Author Topic: My observations of early retirees  (Read 14545 times)

quilter

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My observations of early retirees
« on: February 03, 2014, 05:17:46 AM »
We retired at 52 and 55 (DH stayed the extra three years so we could stay on the health plan) and had several friends who retired at that age.  I know that is not extreme early retirement, but better than most.

So since retirement we have met lots of other early retirees as we are very active in a long distance bike group, canoe group, masters swim team and volunteer for habitat.  So while there are many exceptions I have noticed many things we have in common.  This is a totally observational non scientific study.

1.  Limiting family size. Many are childless, or have one or two children. One exception, who has five children graduated college with money in the bank ( lived at home and commuted) and to this day lives in an old city house he bought cheap and renovated himself.
2.  Modest homes. The average home price where I live is around $300,000.  We all tend to live in the more modest homes worth $175,000 -$200,000.
3.  We were not saddled with huge student loans. DH had big loans for the day, probably equivalent to about $40,000 in today's dollars, but he was an exception and attended a good engineering school. His starting salary was more than that. Most of our friends had little to no college debt. I had none.  I am not sure how it came to be that these gigantic student loans I see posted here are the norm.
4.  Eating out is an occasional luxury.  It is normal at the habitat worksites or on our various canoe and biking outings for people to show up with a lunchbox.  Scoping out the local farmers markets and ethnic food stores is the norm.
5.  While appropriate gear is the norm at these activities, all the latest gewgaws and gadgets are not.
6.  People seem to realize that it is not things that make you happy.
7.  We were talking about  a rash of home break ins in our town. One guy said it all when he said his important papers were in a safety deposit box. He had very little worth stealing - after all if you spend lots of money on stuff you have to keep working to maintain it all.

Gray Matter

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Re: My observations of early retirees
« Reply #1 on: February 03, 2014, 05:31:07 AM »
Interesting observations and principles to live by!

One thing I wanted to comment on...

I am not sure how it came to be that these gigantic student loans I see posted here are the norm.

While I think it is true that people have become more comfortable with the notion of debt, I think the bigger issue is that the cost of college has far surpassed people's ability to pay as you go.  College costs are inflating far beyond wages, so anyone who went to college 25 or 35 years ago was at a significant advantage compared to today's students.  I read somewhere that 30 years ago, average summer wages were enough to pay for a year's tuition.  That is nowhere near the case today.

As someone who teaches the occasional class at our local university (where I graduated in 1993), I have access to things like student wages, so I was able to calculate how things have changes since I went there:
  • Student wages (work-study, campus jobs) have gone up 45%.
  • Tuition and room and board have gone up over 350%.

It was really eye-opening for me.  And while I will counsel my own children to avoid student loans like the plague, I am much more sympathetic than I used to be towards today's college students.  It's crazy what a degree costs these days, especially since they seem to have less value than they used to.

MrsPete

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Re: My observations of early retirees
« Reply #2 on: February 03, 2014, 06:13:41 AM »
We retired at 52 and 55 (DH stayed the extra three years so we could stay on the health plan) and had several friends who retired at that age.  I know that is not extreme early retirement, but better than most.

So since retirement we have met lots of other early retirees as we are very active in a long distance bike group, canoe group, masters swim team and volunteer for habitat.  So while there are many exceptions I have noticed many things we have in common.  This is a totally observational non scientific study.

1.  Limiting family size. Many are childless, or have one or two children. One exception, who has five children graduated college with money in the bank ( lived at home and commuted) and to this day lives in an old city house he bought cheap and renovated himself.
2.  Modest homes. The average home price where I live is around $300,000.  We all tend to live in the more modest homes worth $175,000 -$200,000.
3.  We were not saddled with huge student loans. DH had big loans for the day, probably equivalent to about $40,000 in today's dollars, but he was an exception and attended a good engineering school. His starting salary was more than that. Most of our friends had little to no college debt. I had none.  I am not sure how it came to be that these gigantic student loans I see posted here are the norm.
4.  Eating out is an occasional luxury.  It is normal at the habitat worksites or on our various canoe and biking outings for people to show up with a lunchbox.  Scoping out the local farmers markets and ethnic food stores is the norm.
5.  While appropriate gear is the norm at these activities, all the latest gewgaws and gadgets are not.
6.  People seem to realize that it is not things that make you happy.
7.  We were talking about  a rash of home break ins in our town. One guy said it all when he said his important papers were in a safety deposit box. He had very little worth stealing - after all if you spend lots of money on stuff you have to keep working to maintain it all.
Yes, I think this is a pretty good description of the people I know who've retired early (and successfully).  I'll add two more: 

8.  Most are married, and still married to the original spouse.  Even setting emotions aside, few things in life set you back as badly as divorce.
9.  Most travel, even splurge-travel occasionally, but they do it "on the cheap" -- that is, using Priceline hotels, or staying with relatives. 

Interesting observations and principles to live by!

One thing I wanted to comment on...

I am not sure how it came to be that these gigantic student loans I see posted here are the norm.

While I think it is true that people have become more comfortable with the notion of debt, I think the bigger issue is that the cost of college has far surpassed people's ability to pay as you go.  College costs are inflating far beyond wages, so anyone who went to college 25 or 35 years ago was at a significant advantage compared to today's students.  I read somewhere that 30 years ago, average summer wages were enough to pay for a year's tuition.  That is nowhere near the case today.

As someone who teaches the occasional class at our local university (where I graduated in 1993), I have access to things like student wages, so I was able to calculate how things have changes since I went there:
  • Student wages (work-study, campus jobs) have gone up 45%.
  • Tuition and room and board have gone up over 350%.

It was really eye-opening for me.  And while I will counsel my own children to avoid student loans like the plague, I am much more sympathetic than I used to be towards today's college students.  It's crazy what a degree costs these days, especially since they seem to have less value than they used to.
What you say is true, but incomplete.  I've been out of college -- can it be true? -- 25 years, so I'm not quite in the "30 years ago this was possible" generation, but I can make a couple comments on my own college experience vs. my daughter's current college experience -- some that support your point, some that are argumentative.  I think the whole situation isn't all that clear cut:

- Yes, tuition and other costs are higher; that is undeniable.  Her tuition is roughly 12Xs higher than mine was in the 80s, and it's impossible to pretend that doesn't matter.

