. Even if my house were to be worth over a million bucks, I'd still only be paying around $2k/year. So at $40k a year in prop taxes the poster must have spend a couple million or more. Very luxurious even for the Bay area.
I wish NJ would do that...my property tax has gone up nearly 5% in the last couple of years and the tax basis was originally over 3% of purchase price.
I understand the impulse. My property tax bill is already 1/3 larger than it was when I bought my house six years ago.
But at the same time I want to point out that Prop 13 has not been great for the state of California. It shifts more of the tax burden from older individuals and families who bought their houses decades ago and typically more money to young families who pay much higher taxes for the exact same houses while typically having much less money overall. It also creates a disincentive to move in retirement when people are typically otherwise more location independent, which is probably making the housing shortage/housing affordability crisis even worse than it otherwise would be.
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@jehovasfitness23 - yes. Bay Area
$40k/yr for property taxes? holeeee shit
If their property taxes in Calif are that high then they have a hugely expensive house since Prop 13 sets the tax basis at 1% of the purchase price and it only goes up a relatively small fixed amount each year regardless of increases in value. There are lots of people here in Calif who own homes worth a million plus but only pay a few hundred or a few thousand in prop taxes. I live in coastal SoCal (Orange County) and Fired here with a paid off house and paid less then $2000/year on a house who's value increased greatly inn a few years. Even if my house were to be worth over a million bucks, I'd still only be paying around $2k/year. So at $40k a year in prop taxes the poster must have spend a couple million or more. Very luxurious even for the Bay area.
My sister and her spouse bought my parent's OC home when they moved to their retirement home. They had purchased it in 1989. Prop 13 allows the property tax rate to be kept if a house goes from parent to child. That meant it was cheaper for my sister to buy my parents' larger, more expensive house than to buy the more modest place that they otherwise would have. I think her basis is way less than 50% of what it would be if purchased today. Insanity.
I understand prop 13 and what it intended to do, but I think it goes to far. (And I say this as someone who owns CA real estate and benefits from it.)
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If their property taxes in Calif are that high then they have a hugely expensive house since Prop 13 sets the tax basis at 1% of the purchase price and it only goes up a relatively small fixed amount each year regardless of increases in value. There are lots of people here in Calif who own homes worth a million plus but only pay a few hundred or a few thousand in prop taxes. I live in coastal SoCal (Orange County) and Fired here with a paid off house and paid less then $2000/year on a house who's value increased greatly inn a few years. Even if my house were to be worth over a million bucks, I'd still only be paying around $2k/year. So at $40k a year in prop taxes the poster must have spend a couple million or more. Very luxurious even for the Bay area.
I wish NJ would do that...my property tax has gone up nearly 5% in the last couple of years and the tax basis was originally over 3% of purchase price.
I understand the impulse. My property tax bill is already 1/3 larger than it was when I bought my house six years ago.
But at the same time I want to point out that Prop 13 has not been great for the state of California. It shifts more of the tax burden from older individuals and families who bought their houses decades ago and typically more money to young families who pay much higher taxes for the exact same houses while typically having much less money overall. It also creates a disincentive to move in retirement when people are typically otherwise more location independent, which is probably making the housing shortage/housing affordability crisis even worse than it otherwise would be.
Agree with the location lock, but not so much the younger argument. The prop was put in place bc people were getting taxed out of their house bc they were going up so fast. But when a younger person buys a house with said higher taxes they know what they are and what they can afford and benefit similarly knowing that they too won't be taxed out of their house.
When I first moved to NJ my property taxes doubled in six years from $6k to $12k they have been more modest increases since then with some flat years but if my income wasn't growing fast back then an extra $500/month would have been touch and was for a lot of people. And for nothing gained.
House affordability is a different issue in CA.
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It seems what we need to define is whether assisting aging parents or living in Southern California are roughly equivalent to owning two Teslas and a Hum-V, and eating out 3 meals a day, having a second home, or wearing $1000 shoes, when looking at what constitutes "fat" FIRE.
Or wanting to donate well into 5 figures to charity, or having a special-needs child, or whatever.
Same dollars, differing values. So are they all the same if we look at whether FIRE is fat? To me, they are not, but I can respect the argument that they are. It is a luxury many don't have to be able to support one's special needs child without many compromises or sacrifices. It is a luxury to continue living in an expensive city where you have a network, once you no longer have a job there. So if "fat" is "having expensive luxuries", that that's pretty overweight. But to me, those things are different. For me, fat FIRE is about extravagance and indulgence, and while those things are luxuries, I don't think they are extravagant.
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It seems what we need to define is whether assisting aging parents or living in Southern California are roughly equivalent to owning two Teslas and a Hum-V, and eating out 3 meals a day, having a second home, or wearing $1000 shoes, when looking at what constitutes "fat" FIRE.
Or wanting to donate well into 5 figures to charity, or having a special-needs child, or whatever.
Same dollars, differing values. So are they all the same if we look at whether FIRE is fat? To me, they are not, but I can respect the argument that they are. It is a luxury many don't have to be able to support one's special needs child without many compromises or sacrifices. It is a luxury to continue living in an expensive city where you have a network, once you no longer have a job there. So if "fat" is "having expensive luxuries", that that's pretty overweight. But to me, those things are different. For me, fat FIRE is about extravagance and indulgence, and while those things are luxuries, I don't think they are extravagant.
Yeah, that's because none of these terms actually mean anything, and that's a value judgement you are putting on them.
Is it because you find the term fatFIRE to be insulting and have some kind of negative connotation?
Would you feel differently if it was termed cushyFIRE?
The simple fact is that the OP came here saying that they doubt that having enough savings to generate 100K/yr constitutes fatFIRE and that maybe it now has to be 200K. That's just ridiculous. For the vast, overwhelming majority of people, having 100K+inflation to spend every single year while maintaining your nest egg, is BEYOND luxury.
And yes, being able to own a nice home in an expensive area and support you parents and donate generously to charity counts as extreme luxury, of course it does. To claim any differently, just because it aligns with your personal values is nonsense.
I say this as someone who will have a household retirement income of well over 100K, and DH and I marvel constantly and the immense possibilities this affords us. It IS a luxury. It just is.
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It seems what we need to define is whether assisting aging parents or living in Southern California are roughly equivalent to owning two Teslas and a Hum-V, and eating out 3 meals a day, having a second home, or wearing $1000 shoes, when looking at what constitutes "fat" FIRE.
Or wanting to donate well into 5 figures to charity, or having a special-needs child, or whatever.
Same dollars, differing values. So are they all the same if we look at whether FIRE is fat? To me, they are not, but I can respect the argument that they are. It is a luxury many don't have to be able to support one's special needs child without many compromises or sacrifices. It is a luxury to continue living in an expensive city where you have a network, once you no longer have a job there. So if "fat" is "having expensive luxuries", that that's pretty overweight. But to me, those things are different. For me, fat FIRE is about extravagance and indulgence, and while those things are luxuries, I don't think they are extravagant.
That's interesting. I just thought fat fire was having more $ than you really need to spend on extras (additional or more expensive travel, etc). So I would agree that supporting family members or living in a HCOL area would fall into the normal expenses category, ie regular FIRE for those people.
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If their property taxes in Calif are that high then they have a hugely expensive house since Prop 13 sets the tax basis at 1% of the purchase price and it only goes up a relatively small fixed amount each year regardless of increases in value. There are lots of people here in Calif who own homes worth a million plus but only pay a few hundred or a few thousand in prop taxes. I live in coastal SoCal (Orange County) and Fired here with a paid off house and paid less then $2000/year on a house who's value increased greatly inn a few years. Even if my house were to be worth over a million bucks, I'd still only be paying around $2k/year. So at $40k a year in prop taxes the poster must have spend a couple million or more. Very luxurious even for the Bay area.
Prop 13 greatly rewards those who have owned their property the longest, generally at expense of those who purchased more recently. In addition to regular property taxes, there can be special assessment districts which could cause the total bill to be significantly more than 1% of the tax basis for some properties (though this is much more likely the case if the property has a very low basis and is subject to special assessments that are not based on property value). Still, I agree that it would have to be a very expensive property to have a $40k/year bill.
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It seems what we need to define is whether assisting aging parents or living in Southern California are roughly equivalent to owning two Teslas and a Hum-V, and eating out 3 meals a day, having a second home, or wearing $1000 shoes, when looking at what constitutes "fat" FIRE.
Or wanting to donate well into 5 figures to charity, or having a special-needs child, or whatever.
Same dollars, differing values. So are they all the same if we look at whether FIRE is fat? To me, they are not, but I can respect the argument that they are. It is a luxury many don't have to be able to support one's special needs child without many compromises or sacrifices. It is a luxury to continue living in an expensive city where you have a network, once you no longer have a job there. So if "fat" is "having expensive luxuries", that that's pretty overweight. But to me, those things are different. For me, fat FIRE is about extravagance and indulgence, and while those things are luxuries, I don't think they are extravagant.
That's interesting. I just thought fat fire was having more $ than you really need to spend on extras (additional or more expensive travel, etc). So I would agree that supporting family members or living in a HCOL area would fall into the normal expenses category, ie regular FIRE for those people.
Yeah, it doesn't really have a definition.
Typically I err on the side of defining fatFIRE being having more than you need, whatever that means relative to what you need. But this thread clearly was talking about absolute amounts.
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Definitely not in my area. Depending on what link you chose, 81k is the average salary in Seattle so 100k puts you barely above average.
https://www.payscale.com/research/US/Location=Seattle-WA/Salary
Housing is also absurd here, 1+ Mil for a free standing house in Seattle proper with more than 2 bedrooms. So taxes alone are going to be 15k in this region.
That in mind, I'd say 150k draw is more like fatfire to me. 100k is still pretty lean since 30k for income taxes, 15k for property taxes (assuming you own your home outright), leaving barely 50k for spending.
Above average and you don't have to worry about retirement savings anymore...
We spent $50k last year including rent, in a city with a similar COL to Seattle. It really is all in the eye of the beholder.
The question is about FAT fire. Not ability to live and survive and normal FIRE. Are you stating that 50k is FATfire?
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Definitely not in my area. Depending on what link you chose, 81k is the average salary in Seattle so 100k puts you barely above average.
https://www.payscale.com/research/US/Location=Seattle-WA/Salary
Housing is also absurd here, 1+ Mil for a free standing house in Seattle proper with more than 2 bedrooms. So taxes alone are going to be 15k in this region.
That in mind, I'd say 150k draw is more like fatfire to me. 100k is still pretty lean since 30k for income taxes, 15k for property taxes (assuming you own your home outright), leaving barely 50k for spending.
Again, you confused retirement spending with work salary. If you make $150k a year, you should probably spend less than $75k a year, with 401k saving, FICA taxes, child education, etc..
I didn't. I specifically gave an example of a 150k draw. While a draw and a salary are obviously different, I was benchmarking the COL with the 81k reference. The explanation of income taxes and property taxes on 100k draw was valid. I don't think 50k of spending is FATfire. *shrug*
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Definitely not in my area. Depending on what link you chose, 81k is the average salary in Seattle so 100k puts you barely above average.
https://www.payscale.com/research/US/Location=Seattle-WA/Salary
Housing is also absurd here, 1+ Mil for a free standing house in Seattle proper with more than 2 bedrooms. So taxes alone are going to be 15k in this region.
That in mind, I'd say 150k draw is more like fatfire to me. 100k is still pretty lean since 30k for income taxes, 15k for property taxes (assuming you own your home outright), leaving barely 50k for spending.
Above average and you don't have to worry about retirement savings anymore...
We spent $50k last year including rent, in a city with a similar COL to Seattle. It really is all in the eye of the beholder.
The question is about FAT fire. Not ability to live and survive and normal FIRE. Are you stating that 50k is FATfire?
In response to $50k after taxes and after housing, yes, I am saying that most people would consider that pretty generous vs the pretty lean that you claim it is. It is well above average for post housing spending. Is it FatFIRE? I was the first to argue that depends on the individual.
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I always assumed fatfire was relative to what the person was spending before, and spending in retirement.
Spending as much or more in retirement (or the ability to spend more than while working = fatfire
fire
needing to keep to a budget, spend less money than would be incline (keep to a strict budget) = leanfire.
In all these cases it is a relative amount, as other people said, such as 4% withdrawal covering expenses = fire, 1-3% of withdrawals covering expenses = fatfire, and more than 4% withdrawal = lean fire.
Since I've never made more than 70 something K a year my entire life, and live off around 50K while also paying for a house and 2 kids, 100K for myself, especially when housing is paid for, kids are launched would definitely be fatfire! But also not something I would aim for, because it would mean working far longer than I intend to for that additional (and to me unnecessary) cushion.
If you want to talk about averages, the median income in the Us is 33K. so many many people live on far less than 100K (happily or unhappily, who knows). The Pension Rights Center reports that “Half of all Americans age 65 or older have incomes of less than around $25,000 a year". 100K is 4 times that amount.
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Definitely not in my area. Depending on what link you chose, 81k is the average salary in Seattle so 100k puts you barely above average.
https://www.payscale.com/research/US/Location=Seattle-WA/Salary
Housing is also absurd here, 1+ Mil for a free standing house in Seattle proper with more than 2 bedrooms. So taxes alone are going to be 15k in this region.
That in mind, I'd say 150k draw is more like fatfire to me. 100k is still pretty lean since 30k for income taxes, 15k for property taxes (assuming you own your home outright), leaving barely 50k for spending.
Again, you confused retirement spending with work salary. If you make $150k a year, you should probably spend less than $75k a year, with 401k saving, FICA taxes, child education, etc..
I didn't. I specifically gave an example of a 150k draw. While a draw and a salary are obviously different, I was benchmarking the COL with the 81k reference. The explanation of income taxes and property taxes on 100k draw was valid. I don't think 50k of spending is FATfire. *shrug*
How on earth do you get $30k for income taxes when one is retired? And if you own your own home outright, you have no mortgage or rent payment, only the aforementioned property taxes. Seems your discretionary income would be substantially higher than the majority’s total take home pay.
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Yeah, it doesn't really have a definition.
Typically I err on the side of defining fatFIRE being having more than you need, whatever that means relative to what you need. But this thread clearly was talking about absolute amounts.
It is amazing, and a little sad, how many apparently fundamental disagreements actually turn out to simply be cases of the same word meaning different things to different people. In this thread alone the fatFIRE/leanFIRE distinction has been used to variously mean:
1) Excessively cautious vs excessively optimistic withdrawal rates.
2) High vs low planned spending in retirement in dollar values.
3) High vs low planned spending in retirement relative to what people think they themselves or others "need" to spend.
4) High vs low planned spending in retirement relative to the spending of other people in the same neighborhood.
For what it is worth, I will say the reddit community split between leanFIRE vs fatFIRE seems to use primarily definition #2. But why argue about what a word does or doesn't apply to when we don't even agree on what the word means. (And to be clear, I see no point in arguing about which meaning of the word is best either).
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Definitely not in my area. Depending on what link you chose, 81k is the average salary in Seattle so 100k puts you barely above average.
https://www.payscale.com/research/US/Location=Seattle-WA/Salary
Housing is also absurd here, 1+ Mil for a free standing house in Seattle proper with more than 2 bedrooms. So taxes alone are going to be 15k in this region.
That in mind, I'd say 150k draw is more like fatfire to me. 100k is still pretty lean since 30k for income taxes, 15k for property taxes (assuming you own your home outright), leaving barely 50k for spending.
Again, you confused retirement spending with work salary. If you make $150k a year, you should probably spend less than $75k a year, with 401k saving, FICA taxes, child education, etc..
I didn't. I specifically gave an example of a 150k draw. While a draw and a salary are obviously different, I was benchmarking the COL with the 81k reference. The explanation of income taxes and property taxes on 100k draw was valid. I don't think 50k of spending is FATfire. *shrug*
How on earth do you get $30k for income taxes when one is retired? And if you own your own home outright, you have no mortgage or rent payment, only the aforementioned property taxes. Seems your discretionary income would be substantially higher than the majority’s total take home pay.
If I'm withdrawing 100k from a stash that I have not paid income (federal and state) taxes on...... May be even higher than 30k. Might be lower. It depends on age, place you are withdrawing your money from, any 10% penalties, etc. It was just a guessed number, not from personal experience.
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Yeah, it doesn't really have a definition.
Typically I err on the side of defining fatFIRE being having more than you need, whatever that means relative to what you need. But this thread clearly was talking about absolute amounts.
It is amazing, and a little sad, how many apparently fundamental disagreements actually turn out to simply be cases of the same word meaning different things to different people. In this thread alone the fatFIRE/leanFIRE distinction has been used to variously mean:
1) Excessively cautious vs excessively optimistic withdrawal rates.
2) High vs low planned spending in retirement in dollar values.
3) High vs low planned spending in retirement relative to what people think they themselves or others "need" to spend.
4) High vs low planned spending in retirement relative to the spending of other people in the same neighborhood.
For what it is worth, I will say the reddit community split between leanFIRE vs fatFIRE seems to use primarily definition #2. But why argue about what a word does or doesn't apply to when we don't even agree on what the word means. (And to be clear, I see no point in arguing about which meaning of the word is best either).
well said,
if we use definition #2, post tax spending, in today's dollars, $100k seems* like it should be FatFire when considered for purchasing the basic non-luxury things in life when compared to most every median income metric (in the USA)
* YMNV along with personal financial obligations impacting this arbitrary $100k dollar amount,
FWIW my goal retirement spending in todays dollars is ~70-75k post tax with lots of fluff for having fun and a paid off home
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If you want to talk about averages, the median income in the Us is 33K. so many many people live on far less than 100K (happily or unhappily, who knows). The Pension Rights Center reports that “Half of all Americans age 65 or older have incomes of less than around $25,000 a year". 100K is 4 times that amount.
I think that might median per capita, per census.gov per capita was $34.1k and household was $62.8k. So sure there a lot of households (single, married, families) that live on less I wouldn't call the $32k gap between $100k and the median dramatic to the point of being super rich.
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Definitely not in my area. Depending on what link you chose, 81k is the average salary in Seattle so 100k puts you barely above average.
https://www.payscale.com/research/US/Location=Seattle-WA/Salary
Housing is also absurd here, 1+ Mil for a free standing house in Seattle proper with more than 2 bedrooms. So taxes alone are going to be 15k in this region.
That in mind, I'd say 150k draw is more like fatfire to me. 100k is still pretty lean since 30k for income taxes, 15k for property taxes (assuming you own your home outright), leaving barely 50k for spending.
Again, you confused retirement spending with work salary. If you make $150k a year, you should probably spend less than $75k a year, with 401k saving, FICA taxes, child education, etc..
I didn't. I specifically gave an example of a 150k draw. While a draw and a salary are obviously different, I was benchmarking the COL with the 81k reference. The explanation of income taxes and property taxes on 100k draw was valid. I don't think 50k of spending is FATfire. *shrug*
How on earth do you get $30k for income taxes when one is retired? And if you own your own home outright, you have no mortgage or rent payment, only the aforementioned property taxes. Seems your discretionary income would be substantially higher than the majority’s total take home pay.
If I'm withdrawing 100k from a stash that I have not paid income (federal and state) taxes on...... May be even higher than 30k. Might be lower. It depends on age, place you are withdrawing your money from, any 10% penalties, etc. It was just a guessed number, not from personal experience.
A single person drawing $100k from ira or 401k would owe about $15k and in my state another $6k to them so $21k total. Diversity of tax type accounts can help with this. Then drop another IDK $10-20k on Healthcare and $100k WR isn't looking as great.
On the other hand a family of 4 would owe just $1k so filing status/dependents matter. Also something to think about as you and your kids (if applicable) age out of being dependents. So if one was fire with a family and had tax advantaged accounts you should Def do roth conversion now and don't touch taxable.
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It seems what we need to define is whether assisting aging parents or living in Southern California are roughly equivalent to owning two Teslas and a Hum-V, and eating out 3 meals a day, having a second home, or wearing $1000 shoes, when looking at what constitutes "fat" FIRE.
Or wanting to donate well into 5 figures to charity, or having a special-needs child, or whatever.
Same dollars, differing values. So are they all the same if we look at whether FIRE is fat? To me, they are not, but I can respect the argument that they are. It is a luxury many don't have to be able to support one's special needs child without many compromises or sacrifices. It is a luxury to continue living in an expensive city where you have a network, once you no longer have a job there. So if "fat" is "having expensive luxuries", that that's pretty overweight. But to me, those things are different. For me, fat FIRE is about extravagance and indulgence, and while those things are luxuries, I don't think they are extravagant.
Yeah, that's because none of these terms actually mean anything, and that's a value judgement you are putting on them.
Is it because you find the term fatFIRE to be insulting and have some kind of negative connotation?
Would you feel differently if it was termed cushyFIRE?
The simple fact is that the OP came here saying that they doubt that having enough savings to generate 100K/yr constitutes fatFIRE and that maybe it now has to be 200K. That's just ridiculous. For the vast, overwhelming majority of people, having 100K+inflation to spend every single year while maintaining your nest egg, is BEYOND luxury.
And yes, being able to own a nice home in an expensive area and support you parents and donate generously to charity counts as extreme luxury, of course it does. To claim any differently, just because it aligns with your personal values is nonsense.
I say this as someone who will have a household retirement income of well over 100K, and DH and I marvel constantly and the immense possibilities this affords us. It IS a luxury. It just is.
No, I don't find it insulting or pejorative. It just implies a certain level of extravagance *to me*. Of course we are all going to see it a little different, which is what I was trying to get at with my post.
Regarding the bolded, that's exactly why I said it was a luxury. In my mind, those things are generally not extravagant (though even that word, like the phrase fat FIRE, is going to have different connotations for different people). And for me fat FIRE is not just having some major luxuries; it's have significant extravagances. YMMV, and as I also said, I can respect those who see all this a bit differently.
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Definitely not in my area. Depending on what link you chose, 81k is the average salary in Seattle so 100k puts you barely above average.
https://www.payscale.com/research/US/Location=Seattle-WA/Salary
Housing is also absurd here, 1+ Mil for a free standing house in Seattle proper with more than 2 bedrooms. So taxes alone are going to be 15k in this region.
That in mind, I'd say 150k draw is more like fatfire to me. 100k is still pretty lean since 30k for income taxes, 15k for property taxes (assuming you own your home outright), leaving barely 50k for spending.
Again, you confused retirement spending with work salary. If you make $150k a year, you should probably spend less than $75k a year, with 401k saving, FICA taxes, child education, etc..
I didn't. I specifically gave an example of a 150k draw. While a draw and a salary are obviously different, I was benchmarking the COL with the 81k reference. The explanation of income taxes and property taxes on 100k draw was valid. I don't think 50k of spending is FATfire. *shrug*
How on earth do you get $30k for income taxes when one is retired? And if you own your own home outright, you have no mortgage or rent payment, only the aforementioned property taxes. Seems your discretionary income would be substantially higher than the majority’s total take home pay.
If I'm withdrawing 100k from a stash that I have not paid income (federal and state) taxes on...... May be even higher than 30k. Might be lower. It depends on age, place you are withdrawing your money from, any 10% penalties, etc. It was just a guessed number, not from personal experience.
A single person drawing $100k from ira or 401k would owe about $15k and in my state another $6k to them so $21k total. Diversity of tax type accounts can help with this. Then drop another IDK $10-20k on Healthcare and $100k WR isn't looking as great.
On the other hand a family of 4 would owe just $1k so filing status/dependents matter. Also something to think about as you and your kids (if applicable) age out of being dependents. So if one was fire with a family and had tax advantaged accounts you should Def do roth conversion now and don't touch taxable.
Here’s a good example of how drawing from savings in retirement receives favorable tax treatment compare and to earned income, and is a source of confusion in this thread.
LTCG are taxed at 0, 15% and 20% - and those rates are graduated (much as income tax brackets are). Those rates are also only applicable to gains, not principle (i.e. ‘basis’)
So let’s look at someone who files as ‘Single’ and has only taxable investment accounts to draw from. If we take the most extreme (and exceedingly unlikely) scenario where 100% of withdrawals were capital gains, the federal tax rate would be $6,800. State rates vary wildly, from very high states like NY and CA (est. $5,900) to states with no LTCG tax (e.g. FL, TX, AK, WA, NH and others...). In all cases you’d be well below the threshold for paying an additional 3.8% Medicare tax
So in this ‘extreme’ example there would be a range from $6,800 to $12,900 depending on what state you live in.
More likely, a portion of a retiree’s withdrawal will not be capital gains (the gains have to come from somewhere), and may include tax-advantaged buckets like Roths or HSAs. More typical on $100k would be about $65k in LTCG with the remainder being principle. That drops the federal taxable burden to just $1,700
Married (filling jointly)? There would be no federal tax on LTCG at a $100k withdrawal rate.
Ironically moderate levels of STCG would actually improve the situation, as they would be offset by the standard deduction.`
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Guess I am asking, what level do you consider Fat FIRE and do you think the amounts have or are shifting hire to be Fat FIRE?
There is no single figure. What it is for a family still paying down a mortgage in a HCOL area would be expected to be much greater than it is for a single person living in a LCOL area with a paid off home, for example.
I could get by on $22K/yr in early FIRE including taxes and sinking funds just by staying in my home - that's just getting the bills paid, not FAT fire. But, $50K/yr would be pretty FAT from my perspective if I stayed put, and my stash and retirement income will allow about 50% more than that. I also realize there are others here that would consider $50K/yr a hardship.
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Guess I am asking, what level do you consider Fat FIRE and do you think the amounts have or are shifting hire to be Fat FIRE?
There is no single figure. What it is for a family still paying down a mortgage in a HCOL area would be expected to be much greater than it is for a single person living in a LCOL area with a paid off home, for example.
I could get by on $22K/yr in early FIRE including taxes and sinking funds just by staying in my home - that's just getting the bills paid, not FAT fire. But, $50K/yr would be pretty FAT from my perspective if I stayed put, and my stash and retirement income will allow about 50% more than that. I also realize there are others here that would consider $50K/yr a hardship.
I get that and it's something I personally am trying, unsuccessfully, to reconcile. Family of five with teens and a tween in probably peak expense as far as kids go (food, clothing, activities, travel, fun money, car insurance, etc) and aside from college many of these costs will go away, but in the moment they feel permanent. Asking myself if I have too much, enough or not enough....things I didn't think about leading up to fire.
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If you think you need $100k or more in retirement, you may be missing the entire point of this blog.
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LTCG are taxed at 0, 15% and 20% - and those rates are graduated (much as income tax brackets are). Those rates are also only applicable to gains, not principle (i.e. ‘basis’)
So let’s look at someone who files as ‘Single’ and has only taxable investment accounts to draw from. If we take the most extreme (and exceedingly unlikely) scenario where 100% of withdrawals were capital gains, the federal tax rate would be $6,800. State rates vary wildly, from very high states like NY and CA (est. $5,900) to states with no LTCG tax (e.g. FL, TX, AK, WA, NH and others...). In all cases you’d be well below the threshold for paying an additional 3.8% Medicare tax
So in this ‘extreme’ example there would be a range from $6,800 to $12,900 depending on what state you live in.
More likely, a portion of a retiree’s withdrawal will not be capital gains (the gains have to come from somewhere), and may include tax-advantaged buckets like Roths or HSAs. More typical on $100k would be about $65k in LTCG with the remainder being principle. That drops the federal taxable burden to just $1,700
Married (filling jointly)? There would be no federal tax on LTCG at a $100k withdrawal rate.
Ironically moderate levels of STCG would actually improve the situation, as they would be offset by the standard deduction.`
In our household, we are fortunate to have enough for retirement in after-tax savings (at a 4% WR). I should note that we also have a substantial amount in tax advantaged buckets. Even though we live in NJ, a high tax state, the burden is not going to be big, precisely for the reasons you describe. I will only have to pay tax on dividends, interest and capital gains (most of which is long term). I hope to delay withdrawing from our tax advantaged accounts until forced to do so by RMDs - which is a long time away.
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I think people spend too much time trying to define different types of FIRE. Why can't it just be FIRE?
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I think people spend too much time trying to define different types of FIRE. Why can't it just be FIRE?
Human nature: many of us enjoy saying "you're doing that wrong" and few of us enjoy hearing "you're doing that wrong."
More seriously I think the only reason these two terms entered the early retirement community's lexicon is that the people on reddit split out into subreddits defined using those terms. And if you read the rules on the fatFIRE subreddit, this one jumps out as the likely motivation for creating a separate community:
Comments which criticize someone simply for living a “FatFIRE” lifestyle or making a high income will be removed, and users will be muted or banned at the moderator’s discretion.
Then there's the leanFIRE subreddit, which has their explicit definition of who does and does not qualify as leanFIRE right on their own sidebar:
If you want to retire before 60 with less than $40k in planned yearly household expenses ($20k individual), this is the place to discuss it!
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$100,000 is fat fire in flyover country. We have an income of about $80,000 and that buys a nice lifestyle. We have no mortgage. We have multiple properties.
This annual income doesnt cover new automobiles or trips to Europe, those come out of our stash.
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Due to inflation $100k is not what it used to be. It remains a significant amount of income on which one can lead a great life and retire early assuming you don’t live in a HCOL area like New York City or San Francisco.
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$100K is a lot of money. It's 60% more than the median household income.
That said, I think the PF space should move away from the concept of "lean fire". At least in the US. The ACA has been a big help, but even with the ACA, the OOPM can get up to $17K. The idea that people think they can retire at 40 on something like $30K a year and live for the next 50 years with no major medical incidents or any other major life changes that might require more money is silly IMO.
You can blow out your knee tomorrow. That's the surgery + physical therapy. And then maybe all of the sudden, your compact non-"clown car" kills your knee to get in and out of, or even to drive in for extended periods of time. There are taxes. Often times, they go up. If you own property and you're not a senior citizen, in a lot of cases, your property taxes go up faster than inflation.
We're all (hopefully) going to live a long time. Things will change. Likely for the more expensive. And unless you're all secretly FIRE bloggers who get income off of affiliate links, 4% of a modest next egg might not cut it.
By all means, don't keep up with the Jones's. But don't keep down with them either. Unless your job is truly standing between you and happiness, I say stick it out a little longer and accumulate. Worst case scenario is you die rich and make some charitable cause very happy.
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Due to inflation $100k is not what it used to be. It remains a significant amount of income on which one can lead a great life and retire early assuming you don’t live in a HCOL area like New York City or San Francisco.
Again, no one is talking about 100K work income, we're talking about 100K in retirement income, *after* all of the savings has been done, and likely when there's either a paid off house, or a ton of untouched equity in that house.
Plus, if the person is retired, then there's no work obligation keeping them in an HCOL area, so choosing to stay there is a luxury decision, which is thankfully affordable on a generous 100K retirement income.
100K in retirement income is a lot. No one is saying it's too much, no one is saying it's an unreasonable goal, but also no one can safely argue that it's not a lot of retirement income.
And that's what OP said, that they used to think it was a lot, and now they are unsure. Well no, it's still a lot. It's still a hefty amount to be able to spend year over year, plus inflation, indefinitely in retirement.
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Due to inflation $100k is not what it used to be. It remains a significant amount of income on which one can lead a great life and retire early assuming you don’t live in a HCOL area like New York City or San Francisco.
Again, no one is talking about 100K work income, we're talking about 100K in retirement income, *after* all of the savings has been done, and likely when there's either a paid off house, or a ton of untouched equity in that house.
Plus, if the person is retired, then there's no work obligation keeping them in an HCOL area, so choosing to stay there is a luxury decision, which is thankfully affordable on a generous 100K retirement income.
100K in retirement income is a lot. No one is saying it's too much, no one is saying it's an unreasonable goal, but also no one can safely argue that it's not a lot of retirement income.
And that's what OP said, that they used to think it was a lot, and now they are unsure. Well no, it's still a lot. It's still a hefty amount to be able to spend year over year, plus inflation, indefinitely in retirement.
As the OP I want to correct you I mean saying I was unsure if it was a lot, I said I still think it is a lot. But I questioned whether or not it would still be Fat FIRE (again whatever that is). Based on the thread the consistency is that it means different amounts to different people on different areas.
Also, your counter to other posters in a lot of your responses is basically "Its a luxury" implying that they are stupidly fat fire and spendy. And that may in fact be the case but that is not the question. Shit, even lean FIRE is a luxury. Just living in the U.S. is a luxury (even with a feed up health system). Typing this on a phone is huge luxury.
Anyway, $100k in my mind is a lot of money but I am still not sure it is a level that is hugely fat especially when location is factored in. Sure I could move to rural Alabama probably be stupidly fat but that's not happening.
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It seems what we need to define is whether assisting aging parents or living in Southern California are roughly equivalent to owning two Teslas and a Hum-V, and eating out 3 meals a day, having a second home, or wearing $1000 shoes, when looking at what constitutes "fat" FIRE.
Or wanting to donate well into 5 figures to charity, or having a special-needs child, or whatever.
Same dollars, differing values. So are they all the same if we look at whether FIRE is fat? To me, they are not, but I can respect the argument that they are. It is a luxury many don't have to be able to support one's special needs child without many compromises or sacrifices. It is a luxury to continue living in an expensive city where you have a network, once you no longer have a job there. So if "fat" is "having expensive luxuries", that that's pretty overweight. But to me, those things are different. For me, fat FIRE is about extravagance and indulgence, and while those things are luxuries, I don't think they are extravagant.
Yeah, that's because none of these terms actually mean anything, and that's a value judgement you are putting on them.
Is it because you find the term fatFIRE to be insulting and have some kind of negative connotation?
Would you feel differently if it was termed cushyFIRE?
The simple fact is that the OP came here saying that they doubt that having enough savings to generate 100K/yr constitutes fatFIRE and that maybe it now has to be 200K. That's just ridiculous. For the vast, overwhelming majority of people, having 100K+inflation to spend every single year while maintaining your nest egg, is BEYOND luxury.
And yes, being able to own a nice home in an expensive area and support you parents and donate generously to charity counts as extreme luxury, of course it does. To claim any differently, just because it aligns with your personal values is nonsense.
I say this as someone who will have a household retirement income of well over 100K, and DH and I marvel constantly and the immense possibilities this affords us. It IS a luxury. It just is.
No, I don't find it insulting or pejorative. It just implies a certain level of extravagance *to me*. Of course we are all going to see it a little different, which is what I was trying to get at with my post.
Regarding the bolded, that's exactly why I said it was a luxury. In my mind, those things are generally not extravagant (though even that word, like the phrase fat FIRE, is going to have different connotations for different people). And for me fat FIRE is not just having some major luxuries; it's have significant extravagances. YMMV, and as I also said, I can respect those who see all this a bit differently.
What do people with below average income do when they confront situations like parents needing help or a special-needs kid? (Honest question. So far I'm lucky enough not to have needed to know.)
It is amazing, and a little sad, how many apparently fundamental disagreements actually turn out to simply be cases of the same word meaning different things to different people. In this thread alone the fatFIRE/leanFIRE distinction has been used to variously mean:
1) Excessively cautious vs excessively optimistic withdrawal rates.
2) High vs low planned spending in retirement in dollar values.
3) High vs low planned spending in retirement relative to what people think they themselves or others "need" to spend.
4) High vs low planned spending in retirement relative to the spending of other people in the same neighborhood.
For what it is worth, I will say the reddit community split between leanFIRE vs fatFIRE seems to use primarily definition #2. But why argue about what a word does or doesn't apply to when we don't even agree on what the word means. (And to be clear, I see no point in arguing about which meaning of the word is best either).
I'd say whatever you call Fat FIRE, it's purely about spending and not about withdrawal rates. That's a whole other subject.
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What do people with below average income do when they confront situations like parents needing help or a special-needs kid? (Honest question. So far I'm lucky enough not to have needed to know.)
