Author Topic: A hypothetical game of sorts...  (Read 684 times)

Finallyunderstand

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A hypothetical game of sorts...
« on: July 25, 2019, 10:07:45 AM »
My friends and I had a discussion the other day that was sort of interesting and I'm curious what other people would say if they did something similar with their friends and if I can explain it correctly to relay what we did. 

If you and a few other friends were all told that you could pick any amount of annual compensation that would be given to you with no strings attached, how high of an amount would you choose without knowing what amounts your friends will choose?  You have to write down your number  in secret before it's shared with your friends.  There are two rules though:

         1) With the amount picked, if you win, you can no longer work and have to live solely off of that income for the rest
          of your life. Let's assume it's adjusted for inflation indefinitely.

         2) Out of the people  playing the game, only the person with the lowest amount will win.

It was a mental game of sorts to try to figure out how high you might want to go that would still be below your friends amount but high enough for you to be happy with.  I know this can vary drastically based on different groups of friends but it makes it interesting.

In our case the winning lowest amount was $95,950.

End of my pointless hypothetical game post.   


spartana

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Re: A hypothetical game of sorts...
« Reply #1 on: July 25, 2019, 12:22:52 PM »
$12,000/year. That's what I'd need to cover all my expenses. I doubt any of my spendy friends, even if they had low cost medical insurance and a low cost housing or paid off house like I do, would want to live on that amount. Throw in an extra $5000 or $6000 a year for a few months of travel and I'd be set. ETA I'm FIREd and live on about $18k - $24k/ year depending what I do that year - about half goes toward travel and fun stuff.
« Last Edit: July 25, 2019, 12:30:03 PM by spartana »

Villanelle

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Re: A hypothetical game of sorts...
« Reply #2 on: July 25, 2019, 12:30:13 PM »
This would rely entirely on the friends with whom I was playing. 

Also, it sounds like I could keep earning additional income and doing all the things I'd currently do, in which case my number would be much lower.  As I said, I'd base it partly on the people with whom I was playing, but if it was a small selection of random people about whom I knew nothing?  $16,000.  That's enough to be very meaningful, but less than I think most people would probably pick.  And it's also a small enough amount that I wouldn't be devastated if I didn't win. 

acepedro45

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Re: A hypothetical game of sorts...
« Reply #3 on: July 25, 2019, 03:09:58 PM »
Interesting concept...but I think both @spartana and @Villanelle misunderstood part of the premise.
Quote
...if you win, you can no longer work and have to live solely off of that income for the rest
          of your life.


Quote
…And it's also a small enough amount that I wouldn't be devastated if I didn't win.


It's a small enough amount that you'd be devastated if you did win! You'd be stuck living off of a pittance for the rest of your life.

I guess the correct strategy is to just pick your FIRE annual number, maybe adjusting up depending if you thought you were playing against Consumer Suckas. I'd probably pick a number a little lower than FinallyUnderstoods 95k.

Villanelle

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Re: A hypothetical game of sorts...
« Reply #4 on: July 25, 2019, 06:05:59 PM »
Interesting concept...but I think both @spartana and @Villanelle misunderstood part of the premise.
Quote
...if you win, you can no longer work and have to live solely off of that income for the rest
          of your life.


Quote
…And it's also a small enough amount that I wouldn't be devastated if I didn't win.


It's a small enough amount that you'd be devastated if you did win! You'd be stuck living off of a pittance for the rest of your life.

I guess the correct strategy is to just pick your FIRE annual number, maybe adjusting up depending if you thought you were playing against Consumer Suckas. I'd probably pick a number a little lower than FinallyUnderstoods 95k.

I definitely missed that part! My number was based on the fact that this would just be free, extra money, on top of any other income.  OP specifically said, "no strings attached".  I think, "you can't work or earn any other income" is a significant string, no? 


chemistk

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Re: A hypothetical game of sorts...
« Reply #5 on: July 26, 2019, 06:21:02 AM »
At face value it's an easy enough concept, but once you start to think about it, there are a lot of uncomfortable things that come with winning (and some questions).

So basically, if I win, I retire today - never having to work a day in my life. Great! Except my retirement goal is to continue to pick up gigs and odd jobs here and there to keep myself occupied, so that suddenly is out of the question unless I work for free. I also can't jump into an organization (helping friends with a business, lending technical expertise) unless I'm doing it completely out of the kindness of my heart. To never be handed a single penny for the rest of my life because of any work I did would be...difficult to explain.

Also, though I can't work, can my soldiers? If not, inflation would absolutely ruin everything. And if they can? Easy opportunity to set yourself up later on down the road.