- I don't remember my friends particularly searching out THE COLLEGE EXPERIENCE.  I know I personally was not in a financial position to do so, but today most of my high school students are very, very interested in attending THE SCHOOL, and in their minds it goes beyond the academics.  It's a social thing, a first-step into adulthood thing, and they're much more willing to pay big bucks to go out of state, etc.  I can understand that an 18-year old might not have the understanding of what it'll mean to their future to pay back these loans, but their parents are going along with it, heads a-waggin' "Yes, yes, borrow, borrow."  I rarely hear much talk of accepting what one can actually afford.  Even the kids who attend the university 20 minutes down the road tend to move into dorms or apartments, which negates the benefits of "staying local". 

- Scholarships are down.  Down in number of recipients, down in dollar figures.  I've been teaching high school seniors for years, and these days practically no one (except military) gets a full-ride scholarship.  My daughter was the #2 scholarship recipient in her high school graduating class, and she got about 50% of her costs paid -- I was thrilled.  If she were ten years older, I'm certain she'd have had a full ride AND money back on top. 

- We had exactly one spot in which to buy our books (unless we were fortunate enough to find a girl down the hall who'd sell her old math book), and that was the high-priced book store:  They have the internet to help them find inexpensive copies. 

- When I was a student everyone worked in the summer (multiple jobs often) and almost everyone worked during the school year (part time).  Today most of my daughters' friends aren't working during college -- at all.  You might argue that jobs are more difficult to find today, but that wouldn't be true in my very touristy home town. 

- We had a sense of "loans are dangerous, don't sell your future earnings".  Today's students seem to accept that loans are a necessary evil, something everyone has.  And if you're going to have to pay back something, why not make your life just a little easier today -- don't scrimp on things, borrow enough for a few splurges!  They also buy into the concept of "good debt", which makes no sense. 

- Today's college students have more stuff.  Most of my friends did not have personal cars on campus when I was a student; my daughter is almost alone in being car-less.  No one had a cell phone (about 1/3 of us didn't have phones in the dorm and were confined to using the pay phones in the lobby).  In my last year or two of school, a small smattering of students owned computers.  Girls decorate, decorate, decorate their dorm rooms, then toss it all as they move into an apartment the next year.   

- Today's college students go out more often.  We went out to dinner only occasionally -- the night of a dance, Valentine's Day.  In contrast, most of my daughter's friends go out multiple times a week.  It's also "expected" that they're planning some sort of a trip (many of them cruises) for Spring Break . . . and a summer vacation too.  That's something I did exactly once in all my college years. 


So, yes, college costs ARE skyrocketing, but I also don't think the average college student is really doing all that much to help himself get through "on the cheap".  It's something of a double-edged sword.
« Last Edit: February 03, 2014, 06:19:55 AM by MrsPete »

quilter

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Re: My observations of early retirees
« Reply #3 on: February 03, 2014, 06:56:41 AM »
All very interesting points about student loans. I really had no idea about the prevelance of these massive student loans before I started reading people's budgets here.   The occasional news article doesn't show the true picture like the real people who post here. Certainly lots to think about, especially what grey matter explains.

Also, I like the 8 & 9 that were added.  For 10 I would like to add that none of the wives ( or husbands for that matter) of these people are frou frou people. Like in not having nails done, wearing lots of makeup, fancy clothes that need to be dry cleaned. Much more likely to be clean and neat, maybe with a little makeup but with serviceable clothes, not fancy pants.


SwordGuy

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Re: My observations of early retirees
« Reply #4 on: February 03, 2014, 07:05:08 AM »
My wife teaches at a university.  She mentioned to me that the universities are building fancier, more feature rich student dorms, student centers, etc. because students want to live much fancier lives while in college.  That stuff costs money.   Because the students can get loans and don't understand the long term costs of that, they get loans to live high on the hog.

mrsggrowsveg

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Re: My observations of early retirees
« Reply #5 on: February 03, 2014, 07:28:13 AM »
These are great observations and very motivational for people who hope to retire early.  Your friends sound like really fun people.

foobar

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Re: My observations of early retirees
« Reply #6 on: February 03, 2014, 07:45:20 AM »
Do old people also want fancy buildings? After all the average hospital is getting fancier all the time. I think the admin in most cases deserves the "blame". Spending money on a new science center looks a lot better than keeping the rate of tuition increases to 2% instead of 5% when your sending out press releases.



My wife teaches at a university.  She mentioned to me that the universities are building fancier, more feature rich student dorms, student centers, etc. because students want to live much fancier lives while in college.  That stuff costs money.   Because the students can get loans and don't understand the long term costs of that, they get loans to live high on the hog.

bogart

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Re: My observations of early retirees
« Reply #7 on: February 03, 2014, 08:16:30 AM »

I am not sure how it came to be that these gigantic student loans I see posted here are the norm.


(strikeout added)

My sense is that as little as 3 decades ago, it was much, much more difficult to borrow money (or have access to credit), period -- student loans, mortgages, and certainly anything unsecured (of course student loans aren't secured, but neither are they discharged in bankruptcy).  That even folks with "good" credit wouldn't be welcomed to take out a large number of credit cards or otherwise have numerous, or large, loans.  Though the financial reforms passed a few years ago have increased restrictions on the access to credit offered to some (including students), and certainly those with a "dinged" (or worse) history are in another category altogether, it astounds me how readily and how much those of us with good credit histories can borrow.