They make do. In some cases a three bedroom house might have the grandparents in one bedroom, the disabled kid in another, the mom and dad in the master bedroom, and two non-handicapped kids sleeping on the couches in the den. I've seen very similar living arrangements from family and friends.
You can rely on food pantries and sometimes some charity/community sharing from the churches for other necessities. It's not a great life, but you just make do.
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Due to inflation $100k is not what it used to be. It remains a significant amount of income on which one can lead a great life and retire early assuming you don’t live in a HCOL area like New York City or San Francisco.
Again, no one is talking about 100K work income, we're talking about 100K in retirement income, *after* all of the savings has been done, and likely when there's either a paid off house, or a ton of untouched equity in that house.
Plus, if the person is retired, then there's no work obligation keeping them in an HCOL area, so choosing to stay there is a luxury decision, which is thankfully affordable on a generous 100K retirement income.
100K in retirement income is a lot. No one is saying it's too much, no one is saying it's an unreasonable goal, but also no one can safely argue that it's not a lot of retirement income.
And that's what OP said, that they used to think it was a lot, and now they are unsure. Well no, it's still a lot. It's still a hefty amount to be able to spend year over year, plus inflation, indefinitely in retirement.
As the OP I want to correct you I mean saying I was unsure if it was a lot, I said I still think it is a lot. But I questioned whether or not it would still be Fat FIRE (again whatever that is). Based on the thread the consistency is that it means different amounts to different people on different areas.
Also, your counter to other posters in a lot of your responses is basically "Its a luxury" implying that they are stupidly fat fire and spendy. And that may in fact be the case but that is not the question. Shit, even lean FIRE is a luxury. Just living in the U.S. is a luxury (even with a feed up health system). Typing this on a phone is huge luxury.
Anyway, $100k in my mind is a lot of money but I am still not sure it is a level that is hugely fat especially when location is factored in. Sure I could move to rural Alabama probably be stupidly fat but that's not happening.
You're the one implying that it's implying that being able to afford a luxury implies a stupid level of spending.
I never ever said or implied that and clearly stated the opposite multiple times.
fatFIRE doesn't have to connote a negative implication. I see nothing wrong with having 100K of retirement income I think I already mentioned that I expect more than that from my own stash. I'm simply recognizing that it is an extreme level of luxury, the amount of options that will be available to me with that level of retirement income.
I could choose to help my parents financially, there isn't a city I couldn't afford to live in, I have zero concerns about medical costs, etc, etc. My level of savings will provide me a profound level of retirement luxury that most can never have. That's a fact. Not an insult.
What I find really weird is that people seem to only want to call FIRE "fat" if they're spending on things they personally think are excessive and unnecessary. So spending 6 figures a year is not fat if there's no handbags or luxury cars? It's only luxury if it's something you wouldn't buy for yourself?
Seems unnecessarily judgemental and arbitrary to me.
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Due to inflation $100k is not what it used to be. It remains a significant amount of income on which one can lead a great life and retire early assuming you don’t live in a HCOL area like New York City or San Francisco.
Again, no one is talking about 100K work income, we're talking about 100K in retirement income, *after* all of the savings has been done, and likely when there's either a paid off house, or a ton of untouched equity in that house.
Plus, if the person is retired, then there's no work obligation keeping them in an HCOL area, so choosing to stay there is a luxury decision, which is thankfully affordable on a generous 100K retirement income.
100K in retirement income is a lot. No one is saying it's too much, no one is saying it's an unreasonable goal, but also no one can safely argue that it's not a lot of retirement income.
And that's what OP said, that they used to think it was a lot, and now they are unsure. Well no, it's still a lot. It's still a hefty amount to be able to spend year over year, plus inflation, indefinitely in retirement.
As the OP I want to correct you I mean saying I was unsure if it was a lot, I said I still think it is a lot. But I questioned whether or not it would still be Fat FIRE (again whatever that is). Based on the thread the consistency is that it means different amounts to different people on different areas.
Also, your counter to other posters in a lot of your responses is basically "Its a luxury" implying that they are stupidly fat fire and spendy. And that may in fact be the case but that is not the question. Shit, even lean FIRE is a luxury. Just living in the U.S. is a luxury (even with a feed up health system). Typing this on a phone is huge luxury.
Anyway, $100k in my mind is a lot of money but I am still not sure it is a level that is hugely fat especially when location is factored in. Sure I could move to rural Alabama probably be stupidly fat but that's not happening.
You're the one implying that it's implying that being able to afford a luxury implies a stupid level of spending.
I never ever said or implied that and clearly stated the opposite multiple times.
fatFIRE doesn't have to connote a negative implication. I see nothing wrong with having 100K of retirement income I think I already mentioned that I expect more than that from my own stash. I'm simply recognizing that it is an extreme level of luxury, the amount of options that will be available to me with that level of retirement income.
I could choose to help my parents financially, there isn't a city I couldn't afford to live in, I have zero concerns about medical costs, etc, etc. My level of savings will provide me a profound level of retirement luxury that most can never have. That's a fact. Not an insult.
What I find really weird is that people seem to only want to call FIRE "fat" if they're spending on things they personally think are excessive and unnecessary. So spending 6 figures a year is not fat if there's no handbags or luxury cars? It's only luxury if it's something you wouldn't buy for yourself?
Seems unnecessarily judgmental and arbitrary to me.
The entire concept of "fat FIRE" is arbitrary. So i'm not sure how it is any more arbitrary to say that certain things feed into that and others don't. And you yourself keep harping on the fact that it isn't a negative term, so how is it then judgmental to apply it to certain behaviors and not others. Because yes, I think someone who has adopted the 7 children of their deceased sibling and is raising them in SoCal so they can remain close to the deceased father's family to maintain that connect, is not living what *I personally* consider a fat FIRE lifestyle. Someone traveling frequently (as I plan to do) is probably fat FIRE by my definition, even if they spend the same amount. (So yes, I consider my FIRE plans and budget to be either fat, or at least chubby, and no, I don't consider that to be a negative thing.)
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In the same way that $100K in income is different than $100K in retirement income, retirement income pre and post 65 are also very different. Our society is built around supporting an age 65 retirement. Medicare Part A/B/D, social security, freezing property tax increases for seniors, etc. A senior citizen's idea of a good time also changes less rapidly or isn't as expensive as what a FIREd 40 year old wants out of life.
I encourage everyone to imagine how much more expensive their life could get, above and beyond their planned FIRE spend. Your favorite blogger will 100% write a blog post in the future (if they have not already) rationalizing why they compromised on their low spend. Unforeseen medical circumstances. Missed the dynamic city life. Priorities changed. etc.
This is gonna happen to all of us too. It's best to plan on it IMO and not get hung up on "fat" or "lean".
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Due to inflation $100k is not what it used to be. It remains a significant amount of income on which one can lead a great life and retire early assuming you don’t live in a HCOL area like New York City or San Francisco.
Again, no one is talking about 100K work income, we're talking about 100K in retirement income, *after* all of the savings has been done, and likely when there's either a paid off house, or a ton of untouched equity in that house.
Plus, if the person is retired, then there's no work obligation keeping them in an HCOL area, so choosing to stay there is a luxury decision, which is thankfully affordable on a generous 100K retirement income.
100K in retirement income is a lot. No one is saying it's too much, no one is saying it's an unreasonable goal, but also no one can safely argue that it's not a lot of retirement income.
And that's what OP said, that they used to think it was a lot, and now they are unsure. Well no, it's still a lot. It's still a hefty amount to be able to spend year over year, plus inflation, indefinitely in retirement.
As the OP I want to correct you I mean saying I was unsure if it was a lot, I said I still think it is a lot. But I questioned whether or not it would still be Fat FIRE (again whatever that is). Based on the thread the consistency is that it means different amounts to different people on different areas.
Also, your counter to other posters in a lot of your responses is basically "Its a luxury" implying that they are stupidly fat fire and spendy. And that may in fact be the case but that is not the question. Shit, even lean FIRE is a luxury. Just living in the U.S. is a luxury (even with a feed up health system). Typing this on a phone is huge luxury.
Anyway, $100k in my mind is a lot of money but I am still not sure it is a level that is hugely fat especially when location is factored in. Sure I could move to rural Alabama probably be stupidly fat but that's not happening.
You're the one implying that it's implying that being able to afford a luxury implies a stupid level of spending.
I never ever said or implied that and clearly stated the opposite multiple times.
fatFIRE doesn't have to connote a negative implication. I see nothing wrong with having 100K of retirement income I think I already mentioned that I expect more than that from my own stash. I'm simply recognizing that it is an extreme level of luxury, the amount of options that will be available to me with that level of retirement income.
I could choose to help my parents financially, there isn't a city I couldn't afford to live in, I have zero concerns about medical costs, etc, etc. My level of savings will provide me a profound level of retirement luxury that most can never have. That's a fact. Not an insult.
What I find really weird is that people seem to only want to call FIRE "fat" if they're spending on things they personally think are excessive and unnecessary. So spending 6 figures a year is not fat if there's no handbags or luxury cars? It's only luxury if it's something you wouldn't buy for yourself?
Seems unnecessarily judgmental and arbitrary to me.
The entire concept of "fat FIRE" is arbitrary. So i'm not sure how it is any more arbitrary to say that certain things feed into that and others don't. And you yourself keep harping on the fact that it isn't a negative term, so how is it then judgmental to apply it to certain behaviors and not others. Because yes, I think someone who has adopted the 7 children of their deceased sibling and is raising them in SoCal so they can remain close to the deceased father's family to maintain that connect, is not living what *I personally* consider a fat FIRE lifestyle. Someone traveling frequently (as I plan to do) is probably fat FIRE by my definition, even if they spend the same amount. (So yes, I consider my FIRE plans and budget to be either fat, or at least chubby, and no, I don't consider that to be a negative thing.)
Yes, there is no definition, so why apply arbitrary metrics to be judgemental. I don't understand.
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What I find really weird is that people seem to only want to call FIRE "fat" if they're spending on things they personally think are excessive and unnecessary. So spending 6 figures a year is not fat if there's no handbags or luxury cars? It's only luxury if it's something you wouldn't buy for yourself?
Seems unnecessarily judgemental and arbitrary to me.
Yeah I get that. I think of fat fire as being able to solve a big issue (replace a car, major house repair/update, medical), major family trip (not camping), help out a family member, etc......one of such things but not all of these things in any given year over and above normal lifestyle expenses.
I think $100k does this but all I am saying that it isn't as clear to me as it was in the past. And I don't necessarily see that as a luxury bc it did take a lot of time, hard work, planning, discipline, luck to some extent, risk to get to that point.
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What I find really weird is that people seem to only want to call FIRE "fat" if they're spending on things they personally think are excessive and unnecessary. So spending 6 figures a year is not fat if there's no handbags or luxury cars? It's only luxury if it's something you wouldn't buy for yourself?
Seems unnecessarily judgemental and arbitrary to me.
Yeah I get that. I think of fat fire as being able to solve a big issue (replace a car, major house repair/update, medical), major family trip (not camping), help out a family member, etc......one of such things but not all of these things in any given year over and above normal lifestyle expenses.
I think $100k does this but all I am saying that it isn't as clear to me as it was in the past. And I don't necessarily see that as a luxury bc it did take a lot of time, hard work, planning, discipline, luck to some extent, risk to get to that point.
You don't consider consider something a luxury if it's earned?
I earned my lifestyle and I consider it very luxurious.
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Due to inflation $100k is not what it used to be. It remains a significant amount of income on which one can lead a great life and retire early assuming you don’t live in a HCOL area like New York City or San Francisco.
Again, no one is talking about 100K work income, we're talking about 100K in retirement income, *after* all of the savings has been done, and likely when there's either a paid off house, or a ton of untouched equity in that house.
Plus, if the person is retired, then there's no work obligation keeping them in an HCOL area, so choosing to stay there is a luxury decision, which is thankfully affordable on a generous 100K retirement income.
100K in retirement income is a lot. No one is saying it's too much, no one is saying it's an unreasonable goal, but also no one can safely argue that it's not a lot of retirement income.
And that's what OP said, that they used to think it was a lot, and now they are unsure. Well no, it's still a lot. It's still a hefty amount to be able to spend year over year, plus inflation, indefinitely in retirement.
As the OP I want to correct you I mean saying I was unsure if it was a lot, I said I still think it is a lot. But I questioned whether or not it would still be Fat FIRE (again whatever that is). Based on the thread the consistency is that it means different amounts to different people on different areas.
Also, your counter to other posters in a lot of your responses is basically "Its a luxury" implying that they are stupidly fat fire and spendy. And that may in fact be the case but that is not the question. Shit, even lean FIRE is a luxury. Just living in the U.S. is a luxury (even with a feed up health system). Typing this on a phone is huge luxury.
Anyway, $100k in my mind is a lot of money but I am still not sure it is a level that is hugely fat especially when location is factored in. Sure I could move to rural Alabama probably be stupidly fat but that's not happening.
You're the one implying that it's implying that being able to afford a luxury implies a stupid level of spending.
I never ever said or implied that and clearly stated the opposite multiple times.
fatFIRE doesn't have to connote a negative implication. I see nothing wrong with having 100K of retirement income I think I already mentioned that I expect more than that from my own stash. I'm simply recognizing that it is an extreme level of luxury, the amount of options that will be available to me with that level of retirement income.
I could choose to help my parents financially, there isn't a city I couldn't afford to live in, I have zero concerns about medical costs, etc, etc. My level of savings will provide me a profound level of retirement luxury that most can never have. That's a fact. Not an insult.
What I find really weird is that people seem to only want to call FIRE "fat" if they're spending on things they personally think are excessive and unnecessary. So spending 6 figures a year is not fat if there's no handbags or luxury cars? It's only luxury if it's something you wouldn't buy for yourself?
Seems unnecessarily judgmental and arbitrary to me.
The entire concept of "fat FIRE" is arbitrary. So i'm not sure how it is any more arbitrary to say that certain things feed into that and others don't. And you yourself keep harping on the fact that it isn't a negative term, so how is it then judgmental to apply it to certain behaviors and not others. Because yes, I think someone who has adopted the 7 children of their deceased sibling and is raising them in SoCal so they can remain close to the deceased father's family to maintain that connect, is not living what *I personally* consider a fat FIRE lifestyle. Someone traveling frequently (as I plan to do) is probably fat FIRE by my definition, even if they spend the same amount. (So yes, I consider my FIRE plans and budget to be either fat, or at least chubby, and no, I don't consider that to be a negative thing.)
Yes, there is no definition, so why apply arbitrary metrics to be judgmental. I don't understand.
Because I'm not being judgmental, assuming your definition of "judgmental" means placing a negative value on something. I'm not being judgmental when I say X is fat FIRE and Y isn't, because fat FIRE isn't a negative term for me. You strongly imply it isn't negative to you either, but then you claim that using it in some cases is applying "judgement", which certainly makes it sound like you think it's negative, or being applied negative, and you balk at it being applied in some case and not others. When I say that 'this apple is large and that one is not', there is no judgement (in any negative sense), even though "large apple vs not large apple" is an arbitrary and nebulous concept and people will disagree with exactly where the line is between large and not large. . So how is "fat FIRE vs not fat FIRE" judgmental (again, assuming you are applying a negative connotation to "judgmental").
You say you don't think it's negative, but it seems maybe you do, at least a bit, where as I truly don't.
Also, are there some versions of FIRE you'd consider fat, and others you wouldn't, or do you just reject the term entirely. It seems like you are fine with the term, you just object to my definition. So you there are things you would say are fat FIRE and things you would say are not fat FIRE, then you too are making a "judgement". it's just got different criteria then I'm using.
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That said, I think the PF space should move away from the concept of "lean fire". At least in the US. The ACA has been a big help, but even with the ACA, the OOPM can get up to $17K. The idea that people think they can retire at 40 on something like $30K a year and live for the next 50 years with no major medical incidents or any other major life changes that might require more money is silly IMO.
You can blow out your knee tomorrow. That's the surgery + physical therapy. And then maybe all of the sudden, your compact non-"clown car" kills your knee to get in and out of, or even to drive in for extended periods of time. There are taxes. Often times, they go up. If you own property and you're not a senior citizen, in a lot of cases, your property taxes go up faster than inflation.
Except that someone who is FIREing on something like $30k / year won't have an ACA plan that has an OOPM of $17k. Someone FIREd living on $30k almost has ways to get their taxable income down to the level where Cost Sharing Reductions reduce OOPM to a few thousand, and preimums, deductibles, and co-insurance costs are much lower than normal as well.
The question is about FAT fire. Not ability to live and survive and normal FIRE. Are you stating that 50k is FATfire?
I'm not the person you were referring to, but I would think that $50k would be the range I would start to see as fatFIRE. In that case, I'm assuming a single individual or a couple and a paid off house. It's not all that hard to do that very comfortably on something like $40k/year so $50k adds an extra $10k of fat to spend. Certainly for a family or people with other extra costs might need more for FatFIRE, but to me the discussion about whatever FatFIRE means starts around $50k. It's very hard for me to imagine any universe where spending that's WAY OVER the median household income (talking $100k here) is not FatFIRE. With a paid off house that means that you're spending more money than the median, but you don't have to save anything more for retirement and you don't have a mortgage to pay. More income than most but leaving out 2 major expenses? Not calling that FatFIRE just seems insane to me.
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Due to inflation $100k is not what it used to be. It remains a significant amount of income on which one can lead a great life and retire early assuming you don’t live in a HCOL area like New York City or San Francisco.
Again, no one is talking about 100K work income, we're talking about 100K in retirement income, *after* all of the savings has been done, and likely when there's either a paid off house, or a ton of untouched equity in that house.
Plus, if the person is retired, then there's no work obligation keeping them in an HCOL area, so choosing to stay there is a luxury decision, which is thankfully affordable on a generous 100K retirement income.
100K in retirement income is a lot. No one is saying it's too much, no one is saying it's an unreasonable goal, but also no one can safely argue that it's not a lot of retirement income.
And that's what OP said, that they used to think it was a lot, and now they are unsure. Well no, it's still a lot. It's still a hefty amount to be able to spend year over year, plus inflation, indefinitely in retirement.
As the OP I want to correct you I mean saying I was unsure if it was a lot, I said I still think it is a lot. But I questioned whether or not it would still be Fat FIRE (again whatever that is). Based on the thread the consistency is that it means different amounts to different people on different areas.
Also, your counter to other posters in a lot of your responses is basically "Its a luxury" implying that they are stupidly fat fire and spendy. And that may in fact be the case but that is not the question. Shit, even lean FIRE is a luxury. Just living in the U.S. is a luxury (even with a feed up health system). Typing this on a phone is huge luxury.
Anyway, $100k in my mind is a lot of money but I am still not sure it is a level that is hugely fat especially when location is factored in. Sure I could move to rural Alabama probably be stupidly fat but that's not happening.
You're the one implying that it's implying that being able to afford a luxury implies a stupid level of spending.
I never ever said or implied that and clearly stated the opposite multiple times.
fatFIRE doesn't have to connote a negative implication. I see nothing wrong with having 100K of retirement income I think I already mentioned that I expect more than that from my own stash. I'm simply recognizing that it is an extreme level of luxury, the amount of options that will be available to me with that level of retirement income.
I could choose to help my parents financially, there isn't a city I couldn't afford to live in, I have zero concerns about medical costs, etc, etc. My level of savings will provide me a profound level of retirement luxury that most can never have. That's a fact. Not an insult.
What I find really weird is that people seem to only want to call FIRE "fat" if they're spending on things they personally think are excessive and unnecessary. So spending 6 figures a year is not fat if there's no handbags or luxury cars? It's only luxury if it's something you wouldn't buy for yourself?
Seems unnecessarily judgmental and arbitrary to me.
The entire concept of "fat FIRE" is arbitrary. So i'm not sure how it is any more arbitrary to say that certain things feed into that and others don't. And you yourself keep harping on the fact that it isn't a negative term, so how is it then judgmental to apply it to certain behaviors and not others. Because yes, I think someone who has adopted the 7 children of their deceased sibling and is raising them in SoCal so they can remain close to the deceased father's family to maintain that connect, is not living what *I personally* consider a fat FIRE lifestyle. Someone traveling frequently (as I plan to do) is probably fat FIRE by my definition, even if they spend the same amount. (So yes, I consider my FIRE plans and budget to be either fat, or at least chubby, and no, I don't consider that to be a negative thing.)
Yes, there is no definition, so why apply arbitrary metrics to be judgmental. I don't understand.
Because I'm not being judgmental, assuming your definition of "judgmental" means placing a negative value on something. I'm not being judgmental when I say X is fat FIRE and Y isn't, because fat FIRE isn't a negative term for me. You strongly imply it isn't negative to you either, but then you claim that using it in some cases is applying "judgement", which certainly makes it sound like you think it's negative, or being applied negative, and you balk at it being applied in some case and not others. When I say that 'this apple is large and that one is not', there is no judgement (in any negative sense), even though "large apple vs not large apple" is an arbitrary and nebulous concept and people will disagree with exactly where the line is between large and not large. . So how is "fat FIRE vs not fat FIRE" judgmental (again, assuming you are applying a negative connotation to "judgmental").
You say you don't think it's negative, but it seems maybe you do, at least a bit, where as I truly don't.
Also, are there some versions of FIRE you'd consider fat, and others you wouldn't, or do you just reject the term entirely. It seems like you are fine with the term, you just object to my definition. So you there are things you would say are fat FIRE and things you would say are not fat FIRE, then you too are making a "judgement". it's just got different criteria then I'm using.
Not really.
I don't really define fatFIRE, and have exactly zero negative feelings towards the term.
I'm surprised that so many people seem to want to define it in terms that seem to me as judgemental. People seem to want to define fatFIRE as spending on unnecessary luxuries, but certain acceptable luxuries seem to not count, like choosing to live somewhere insanely expensive.
You have your particular examples of spending 100K that you don't think should be considered fatFIRE because what the person is spending on, to you, isn't a luxury, such as adopting a bunch of orphaned nieces and nephews. I, on the other hand, consider it a HUGE luxury to be able to adopt a bunch of orphaned nieces and nephews and raise them in a crazy expensive location so that they can stay close to other family. I would be like "thank fuck I'm fatFIREd enough to afford this!"
In all honesty, I actually prefer to use fat vs lean as relative terms to how much someone has saved compared to their lean expenses. I don't even like using actual amounts for fat vs lean FIRE, so I don't usually.
I was initially responding to OP implying that 100K in retirement income was possibly no longer considered "a lot". It's just so much more than most people could ever hope to have, I can't fathom a world where we don't consider it a huge luxury to have that much money to spend in retirement.
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FatFIRE is over $76,804
LeanFIRE is under $76,801
Multiply by 1.1 if you live in a HCOL area, 1.13 if it is a VHCOL and 0.7 of it is LCOL
/s
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FatFIRE is over $76,804
LeanFIRE is under $76,801
Multiply by 1.1 if you live in a HCOL area, 1.13 if it is a VHCOL and 0.7 of it is LCOL
/s
And so it has been written.
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So by my calculations, $153,608 is morbidly obese FIRE as it is 2x fat FIRE.
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FatFIRE is over $76,804
LeanFIRE is under $76,801
Multiply by 1.1 if you live in a HCOL area, 1.13 if it is a VHCOL and 0.7 of it is LCOL
/s
And so it has been written.
Gotta aim for that sweet spot: $76,802 to $76,803. Anything else and we'll need to bring in the FIRE police.
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That said, I think the PF space should move away from the concept of "lean fire". At least in the US. The ACA has been a big help, but even with the ACA, the OOPM can get up to $17K. The idea that people think they can retire at 40 on something like $30K a year and live for the next 50 years with no major medical incidents or any other major life changes that might require more money is silly IMO.
You can blow out your knee tomorrow. That's the surgery + physical therapy. And then maybe all of the sudden, your compact non-"clown car" kills your knee to get in and out of, or even to drive in for extended periods of time. There are taxes. Often times, they go up. If you own property and you're not a senior citizen, in a lot of cases, your property taxes go up faster than inflation.
Except that someone who is FIREing on something like $30k / year won't have an ACA plan that has an OOPM of $17k. Someone FIREd living on $30k almost has ways to get their taxable income down to the level where Cost Sharing Reductions reduce OOPM to a few thousand, and preimums, deductibles, and co-insurance costs are much lower than normal as well.
The question is about FAT fire. Not ability to live and survive and normal FIRE. Are you stating that 50k is FATfire?
I'm not the person you were referring to, but I would think that $50k would be the range I would start to see as fatFIRE. In that case, I'm assuming a single individual or a couple and a paid off house. It's not all that hard to do that very comfortably on something like $40k/year so $50k adds an extra $10k of fat to spend. Certainly for a family or people with other extra costs might need more for FatFIRE, but to me the discussion about whatever FatFIRE means starts around $50k. It's very hard for me to imagine any universe where spending that's WAY OVER the median household income (talking $100k here) is not FatFIRE. With a paid off house that means that you're spending more money than the median, but you don't have to save anything more for retirement and you don't have a mortgage to pay. More income than most but leaving out 2 major expenses? Not calling that FatFIRE just seems insane to me.
Median hh income is a good benchmark as I indicates previously, but the median is $64k for the US but in my example my town median hh is $95k and even more direct my neighborhood of 1600 houses is closer to $150k. Even the state has med hh income of $85k. So for me in my area $100k isn't exorbitant and certainly not "Way over over the median"
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Median hh income is a good benchmark as I indicates previously, but the median is $64k for the US but in my example my town median hh is $95k and even more direct my neighborhood of 1600 houses is closer to $150k. Even the state has med hh income of $85k. So for me in my area $100k isn't exorbitant and certainly not "Way over over the median"
Say I live in St. Louis. Specifically I live in Ladue (median household income $214k/year) and have FIRED with a spend of $100k/year, half of the median for my neighborhood. For you is that leanFIRE? Then I buy a new house 15 minutes away in Kinloch (median household income $28k/year). Now my spend is 4x that of my neighborhood.
By moving a few minutes down the road, am I now fatFIRE?
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Median hh income is a good benchmark as I indicates previously, but the median is $64k for the US but in my example my town median hh is $95k and even more direct my neighborhood of 1600 houses is closer to $150k. Even the state has med hh income of $85k. So for me in my area $100k isn't exorbitant and certainly not "Way over over the median"
I disagree that median income (or income in general) is a good benchmark for retirement spending for all the reasons listed above and many more that have been discussed at length on this forum.
Tax rates are vastly more favorable to investment income, work-related costs can be considerable (e.g. commuting, wardrobe, tech-devices, ‘social-networking’,), and the inflexibility and lack of time leads to cost inefficiencies. Additionally, people who are still working are (or at least should be) contributing towards their savings.
Even non-mustachian individuals earning $100k might be spending less than $50k when you subtract taxes, retirement savings, and work-related costs.
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Median hh income is a good benchmark as I indicates previously, but the median is $64k for the US but in my example my town median hh is $95k and even more direct my neighborhood of 1600 houses is closer to $150k. Even the state has med hh income of $85k. So for me in my area $100k isn't exorbitant and certainly not "Way over over the median"
Say I live in St. Louis. Specifically I live in Ladue (median household income $214k/year) and have FIRED with a spend of $100k/year, half of the median for my neighborhood. For you is that leanFIRE? Then I buy a new house 15 minutes away in Kinloch (median household income $28k/year). Now my spend is 4x that of my neighborhood.
By moving a few minutes down the road, am I now fatFIRE?
Quite possibly, often times your locale and the company you keep is part of your desired lifestyle and influences spending. But neighborhood is probably not the best guide and town is or moreso state or msa. But overall US is not because that would would infer that you would likely have to move to be of similar level. Incidentally when I say town it is misleading because its rather large at 75,000 compared to Ladue at 8,600
Median hh income is a good benchmark as I indicates previously, but the median is $64k for the US but in my example my town median hh is $95k and even more direct my neighborhood of 1600 houses is closer to $150k. Even the state has med hh income of $85k. So for me in my area $100k isn't exorbitant and certainly not "Way over over the median"
I disagree that median income (or income in general) is a good benchmark for retirement spending for all the reasons listed above and many more that have been discussed at length on this forum.
Tax rates are vastly more favorable to investment income, work-related costs can be considerable (e.g. commuting, wardrobe, tech-devices, ‘social-networking’,), and the inflexibility and lack of time leads to cost inefficiencies. Additionally, people who are still working are (or at least should be) contributing towards their savings.
Even non-mustachian individuals earning $100k might be spending less than $50k when you subtract taxes, retirement savings, and work-related costs.
Maybe, but then there are possibly still taxes depending on how the assets are allocated. There is likely a big increase in health care because employer isn't picking up most of it with a better plan. There is probably more travel or hobby costs, which can be done more efficiently as you say, but still likely more. Sure no social networking, but I expect and have experienced a significant increase in socializing, much done cheaply or no cost at all but still a lot more including spending more (when I was working I never wanted to see anybody on a Friday or Sunday), and also if it FIRE to socialize often means seeing people around their work schedules.
So while it is still probably more to than work income, it may not be as great as you suggest. And still the point is about it being fat FIRE not lean or below all your network (no fun to watch all your friends go out somewhere only to say no because I can't afford it). As I said the company you keep matters, so while I may not need or want to do some of these things I, and my wife and my kids, do like being around our friends and family and sometimes that comes with a cost. And a big indicator of cost is household income because in the US spend spend spend is the way (even if we all don't spend it all). So if household income for your area is $100k and even if that translates down to $50k after taxes, retirement, work costs (I think it would be more like $65k) it still wouldn't put $100K off the charts because its median which means that half the people are making more than $100k and half less.
To me Fat FIRE is meeting all basic needs (including expensive health care), being able doing a lot of wants (travel, socializing), and being able to handle a big outlay in any given year for whatever (OOPM for health, roof, car, etc). But still can't do it all, we have friends (two families of 3) that went to some island for spring break all inclusive and are probably spending $15k for the trip - aside from its not on my list of wants but the ask was decidedly declined. Not to mention for our family of five it would have been more like $20k. Also something like this may be more typical for these two families and dear friends but is definitely not typical for most other families - they are the 1%ers of our neighborhood.
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Median hh income is a good benchmark as I indicates previously, but the median is $64k for the US but in my example my town median hh is $95k and even more direct my neighborhood of 1600 houses is closer to $150k. Even the state has med hh income of $85k. So for me in my area $100k isn't exorbitant and certainly not "Way over over the median"
I don't buy the argument that someone who has an ability in retirement to spend significantly more than the median household income in one of the wealthiest countries in the world is somehow not FatFIRE regardless of where they live. People live in those expensive places because they're willing to pay a tremendous about to take advantage of those benefits, whether they're great schools, parks, or other amenities.
But if I do stipulate that idea - that somehow the local area's spending determines what FatFIRE is - I still don't accept that $100k isn't FatFIRE in the area you live in. To use your example, in one of the wealthiest countries in the world, in one of the wealthiest states in that country, and in an above average income town within that wealthy state, $100k spending is STILL higher than the median income! And given that $100k of spending is worth a lot more than $100k of income due to tax laws, no need to save more for retirement, and the money saving skills from this website that FIREd person is significantly more wealthy in real terms that that median household in a wealthy town in a wealthy state in a wealthy country.
And the idea that living on $100k of spending in a neighborhood where the income is closer to $150k somehow means you're not FatFIRE just blows my mind. You're living in an insanely wealthy area and you don't have to work! How is that not the exact definition of FatFIRE? I'm just flabbergasted at the idea.
One last thing on location. According to Wikipedia, a U.S. county with a median household income of $100k would rank as the 17th highest. There are 3,006 counties in the U.S. That means that if we had a FIRE'd county in the U.S. where the median household spending was $100k that county would essentially rank in the top 0.57% of counties in the country. This county would be wealthier than 99.43% of counties in the U.S. How can we have a FatFIRE definition where wealth on that scale isn't considered FatFIRE?
Note - I don't have any problem at all with FatFIRE. I'm FatFIRE myself. My numbers are somewhere in the ballpark that we're talking about here. I'm not in any way criticizing FIREing on $100k or $200k or even more. But we really should be aware of how spectacularly wealthy that really is.
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Dictionary Attack
My impression is that FIRE is retiring with 25x your annual expenses.
fatFIRE means padding your budget, whether for unexpected changes in budget, concerns about (unforeseen?) risk, or some vague notion of spending you know you don't need to spend, but will enjoy spending.
leanFIRE is knowing that your FIRE number really has no wiggle room and might require cutting back on a few things early in retirement but gets you out of compulsory employment sooner.
baristaFIRE is leanFIRE but you have plans of some sort to find some source of income you enjoy but should keep you "retired" from a job you hate (while maintaining your investments so they have time to grow).
The United States dollar and multiples of it shouldn't be in this equation whatsoever. I mean we still define FIRE as 25x your annual expenses whether they are $7,000, $40,000 or $100,000. If you save up $2.5 million and your budget shows that you have a $100k in annual expenses, congrats, you can be called FIRE. Remember that just means Financially Independent, Retired Early.
Judgement Time
Trying to drag labels or judgement into it will of course result in disagreement. Pretty sure about 60% (made up statistic) of the forum threads are people trying to justify their spending decisions while others judge them for it. But to put it another way, you and I don't get to define what other people value. We only really get to do it for ourselves (or when other people ask us to do it for them!)
While it might not be pretty, I will balk a bit at anyone expecting to pay $100k every year for "things" in retirement. But I'm a healthy 41 year old, and with my spouse we have been mindful with our spending for a pretty long time, so we get a lot of enjoyment out of a $40-60k lifestyle - big house, two cars, a light mix of national and international travel. (The median home price in my county is about $380k and ours was just a pinch more than that... my mortgage is $1750 or $21k/year thanks to down payment, paying down PMI and refi'ing at 2.99%... $40k / year wouldn't include principal payments on our mortgage, but my nest egg would have to be large enough to pay off the principal before I'd pull the plug and call myself FIRE.) So from inside my personal bubble, $100k seems like "a lot of annual expenses" but in no way differentiates between leanFIRE, FIRE, and fatFIRE. Inflation will eventually make $100k feel like a different number than it feels like today. But it probably won't change the way people judge each other!
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This is an interesting discussion. I always think some of the terms around FIRE are useful but may tend to generate different ideas depending on someone’s interpretation.
I tend to think of Lean FIRE as just covering my core costs plus a small proportion of my discretionary spending. Someone following the Lean approach may be willing to fit some part time work in here and there, or are just seeing if they hit a positive sequence of returns era. Regular FIRE would meet my total desired expenses, while Fat FIRE would be way more than I needed. This is very personal. Someone could Lean FIRE on 10k a year, FIRE on £25k a year and Fat FIRE on a stash that can generate £40k a year.
Alternatively someone who for some bizarre reason needs to spend 1M a year would be in a Lean FIRE situation if their stash was ‘only’ generating 800k a year. So I don’t think it is possible to point to any given number and say if it is Lean, Regular or Fat. That has to be relative to stash size.
However I see that $100k is the equivalent of £72k. If I earned £72k I’d be in the top 5% of UK earners. As a global figure I’m guessing the top 1-2%? I’m not sure I could sit in a room full of people in that 95-98% and try to claim that £72k isn’t a lot to live on, when so many in the world live on so much less. It is a lot of money. It isn’t a lot of money if someone lives somewhere with a very high cost of living. But that is a choice. It is still an expensive lifestyle, but I certainly don’t mean to criticise anyone that spends that amount.
I’ve slightly cross posted with neo von retorch.
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Due to inflation $100k is not what it used to be. It remains a significant amount of income on which one can lead a great life and retire early assuming you don’t live in a HCOL area like New York City or San Francisco.