What about selling my possessions? Am I to donate or discard everything I no longer want or need?

What about my wife/kids - are they still able to earn an income or is this a family based thing?

Ha, these are the questions I'd need clarified before I could formulate a response.

Supposing three strikes on my questions, I'd probably pick some number that's at least 2-3x my current annual expenses and sock all extra cash for later-in-life expenses, just so that I could maybe net out on inflation.

But if any or all of the three are fine, I'd pick some number that's marginally higher than my current annual expenses and then send my wife out the door as I don the SAHD hat.

BlueHouse

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Re: A hypothetical game of sorts...
« Reply #6 on: July 26, 2019, 07:38:04 AM »
I love this game and I'm going to play it with my friends and co-workers.  It's a non-threatening way to find out how much they think they can live on.  They'll never even realize how much information they're giving me. 

bwahahaha

Rosy

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Re: A hypothetical game of sorts...
« Reply #7 on: July 26, 2019, 08:01:14 AM »
Quote
You'd be stuck living off of a pittance for the rest of your life.
A pittance is relative:)

I'm one of those people who always want a little more - so being stuck with a finite number with no way to add or improve would feel uncomfortable. Heck, I'd even miss the coupons that save us a few bucks each month:).

Strangely enough, I do find myself in agreement with that $95K number for the two of us.
However, IRL we will be closer to $80-$86K when Mr. R. retires, plus paid off house.

spartana

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Re: A hypothetical game of sorts...
« Reply #8 on: July 26, 2019, 03:03:01 PM »
Interesting concept...but I think both @spartana and @Villanelle misunderstood part of the premise.
Quote
...if you win, you can no longer work and have to live solely off of that income for the rest
          of your life.


Quote
…And it's also a small enough amount that I wouldn't be devastated if I didn't win.


It's a small enough amount that you'd be devastated if you did win! You'd be stuck living off of a pittance for the rest of your life.

I guess the correct strategy is to just pick your FIRE annual number, maybe adjusting up depending if you thought you were playing against Consumer Suckas. I'd probably pick a number a little lower than FinallyUnderstoods 95k.
No I didn't miss it. I'm FIREd and was easily able to live on $500/ month to cover all my base expenses with no debt, paid off house that while in a HCOL coastal SoCal had very low prop taxes, insurance, repairs and utilities), no kids, free medical thru the VA and single. I then added in another $500/ month or so for travel, fun stuff or any car or house repairs I needed. I did that for many years (living on $1000 while working and investing the rest of my income and then in RE) and found it to he a very easy and fun life. Eventually sold and downsized my house and invested the extra money so can have a higher spend if I want. To be honest there really isn't that much that I've wanted that I can't get on $12k/ year. I haven't worked in over a decade.

Now if the OP said "if you are starting out with nothing - no house you could sell or rent out or get roommates, no investments, pension, inheritance or social security you could get later, no spouse or SO who's income you can share - how much would you need each year to cover all your expenses without ever earning money again" my answer would probably be different but not by a huge amount. Maybe $24k/year.
 
« Last Edit: July 26, 2019, 03:23:56 PM by spartana »

affordablehousing

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Re: A hypothetical game of sorts...
« Reply #9 on: July 26, 2019, 03:39:20 PM »
I think this game, in some ways, reveals the whole spectrum of how people approach this forum. For me it made me realize I just like coming here to feel comfortable talking to other people about money and in striving to feel secure, not that I have any real interest in not working. Like a great mathematical proof I think you distilled it all down to the perfect variables here - what they need to live on, which for many on this forum is irrelevant (or just an illusory idea) and what money, life experience or other they'd be worried about missing out on, the WIIMO factor (what if I missed out).


spartana

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Re: A hypothetical game of sorts...
« Reply #10 on: July 26, 2019, 04:31:59 PM »
I think this game, in some ways, reveals the whole spectrum of how people approach this forum. For me it made me realize I just like coming here to feel comfortable talking to other people about money and in striving to feel secure, not that I have any real interest in not working. Like a great mathematical proof I think you distilled it all down to the perfect variables here - what they need to live on, which for many on this forum is irrelevant (or just an illusory idea) and what money, life experience or other they'd be worried about missing out on, the WIIMO factor (what if I missed out).
I always like these kind of questions too - they are fun and informative. But like other similar questions here the answer is just to dependent on everyone's individual circumstances. Where do you live? How do you live (own, rent, share, a van down by the river)? How many kids? Debt? What's your medical costs? What do you have now? Etc. Just to many variables to put a real number on.  But still fun.