Another thing that's changed dramatically, of course, is the availability of low-cost-to-the-consumer health care for those in precarious (employment or health) positions.  The ACA may improve this, but even its fans wouldn't say it's perfect in that regard.  Of course, there do also exist lots of medical treatments that weren't even available (or not nearly as widely available) 3 decades ago, so I'm not saying I'm comparing apples-to-apples, but my sense is that medical debt, including debt placed on credit cards (versus a low- or no-cost revolving account with a physician's office, which I think used to be more common), is a common source of financial difficulties. 

MooseOutFront

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Re: My observations of early retirees
« Reply #8 on: February 03, 2014, 10:27:19 AM »
Thanks for sharing your observations.  I think the house one resonates with me.  Our home is in that $185-210,000 value range, we owe $110,000 on it and have it on a 30 yr at 3.5%.  Meanwhile our peers continue to upgrade their homes as kids are hitting the ground and careers are becoming established.  Pretty much any co-worker or friend in our relative demographic I can think of has done this within the past 3 years.

My wife would love for us to move, but any move we make would make us poorer instantly.  Our neighborhood is nice, we're close enough for me to bike to work, and our house is nice though clearly neither of our dream home.  Any upgrade to our housing situation is purely a consumption item.  I'll continue to resist it.

tomsang

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Re: My observations of early retirees
« Reply #9 on: February 03, 2014, 10:38:33 AM »
Tuition and room and board have gone up over 350%.

So, yes, college costs ARE skyrocketing, but I also don't think the average college student is really doing all that much to help himself get through "on the cheap".  It's something of a double-edged sword.

The cost to educate a student has not increased significantly over the last twenty years in Washington State. The big change has been who is paying for "public" education. When I went to the University of Washington 20 years ago, the state paid 80% of the tuition and fees. Today they pay something like 20% because of budget cuts. So those that are saying that you paid your way through college, why can't this generation.  The answer is that you didn't pay your way through college. You paid 20%. Now we are expecting our kids to pay 80%. It still can be done, but it is apples and oranges at least in Washington.

Check out your state's funding. It may be eye opening.

infogoon

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Re: My observations of early retirees
« Reply #10 on: February 03, 2014, 10:46:32 AM »
Colleges are getting more fancy and expensive because prospective students care far more about the dining hall, the dorms, and the sports teams than they do about the academic credentials of the college. Not all prospective students, of course, but a large majority. The ones who show up with no idea what they want to do, coast through four years to a general business or communications degree, and cheer for the football team are the ones who keep the coffers full.

Also, many colleges are also increasing the "discount rate", meaning that financial aid (including loans) is covering far more of the sticker price. My alma mater charges over $30k a year, but on average, students pay about $15k out of pocket.

CommonCents

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Re: My observations of early retirees
« Reply #11 on: February 03, 2014, 11:22:21 AM »
- Today's college students have more stuff.  Most of my friends did not have personal cars on campus when I was a student; my daughter is almost alone in being car-less.  No one had a cell phone (about 1/3 of us didn't have phones in the dorm and were confined to using the pay phones in the lobby).  In my last year or two of school, a small smattering of students owned computers. 

My college required us to buy computers and included it in a student loan if we needed it.  I'm not saying you need the fanciest computer (I brought older one from home my dad had built cheaper than he could buy) but this is not necessarily optional, even 17 years ago when I started college...

quilter

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Re: My observations of early retirees
« Reply #12 on: February 03, 2014, 11:47:26 AM »
Excellent points on the cost of things, as well as what is subsidized regarding education. Also on the expectations of the students. I also am shocked to see that if I go to the bank I get less than 1% yet some of these loans are six or more.  Someone is making a lot of money on these loans
« Last Edit: February 03, 2014, 11:49:25 AM by quilter »

galliver

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Re: My observations of early retirees
« Reply #13 on: February 03, 2014, 02:17:23 PM »
Tuition and room and board have gone up over 350%.

So, yes, college costs ARE skyrocketing, but I also don't think the average college student is really doing all that much to help himself get through "on the cheap".  It's something of a double-edged sword.

The cost to educate a student has not increased significantly over the last twenty years in Washington State. The big change has been who is paying for "public" education. When I went to the University of Washington 20 years ago, the state paid 80% of the tuition and fees. Today they pay something like 20% because of budget cuts. So those that are saying that you paid your way through college, why can't this generation.  The answer is that you didn't pay your way through college. You paid 20%. Now we are expecting our kids to pay 80%. It still can be done, but it is apples and oranges at least in Washington.

Check out your state's funding. It may be eye opening.

I remember reading this figure (and I believe it) but I'm not sure where to find it. I was only able to find the actual costs during my last search. Granted I didn't spend a week on it or anything. Suggestions?

tomsang

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Re: My observations of early retirees
« Reply #14 on: February 03, 2014, 03:47:32 PM »

I remember reading this figure (and I believe it) but I'm not sure where to find it. I was only able to find the actual costs during my last search. Granted I didn't spend a week on it or anything. Suggestions?


I have read it in a few places, but this is probably the easiest to read and understand. Funding went up in 2013/2014, but that brings it to 31% covered by state vs. 82% back in 1990-1991.  If I recall the state started dropping their funding in 1989ish as I recall protests in Red Square about the increase in tuition. 

http://www.washington.edu/externalaffairs/files/2013/07/2013-resident-undergrad-factsheet.pdf

galliver

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Re: My observations of early retirees
« Reply #15 on: February 03, 2014, 03:50:53 PM »

I remember reading this figure (and I believe it) but I'm not sure where to find it. I was only able to find the actual costs during my last search. Granted I didn't spend a week on it or anything. Suggestions?