Again, no one is talking about 100K work income, we're talking about 100K in retirement income, *after* all of the savings has been done, and likely when there's either a paid off house, or a ton of untouched equity in that house.
Plus, if the person is retired, then there's no work obligation keeping them in an HCOL area, so choosing to stay there is a luxury decision, which is thankfully affordable on a generous 100K retirement income.
100K in retirement income is a lot. No one is saying it's too much, no one is saying it's an unreasonable goal, but also no one can safely argue that it's not a lot of retirement income.
And that's what OP said, that they used to think it was a lot, and now they are unsure. Well no, it's still a lot. It's still a hefty amount to be able to spend year over year, plus inflation, indefinitely in retirement.
As the OP I want to correct you I mean saying I was unsure if it was a lot, I said I still think it is a lot. But I questioned whether or not it would still be Fat FIRE (again whatever that is). Based on the thread the consistency is that it means different amounts to different people on different areas.
Also, your counter to other posters in a lot of your responses is basically "Its a luxury" implying that they are stupidly fat fire and spendy. And that may in fact be the case but that is not the question. Shit, even lean FIRE is a luxury. Just living in the U.S. is a luxury (even with a feed up health system). Typing this on a phone is huge luxury.
Anyway, $100k in my mind is a lot of money but I am still not sure it is a level that is hugely fat especially when location is factored in. Sure I could move to rural Alabama probably be stupidly fat but that's not happening.
You're the one implying that it's implying that being able to afford a luxury implies a stupid level of spending.
I never ever said or implied that and clearly stated the opposite multiple times.
fatFIRE doesn't have to connote a negative implication. I see nothing wrong with having 100K of retirement income I think I already mentioned that I expect more than that from my own stash. I'm simply recognizing that it is an extreme level of luxury, the amount of options that will be available to me with that level of retirement income.
I could choose to help my parents financially, there isn't a city I couldn't afford to live in, I have zero concerns about medical costs, etc, etc. My level of savings will provide me a profound level of retirement luxury that most can never have. That's a fact. Not an insult.
What I find really weird is that people seem to only want to call FIRE "fat" if they're spending on things they personally think are excessive and unnecessary. So spending 6 figures a year is not fat if there's no handbags or luxury cars? It's only luxury if it's something you wouldn't buy for yourself?
Seems unnecessarily judgmental and arbitrary to me.
The entire concept of "fat FIRE" is arbitrary. So i'm not sure how it is any more arbitrary to say that certain things feed into that and others don't. And you yourself keep harping on the fact that it isn't a negative term, so how is it then judgmental to apply it to certain behaviors and not others. Because yes, I think someone who has adopted the 7 children of their deceased sibling and is raising them in SoCal so they can remain close to the deceased father's family to maintain that connect, is not living what *I personally* consider a fat FIRE lifestyle. Someone traveling frequently (as I plan to do) is probably fat FIRE by my definition, even if they spend the same amount. (So yes, I consider my FIRE plans and budget to be either fat, or at least chubby, and no, I don't consider that to be a negative thing.)
Yes, there is no definition, so why apply arbitrary metrics to be judgmental. I don't understand.
Because I'm not being judgmental, assuming your definition of "judgmental" means placing a negative value on something. I'm not being judgmental when I say X is fat FIRE and Y isn't, because fat FIRE isn't a negative term for me. You strongly imply it isn't negative to you either, but then you claim that using it in some cases is applying "judgement", which certainly makes it sound like you think it's negative, or being applied negative, and you balk at it being applied in some case and not others. When I say that 'this apple is large and that one is not', there is no judgement (in any negative sense), even though "large apple vs not large apple" is an arbitrary and nebulous concept and people will disagree with exactly where the line is between large and not large. . So how is "fat FIRE vs not fat FIRE" judgmental (again, assuming you are applying a negative connotation to "judgmental").
You say you don't think it's negative, but it seems maybe you do, at least a bit, where as I truly don't.
Also, are there some versions of FIRE you'd consider fat, and others you wouldn't, or do you just reject the term entirely. It seems like you are fine with the term, you just object to my definition. So you there are things you would say are fat FIRE and things you would say are not fat FIRE, then you too are making a "judgement". it's just got different criteria then I'm using.
Not really.
I don't really define fatFIRE, and have exactly zero negative feelings towards the term.
I'm surprised that so many people seem to want to define it in terms that seem to me as judgemental. People seem to want to define fatFIRE as spending on unnecessary luxuries, but certain acceptable luxuries seem to not count, like choosing to live somewhere insanely expensive.
You have your particular examples of spending 100K that you don't think should be considered fatFIRE because what the person is spending on, to you, isn't a luxury, such as adopting a bunch of orphaned nieces and nephews. I, on the other hand, consider it a HUGE luxury to be able to adopt a bunch of orphaned nieces and nephews and raise them in a crazy expensive location so that they can stay close to other family. I would be like "thank fuck I'm fatFIREd enough to afford this!"
In all honesty, I actually prefer to use fat vs lean as relative terms to how much someone has saved compared to their lean expenses. I don't even like using actual amounts for fat vs lean FIRE, so I don't usually.
I was initially responding to OP implying that 100K in retirement income was possibly no longer considered "a lot". It's just so much more than most people could ever hope to have, I can't fathom a world where we don't consider it a huge luxury to have that much money to spend in retirement.
I feel like you aren't reading what I'm saying, because I have said that I readily acknowledge that living in a HCOL city or supporting parents (as two examples) are luxuries. But you seem to claim I don't think they are luxuries. I do. I just don't think that all luxuries are equal and that they all mean fat FIRE. I also think that raising one's nieces and nephews is a luxury. But what I don't think is that living a life with luxuries automatically constitutes fat FIRE. As I've said, for me the difference is what I'd call extravagances, and for me, caring for mom or Sister, Jr. or living in SoCal because that's is where one's friends and family are is not extravagant (but yes, it is a luxury to be able to do so).
I've also said that I think reasonable people can define all this differently. But what I object to is the claim that I'm being judgmental. Because, again, I plan on what is probably fat FIRE, with travel being a main luxury. I think my FIRE will be far more fat than someone with the sam budget because they have a disable child then need to not only care for, but leave sufficient money to after they are gone. I don't think they are better then me (so, no judgment), but I do think they are less "fat" than me.
If you are seeing that as judgmental, that suggests you are the one placing positive and negative connotations on the term "fat FIRE", not me.
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Due to inflation $100k is not what it used to be. It remains a significant amount of income on which one can lead a great life and retire early assuming you don’t live in a HCOL area like New York City or San Francisco.
Again, no one is talking about 100K work income, we're talking about 100K in retirement income, *after* all of the savings has been done, and likely when there's either a paid off house, or a ton of untouched equity in that house.
Plus, if the person is retired, then there's no work obligation keeping them in an HCOL area, so choosing to stay there is a luxury decision, which is thankfully affordable on a generous 100K retirement income.
100K in retirement income is a lot. No one is saying it's too much, no one is saying it's an unreasonable goal, but also no one can safely argue that it's not a lot of retirement income.
And that's what OP said, that they used to think it was a lot, and now they are unsure. Well no, it's still a lot. It's still a hefty amount to be able to spend year over year, plus inflation, indefinitely in retirement.
As the OP I want to correct you I mean saying I was unsure if it was a lot, I said I still think it is a lot. But I questioned whether or not it would still be Fat FIRE (again whatever that is). Based on the thread the consistency is that it means different amounts to different people on different areas.
Also, your counter to other posters in a lot of your responses is basically "Its a luxury" implying that they are stupidly fat fire and spendy. And that may in fact be the case but that is not the question. Shit, even lean FIRE is a luxury. Just living in the U.S. is a luxury (even with a feed up health system). Typing this on a phone is huge luxury.
Anyway, $100k in my mind is a lot of money but I am still not sure it is a level that is hugely fat especially when location is factored in. Sure I could move to rural Alabama probably be stupidly fat but that's not happening.
You're the one implying that it's implying that being able to afford a luxury implies a stupid level of spending.
I never ever said or implied that and clearly stated the opposite multiple times.
fatFIRE doesn't have to connote a negative implication. I see nothing wrong with having 100K of retirement income I think I already mentioned that I expect more than that from my own stash. I'm simply recognizing that it is an extreme level of luxury, the amount of options that will be available to me with that level of retirement income.
I could choose to help my parents financially, there isn't a city I couldn't afford to live in, I have zero concerns about medical costs, etc, etc. My level of savings will provide me a profound level of retirement luxury that most can never have. That's a fact. Not an insult.
What I find really weird is that people seem to only want to call FIRE "fat" if they're spending on things they personally think are excessive and unnecessary. So spending 6 figures a year is not fat if there's no handbags or luxury cars? It's only luxury if it's something you wouldn't buy for yourself?
Seems unnecessarily judgmental and arbitrary to me.
The entire concept of "fat FIRE" is arbitrary. So i'm not sure how it is any more arbitrary to say that certain things feed into that and others don't. And you yourself keep harping on the fact that it isn't a negative term, so how is it then judgmental to apply it to certain behaviors and not others. Because yes, I think someone who has adopted the 7 children of their deceased sibling and is raising them in SoCal so they can remain close to the deceased father's family to maintain that connect, is not living what *I personally* consider a fat FIRE lifestyle. Someone traveling frequently (as I plan to do) is probably fat FIRE by my definition, even if they spend the same amount. (So yes, I consider my FIRE plans and budget to be either fat, or at least chubby, and no, I don't consider that to be a negative thing.)
Yes, there is no definition, so why apply arbitrary metrics to be judgmental. I don't understand.
Because I'm not being judgmental, assuming your definition of "judgmental" means placing a negative value on something. I'm not being judgmental when I say X is fat FIRE and Y isn't, because fat FIRE isn't a negative term for me. You strongly imply it isn't negative to you either, but then you claim that using it in some cases is applying "judgement", which certainly makes it sound like you think it's negative, or being applied negative, and you balk at it being applied in some case and not others. When I say that 'this apple is large and that one is not', there is no judgement (in any negative sense), even though "large apple vs not large apple" is an arbitrary and nebulous concept and people will disagree with exactly where the line is between large and not large. . So how is "fat FIRE vs not fat FIRE" judgmental (again, assuming you are applying a negative connotation to "judgmental").
You say you don't think it's negative, but it seems maybe you do, at least a bit, where as I truly don't.
Also, are there some versions of FIRE you'd consider fat, and others you wouldn't, or do you just reject the term entirely. It seems like you are fine with the term, you just object to my definition. So you there are things you would say are fat FIRE and things you would say are not fat FIRE, then you too are making a "judgement". it's just got different criteria then I'm using.
Not really.
I don't really define fatFIRE, and have exactly zero negative feelings towards the term.
I'm surprised that so many people seem to want to define it in terms that seem to me as judgemental. People seem to want to define fatFIRE as spending on unnecessary luxuries, but certain acceptable luxuries seem to not count, like choosing to live somewhere insanely expensive.
You have your particular examples of spending 100K that you don't think should be considered fatFIRE because what the person is spending on, to you, isn't a luxury, such as adopting a bunch of orphaned nieces and nephews. I, on the other hand, consider it a HUGE luxury to be able to adopt a bunch of orphaned nieces and nephews and raise them in a crazy expensive location so that they can stay close to other family. I would be like "thank fuck I'm fatFIREd enough to afford this!"
In all honesty, I actually prefer to use fat vs lean as relative terms to how much someone has saved compared to their lean expenses. I don't even like using actual amounts for fat vs lean FIRE, so I don't usually.
I was initially responding to OP implying that 100K in retirement income was possibly no longer considered "a lot". It's just so much more than most people could ever hope to have, I can't fathom a world where we don't consider it a huge luxury to have that much money to spend in retirement.
I feel like you aren't reading what I'm saying, because I have said that I readily acknowledge that living in a HCOL city or supporting parents (as two examples) are luxuries. But you seem to claim I don't think they are luxuries. I do. I just don't think that all luxuries are equal and that they all mean fat FIRE. I also think that raising one's nieces and nephews is a luxury. But what I don't think is that living a life with luxuries automatically constitutes fat FIRE. As I've said, for me the difference is what I'd call extravagances, and for me, caring for mom or Sister, Jr. or living in SoCal because that's is where one's friends and family are is not extravagant (but yes, it is a luxury to be able to do so).
I've also said that I think reasonable people can define all this differently. But what I object to is the claim that I'm being judgmental. Because, again, I plan on what is probably fat FIRE, with travel being a main luxury. I think my FIRE will be far more fat than someone with the sam budget because they have a disable child then need to not only care for, but leave sufficient money to after they are gone. I don't think they are better then me (so, no judgment), but I do think they are less "fat" than me.
If you are seeing that as judgmental, that suggests you are the one placing positive and negative connotations on the term "fat FIRE", not me.
Yep, we're clearly not understanding each other, and that's fine. We both agree this is largely arbitrary.
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I think 100K is generally going to be VERY "fat" in terms of consumption and environmental destructiveness, which is ultimately the entire thing MMM created his blog to fight back against. With a few exceptions (like charitable donations, very high rent, 6+ children, or costly schooling) I just don't see how a person could spend that much without producing massive amounts of pollution and garbage, and general being pretty awful to planet earth. I would be very interested in seeing a 100K budget that was actually sustainable and didn't involve trashing the planet, and also did not contribute to the human rights issues that are endemic to overconsumption (child/slave labor to produce goods, workers dying in nasty ways due to lack of regulation overseas, cartels, sweatshops, etc). I just don't see how a person could ethically consume at that rate, but I would be interested to see if a person could manage to.
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I think 100K is generally going to be VERY "fat" in terms of consumption and environmental destructiveness, which is ultimately the entire thing MMM created his blog to fight back against. With a few exceptions (like charitable donations, very high rent, 6+ children, or costly schooling) I just don't see how a person could spend that much without producing massive amounts of pollution and garbage, and general being pretty awful to planet earth. I would be very interested in seeing a 100K budget that was actually sustainable and didn't involve trashing the planet, and also did not contribute to the human rights issues that are endemic to overconsumption (child/slave labor to produce goods, workers dying in nasty ways due to lack of regulation overseas, cartels, sweatshops, etc). I just don't see how a person could ethically consume at that rate, but I would be interested to see if a person could manage to.
In some ways spending more money can be better for the environment and economy, no?
Take my lawn for example. On a weekly or bi-weekly basis I can pay someone to come and mow, blow leaves, edge, and trim. That is 4 separate pieces of equipment I would need to buy (more stuff) that is only used weekly or bi-weekly.
In turn, I can pay someone to do all that stuff and not need to buy any of that equipment. The money I spend also helps support a small private business.
Boots can be another example. My $230 steel toed thorogood American made work boots last 2-3x longer than the $150 foreign boots I used to buy. The same can be said for many types of well made clothes, leathers, etc.
In other comparison - does a $50 tenderloin harm the environment any more than a $10 strip?
Does a $50 bottle of wine hurt the environment more than a $10 bottle?
My blender may cost 6x more than my old one, but even if it lasts 3x as long, isn’t that actually better for the environment than buying a new blender and tossing an old one every 2 years?
I have a set of $1200 Milwaukee brushless power tools - fairly confident they’ll last far longer than a $300 set.
List goes on with most things I own..
People can spend a LOT more money simply buying high quality items that last longer as opposed to being frugal and buying cheap crap.
I spend a lot, seemingly more than anyone posting in this thread, yet I just moved into my first house (still renting) in my whole life. Prior to that we had an apartment. You can only own so much living in an apartment.
I don’t have a LOT compared to many others in terms of quantity, but most things I buy are deeply researched and nearly the best of the best. I’m hoping many of the high quality things I own will last me well into FIRE. That was my intention of buying such high quality things while I’m working and making a lot.
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I think 100K is generally going to be VERY "fat" in terms of consumption and environmental destructiveness, which is ultimately the entire thing MMM created his blog to fight back against. With a few exceptions (like charitable donations, very high rent, 6+ children, or costly schooling) I just don't see how a person could spend that much without producing massive amounts of pollution and garbage, and general being pretty awful to planet earth. I would be very interested in seeing a 100K budget that was actually sustainable and didn't involve trashing the planet, and also did not contribute to the human rights issues that are endemic to overconsumption (child/slave labor to produce goods, workers dying in nasty ways due to lack of regulation overseas, cartels, sweatshops, etc). I just don't see how a person could ethically consume at that rate, but I would be interested to see if a person could manage to.
In some ways spending more money can be better for the environment and economy, no?
Take my lawn for example. On a weekly or bi-weekly basis I can pay someone to come and mow, blow leaves, edge, and trim. That is 4 separate pieces of equipment I would need to buy (more stuff) that is only used weekly or bi-weekly.
In turn, I can pay someone to do all that stuff and not need to buy any of that equipment. The money I spend also helps support a small private business.
Boots can be another example. My $230 steel toed thorogood American made work boots last 2-3x longer than the $150 foreign boots I used to buy. The same can be said for many types of well made clothes, leathers, etc.
In other comparison - does a $50 tenderloin harm the environment any more than a $10 strip?
Does a $50 bottle of wine hurt the environment more than a $10 bottle?
My blender may cost 6x more than my old one, but even if it lasts 3x as long, isn’t that actually better for the environment than buying a new blender and tossing an old one every 2 years?
I have a set of $1200 Milwaukee brushless power tools - fairly confident they’ll last far longer than a $300 set.
List goes on with most things I own..
People can spend a LOT more money simply buying high quality items that last longer as opposed to being frugal and buying cheap crap.
I spend a lot, seemingly more than anyone posting in this thread, yet I just moved into my first house (still renting) in my whole life. Prior to that we had an apartment. You can only own so much living in an apartment.
I don’t have a LOT compared to many others, but most things I buy are deeply researched and nearly the best of the best.
I think that's true to an extent, but when you're talking about spending 100K per year, EVERY YEAR, I feel like there's a limit to how much of that could be going towards buy-it-for-life stuff, because even buying more expensive products, your home would very quickly be filled to the rafters with all that stuff at that rate of spending. You could get away with that excuse for maybe one year tops, but I just can't see someone seriously claiming that over 5 years they spent 500K on mostly buy-it-for-life type stuff, because there's just no way someone could possibly need or use so much.
As far as lawns go, it's an interesting example to use, because the process you're describing is actually pretty bad environmentally regardless of whether you do it yourself or hire it out - burning gasoline to blow leaves around, using a lot of water, etc. A lot of people these days instead design their lawns to use native plants that are suited to the local environment and don't need watering or fussing, which is the obvious environmental choice (that or gardening).
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I think 100K is generally going to be VERY "fat" in terms of consumption and environmental destructiveness, which is ultimately the entire thing MMM created his blog to fight back against. With a few exceptions (like charitable donations, very high rent, 6+ children, or costly schooling) I just don't see how a person could spend that much without producing massive amounts of pollution and garbage, and general being pretty awful to planet earth. I would be very interested in seeing a 100K budget that was actually sustainable and didn't involve trashing the planet, and also did not contribute to the human rights issues that are endemic to overconsumption (child/slave labor to produce goods, workers dying in nasty ways due to lack of regulation overseas, cartels, sweatshops, etc). I just don't see how a person could ethically consume at that rate, but I would be interested to see if a person could manage to.
In some ways spending more money can be better for the environment and economy, no?
Take my lawn for example. On a weekly or bi-weekly basis I can pay someone to come and mow, blow leaves, edge, and trim. That is 4 separate pieces of equipment I would need to buy (more stuff) that is only used weekly or bi-weekly.
In turn, I can pay someone to do all that stuff and not need to buy any of that equipment. The money I spend also helps support a small private business.
Boots can be another example. My $230 steel toed thorogood American made work boots last 2-3x longer than the $150 foreign boots I used to buy. The same can be said for many types of well made clothes, leathers, etc.
In other comparison - does a $50 tenderloin harm the environment any more than a $10 strip?
Does a $50 bottle of wine hurt the environment more than a $10 bottle?
My blender may cost 6x more than my old one, but even if it lasts 3x as long, isn’t that actually better for the environment than buying a new blender and tossing an old one every 2 years?
I have a set of $1200 Milwaukee brushless power tools - fairly confident they’ll last far longer than a $300 set.
List goes on with most things I own..
People can spend a LOT more money simply buying high quality items that last longer as opposed to being frugal and buying cheap crap.
I spend a lot, seemingly more than anyone posting in this thread, yet I just moved into my first house (still renting) in my whole life. Prior to that we had an apartment. You can only own so much living in an apartment.
I don’t have a LOT compared to many others, but most things I buy are deeply researched and nearly the best of the best.
I think that's true to an extent, but when you're talking about spending 100K per year, EVERY YEAR, I feel like there's a limit to how much of that could be going towards buy-it-for-life stuff, because even buying more expensive products, your home would very quickly be filled to the rafters with all that stuff at that rate of spending. You could get away with that excuse for maybe one year tops, but I just can't see someone seriously claiming that over 5 years they spent 500K on mostly buy-it-for-life type stuff, because there's just no way someone could possibly need or use so much.
As far as lawns go, it's an interesting example to use, because the process you're describing is actually pretty bad environmentally regardless of whether you do it yourself or hire it out - burning gasoline to blow leaves around, using a lot of water, etc. A lot of people these days instead design their lawns to use native plants that are suited to the local environment and don't need watering or fussing, which is the obvious environmental choice (that or gardening).
All very good points. I was waiting for someone to chime in and be like.. “why mow your lawn at all” or, “why not just put rock and pea gravel down over your yard.” There are certainly more environmentally factors to nearly everything... I could ride my bike on the 2 lane 50 mph hwy with no shoulder 12 miles to/from work in the dark, but that doesn’t seem too appealing (although it would be the best from an environmental standpoint).
You are right though in regards to the “buy for life” stuff. There is eventually a limit to that, you’d be surprised how long it could take to get to that limit... While I generally have nice things, our TV is still a low level Vizio (although good sized). I could easily drop $5k on a new TV, but don’t mind the current one. I used to play the guitar but haven’t in a decade, my dream guitar/amp combo would be about $9k... Haven’t pulled the trigger on that yet either.
Also, for those that spend a lot, you have to consider how much of that money can be for purely “convenience” spending and hiring others to do things you don’t want to do. It’s not like everyone that spends a lot just fills a garage which plastic Chinese garbage that will go to a landfill every year.
There’s a LOT of stuff that I don’t do myself (car maintenance, etc.) for the sheer fact that I work a ton and I make enough that the opportunity cost is not worth spending my free time doing tasks I can pay others to do.
Last week I worked 57 hours. I lifted weights 4x, did 20 minutes of yoga 4x and went to a birthday part for friends both weekends. I was pretty busy doing things for both enjoyment and self improvement outside of work. I listen to audiobooks to/from work and do guided meditations during my lunch.
In my limited down time, I don’t want to do maintenance on my car or my lawn. My take home pay for those 57 hours will be $5840. I’ll be damned if i’m going to spend 1.5 hrs doing my own lawn when I can pay some guy to come do it for $25 and probably do a far better job than I will do. Alternatively, I could work the standard 40 hrs, take home about $2k/wk less, and then doing all the other crap myself? I don’t think that would balance out...
When I am FIRE, I expect my spending to go down a TON. I genuinely want to take care of my own lawn. I want to do my own car maintenance (I have in the past a lot, especially when my income was lower). I LIKE doing that stuff, but I’m not willing to cut back on work, exercise, or downtime with my wife, so that I can do my own lawn care.
For now, my focus is on making as much as I can, and spending to a level to support enough downtime and enjoyment outside of work that I can find a good balance.
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All very good points. I was waiting for someone to chime in and be like.. “why mow your lawn at all” or, “why not just put rock and pea gravel down over your yard.” There are certainly more environmentally factors to nearly everything... I could ride my bike on the 2 lane 50 mph hwy with no shoulder 12 miles to/from work in the dark, but that doesn’t seem too appealing (although it would be the best from an environmental standpoint).
You are right though in regards to the “buy for life” stuff. There is eventually a limit to that, you’d be surprised how long it could take to get to that limit... While I generally have nice things, our TV is still a low level Vizio (although good sized). I could easily drop $5k on a new TV, but don’t mind the current one. I used to play the guitar but haven’t in a decade, my dream guitar/amp combo would be about $9k... Haven’t pulled the trigger on that yet either.
Also, for those that spend a lot, you have to consider how much of that money can be for purely “convenience” spending and hiring others to do things you don’t want to do. It’s not like everyone that spends a lot just fills a garage which plastic Chinese garbage that will go to a landfill every year.
There’s a LOT of stuff that I don’t do myself (car maintenance, etc.) for the sheer fact that I work a ton and I make enough that the opportunity cost is not worth spending my free time doing tasks I can pay others to do.
Last week I worked 57 hours. I lifted weights 4x, did 20 minutes of yoga 4x and went to a birthday part for friends both weekends. I was pretty busy doing things for both enjoyment and self improvement outside of work. I listen to audiobooks to/from work and do guided meditations during my lunch.
In my limited down time, I don’t want to do maintenance on my car or my lawn. My take home pay for those 57 hours will be $5840. I’ll be damned if i’m going to spend 1.5 hrs doing my own lawn when I can pay some guy to come do it for $25 and probably do a far better job than I will do. Alternatively, I could work the standard 40 hrs, take home about $2k/wk less, and then doing all the other crap myself? I don’t think that would balance out...
When I am FIRE, I expect my spending to go down a TON. I genuinely want to take care of my own lawn. I want to do my own car maintenance (I have in the past a lot, especially when my income was lower). I LIKE doing that stuff, but I’m not willing to cut back on work, exercise, or downtime with my wife, so that I can do my own lawn care.
For now, my focus is on making as much as I can, and spending to a level to support enough downtime and enjoyment outside of work that I can find a good balance.
For the most part I'm not really saying you should do X versus pay someone to do X, I'm saying you could just eliminate X altogether, often with much better results and more happiness. I get not wanting to fuck around with a lawn after work - I don't want to either, so I don't have a lawn. But if I did, personally, I think xeriscaping looks so, so much better than a lawn - lawns are ugly and boring, in addition to being useless and environmentally destructive. And for stuff like the $5K TV, a lot of people find that their quality of life improves dramatically by just getting rid of the television entirely and doing other things instead.
Your description of your life honestly sounds pretty bad to me. You're working so hard to buy all this stuff, and you don't have time to do stuff you want, when you could instead learn to be happy with less stuff, work way less, and have so much more time to devote to the things you actually want to spend time on.
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All very good points. I was waiting for someone to chime in and be like.. “why mow your lawn at all” or, “why not just put rock and pea gravel down over your yard.” There are certainly more environmentally factors to nearly everything... I could ride my bike on the 2 lane 50 mph hwy with no shoulder 12 miles to/from work in the dark, but that doesn’t seem too appealing (although it would be the best from an environmental standpoint).
You are right though in regards to the “buy for life” stuff. There is eventually a limit to that, you’d be surprised how long it could take to get to that limit... While I generally have nice things, our TV is still a low level Vizio (although good sized). I could easily drop $5k on a new TV, but don’t mind the current one. I used to play the guitar but haven’t in a decade, my dream guitar/amp combo would be about $9k... Haven’t pulled the trigger on that yet either.
Also, for those that spend a lot, you have to consider how much of that money can be for purely “convenience” spending and hiring others to do things you don’t want to do. It’s not like everyone that spends a lot just fills a garage which plastic Chinese garbage that will go to a landfill every year.
There’s a LOT of stuff that I don’t do myself (car maintenance, etc.) for the sheer fact that I work a ton and I make enough that the opportunity cost is not worth spending my free time doing tasks I can pay others to do.
Last week I worked 57 hours. I lifted weights 4x, did 20 minutes of yoga 4x and went to a birthday part for friends both weekends. I was pretty busy doing things for both enjoyment and self improvement outside of work. I listen to audiobooks to/from work and do guided meditations during my lunch.
In my limited down time, I don’t want to do maintenance on my car or my lawn. My take home pay for those 57 hours will be $5840. I’ll be damned if i’m going to spend 1.5 hrs doing my own lawn when I can pay some guy to come do it for $25 and probably do a far better job than I will do. Alternatively, I could work the standard 40 hrs, take home about $2k/wk less, and then doing all the other crap myself? I don’t think that would balance out...
When I am FIRE, I expect my spending to go down a TON. I genuinely want to take care of my own lawn. I want to do my own car maintenance (I have in the past a lot, especially when my income was lower). I LIKE doing that stuff, but I’m not willing to cut back on work, exercise, or downtime with my wife, so that I can do my own lawn care.
For now, my focus is on making as much as I can, and spending to a level to support enough downtime and enjoyment outside of work that I can find a good balance.
For the most part I'm not really saying you should do X versus pay someone to do X, I'm saying you could just eliminate X altogether, often with much better results and more happiness. I get not wanting to fuck around with a lawn after work - I don't want to either, so I don't have a lawn. But if I did, personally, I think xeriscaping looks so, so much better than a lawn - lawns are ugly and boring, in addition to being useless and environmentally destructive. And for stuff like the $5K TV, a lot of people find that their quality of life improves dramatically by just getting rid of the television entirely and doing other things instead.
Your description of your life honestly sounds pretty bad to me. You're working so hard to buy all this stuff, and you don't have time to do stuff you want, when you could instead learn to be happy with less stuff, work way less, and have so much more time to devote to the things you actually want to spend time on.
I’m 32 years old and my savings/investments went up $279k last year off my single income.
I could find a less stressful job with less hours and one I enjoy more, but I’d probably make $250k less per year.. On my current path of income and spending I’d hit around $2.6MM by the time I turn 40, but I plan to dial it way back before then.
I’m cruising to FIRE pretty quick.. spending the extra amount I am right now isn’t much of an impact.
Also, my wife doesn’t work (1st baby on the way) so I don’t have to worry about any errands, cleaning, laundry, etc.. I work a lot, but my time spent not working is doing things I enjoy.
I consider myself and my life very fortunate. Different people have different interests and goals though.
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I live in the Seattle area and when we look at taxes, health insurance, home insurance, earthquake insurance, it is already about 45K or so. Consequently, 100K doesn't seem FAT to me (though I am perfectly contented at that spending level - call me pleasantly rounded, though not FAT). Given the recent changes to the obamacare cliff, I think that our yearly spend will go down a bit, but health insurance for a family of 3 adds up.
Of course if I was single and in the same financial situation, I'd certainly be feeling rather stout.
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Definitely not in my area. Depending on what link you chose, 81k is the average salary in Seattle so 100k puts you barely above average.
https://www.payscale.com/research/US/Location=Seattle-WA/Salary
Housing is also absurd here, 1+ Mil for a free standing house in Seattle proper with more than 2 bedrooms. So taxes alone are going to be 15k in this region.
That in mind, I'd say 150k draw is more like fatfire to me. 100k is still pretty lean since 30k for income taxes, 15k for property taxes (assuming you own your home outright), leaving barely 50k for spending.
We are a family of four in Seattle. We own our home outright. We have structured our finances so that we do not owe federal income taxes, and qualify for the senior exemption on our property taxes starting in 2020 (dropped our bill from 8k to 2400/year). Our overall spending last year was under 60k, including 20k+ on sewer line repairs.
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Definitely not in my area. Depending on what link you chose, 81k is the average salary in Seattle so 100k puts you barely above average.
https://www.payscale.com/research/US/Location=Seattle-WA/Salary
Housing is also absurd here, 1+ Mil for a free standing house in Seattle proper with more than 2 bedrooms. So taxes alone are going to be 15k in this region.
That in mind, I'd say 150k draw is more like fatfire to me. 100k is still pretty lean since 30k for income taxes, 15k for property taxes (assuming you own your home outright), leaving barely 50k for spending.
We are a family of four in Seattle. We own our home outright. We have structured our finances so that we do not owe federal income taxes, and qualify for the senior exemption on our property taxes starting in 2020 (dropped our bill from 8k to 2400/year). Our overall spending last year was under 60k, including 20k+ on sewer line repairs.
You must be impoverished.
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People seem to frequently grossly overestimate their taxes.
Someone withdrawing $100k to pay for FIRE doesn't pay $30k in income taxes. Worst-case scenario is just over $15k in taxes (single, no dependents, no deductions or credits, all income is fully taxable income). Reality is probably much lower - if they're married, have kids, have any deductions/credits, and especially if they're FIRE a huge chunk of the spending is not counted as earned income - it could be return of principal, Roth withdrawals, or capital gains tax rates.
Even if you add state taxes on top (and the example given was Seattle, WA, which has no state income tax), there isn't a state in the union with tax rates higher than federal on $100k of income.
Property taxes are also not going to average anywhere near $15k, even in Seattle. They have complicated property tax laws, but as I understand it the taxes only rise by about 1% per year. I think you'd have to be buying new construction of a fancy house to approach that level.
Per the OP, I think that $100k of spending is pretty clearly fatFIRE if it includes a paid-off house, no matter where you live. If not, I admit there could be some grey area for VHCOLAs. As others have stated, though, it's all completely subjective, and likely just anchored to your own experiences.
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I hope UBI pays for all my expenses. I don't want to have to work anymore and have naïve suckers work and pay for me to RE.
If UBI is say, 24k a year, then I only need to come up with the spending delta. Most of us are probably closer to RE then we think.
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People seem to frequently grossly overestimate their taxes.
Hear, hear!
I live in the city of Boston, MA. Property tax last year on our single family home was nowhere even close to $15k. It wasn't even a third of that. Here's a hint if you want to save money on property taxes in Boston: live in Boston. They charge more to people who own property here but don't live here.
EDIT: specified that I'm talking about last year's property taxes.
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To me, that would be Fat.
Another way to look at it is that 100k/yr USD at a 4% withdrawal would be $2.5M. That would put you squarely in the global 1%.
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People seem to frequently grossly overestimate their taxes.
Someone withdrawing $100k to pay for FIRE doesn't pay $30k in income taxes. Worst-case scenario is just over $15k in taxes (single, no dependents, no deductions or credits, all income is fully taxable income). Reality is probably much lower - if they're married, have kids, have any deductions/credits, and especially if they're FIRE a huge chunk of the spending is not counted as earned income - it could be return of principal, Roth withdrawals, or capital gains tax rates.
Even if you add state taxes on top (and the example given was Seattle, WA, which has no state income tax), there isn't a state in the union with tax rates higher than federal on $100k of income.
Property taxes are also not going to average anywhere near $15k, even in Seattle. They have complicated property tax laws, but as I understand it the taxes only rise by about 1% per year. I think you'd have to be buying new construction of a fancy house to approach that level.
Per the OP, I think that $100k of spending is pretty clearly fatFIRE if it includes a paid-off house, no matter where you live. If not, I admit there could be some grey area for VHCOLAs. As others have stated, though, it's all completely subjective, and likely just anchored to your own experiences.
Mine are $14,500 for a ~1925 sq ft house in northern NJ. Now I wouldn't FIRE here, but there are absolutely places where a reasonably normal house will cost ~$15k in property taxes. They also go up by 2-3% a year :( Average statewide is just over $9k.
The average American household apparently pays under $2500. I'm looking forward to when I can move.
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Been stated on this thread a few times, here and there but SPENDING 100k is completely different from earning 100k
Someone, in MOST places in the USA, earning 100k is "well off" and basically wants for nothing. Sure they are flying economy and probably buying NICER used cars but still, they will have a nice house, international vacations, eat out 5 nights a week etc.
Someone SPENDING 100k a year, can fly first class domestically, have a new car, motorcycle and a sports car AND probably have a 3,000-6,000 sqft newer home.
These are two people on entirely different levels. Paying taxes on 100k salary, saving from it, and having to build FIRE from it will cause this person to live a more modest lifestyle.
I would damn near say, earning 200k or nearly 2x probably puts you on the same level.
