Race from $2M to $4M...and Beyond!

[Dicey]

This sounds braggy, so of course I'm going to post it here...

DH and I were playing with Rich, Broke, or Dead the other day. We discovered that we could theoretically spend 40% more per year than we do now (and we're not suffering by any means) without running out of money. Just for grins, I added in a one-time expenditure of $250k to buy the fancy-pants RV we saw at the RV show and still had a 100% success rate.

Mind blown.

Don't worry, we won't be buying a new $250k RV, but five years from now, we might start watching for a gently used one. Our current rig will be 18 years old by then. We bought it the same way.

[Much Fishing to Do]

This sounds braggy, so of course I'm going to post it here...

DH and I were playing with Rich, Broke, or Dead the other day. We discovered that we could theoretically spend 40% more per year than we do now (and we're not suffering by any means) without running out of money. Just for grins, I added in a one-time expenditure of $250k to buy the fancy-pants RV we saw at the RV show and still had a 100% success rate.

Mind blown.

Don't worry, we won't be buying a new $250k RV, but five years from now, we might start watching for a gently used one. Our current rig will be 18 years old by then. We bought it the same way.

Rich, Broke, or Dead is the worst.  I can often come up with a strategy that prevents broke, but that Dead curve is pretty persistent.

[Dicey]

This sounds braggy, so of course I'm going to post it here...

DH and I were playing with Rich, Broke, or Dead the other day. We discovered that we could theoretically spend 40% more per year than we do now (and we're not suffering by any means) without running out of money. Just for grins, I added in a one-time expenditure of $250k to buy the fancy-pants RV we saw at the RV show and still had a 100% success rate.

Mind blown.

Don't worry, we won't be buying a new $250k RV, but five years from now, we might start watching for a gently used one. Our current rig will be 18 years old by then. We bought it the same way.

Rich, Broke, or Dead is the worst.  I can often come up with a strategy that prevents broke, but that Dead curve is pretty persistent.

To paraphrase our dear Metalcat, death is not a surprise, it is the expected outcome. My goal is to have as much fun as possible before the inevitable happens.

[Exflyboy]

@Dicey I had to stop looking at the RBD calculator.. Keeps telling me to spend outrageous sums o' money.. I don't like spending money!.. I like imagining this pile of one dollar bills that represents the stash and wondering if Walter White would be impressed?.. nope!

Our pensions + SS are going to be roughly twice our annual spend as it is.. I just can't think about it.. I'm just going to continue to look at menu prices..:)

[jeroly]

This sounds braggy, so of course I'm going to post it here...

DH and I were playing with Rich, Broke, or Dead the other day. We discovered that we could theoretically spend 40% more per year than we do now (and we're not suffering by any means) without running out of money. Just for grins, I added in a one-time expenditure of $250k to buy the fancy-pants RV we saw at the RV show and still had a 100% success rate.

Mind blown.

Don't worry, we won't be buying a new $250k RV, but five years from now, we might start watching for a gently used one. Our current rig will be 18 years old by then. We bought it the same way.

I have the same problem with the Bogleheads' Variable Percentage Withdrawal calculator, which tells me I should be spending about 40% more than the already ridiculously spendy amount I'm currently spending. 

[dividendman]

This sounds braggy, so of course I'm going to post it here...

DH and I were playing with Rich, Broke, or Dead the other day. We discovered that we could theoretically spend 40% more per year than we do now (and we're not suffering by any means) without running out of money. Just for grins, I added in a one-time expenditure of $250k to buy the fancy-pants RV we saw at the RV show and still had a 100% success rate.

Mind blown.

Don't worry, we won't be buying a new $250k RV, but five years from now, we might start watching for a gently used one. Our current rig will be 18 years old by then. We bought it the same way.

I have the same problem with the Bogleheads' Variable Percentage Withdrawal calculator, which tells me I should be spending about 40% more than the already ridiculously spendy amount I'm currently spending.

The good thing about that Boglehead sheet is that it also tells you what could happen in a worst case (if the worst is as bad as the past) scenario.... I don't even spend that much though so...

[EscapeVelocity2020]

That’s what’s nice about being in this cohort, I don’t look at calculators anymore.  Maybe if we have a massive, long lasting drawdown….  Otherwise I have the FI superpower of spending whatever I want and having more money a year from now.

Like Forest Gump, now that I don’t have to worry about money, I worry about real problems!

[Exflyboy]

@EscapeVelocity2020 You can cut that grass for free.. Or pay somebody else to do it!..:)

[Dicey]

@Dicey I had to stop looking at the RBD calculator.. Keeps telling me to spend outrageous sums o' money.. I don't like spending money!.. I like imagining this pile of one dollar bills that represents the stash and wondering if Walter White would be impressed?.. nope!