I have read it in a few places, but this is probably the easiest to read and understand. Funding went up in 2013/2014, but that brings it to 31% covered by state vs. 82% back in 1990-1991.  If I recall the state started dropping their funding in 1989ish as I recall protests in Red Square about the increase in tuition. 

http://www.washington.edu/externalaffairs/files/2013/07/2013-resident-undergrad-factsheet.pdf

Thanks! More reputable than the last source I read it on, I think. Though finding the analogous Illinois page might be hard.

goodlife

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Re: My observations of early retirees
« Reply #16 on: February 03, 2014, 03:56:24 PM »
A lot of good points here indeed. I wanted to comment given that I am a more recent graduate, I graduated 5 years ago (did Bachelor and Master back to back). I graduated with no student loans and contribution from my parents was zero because they couldn't afford anything. Even though I got into a lot of Ivy League schools for both undergrad and grad school, I turned them all down and went to the schools that gave me full rides. It seems most people don't do this. When I got into Harvard for grad school I went to talk to the financial aid people to see if I can get any more scholarship money as I really wanted to attend. They told me no and that they see people all the time who turn down full rides in order to take out 200k in loans to go to Harvard. I really couldn't belive that and it shocked me. I went to the school that offered me the full ride.

During undergrad, I think more than 90% of students had cars. I went to a small college in a rural area, but I don't think a car was necessary. We were students and students are there to study, I never had to leave campus and on the few occasions that I had to, I always found a way to make it work. However, the majority of my class mates thought I was suffering undue hardship because I didn't have a car. Those same people went out to eat a lot, to parties, on spring break trips to Mexico etc. I didn't do any of that. Most of them didn't have jobs either even tough ON CAMPUS jobs were quite readily available. They were so plentiful that I managed to get 5 of them at the same time because nobody else seemed to want them. I made enough money for books and to fly home at Christmas (except the first year) to visit my family and to pay for occasional expenses. However, given that room and board and tuition were all covered by my scholarship, I had very few occasional expenses.

A note on books: most people I went to school with bought books from the campus book store. New books. They often cost more than $100 each. I ordered them used from Thailand (or wherever) on amazon. I paid maybe 10% of the original price. I even went around and told other people about this because I thought maybe they just don't know. But very rarely did anyone follow my advice. Seems they were happy to spend more than 1k on books each semester.

I never had a cell phone until junior year when I got a paid internship that required me to have one. And then I got some $10/month pre-paid plan. Most of my peers spent crazy amounts of money on unlimited plans.

So, my point is, yes, tuition has gone up A LOT and I think it is unsustainable. But I also think a lot of students these days are living a life of big spending and luxuries that I have never even afforded myself since I started working. There is a ton of unneccessary spending and I do think that this contributes to all the student loans people have.

Another case in point, I work close to a university. The local Starbucks is always packed with college students buying their lattes. This would never have occured to me! I don't think I ever even set foot into a Starbucks when I was in college. I also see a lot of High School students at Starbucks on their way to school. Somebody is giving them the money to buy their lattes...i.e. their parents. These are 15 year old kids buying at least one latte per day. When I was their age...and that wasn't THAT long ago...I wouldn't ever have had that kind of money. And for sure I wouldn't have dared to ask my parents for it because I know what the answer would have been. Just saying.
« Last Edit: February 03, 2014, 03:59:13 PM by goodlife »

Capsu78

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Re: My observations of early retirees
« Reply #17 on: February 03, 2014, 05:02:53 PM »
From above comment:
"The cost to educate a student has not increased significantly over the last twenty years in Washington State. The big change has been who is paying for "public" education. When I went to the University of Washington 20 years ago, the state paid 80% of the tuition and fees. Today they pay something like 20% because of budget cuts. So those that are saying that you paid your way through college, why can't this generation.  The answer is that you didn't pay your way through college. You paid 20%. Now we are expecting our kids to pay 80%. It still can be done, but it is apples and oranges at least in Washington.

Check out your state's funding. It may be eye opening.
[/quote]

I have had a couple of "student loan" carriers try to have me buy into this percentage based argument, but I think it is misleading and "jello-y".  The dollars actually put into schools by the states do not match the 80% down to 20%, or anything like a 60% swing in dollars spent.  In real dollars most states put substancially more dollars in now vs then, even when adjusted for inflation. 
The day when college campuses HR department found they had more "non teaching" administrators than actual folks that "teach".
I was 3 of 5 my parents put through- Dad did the math and my 4 years (only 4) from 74-78 room, board, tuition, books but (excluding beer)  came to $13,500 at Big State U.  I had no access to credit cards under my name, no rock climbing walls, institutional menu choices, no Bitter Woymn's Studies program cranking out the next generation of Starbucks barrista's... wait, we didn't have Starbucks!  Only an "endless cup of Joe served by a waitress named Flo".
I loved my college days and only really stopped acting like I was still in one as my daughters passed through their college years and I was embarrassing them!  This much I know, the delivers of education industry are in for a "newspaper" like reengineering by the time my grandkids arrive "...at Childhoods Gate"
« Last Edit: February 03, 2014, 05:04:28 PM by Capsu78 »

Dr. Doom

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Re: My observations of early retirees
« Reply #18 on: February 03, 2014, 05:45:36 PM »
Colleges are getting more fancy and expensive because prospective students care far more about the dining hall, the dorms, and the sports teams than they do about the academic credentials of the college. Not all prospective students, of course, but a large majority. The ones who show up with no idea what they want to do, coast through four years to a general business or communications degree, and cheer for the football team are the ones who keep the coffers full.

It's not just the students who care about all of the fanciness.  The schools themselves, do, too.  The ranking systems monitor how much universities spend per-student on faculty, on buildings and grounds, on libraries.  And all schools care an awful lot about rankings, since rankings determine their ability to make money year-in and year out, i.e. future viability of the 'business.'

Some anecdotal proof:  I work at a university that just spent upwards of 40 mil last year on a new student center just so they could hit a certain spending target associated with the US News ranking.

See this if you're interested.
 http://www.usnews.com/education/best-colleges/articles/2013/09/09/how-us-news-calculated-the-2014-best-colleges-rankings?page=5

And we're all obsessed with rankings, and attending the "very very" best school, aren't we? Sigh.  It's another status-driven development, I suppose.

tomsang

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Re: My observations of early retirees
« Reply #19 on: February 03, 2014, 05:47:13 PM »
In real dollars most states put substancially more dollars in now vs then, even when adjusted for inflation. 