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I don't buy the argument that someone who has an ability in retirement to spend significantly more than the median household income in one of the wealthiest countries in the world is somehow not FatFIRE regardless of where they live. People live in those expensive places because they're willing to pay a tremendous about to take advantage of those benefits, whether they're great schools, parks, or other amenities.
But if I do stipulate that idea - that somehow the local area's spending determines what FatFIRE is - I still don't accept that $100k isn't FatFIRE in the area you live in. To use your example, in one of the wealthiest countries in the world, in one of the wealthiest states in that country, and in an above average income town within that wealthy state, $100k spending is STILL higher than the median income!
I read through a lot of posts and I think you've said much of what I was thinking with your post - I can't count how many times I've seen posts on non-FIRE money management forums where people define the COL by their neighborhood rather than their country or state. Another element I think was rarely spoken of is having paid off housing versus a mortgage, or to a lesser common degree in FIRE, renting. Like I look at my retired parents and they're spending something like $90k/year but they still have 14 years left on their mortgage. It's just how life worked out for them. Their P&I is something like $2100/mo so really with a paid off house their spending is more in the $65k range for the couple, which is $32.5k per person. Numbers everyone is much more accustomed to working with.
While I think $100k of spending in FIRE sounds exceptionally high, there's plenty of variables, just as many have pointed out. I do think the point "Fire 20/20" was making above about people declaring their cost of living based on their neighborhood is a big point though. It's basically just luxury for people to declare that not only are they unwilling to move to a different city, they won't even move to a different house/neighborhood in order to cut their expenses. I view housing as the #1 biggest area where people box themselves into prisons of their own making.
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While I think $100k of spending in FIRE sounds exceptionally high, there's plenty of variables, just as many have pointed out. I do think the point "Fire 20/20" was making above about people declaring their cost of living based on their neighborhood is a big point though. It's basically just luxury for people to declare that not only are they unwilling to move to a different city, they won't even move to a different house/neighborhood in order to cut their expenses. I view housing as the #1 biggest area where people box themselves into prisons of their own making.
I agree. Almost no one needs to live in a specific super-expensive area after retirement, they just want to. Either they can downsize to save money or move out of the area completely. Needs != wants. Spending > needs = fat fire. We can dress it up however we want, but $100k spending a year is what most people here (and in the world) would consider excess.
Am I currently spending a silly (and I mean silly) amount of money on housing? Yes. Do I expect anyone to tell me that it's anything other than ridiculous? No. But I realize money isn't everything, so I am currently setting that pile of cash on fire for now. Because real estate is weird and very local, the pile probably won't burn to a complete crisp. In the mean time, I just don't expect anyone to say it smells nice and pat me on the back. Same thing applies even more in retirement, when I won't have a monsoon of money raining on me.
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Been stated on this thread a few times, here and there but SPENDING 100k is completely different from earning 100k
Someone, in MOST places in the USA, earning 100k is "well off" and basically wants for nothing. Sure they are flying economy and probably buying NICER used cars but still, they will have a nice house, international vacations, eat out 5 nights a week etc.
Someone SPENDING 100k a year, can fly first class domestically, have a new car, motorcycle and a sports car AND probably have a 3,000-6,000 sqft newer home.
These are two people on entirely different levels. Paying taxes on 100k salary, saving from it, and having to build FIRE from it will cause this person to live a more modest lifestyle.
I would damn near say, earning 200k or nearly 2x probably puts you on the same level.
Do you mean a single person spending $100k? Because it’s a lot of spending, but it’s not really fly first class regularly spending. It’s more like a $500k mortgage, two in daycare or private school, a couple moderate trips a year, and eating out too much with your family of four. Those are all lifestyle choices to be sure, but not things that would be perceived as extravagant by many upper middle class folks.
I think people underestimate the amount of money you need to really spend on crazy extravagances.
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People seem to frequently grossly overestimate their taxes.
Hear, hear!
I live in the city of Boston, MA. Property tax last year on our single family home was nowhere even close to $15k. It wasn't even a third of that. Here's a hint if you want to save money on property taxes in Boston: live in Boston. They charge more to people who own property here but don't live here.
EDIT: specified that I'm talking about last year's property taxes.
$15k doesn't sound that far fetched to me, depending on the town - mill rates vary widely. We had a $250k ish house in CT and property taxes on house + cars was about $10k each year. We don't have new or fancy cars, either.
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People seem to frequently grossly overestimate their taxes.
Hear, hear!
I live in the city of Boston, MA. Property tax last year on our single family home was nowhere even close to $15k. It wasn't even a third of that. Here's a hint if you want to save money on property taxes in Boston: live in Boston. They charge more to people who own property here but don't live here.
EDIT: specified that I'm talking about last year's property taxes.
$15k doesn't sound that far fetched to me, depending on the town - mill rates vary widely. We had a $250k ish house in CT and property taxes on house + cars was about $10k each year. We don't have new or fancy cars, either.
The post I was (indirectly) responding to was discussing property taxes in Washington State, where I found the numbers/assumptions to be objectionable. I'm well aware that there are regions with higher property taxes where $15k is definitely not far-fetched. New Jersey always seems to make that list, as it combines both fairly high property prices with high tax rates; most other states might have one or the other (for example, CA has high prices but a lower rate; Texas has high rates but low prices), but not both.
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Been stated on this thread a few times, here and there but SPENDING 100k is completely different from earning 100k
Someone, in MOST places in the USA, earning 100k is "well off" and basically wants for nothing. Sure they are flying economy and probably buying NICER used cars but still, they will have a nice house, international vacations, eat out 5 nights a week etc.
Someone SPENDING 100k a year, can fly first class domestically, have a new car, motorcycle and a sports car AND probably have a 3,000-6,000 sqft newer home.
These are two people on entirely different levels. Paying taxes on 100k salary, saving from it, and having to build FIRE from it will cause this person to live a more modest lifestyle.
I would damn near say, earning 200k or nearly 2x probably puts you on the same level.
Do you mean a single person spending $100k? Because it’s a lot of spending, but it’s not really fly first class regularly spending. It’s more like a $500k mortgage, two in daycare or private school, a couple moderate trips a year, and eating out too much with your family of four. Those are all lifestyle choices to be sure, but not things that would be perceived as extravagant by many upper middle class folks.
I think people underestimate the amount of money you need to really spend on crazy extravagances.
$100k of earned income, while maxing retirement accounts, with $500k mortgage, and 2 kids in daycare wouldn't be enough income. Our mortgage is less than $500k but in the ball park, PITI is around $2300, Daycare for two is ~$2800. Those two expenses are $61,200 in annual post tax spending. Add $19,500 and $7,000 for 401k and HSA and you get ~$87,700 or $12,300 a year for taxes and money to live on, i would argue not enough.
However, this thread has changed my mind, i used to think $100k/year in retirement distributions wasn't that much, but i think i was wrong and its "a lot", not fly business class internationally multiple times a year (for a couple) lot but a fun retirement.
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In Seattle/King County the property tax rate is around 1% -- there might be a slight surcharge for more expensive properties. But the assessed values of most properties will be 10-20% lower than market value. If we put our house on the market today we would probably get between 1-1.2 million (hot market, limited inventory, crazy bidding wars). But our assessed value is only 770k. And since we are able to manage our income so that we look poor on paper, and since my SO is now over the age limit, we qualify for the highest level of the senior property tax exemption and are only taxed on 308k of that. You can get some level of property tax exemption the year you turn 62 if your income is lower than something like the 60th percentile now in Washington state? In King County, the cutoff is near 60k/year.
Washington has one of the most regressive tax structures in the US -- no income tax, fairly high exemption levels for estate taxes (I think around 2 mill? No limit for spousal transfers). Sales tax is around 10%, but IIRC the sales tax in NYC and other places with high tax rates is not much less. No sales tax on food. So if you make it to age 62 you can spend all your property tax savings on making gourmet cuisine!
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Been stated on this thread a few times, here and there but SPENDING 100k is completely different from earning 100k
Someone, in MOST places in the USA, earning 100k is "well off" and basically wants for nothing. Sure they are flying economy and probably buying NICER used cars but still, they will have a nice house, international vacations, eat out 5 nights a week etc.
Someone SPENDING 100k a year, can fly first class domestically, have a new car, motorcycle and a sports car AND probably have a 3,000-6,000 sqft newer home.
These are two people on entirely different levels. Paying taxes on 100k salary, saving from it, and having to build FIRE from it will cause this person to live a more modest lifestyle.
I would damn near say, earning 200k or nearly 2x probably puts you on the same level.
Do you mean a single person spending $100k? Because it’s a lot of spending, but it’s not really fly first class regularly spending. It’s more like a $500k mortgage, two in daycare or private school, a couple moderate trips a year, and eating out too much with your family of four. Those are all lifestyle choices to be sure, but not things that would be perceived as extravagant by many upper middle class folks.
I think people underestimate the amount of money you need to really spend on crazy extravagances.
$100k of earned income, while maxing retirement accounts, with $500k mortgage, and 2 kids in daycare wouldn't be enough income. Our mortgage is less than $500k but in the ball park, PITI is around $2300, Daycare for two is ~$2800. Those two expenses are $61,200 in annual post tax spending. Add $19,500 and $7,000 for 401k and HSA and you get ~$87,700 or $12,300 a year for taxes and money to live on, i would argue not enough.
However, this thread has changed my mind, i used to think $100k/year in retirement distributions wasn't that much, but i think i was wrong and its "a lot", not fly business class internationally multiple times a year (for a couple) lot but a fun retirement.
If you and your spouse were both FIRE’d, you would still spend $2800/mo in daycare?
A big part of my FIRE calculations will involve doing things myself, that I currently pay others to do (such as lawn maintenance, car maintenance, etc.)
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Been stated on this thread a few times, here and there but SPENDING 100k is completely different from earning 100k
Someone, in MOST places in the USA, earning 100k is "well off" and basically wants for nothing. Sure they are flying economy and probably buying NICER used cars but still, they will have a nice house, international vacations, eat out 5 nights a week etc.
Someone SPENDING 100k a year, can fly first class domestically, have a new car, motorcycle and a sports car AND probably have a 3,000-6,000 sqft newer home.
These are two people on entirely different levels. Paying taxes on 100k salary, saving from it, and having to build FIRE from it will cause this person to live a more modest lifestyle.
I would damn near say, earning 200k or nearly 2x probably puts you on the same level.
Do you mean a single person spending $100k? Because it’s a lot of spending, but it’s not really fly first class regularly spending. It’s more like a $500k mortgage, two in daycare or private school, a couple moderate trips a year, and eating out too much with your family of four. Those are all lifestyle choices to be sure, but not things that would be perceived as extravagant by many upper middle class folks.
I think people underestimate the amount of money you need to really spend on crazy extravagances.
$100k of earned income, while maxing retirement accounts, with $500k mortgage, and 2 kids in daycare wouldn't be enough income. Our mortgage is less than $500k but in the ball park, PITI is around $2300, Daycare for two is ~$2800. Those two expenses are $61,200 in annual post tax spending. Add $19,500 and $7,000 for 401k and HSA and you get ~$87,700 or $12,300 a year for taxes and money to live on, i would argue not enough.
However, this thread has changed my mind, i used to think $100k/year in retirement distributions wasn't that much, but i think i was wrong and its "a lot", not fly business class internationally multiple times a year (for a couple) lot but a fun retirement.
If you and your spouse were both FIRE’d, you would still spend $2800/mo in daycare?
A big part of my FIRE calculations will involve doing things myself, that I currently pay others to do (such as lawn maintenance, car maintenance, etc.)
No we wouldn't spend anything on daycare, because we are retired and able to watch the kids, i said earned income above.
my point was that $100k+ in earned income can get gobbled up quickly while working and in many cases may not be enough depending income depending upon where you live and how big your family is.
Once retired, $100k in distributions seems like more than enough money
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Been stated on this thread a few times, here and there but SPENDING 100k is completely different from earning 100k
Someone, in MOST places in the USA, earning 100k is "well off" and basically wants for nothing. Sure they are flying economy and probably buying NICER used cars but still, they will have a nice house, international vacations, eat out 5 nights a week etc.
Someone SPENDING 100k a year, can fly first class domestically, have a new car, motorcycle and a sports car AND probably have a 3,000-6,000 sqft newer home.
These are two people on entirely different levels. Paying taxes on 100k salary, saving from it, and having to build FIRE from it will cause this person to live a more modest lifestyle.
I would damn near say, earning 200k or nearly 2x probably puts you on the same level.
Do you mean a single person spending $100k? Because it’s a lot of spending, but it’s not really fly first class regularly spending. It’s more like a $500k mortgage, two in daycare or private school, a couple moderate trips a year, and eating out too much with your family of four. Those are all lifestyle choices to be sure, but not things that would be perceived as extravagant by many upper middle class folks.
I think people underestimate the amount of money you need to really spend on crazy extravagances.
I don't think so, sometimes I even fly first class NOW and my spending for 2 is still only around 60k. Talking round trip for two being in that 300-500 range for economy and sometimes you can nab first class for another $200-400 on major carriers. Even if you fly once a month, we're talking $2400-$4800 more per year. (Again, pricing varies wildly and sometimes the same $300 flight is $3000, in that case, you sit in back)
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Been stated on this thread a few times, here and there but SPENDING 100k is completely different from earning 100k
Someone, in MOST places in the USA, earning 100k is "well off" and basically wants for nothing. Sure they are flying economy and probably buying NICER used cars but still, they will have a nice house, international vacations, eat out 5 nights a week etc.
Someone SPENDING 100k a year, can fly first class domestically, have a new car, motorcycle and a sports car AND probably have a 3,000-6,000 sqft newer home.
These are two people on entirely different levels. Paying taxes on 100k salary, saving from it, and having to build FIRE from it will cause this person to live a more modest lifestyle.
I would damn near say, earning 200k or nearly 2x probably puts you on the same level.
Do you mean a single person spending $100k? Because it’s a lot of spending, but it’s not really fly first class regularly spending. It’s more like a $500k mortgage, two in daycare or private school, a couple moderate trips a year, and eating out too much with your family of four. Those are all lifestyle choices to be sure, but not things that would be perceived as extravagant by many upper middle class folks.
I think people underestimate the amount of money you need to really spend on crazy extravagances.
$100k of earned income, while maxing retirement accounts, with $500k mortgage, and 2 kids in daycare wouldn't be enough income. Our mortgage is less than $500k but in the ball park, PITI is around $2300, Daycare for two is ~$2800. Those two expenses are $61,200 in annual post tax spending. Add $19,500 and $7,000 for 401k and HSA and you get ~$87,700 or $12,300 a year for taxes and money to live on, i would argue not enough.
However, this thread has changed my mind, i used to think $100k/year in retirement distributions wasn't that much, but i think i was wrong and its "a lot", not fly business class internationally multiple times a year (for a couple) lot but a fun retirement.
If you and your spouse were both FIRE’d, you would still spend $2800/mo in daycare?
A big part of my FIRE calculations will involve doing things myself, that I currently pay others to do (such as lawn maintenance, car maintenance, etc.)
No we wouldn't spend anything on daycare, because we are retired and able to watch the kids, i said earned income above.
my point was that $100k+ in earned income can get gobbled up quickly while working and in many cases may not be enough depending income depending upon where you live and how big your family is.
Once retired, $100k in distributions seems like more than enough money
Yeah, this thread is about 100K in retirement income.
Although Financial Samurai would probably call it "poverty"
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$100K of spend probably is plenty to retire on. Though I do again want to reiterate that retirement income pre and post 65 are very different in the United States.
People should also do a lot of thinking about the difference between being a high income person who spends a nominal amount of money, and being locked into low spending in perpetuity.
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In Seattle/King County the property tax rate is around 1% -- there might be a slight surcharge for more expensive properties. But the assessed values of most properties will be 10-20% lower than market value. If we put our house on the market today we would probably get between 1-1.2 million (hot market, limited inventory, crazy bidding wars). But our assessed value is only 770k. And since we are able to manage our income so that we look poor on paper, and since my SO is now over the age limit, we qualify for the highest level of the senior property tax exemption and are only taxed on 308k of that. You can get some level of property tax exemption the year you turn 62 if your income is lower than something like the 60th percentile now in Washington state? In King County, the cutoff is near 60k/year.
Washington has one of the most regressive tax structures in the US -- no income tax, fairly high exemption levels for estate taxes (I think around 2 mill? No limit for spousal transfers). Sales tax is around 10%, but IIRC the sales tax in NYC and other places with high tax rates is not much less. No sales tax on food. So if you make it to age 62 you can spend all your property tax savings on making gourmet cuisine!
Yes, thanks, that's what I was getting at without spelling it out as concisely or with concrete examples. We're moving to Washington State this year from California. I was pleased to realize these sorts of details about a month ago, when I had previously been budgeting 1% of the purchase price; our new property will have an assessed value about 2/3 of what we're buying it for, so our property taxes will be dropping quite a bit even though we're spending $100k more than I was planning on the house.
I did discover one area where WA taxes are much higher than CA - real estate transfer taxes. Thankfully for us, those are paid by the seller, and we're hoping to stay put for a very long time after the move.
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[Spits out my water] Yes, in my mind $100k per year is clearly Fat FIRE.
Not gonna lie, that was my reaction too. I can't even imagine what I'd have to be doing to spend upwards of 100k a year. Maybe if I decided to eat out for lobster & steak every meal, travel internationally every other month, buy a McMansion AND a Tesla AND idk a flock of exotic birds?
Shovel quite a bit of money at great causes like the Nature Conservancy.
https://www.nature.org/en-us/what-we-do/our-priorities/
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Yes it's a lot. No it's not FatFIRE. I would call it ChubbyFIRE. But obviously just one person's opinion, there is no standard definition and depends on location and blah blah blah
I'm puzzled by this opinion. With a paid off house in a mid-COL area, the whole MMM family (pre-divorce) was spending ~$25k/year for everything.
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Yes it's a lot. No it's not FatFIRE. I would call it ChubbyFIRE. But obviously just one person's opinion, there is no standard definition and depends on location and blah blah blah
I'm puzzled by this opinion. With a paid off house in a mid-COL area, the whole MMM family (pre-divorce) was spending ~$25k/year for everything those things MMM decided should be counted in a sample budget, but not everything.
FTFY
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Yes it's a lot. No it's not FatFIRE. I would call it ChubbyFIRE. But obviously just one person's opinion, there is no standard definition and depends on location and blah blah blah
I'm puzzled by this opinion. With a paid off house in a mid-COL area, the whole MMM family (pre-divorce) was spending ~$25k/year for everything.
You have to squint really hard to accept that at face value though. If his blog posts were treated as financial statements, there would be accruals and deferrals for buying half million dollar homes with cash, self-insuring them, and self-insuring his family.
This amounts to tens of thousands of dollars a year.
It's a fun exercise, but I strongly discourage anyone from taking anything concrete or actionable from it.
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Yes it's a lot. No it's not FatFIRE. I would call it ChubbyFIRE. But obviously just one person's opinion, there is no standard definition and depends on location and blah blah blah
I'm puzzled by this opinion. With a paid off house in a mid-COL area, the whole MMM family (pre-divorce) was spending ~$25k/year for everything.
Even if that were true, which it's not, that would be more like PovertyFIRE. I mean literally that is below the federal poverty line.
$100k is the 64th percentile for household income, not even in the top 1/3 (almost, but not quite).
https://dqydj.com/household-income-percentile-calculator/ (https://dqydj.com/household-income-percentile-calculator/)
That is a very comfortable retirement, and I'm sure some people could live FAT on that, but to me personally, no that is not FatFIRE, it's Chubby:
https://www.reddit.com/r/ChubbyFIRE/ (https://www.reddit.com/r/ChubbyFIRE/)
About Community
Those who don't fit into r/leanfire or r/fatFire, we have a place to talk. Basic outline is a retirement portfolio target of ~2.5MM-5MM, think of it as the upper middle class of retirement
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^^ Using the same link as above, but for wealth instead of income, to get $100k/year from investments at 4% a year means $2.5M of investments. Plug it in with ignoring home equity (since that doesn't generate income) and you get the top 95.5 percentile. That is a much more realistic picture of where you're at in society if you're getting $100k/year from safe, passive investments.
https://dqydj.com/net-worth-percentile-calculator-united-states/
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Yes it's a lot. No it's not FatFIRE. I would call it ChubbyFIRE. But obviously just one person's opinion, there is no standard definition and depends on location and blah blah blah
I'm puzzled by this opinion. With a paid off house in a mid-COL area, the whole MMM family (pre-divorce) was spending ~$25k/year for everything.
Even if that were true, which it's not, that would be more like PovertyFIRE. I mean literally that is below the federal poverty line.
$100k is the 64th percentile for household income, not even in the top 1/3 (almost, but not quite).
First, *spending* $25k/year with a paid off home is no where near the federal poverty line. It’s actually very close to the typical middle-class retiree’s budget.
Second, we are discussing $100k in spending in retirement, not earnings
In both cases you’ve conflated income with retirement spending, which are two very different things.
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100k spending in retirement would be fat indeed especially if the house is paid for. I live in a MCOL and am newly divorced. If I had to rent I would not have the level of income that I would be comfortable at. Luckily I have the money to buy a condo and am choosing a small mortgage of 85k. I will be comfortable on my income of 31k and will be able to travel, etc.
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^^ Using the same link as above, but for wealth instead of income, to get $100k/year from investments at 4% a year means $2.5M of investments. Plug it in with ignoring home equity (since that doesn't generate income) and you get the top 95.5 percentile. That is a much more realistic picture of where you're at in society if you're getting $100k/year from safe, passive investments.
https://dqydj.com/net-worth-percentile-calculator-united-states/
The flip side of that is even MMM FIRE ($25k/yr) requires a stache of $625k, which puts you in the 86.5 percentile. Anyone who can FIRE, fat or lean is going to be near the top of the wealth distribution.
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^^ Using the same link as above, but for wealth instead of income, to get $100k/year from investments at 4% a year means $2.5M of investments. Plug it in with ignoring home equity (since that doesn't generate income) and you get the top 95.5 percentile. That is a much more realistic picture of where you're at in society if you're getting $100k/year from safe, passive investments.
https://dqydj.com/net-worth-percentile-calculator-united-states/
The flip side of that is even MMM FIRE ($25k/yr) requires a stache of $625k, which puts you in the 86.5 percentile. Anyone who can FIRE, fat or lean is going to be near the top of the wealth distribution.
Yeah, wealth shouldn't be part of this discussion bc as you say anybody FIRE or close to it will be considered wealthy. Even anybody just thinking that they may be able to FIRE will put them up there.
Avg social security is $1543/mo and up to $3100 at full retirement, at 4% that would be $463k to $930k (not really the value bc there is no actual wealth and nothing to transfer but it is guaranteed and cola'd) . So just by having a job and contributing you will be globally wealthy at some point.
Although I do so much enjoy when people say you are so wealthy compared to someone in Zimbabwe. I really don't give two caps about the relative argument. If my life is designed in a higher COL area with some of the social trappings why would I care if I can FIRE IN Zimbabwe with $14 or Mississippi with $14k.....I don't, it's a nonsense argument. Location matters, relativity to others locations only matters if I plans don't work out and I don't want to go back to work. Or if I am tired of my area and can move to a lower COL and thereby increase travel budget or charitable.
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Just saw a Forbes article from September 2019, discussing 13 ways to make your money last in retirement. Nothing earthshaking, but there was one line that was basically "If you are using a 4% withdrawal rate, you need $7,500,000 saved to take out $300,000" I'm not sure of the right medical term to describe that level of fire.
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Just saw a Forbes article from September 2019, discussing 13 ways to make your money last in retirement. Nothing earthshaking, but there was one line that was basically "If you are using a 4% withdrawal rate, you need $7,500,000 saved to take out $300,000" I'm not sure of the right medical term to describe that level of fire.
Crap, I am in trouble then, now I have to go back to work or move to Zimbabwe! 😉
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why would I care if I can FIRE IN Zimbabwe with $14 or Mississippi with $14k.....
Haha, I must be vastly overspending for living in Mississippi.
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Yes it's a lot. No it's not FatFIRE. I would call it ChubbyFIRE. But obviously just one person's opinion, there is no standard definition and depends on location and blah blah blah
I'm puzzled by this opinion. With a paid off house in a mid-COL area, the whole MMM family (pre-divorce) was spending ~$25k/year for everything.
Even if that were true, which it's not, that would be more like PovertyFIRE. I mean literally that is below the federal poverty line.
$100k is the 64th percentile for household income, not even in the top 1/3 (almost, but not quite).
First, *spending* $25k/year with a paid off home is no where near the federal poverty line. It’s actually very close to the typical middle-class retiree’s budget.
Second, we are discussing $100k in spending in retirement, not earnings
In both cases you’ve conflated income with retirement spending, which are two very different things.
Family of three living on $25k is def poverty level in my book. Paid off house or no.
In retirement, your withdrawal is your income, they are logically equivalent. Whether I'm getting my $100k from a job or that is my portfolio draw per my safe withdrawal rate, that is what I have to live on per year. And for me, $100k is not FAT. Key words there being "for me"
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^^ Using the same link as above, but for wealth instead of income, to get $100k/year from investments at 4% a year means $2.5M of investments. Plug it in with ignoring home equity (since that doesn't generate income) and you get the top 95.5 percentile. That is a much more realistic picture of where you're at in society if you're getting $100k/year from safe, passive investments.
https://dqydj.com/net-worth-percentile-calculator-united-states/
The flip side of that is even MMM FIRE ($25k/yr) requires a stache of $625k, which puts you in the 86.5 percentile. Anyone who can FIRE, fat or lean is going to be near the top of the wealth distribution.
These two posts seem to highlight how extraordinary everyone is on this site, just being here, actively thinking and planning about your future or already reaping the rewards of years of hard work so you can step away from a "regular" life and live on your own terms. Pretty awesome accomplishment on any personal FIRE budget $25k-$100k+
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In retirement, your withdrawal is your income, they are logically equivalent. Whether I'm getting my $100k from a job or that is my portfolio draw per my safe withdrawal rate, that is what I have to live on per year. And for me, $100k is not FAT. Key words there being "for me"
This is simply not true. I am FIREd and I live on (spend) a lot more than my withdrawals. How? I have lots of post-tax accounts that I spend down while I optimize my tax and health insurance costs by keeping my withdrawals low. In addition, $100k from a job is nothing like $100k of spending. I took some of my data (below) from the Smartasset.com tax estimator.
For someone pursuing FIRE, assume a $100k annual income. In order to FIRE, a 30% savings rate is close to a minimum. According to MMM's Simple Math post, a 30% savings rate = 28 working years, so someone starting after college (age 22) would FIRE at age 50. Let's assume they max out their 401(k) ($19,500) so their taxable income is $80,500. They save $10,500 in Roth/after tax accounts. Their federal taxes would be about $10,700, FICA would be about $6,200, and they may have state taxes (assume $0 here). That's close to $17,000 in federal and FICA taxes. So from that $100k income, we subtract $19,500 in 401(k) contributions, $10,500 in other retirement savings, and $17,000 in federal taxes. That leaves $53,000. This person also needs to pay for work clothes, maybe commuting, and may pay for things like car repairs, lawn service, cleaning service, and other job-related expenses.
It's not hard for someone FIREd to keep their expenses much, much lower. My spending level is around double my taxable income, and that person doesn't need to save anything for retirement. If I assume $50k of taxable income that would only mean $4,300 in Federal Income Tax, and they wouldn't be paying FICA taxes. They also wouldn't need to save anything for retirement because by definition they're already retired. So this person would have about $95,700 to spend compared to the $53,000 from the working person.
Health care costs don't change this. A quick check shows a typical Silver plan for someone age 50 in my state is in the $400-600 range, so about $6,000 / year. OOP max is about $17k. If someone somehow gets totally free health care through work (not likely), and spends the absolute maximum on health care after they're FIREd, they still have tens of thousands of dollars more available to spend than the working person.
Even making the most lopsided assumptions - low (30%) savings rate, zero health care costs while employed and maximum health care costs when FIREd, ignoring work-related costs that disappear, and minimal tax optimization, the FIREd person "spending" $100k a year has tens of thousands of dollars extra to spend than the working person. If they FIREd person optimizes just a bit they'll be even further ahead.
I can say that for me personally, in the 2 years I've been FIREd I live the same lifestyle I did while working, while my taxable income is 15.3% of my working income while my spending is the same at about 45% of my working income. So if I earned $100k a year while working, I now "earn" $15,300 in taxable income while living on $45k of spending each year. Those aren't my actual numbers, but the ratios are correct.
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Yes it's a lot. No it's not FatFIRE. I would call it ChubbyFIRE. But obviously just one person's opinion, there is no standard definition and depends on location and blah blah blah
I'm puzzled by this opinion. With a paid off house in a mid-COL area, the whole MMM family (pre-divorce) was spending ~$25k/year for everything.
Even if that were true, which it's not, that would be more like PovertyFIRE. I mean literally that is below the federal poverty line.
$100k is the 64th percentile for household income, not even in the top 1/3 (almost, but not quite).
First, *spending* $25k/year with a paid off home is no where near the federal poverty line. It’s actually very close to the typical middle-class retiree’s budget.
Second, we are discussing $100k in spending in retirement, not earnings
In both cases you’ve conflated income with retirement spending, which are two very different things.
LOL family of three living on $25k is def poverty level in my book. Paid off house or no.
In retirement, your withdrawal is your income, they are logically equivalent. Whether I'm getting my $100k from a job or that is my portfolio draw per my safe withdrawal rate, that is what I have to live on per year. And for me, $100k is not FAT. Key words there being "for me"
But it's not the same, if for no other reason than income taxes. Let's assume that the $100k in discussion is total income (i.e., gross income, pre-tax) and filing Single.
--------Scenario #1-------------
So let's start with $100k of earned income. For simplicity's sake we'll say that all income is W-2 wages.
Start: $100k
Std Deduction: ($12,400)
--------------------------------
Taxable Income: $87,600
Income Tax: ($15,110) <---- From the IRS tax tables for tax year 2020
--------------------------------
Income after income tax: $72,490
Soc. Sec. (6.2% of $100k) = ($6,200)
Medicare (1.45% of $100k) = ($1,450)
---------------------------------------------
Income after FICA & Income Tax: $64,840 + $12,400 = $77,240
So in this scenario, you get to "spend" $77,240 of your $100k income.
--------Scenario #2-------------
Now it starts to become much more complicated, because the source of your income becomes very important, as not all income is taxed the same. Let's say the $100k is all coming from a 401(k) or tIRA
Start: $100k
Std Deduction: ($12,400)
--------------------------------
Taxable Income: $87,600
Income Tax: ($15,110)
--------------------------------
Income after income tax: $72,490 + $12,400 = $84,890
In this scenario, you get to "spend" $84,890 of your $100k income.
--------Scenario #3-------------
Let's say all your income all comes from an after-tax brokerage account that you've stopped contributing to over a year ago. So let's say that your $100k breaks down as follows, just for argument's sake:
Dividends: $40,000 <---- (Assuming a dividend rate of 2% of $2M assets)
Long Term Gain: $45,000
Return of Basis: $15,000
LTCG Tax: $0 <--- Taxable income is < $80k in this example
Qualified Dividends Tax: $0 <------ Taxable income is < $40k in this example (Qual. Div. Income is not included in this number.)
----------------------------------
Income after tax: $100,000
NOte: This is not tax-advice. I am not a tax professional, and you should verify any information contained herein.
EDIT: Thank you to @Alternatepriorities for reminding me to add the Std Deduction back to the income.
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In retirement, your withdrawal is your income, they are logically equivalent. Whether I'm getting my $100k from a job or that is my portfolio draw per my safe withdrawal rate, that is what I have to live on per year. And for me, $100k is not FAT. Key words there being "for me"
This is simply not true. I am FIREd and I live on (spend) a lot more than my withdrawals. How? I have lots of post-tax accounts that I spend down while I optimize my tax and health insurance costs by keeping my withdrawals low. In addition, $100k from a job is nothing like $100k of spending. I took some of my data (below) from the Smartasset.com tax estimator.
For someone pursuing FIRE, assume a $100k annual income. In order to FIRE, a 30% savings rate is close to a minimum. According to MMM's Simple Math post, a 30% savings rate = 28 working years, so someone starting after college (age 22) would FIRE at age 50. Let's assume they max out their 401(k) ($19,500) so their taxable income is $80,500. They save $10,500 in Roth/after tax accounts. Their federal taxes would be about $10,700, FICA would be about $6,200, and they may have state taxes (assume $0 here). That's close to $17,000 in federal and FICA taxes. So from that $100k income, we subtract $19,500 in 401(k) contributions, $10,500 in other retirement savings, and $17,000 in federal taxes. That leaves $53,000. This person also needs to pay for work clothes, maybe commuting, and may pay for things like car repairs, lawn service, cleaning service, and other job-related expenses.
It's not hard for someone FIREd to keep their expenses much, much lower. My spending level is around double my taxable income, and that person doesn't need to save anything for retirement. If I assume $50k of taxable income that would only mean $4,300 in Federal Income Tax, and they wouldn't be paying FICA taxes. They also wouldn't need to save anything for retirement because by definition they're already retired. So this person would have about $95,700 to spend compared to the $53,000 from the working person.
Health care costs don't change this. A quick check shows a typical Silver plan for someone age 50 in my state is in the $400-600 range, so about $6,000 / year. OOP max is about $17k. If someone somehow gets totally free health care through work (not likely), and spends the absolute maximum on health care after they're FIREd, they still have tens of thousands of dollars more available to spend than the working person.
Even making the most lopsided assumptions - low (30%) savings rate, zero health care costs while employed and maximum health care costs when FIREd, ignoring work-related costs that disappear, and minimal tax optimization, the FIREd person "spending" $100k a year has tens of thousands of dollars extra to spend than the working person. If they FIREd person optimizes just a bit they'll be even further ahead.
I can say that for me personally, in the 2 years I've been FIREd I live the same lifestyle I did while working, while my taxable income is 15.3% of my working income while my spending is the same at about 45% of my working income. So if I earned $100k a year while working, I now "earn" $15,300 in taxable income while living on $45k of spending each year. Those aren't my actual numbers, but the ratios are correct.
Yes I understand all that and none of that is relevant to my argument.
I am FIRE'd too. I spend about $125k/yr. My AGI is obviously a lot lower than that for the reasons you mention. I am living the same lifestyle as someone in the 80-90% income decile depending on how much they save and pay in taxes. I do not consider myself FatFIREd, although many here on MMM would consider that FatFIRE. MMM leans minimalist.
OP is asking for opinions of whether $100k is a lot and whether it's FatFIRE. Yes, and no. My opinion, speaking from experience in that range.
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But it's not the same, if for no other reason than income taxes. Let's assume that the $100k in discussion is total income (i.e., gross income, pre-tax) and filing Single.
--------Scenario #1-------------
So let's start with $100k of earned income. For simplicity's sake we'll say that all income is W-2 wages.
Start: $100k
Std Deduction: ($12,400)
--------------------------------
Taxable Income: $87,600
Income Tax: ($15,110) <---- From the IRS tax tables for tax year 2020
--------------------------------
Income after income tax: $72,490
Soc. Sec. (6.2% of $100k) = ($6,200)
Medicare (1.45% of $100k) = ($1,450)
---------------------------------------------
Income after FICA & Income Tax: $64,840
So in this scenario, you get to "spend" $64,840 of your $100k income.
--------Scenario #2-------------
Now it starts to become much more complicated, because the source of your income becomes very important, as not all income is taxed the same. Let's say the $100k is all coming from a 401(k) or tIRA
Start: $100k
Std Deduction: ($12,400)
--------------------------------
Taxable Income: $87,600
Income Tax: ($15,110)
--------------------------------
Income after income tax: $72,490
In this scenario, you get to "spend" $72,490 of your $100k income.