Our pensions + SS are going to be roughly twice our annual spend as it is.. I just can't think about it.. I'm just going to continue to look at menu prices..:)

Oh, shit! I forgot about Social Security. Hmmm, I didn't include rental income either. What's a Mustachian to do?

[Fomerly known as something]

@Dicey I had to stop looking at the RBD calculator.. Keeps telling me to spend outrageous sums o' money.. I don't like spending money!.. I like imagining this pile of one dollar bills that represents the stash and wondering if Walter White would be impressed?.. nope!

Our pensions + SS are going to be roughly twice our annual spend as it is.. I just can't think about it.. I'm just going to continue to look at menu prices..:)

I still look at menu prices, I will always look, at menu prices.  But I for example on my hotels in Florence and Milan this coming September, when I hesitated, I also asked myself if you don’t spend it here why did you work for it to begin with.  That does not mean price still isn’t a conservation, but it’s raise my “no price” a bit higher on things like that.

 I’m also semi minimalist.  Which means I just don’t like to buy a lot of stuff.  This allows me to say when I decide I want a new dress. I just buy the dress, I don’t look for the best deal, I don’t need to look for the best deal, I don’t want to spend the time to look for the best deal.  I have decided to buy the dress and therefore I will so long if it’s “reasonable” in my mind.

[Fomerly known as something]

And Dicey made me go play with RBD.  I’m at 94-100% with the planned spending I have in theory starting next month.  Note I my “planned spending’ isn’t necessarily what I will spend, it’s a number on paper which is more than I’ve ever spent.

[tooqk4u22]

I would really like to be in this club plus a pension that covers most or all of my living expenses....that is pretty hard to screw that up. Not sure why anyone would worry about anything with that combination.   

[BeanCounter]

Am I the only one in this group that is seriously considering leaving the principal to their heirs? Maybe this is a silly goal but I think unless something unforeseen happens, it’s highly likely we’ll leave behind a large sum of money. So it might make sense to just plan for that and leave my future generations some sort of basic income. Then they can pursue any career they want and not have to consider how much money they will make.

[secondcor521]

Am I the only one in this group that is seriously considering leaving the principal to their heirs? Maybe this is a silly goal but I think unless something unforeseen happens, it’s highly likely we’ll leave behind a large sum of money. So it might make sense to just plan for that and leave my future generations some sort of basic income. Then they can pursue any career they want and not have to consider how much money they will make.

How much to help the next generation usually comes down to (a) how you feel about what the previous generation(s) left you, and (b) how much you have and will have left over.

I don't *plan* to leave a large sum of money behind, but it won't bother me much if I do because I like my three kids and I think they could handle it well.  Because of late in life uncertainties and compounding, it's a little difficult *not* to leave behind at least something.

You might be interested in the concepts in the book "Die With Zero".  The parts I remember basically talk about gifting to the next generation earlier in life rather than holding on to everything until one passes.  I generally agree with those concepts and am implementing them myself.

[tooqk4u22]

Am I the only one in this group that is seriously considering leaving the principal to their heirs? Maybe this is a silly goal but I think unless something unforeseen happens, it’s highly likely we’ll leave behind a large sum of money. So it might make sense to just plan for that and leave my future generations some sort of basic income. Then they can pursue any career they want and not have to consider how much money they will make.

I am not planning for it but at some point I hope to have to plan for it.  It is kind of hard for me to plan for legacy when I still am planning/worrying about the 4% 3% rule 😒😁

Even if it becomes apparent that we are well beyond SORR and expenses haven't gone crazy and becomes obvious that there will be a large pot at the end of the rainbow I think I would then be planning on how to spend more on them (to help or enjoy) while we are still alive.  If we die at 80 and they are 50 the extra money may be great for them but hopefully by then they are well along on their path to wealth. 

I would rather give them out at an earlier stage (you know those mid-20s to 40s when there are a lot of time and money obligations and not enough time and money to go around) maybe down payment for a house, or take them on a family vacation that they otherwise might not be able to afford, put money into their kids college accounts, etc.

[BeanCounter]

Am I the only one in this group that is seriously considering leaving the principal to their heirs? Maybe this is a silly goal but I think unless something unforeseen happens, it’s highly likely we’ll leave behind a large sum of money. So it might make sense to just plan for that and leave my future generations some sort of basic income. Then they can pursue any career they want and not have to consider how much money they will make.

