Author Topic: A proper comparision  (Read 3124 times)

hoping2retire35

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A proper comparision
« on: October 27, 2016, 12:26:12 PM »
I see a lot of threads along the lines of "Share how much you saved" or "What's your NW?" These thread seem somewhat pointless because it does not speak to our different situations, ie; you don't deserve a pat on the back for being 45 with $1mil NW if you make $500k a year, make sense?

I think a better comparison would be "What's % do you save above the poverty line?" or "what % of the poverty line do you spend in post FIRE?"

So for a family of 5 the poverty line is ~$28k. So if you have a HH of 5 and spent $27.5k last year or projected for this year you could respond "100%+, yea for us!" or "I am up to 80%, if I can cut the beer and cigarettes I'll be up to 95%. Almost there." See how that works?

Even if you make $500k it may seem like it would be easy to be in the 90-95%+ range but I think lifestyle inflation and professional class will keep this in check. I also think most mustachians will be in the range of over 100%. Note; there is also a COL adjustment in the poverty rate, check your local amount.

Thoughts?

Metric Mouse

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Re: A proper comparision
« Reply #1 on: November 02, 2016, 12:23:28 AM »
I see a lot of threads along the lines of "Share how much you saved" or "What's your NW?" These thread seem somewhat pointless because it does not speak to our different situations, ie; you don't deserve a pat on the back for being 45 with $1mil NW if you make $500k a year, make sense?

I think a better comparison would be "What's % do you save above the poverty line?" or "what % of the poverty line do you spend in post FIRE?"

So for a family of 5 the poverty line is ~$28k. So if you have a HH of 5 and spent $27.5k last year or projected for this year you could respond "100%+, yea for us!" or "I am up to 80%, if I can cut the beer and cigarettes I'll be up to 95%. Almost there." See how that works?

Even if you make $500k it may seem like it would be easy to be in the 90-95%+ range but I think lifestyle inflation and professional class will keep this in check. I also think most mustachians will be in the range of over 100%. Note; there is also a COL adjustment in the poverty rate, check your local amount.

Thoughts?

I'm not certain that I feel the need to compare myself with others, so I too struggle to understand the NW threads or the 'savings rate' threads.

expatartist

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Re: A proper comparision
« Reply #2 on: November 02, 2016, 12:42:27 AM »
The threads about net worth hold no interest for me at all. But it's good to have quantifiable goals; these vary wildly depending on one's situation and personality. It's fascinating to see how different they are:  my goals are to invest US $50k/year, half or more of that into my $ net worth, the other half into my art career.

hoping2retire35

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Re: A proper comparision
« Reply #3 on: November 02, 2016, 06:01:02 AM »
I'm not certain that I feel the need to compare myself with others, so I too struggle to understand the NW threads or the 'savings rate' threads.

In general, me neither. But if I am going to tell someone 'great job' I want it to be some type of quantifiable way that is equitable to all. That's why I came up with the above scenario or formula.

You could also add caveats to your percent statement like 'we have a garden and grow a lot of our own food so that is why we have a savings rate above poverty at 120% (meaning actually living off less than the poverty line).' or just omit a mortgage payment when stating your percent but make a point to state that.

Much Fishing to Do

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Re: A proper comparision
« Reply #4 on: November 02, 2016, 06:19:14 AM »
Age, Annual Income, Annual Spending, Investable Assets.

These 4 simple numbers tell me a lot.  Though I'm looking a lot more through the eyes of speed of attainment of FI and not whether someone should get a "pat on the back".  I'll give anyone who works for 50 years a pat on the back for being tougher than me....

MrsPete

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Re: A proper comparision
« Reply #5 on: November 02, 2016, 04:39:40 PM »
I'm not certain that I feel the need to compare myself with others,
Ditto.

FrugalFan

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Re: A proper comparision
« Reply #6 on: November 03, 2016, 07:34:42 AM »
I like those threads for motivation, not to compare myself to others. It really does help keep me motivated to have that bit of accountability. But given how much we make, I totally realize our savings are not that impressive, and I don't feel bad about that. I'm not looking for a pat on the back. I am trying to optimize our family's journey by enjoying the present and saving for the future.

 

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