That is not factually correct in Washington State per the link that I provided and many other sources.  It also is not consistent with what I have seen for other states, so it is not factually correct at most public schools throughout the United States.  Do you have something to back this up?  I could see a few of the oil dependent states having excess dollars, but the vast majority of states have been slashing their education budgets over the last decade or two.
 

HappierAtHome

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Re: My observations of early retirees
« Reply #20 on: February 03, 2014, 05:54:23 PM »
Re: the point about not divorcing.

I think having a frugal spouse, and eventually parting ways, generally leaves you better off than having a spendy spouse and staying with them. I see this with my in-laws who are both frugal, sensible people and managed to build enough wealth that after divorcing, my FIL was still able to retire soon after 50.

In fact rather than "don't divorce", I'd say "only marry someone you can work with". Maybe they're already frugal, maybe they're open to becoming frugal, but if they're clearly messed up in their attitude to money (and/or life) you're setting yourself up for a world of pain.

galliver

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Re: My observations of early retirees
« Reply #21 on: February 03, 2014, 06:17:52 PM »
From above comment:
"The cost to educate a student has not increased significantly over the last twenty years in Washington State. The big change has been who is paying for "public" education. When I went to the University of Washington 20 years ago, the state paid 80% of the tuition and fees. Today they pay something like 20% because of budget cuts. So those that are saying that you paid your way through college, why can't this generation.  The answer is that you didn't pay your way through college. You paid 20%. Now we are expecting our kids to pay 80%. It still can be done, but it is apples and oranges at least in Washington.

Check out your state's funding. It may be eye opening.

I have had a couple of "student loan" carriers try to have me buy into this percentage based argument, but I think it is misleading and "jello-y".  The dollars actually put into schools by the states do not match the 80% down to 20%, or anything like a 60% swing in dollars spent.  In real dollars most states put substancially more dollars in now vs then, even when adjusted for inflation. 
The day when college campuses HR department found they had more "non teaching" administrators than actual folks that "teach".
I was 3 of 5 my parents put through- Dad did the math and my 4 years (only 4) from 74-78 room, board, tuition, books but (excluding beer)  came to $13,500 at Big State U.  I had no access to credit cards under my name, no rock climbing walls, institutional menu choices, no Bitter Woymn's Studies program cranking out the next generation of Starbucks barrista's... wait, we didn't have Starbucks!  Only an "endless cup of Joe served by a waitress named Flo".
I loved my college days and only really stopped acting like I was still in one as my daughters passed through their college years and I was embarrassing them!  This much I know, the delivers of education industry are in for a "newspaper" like reengineering by the time my grandkids arrive "...at Childhoods Gate"
[/quote]

Are you looking at per student? Because the absolute number of dollars may well have gone up; but so has enrollment. I agree with you on a lot of things: that simple options are no longer available, that there are too many administrators and offices, that some of this growth has been spurred by "free money" offered by student loans available to virtually everyone, and that admissions rates are now only limited by the ability of universities to create the facilities, not by any kind of achievement threshold.

But I wonder if you've done the math, or how it comes out for you. Your $13500 (1976) at Big State U would be $55k in 2013. That might be enough for 2 years at my school at 2013-2014 rates ($11k tuition, $14k room/board/fees/books)...if you're in Education or Liberal Arts and Sciences. Engineering is an extra $5k/year. Some scholarships might be available...$1.5k/yr. $5k/yr. Except military or perhaps some external organizations, chances at significant funding at [this] state school are pretty low. Note: I'm a grad student, so I actually get paid to be here, but I have friends and students who are trying very hard and I'm sure will still have loans.

How did it work out for your daughters? Did they live on campus? Did they never eat out or get coffee? Did they work full time? Did they get significant scholarships?

bikebum

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Re: My observations of early retirees
« Reply #22 on: February 03, 2014, 06:27:49 PM »
Just want to add to the comments about the College Experience.

I know of lots of people who took out massive loans to go to fancy colleges, and to study abroad. I graduated in 2010, and this was seen as normal at the time. Great to have adventures while you're young and free, but I don't think I'd have much fun knowing I had to pay for it later. Also, student loans are ridiculously easy to get; too easy IMHO.

My university built a HUGE recreation center which opened my senior year. Weight rooms, treadmills, ellipticals, rock climbing walls, swimming pools, hot tubs, indoor track and courts (you know, so you can run and play sports without being exposed to that harsh, outdoor air). I went there a few times, then went back to trail running, push-ups in the dirt, and pull-ups on tree limbs :)

Mr Mark

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Re: My observations of early retirees
« Reply #23 on: February 03, 2014, 06:51:22 PM »
The whole student loan thing is such a mess. Government subsidies encourage borrowing, free market exploits the loopholes,  schools, now facing richer students, spend to attract on useless but cool stuff, students - being young and immortal - borrow like hell and proceed to YOLO... in many cases aided and abetted by guilty guillible parents....

galliver

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Re: My observations of early retirees
« Reply #24 on: February 03, 2014, 07:18:58 PM »
This was like the third thread I've read that is getting derailed by "college these days" so I started a thread: https://forum.mrmoneymustache.com/welcome-to-the-forum/student-life-student-loans-costs-of-college-now-and-then-%27kids-these-days%27/

dragoncar

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Re: My observations of early retirees
« Reply #25 on: February 03, 2014, 09:27:34 PM »
This was like the third thread I've read that is getting derailed by "college these days" so I started a thread: https://forum.mrmoneymustache.com/welcome-to-the-forum/student-life-student-loans-costs-of-college-now-and-then-%27kids-these-days%27/

I'd be very surprised if we didn't already have such a thread

galliver

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Re: My observations of early retirees
« Reply #26 on: February 03, 2014, 09:51:53 PM »
This was like the third thread I've read that is getting derailed by "college these days" so I started a thread: https://forum.mrmoneymustache.com/welcome-to-the-forum/student-life-student-loans-costs-of-college-now-and-then-%27kids-these-days%27/

I'd be very surprised if we didn't already have such a thread

Well no one is using it and they keep talking about it elsewhere!

infogoon

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Re: My observations of early retirees
« Reply #27 on: February 04, 2014, 08:04:40 AM »
The whole student loan thing is such a mess. Government subsidies encourage borrowing, free market exploits the loopholes,  schools, now facing richer students, spend to attract on useless but cool stuff, students - being young and immortal - borrow like hell and proceed to YOLO... in many cases aided and abetted by guilty guillible parents....