I am not planning for it but at some point I hope to have to plan for it.  It is kind of hard for me to plan for legacy when I still am planning/worrying about the 4% 3% rule 😒😁

Even if it becomes apparent that we are well beyond SORR and expenses haven't gone crazy and becomes obvious that there will be a large pot at the end of the rainbow I think I would then be planning on how to spend more on them (to help or enjoy) while we are still alive.  If we die at 80 and they are 50 the extra money may be great for them but hopefully by then they are well along on their path to wealth. 

I would rather give them out at an earlier stage (you know those mid-20s to 40s when there are a lot of time and money obligations and not enough time and money to go around) maybe down payment for a house, or take them on a family vacation that they otherwise might not be able to afford, put money into their kids college accounts, etc.

Yes. Good point. We are currently paying for lots of private school tuition and one kid is on a school trip through Europe and I hope his younger brother will do the same. We’ve also spent lots of money on family vacations. I think college is pretty well covered depending on what they decide to do. As our expenses on all those things decrease we would like to increase our annual cash support if possible. But I’d like to leave a legacy even to their kids. Not enough to not work but just enough annual income to give them lots of options.

Because the reality is we likely have no real desire to spend it down. I’m sitting here on my patio listening to our water feature trickle and I can’t imagine ever needing anything else in life.

[Fomerly known as something]

Am I the only one in this group that is seriously considering leaving the principal to their heirs? Maybe this is a silly goal but I think unless something unforeseen happens, it’s highly likely we’ll leave behind a large sum of money. So it might make sense to just plan for that and leave my future generations some sort of basic income. Then they can pursue any career they want and not have to consider how much money they will make.

I’m SINK, I have no heirs.  Planning is different for us.  Standard financial planning does have this as a component.

[tooqk4u22]

Am I the only one in this group that is seriously considering leaving the principal to their heirs? Maybe this is a silly goal but I think unless something unforeseen happens, it’s highly likely we’ll leave behind a large sum of money. So it might make sense to just plan for that and leave my future generations some sort of basic income. Then they can pursue any career they want and not have to consider how much money they will make.

I am not planning for it but at some point I hope to have to plan for it.  It is kind of hard for me to plan for legacy when I still am planning/worrying about the 4% 3% rule 😒😁

Even if it becomes apparent that we are well beyond SORR and expenses haven't gone crazy and becomes obvious that there will be a large pot at the end of the rainbow I think I would then be planning on how to spend more on them (to help or enjoy) while we are still alive.  If we die at 80 and they are 50 the extra money may be great for them but hopefully by then they are well along on their path to wealth. 

I would rather give them out at an earlier stage (you know those mid-20s to 40s when there are a lot of time and money obligations and not enough time and money to go around) maybe down payment for a house, or take them on a family vacation that they otherwise might not be able to afford, put money into their kids college accounts, etc.

Yes. Good point. We are currently paying for lots of private school tuition and one kid is on a school trip through Europe and I hope his younger brother will do the same. We’ve also spent lots of money on family vacations. I think college is pretty well covered depending on what they decide to do. As our expenses on all those things decrease we would like to increase our annual cash support if possible. But I’d like to leave a legacy even to their kids. Not enough to not work but just enough annual income to give them lots of options.

Because the reality is we likely have no real desire to spend it down. I’m sitting here on my patio listening to our water feature trickle and I can’t imagine ever needing anything else in life.

That reminds me....I need a water feature to listen to!  There goes the legacy haha.

[EscapeVelocity2020]

Am I the only one in this group that is seriously considering leaving the principal to their heirs? Maybe this is a silly goal but I think unless something unforeseen happens, it’s highly likely we’ll leave behind a large sum of money. So it might make sense to just plan for that and leave my future generations some sort of basic income. Then they can pursue any career they want and not have to consider how much money they will make.

How much to help the next generation usually comes down to (a) how you feel about what the previous generation(s) left you, and (b) how much you have and will have left over.

I don't *plan* to leave a large sum of money behind, but it won't bother me much if I do because I like my three kids and I think they could handle it well.  Because of late in life uncertainties and compounding, it's a little difficult *not* to leave behind at least something.

You might be interested in the concepts in the book "Die With Zero".  The parts I remember basically talk about gifting to the next generation earlier in life rather than holding on to everything until one passes.  I generally agree with those concepts and am implementing them myself.

+1 - we are trying to do most of our gifting and active inheritance management now and while the kids are under 30.  They have no idea of our HH NW, but will not have school debt, have had good international experiences, and should even get nice down payments on homes...  The actual inheritance strategy is so far off, with tax situations and NW situations being unpredictable, so we focus more on the here and 'now' (within the next decade)...