--------Scenario #3-------------
Let's say all your income all comes from an after-tax brokerage account that you've stopped contributing to over a year ago. So let's say that your $100k breaks down as follows, just for argument's sake:
Dividends: $40,000 <---- (Assuming a dividend rate of 2% of $2M assets)
Long Term Gain: $45,000
Return of Basis: $15,000
LTCG Tax: $0 <--- Taxable income is < $80k in this example
Qualified Dividends Tax: $0 <------ Taxable income is < $40k in this example (Qual. Div. Income is not included in this number.)
----------------------------------
Income after tax: $100,000
NOte: This is not tax-advice. I am not a tax professional, and you should verify any information contained herein.
Scenarios 1&2 are missing the "Std deduction" in the net after tax income. That $12,400 needs to be added back in to the after tax calculations. A minor quibble that doesn't change the conclusion, but it drives me nuts when bad math makes tax rates look either better or worse than they really are. Scenario 1 should be $64,840+$12,400 = $77,240 and #2 should be $72,490+$12,400=$84,890. I have a friend who pulled off something very close to scenario 3 and had a $100,000+ income there first year of retirement tax free.
It should also be noted that a number of people refer to after tax income as "income" including MMM. See "the simple math of early retirement" post. In talking to friends about this and helping them "get it" I've come to see why. A deep dive into moving income around to maximize tax efficiency makes most peoples eyes glaze over. ROMs and hand waving the numbers get people way more excited about the possibility of not working till they die and the details come later.
To the question: For us 100k a year would feel very fat as we've never spent that much in a year. That would mean a lake front house and all the outdoor toys I could want, probably even an airplane... or giving away about half and living like we do now...
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...
I am FIRE'd too. I spend about $125k/yr. My AGI is obviously a lot lower than that for the reasons you mention. I am living the same lifestyle as someone in the 80-90% income decile depending on how much they save and pay in taxes. I do not consider myself FatFIREd, although many here on MMM would consider that FatFIRE. MMM leans minimalist.
OP is asking for opinions of whether $100k is a lot and whether it's FatFIRE. Yes, and no. My opinion, speaking from experience in that range.
125k/year in spending is FFFFFAAAAAAAATTTTTTFire.
I am struggling to see how (non-mortgage) spending much above 60k/year is not FatFire. There may be 1000 laudable, worth while, good ways to spend above that that make the world a better place and bring happiness to all around but it is still a shit ton of money to be spending.
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Yes I understand all that and none of that is relevant to my argument.
You made a statement, specifically "In retirement, your withdrawal is your income, they are logically equivalent. Whether I'm getting my $100k from a job or that is my portfolio draw per my safe withdrawal rate, that is what I have to live on per year. "
That statement is not true and been demonstrated repeatedly to be not true. If someone is planning to FIRE and saving for FIRE, living on a $100k / year income is nothing at all like being FIREd and living on $100k from a portfolio. To say that they are is simply to make a statement that does not comport with reality, as has been repeatedly shown in this thread.
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Scenarios 1&2 are missing the "Std deduction" in the net after tax income. That $12,400 needs to be added back in to the after tax calculations. A minor quibble that doesn't change the conclusion, but it drives me nuts when bad math makes tax rates look either better or worse than they really are. Scenario 1 should be $64,840+$12,400 = $77,240 and #2 should be $72,490+$12,400=$84,890. I have a friend who pulled off something very close to scenario 3 and had a $100,000+ income there first year of retirement tax free.
Quite right. I was so concerned with the taxes, I missed that. Thank you for pointing that out; I'll fix it and give credit where it's due!
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<Excellent work here - see above>
Scenarios 1&2 are missing the "Std deduction" in the net after tax income. That $12,400 needs to be added back in to the after tax calculations. A minor quibble that doesn't change the conclusion, but it drives me nuts when bad math makes tax rates look either better or worse than they really are. Scenario 1 should be $64,840+$12,400 = $77,240 and #2 should be $72,490+$12,400=$84,890. I have a friend who pulled off something very close to scenario 3 and had a $100,000+ income there first year of retirement tax free.
It should also be noted that a number of people refer to after tax income as "income" including MMM. See "the simple math of early retirement" post. In talking to friends about this and helping them "get it" I've come to see why. A deep dive into moving income around to maximize tax efficiency makes most peoples eyes glaze over. ROMs and hand waving the numbers get people way more excited about the possibility of not working till they die and the details come later.
To the question: For us 100k a year would feel very fat as we've never spent that much in a year. That would mean a lake front house and all the outdoor toys I could want, probably even an airplane... or giving away about half and living like we do now...
Thank you @Alternatepriorities and @Tigerpine for doing a better job that I did. I will add that the big difference comes in from not having to save for FIRE. People pursuing FIRE generally save somewhere around 30-70% of their income and it's often their largest expense while working. I realize that makes the math harder to do, but it really drives the actual spending money that people have in each scenario.
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...
I am FIRE'd too. I spend about $125k/yr. My AGI is obviously a lot lower than that for the reasons you mention. I am living the same lifestyle as someone in the 80-90% income decile depending on how much they save and pay in taxes. I do not consider myself FatFIREd, although many here on MMM would consider that FatFIRE. MMM leans minimalist.
OP is asking for opinions of whether $100k is a lot and whether it's FatFIRE. Yes, and no. My opinion, speaking from experience in that range.
125k/year in spending is FFFFFAAAAAAAATTTTTTFire.
I am struggling to see how (non-mortgage) spending much above 60k/year is not FatFire. There may be 1000 laudable, worth while, good ways to spend above that that make the world a better place and bring happiness to all around but it is still a shit ton of money to be spending.
This seems to be a theme, that people who spend 6 figures think that their high spend doesn't count as fatFIRE because it matches their personal priorities.
I've had years spending 6 figures and it didn't feel particularly, overly luxurious, but I have no illusion that I wasn't spending a fuck ton of money.
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If you think you need $100k or more in retirement, you may be missing the entire point of this blog.
I think you missed the the point of this thread.
And... nursing facilities can cost 100k a year. So, I do find it a reasonable goal.
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People seem to frequently grossly overestimate their taxes.
Hear, hear!
I live in the city of Boston, MA. Property tax last year on our single family home was nowhere even close to $15k. It wasn't even a third of that. Here's a hint if you want to save money on property taxes in Boston: live in Boston. They charge more to people who own property here but don't live here.
EDIT: specified that I'm talking about last year's property taxes.
$15k doesn't sound that far fetched to me, depending on the town - mill rates vary widely. We had a $250k ish house in CT and property taxes on house + cars was about $10k each year. We don't have new or fancy cars, either.
The post I was (indirectly) responding to was discussing property taxes in Washington State, where I found the numbers/assumptions to be objectionable. I'm well aware that there are regions with higher property taxes where $15k is definitely not far-fetched. New Jersey always seems to make that list, as it combines both fairly high property prices with high tax rates; most other states might have one or the other (for example, CA has high prices but a lower rate; Texas has high rates but low prices), but not both.
My property taxes in WA state are over 15k a year. I have a nice house in the city proper, but not a McMansion.
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And... nursing facilities can cost 100k a year. So, I do find it a reasonable goal.
Assuming this is true and assuming I could save 100k a year after taxes and spending I'm trading 1 year of work (while healthy) for 1 year in a nursing home... To me this is a terrible trade. I'm much better off RE while I can still do the things I love and ending life under a bridge.
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Family of three living on $25k is def poverty level in my book. Paid off house or no.
In retirement, your withdrawal is your income, they are logically equivalent. Whether I'm getting my $100k from a job or that is my portfolio draw per my safe withdrawal rate, that is what I have to live on per year. And for me, $100k is not FAT. Key words there being "for me"
“Poverty Level” is a federally defined level. It doesn’t matter what “your book” says, though it does matter how many people are in the household. More to the point, many households at the median income level would have an increase in spending if they 1) did not have a mortgage 2) had the favorable tax treatment of LTCG and 3) were no longer saving for retirement nor incurring work-related expenses (e.g. commuting).
As others have pointed out, earned income and spending are not “logically equivalent” as they do not result in similar amounts of discretionary spending.
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And... nursing facilities can cost 100k a year. So, I do find it a reasonable goal.
Assuming this is true and assuming I could save 100k a year after taxes and spending I'm trading 1 year of work (while healthy) for 1 year in a nursing home... To me this is a terrible trade. I'm much better off RE while I can still do the things I love and ending life under a bridge.
I have children and would never want to burden myself on them - they'd take care of me whether they I wanted them to or not. Dying alone under a bridge when I'm old without proper medical care... doesn't sound that appealing.
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My property taxes in WA state are over 15k a year. I have a nice house in the city proper, but not a McMansion.
I have a brother in the Seattle area... His RE is going to cost twice as much as mine for reasons such as this. Our property taxes are under 3k a year for a 1500 sq ft house with garage on an acre... Our father lives in a town without property taxes and with 5 acres paid for he's living well in the house he build for ~20k a year. That includes the premiums on a supplemental insurance beyond Medicare. He does grow much of his own food in subarctic conditions and heat his domestic water off his wood stove with a system of his own creation... so it might not be good target for many...
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And... nursing facilities can cost 100k a year. So, I do find it a reasonable goal.
Assuming this is true and assuming I could save 100k a year after taxes and spending I'm trading 1 year of work (while healthy) for 1 year in a nursing home... To me this is a terrible trade. I'm much better off RE while I can still do the things I love and ending life under a bridge.
I have children and would never want to burden myself on them - they'd take care of me whether they I wanted them to or not. Dying alone under a bridge when I'm old without proper medical care... doesn't sound that appealing.
Nobody is criticizing anyone for their reasons for wanting to have 6 figures of retirement income. Calling it fatFIRE is not an insult, it's simply recognizing that it's a lot of money to spend.
You obviously have your reasons for wanting to be able to spend a lot of money, that's cool, but your reasons don't make it not a lot of money. I say this as someone who also intends to have a 6 figure retirement income.
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People seem to frequently grossly overestimate their taxes.
Hear, hear!
I live in the city of Boston, MA. Property tax last year on our single family home was nowhere even close to $15k. It wasn't even a third of that. Here's a hint if you want to save money on property taxes in Boston: live in Boston. They charge more to people who own property here but don't live here.
EDIT: specified that I'm talking about last year's property taxes.
$15k doesn't sound that far fetched to me, depending on the town - mill rates vary widely. We had a $250k ish house in CT and property taxes on house + cars was about $10k each year. We don't have new or fancy cars, either.
The post I was (indirectly) responding to was discussing property taxes in Washington State, where I found the numbers/assumptions to be objectionable. I'm well aware that there are regions with higher property taxes where $15k is definitely not far-fetched. New Jersey always seems to make that list, as it combines both fairly high property prices with high tax rates; most other states might have one or the other (for example, CA has high prices but a lower rate; Texas has high rates but low prices), but not both.
My property taxes in WA state are over 15k a year. I have a nice house in the city proper, but not a McMansion.
Fair enough. However, I'm assuming that's a house that would sell for $2M or so these days...which leads right back to the notion that such a house is consistent with fat FIRE. Not trying to judge, but I think the notion that a multi-million dollar house is somehow average (as in average-, but not fat-FIRE) is a bit far-fetched.
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@jehovasfitness23 - yes. Bay Area
$40k/yr for property taxes? holeeee shit
That's a $3M property then. Most CA areas are 1-1.25% of purchase price. I've lived in the Bay Area since 1987, and there's no way anyone MUST have a $3M house here. That's a choice, not a requirement.
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Too many here have conflated spending with earnings, and pre-FIRE budgets with post.
Not necessarily. I just did an update of my proposed retirement budget, and was horrified to realize that since I will not be getting healthcare through my employer - pretax premiums, natch - it means that I have to pay for those premiums pre-tax. Since they won't reach 7.5% of AGI, they will not be deductible. That's about a $3500 swing in taxes on premiums alone.
I will also pay about $15k MORE in taxes, simply because my income will no longer be offset by pre-tax savings that greatly reduced our tax bill each year.
So my post-FIRE budget will have nearly $20k more in taxes, just because of those two line items.
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Too many here have conflated spending with earnings, and pre-FIRE budgets with post.
Not necessarily. I just did an update of my proposed retirement budget, and was horrified to realize that since I will not be getting healthcare through my employer - pretax premiums, natch - it means that I have to pay for those premiums pre-tax. Since they won't reach 7.5% of AGI, they will not be deductible. That's about a $3500 swing in taxes on premiums alone.
I will also pay about $15k MORE in taxes, simply because my income will no longer be offset by pre-tax savings that greatly reduced our tax bill each year.
So my post-FIRE budget will have nearly $20k more in taxes, just because of those two line items.
If you aren't saving anymore then why do you need that same income?
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Too many here have conflated spending with earnings, and pre-FIRE budgets with post.
Not necessarily. I just did an update of my proposed retirement budget, and was horrified to realize that since I will not be getting healthcare through my employer - pretax premiums, natch - it means that I have to pay for those premiums pre-tax. Since they won't reach 7.5% of AGI, they will not be deductible. That's about a $3500 swing in taxes on premiums alone.
I will also pay about $15k MORE in taxes, simply because my income will no longer be offset by pre-tax savings that greatly reduced our tax bill each year.
So my post-FIRE budget will have nearly $20k more in taxes, just because of those two line items.
If you aren't saving anymore then why do you need that same income?
Because we will still have other expenses in retirement - such as travel - that we skimp on now. I also expect our medical expenses to rise. So we have to offset the increase in taxes and medical care with the reduction in savings. Happily, because we've lived so far below our means, this realization won't skew plans significantly.
But $20k more in expenses in any category is worth thinking about - I had focused instead on all the SAVINGS we'd have! No more mandatory retirement savings; no more voluntary savings for retirement! No more FICA! No more ST or LT disability insurance! No more life insurance premiums!
And to other assertions that taxes are lower in retirement? No, they aren't, if you have a pension.
The pension means that 85% of our Social Security income will be taxed. It means I can't control income to reduce tax bracket thresholds. It means that any distributions from our pre-tax accounts will be taxed at 24% Fed (or more, post 2026) and also the additional 9.3% state - a nice even 33.3%.
I can't even move out of CA, as my retiree health care coverage is only in effect if I live within CA - and the healthcare equation is so much more expensive than the CA state income tax, it effectively traps us here.
If we need to depend on the ACA - assuming cliffs and costs resume after the 2022 expiration of the ARP reductions - we will have no way of getting subsidies. A bronze plan in CA will run us nearly $35k annually for the two of us.
So yeah - that's why we're planning on 100% of working income as our target for retirement income. The categories may shift post-employment, but the dollar outlay is expected to be remarkably similar.
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Your pension plus 85% of your social security alone are in the six figures? Nice!
If you anticipate 15k in new taxes from not being able to deferring income taxed at a 1/3 rate that suggests $45,000 of pretax savings/year. Are you a teacher/university worker with access to both a 403b and 457? In any case, you're budgeting for $30k a year in additional travel in retirement? That's almost $360/day of travel expenses if you're going on a one week trip every month.
Sounds like a fascinating retirement. Not exactly the one I'd plan, but I hope it is one which will make you happy.
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People seem to frequently grossly overestimate their taxes.
Hear, hear!
I live in the city of Boston, MA. Property tax last year on our single family home was nowhere even close to $15k. It wasn't even a third of that. Here's a hint if you want to save money on property taxes in Boston: live in Boston. They charge more to people who own property here but don't live here.
EDIT: specified that I'm talking about last year's property taxes.
$15k doesn't sound that far fetched to me, depending on the town - mill rates vary widely. We had a $250k ish house in CT and property taxes on house + cars was about $10k each year. We don't have new or fancy cars, either.
The post I was (indirectly) responding to was discussing property taxes in Washington State, where I found the numbers/assumptions to be objectionable. I'm well aware that there are regions with higher property taxes where $15k is definitely not far-fetched. New Jersey always seems to make that list, as it combines both fairly high property prices with high tax rates; most other states might have one or the other (for example, CA has high prices but a lower rate; Texas has high rates but low prices), but not both.
My property taxes in WA state are over 15k a year. I have a nice house in the city proper, but not a McMansion.
Fair enough. However, I'm assuming that's a house that would sell for $2M or so these days...which leads right back to the notion that such a house is consistent with fat FIRE. Not trying to judge, but I think the notion that a multi-million dollar house is somehow average (as in average-, but not fat-FIRE) is a bit far-fetched.
Not quite but nearing that. Housing prices have nearly doubled here in Seattle in the past 10 years. Plus add on ridiculous bidding wars and paying 100k-200k over asking... Absurdity. I can commute downtown via bike or bus and spend ~30 minutes each way commuting. That as one of my limits. (plus a yard for kids and gardening). When I pull the trigger we will move out of Seattle proper to the 'burbs and hopefully buy a house that is half price (or less).
As someone who had a house with a pool in Texas and we sold for ~150k... I get it. But I don't want to move back to Texas!! :D
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Too many here have conflated spending with earnings, and pre-FIRE budgets with post.
Not necessarily. I just did an update of my proposed retirement budget, and was horrified to realize that since I will not be getting healthcare through my employer - pretax premiums, natch - it means that I have to pay for those premiums pre-tax. Since they won't reach 7.5% of AGI, they will not be deductible. That's about a $3500 swing in taxes on premiums alone.
I will also pay about $15k MORE in taxes, simply because my income will no longer be offset by pre-tax savings that greatly reduced our tax bill each year.
So my post-FIRE budget will have nearly $20k more in taxes, just because of those two line items.
If you aren't saving anymore then why do you need that same income?
Because we will still have other expenses in retirement - such as travel - that we skimp on now. I also expect our medical expenses to rise. So we have to offset the increase in taxes and medical care with the reduction in savings. Happily, because we've lived so far below our means, this realization won't skew plans significantly.
So your spending increases. That's the whole point. For the same "income" you can spend more in post-FIRE.
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Your pension plus 85% of your social security alone are in the six figures? Nice!
If you anticipate 15k in new taxes from not being able to deferring income taxed at a 1/3 rate that suggests $45,000 of pretax savings/year.
Yep, that's correct. Plus DH's Social Security. Plus investment withdrawals. Plus (in Year One) a payout of vacation PTO that will be substantial.
Are you a teacher/university worker with access to both a 403b and 457? In any case, you're budgeting for $30k a year in additional travel in retirement? That's almost $360/day of travel expenses if you're going on a one week trip every month.
We're planning $20k per year in travel, and another $10k in medical costs. Plus some house renovations that I've been too cheap to pay for while working - we're probably at coast Fat FI now, but I just can't reconcile spending all of it on taxes now - delay as long as possible, while maxxing the stash has worked well.
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We are currently spending in the $70-80k/yr range in FIRE as a family of three. We don’t spend lavishly at that level and I consider us pretty regular FIRE. But, we have the luxury of paying low taxes, low premiums, and have a low OOP Max for health care (which we’ve already hit this year). If our income mix was different, we could be paying much more.
IMO this stuff highly depends on the specifics. A single person with $100k/yr from mostly Roth money is doing really well. A family with $100k from 100% traditional accounts, with everything taxed as income, full rate for healthcare, and a high OOP Max might well have less left over after taxes and health care than we do.
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genuinely confused - why would money coming from taxable investment accounts ever be fully taxed as income?
I mean, sure... you will have a minor amount of STCG, but unless you are day trading most will be LTCG, even if you have zero in Roth or HSA accounts...
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nereo, I think the scenario is if everything is in traditional (e.g. tax deferred) retirement accounts. In which case it counts as regular income when you withdraw it (at normal retirement age) or roll it into a Roth conversion pipeline (in FIRE), although you still saving by being able to skip payroll/self employment taxes.
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nereo, I think the scenario is if everything is in traditional (e.g. tax deferred) retirement accounts. In which case it counts as regular income when you withdraw it (at normal retirement age) or roll it into a Roth conversion pipeline (in FIRE), although you still saving by being able to skip payroll/self employment taxes.
ok, thanks. I was trying to figure out how that would ever occur...
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I find it fascinating that we are discussing $100k on MMM vs. $50k on bogleheads...
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I find it fascinating that we are discussing $100k on MMM vs. $50k on bogleheads...
there was a thread a couple years back about whether this forum has gone soft. Back then there was a lot of talk about around a retirement spending threshold of $50k-60k....
It still blows my mind when people come into a discussion declaring that a spend rate substantially above the median income in a region should be considered "about average/normal/typical". Um, no... by definition it puts you among the privileged upper percentiles. Great for you! But still not normal.
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I find it fascinating that we are discussing $100k on MMM vs. $50k on bogleheads...
Maybe we need to focus the discussion on ways to do more with less so that 100k/year seems like fatfire again...
For example: This is my answer to "money can't buy happiness, but it can buy a boat" The whole setup including trailer cost me less than $2500 and will get me into much of the same amazing country as a jet boat at 1/10th the cost.
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amazing locale.
I love small boats. Particularly the human-powered kind, though a 16' skiff with a small kicker on the back can get you to all sorts of places that you can't easily access without a boat OR with a much bigger, fancier, heavier boat.
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It still blows my mind when people come into a discussion declaring that a spend rate substantially above the median income in a region should be considered "about average/normal/typical". Um, no... by definition it puts you among the privileged upper percentiles. Great for you! But still not normal.
I think it really illustrates how much of a bubble many high earners live in. When all your friends and co-workers are earning and spending six figures it's easy to fall into the trap of assuming that your personal social circle is representative of society at large and in fact earning and spending that much is the only way to live.
Wonder if the last year has actually exaggerated this effect since so many people with high incomes have been working from home and only interacting with co-workers and people they have close enough connections with to set up zoom social events. Even fewer random/unplanned encounters with people. I was on a zoom call with someone from industry earlier today and she mentioned that, coming in to the office for the first times, one of the things she realized was that, while she still had seen the people on her team regularly over zoom, she hadn't realized how she'd let connections with security guards and other facilities staff she used to chat with when working from the office full time lapse so completely.
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Wonder if the last year has actually exaggerated this effect since so many people with high incomes have been working from home and only interacting with co-workers and people they have close enough connections with to set up zoom social events. Even fewer random/unplanned encounters with people. I was on a zoom call with someone from industry earlier today and she mentioned that, coming in to the office for the first times, one of the things she realized was that, while she still had seen the people on her team regularly over zoom, she hadn't realized how she'd let connections with security guards and other facilities staff she used to chat with when working from the office full time lapse so completely.
Completely anecdotal, but from my perspective it certainly has. I was furloughed due to the pandemic while my wife worked. My siblings (of which there are six pairs, if you include those on my spouse's side) were evenly split between work from home and unemployed/underemployed. Listening to each talk about the economic impacts of 2020 couldn't be more stark. To those of us who lost some or all of our income it's been the worst economic period on record. To those siblings who kept their positions, they are riding high (having spent far less with no vacations or dining out, and often having racked up overtime). Two of my siblings are pursuing major purchases they never previously though obtainable. Two others have been on extended unemployment and have burned through their entire savings. Yet to listen to any one of them they naturally assume that their experience is largely reflected by the others, have have to be reminded just how different our experiences really are.
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And... nursing facilities can cost 100k a year. So, I do find it a reasonable goal.
Assuming this is true and assuming I could save 100k a year after taxes and spending I'm trading 1 year of work (while healthy) for 1 year in a nursing home... To me this is a terrible trade. I'm much better off RE while I can still do the things I love and ending life under a bridge.
This is the best post I've ever read on MMM! Hahaha! And I totally agree.
When you are drooling on yourself in a nursing home, its not going to matter if it costs $100k or its free from the government.
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I find it fascinating that we are discussing $100k on MMM vs. $50k on bogleheads...
Maybe we need to focus the discussion on ways to do more with less so that 100k/year seems like fatfire again...
For example: This is my answer to "money can't buy happiness, but it can buy a boat" The whole setup including trailer cost me less than $2500 and will get me into much of the same amazing country as a jet boat at 1/10th the cost.
I have a 40' sailboat, and I consider $100k to be a high spend year, not an average.
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It still blows my mind when people come into a discussion declaring that a spend rate substantially above the median income in a region should be considered "about average/normal/typical". Um, no... by definition it puts you among the privileged upper percentiles. Great for you! But still not normal.
In our case, median family income for our large county is over $90k/yr. Our particular town is closer to $120k. So much depends on where you live and your family size. We’ll spend significantly less once empty nesters.
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It still blows my mind when people come into a discussion declaring that a spend rate substantially above the median income in a region should be considered "about average/normal/typical". Um, no... by definition it puts you among the privileged upper percentiles. Great for you! But still not normal.
In our case, median family income for our large county is over $90k/yr. Our particular town is closer to $120k. So much depends on where you live and your family size. We’ll spend significantly less once empty nesters.
Yes, but...
1) you aren’t proposing to spend significantly more than your regional average and call it normal
2) not to sound like a broken record but spending isn’t the same as earnings. If it were very few would ever be able to retire.
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I find it fascinating that we are discussing $100k on MMM vs. $50k on bogleheads...
Maybe we need to focus the discussion on ways to do more with less so that 100k/year seems like fatfire again...
For example: This is my answer to "money can't buy happiness, but it can buy a boat" The whole setup including trailer cost me less than $2500 and will get me into much of the same amazing country as a jet boat at 1/10th the cost.
I have a 40' sailboat, and I consider $100k to be a high spend year, not an average.
I'd consider a sailboat to be another example of doing more with less. Especially if you are planning to live on it part time and sail around seeing the world. Probably more expensive than slow traveling out of a backpack, but still possible to do frugally.
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amazing locale.
I love small boats. Particularly the human-powered kind, though a 16' skiff with a small kicker on the back can get you to all sorts of places that you can't easily access without a boat OR with a much bigger, fancier, heavier boat.
I am hoping to spend more time exploring the rivers up here in retirement. This is my first powered boat, and the longtail motor is for very shallow water, but I think a small kicker would add some nice versatility. I'd like to get a kayak or canoe at some point too.
This is the best post I've ever read on MMM! Hahaha! And I totally agree.
When you are drooling on yourself in a nursing home, its not going to matter if it costs $100k or its free from the government.
Thank you!
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I find it fascinating that we are discussing $100k on MMM vs. $50k on bogleheads...
Maybe we need to focus the discussion on ways to do more with less so that 100k/year seems like fatfire again...
For example: This is my answer to "money can't buy happiness, but it can buy a boat" The whole setup including trailer cost me less than $2500 and will get me into much of the same amazing country as a jet boat at 1/10th the cost.
I have a 40' sailboat, and I consider $100k to be a high spend year, not an average.
I'd consider a sailboat to be another example of doing more with less. Especially if you are planning to live on it part time and sail around seeing the world. Probably more expensive than slow traveling out of a backpack, but still possible to do frugally.
We have lived onboard full time in the past and plan to again in the relatively near future, so yes, we are making the most of it. I pointed out that the cost of a boat could buy a lot of nights in hostels before we bought the boat, but DH really likes sleeping in his own bed :)
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I find it fascinating that we are discussing $100k on MMM vs. $50k on bogleheads...
Maybe we need to focus the discussion on ways to do more with less so that 100k/year seems like fatfire again...
For example: This is my answer to "money can't buy happiness, but it can buy a boat" The whole setup including trailer cost me less than $2500 and will get me into much of the same amazing country as a jet boat at 1/10th the cost.
I have a 40' sailboat, and I consider $100k to be a high spend year, not an average.
I'd consider a sailboat to be another example of doing more with less. Especially if you are planning to live on it part time and sail around seeing the world. Probably more expensive than slow traveling out of a backpack, but still possible to do frugally.
We have lived onboard full time in the past and plan to again in the relatively near future, so yes, we are making the most of it. I pointed out that the cost of a boat could buy a lot of nights in hostels before we bought the boat, but DH really likes sleeping in his own bed :)
Well I "only" had a little over 100k in my stash when I took my first year long retirement so I slept in a lot of hostel beds... It did get a little old after a while, but I think part of that was moving too often.
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For example: This is my answer to "money can't buy happiness, but it can buy a boat" The whole setup including trailer cost me less than $2500 and will get me into much of the same amazing country as a jet boat at 1/10th the cost.
Are we talking about sneaking across a border??? ;)
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For example: This is my answer to "money can't buy happiness, but it can buy a boat" The whole setup including trailer cost me less than $2500 and will get me into much of the same amazing country as a jet boat at 1/10th the cost.
Are we talking about sneaking across a border??? ;)
Haha, I hadn’t really thought about it, but now that I do, I’m sure there numerous small rivers crossing the boarder no one around up here. Seems like a lot of extra effort considering how friendly the Canadians at the boarder are (during non covid times). One time they let me cross just to buy gas...
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Additional Mustachian solutions: Yesterday I figured out how to use the trailer I got for free with that boat to haul two snowmobiles... On the drive home I designed the modification to make it work as well as a dedicated sled trailer... Sketched it this morning and for a $300 bucks in materials and a little work I'll save myself $3500!
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100 does seem like a lot. I am anticipating about 48 in FIRE living expenses and up to another 24 in fun money. Ergo 72, the happiness Frontier.
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$75,000/year in 2009 dollars [1]. $92,000/year in today's dollars [2]. Inflation sneaks up on all of us.
[1] The original study showing no further increase in emotional wellbeing beyond $75,000/year was published in 2010 using data collected in 2009 [3]. https://www.pnas.org/content/107/38/16489
[2] Obviously mustachians know a lot more about how to practice conscious spending on things which bring them genuine happiness while cutting out a lot of the mindless spending, so the fact it took the average american $92k/year in income to max out on the beneficial emotional effects on having more money doesn't mean it should take those of us in this discussion nearly so much to do the same.
[3] Disclaimer that a more recent study came out earlier this year using a different method of measuring happiness and finding that happiness continues to grow with log transformed income up to at least ~$500,000 year. https://www.pnas.org/content/118/4/e2016976118
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LOL are you me ;-). I did the grungy hostel staying backpacker thing the first 2 years I Fired (lean FIRE) and yeah it does get old. My solution was to rent an inexpensive place or room for a month or longer and stay put in some cool place. Lots of fun, cheaper then moving all the time or staying in hostels or even camping and way more comfortable. I didn't have a home base then so very cheap. If I had a home base I could have rented it out and that would have paid not only all my house expenses but my budget travel.expenses too. Now I like to camp to have my own "space" or do the cheap rental apt. Lots of ways to do many things on a much lower budget then expected if a fancy cruise and 5 star resorts stays aren't your thing.
[/quote]
After about 4 months on the move ever day or three I rented an AirBNB in northern Italy for a week of not "going" anywhere. Turned out they hadn't meant to make the listing live but as it was getting dark and there was no where else to go they let us stay anyway. He had the BNB to ourselves, dined with the proprietor despite limited communication and helped celebrate the grand opening of his restaurant. That week ended up among the highlights of the year.
I sometimes struggle to realign spending expectations to the length/type of trips. It's almost always going to cost more to be in Europe than to just go hiking in Nepal for two months. I was living pretty fat on $20 a day there and I lost a lot of body fat at the same time. Win/win.
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$75,000/year in 2009 dollars [1]. $92,000/year in today's dollars [2]. Inflation sneaks up on all of us.
[1] The original study showing no further increase in emotional wellbeing beyond $75,000/year was published in 2010 using data collected in 2009 [3]. https://www.pnas.org/content/107/38/16489
[2] Obviously mustachians know a lot more about how to practice conscious spending on things which bring them genuine happiness while cutting out a lot of the mindless spending, so the fact it took the average american $92k/year in income to max out on the beneficial emotional effects on having more money doesn't mean it should take those of us in this discussion nearly so much to do the same.
[3] Disclaimer that a more recent study came out earlier this year using a different method of measuring happiness and finding that happiness continues to grow with log transformed income up to at least ~$500,000 year. https://www.pnas.org/content/118/4/e2016976118
This is a really good point. I hadn't given any thought at all to how long ago that study was. On the other hand, I don't think I would have any interesting problems left to solve (see above) on 92k/year and I might actually miss that. I honestly have no idea how I could spend $500k/year. I would be very susceptible to OMY at that income level though as I struggle to conceive how I would ever have such an opportunity again.
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FatFIRE is over $76,804
LeanFIRE is under $76,801
Multiply by 1.1 if you live in a HCOL area, 1.13 if it is a VHCOL and 0.7 of it is LCOL
/s
Yep! At $76,805 you are able to live in a ginormous mcmansion with a batcave filled with Ferraris. At $76,800 you are living in a beater van down by the river eating government cheese ;-).
A climber friend and I were discussing this thread last night and his definition of Fat FIRE vs. Lean FIRE vs. Regular FIRE was basicly that if a person quit working to climb full time the lean person could afford to live the dirt bag life in a van, a tent, and a sleazy hostel eating ramen noodles and street food while trekking miles to their climbing site totally unaided. The fat FIRE person would be renting a luxury mountain side chalet with guides and porters ferry their gear everywhere and maybe a quick hello ride to the climb site and back where a nice meal in a warm chalet (and perhaps a masseuse) and a Jacuzzi spa would await them. The regular FIRE person would be staying at a chain motel and using a rental car to get around. Neither the lean FIRE or the regular FIRE person could afford the fat FIRE persons life without working longer. And the lean FIRE person couldn't afford the regular FIRE persons life without having to work longer. In the end they all get to spend their days climbing instead of being stuck at work but otherwise their lives are very different.
First, thanks for the good belly laugh @spartana !
I agree that we're arguing a lot about definitions, and your example illustrates the life differences.
When I was a kid, I thought $100,000 salary was an ungodly amount of money, and a million dollar stash made you incredibly rich.
Now my salary is above 100k and the kids talk about million-bajillions, so that must be the new standard.
Ultimately $100k/yr spending with a paid-off house, especially in a HCOL area is most definitely FatFIRE.
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[3] Disclaimer that a more recent study came out earlier this year using a different method of measuring happiness and finding that happiness continues to grow with log transformed income up to at least ~$500,000 year. https://www.pnas.org/content/118/4/e2016976118
Now you're talking, @maizefolk , bring on the morbidly obese FIRE!
How many logs do you have to transform to get your annual income up to $500k? Is investment in timberland and the attendant log income the key to FIRE?
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Just saw a Forbes article from September 2019, discussing 13 ways to make your money last in retirement. Nothing earthshaking, but there was one line that was basically "If you are using a 4% withdrawal rate, you need $7,500,000 saved to take out $300,000" I'm not sure of the right medical term to describe that level of fire.
Crap, I am in trouble then, now I have to go back to work or move to Zimbabwe! 😉
A Foreign Service colleague used to carry around a $100 trillion (Zimbabwe dollar) note in his wallet from a stint in Harare.
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How many logs do you have to transform to get your annual income up to $500k? Is investment in timberland and the attendant log income the key to FIRE?
Assuming we're talking forty year old black walnut, about five hundred a year.
One can grow about 100 trees an acre (plant 5-10x that but thin them as they mature) so a $500k annual income would only require planting and maintaining 200 acres (500/100 * 40) of timberland .... and starting 40 years before you needed the income to start.
The good news is all the fresh air and exercise involved in trying to maintain 200 acres of forest and 20,000 trees of sufficient quality to fetch good prices should also be good for ones fitness (also generally correlated with happiness).
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How many logs do you have to transform to get your annual income up to $500k? Is investment in timberland and the attendant log income the key to FIRE?
Assuming we're talking forty year old black walnut, about five hundred a year.
One can grow about 100 trees an acre (plant 5-10x that but thin them as they mature) so a $500k annual income would only require planting and maintaining 200 acres (500/100 * 40) of timberland .... and starting 40 years before you needed the income to start.