And yet somehow there are people that think voucher programs are going to save K-12 education and not devolve into the same mess.

kolorado

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Re: My observations of early retirees
« Reply #28 on: February 04, 2014, 09:14:40 AM »
1.  Limiting family size.
2.  Modest homes.
3.  We were not saddled with huge student loans.
4.  Eating out is an occasional luxury. 
5.  While appropriate gear is the norm at these activities, all the latest gewgaws and gadgets are not.
6.  People seem to realize that it is not things that make you happy.
7.  He had very little worth stealing - after all if you spend lots of money on stuff you have to keep working to maintain it all.

These are very good observations. I only know two people who retired early.

 My FIL and MIL retired at 55 and 53. Their well-off but frugal parents funded their college education. I remember my MIL saying that her entire 4 years cost only $3000 in the late 60's. They had three children and put them through private school on a modest income from government(pension) and secretarial jobs. They also had the benefit of inheriting from parents on both sides and being able to buy extra years in the labor force to dramatically increase their pension and SSA payouts. They lived very modestly for 30 years in a 1000sq ft lake cabin then moved to my FIL's childhood home when his mother died. They used the furniture they'd bought in Japan(on a Navy salary) for 35 years. Now they are using the childhood home as furnished by grandmom in the 70's. BUT, they always spent a ton on food, both for home and eating out. They bought new cars and traded them in every 5 years although my FIL rode his bike to work at least 50% of the time. They loved their tv's and cable packages and portable gadgets. Early adopters of most everything. They go on cruises every year and not the cheapo Celebrity stuff either. 2013 was their month long Med cruise. So in their case I think the early retirement(in 2005)was a combination of wise parents, average saving, a little opportunistic wheeling and dealing, inheritances and timing.
 
 The other example is my grandparents. No college for either of them. Came from dirt poor. My grandpa worked in the fishing industry as a boat captain. This was back in the 50's-80's. There was actually pretty good money in that back then. My grandmother did not work. They had three kids and lived pretty poor until the late 60's. That's when my grandpa got his own boat and was able to buy a new property and put a double wide trailer on it. I grew up having no idea that it was a trailer, it was that nice inside and out. My grandpa had retired in the mid-80's(I think he was 50) and spent all his time after that "puttering". He did absolutely everything himself from replacing the metal roofing, to new siding, to the windows, porches, decks, carport, sheds, shop, sidewalks, carpeting, wiring, appliances, flooring.....he was amazing. And everything he put on his house that was "new" was actually something he'd bought at public auctions. He always bought used cars and kept them running. Never a payment. No eating out ever. My grandmom was an amazing cook. No gadgets except an old fashioned tv and cable for my grandmom and a few metal detectors for my grandpa(auction bought as well). Vacations were camping with friends in their used, no payment travel trailer. My grandmom didn't like traveling and my grandpa got his kicks on a small boat out in the bay on the weekends. Not a boat you buy from a dealer, but a decrepit boat he saw in someone's backyard, hauled home for nearly nothing and fixed up himself. He's always kept himself busy. He's in his 80's now but still goes to the auctions and buys the broken stuff for pennies and fixes them up, selling them through the free papers and through friends. This supplements their SS income, which is pretty much all they have. And they seem happy!

Personally, I really respect my in-laws, because they have done something the average family could not/would not do, and a lot of their success was their discipline and choices over a lifetime. But I'd rather be like my grandpa, to have ingenuity and creativity and be happy with keeping busy and with simple hobbies. So my hubby and I have combined these two ideas for our own plan. We could easily retire in 9 years if hubby would lean more toward my side but it was a stretch to get him to plan for retirement at 55. He's not creative and believes he will be bored to death without a job. But for now, that's the plan. Him 55 and me 48. :)
« Last Edit: February 07, 2014, 09:20:32 AM by kolorado »

quilter

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Re: My observations of early retirees
« Reply #29 on: February 04, 2014, 09:58:15 AM »
Well I am guessing what is the most relevant is how can people take the lessons learned and apply them to the realities of today. Obviously, university is very different than what it was when I went. Even when my kids went ten years ago. Pensions are rapidly disappearing. Medical premiums.  Ugh. Social security it seems to me to be something that our noble leaders can't wait to get their grubby hands on.

So how can you take from the past examples and apply them to the realities of today to move yourself forward is the real question.   The only way I can see is to live way below your means. 

MooseOutFront

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Re: My observations of early retirees
« Reply #30 on: February 04, 2014, 11:43:25 AM »
The only way I can see is to live way below your means.
It's the ultimate life hack.

Thegoblinchief

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Re: My observations of early retirees
« Reply #31 on: February 04, 2014, 02:59:02 PM »
I don't know any early retirees in my personal life. There's quite a few friends in my age group, however, who are fed up with consumerism and have plans to FIRE. Swapping tips with them is quite fun :)

I agree with most of the list of attributes, but I'd side with the pro-divorce camp. Or at the very least neutral on it. Emotional happiness and financial well-being are strongly interlinked. Clearly avoid marrying a spendthrift, but staying married to an also-frugal person if nothing else works about the relationship is bad advice.

SwordGuy

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Re: My observations of early retirees
« Reply #32 on: February 04, 2014, 06:33:08 PM »
Social security it seems to me to be something that our noble leaders can't wait to get their grubby hands on.

They did that in the 1960s.  That's why the SS trust fund is full of IOUs from the US Government to itself.  They money has already been spent.