[Turtle]

My kids have already inherited from another family member, so I am not considering doing any sizable gifts in the immediate future.  No grandkids yet, but that is the generation I am planning on helping with; safest car seats, cost difference for better daycare, swim lessons, 529 funding, etc.

As someone mentioned above, one of my goals is to leave the principal roughly intact.  It’s going to be split 5 ways, though, so the pieces will not enough for anyone to retire on alone but will help get them over the finish line if they are running behind.

[jeroly]

The good thing about that Boglehead sheet is that it also tells you what could happen in a worst case (if the worst is as bad as the past) scenario.... I don't even spend that much though so...

I think that the default settings in the VPW spreadsheet hypothesize only a 30% drawdown which doesn't feel close to a worst case for me; I changed it to 90%.  I'd still be more than okay (assuming that SS is still around and paying the currently promised amount) at my current spending level.

[tooqk4u22]

The good thing about that Boglehead sheet is that it also tells you what could happen in a worst case (if the worst is as bad as the past) scenario.... I don't even spend that much though so...

I think that the default settings in the VPW spreadsheet hypothesize only a 30% drawdown which doesn't feel close to a worst case for me; I changed it to 90%.  I'd still be more than okay (assuming that SS is still around and paying the currently promised amount) at my current spending level.

That's pretty good, but if we have a 90% drawdown I don't think I will be able to handle it....definitely will be freaking out.

[couponvan]

And here I am buying my 99 year old grandma (4’11”-so don’t say thrift stores) enough clothes to last 2 weeks without washing. Reverse assistance because she won’t buy them for herself. I’m not talking Chanel, but Kohls. Feels good. Better than buying my teen clothes.

[Fomerly known as something]

And here I am buying my 99 year old grandma (4’11”-so don’t say thrift stores) enough clothes to last 2 weeks without washing. Reverse assistance because she won’t buy them for herself. I’m not talking Chanel, but Kohls. Feels good. Better than buying my teen clothes.

My mom did this for my Grandmas.

[tooqk4u22]

And here I am buying my 99 year old grandma (4’11”-so don’t say thrift stores) enough clothes to last 2 weeks without washing. Reverse assistance because she won’t buy them for herself. I’m not talking Chanel, but Kohls. Feels good. Better than buying my teen clothes.

My mom did this for my Grandmas.

This is the kind of freedom that we should strive for, that is great.  Once you can fund your lifestyle (whatever that means and probably should include the ability to help people out here and there) anything more than has more impact if used for such purposes vs more lifestyle inflation. 

[couponvan]

And here I am buying my 99 year old grandma (4’11”-so don’t say thrift stores) enough clothes to last 2 weeks without washing. Reverse assistance because she won’t buy them for herself. I’m not talking Chanel, but Kohls. Feels good. Better than buying my teen clothes.

My mom did this for my Grandmas.

My mom is the worst about shopping, but my sister and I wear the same size as my mom so my sister and I call the “hand me ups” to her.

[catccc]

So, I came here to post that as of recently, we are $3 millionaires.  Which is a little exciting, but also, since we've been through million dollar milestones before, also not that exciting.  Having been on the cusp of $3M for what feels like a long while with volatile markets, it's nice to have crossed it.

On other recent topics, I'm 4'11" (actually, 4' 10.5", so not quite) and I love a thrift store more than shopping new!  I actually also thought once I'd make an appointment with a personal shopper at Nordstrom and see if extra $$ and a professional could buy a better fit.  Nope.  Back to goodwill. 

Also, my two teen daughters and I, though pretty different sizes, can manage to wear almost all the same size clothing.  Turns out 4'11"/99 lbs, 5'3"/110 lbs, 5'4"/90 lbs aren't that different.  We call passed around stuff "hand me overs."

[couponvan]

Congrats catccc! $3 million is the inflection point for most people here. I think if she had any stamina it would be ok for a thrift shop, but since she can’t try them on or go there, it’s much harder.

[FireLane]

So, I came here to post that as of recently, we are $3 millionaires.  Which is a little exciting, but also, since we've been through million dollar milestones before, also not that exciting.  Having been on the cusp of $3M for what feels like a long while with volatile markets, it's nice to have crossed it.

Congrats on the big milestone! My investments keep almost reaching the $3M mark, then falling back. Some days it feels like the market is deliberately teasing me.

[Geppetto]

Am I the only one in this group that is seriously considering leaving the principal to their heirs? Maybe this is a silly goal but I think unless something unforeseen happens, it’s highly likely we’ll leave behind a large sum of money. So it might make sense to just plan for that and leave my future generations some sort of basic income. Then they can pursue any career they want and not have to consider how much money they will make.