The good news is all the fresh air and exercise involved in trying to maintain 200 acres of forest and 20,000 trees of sufficient quality to fetch good prices should also be good for ones fitness (also generally correlated with happiness).
Hmm... does that include the cost of a third party contractor felling and rough-cutting the harvested trees? What about the opportunity cost of purchasing and holding 200 acres (not to mention requisite taxes)? And maintaining 200 acres sounds suspiciously like work.
I might have to report this to the IRP for further investigation.
:-P
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Yes, there is a lot of unappreciated work and a lot of production costs involved in forestry for profit. For anyone thinking agroforestry is the path to easy riches, just remember:
Lumber doesn't grow on trees.
(•_•)
( •_•)>⌐■-■
(⌐■_■)
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When I was a kid, I thought $100,000 salary was an ungodly amount of money, and a million dollar stash made you incredibly rich.
Since the Barenaked Ladies came out with the song “If I Had $1,000,000”, inflation has cut the value of that in nearly half. I was an adult when that came out, but $1M when I start elementary school would be over $5M in today’s dollars.
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How many logs do you have to transform to get your annual income up to $500k? Is investment in timberland and the attendant log income the key to FIRE?
Assuming we're talking forty year old black walnut, about five hundred a year.
One can grow about 100 trees an acre (plant 5-10x that but thin them as they mature) so a $500k annual income would only require planting and maintaining 200 acres (500/100 * 40) of timberland .... and starting 40 years before you needed the income to start.
The good news is all the fresh air and exercise involved in trying to maintain 200 acres of forest and 20,000 trees of sufficient quality to fetch good prices should also be good for ones fitness (also generally correlated with happiness).
This is the most appealing non index based FIRE plan I've seen. As a bonus all the thinning should provide amazing wood for the actual fire. Unfortunately I don't think a single black walnut tree can be grown on 200 acres here, and there is just not the same demand for black spruce...
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Yes, there is a lot of unappreciated work and a lot of production costs involved in forestry for profit. For anyone thinking agroforestry is the path to easy riches, just remember:
Lumber doesn't grow on trees.
(•_•)
( •_•)>⌐■-■
(⌐■_■)
I love this! My husband's family has a small tree farm, I'll have to pass this along.
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How many logs do you have to transform to get your annual income up to $500k? Is investment in timberland and the attendant log income the key to FIRE?
Assuming we're talking forty year old black walnut, about five hundred a year.
One can grow about 100 trees an acre (plant 5-10x that but thin them as they mature) so a $500k annual income would only require planting and maintaining 200 acres (500/100 * 40) of timberland .... and starting 40 years before you needed the income to start.
The good news is all the fresh air and exercise involved in trying to maintain 200 acres of forest and 20,000 trees of sufficient quality to fetch good prices should also be good for ones fitness (also generally correlated with happiness).
This is the most appealing non index based FIRE plan I've seen. As a bonus all the thinning should provide amazing wood for the actual fire. Unfortunately I don't think a single black walnut tree can be grown on 200 acres here, and there is just not the same demand for black spruce...
I watched a youtube documentary with a man who way-back-when bought a nice bit of land in some NorCal mountains, raised a family with the sales of ~50,000 christmas trees per year that he grew on the land. He built his own home (twice) and did lots of sculpture and all in all seemed to have had a very good life by living simply and building things. Wish I could find it in my history.
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How many logs do you have to transform to get your annual income up to $500k? Is investment in timberland and the attendant log income the key to FIRE?
Assuming we're talking forty year old black walnut, about five hundred a year.
One can grow about 100 trees an acre (plant 5-10x that but thin them as they mature) so a $500k annual income would only require planting and maintaining 200 acres (500/100 * 40) of timberland .... and starting 40 years before you needed the income to start.
The good news is all the fresh air and exercise involved in trying to maintain 200 acres of forest and 20,000 trees of sufficient quality to fetch good prices should also be good for ones fitness (also generally correlated with happiness).
This is the most appealing non index based FIRE plan I've seen. As a bonus all the thinning should provide amazing wood for the actual fire. Unfortunately I don't think a single black walnut tree can be grown on 200 acres here, and there is just not the same demand for black spruce...
I watched a youtube documentary with a man who way-back-when bought a nice bit of land in some NorCal mountains, raised a family with the sales of ~50,000 christmas trees per year that he grew on the land. He built his own home (twice) and did lots of sculpture and all in all seemed to have had a very good life by living simply and building things. Wish I could find it in my history.
https://www.youtube.com/watch?v=2qcsWajivnI ?
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....
I watched a youtube documentary with a man who way-back-when bought a nice bit of land in some NorCal mountains, raised a family with the sales of ~50,000 christmas trees per year that he grew on the land. He built his own home (twice) and did lots of sculpture and all in all seemed to have had a very good life by living simply and building things. Wish I could find it in my history.
https://www.youtube.com/watch?v=2qcsWajivnI ?
Yep, if you are not going to spend the next 47 minutes and 28 seconds outside making the world a better place you probably should watch the video.
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Got to say that I object somewhat to using median income for the specific city/suburb one lives in to classify whether or not one is fatFIRE or not. If I move a few miles in various directions from my current house, I might be in a city of $50k median income, $90k median income, or $150k median income. Choosing the ritzy location to live in doesn't somehow make you less fatFIRE just because your neighbors are also rich and spendy.
General cost-of-living adjustments for the area, sure. Choosing a super-pricey suburb? Nuh-uh.
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How many logs do you have to transform to get your annual income up to $500k? Is investment in timberland and the attendant log income the key to FIRE?
Assuming we're talking forty year old black walnut, about five hundred a year.
One can grow about 100 trees an acre (plant 5-10x that but thin them as they mature) so a $500k annual income would only require planting and maintaining 200 acres (500/100 * 40) of timberland .... and starting 40 years before you needed the income to start.
The good news is all the fresh air and exercise involved in trying to maintain 200 acres of forest and 20,000 trees of sufficient quality to fetch good prices should also be good for ones fitness (also generally correlated with happiness).
This is the most appealing non index based FIRE plan I've seen. As a bonus all the thinning should provide amazing wood for the actual fire. Unfortunately I don't think a single black walnut tree can be grown on 200 acres here, and there is just not the same demand for black spruce...
So is the appropriate measure of Fat Fire cords or board feet?
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So is the appropriate measure of Fat Fire cords or board feet?
I suspect it varies by zip code... Looking out at 8 cords of split firewood stacked in the yard as the snow flurries start does give me that fat and happy feeling... Because I only burn about half each winter.
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I have relatives that live in the rural south. I've heard from a couple of them that the way to save for a kid's education is to plant #x acres with pine trees when the pregnancy is announced and cut and sell it 18-19 years later. Next time I see my cousin I will ask how many acres he planted. (His daughter ended up going to school partially on a softball scholarship so maybe some of the trees are still standing).
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I have relatives that live in the rural south. I've heard from a couple of them that the way to save for a kid's education is to plant #x acres with pine trees when the pregnancy is announced and cut and sell it 18-19 years later. Next time I see my cousin I will ask how many acres he planted. (His daughter ended up going to school partially on a softball scholarship so maybe some of the trees are still standing).
Can that be incorporated into a 529 so you don't have to pay the lumber tax at harvest?
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You only need to plant pine trees if you're really sappy. At least that's what I in-fir'd.
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....
I watched a youtube documentary with a man who way-back-when bought a nice bit of land in some NorCal mountains, raised a family with the sales of ~50,000 christmas trees per year that he grew on the land. He built his own home (twice) and did lots of sculpture and all in all seemed to have had a very good life by living simply and building things. Wish I could find it in my history.
https://www.youtube.com/watch?v=2qcsWajivnI ?
Yep, if you are not going to spend the next 47 minutes and 28 seconds outside making the world a better place you probably should watch the video.
The number of commercials breaks in the 47 minutes is kind of funny.
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You only need to plant pine trees if you're really sappy. At least that's what I in-fir'd.
(https://media3.giphy.com/media/ac7MA7r5IMYda/giphy.gif)
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You only need to plant pine trees if you're really sappy. At least that's what I in-fir'd.
(https://media3.giphy.com/media/ac7MA7r5IMYda/giphy.gif)
Excellent!! :-)
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So is the appropriate measure of Fat Fire cords or board feet?
I suspect it varies by zip code... Looking out at 8 cords of split firewood stacked in the yard as the snow flurries start does give me that fat and happy feeling... Because I only burn about half each winter.
When a blizzard is setting in, no amount of money can match the security of a big stack of dry wood.
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So is the appropriate measure of Fat Fire cords or board feet?
I suspect it varies by zip code... Looking out at 8 cords of split firewood stacked in the yard as the snow flurries start does give me that fat and happy feeling... Because I only burn about half each winter.
When a blizzard is setting in, no amount of money can match the security of a big stack of dry wood.
Amen!
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So is the appropriate measure of Fat Fire cords or board feet?
I suspect it varies by zip code... Looking out at 8 cords of split firewood stacked in the yard as the snow flurries start does give me that fat and happy feeling... Because I only burn about half each winter.
When a blizzard is setting in, no amount of money can match the security of a big stack of dry wood.
Amen!
Winter days are short and cold.
Wood is worth its weight in gold.
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What the fucking fuck?
lol
@Malcat , I always enjoy your responses.
I think it's important not to get hung up on the fatFIRE/leanFIRE terminology, or compare yourself to anyone else, since we all have different financial needs.
So it's not about whether $100k is fatFIRE for someone else; it's about whether you have a big enough stash to support the lifestyle you want or require, potentially including hefty medical expenses and/or supporting (non-codependent) family members -- so it's not all about yachts or Ferraris or fun, but about your specific life.
For me, it's also about having a comfortable extra cushion in the stash -- not for more profligate spending, but so I can sleep at night. YMMV.
You have to figure out your own priorities, expenses, contingency plans, etc., and determine your own FIRE number that way. And remember that medical costs often increase as you age.
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@jehovasfitness23 - yes. Bay Area
$40k/yr for property taxes? holeeee shit
That's a $3M property then. Most CA areas are 1-1.25% of purchase price. I've lived in the Bay Area since 1987, and there's no way anyone MUST have a $3M house here. That's a choice, not a requirement.
I'm guessing you're missing the part where I also said this:
"I'm going with this. Our expenses in FIRE will be at around around $100k, with 40% of that tied up in property taxes. Of course, we could live somewhere cheaper. Opting to pay that type of property taxes is a luxury choice in and of itself."
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I keep wanting to post something in this thread, but then I click on it, and I just can't hear anything over the exploding volcanoes of cash in here. $25k/yr is povertyFIRE? Oh, boy. Somebody better tell HerbertDerp; I don't think he knows.
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If you think you need $100k or more in retirement, you may be missing the entire point of this blog.
This.
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If you think you need $100k or more in retirement, you may be missing the entire point of this blog.
This.
Agreed. Especially since it's well over the median household income for the US, that puts your spending above that of the average consumer. Not something I'd aspire to.
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If you think you need $100k or more in retirement, you may be missing the entire point of this blog.
This.
Agreed. Especially since it's well over the median household income for the US, that puts your spending above that of the average consumer. Not something I'd aspire to.
The US is a big country, and it's best not to apply generalizations to the entire population. $100k in Loudoun County, VA is below the median income.
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(https://media1.tenor.com/images/8fcbc2fd0aab631b25d3f2aba5724ec3/tenor.gif?itemid=16786213)
Now, you know it's up to you whether or not you want to just do the bare minimum. Now if you feel that the bare minimum is enough, then okay. But some people choose to be more frugal and we encourage that, okay? You do want to express yourself, don't you?
Don't aim for median.
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I think if you've been earning at say 99 percentile income then it makes sense to aim for 90th percentile income in retirement and if you've been earning at 90th percentile income it makes sense to aim for at least 60th percentile income in retirement etc
That is to say, your individual circumstances dictate whether or not the 'median' is truly applicable to you in a relative sense.
The median weight is quite fat - the median IQ is 100 - we do not always follow medians when it comes to our own measuring sticks.
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I think if you've been earning at say 99 percentile income then it makes sense to aim for 90th percentile income in retirement and if you've been earning at 90th percentile income it makes sense to aim for at least 60th percentile income in retirement etc
That is to say, your individual circumstances dictate whether or not the 'median' is truly applicable to you in a relative sense.
The median weight is quite fat - the median IQ is 100 - we do not always follow medians when it comes to our own measuring sticks.
What others are doing around me is much less significant than the number of other things I'd rather be doing with my time and how much I'd rather be doing them than work I'm doing to make money. I then weigh that against various levels of comfort to decide how much of my life I'm willing to trade for hedonic adaption rather then spend it working on something I really want to. I will admit that making more money has made hedonic adaptation a bit more tempting.
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I know I'm getting in on this discussion on the late side, but having read through the thread, it seems like a bunch of points were either missed or glossed over. Since I'm at around the spending level being discussed, I thought I'd also throw in my perceptions around spending this amount in FIRE...
- The Reddit world has separate subreddits for ChubbyFIRE and FatFIRE. ChubbyFIRE defines itself as for people having a stash of $2.5m-$5m, so at a 4% WR you're looking at a $100k-200k draw. FatFIRE agrees with a $5m threshold, i.e. a $200k/yr draw.
- I think that it makes a big difference whether you're looking at spending for one person, a couple, or a family to assess whether it's FatFIRE. Spending $100k for a family may not be leanFIRE but doesn't feel fatFIRE either.
- It also will make a huge difference whether your housing is paid off or not.
- It will make a big difference whether you are able to arrange your income so that you qualify for ACA subsidies or not.
I have been FIREd for 21 years and have had remarkably level withdrawals from my accounts of around 90-100k/yr, partly from trying to keep under a 'safe' WR (not always safe, in retrospect, but back in the day I didn't know about SORR), partly by chance. When I was spending that whilst paying a mortgage, paying for my SO's schooling, and for her living expenses as well, in a VHCOL city (NYC), it did not feel like FatFIRE (although I didn't feel like I was scrimping much either). When I was spending that whilst living alone in an HCOL city (DC - which has been transitioning to a VHCOL city in the past few years), it felt pretty fat - I could rent a fancy townhouse with more room than I neded, pay for a housecleaner, get theater subscriptions and go to whatever concerts or sporting events I wanted (not the priciest tickets of course), go out to eat whenever I wanted, subscribe to the print edition of the NY Times, give hefty gifts to my DD, buy all of the tech 'toys' I have wanted, and travel 1/3 of the year, without feeling like I had exceeded my target spending.
Current approximate spending (no facepunches neccesary - I know that it's crazy high)
Rent $40k
Healthcare $10k
Entertainment (includes dining out) $10k
Gifts $5k
Travel $15k
Media $1.5k
Food $3k
Utilities $4k
Car depreciation and expenses $3k
Clothes $0.5k
'Toys' (tech) $1.5k
Pet $0.5k
Charity $5k
Miscellaneous $1k
I could see spending more (more car, more entertainment, more 'toys') but don't think I could really up it beyond $125k or so without being overwhelmed by my own piggishness - unless the extra spending was all going to gifts and charity.
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^ none of that was glossed over
There are just some of us who feel like 100K isn't a lot of money to spend in retirement, and some of us who do.
The ones who don't cite all sorts of reasons for spending 100K, and the ones who do cite that just because there are reasons, doesn't mean it's not a lot of money. Even you yourself acknowledge that your numbers are "crazy high".
As far as I recall, no one in this thread has said that people aren't justified in spending 100K.
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I keep wanting to post something in this thread, but then I click on it, and I just can't hear anything over the exploding volcanoes of cash in here. $25k/yr is povertyFIRE? Oh, boy. Somebody better tell HerbertDerp; I don't think he knows.
That's because no one with a family can eat for $200/month. "You're all going to starve!!!" ;-).
While I'm in the "can and do easily live on a lot less then $25k" group, and it doesn't feel impoverished at all - especially with a fat stash to back it up. - I do realize that for those with mortgages or rents, kids, medical cost (even with the ACA subsidies you still have high OOP max unless you can go on Medicaid), and a whole host of other things might have a different experience the our sort. $100k though is crazy high for most people.
ETA haven't heard from the OP. Have you changed your mind a bit or do you still think $100k is a low FIRE number and $200k FatFI?
As I said in OP I do think $100k is a lot. Still not sure that it is fatFIRE but as this thread has discussed may be highly dependent on situation. A single person in a LCOL (or most places probaly) it will probably be fatfire. I have a family of five with three teens, Ina variety of activities (food, gear,, clothing, and other consumes are quite high). And all of this can also be very individual based on what's important - travel, well for 5 that adds up quick, single person not as much.
Can people live on much much less - absolutely that may be surviving or living well but probably not fatFIRE.
I disagree with the notion that median income for one's local/regional area doesn't matter. It's a big country and a big world. That doesn't mean that those aren't choices but the area income often dictates/influences prices (not to mention my high property taxes).
Take Europe for example. geographically equal in size to the US and has 50 countries (twice the population) and I doubt someone in Switzerland would say their income/spending is ridiculously fat bc you could always move to Serbia. It's a nonsense argument.
Anyway 100k is plenty for me but I don't consider it fatFIRE for our family size in our general location. If I lived on flyover country then I might feel differently.
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^ none of that was glossed over
There are just some of us who feel like 100K isn't a lot of money to spend in retirement, and some of us who do.
The ones who don't cite all sorts of reasons for spending 100K, and the ones who do cite that just because there are reasons, doesn't mean it's not a lot of money. Even you yourself acknowledge that your numbers are "crazy high".
As far as I recall, no one in this thread has said that people aren't justified in spending 100K.
I'll take your word on those not being glossed over; I didn't come across the discussion of those points in five pages of posts but probably just missed it.
Additionally, in no way was I trying to justify my spending. I was bringing it up to flag that, based on my personal experience, $100k for an individual feels incredibly fat to me (and for two people, not so much). It more or less allows me to do whatever I want whenever I want with room to spare. Of course not wanting a talking astrolabe or an underwater lair helps ;-)
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^ none of that was glossed over
There are just some of us who feel like 100K isn't a lot of money to spend in retirement, and some of us who do.
The ones who don't cite all sorts of reasons for spending 100K, and the ones who do cite that just because there are reasons, doesn't mean it's not a lot of money. Even you yourself acknowledge that your numbers are "crazy high".
As far as I recall, no one in this thread has said that people aren't justified in spending 100K.
I'll take your word on those not being glossed over; I didn't come across the discussion of those points in five pages of posts but probably just missed it.
Additionally, in no way was I trying to justify my spending. I was bringing it up to flag that, based on my personal experience, $100k for an individual feels incredibly fat to me (and for two people, not so much). It more or less allows me to do whatever I want whenever I want with room to spare. Of course not wanting a talking astrolabe or an underwater lair helps ;-)
Hey, I'm not judging you or anyone who chooses to spend 100K in retirement. I don't think anyone else is either. Some are just saying that it's a lot of money, regardless of the reasons.
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What all is included in the 100k? I spend $21,000 a year for health insurance. Also taxes take a big bite, both real estate and federal.
My wife and I could of coarse get by on $100k, but thankfully we don’t have to. I guess we are in the chubbyfire class.
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In past I have seen a few threads circle back on themselves as the page count grows but never before have I seen a thread circle back around onto itself continuously at 100rpm for 4.5 pages right off the bat.
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In past I have seen a few threads circle back on themselves as the page count grows but never before have I seen a thread circle back around onto itself continuously at 100rpm for 4.5 pages straight right off the bat.
It's quite something.
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I used to wonder why MMM didn’t spend more time in the forum he created
I don’t wonder anymore.
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I used to wonder why MMM didn’t spend more time in the forum he created
I don’t wonder anymore.
Ha!
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I used to wonder why MMM didn’t spend more time in the forum he created
I don’t wonder anymore.
Indeed. The 'badassity' has left the building. Not throwing stones, since I deserve plenty of facepunches myself, but it does seem like that part of the message isn't even on most people's radar anymore.
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I used to wonder why MMM didn’t spend more time in the forum he created
I don’t wonder anymore.
Indeed. The 'badassity' has left the building. Not throwing stones, since I deserve plenty of facepunches myself, but it does seem like that part of the message isn't even on most people's radar anymore.
It never was on my radar. I'm all for being conscious about spending and making efficient choices regarding money/time, but voluntary deprivation or anti-consumption or frugality solely for its own sake means nothing to me.
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I used to wonder why MMM didn’t spend more time in the forum he created
I don’t wonder anymore.
Indeed. The 'badassity' has left the building. Not throwing stones, since I deserve plenty of facepunches myself, but it does seem like that part of the message isn't even on most people's radar anymore.
It never was on my radar. I'm all for being conscious about spending and making efficient choices regarding money/time, but voluntary deprivation or anti-consumption or frugality solely for its own sake means nothing to me.
Anti-consumption for it's own sake is important to me, so for me it was a draw to MMM in addition to the early retirement concept. I have definitely become less interested due to the forum's more consumeristic trend in recent years. People have also become very sensitive about face punches, which is just funny to see.
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I used to wonder why MMM didn’t spend more time in the forum he created
I don’t wonder anymore.
Indeed. The 'badassity' has left the building. Not throwing stones, since I deserve plenty of facepunches myself, but it does seem like that part of the message isn't even on most people's radar anymore.
It never was on my radar. I'm all for being conscious about spending and making efficient choices regarding money/time, but voluntary deprivation or anti-consumption or frugality solely for its own sake means nothing to me.
Anti-consumption for it's own sake is important to me, so for me it was a draw to MMM in addition to the early retirement concept. I have definitely become less interested due to the forum's more consumeristic trend in recent years. People have also become very sensitive about face punches, which is just funny to see.
I go further than that as well. FIRE is a side effect of my anti-consumption efforts, because low consumption = massive excess of money, even if you don't earn a lot. Just a question of what you want to direct the firehose at.
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I used to wonder why MMM didn’t spend more time in the forum he created
I don’t wonder anymore.
Indeed. The 'badassity' has left the building. Not throwing stones, since I deserve plenty of facepunches myself, but it does seem like that part of the message isn't even on most people's radar anymore.
It never was on my radar. I'm all for being conscious about spending and making efficient choices regarding money/time, but voluntary deprivation or anti-consumption or frugality solely for its own sake means nothing to me.
This is a pretty common misconception on MMM. He's not saying anything about deprivation or frugality for frugality's sake, but about optimization. It's not deprivation if you're "depriving" yourself of things that aren't actually making you happy or that aren't worth the trade-offs. And also people are pretty bad at guessing what will actually make them happy, especially in terms of spending. All his articles are quick to point out that his lifestyle is fairly plush, and he's not being all that frugal.
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I'm fine with optimisation, but the tone I get from the blog posts is that there's a degree of wanting to live a minimalist life focussing on, for example, not driving where possible, and not otherwise consuming resources.
That is to say, the objective is to be frugal in absolute terms, not just relative to your income and time spend.
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I used to wonder why MMM didn’t spend more time in the forum he created
I don’t wonder anymore.
Indeed. The 'badassity' has left the building. Not throwing stones, since I deserve plenty of facepunches myself, but it does seem like that part of the message isn't even on most people's radar anymore.
It never was on my radar. I'm all for being conscious about spending and making efficient choices regarding money/time, but voluntary deprivation or anti-consumption or frugality solely for its own sake means nothing to me.
This is a pretty common misconception on MMM. He's not saying anything about deprivation or frugality for frugality's sake, but about optimization. It's not deprivation if you're "depriving" yourself of things that aren't actually making you happy or that aren't worth the trade-offs. And also people are pretty bad at guessing what will actually make them happy, especially in terms of spending. All his articles are quick to point out that his lifestyle is fairly plush, and he's not being all that frugal.
Indeed. He's even argued passionately and repeatedly about how his approach is NOT about extreme frugality, and that his own life is an exploding volcano of luxury and excess.
https://www.mrmoneymustache.com/2014/11/23/not-extreme-frugality/ (https://www.mrmoneymustache.com/2014/11/23/not-extreme-frugality/)
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Yes, I've missed this aspect of the forum as well. We used to spend a lot more time talking about and debating what spending actually lead to increased happiness/life satisfaction and what spending just lead one down a hedonic treadmill.
https://www.mrmoneymustache.com/2011/10/22/what-is-hedonic-adaptation-and-how-can-it-turn-you-into-a-sukka/
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I'm fine with optimisation, but the tone I get from the blog posts is that there's a degree of wanting to live a minimalist life focussing on, for example, not driving where possible, and not otherwise consuming resources.
That is to say, the objective is to be frugal in absolute terms, not just relative to your income and time spend.
Well it's partly that that supposed "minimalism" might make you happier. For instance driving has a lot of downsides for your happiness like lack of exercise and isolation from other people. Then that aside, the spending may not be worth the effort it took to earn the money. And your perception of what's making you happy may not be very well in tune with what actually is.
The other undertone I get is that some forms of minimalism keep you from harming other people. To take driving again, emissions do harm to others even if not you.
And maybe there is a loss of the idea that some things may be worth it for high earners that wouldn't be for people on a limited budget, but just because you can easily afford it doesn't mean that a 300 sq m house will make you any happier than somebody that would have to stretch for it. A lot of things are not really relative to your income in terms of how much they're worth it.
But the point I'm trying to make is that I still think that you along with tons of other people are arguing against what hasn't actually been said.
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I'm fine with optimisation, but the tone I get from the blog posts is that there's a degree of wanting to live a minimalist life focussing on, for example, not driving where possible, and not otherwise consuming resources.
That is to say, the objective is to be frugal in absolute terms, not just relative to your income and time spend.
That's not the impression I get from the blog, I got the message that people over estimate how hard and awful those options are and end up spending enormous amounts for marginal increases in benefit.
He has a specific form of lifestyle that he likes and talks about as a model for that type of thinking, but he is unapologetically living his best life and spending on whatever he has found to be worthwhile.
A nice car for a high earner who enjoys their job isn't a significant sacrifice, but for a middle class earner, it is. They have to make an ENORMOUS trade off to choose it. That's why that's an obvious target for most people.
The message is to question what you have been trained to believe is "worth it" and to understand the real life costs of the things you spend on.
I spend on plenty that Pete wouldn't, but I never once felt like his message wasn't for me.
That said, I don't do something stupid like come here and try and look for approval for the luxuries I believe are valuable to me. That's just silly, although it's becoming more and more the norm around here.
The reason face punches were a thing here was not to shame people for spending, but because the assumption was that they were looking for encouragement to question what they were spending on.
The default question here was always: why the fuck would you spend on that??? Look at this much cheaper alternative!
People came here for that. The point was to have our thinking challenged.
Through participating here I have spent less on some things, more on others, and ironically learned to care a lot less about saving.
This place has helped me challenge my own biases and assumptions and I feel more confident than ever about my ability to assess the value of spending in my life.
That's what's sad, to me, about the erosion of the facepunches here. This place has basically become representative of the same, normal, middle class spending values of the rest of the world. There's still great advice, but it's no longer a place to really come and have your thinking and values challenged.
At least, that's what I see.
I feel like I could post just about any absurd spending idea and as long as I say "I can afford it", the general consensus will be "sounds great!"
Years ago I was often one of the few people in a thread saying something like that. Now it's the norm.
And yes, I'm acknowledging myself as part of the wave of high earners who benefitted from the facepunch culture but contributed to it's downfall.
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I'm fine with optimisation, but the tone I get from the blog posts is that there's a degree of wanting to live a minimalist life focussing on, for example, not driving where possible, and not otherwise consuming resources.
That is to say, the objective is to be frugal in absolute terms, not just relative to your income and time spend.
(1) Well it's partly that that supposed "minimalism" might make you happier. For instance driving has a lot of downsides for your happiness like lack of exercise and isolation from other people. Then that aside, the spending may not be worth the effort it took to earn the money. And your perception of what's making you happy may not be very well in tune with what actually is.
(2) The other undertone I get is that some forms of minimalism keep you from harming other people. To take driving again, emissions do harm to others even if not you.
(3) And maybe there is a loss of the idea that some things may be worth it for high earners that wouldn't be for people on a limited budget, but just because you can easily afford it doesn't mean that a 300 sq m house will make you any happier than somebody that would have to stretch for it. A lot of things are not really relative to your income in terms of how much they're worth it.
But the point I'm trying to make is that I still think that you along with tons of other people are arguing against what hasn't actually been said.
I agree with your points 1 and 3 as being pretty uncontroversial in terms of personal finances. Point 2 is the bit of MMM that I find a little unattractive. The stuff about bike riding for instance - many people have good reasons (health issues) why they don't ride bikes, or it is simply not convenient a form of commute (for time or hygiene or dress code reasons). Or someone might simply like driving. For sure, it's important to be mindful of the hedonic treadmill and to examine what spending you do, but I suspect MMM would favour a bike over a yacht even all other things being equal - and I am not in favour of those sort of value judgments.
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That's what's sad, to me, about the erosion of the facepunches here. This place has basically become representative of the same, normal, middle class spending values of the rest of the world. There's still great advice, but it's no longer a place to really come and have your thinking and values challenged.
At least, that's what I see.
I feel like I could post just about any absurd spending idea and as long as I say "I can afford it", the general consensus will be "sounds great!"
Years ago I was often one of the few people in a thread saying something like that. Now it's the norm.
And yes, I'm acknowledging myself as part of the wave of high earners who benefitted from the facepunch culture but contributed to it's downfall.
To some extent it's sad that the optimization message and the hyperbole get watered down, but it's probably better that a watered down version reach a bunch of people than just have a handful of hardcore supporters.
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That's what's sad, to me, about the erosion of the facepunches here. This place has basically become representative of the same, normal, middle class spending values of the rest of the world. There's still great advice, but it's no longer a place to really come and have your thinking and values challenged.
At least, that's what I see.
I feel like I could post just about any absurd spending idea and as long as I say "I can afford it", the general consensus will be "sounds great!"
Years ago I was often one of the few people in a thread saying something like that. Now it's the norm.
And yes, I'm acknowledging myself as part of the wave of high earners who benefitted from the facepunch culture but contributed to it's downfall.
To some extent it's sad that the optimization message and the hyperbole get watered down, but it's probably better that a watered down version reach a bunch of people than just have a handful of hardcore supporters.
From my perspective, the challenge is that even the MMM blog itself went down this route.
I regularly tell people the early posts (like pre 2013 range) are good. The blog then was definitely a different style. I felt like the value proposition of the blog quickly drops off and honestly I'm not surprised the forum change dwith.
I'm not sure when or what contributed to it, but I felt the blog got a lot less focused on what I always felt was the core of MMM and the reason I found myself here. But, then again, you can only do so many blog posts about hedonistic adaption and what is realistically pretty basic math.
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I agree with your points 1 and 3 as being pretty uncontroversial in terms of personal finances. Point 2 is the bit of MMM that I find a little unattractive. The stuff about bike riding for instance - many people have good reasons (health issues) why they don't ride bikes, or it is simply not convenient a form of commute (for time or hygiene or dress code reasons). Or someone might simply like driving. For sure, it's important to be mindful of the hedonic treadmill and to examine what spending you do, but I suspect MMM would favour a bike over a yacht even all other things being equal - and I am not in favour of those sort of value judgments.
The other thing I think gets missed so much is the hyperbole. The MMM character is a caricature. Obviously people are going to drive for some things. I drive a decent amount because I have some health problems that get exacerbated by biking too much. It's not an absolute, but overblown absolutes can make for a good writing style.
As for why you don't have any desire to at least try to bring down spending on things that hurt other people, that's a little disappointing.
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That's what's sad, to me, about the erosion of the facepunches here. This place has basically become representative of the same, normal, middle class spending values of the rest of the world. There's still great advice, but it's no longer a place to really come and have your thinking and values challenged.
At least, that's what I see.
I feel like I could post just about any absurd spending idea and as long as I say "I can afford it", the general consensus will be "sounds great!"
Years ago I was often one of the few people in a thread saying something like that. Now it's the norm.
And yes, I'm acknowledging myself as part of the wave of high earners who benefitted from the facepunch culture but contributed to it's downfall.
To some extent it's sad that the optimization message and the hyperbole get watered down, but it's probably better that a watered down version reach a bunch of people than just have a handful of hardcore supporters.
Sort of. Years ago when facepunches were still common, I saw many a poster staunchly stand their ground on certain spending choices. They were challenged, and rechallenged until it it was clear that their reasoning was sound.
This place has always been filled with highly intelligent people. Having thinking heavily challenged is not the same as having thinking overtly rejected.
I never once felt like this was the wrong place for me just because I wouldn't bend on certain spending decisions. Again though, I never asked for anyone's approval. I don't give a fuck what any of you think about what I choose to spend on, lol.
I did have my thinking on mortgage payoff challenged by B42, which totally changed my perspective on how I manage my debt, which hugely helped me, because I had a TON of debt that I was treating emotionally and not rationally.
I still chose a far more inefficient debt payoff strategy, but his relentless criticism of my thinking made my thinking better. By being critiqued, I was better able to see my own biases and make better decisions based on what I actually wanted.
At the end of the day, it's strangers on the internet, you take from them what you want and ignore the rest.
I haven't felt a culture of challenging middle class spending here for years. And we definitely lose something in losing that.
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One of the most important things I got from MMM was that "can I afford it" is the wrong question for most of us. How does this fit with my priorities and how does this affect my overall goals are much more important questions.
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That's what's sad, to me, about the erosion of the facepunches here. This place has basically become representative of the same, normal, middle class spending values of the rest of the world. There's still great advice, but it's no longer a place to really come and have your thinking and values challenged.
At least, that's what I see.
I feel like I could post just about any absurd spending idea and as long as I say "I can afford it", the general consensus will be "sounds great!"
Years ago I was often one of the few people in a thread saying something like that. Now it's the norm.
And yes, I'm acknowledging myself as part of the wave of high earners who benefitted from the facepunch culture but contributed to it's downfall.
To some extent it's sad that the optimization message and the hyperbole get watered down, but it's probably better that a watered down version reach a bunch of people than just have a handful of hardcore supporters.
From my perspective, the challenge is that even the MMM blog itself went down this route.
I regularly tell people the early posts (like pre 2013 range) are good. The blog then was definitely a different style. I felt like the value proposition of the blog quickly drops off and honestly I'm not surprised the forum change dwith.
I'm not sure when or what contributed to it, but I felt the blog got a lot less focused on what I always felt was the core of MMM and the reason I found myself here. But, then again, you can only do so many blog posts about hedonistic adaption and what is realistically pretty basic math.
People tend not to account for when this blog started.....coming out of the financial crisis, high joblessness, low savings, not to mention millenials trying to get going and struggling. At that time the blog provided from practical advice and challenging views to be better. The message was better received bc there was a hope element to it in desperate times and showed a way to live in such desperate times and possibly still save money. Fast forward, everybody got jobs, income and wealth grew substantially, and the largest cohort ever started feeling/believing that there is no down. So everyone loosens the purse strings to their more natural forbthem level and then some. Ie it's easy to live low and say it is not deprivation when your broke.
The blog itself trailed off horribly as it went from practical to preachy and the articles themselves were just bs covers for spending but not really spending.
Back on topic a bit, I did once compare the basic costs differences to live (similar size/value house) and his $25k was more like $45k in my area. Property taxes were the big difference, but was surprised that utility rates, insurance and even ACA are like double where I am. This was years ago but I am sure it still holds. I only did this bc I couldn't quite figure it out so I actually researched it and called or got estimates online. Sort of the challenge part for me.
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I'm in on this late and it's been said multiple times, but I think it depends. For me personally I would put $100k of spend yearly in the fatFIRE camp. We currently spend ~ $70-$90k/yr (depending on if you count 529s as investments or just "future spend") and that's currently with 2 kids in daycare. I'd fully anticipate that FIRE for us once the kids are done with college and the mortgage is paid off would be in the $40-$60k range and that fatFIRE would be in the $100-$120k+ range. But I do understand that people live in other areas of the country where property taxes alone could push you to the $15-$25k/yr range.