Dicey

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Re: My observations of early retirees
« Reply #33 on: February 04, 2014, 09:49:42 PM »
[1.] Social security it seems to me to be something that our noble leaders can't wait to get their grubby hands on.
[2.] The only way I can see is to live way below your means.

I was really enjoying this thread, until I read the part about #1 "noble leaders". I wondered why someone had to interject politics into this discussion. I was surprised to see it was the OP. If I never post anything again, I'll be happy if people remember me for saying this: Politics has nothing to do with ER! Blaming politicians is just lip flapping. The way to FIRE or FI or RE is to learn the game (whoever's in charge) and then work around it. Period.

IMHO (and I'm FIRE, so I think it counts) #2 is the Holy Grail. It really doesn't matter how much you spend on houses, cars, boats or anything, as long as you live within your means and save enough to afford the lifestyle you chose.

Jack

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Re: My observations of early retirees
« Reply #34 on: February 04, 2014, 11:23:50 PM »
Even though I got into a lot of Ivy League schools for both undergrad and grad school, I turned them all down and went to the schools that gave me full rides. It seems most people don't do this.

Most people don't do this because they aren't offered full-ride scholarships, not because they're offered them and turn them down!

It's not just the students who care about all of the fanciness.  The schools themselves, do, too.  The ranking systems monitor how much universities spend per-student on faculty, on buildings and grounds, on libraries.  And all schools care an awful lot about rankings, since rankings determine their ability to make money year-in and year out, i.e. future viability of the 'business.'

...

And we're all obsessed with rankings, and attending the "very very" best school, aren't we? Sigh.  It's another status-driven development, I suppose.

Some of you guys are complaining about schools with "fancy" facilities as if the students have a choice. In my state, there was until very recently exactly one public university that offered engineering degrees. If you want to be an engineer, and you don't want to pay even more for out-of-state or private school tuition, you go there despite the ridiculous facility spending. (As of the last year or so there are now two... but the other one is the other major research university and therefore probably just as bad!)

(There are other public regional universities that offer "engineering technology" programs, but that means it takes twice as long to become eligible for a PE license. The only way to go there and then get a "real engineering" degree is to transfer to the above-mentioned "fancy" university after two years.)

quilter

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Re: My observations of early retirees
« Reply #35 on: February 05, 2014, 03:37:28 AM »
I don't know any early retirees in my personal life. There's quite a few friends in my age group, however, who are fed up with consumerism and have plans to FIRE. Swapping tips with them is quite fun :)

I agree with most of the list of attributes, but I'd side with the pro-divorce camp. Or at the very least neutral on it. Emotional happiness and financial well-being are strongly interlinked. Clearly avoid marrying a spendthrift, but staying married to an also-frugal person if nothing else works about the relationship is bad advice.

A very good point about divorce. Of course living a life in misery for the sake of an earlier FI seems bad. But it is important to try to work through the rough times if you can.

And Diane c, sorry to offend but even with retiring early, when we hit ss in a few years we can cover all of our necessary expenses just with ss, which will be about $30.000.  I wish those after us would have the same experience after being forced to pay in all those years.  Just another reality of modern financial life like the whole student loan thing and the ridiculous interest rates.  Unnecessarily needs a major work around.

« Last Edit: February 05, 2014, 03:41:33 AM by quilter »

Dicey

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Re: My observations of early retirees
« Reply #36 on: February 05, 2014, 11:47:21 AM »
And Diane c, sorry to offend but even with retiring early, when we hit ss in a few years we can cover all of our necessary expenses just with ss, which will be about $30.000.  I wish those after us would have the same experience after being forced to pay in all those years.  Just another reality of modern financial life like the whole student loan thing and the ridiculous interest rates.  Unnecessarily needs a major work around.

No worries and no offense, Quilter. I said I was "surprised", not offended. I used your comment and my reaction to make the point that blaming politicians is not useful, if one is set on achieving FIRE. The reason your SS will be enough for you is that you worked enough years and put enough into the system to earn $30k/year. You have obviously saved even more to allow you to live comfortably until you are old enough to start collecting SS. You have also honed your lifestyle so that you can live comfortably within your means. You learned the system, managed your wants, and made it work for you. Congratulations on your success!

As to the poor students, no one is forcing them to take out huge student loans. Many of them are doing it just because "that's what everyone does". There are loads of workarounds. Learning and utilizing them certainly would set those young'ns up with the skills to become FI and RE, whoever is in office and whatever happens with SS.

Unionville

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Re: My observations of early retirees
« Reply #37 on: February 05, 2014, 12:19:13 PM »
I am 50 and I am the only person I know who is an early retiree where I live.  It makes it tough for doing activities with friends who have to work all the time. Perhaps the area I live in is just too expensive for people to retire in.  I lucked out and got a 1/2 price ratty house and paid cash so our cost of living is almost zero.  I don't know anyone else whose house is paid for.

Unionville

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Re: My observations of early retirees
« Reply #38 on: February 05, 2014, 12:26:19 PM »
A lot of good points here indeed. I wanted to comment given that I am a more recent graduate, I graduated 5 years ago (did Bachelor and Master back to back). I graduated with no student loans and contribution from my parents was zero because they couldn't afford anything. Even though I got into a lot of Ivy League schools for both undergrad and grad school, I turned them all down and went to the schools that gave me full rides. It seems most people don't do this. When I got into Harvard for grad school I went to talk to the financial aid people to see if I can get any more scholarship money as I really wanted to attend. They told me no and that they see people all the time who turn down full rides in order to take out 200k in loans to go to Harvard. I really couldn't belive that and it shocked me. I went to the school that offered me the full ride.

During undergrad, I think more than 90% of students had cars. I went to a small college in a rural area, but I don't think a car was necessary. We were students and students are there to study, I never had to leave campus and on the few occasions that I had to, I always found a way to make it work. However, the majority of my class mates thought I was suffering undue hardship because I didn't have a car. Those same people went out to eat a lot, to parties, on spring break trips to Mexico etc. I didn't do any of that. Most of them didn't have jobs either even tough ON CAMPUS jobs were quite readily available. They were so plentiful that I managed to get 5 of them at the same time because nobody else seemed to want them. I made enough money for books and to fly home at Christmas (except the first year) to visit my family and to pay for occasional expenses. However, given that room and board and tuition were all covered by my scholarship, I had very few occasional expenses.

