Author Topic: Lifestyle Inflation  (Read 8242 times)


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Lifestyle Inflation
« on: March 22, 2012, 04:48:46 PM »
What is the general consensus of lifestyle inflation once one has reached the level of FI? Or in other words, lifestyle inflation based on income other than earned. While obviously, spending now while attempting to achieve FI doesn't work very well. But at the same time, once FI is reached, gobs of extra money will quickly start showing up unless someone literally sits at home doing nothing all day (highly unlikely). So I guess the question I'm posing is at what level would one feel comfortable in starting to say enjoi a restaurant dinner instead of cooking at home or taking an all-inclusive vacation, etc.?


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Re: Lifestyle Inflation
« Reply #1 on: March 22, 2012, 04:54:21 PM »
So I guess the question I'm posing is at what level would one feel comfortable in starting to say enjoi a restaurant dinner instead of cooking at home or taking an all-inclusive vacation, etc.?

I anticipate the same level after FI as now.  I don't deprive myself now, but do what I enjoy.  Very little would change if I won the lottery.

(EDIT: the only thing I can think of that would change is we'd have kids now, instead of waiting another two years or so. /END EDIT.)

One who deprives themselves and sacrifices a lot now may have a different answer.

Hopefully in the meantime you learn to enjoy the simple things, enjoy cooking at home over eating out, enjoy looking for the best deal on a vacation, etc.  Then those things aren't bad things, and may likely stay after FI.

If you are at the level of making lots of sacrifices now, I'd actually say ease off the gas when you get close to FI (if not right away) and live the life you want - conscious decisions, yes, but also not one of lacking.  Better to achieve FI at a happy medium than achieving it quickly, and having expenses jump after due to desires.
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Re: Lifestyle Inflation
« Reply #2 on: March 22, 2012, 05:07:23 PM »
We have chosen a lifestyle consumption rate that will not get us to FI in five years, and we have done so with the expectation and acknowledgement that we will work longer than that.  We've decided it is better for us to live the way we want to live and work a few years longer in order to maintain a constant lifestye, rather than drastically cut back now, retire sooner, and live with the reduced lifestyle forever.

I think the important thing is to have a plan.  Plot out your lifetime earnings and lifetime expenses, and see how long you will need to work to support a given level of consumption.  For some people, that will mean living in an RV and spending $7k/year.  For others, it will mean going to a cubicle farm for 20 years to pay for fancy toys.  As long as you recognize the trade-offs you are making in sacrificing your time to pay for those expenses, then you are free to choose.

Sadly, most people never see the choices they make as choices, and just assume that working til 62 and then retiring in poverty is the only viable path.


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Re: Lifestyle Inflation
« Reply #3 on: March 22, 2012, 09:24:56 PM »
We intend to have a higher passive income when we "retire" than our current total income, savings included. As I've mentioned elsewhere on this forum, our plan is to give the majority of any excess to others- family, churches, charities, the less fortunate, etc.

To answer the second half of your post, about gobs of extra money, that's not something I'm counting on for several reasons, the two big ones being:
-I'm a clergy person in a denomination whose average church does not have a lot of money. If we were FI, I would be more than happy to volunteer my services to a congregation in need (I'm doing it right now, and we're far from FI).
-My plan for "being productive" post-FI is to focus a lot of my attention on research and writing. While it's possible that a book I write could produce a significant income, it's equally possible that my annual royalty checks will barely cover the cost of maintenance and supplies for my typewriter (yeah, I use one of those).

So, I could draw a significant salary from a church, write a NYT Best Seller, and be rolling in millions of mustaches, but it's not something I'm counting on, or worrying about.