I do think it's true that as this forum has grown upper middle class spend has become more of the norm. I think some of that is good for the forum and some of it is bad. For example, should I be face-punched for spending $3k on a mountain bike for a hobby I enjoy because I could presumably get a crappy $300 bike from Walmart or Target? On the other hand is a $12k bike necessary? I would be rather interested to see someone break down a $100k/yr budget that doesn't include a mortgage or kids schooling and rationalize how much of the spend isn't unnecessary. I guess it all comes back to your comparison group. If you are frugal compared to your immediate peers you may feel that you are not spending unnecessarily compared to them. I guess if that's how we do it I'm extremely frugal as most of my friends have HH incomes in the $200k+ range and we live in a relatively low cost of living area of the country. I'd venture to guess that we spend about 1/2 of what our closest friends spend per year.
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For example, should I be face-punched for spending $3k on a mountain bike for a hobby I enjoy because I could presumably get a crappy $300 bike from Walmart or Target? On the other hand is a $12k bike necessary?
A $300 BSO is indeed crappy, but there are decent options between $300 BSO and $3k. $3k is probably at least 2x what you need to spend to have a very enjoyable new mountain bike. Most appropriate way per MMM blog to acquire the bike for your hobby would be to spend about $500 for a decent used bike.
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For example, should I be face-punched for spending $3k on a mountain bike for a hobby I enjoy because I could presumably get a crappy $300 bike from Walmart or Target? On the other hand is a $12k bike necessary?
A $300 BSO is indeed crappy, but there are decent options between $300 BSO and $3k. $3k is probably at least 2x what you need to spend to have a very enjoyable new mountain bike. Most appropriate way per MMM blog to acquire the bike for your hobby would be to spend about $500 for a decent used bike.
Indeed, but good luck finding a good $500 used mountain bike where I'm at. Most mountain bikes in my area are now going for what they sold for new a year ago. My $3k bike was a bit extravagant. If it makes you feel any better it's actually a $5.5k bike that I bought used for $3k. I can all but guarantee you I'd break a $500 bike on the trails I ride. My wife had an $800 bike and we had to upgrade her after she moved past the green trails. I ride a lot of black diamonds. I bet if I scoured the internet for a few more months I could have found a similar quality FS for $2.5k, but I guess the way I see it is that's like 6 hours of work for me, so why? Most decent FSs even used are in the $2-$5k range.
But on the other side of it I keep my house at 63 in the winter and at 80 in the summer and I eat almost every meal at home. I'm willing to spend a bit of money on things I value and skimp on things I don't. I only spent $1.2k on my gravel bike though :)
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Most mountain bikes in my area are now going for what they sold for new a year ago.
Yes, COVID gym closures created a demand shock on the used bike market.
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Related but unrelated--I've been listening to the audiobook The Wisdom of Frugality and from the get-go the author promises to examine (from a philosophical lens) both the pros & cons of frugality and the implied values associated with it (both positive and negative).
One point that has stuck was the idea that if you ask anyone what the definition of greed is, it is likely to be someone who wants more than you do :)
I've enjoyed reading through this thread.
I am a relatively low income earner compared to most on here so it's a fascinating peak into a whole other world.
(And no judgements, I don't mind what people spend their money on but it sure is interesting to hear!)
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One point that has stuck was the idea that if you ask anyone what the definition of greed is, it is likely to be someone who wants more than you do :)
Yup, I first became familiar with the general concept when I heard somebody talk of moral relativism. What suck with me all those years since is the same rough observation as yours: that people always put the line that divides right and wrong juuuust on the other side of what they themselves are doing. Everything *I* do is moral, but anybody who does things beyond what I myself do must be the bad people. Counts for consumption, taxes, moral issues, how many affairs in a marriage before it's considered cheating, and so on. People, by default, don't want independent authority. They want relative authority that is defined by their own desires.
I've mentioned it before but I think websites and forums like this one are great for having something independent from myself to evaluate my own decisions against. I've been frugal all my life, but once I started going down the FIRE path, this and a half dozen other websites really let me create a framework independent of my own upbringing and personal desires and influences. It's great to have outside authority, IMO.
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Everything *I* do is moral, but anybody who does things beyond what I myself do must be the bad people. Counts for consumption, taxes, moral issues, how many affairs in a marriage before it's considered cheating, and so on.
Agreed on the concept, but yikes that last example is a new one for me!
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This thread is fucking hilarious. Definitely worth the long read for anyone coming in late. And yes, it is ridiculously fat FIRE. Can you post your actual spending for last year? We can pick it apart and give you face punches.
I know that it is all relative. I just sold my big fancy house and now I can buy a smaller less fancy one for cash if I want to. The person who bought mine is paying all cash, so I am assuming that she had an even bigger and fancier house that she sold. Our spending for the last four years averaged a bit under $40K per year for two adults and two kids, and that should go down once we move to a cheaper place. Even the cheaper places I'm looking at are much fancier than the one I grew up in. I don't know what your frame of reference is like, if you think 100K isn't that much.
I don't count the mortgage principal or the 529 contributions as spending since they don't change my net worth.
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Everything *I* do is moral, but anybody who does things beyond what I myself do must be the bad people. Counts for consumption, taxes, moral issues, how many affairs in a marriage before it's considered cheating, and so on.
Agreed on the concept, but yikes that last example is a new one for me!
Wait, there;s a minimum number that’s greater than zero??
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Everything *I* do is moral, but anybody who does things beyond what I myself do must be the bad people. Counts for consumption, taxes, moral issues, how many affairs in a marriage before it's considered cheating, and so on.
Agreed on the concept, but yikes that last example is a new one for me!
Wait, there;s a minimum number that’s greater than zero??
An affair isn't necessarily cheating, if the other spouse is ok with it or the couple is separated. It's not a number thing though.
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Everything *I* do is moral, but anybody who does things beyond what I myself do must be the bad people. Counts for consumption, taxes, moral issues, how many affairs in a marriage before it's considered cheating, and so on.
Agreed on the concept, but yikes that last example is a new one for me!
Wait, there;s a minimum number that’s greater than zero??
An affair isn't necessarily cheating, if the other spouse is ok with it or the couple is separated. It's not a number thing though.
That doesn't really even meet the definition of an affair then though.
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Wait, there;s a minimum number that’s greater than zero??
That's why I mention that it's an example of moral relativism. I'm divorced and I'll let you guess where my introduction to "OK but it's not actually cheating at this point" came from.
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Everything *I* do is moral, but anybody who does things beyond what I myself do must be the bad people. Counts for consumption, taxes, moral issues, how many affairs in a marriage before it's considered cheating, and so on.
Agreed on the concept, but yikes that last example is a new one for me!
Wait, there;s a minimum number that’s greater than zero??
An affair isn't necessarily cheating, if the other spouse is ok with it or the couple is separated. It's not a number thing though.
That doesn't really even meet the definition of an affair then though.
Any short term relationship can be called an affair, whether or not one is already in a committed relationship. That usage is a bit outdated though. We didn't used to say "hookups" or "friends with benefits", it was all just affairs unless you were exclusively dating or married. I'm not even that old but I read a ton of romance novels as a preteen.
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Any short term relationship can be called an affair, whether or not one is already in a committed relationship. That usage is a bit outdated though. We didn't used to say "hookups" or "friends with benefits", it was all just affairs unless you were exclusively dating or married. I'm not even that old but I read a ton of romance novels as a preteen.
Huh. Definitely a change of meaning (or at least two different shades of meaning existing in slightly different flavors of english).
As I use the term "affair" specifically implies a clandestine relationship and doesn't say anything about whether one or both parties are in a committed relationship with someone else. So two people could have an office affair, even if neither was in a committed relationship so long as they were keeping the relationship secret from everyone else. But a person in an open marriage having sex with someone they aren't married to wouldn't be something I'd apply the word "affair" to.
Anyway, good to know it can mean something different. Thanks!
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Any short term relationship can be called an affair, whether or not one is already in a committed relationship. That usage is a bit outdated though. We didn't used to say "hookups" or "friends with benefits", it was all just affairs unless you were exclusively dating or married. I'm not even that old but I read a ton of romance novels as a preteen.
Huh. Definitely a change of meaning (or at least two different shades of meaning existing in slightly different flavors of english).
As I use the term "affair" specifically implies a clandestine relationship and doesn't say anything about whether one or both parties are in a committed relationship with someone else. So two people could have an office affair, even if neither was in a committed relationship so long as they were keeping the relationship secret from everyone else. But a person in an open marriage having sex with someone they aren't married to wouldn't be something I'd apply the word "affair" to.
Actual definition...
a sexual relationship between two people, one or both of whom are married to someone else
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English words mean whatever english speakers use them to mean.
As a random example of the usage I describe by someone that isn't me, I refer to any of half a dozen episodes of "Better Off Ted" which discuss the "one office affair rule" as a limitation the characters place on how many people they can sleep with at the office, despite all the characters in questions not being married or in committed relationships.
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So an open marriage situation is an affair, but it is not cheating, nor particularly clandestine.
I was partly wrong. "Affair" just sounds sexier than "hookup" though. Maybe that's all the romance novels in my past talking...It's not like they are the best representations of the English language. See "aquiline."
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English words mean whatever english speakers use them to mean.
As a random example of the usage I describe by someone that isn't me, I refer to any of half a dozen episodes of "Better Off Ted" which discuss the "one office affair rule" as a limitation the characters place on how many people they can sleep with at the office, despite all the characters in questions not being married or in committed relationships.
I've never seen that show, but I will bet that rule goes out the window as soon as the writers get bored. I bet they put it in there so they can have the characters talk about breaking it later.
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Setting aside the marriage aspect, which I think is too limiting, bottom line is that an affair is having a sexual or emotional relationship with someone other than the person you are committed to. I.e. if the person you are in a relationship with and are committed to (aside from stalkers) would be hurt by the action then it is an affair. It's not a positive and makes one a very horrible person.
An open marriage is not an affair.
And yes there is a more modern aspect of affair that is confused with dating.....not an affair
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Setting aside the marriage aspect, which I think is too limiting, bottom line is that an affair is having a sexual or emotional relationship with someone other than the person you are committed to. I.e. if the person you are in a relationship with and are committed to (aside from stalkers) would be hurt by the action then it is an affair. It's not a positive and makes one a very horrible person.
An open marriage is not an affair.
And yes there is a more modern aspect of affair that is confused with dating.....not an affair
I think your usage is more modern than mine. In the past, any sexual relationship outside of marriage was necessarily clandestine, so it counted as an affair.
Emotional is trickier. On one hand, you are having an emotional affair. On the other hand, your partner is a controlling jerk who doesn't want you to have friends. Really hard to differentiate.
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Setting aside the marriage aspect, which I think is too limiting, bottom line is that an affair is having a sexual or emotional relationship with someone other than the person you are committed to. I.e. if the person you are in a relationship with and are committed to (aside from stalkers) would be hurt by the action then it is an affair. It's not a positive and makes one a very horrible person.
An open marriage is not an affair.
And yes there is a more modern aspect of affair that is confused with dating.....not an affair
The most common understanding of an affair is cheating. But another very common and enduring use of the term, best exemplified in the phrase "love affair," is more broad and can refer to a variety of ill-conceived romantic couplings, whether it's a fling, office hook up, or extramarital type relationship.
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Do affairs fall under, at, or above $100k spend?
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Do affairs fall under, at, or above $100k spend?
Doesn't this depend on how much you pay for the affair?
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Do affairs fall under, at, or above $100k spend?
Doesn't this depend on how much you pay for the affair?
So many variables the range is huge and unpredictable. Anywhere from $0 into the millions. Kind of like long term care. Better buy an island just to be safe.
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Do affairs fall under, at, or above $100k spend?
Doesn't this depend on how much you pay for the affair?
So many variables the range is huge and unpredictable. Anywhere from $0 into the millions. Kind of like long term care. Better buy an island just to be safe.
This is what I find so frustrating (the lack of any good standards). I’m trying to incorporate how large my ‘stache should be using a 4% WR, but I’m not finding a lot of consensus on 1) the future cost of healthcare and 2) the annual cost of affairs. Any guidance is appreciated
/s
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Do affairs fall under, at, or above $100k spend?
Doesn't this depend on how much you pay for the affair?
So many variables the range is huge and unpredictable. Anywhere from $0 into the millions. Kind of like long term care. Better buy an island just to be safe.
This is what I find so frustrating (the lack of any good standards). I’m trying to incorporate how large my ‘stache should be using a 4% WR, but I’m not finding a lot of consensus on 1) the future cost of healthcare and 2) the annual cost of affairs. Any guidance is appreciated
/s
I'm surprised that there's no insurance for that. Of course they would have all kinds of rules about prior approvals and preexisting affairs.
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That's our annual budget for FIRE give or take a bit. We are both nurses and live a pretty un-extravagant lifestyle. I do not consider it Fat Fire for the Bay Area. It's more like middle class FIRE. If I were to move back to my home town in rural Southern Indiana, it would absolutely be mega FAT FIRE. But we don't want to do that.
This statement is entirely dependent upon specific situations.
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Do affairs fall under, at, or above $100k spend?
Doesn't this depend on how much you pay for the affair?
So many variables the range is huge and unpredictable. Anywhere from $0 into the millions. Kind of like long term care. Better buy an island just to be safe.
This is what I find so frustrating (the lack of any good standards). I’m trying to incorporate how large my ‘stache should be using a 4% WR, but I’m not finding a lot of consensus on 1) the future cost of healthcare and 2) the annual cost of affairs. Any guidance is appreciated
/s
I'm surprised that there's no insurance for that. Of course they would have all kinds of rules about prior approvals and preexisting affairs.
Get congress to approve a new ACA (Affair Care Act)...first one is on the govt.....why not, everything else is at this point!
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Do affairs fall under, at, or above $100k spend?
Doesn't this depend on how much you pay for the affair?
The answer to this lies somewhere along the paramour-skank scale.
Affairs are one thing that seems to be common to all classes.
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That's our annual budget for FIRE give or take a bit. We are both nurses and live a pretty un-extravagant lifestyle. I do not consider it Fat Fire for the Bay Area. It's more like middle class FIRE. If I were to move back to my home town in rural Southern Indiana, it would absolutely be mega FAT FIRE. But we don't want to do that.
This statement is entirely dependent upon specific situations.
Oh, okay, cool, we'll jump right back into the merry-go-round of the original debate. I have insomnia, so why not?
You say Fat FIRE is location dependent, I say being able to afford to live in a VHCOL is a hell of a luxury. You said it yourself, you could live elsewhere, you just don't want to.
How is the luxury of spending on a location fundamentally different than the luxury of spending on something like travel or any other lifestyle choice that results in me spending much more than the average person can afford?
Let me put it this way, let's say I retire with several million and I decide that because I can afford it, that I'm going to go live in Paris, one of the most expensive cities in the world. I live what an American would consider a "normal middle class" lifestyle, which in Paris would cost an absolute fortune.
Is my obscenely expensive Parisian life not considered Fat FIRE just because Paris is VVVHCOL?
Location in retirement is usually optional, so it's a luxury. I totally respect why you might opt for that luxury, you will get no judgement from me. I hold no judgement of anyone who spends 6 figures in retirement, I just refuse to subscribe to a narrative that a lot of money stops being a lot of money just because you choose to retire somewhere that's crazy expensive.
Also, yet again, we're talking post retirement spending, so at some point you won't have a mortgage, no commute to work, etc, etc.
I'm not familiar with the Bay Area, but does 100K of spending without a mortgage or commute costs really only buy a modest lifestyle?
Like, does a head of cabbage cost $12 or something?
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Yeah, I actually don't want to spend the time to read all these pages, so apologies if I am late to this discussion.
Funny you ask about the cabbage... I happened to buy a head of green cabbage this morning, so I have very current rates on them... Green cabbage was $0.99/lb and green peppers were $1.69/lb. I also picked up what I consider a very good value, the grocery store sells these pre-made Hoagies for $6.99, so out the door with these three items for $9.83 and this is at what many would consider a higher end grocery shopping experience (Lunardi's for those in the know).
I'm not going to go into the details of our spending, but 96k/yr is 8k month and automatically, half to more than that is mortgage/property taxes if you own a home here in a somewhat desirable region. It can easily be half that if you have owned a long time, we have not. And it's going to be a lot more for those who are buying into the current RE mania that is going on.
Edited:
Well, what the hell, here are our budget categories from Mint
Home: Mortgage/taxes/other expenditures on the home: $4000
Auto/Transport: $500 (insurance, maint, fuel, no payments)
Utilities $300
Entertainment $50
Groceries/Restaurants $600
Gym/Fitness $200
Pets $150
"Shopping" (everything else) $200
Travel $600
Total
$6500 and I'd say our average is usually around 7k, which is 84/year.
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FWIW, I live in a city that an internet cost of living comparison calculator says is 1/3 the cost of San Francisco and green cabbage is $0.89/lb.
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There is a dude with ten million in the bay area who claims he only spends 24k per year. I got the vibe that he was maybe on here looking for women. He didn't want to pay any tax for his affair care plan. Hope he has health insurance. I believe he is actually in the bay area because he mentioned the dim sum, which is something I remember vividly from my one visit to San Francisco at age 8.
How much dim sum can $100k buy? I have $70 worth of Bitcoin I got for free that I was saving for my retirement pizza party, but now dim sum sounds better. I'll have to trade it for ethereum if I want dim sum.
Also what Malcat said. And I don't mean any harm to those who have actually suffered from affairs.
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There is a dude with ten million in the bay area who claims he only spends 24k per year.
You aboslutely could do this. I have a friend who lives on a boat in the Berkeley Harbor. His slip fees are like $500/month and he gets access to bathrooms and a shower. If he would finish a degree instead of talking about finishing degrees, or even just develop some marketable skill, he could be living in a very profitable fashion. Walking distance to the Berkeley Bowl, annual access to Cal Sailing Club, etc. Alas, he prefers to do something...else. In keeping with the current drift of this thread.... he claims of have even had affairs whilst captive to his less than optimal living situation (!)
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Yeah, I actually don't want to spend the time to read all these pages, so apologies if I am late to this discussion.
Funny you ask about the cabbage... I happened to buy a head of green cabbage this morning, so I have very current rates on them... Green cabbage was $0.99/lb and green peppers were $1.69/lb. I also picked up what I consider a very good value, the grocery store sells these pre-made Hoagies for $6.99, so out the door with these three items for $9.83 and this is at what many would consider a higher end grocery shopping experience (Lunardi's for those in the know).
I'm not going to go into the details of our spending, but 96k/yr is 8k month and automatically, half to more than that is mortgage/property taxes if you own a home here in a somewhat desirable region. It can easily be half that if you have owned a long time, we have not. And it's going to be a lot more for those who are buying into the current RE mania that is going on.
Edited:
Well, what the hell, here are our budget categories from Mint
Home: Mortgage/taxes/other expenditures on the home: $4000
Auto/Transport: $500 (insurance, maint, fuel, no payments)
Utilities $300
Entertainment $50
Groceries/Restaurants $600
Gym/Fitness $200
Pets $150
"Shopping" (everything else) $200
Travel $600
Total
$6500 and I'd say our average is usually around 7k, which is 84/year.
So without your mortgagea and commuting costs, your spending is well under 100K, but quite high on restaurants, which is a luxury item anyway. So all of this supports the point I was making.
Cool.
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So without your mortgagea and commuting costs, your spending is well under 100K, but quite high on restaurants, which is a luxury item anyway. So all of this supports the point I was making.
Cool.
Most of that is Costco spending... but I guess if $8 burritos and $10 MOD Pizza once or twice a month is luxurious, you got me! ("Servant, feed me another grape!")
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So without your mortgagea and commuting costs, your spending is well under 100K, but quite high on restaurants, which is a luxury item anyway. So all of this supports the point I was making.
Cool.
Most of that is Costco spending... but I guess if $8 burritos and $10 MOD Pizza once or twice a month is luxurious, you got me! ("Servant, feed me another grape!")
Lol, oops, I misread it as spending $600 on just restaurants, not groceries and restaurants. Totally my mistake.
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There is a dude with ten million in the bay area who claims he only spends 24k per year.
You aboslutely could do this. I have a friend who lives on a boat in the Berkeley Harbor. His slip fees are like $500/month and he gets access to bathrooms and a shower. If he would finish a degree instead of talking about finishing degrees, or even just develop some marketable skill, he could be living in a very profitable fashion. Walking distance to the Berkeley Bowl, annual access to Cal Sailing Club, etc. Alas, he prefers to do something...else. In keeping with the current drift of this thread.... he claims of have even had affairs whilst captive to his less than optimal living situation (!)
TBH I could have finished my doctorate a few times over in the time I've spent on this forum. The boat life sounds pretty good actually.
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There is a dude with ten million in the bay area who claims he only spends 24k per year.
You aboslutely could do this. I have a friend who lives on a boat in the Berkeley Harbor. His slip fees are like $500/month and he gets access to bathrooms and a shower. If he would finish a degree instead of talking about finishing degrees, or even just develop some marketable skill, he could be living in a very profitable fashion. Walking distance to the Berkeley Bowl, annual access to Cal Sailing Club, etc. Alas, he prefers to do something...else. In keeping with the current drift of this thread.... he claims of have even had affairs whilst captive to his less than optimal living situation (!)
TBH I could have finished my doctorate a few times over in the time I've spent on this forum. The boat life sounds pretty good actually.
Multiple doctorate degrees in 1,833 hours, wow!
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There is a dude with ten million in the bay area who claims he only spends 24k per year.
You aboslutely could do this. I have a friend who lives on a boat in the Berkeley Harbor. His slip fees are like $500/month and he gets access to bathrooms and a shower. If he would finish a degree instead of talking about finishing degrees, or even just develop some marketable skill, he could be living in a very profitable fashion. Walking distance to the Berkeley Bowl, annual access to Cal Sailing Club, etc. Alas, he prefers to do something...else. In keeping with the current drift of this thread.... he claims of have even had affairs whilst captive to his less than optimal living situation (!)
TBH I could have finished my doctorate a few times over in the time I've spent on this forum. The boat life sounds pretty good actually.
I asked some friends on a skiing forum about living on a boat in the Bay Area... one guy recommended I take a cold shower and start ripping up $100 bills for a similar experience. Another remarked on the impossibility of getting your wet gear dry while living on a damp sailboat in the winter months. Seeing as how it only seems to rain a handful of days in the winter here anymore, this might not be a terrible option. Another friend legitimately lived out of a box van for two years before it was the hip thing to do. He only worked 2 days a week and spent the rest of his time in Yosemite rock climbing. If you have a gym membership and can string out enough places to spend time during the day and have minimal possessions, you can make that work. He's softened up now and shares a 1 bdrm apt with his gf.
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There is a dude with ten million in the bay area who claims he only spends 24k per year.
You aboslutely could do this. I have a friend who lives on a boat in the Berkeley Harbor. His slip fees are like $500/month and he gets access to bathrooms and a shower. If he would finish a degree instead of talking about finishing degrees, or even just develop some marketable skill, he could be living in a very profitable fashion. Walking distance to the Berkeley Bowl, annual access to Cal Sailing Club, etc. Alas, he prefers to do something...else. In keeping with the current drift of this thread.... he claims of have even had affairs whilst captive to his less than optimal living situation (!)
TBH I could have finished my doctorate a few times over in the time I've spent on this forum. The boat life sounds pretty good actually.
Multiple doctorate degrees in 1,833 hours, wow!
Jesus that's 73 days. I hope some of it came from having the forum open in another tab while I was doing my course work. I wonder what my word count is?
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There is a dude with ten million in the bay area who claims he only spends 24k per year.
You aboslutely could do this. I have a friend who lives on a boat in the Berkeley Harbor. His slip fees are like $500/month and he gets access to bathrooms and a shower. If he would finish a degree instead of talking about finishing degrees, or even just develop some marketable skill, he could be living in a very profitable fashion. Walking distance to the Berkeley Bowl, annual access to Cal Sailing Club, etc. Alas, he prefers to do something...else. In keeping with the current drift of this thread.... he claims of have even had affairs whilst captive to his less than optimal living situation (!)
TBH I could have finished my doctorate a few times over in the time I've spent on this forum. The boat life sounds pretty good actually.
Multiple doctorate degrees in 1,833 hours, wow!
Jesus that's 73 days. I hope some of it came from having the forum open in another tab while I was doing my course work. I wonder what my word count is?
I made the mistake of looking at mine the other day: 2,500+ hours. I really hope a lot of that is from just leaving tabs open, haha. There are some members on here with over 200+ days (~5,000+ hours)!
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There is a dude with ten million in the bay area who claims he only spends 24k per year.
You aboslutely could do this. I have a friend who lives on a boat in the Berkeley Harbor. His slip fees are like $500/month and he gets access to bathrooms and a shower. If he would finish a degree instead of talking about finishing degrees, or even just develop some marketable skill, he could be living in a very profitable fashion. Walking distance to the Berkeley Bowl, annual access to Cal Sailing Club, etc. Alas, he prefers to do something...else. In keeping with the current drift of this thread.... he claims of have even had affairs whilst captive to his less than optimal living situation (!)
TBH I could have finished my doctorate a few times over in the time I've spent on this forum. The boat life sounds pretty good actually.
Multiple doctorate degrees in 1,833 hours, wow!
Jesus that's 73 days. I hope some of it came from having the forum open in another tab while I was doing my course work. I wonder what my word count is?
I made the mistake of looking at mine the other day: 2,500+ hours. I really hope a lot of that is from just leaving tabs open, haha. There are some members on here with over 200+ days (~5,000+ hours)!
I need about 35 more credits for a doctorate so at 3 hours per week per credit over an 18 week semester that's 1890 hours. I imagine my forum time will go up by the same amount, so 2 doctorates. Also please shoot me in the foot if I ever suggest that it might be a good idea.
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That's our annual budget for FIRE give or take a bit. We are both nurses and live a pretty un-extravagant lifestyle. I do not consider it Fat Fire for the Bay Area. It's more like middle class FIRE. If I were to move back to my home town in rural Southern Indiana, it would absolutely be mega FAT FIRE. But we don't want to do that.
This statement is entirely dependent upon specific situations.
Oh, okay, cool, we'll jump right back into the merry-go-round of the original debate. I have insomnia, so why not?
You say Fat FIRE is location dependent, I say being able to afford to live in a VHCOL is a hell of a luxury. You said it yourself, you could live elsewhere, you just don't want to.
How is the luxury of spending on a location fundamentally different than the luxury of spending on something like travel or any other lifestyle choice that results in me spending much more than the average person can afford?
Let me put it this way, let's say I retire with several million and I decide that because I can afford it, that I'm going to go live in Paris, one of the most expensive cities in the world. I live what an American would consider a "normal middle class" lifestyle, which in Paris would cost an absolute fortune.
Is my obscenely expensive Parisian life not considered Fat FIRE just because Paris is VVVHCOL?
Location in retirement is usually optional, so it's a luxury. I totally respect why you might opt for that luxury, you will get no judgement from me. I hold no judgement of anyone who spends 6 figures in retirement, I just refuse to subscribe to a narrative that a lot of money stops being a lot of money just because you choose to retire somewhere that's crazy expensive.
Also, yet again, we're talking post retirement spending, so at some point you won't have a mortgage, no commute to work, etc, etc.
I'm not familiar with the Bay Area, but does 100K of spending without a mortgage or commute costs really only buy a modest lifestyle?
Like, does a head of cabbage cost $12 or something?
Malcat, as someone who just got word they would be moving to the Bay Area from a L/MCOL Midwest area in September. I’m going to consider myself having a nice juicy fat but different life with an estimated budget spend of $103,000. The fact that I’m choosing to go is in fact Fat as you say. Now my housing might appear middle class, a 1-3 bedroom apartment depending on the sub area I choose but the fact is I have a choice to live pretty much anywhere in the area is a luxury. And yes, my housing budget is over half of my total budgeted amount. But I always marvel at those that shout it’s expensive but don’t adjust housing expectations. My housing situation won’t be worse out there, just different.
I’m also not accounting for taxes or retirement savings (401k) because I’m budgeting from net not gross income. And Yeah it’s just me, but if I had a larger family I’d be making different decisions overall, I still could find a way to live nicely in the Bay Area.
At the same time the other half of my budget is so high because I’m seeing this as kind of an extended slow travel and I’m going to enjoy myself out there but I’m not going to be a baller at the same time. Since I have reached my net worth FIRE amount but I have pension considerations that keep me working until July 2025, I can afford this FAT adventure. I’m guessing I won’t stay permanently because the city proper is a bit bigger than my preference, but I could see myself moving down the coast to some place like Monterey Bay.
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There is a dude with ten million in the bay area who claims he only spends 24k per year.
You aboslutely could do this. I have a friend who lives on a boat in the Berkeley Harbor. His slip fees are like $500/month and he gets access to bathrooms and a shower. If he would finish a degree instead of talking about finishing degrees, or even just develop some marketable skill, he could be living in a very profitable fashion. Walking distance to the Berkeley Bowl, annual access to Cal Sailing Club, etc. Alas, he prefers to do something...else. In keeping with the current drift of this thread.... he claims of have even had affairs whilst captive to his less than optimal living situation (!)
TBH I could have finished my doctorate a few times over in the time I've spent on this forum. The boat life sounds pretty good actually.
Multiple doctorate degrees in 1,833 hours, wow!
Jesus that's 73 days. I hope some of it came from having the forum open in another tab while I was doing my course work. I wonder what my word count is?
I made the mistake of looking at mine the other day: 2,500+ hours. I really hope a lot of that is from just leaving tabs open, haha. There are some members on here with over 200+ days (~5,000+ hours)!
oh dear, I didn't know this was tracked. I'm at 118 days...though a huge amount of that time is open tabs, so I suppose that's some consolation.
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Is 115 days, 16 hours FatForum? I used to think 50 days was FatForum but now I think that's LeanForum.
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Is 115 days, 16 hours FatForum? I used to think 50 days was FatForum but now I think that's LeanForum.
If you have a treadmill desk then it's lean forum.
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100K spend may not be enough depending on the lifestyle one chooses, but even in a VHCOL, 100K *spending* is A LOT. Is it an unreasonable amount? No, not if someone wants that lifestyle, but there's no convincing me it's not a luxurious lifestyle. Having the financial ability to live in a VHCOL area in a nice home *is* a luxury.
100k for a couple doesn't seem outrageous to me at all in a VHCOL especially if you have even one ongoing medical cost. I helped a friend work out a guess at their spending needs last month, so I have this handy:
health $2,000 expected, includes paying 2x prescriptions for spouse, will increase over time above inflation
housing $2,300 includes amortized maint and remodeling (wonders of 1940s construction), property taxes (17000/yr), increases but very slowly
food $1,600
misc bills $ 800 (utilities, internet, cellphone)
personal $ 500 ($250 a month each, clothes, etc.)
gifts $ 100 ($50 a month each)
car $ 400 (insurance, maintenance/service, wear and tear, amortized cost of car)
travel $ 500 (two-ish trips a year)
garden, etc. $ 50 (amortized over the year)
pets $ 150 (food, amortized medical)
8400/month. The top 3 items combined are 70% of the budget. Food is the only one of those where significant savings are possible. In total, that's $100k post-tax per year in a state that does not feature a lower capital gains rate and thus taxes are on top of that.
Is there fat there? Yeah. Of course. Depending on your expectations, probably a lot or a little. This is a couple who has been living on that level for 20+ years and maintaining a crazy savings rate while doing so, so they're not going to be thrilled to change and, basically, don't need to. But I also think that a lot of the budgets people post don't bother to include amortized intermittent expenses and basically just leave that stuff out (home maintenance is a big one, failure to budget for medical incidentals and prescriptions is another big one I've noticed people leaving out - "My budget plan for medical expenses is to just be healthy!" - easy to say when you're 25).
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100K spend may not be enough depending on the lifestyle one chooses, but even in a VHCOL, 100K *spending* is A LOT. Is it an unreasonable amount? No, not if someone wants that lifestyle, but there's no convincing me it's not a luxurious lifestyle. Having the financial ability to live in a VHCOL area in a nice home *is* a luxury.
100k for a couple doesn't seem outrageous to me at all in a VHCOL especially if you have even one ongoing medical cost. I helped a friend work out a guess at their spending needs last month, so I have this handy:
health $2,000 expected, includes paying 2x prescriptions for spouse, will increase over time above inflation
housing $2,300 includes amortized maint and remodeling (wonders of 1940s construction), property taxes (17000/yr), increases but very slowly
food $1,600
misc bills $ 800 (utilities, internet, cellphone)
personal $ 500 ($250 a month each, clothes, etc.)
gifts $ 100 ($50 a month each)
car $ 400 (insurance, maintenance/service, wear and tear, amortized cost of car)
travel $ 500 (two-ish trips a year)
garden, etc. $ 50 (amortized over the year)
pets $ 150 (food, amortized medical)
8400/month. The top 3 items combined are 70% of the budget. Food is the only one of those where significant savings are possible. In total, that's $100k post-tax per year in a state that does not feature a lower capital gains rate and thus taxes are on top of that.
Is there fat there? Yeah. Of course. Depending on your expectations, probably a lot or a little. This is a couple who has been living on that level for 20+ years and maintaining a crazy savings rate while doing so, so they're not going to be thrilled to change and, basically, don't need to. But I also think that a lot of the budgets people post don't bother to include amortized intermittent expenses and basically just leave that stuff out (home maintenance is a big one, failure to budget for medical incidentals and prescriptions is another big one I've noticed people leaving out - "My budget plan for medical expenses is to just be healthy!" - easy to say when you're 25).
Ok but you totally missed Malcat's point that living in an HCOL is a choice. They are probably not interested in early retirement.
$1600 for food, that's 133.3 $12 cabbages every month, or about 4.5 cabbages per day. And $10k every year for house maintenance? They must hire out everything, and 1940s construction is arguably better than today's. I get that they can afford the luxury, but most of us would not choose to work longer in order to afford it. (Or even be able to retire ever if we spent that much).
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food $1,600
misc bills $ 800 (utilities, internet, cellphone)
personal $ 500 ($250 a month each, clothes, etc.)
Is there fat there? Yeah. Of course.
Which is the point: there is a lot of fat there. If that couple is happy with their lifestyle and doing well financially, that is wonderful, but this budget isn't even trying to be frugal, so how does it come in to the current conversation??
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...about that “1940s construction is arguably better than today’s”... I’d be one to strongly argue against that statement. But of course that could be it’s own thread...
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...about that “1940s construction is arguably better than today’s”... I’d be one to strongly argue against that statement. But of course that could be it’s own thread...
Making another thread would definitely be fat forum.
https://archive.curbed.com/2018/3/7/17087588/home-renovation-unnecessary-mcmansion-hell-wagner
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food $1,600
misc bills $ 800 (utilities, internet, cellphone)
personal $ 500 ($250 a month each, clothes, etc.)
Is there fat there? Yeah. Of course.
Which is the point: there is a lot of fat there. If that couple is happy with their lifestyle and doing well financially, that is wonderful, but this budget isn't even trying to be frugal, so how does it come in to the current conversation??
Exactly, FATFire isn’t necessarily “rich”, FATFire is being able to hire a cleaning lady or spend $800 per person a month on food. So yes 100k is FATFire.
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If Starbucks is barista fire, then is KFC deep fat fire?
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I just want to make the point that almost anywhere in a developed country is HCOL. $100k/year in rural Mexico would be morbidly obese FIRE.