A note on books: most people I went to school with bought books from the campus book store. New books. They often cost more than $100 each. I ordered them used from Thailand (or wherever) on amazon. I paid maybe 10% of the original price. I even went around and told other people about this because I thought maybe they just don't know. But very rarely did anyone follow my advice. Seems they were happy to spend more than 1k on books each semester.

I never had a cell phone until junior year when I got a paid internship that required me to have one. And then I got some $10/month pre-paid plan. Most of my peers spent crazy amounts of money on unlimited plans.

So, my point is, yes, tuition has gone up A LOT and I think it is unsustainable. But I also think a lot of students these days are living a life of big spending and luxuries that I have never even afforded myself since I started working. There is a ton of unneccessary spending and I do think that this contributes to all the student loans people have.

Another case in point, I work close to a university. The local Starbucks is always packed with college students buying their lattes. This would never have occured to me! I don't think I ever even set foot into a Starbucks when I was in college. I also see a lot of High School students at Starbucks on their way to school. Somebody is giving them the money to buy their lattes...i.e. their parents. These are 15 year old kids buying at least one latte per day. When I was their age...and that wasn't THAT long ago...I wouldn't ever have had that kind of money. And for sure I wouldn't have dared to ask my parents for it because I know what the answer would have been. Just saying.

I wish your story could be published on front of the NYT.  You could teach a lot of parents and students a thing or two about college debt. Just from your story, I know that you are the type of person who will succeed at whatever you do.
« Last Edit: February 05, 2014, 12:28:44 PM by meteor »

soccerluvof4

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Re: My observations of early retirees
« Reply #39 on: February 05, 2014, 01:04:34 PM »
Scary....49 and have 4 kids starting college with the first one in 3.5 years. Hopefully i will be much more educated thanks to threads like this. It torments me everyday wanting to retire but also wanting to find that balance so there not in debt. Just shouldnt be at the cost of me not being able to fully retire. That and health care are my two biggest battles and yes i have read all the rational but not at ease with it yet.....just saying.

DB

ShortInSeattle

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Re: My observations of early retirees
« Reply #40 on: February 06, 2014, 02:24:07 PM »
1.  Limiting family size.
2.  Modest homes.
3.  We were not saddled with huge student loans.
4.  Eating out is an occasional luxury. 
5.  While appropriate gear is the norm at these activities, all the latest gewgaws and gadgets are not.
6.  People seem to realize that it is not things that make you happy.
7.  He had very little worth stealing - after all if you spend lots of money on stuff you have to keep working to maintain it all.

These are very good observations.

Good list. I'd add in that limiting car expenses seems to be a theme as well. I haven't run across many retirees who lease or drive the latest year's model.


quilter

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Re: My observations of early retirees
« Reply #41 on: February 10, 2014, 05:16:33 AM »
Soccerluv4, you have some time to work with your kids on how to avoid them getting into this enormous debt we are reading about. I had my kids young, and when they were college age I used to pick up extra shifts at the hospital to supplement them. DH also did some overtime and the kids worked. But they were not the type of extravagant students good life described

And yes shortinseattle, car costs seem to be a big part of what MMM constantly is pointing out. I know us having one older car has saved us a ton.

golden1

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Re: My observations of early retirees
« Reply #42 on: February 10, 2014, 06:50:30 AM »
My MIL and FIL as well as my great-aunt and uncle fit these rules perfectly, and when I began reading this blog, I often thought about how well the philosophy of this blog fits their life patterns. 

My MIL and FIL love children but only had two.  My FIL is highly educated but got burned out on social work when he was in his 30s.  He began buying houses in foreclosure and learned how to renovate houses as he worked on them.  He would sell them for a large profit or convert them into apartments.  He was essentially retired from full time work at that point because he was able to take large blocks of time off between renovations by keeping his costs low.  He also had lots of side hustles like teaching martial arts and adjunct teaching at local colleges.  They never bought new cars and always fixed whatever they could themselves.  Until recently, they only went out to eat a few times a year, and rarely travelled.  They were able to live in nice houses because they did all the work to renovate them.  They are both completely retired now (don't work at all) and are 60 and 65. 

My great aunt and uncle worked for 30 years as teachers and retired in their mid 50's.  They never had children and are also very frugal. 

Melody

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Re: My observations of early retirees
« Reply #43 on: February 11, 2014, 05:30:19 AM »
My parents are early retirees and meet these rules too :)

Regarding University, I am from Australia, but had the opportunity to take a (mostly scholarship funded) 6 month university study program in the USA. In Australia our standard BA's are 3 years not 4 and we are likely to live at home with our parents for the first year or two before moving into a share house (if you go to a prestigious university - these are all located in the inner cities - this will likely be four to six people sharing one bathroom in a house that might still have an outdoor toilet... at my university it wasn't this bad, but it was three of us in a smallish unit). Australian students are likely to be serving you drinks at a bar or working in a call centre for about 20 hours a week. We discussed ways to make Mee Goreng (like Top Ramen) more palatable and celebrated with box wine. If we don't know what we want to do with our lives we took a "gap year" (year off working, typically followed by a few months overseas using the money saved).
In America it seemed like everyone was living away from home, and no-one was working in the semester. Dorms were basic but you still got cooked for, cleaned up after and generally looked after which came at a way higher price than sharehousing and mee goreng. If people didn't know what they wanted to do with their lives they took "liberal arts courses" - it seemed like American's spent like money was no issue but Australian's were frugal.
(Yes, we still had student loans, but they were for course fees, not living expenses and we didn't take courses for the sake of "finding ourselves"). Probably an over generalization, but the differences stood out a lot to me at the time.

 

Wow, a phone plan for fifteen bucks!