Author Topic: How Far Can My Money Mustache Go?!  (Read 948 times)

Classical_Liberal

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How Far Can My Money Mustache Go?!
« on: December 28, 2017, 11:27:42 PM »
This is a 2018 challenge designed for folks somewhere in the middle of their FIRE journey, although anyone can play.

The challenge is to see how far past expectations you can stretch your current FIRE budget. 

For example: Someone with a goal of 1 million and 4%WR of 40K.  This person ended 2017 with 500K in savings. Half way there!  This person would expect to get through June 2018 on 20K, but how much further can s/he stretch it?  10 days?... 60 days?

I think it will feel empowering and motivating as we actually live through the weeks or months in which our Money Mustache pays the bills.  Hopefully we will cut down on spending, and maybe a person or two will realize they can call it quits earlier than they thought. 

Basic Rules: 
  • All monthly costs are assessed to spending on the day you pay them.
  • Credit Card purchases are assessed on the day you make them, not the day you pay the bill.
  • Known annual lump sum costs (ie property taxes) should be treated as monthly, due on the 1st of each month.
  • Known long-term maintenance costs (ie new roof) can be annuitized to their known monthly costs EDIT: or if you have a line item in your budget for ongoing maintenance/replacement costs simply use that amount, not the total cost this year.  These "budgeted costs" are due on the 1st of each month.
  • Large, completely unexpected, but necessary expenses can be treated as a monthly bill, due on the 1st of each month(ie new car transmission in January $2400= $200 a month).
  • Large consumer purchases (ie the new mattress I really wanted), must be counted in full at time of purchase.
  • Anyone planning to transition to part time work (I'll probably be one of them) Can NOT use this anticipated income for the challenge.  Sorry, the challenge is to see how far we can get without work
  • Legitimate hobby income earned through enjoyable activities (post tax); if plan is to continue in RE, this can be used to offset spending (ie a $500 for playing a gig at the local bar comes off total spend). Criterion for this is personal, if you are truly doing it for fun, not money, it's in.
  • Rental income (net) will be treated just like passive investment income.
  • Pensions can not be included as income, but may be considered part of your plan. Meaning, if you plan to FIRE on a 6% WR because you will have a substantial pension at 60, then use the 6%WR as your base for calculating.

Wow, after some thought, the rules got more complex than I wanted... However, all of this to try and even things out and make it as realistic as possible. If anyone has other suggestions, let me know.   
« Last Edit: December 29, 2017, 04:34:26 PM by Classical_Liberal »

Classical_Liberal

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Re: How Far can my Money Mustache Go?!
« Reply #1 on: December 28, 2017, 11:33:33 PM »
As of today I have 34% of my FI  funded through liquid, passive investments.  This means I should be able to get 365*.34= 124 days of 2018 covered with my current stache.  This takes me to May 4th, 2018. 

My Bday is May 25th, so this is a minimum goal.  I think its possible to make it through the entire month of June if I buckle down, so this will be my stretch goal.

2018 YTD spending is nada, cause it's still 2017.

2Birds1Stone

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Re: How Far Can My Money Mustache Go?!
« Reply #2 on: December 29, 2017, 07:19:30 AM »
Entrant #2

I Love this challenge. Will edit this post with my specifics.

Basic FIRE Stache Goal - $600k
Current Stache - $360k
% to Goal - 60%
Days covered - 219
Stache should cover me through August 8th 2018

I'm not sure how far I can stretch it, as the $600k amount is already quite low by most standards here (and high by ERE standards lol)

I will aim to get to Sept 1.

Do I count vehicle depreciation? It's a line item cost in my monthly updates for my journal here.
 
« Last Edit: December 29, 2017, 07:23:29 AM by 2Birds1Stone »

Classical_Liberal

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Re: How Far Can My Money Mustache Go?!
« Reply #3 on: December 29, 2017, 04:29:01 PM »
@2B1S 

I've noticed that line item in your budget before. 

I had originally posted to annutize large expected expenses because I didn't want someone who has expensive, planned maintenance/replacement costs which show up early in the year get screwed and have to count it all up front.  I think I may delete that rule and just make it up to the individual. 

Someone may have a monthly budget line item for home maintenance, car replacement, or whatever.  If you'd rather use those budget costs, I see no problem with it.  Personal accounting on such things can get murky.