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I just want to make the point that almost anywhere in a developed country is HCOL. $100k/year in rural Mexico would be morbidly obese FIRE.
There are levels....my mortgage/taxes/insurance combined on my house in Phoenix were 1/3 lower than my property tax alone in NJ.
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I just want to make the point that almost anywhere in a developed country is HCOL. $100k/year in rural Mexico would be morbidly obese FIRE.
There are levels....my mortgage/taxes/insurance combined on my house in Phoenix were 1/3 lower than my property tax alone in NJ.
Yes, but you could have gone significantly lower just a little to your South if you were dead set on LCOL. In Phoenix you're still paying a lot extra to live where you feel like you have the best balance of cost and QOL. Living anywhere in a developed country is a luxury, not that there is anything wrong with that, though.
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I just want to make the point that almost anywhere in a developed country is HCOL. $100k/year in rural Mexico would be morbidly obese FIRE.
There are levels....my mortgage/taxes/insurance combined on my house in Phoenix were 1/3 lower than my property tax alone in NJ.
Yes, but you could have gone significantly lower just a little to your South if you were dead set on LCOL. In Phoenix you're still paying a lot extra to live where you feel like you have the best balance of cost and QOL. Living anywhere in a developed country is a luxury, not that there is anything wrong with that, though.
Well sure, you could live in a cardboard box under a bridge for free too, but when you can easily fit your entire living expenses in one part of the USA inside of the housing costs alone of another part of the USA, that's a fair example of low cost vs high cost. A random cost of living calculator claimed about $700/mo USD for a 3br apartment in city center in Mexico and my 3br house in Phoenix was ~$755/mo.
Granted, that was before the recent real estate explosion in Phoenix so things are different now.
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I just want to make the point that almost anywhere in a developed country is HCOL. $100k/year in rural Mexico would be morbidly obese FIRE.
There are levels....my mortgage/taxes/insurance combined on my house in Phoenix were 1/3 lower than my property tax alone in NJ.
Yes, but you could have gone significantly lower just a little to your South if you were dead set on LCOL. In Phoenix you're still paying a lot extra to live where you feel like you have the best balance of cost and QOL. Living anywhere in a developed country is a luxury, not that there is anything wrong with that, though.
Well sure, you could live in a cardboard box under a bridge for free too, but when you can easily fit your entire living expenses in one part of the USA inside of the housing costs alone of another part of the USA, that's a fair example of low cost vs high cost. A random cost of living calculator claimed about $700/mo USD for a 3br apartment in city center in Mexico and my 3br house in Phoenix was ~$755/mo.
Granted, that was before the recent real estate explosion in Phoenix so things are different now.
It's not just housing. The cost of medical care alone would make life a lot cheaper. Food and not needing a car would be other factors among others. You're still paying a premium to live in AZ over somewhere LCOL on a global level, and that's fine if it's worth the trade-offs to you. I'm just saying that if we're considering location a luxury, the threshold for Fat FIRE gets pretty low when you consider the ability to move to Mexico, Ecuador, the Philippines, etc.
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I just want to make the point that almost anywhere in a developed country is HCOL. $100k/year in rural Mexico would be morbidly obese FIRE.
There are levels....my mortgage/taxes/insurance combined on my house in Phoenix were 1/3 lower than my property tax alone in NJ.
Yes, but you could have gone significantly lower just a little to your South if you were dead set on LCOL. In Phoenix you're still paying a lot extra to live where you feel like you have the best balance of cost and QOL. Living anywhere in a developed country is a luxury, not that there is anything wrong with that, though.
Well sure, you could live in a cardboard box under a bridge for free too, but when you can easily fit your entire living expenses in one part of the USA inside of the housing costs alone of another part of the USA, that's a fair example of low cost vs high cost. A random cost of living calculator claimed about $700/mo USD for a 3br apartment in city center in Mexico and my 3br house in Phoenix was ~$755/mo.
Granted, that was before the recent real estate explosion in Phoenix so things are different now.
It's not just housing. The cost of medical care alone would make life a lot cheaper. Food and not needing a car would be other factors among others. You're still paying a premium to live in AZ over somewhere LCOL on a global level, and that's fine if it's worth the trade-offs to you. I'm just saying that if we're considering location a luxury, the threshold for Fat FIRE gets pretty low when you consider the ability to move to Mexico, Ecuador, the Philippines, etc.
I think that results in a transition from LCOL to VLCOL, much like moving from NJ to Manhattan would be going from HCOL to VHCOL.
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...about that “1940s construction is arguably better than today’s”... I’d be one to strongly argue against that statement. But of course that could be it’s own thread...
It's true, but not in the bay area, that's for sure. Enjoy your orangeburg tar-and-paper sewer line failing or the in-slab pipes having fully rusted years ago without anyone realizing it until you discover one day that the concrete itself has dissolved away and the house is essentially floating on a plot of sewage-saturated earth.
Everything in the valley was thrown up as quickly as possible and yet is 1400+ a square foot.
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It's not just housing. The cost of medical care alone would make life a lot cheaper. Food and not needing a car would be other factors among others. You're still paying a premium to live in AZ over somewhere LCOL on a global level, and that's fine if it's worth the trade-offs to you. I'm just saying that if we're considering location a luxury, the threshold for Fat FIRE gets pretty low when you consider the ability to move to Mexico, Ecuador, the Philippines, etc.
It depends. If you can finagle your income just right you can slot into an ACA category where you may spend less than $1000/year on healthcare even in the USA. I'm not early retired yet, but I've priced it out repeatedly and again, you have to be able to get your taxable income into the level you want (typically by doing traditional to Roth IRA rollovers every year) but as long as that's the case, even healthcare can be quite affordable in the USA. My current US home is a 5 minute walk from a large grocery store, my eye doctor, and my dentist's office so I've commonly gone for extended periods of time without even using my car now that I'm working from home full time thanks to covid.
There's other issues with moving outside the USA as an American that aren't as simple as "Oh but it's cheaper" as you see on expat forums and articles. My favorite was one written recently by a woman who's lived on the cheap in Mexico for a number of years and said the most shocking thing to her is that people would just put their dogs up on the roof of their house to bark at everyone for security. So all day, every day, dogs on rooftops barking all the time. Many other examples, but it was a vivid example of things that are so different that an American might not even think that to be possible, yet it's commonplace.
I'm willing to pay a little extra to not hear dogs barking all day every day from the rooftops of all my neighbors' homes.
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I don't think one lady's experience of barking dogs represents a whole country. There's a name for that, some kind of logical fallacy. I'm not being sarcastic I really just can't fucking remember help me!
ETA: Ok it's a hasty generalization, thanks google!!!
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I don't think one lady's experience of barking dogs represents a whole country. There's a name for that, some kind of logical fallacy. I'm not being sarcastic I really just can't fucking remember help me!
ETA: Ok it's a hasty generalization, thanks google!!!
I agree, but the point does stand that it is VERY difficult for a lot of people psychologically to relocate to a country with a very different culture, especially the older someone gets, especially if they're accustomed to a monoculture their entire lives.
Now, if moving to a retirement haven like Panama or Portugal, that's a bit of a different matter. But picking up and moving to Mexico or Malaysia, that's going to be one hell of an adjustment for a lot of people.
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In fairness to folks in some of the super high cost coastal cities like NYC and SFO, I think there are a number of them who genuinely believe that relocating out into cities elsewhere in the country would be a culture shock equivalent to moving to Mexico or Malaysia.
I don't think the actually degree of culture shock is anywhere close to equivalent or even comparable, but there is a real fear of the unknown even if there isn't a real unknown to be afraid of.
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In fairness to folks in some of the super high cost coastal cities like NYC and SFO, I think there are a number of them who genuinely believe that relocating out into cities elsewhere in the country would be a culture shock equivalent to moving to Mexico or Malaysia.
I don't think the actually degree of culture shock is anywhere close to equivalent or even comparable, but there is a real fear of the unknown even if there isn't a real unknown to be afraid of.
Mexico and Malaysia for sure would be a shock, but I wonder what would be more culture shock for someone from SFO, moving to small town USA or moving to Algarve Portugal? What would be more shocking to them? Fellow Americans or Brits?
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In fairness to folks in some of the super high cost coastal cities like NYC and SFO, I think there are a number of them who genuinely believe that relocating out into cities elsewhere in the country would be a culture shock equivalent to moving to Mexico or Malaysia.
I don't think the actually degree of culture shock is anywhere close to equivalent or even comparable, but there is a real fear of the unknown even if there isn't a real unknown to be afraid of.
I was talking recently to someone who grew up and lives in NYC and the subject of vacations came up. They said they normally fly or take trains and that the longest car ride they had ever been in was about a month ago, 1.5 hours (100 miles) one way. In the last month, I've had 4 trips longer than that and will drive 5 hours one way this weekend. That's a different culture to me.
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I was talking recently to someone who grew up and lives in NYC and the subject of vacations came up. They said they normally fly or take trains and that the longest car ride they had ever been in was about a month ago, 1.5 hours (100 miles) one way. In the last month, I've had 4 trips longer than that and will drive 5 hours one way this weekend. That's a different culture to me.
Yep. My DH's aunt and uncle live in Northern CT. Each summer, they drive to Cape Cod for vacation. It's 175 miles away, less than 3 hours.
We drove from NorCal to SoCal to see them - 6.5 hour drive - just for the weekend. They were amazed, and we were nonchalant. Welcome to CA, where all the driving is lengthy....
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Mexico and Malaysia for sure would be a shock, but I wonder what would be more culture shock for someone from SFO, moving to small town USA or moving to Algarve Portugal? What would be more shocking to them? Fellow Americans or Brits?
Super small town USA is a different animal. When I've talked to folks like this, I'm usually talking about the potential to live places like Kansas City or Fort Collins or Tucson.
I've never been to Algarve, but I would agree someone living in SFO probably is better socially and behaviorally prepared for life in a western or southern European city than life in small town (<10,000 residents) USA.
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Mexico and Malaysia for sure would be a shock, but I wonder what would be more culture shock for someone from SFO, moving to small town USA or moving to Algarve Portugal? What would be more shocking to them? Fellow Americans or Brits?
Super small town USA is a different animal. When I've talked to folks like this, I'm usually talking about the potential to live places like Kansas City or Fort Collins or Tucson.
I've never been to Algarve, but I would agree someone living in SFO probably is better socially and behaviorally prepared for life in a western or southern European city than life in small town (<10,000 residents) USA.
My husband is not from the US, and has also lived in several places in Canada, and we now live in the Bay Area. He's not white, and part of his list of attractive places to live in the US includes having a reasonably diverse population. I don't think that's a crazy ask. When we visit my parents (small, non diverse community)...let's just say that he stands out. We are raising mixed race kids, & it's certainly a factor in where we would be comfortable moving, within the US.
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Mexico and Malaysia for sure would be a shock, but I wonder what would be more culture shock for someone from SFO, moving to small town USA or moving to Algarve Portugal? What would be more shocking to them? Fellow Americans or Brits?
Super small town USA is a different animal. When I've talked to folks like this, I'm usually talking about the potential to live places like Kansas City or Fort Collins or Tucson.
I've never been to Algarve, but I would agree someone living in SFO probably is better socially and behaviorally prepared for life in a western or southern European city than life in small town (<10,000 residents) USA.
My husband is not from the US, and has also lived in several places in Canada, and we now live in the Bay Area. He's not white, and part of his list of attractive places to live in the US includes having a reasonably diverse population. I don't think that's a crazy ask. When we visit my parents (small, non diverse community)...let's just say that he stands out. We are raising mixed race kids, & it's certainly a factor in where we would be comfortable moving, within the US.
Of course! That's a perfectly rational thing to financially prioritize.
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Mexico and Malaysia for sure would be a shock, but I wonder what would be more culture shock for someone from SFO, moving to small town USA or moving to Algarve Portugal? What would be more shocking to them? Fellow Americans or Brits?
Super small town USA is a different animal. When I've talked to folks like this, I'm usually talking about the potential to live places like Kansas City or Fort Collins or Tucson.
I've never been to Algarve, but I would agree someone living in SFO probably is better socially and behaviorally prepared for life in a western or southern European city than life in small town (<10,000 residents) USA.
My husband is not from the US, and has also lived in several places in Canada, and we now live in the Bay Area. He's not white, and part of his list of attractive places to live in the US includes having a reasonably diverse population. I don't think that's a crazy ask. When we visit my parents (small, non diverse community)...let's just say that he stands out. We are raising mixed race kids, & it's certainly a factor in where we would be comfortable moving, within the US.
Sure, it makes sense and is very reasonable for your family to want a diverse population where you will fit in. That doesn't lock you into SFO. There are lots of other areas (in the US or not) with more reasonable cost of living that are diverse. Maybe this preference limits your options in much of the truly low cost areas. But, there are certainly places much cheaper than SFO that would work.
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Mexico and Malaysia for sure would be a shock, but I wonder what would be more culture shock for someone from SFO, moving to small town USA or moving to Algarve Portugal? What would be more shocking to them? Fellow Americans or Brits?
Super small town USA is a different animal. When I've talked to folks like this, I'm usually talking about the potential to live places like Kansas City or Fort Collins or Tucson.
I've never been to Algarve, but I would agree someone living in SFO probably is better socially and behaviorally prepared for life in a western or southern European city than life in small town (<10,000 residents) USA.
My husband is not from the US, and has also lived in several places in Canada, and we now live in the Bay Area. He's not white, and part of his list of attractive places to live in the US includes having a reasonably diverse population. I don't think that's a crazy ask. When we visit my parents (small, non diverse community)...let's just say that he stands out. We are raising mixed race kids, & it's certainly a factor in where we would be comfortable moving, within the US.
Sure, it makes sense and is very reasonable for your family to want a diverse population where you will fit in. That doesn't lock you into SFO. There are lots of other areas (in the US or not) with more reasonable cost of living that are diverse. Maybe this preference limits your options in much of the truly low cost areas. But, there are certainly places much cheaper than SFO that would work.
I don't feel locked in to living in SFO. We're here for work, because currently we need to be & both make a lot of money living/earning here. We won't stay when that changes and our kids are out of high school. My answer was about the broader, "you can move anywhere in the US" vibe. You certainly could, but there are reasons people may choose to live elsewhere.
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Mexico and Malaysia for sure would be a shock, but I wonder what would be more culture shock for someone from SFO, moving to small town USA or moving to Algarve Portugal? What would be more shocking to them? Fellow Americans or Brits?
Super small town USA is a different animal. When I've talked to folks like this, I'm usually talking about the potential to live places like Kansas City or Fort Collins or Tucson.
I've never been to Algarve, but I would agree someone living in SFO probably is better socially and behaviorally prepared for life in a western or southern European city than life in small town (<10,000 residents) USA.
My husband is not from the US, and has also lived in several places in Canada, and we now live in the Bay Area. He's not white, and part of his list of attractive places to live in the US includes having a reasonably diverse population. I don't think that's a crazy ask. When we visit my parents (small, non diverse community)...let's just say that he stands out. We are raising mixed race kids, & it's certainly a factor in where we would be comfortable moving, within the US.
I think that is a perfectly valid way to feel. Yet my observation has been that (some) people living places like San Francisco has a very skewed sense of how diverse (or not) many parts of the country away from the coasts are. It sounds like you're particularly focused on racial appearance and not wanting to stand out too much. Again, completely understandable. But relative to San Francisco proper, how much less diverse would you guess a city like Kansas City or Tucson actually is? Just on gut instinct?
A bit under half of SF residents are non-hispanic white (40%). In Tucson 43%. In Kansas City 55%. To me those don't seem like shockingly different percentages. To you, do those percentages make a big difference in terms of how comfortable you and your family would feel living one place verse another?
Edit to add: By all means don't move to Scottsbluff, Nebraska. Your husband wouldn't feel comfortable there. Your kids might feel isolated in schools. And the cultural amenities are not so great to put it mildly. My concern is how many folks living in Manhattan or San Francisco seem to think that most of the people in the USA who don't live in on of a small number of specific cites instead are getting the Scottsbluff experience.
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Mexico and Malaysia for sure would be a shock, but I wonder what would be more culture shock for someone from SFO, moving to small town USA or moving to Algarve Portugal? What would be more shocking to them? Fellow Americans or Brits?
Super small town USA is a different animal. When I've talked to folks like this, I'm usually talking about the potential to live places like Kansas City or Fort Collins or Tucson.
I've never been to Algarve, but I would agree someone living in SFO probably is better socially and behaviorally prepared for life in a western or southern European city than life in small town (<10,000 residents) USA.
My husband is not from the US, and has also lived in several places in Canada, and we now live in the Bay Area. He's not white, and part of his list of attractive places to live in the US includes having a reasonably diverse population. I don't think that's a crazy ask. When we visit my parents (small, non diverse community)...let's just say that he stands out. We are raising mixed race kids, & it's certainly a factor in where we would be comfortable moving, within the US.
Sure, it makes sense and is very reasonable for your family to want a diverse population where you will fit in. That doesn't lock you into SFO. There are lots of other areas (in the US or not) with more reasonable cost of living that are diverse. Maybe this preference limits your options in much of the truly low cost areas. But, there are certainly places much cheaper than SFO that would work.
I don't feel locked in to living in SFO. We're here for work, because currently we need to be & both make a lot of money living/earning here. We won't stay when that changes and our kids are out of high school. My answer was about the broader, "you can move anywhere in the US" vibe. You certainly could, but there are reasons people may choose to live elsewhere.
The vibe is that there are tons of low cost options in the US, not that those locations are right for everyone, just as Mexico isn't right for everyone. Some people over estimate the culture issues of geo-arbitrage and others under estimate it.
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It depends. If you can finagle your income just right you can slot into an ACA category where you may spend less than $1000/year on healthcare even in the USA. I'm not early retired yet, but I've priced it out repeatedly and again, you have to be able to get your taxable income into the level you want (typically by doing traditional to Roth IRA rollovers every year) but as long as that's the case, even healthcare can be quite affordable in the USA. My current US home is a 5 minute walk from a large grocery store, my eye doctor, and my dentist's office so I've commonly gone for extended periods of time without even using my car now that I'm working from home full time thanks to covid.
This sounds like the price you pay if you're lucky enough to be healthy. If I'm mistaken I'd like to know where I can find these plans because that would really shorten my FIRE timeline.
Mexico and Malaysia for sure would be a shock, but I wonder what would be more culture shock for someone from SFO, moving to small town USA or moving to Algarve Portugal? What would be more shocking to them? Fellow Americans or Brits?
Super small town USA is a different animal. When I've talked to folks like this, I'm usually talking about the potential to live places like Kansas City or Fort Collins or Tucson.
I've never been to Algarve, but I would agree someone living in SFO probably is better socially and behaviorally prepared for life in a western or southern European city than life in small town (<10,000 residents) USA.
My husband is not from the US, and has also lived in several places in Canada, and we now live in the Bay Area. He's not white, and part of his list of attractive places to live in the US includes having a reasonably diverse population. I don't think that's a crazy ask. When we visit my parents (small, non diverse community)...let's just say that he stands out. We are raising mixed race kids, & it's certainly a factor in where we would be comfortable moving, within the US.
I'm from the south and I've lived on the west coast. DH is from the northeast. Being gay is a different experience in different parts of the US. In general, I'm sure moving domestically is not as big an adjustment as moving internationally, but just because it's not the same level as an international move does not mean it's trivial. The logic is still comparable. For various reasons some people will have real trouble making adjustments to a new place domestically the same way some people would have real trouble with an international move, even if the chances are a lot better for a domestic move. Some LGBT+ people might even find it easier to move from Seattle to Mexico City than from Seattle to Arkansas. I just see people acting like moving is trivial just because it's within the same country, and that is just not the case for everyone.
And on that note, if it's a luxury to stay in a HCOL area not to have to make big life adjustments, it's also a luxury to stay in the US and Canada at all for the same reason. So don't judge.
PS I can't type fast enough to keep up with you people.
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What about Chicago or Detroit or Minneapolis? Those are all great diverse cities with much lower cost than the coasts.
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Mexico and Malaysia for sure would be a shock, but I wonder what would be more culture shock for someone from SFO, moving to small town USA or moving to Algarve Portugal? What would be more shocking to them? Fellow Americans or Brits?
Super small town USA is a different animal. When I've talked to folks like this, I'm usually talking about the potential to live places like Kansas City or Fort Collins or Tucson.
I've never been to Algarve, but I would agree someone living in SFO probably is better socially and behaviorally prepared for life in a western or southern European city than life in small town (<10,000 residents) USA.
My husband is not from the US, and has also lived in several places in Canada, and we now live in the Bay Area. He's not white, and part of his list of attractive places to live in the US includes having a reasonably diverse population. I don't think that's a crazy ask. When we visit my parents (small, non diverse community)...let's just say that he stands out. We are raising mixed race kids, & it's certainly a factor in where we would be comfortable moving, within the US.
I think that is a perfectly valid way to feel. Yet my observation has been that (some) people living places like San Francisco has a very skewed sense of how diverse (or not) many parts of the country away from the coasts are. It sounds like you're particularly focused on racial appearance and not wanting to stand out too much. Again, completely understandable. But relative to San Francisco proper, how much less diverse would you guess a city like Kansas City or Tucson actually is? Just on gut instinct?
A bit under half of SF residents are non-hispanic white (40%). In Tucson 43%. In Kansas City 55%. To me those don't seem like shockingly different percentages. To you, do those percentages make a big difference in terms of how comfortable you and your family would feel living one place verse another?
Edit to add: By all means don't move to Scottsbluff, Nebraska. Your husband wouldn't feel comfortable there. Your kids might feel isolated in schools. And the cultural amenities are not so great to put it mildly. My concern is how many folks living in Manhattan or San Francisco seem to think that most of the people in the USA who don't live in on of a small number of specific cites instead are getting the Scottsbluff experience.
Two points of clarification. 1) We don't live in San Francisco, we live in the bay area & there are many cities outside of SF proper. 2) My husband is middle eastern. From a census perspective, middle easterners are considered "white", so the stats you refer to are not particularly helpful when asking the question of whether people stand out. On our street, with possibly 15 homes, there are four families where at least one person is from the same country as my husband.
Diversity matters to us outside of ethnic diversity: we want our kids exposed to a wide variety of perspectives & an acceptance of those who are different than they are. You can find that in many places in the US outside of NYC & SF. We lived in Seattle for 20 years before this, and I'd describe it as fitting the bar as well. I grew up two hours from Seattle, and would most certainly not describe it as fitting the bar. I certainly never claimed that there were only a few places in the US where you can find a diverse experience. I was pointing out why people may choose to live in HCOL places.
To the larger point:
-I still think $100k is fat fire :-)
-Living in a HCOL is a luxury
-There can be reasons people choose to live in a higher cost of living area that are completely valid & reasonable. That comes at a cost from a FIRE perspective. As long as people are looking at all of the options & making decisions aligned with their values, I'm not sure why we need to debate each criteria.
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Raw numbers on race also don't deal with the issue of segregation - populations in segregated neighbourhoods vs mixed neighbourhoods provides a very different living experience.
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Yes, if your definition of diversity is specifically "people who look like my family and came from the same country originally" that's a different search parameter from diversity per se.
I agree diversity of perspective is also important. As someone who has lived in Berkeley and half a dozen other cities or towns across the USA, I didn't find diversity of perspective to be any better (or any worse) while living in the bay area, but, unlike race, it's harder to point to hard numbers when people start listening to their preconceived notions about how all sorts of places to live are not suitable for them because of a lack of that kind of diversity. Race, usually, is an easier way to catch people in assumptions and get them to start questioning their preconceptions about how people in other parts of the country live and experience their lives.
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Personally, the greatest cost associated with geo-arbitrage is the disruption to your social network. And I say this as someone who’s lived in three different countries and moved frequently throughout my life.
There’s a value to having friends and family and even former employees/ers nearby, but it’s very hard to quantify.
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Personally, the greatest cost associated with geo-arbitrage is the disruption to your social network. And I say this as someone who’s lived in three different countries and moved frequently throughout my life.
There’s a value to having friends and family and even former employees/ers nearby, but it’s very hard to quantify.
Yep. I am too old and too much of an introvert to start over from scratch again.
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Personally, the greatest cost associated with geo-arbitrage is the disruption to your social network. And I say this as someone who’s lived in three different countries and moved frequently throughout my life.
There’s a value to having friends and family and even former employees/ers nearby, but it’s very hard to quantify.
Yep. I am too old and too much of an introvert to start over from scratch again.
That network of friends, family and local knowledge is also worth cash money, in that they give you the knowledge to be able to get good quality and good value for your spending and people to call on for assistance. If you are starting over in a new country, or even in a new location in the same country, you lose those advantages. The disadvantage is even greater if you aren't fluent in the local language. My strong view is that going to live in another country if you are only bare bones FIREd in that country's economy is a recipe for disaster.
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Personally, the greatest cost associated with geo-arbitrage is the disruption to your social network. And I say this as someone who’s lived in three different countries and moved frequently throughout my life.
There’s a value to having friends and family and even former employees/ers nearby, but it’s very hard to quantify.
Yep. I am too old and too much of an introvert to start over from scratch again.
That network of friends, family and local knowledge is also worth cash money, in that they give you the knowledge to be able to get good quality and good value for your spending and people to call on for assistance. If you are starting over in a new country, or even in a new location in the same country, you lose those advantages. The disadvantage is even greater if you aren't fluent in the local language. My strong view is that going to live in another country if you are only bare bones FIREd in that country's economy is a recipe for disaster.
Exactly. Every time I’ve lived or worked in a new place, the first several years (at least) were way more expensive than they needed to be, because I didn’t know what most locals know. Who to call for a repair, which ‘official’ bills could be contested or dropped, how to gain access to various services, or even the cheapest places to go for various things. When I needed help I had to pay for it. In every culture (even our own) there is efficiencies and saying built into having a robust social network. It becomes so familiar to us in our native environment that we often overlook the benefits. These are in addition to the mental and happiness benefits that come with having lots of friends and family nearby.
I should add that I’m not at all against moving, and one can certainly save a huge amount moving from a HCOL to LOCL region, but the easily quantifiable (lodging, taxes, food, health-care) are just part of the ledger to consider.
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Personally, the greatest cost associated with geo-arbitrage is the disruption to your social network. And I say this as someone who’s lived in three different countries and moved frequently throughout my life.
There’s a value to having friends and family and even former employees/ers nearby, but it’s very hard to quantify.
Yep. I am too old and too much of an introvert to start over from scratch again.
Wait...you have friends, family, a social network? Oh then that's definitely a LUXURY and you must be stupidly fat FIRE if you choose to stay because of them.....I mean there is Facebook, Instagram and FaceTime to keep in touch with those people so you can lower your cost and move overseas. I am kidding of course, but others may see it this way.
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I think it's a very good point. It's also something for young people to keep in mind as they choose what jobs to take and what cities to move to. I've heard the strategy of working and saving in a HCOL area and then moving to a LCOL to achieve FIRE. But it is very possible (and very human) that one may end up putting down roots without realizing or intending it to the point where moving becomes much less appealing.
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Personally, the greatest cost associated with geo-arbitrage is the disruption to your social network. And I say this as someone who’s lived in three different countries and moved frequently throughout my life.
There’s a value to having friends and family and even former employees/ers nearby, but it’s very hard to quantify.
Yep. I am too old and too much of an introvert to start over from scratch again.
Wait...you have friends, family, a social network? Oh then that's definitely a LUXURY and you must be stupidly fat FIRE if you choose to stay because of them.....I mean there is Facebook, Instagram and FaceTime to keep in touch with those people so you can lower your cost and move overseas. I am kidding of course, but others may see it this way.
As the person in this thread who keeps harping on about HCOL being a luxury, I don't even remotely see the connection. Having relationships isn't a luxury, choosing to live a middle class lifestyle in an HCOL area is a luxury.
I've never once said that choosing the luxury of living in an HCOL region is unreasonable or that people shouldn't do it.
I'm all about my luxuries, I have many that are non negotiable.
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Personally, the greatest cost associated with geo-arbitrage is the disruption to your social network. And I say this as someone who’s lived in three different countries and moved frequently throughout my life.
There’s a value to having friends and family and even former employees/ers nearby, but it’s very hard to quantify.
Yep. I am too old and too much of an introvert to start over from scratch again.
Wait...you have friends, family, a social network? Oh then that's definitely a LUXURY and you must be stupidly fat FIRE if you choose to stay because of them.....I mean there is Facebook, Instagram and FaceTime to keep in touch with those people so you can lower your cost and move overseas. I am kidding of course, but others may see it this way.
As the person in this thread who keeps harping on about HCOL being a luxury, I don't even remotely see the connection. Having relationships isn't a luxury, choosing to live a middle class lifestyle in an HCOL area is a luxury.
I think the connection is that when all your friends, family, and professional relationships reside in a HCOL city, the choice you're making is not to live in an expensive city, it's to live where the people you love are.
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Personally, the greatest cost associated with geo-arbitrage is the disruption to your social network. And I say this as someone who’s lived in three different countries and moved frequently throughout my life.
There’s a value to having friends and family and even former employees/ers nearby, but it’s very hard to quantify.
Yep. I am too old and too much of an introvert to start over from scratch again.
Wait...you have friends, family, a social network? Oh then that's definitely a LUXURY and you must be stupidly fat FIRE if you choose to stay because of them.....I mean there is Facebook, Instagram and FaceTime to keep in touch with those people so you can lower your cost and move overseas. I am kidding of course, but others may see it this way.
As the person in this thread who keeps harping on about HCOL being a luxury, I don't even remotely see the connection. Having relationships isn't a luxury, choosing to live a middle class lifestyle in an HCOL area is a luxury.
I think the connection is that when all your friends, family, and professional relationships reside in a HCOL city, the choice you're making is not to live in an expensive city, it's to live where the people you love are.
Yeah, I got that. There are very good reasons to live in expensive locations. Living in an HCOL location is a luxury, whatever the reason for living there. Having the connections isn't the luxury, being able to choose to live in the HCOL is a luxury.
I can't afford to live where a lot of my friends and family are, I don't have that luxury. I could work a lot more to afford it, but i'm happy living elsewhere, so for me, that luxury isn't worth it. For others it is.
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I think it's a very good point. It's also something for young people to keep in mind as they choose what jobs to take and what cities to move to. I've heard the strategy of working and saving in a HCOL area and then moving to a LCOL to achieve FIRE. But it is very possible (and very human) that one may end up putting down roots without realizing or intending it to the point where moving becomes much less appealing.
Hence why I'm still in expensive yucky coastal SoCal. Came for the job after getting out of the Coast Guard and stayed for the friends and family relationships and activities that are here. Downsizing and living a less spendy life helps a lot but only so much you can do if you are starting out here. Doable for many but tough if you have a family. That said - moving day is this weekend to a rental place for the summer. Not sure where we (BF and I) will end up but it will likely be much lower cost if we decide to buy. Selling my house made me fat FIRE (by my lower spending standards) as selling the BF's house did for him. Neither will spend anywhere near $100k together or separately.
Where is yucky coastal SoCal? Glad I live in pleasant coastal SoCal!
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Personally, the greatest cost associated with geo-arbitrage is the disruption to your social network. And I say this as someone who’s lived in three different countries and moved frequently throughout my life.
There’s a value to having friends and family and even former employees/ers nearby, but it’s very hard to quantify.
Yep. I am too old and too much of an introvert to start over from scratch again.
I never really valued this kind of extended network that comes from staying in one place for awhile. But now that I've actually BEEN in one place for awhile, it's worth a lot more to me (in unquantifiable ways) than I ever would've expected. And +1 to being way too introverted to start that network over again.
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I think it's a very good point. It's also something for young people to keep in mind as they choose what jobs to take and what cities to move to. I've heard the strategy of working and saving in a HCOL area and then moving to a LCOL to achieve FIRE. But it is very possible (and very human) that one may end up putting down roots without realizing or intending it to the point where moving becomes much less appealing.
Hence why I'm still in expensive yucky coastal SoCal. Came for the job after getting out of the Coast Guard and stayed for the friends and family relationships and activities that are here. Downsizing and living a less spendy life helps a lot but only so much you can do if you are starting out here. Doable for many but tough if you have a family. That said - moving day is this weekend to a rental place for the summer. Not sure where we (BF and I) will end up but it will likely be much lower cost if we decide to buy. Selling my house made me fat FIRE (by my lower spending standards) as selling the BF's house did for him. Neither will spend anywhere near $100k together or separately.
Where is yucky coastal SoCal? Glad I live in pleasant coastal SoCal!
LOL! You know that part that has 20 billion people crammed into a tiny sliver of beach during the Santa Ana Winds when it's 100 degrees on the coast and smoggy from the equal 20 billion people on the 405 trying to get there from inland or away from the wildfires. Or at the few jammed packed dry brown treeless hiking trails crammed between vast sprawling vastly expensive housing tracts and strip malls and freeways. That would be the place ;-). Of course I've been here 20 years (with a short term move to Big Bear) so I may be a bit biased.
Oh, yeah, we rarely cross Camp Pendleton. It's crazy up there.
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Someone posted this link in the investor's sub forum and i thought it relevant to the conversation
https://dqydj.com/income-percentile-calculator/
$100,000 is 80th percentile, so very likely fat fire and yes even "Ferraris FIRE" (can i trademark that term?), a used one is ~$120k that at 5% interest for 60 months is $2,265 per month, assume insurance is $200 a month and fuel/maintenance is $135 a month for a total of ~$31,000 a year. Assuming $10k in taxes, $100k-$10k-$31k = ~$59k a year to live which puts you in the 55th percentile. so one could by a Ferrari (a new to you one every 5 years) and still live a middle class lifestyle
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Someone posted this link in the investor's sub forum and i thought it relevant to the conversation
https://dqydj.com/income-percentile-calculator/
$100,000 is 80th percentile, so very likely fat fire and yes even "Ferraris FIRE" (can i trademark that term?), a used one is ~$120k that at 5% interest for 60 months is $2,265 per month, assume insurance is $200 a month and fuel/maintenance is $135 a month for a total of ~$31,000 a year. Assuming $10k in taxes, $100k-$10k-$31k = ~$59k a year to live which puts you in the 55th percentile. so one could by a Ferrari (a new to you one every 5 years) and still live a middle class lifestyle
But Ferraris are really expensive where I live so its not that fat of a fire!
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Someone posted this link in the investor's sub forum and i thought it relevant to the conversation
https://dqydj.com/income-percentile-calculator/
$100,000 is 80th percentile, so very likely fat fire and yes even "Ferraris FIRE" (can i trademark that term?), a used one is ~$120k that at 5% interest for 60 months is $2,265 per month, assume insurance is $200 a month and fuel/maintenance is $135 a month for a total of ~$31,000 a year. Assuming $10k in taxes, $100k-$10k-$31k = ~$59k a year to live which puts you in the 55th percentile. so one could by a Ferrari (a new to you one every 5 years) and still live a middle class lifestyle
But Ferraris are really expensive where I live so its not that fat of a fire!
there are 134 Ferraris for sale at or less than $120k in the country (USA)
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Someone posted this link in the investor's sub forum and i thought it relevant to the conversation
https://dqydj.com/income-percentile-calculator/
$100,000 is 80th percentile, so very likely fat fire and yes even "Ferraris FIRE" (can i trademark that term?), a used one is ~$120k that at 5% interest for 60 months is $2,265 per month, assume insurance is $200 a month and fuel/maintenance is $135 a month for a total of ~$31,000 a year. Assuming $10k in taxes, $100k-$10k-$31k = ~$59k a year to live which puts you in the 55th percentile. so one could by a Ferrari (a new to you one every 5 years) and still live a middle class lifestyle
But Ferraris are really expensive where I live so its not that fat of a fire!
Hahahahaha