I assume that my wife and I will leave an inheritance, but it's more of a side effect than a goal for us. We're in our forties, and although we're the opposite of snowplow type parents, we want to maintain a really strong financial backbone throughout our kids' launch phases so that we can deal with whatever exigencies come along without financial worry. And then we want to be financially secure ourselves for the rest of our lives. If we accomplish those things, we'll die with lots of money unavoidably.

Our hope is our kids will not need it but will be ready to put it to good use. We'll also make testamentary provision for favored charitable causes once there's guaranteed "extra" to divert (as we do annually now).

I don't see anything wrong with having a goal of leaving a financial legacy. Maybe that'll become more of a goal of ours, especially if our kids turn out respectable and not greedy.

[ROF Expat]

Congrats catccc! $3 million is the inflection point for most people here. I think if she had any stamina it would be ok for a thrift shop, but since she can’t try them on or go there, it’s much harder.

Just out of curiosity, what makes you say that $3m is an inflection point? 

For me, the points that seemed significant were when I realized that my investments were generating more per year than I was saving/investing, and when they started generating multiples of that amount.  I realize that people have different experiences, so I'm interested in what other people feel are significant inflection points or milestones. 

[couponvan]

Congrats catccc! $3 million is the inflection point for most people here. I think if she had any stamina it would be ok for a thrift shop, but since she can’t try them on or go there, it’s much harder.

Just out of curiosity, what makes you say that $3m is an inflection point? 

For me, the points that seemed significant were when I realized that my investments were generating more per year than I was saving/investing, and when they started generating multiples of that amount.  I realize that people have different experiences, so I'm interested in what other people feel are significant inflection points or milestones.

Most MMM peeps spend less than $80K per year (I have no “facts” to support this comment-just what I read about budgets).  Even FIREd, the money grows more than they spend and compounds. More OMY in this $3 million group too, so it grows even more in that OMY/TMY. $120K stash earning, while adding another $80-$100K in savings. The needle moves up quickly. You might also feel able to take financial risks that add extra rewards once you have $3 million saved.

[2sk22]

For me, the points that seemed significant were when I realized that my investments were generating more per year than I was saving/investing, and when they started generating multiples of that amount.  I realize that people have different experiences, so I'm interested in what other people feel are significant inflection points or milestones.

When you realize that the daily swings in the value of your investments are the cost of a new car :-)

After much dithering, I recently bought a new Honda CR-V hybrid to replace the old CR-V that I gave to my daughter. $40k seemed like a huge amount until I realized that there have been many days in the past year when the value of our investments have swung by that amount. I showed a graph of our net worth to my wife and asked to her to see if she could spot when we bough the car - she couldn't!

[Exflyboy]

@catccc Congrats of the $3M million mark! Money does seem to be increasingly irrelevant going forward. Irrelevant to the point where its this vague big number that one can't emotionally attach oneself too anymore... Its still relevant when it comes to paying $20 for lunch!.. Like.. HOW MUCH?.. I'm not paying that..:).


@tooqk4u22  As to "worrying" about the situation where pensions and SS = 2X current spending, PLUS a ridiculous stash... I don't think its about "worry" its a culmination of a lifetime of saving hard and simply not being able to break the habit. I mean, yes there are lots of highly unlikely scenarios that could mean all of our wealth could vaporize, but I don't even think it's that.

Its more about this large number is in our accounts but I don't hardly ever look at it because its just not relevant to daily living. What IS relevant is looking at the difference in cost between "economy" and "business class" to the UK and realizing that the same plane goes to the same place so $10,000 for 2 tickets vs $1500 is just a wasteful use of resources.

Of course part of this is habit, partly imposter syndrome etc.. How did a boy that grew up in poverty end up with enough money that I simply won't spend it.

But then why am I trying so hard to turn lazy ungrateful nieces and Nephews into millionaires one day?

[itchyfeet]

I hear you on the business class.

When I set my number it included being able to pay for an annual business class flight from Australia to Europe, or the Americas. Now I can afford it there is now way I can bring myself to spend that much on airfares. Haha.

I have flown long haul business class and first class so many times (work travel and related upgrades) and Flying for 24 hours is still crap no matter how much it’s dressed up. Business class a has lost its aura a bit. As we will have the time post Fire (just 90 more days now) it’ll be better for us to have a few stop vers on-route in Asia and/ or the Middle East. We will be in no hurry to get from A to B any more.

[Exflyboy]

Good for you @itchyfeet I remember the final countdown so well..:)

Like you I spend a little over three years flying all over the World for business.. About half the time I got upgrades.. Of course when I started funding my own travel in "cattle class" after I retired that was a little rough.. But hey, had to stretch those airmiles I'd earned..:)