anyone else think like this?

[mohawkbrah]

I've set myself little goals on my way to FI

for example i spend roughly £750 annually on food. so my first goal is to hit £18750 in investments. so with a 4% withdrawal rate i now know no matter what i'll never starve to death XD.


unless of course the world has an economic collapse. or there's a zombie apocalypse

[marty998]

Small twist to that - I multiply everything by 25 to remind myself how much something is really going to cost me.

I like your way better.

[immocardo]

I've set myself little goals on my way to FI

for example i spend roughly £750 annually on food. so my first goal is to hit £18750 in investments. so with a 4% withdrawal rate i now know no matter what i'll never starve to death XD.


unless of course the world has an economic collapse. or there's a zombie apocalypse

I do something very similar.  I look at my amount saved and multiply it by 4% and see how much I could make each year in "retirement" currently.

Then I order my expenses
1)Food
2)Shelter
3)ETC

In order of priority.  Then I see how far into the list I make it.  That way I can consciously decide whether I'm ready to  quit working or if it would be worth it to continue so I have more _____.

[Thegoblinchief]

Yep. Definitely think this way.

Once you get further along and closer to FI it's worth thinking about "possibility spaces":

1. Move to third world country and retire as expat.
2. Move to a lower COL area in your own country.
3. Stay where you're at and live a bit more frugally,
4. Exact same lifestyle as now.
5. Live where you're at and also travel a bunch. Etc.

Forum member spoonman came up with that concept and i love it when dreaming about the future.

[Rosy]

All I can tell you is that my medical insurance has doubled in 8 years. I opted to add Medicare Part B in retirement (you pay a monthly premium - only Part A (hospitalization) is free). I am fortunate in that I can afford to have both insurance plans.
Apart from having a roof over your head and food on the table being able to afford good health care is the most important consideration.

Here in the US medical costs are insane - the pharma industry has a firm choke hold on prices. It is mind boggling what they get away with. Here is just one story out of many that I am personally aware of - it ain't pretty and it is deathly reality:

I see the financial havoc peoples lives are in, because they have a heart condition with expensive medications. A good friend of mine, registered nurse, worked all her life, not smart with money, but a sweet, caring person - she pays exorbitant medical premiums for very basic coverage, because that is all she can get and has Medicare.

Yet, the coverage for the insanely expensive heart meds stops in October - because that is when the limit is reached that Medicare will pay!
So she tries to save up enough pills throughout the year to have a couple of extra and saves up enough to cover one month herself!

It is a death sentence to not have adequate medical insurance - right here in the good ole USA... and no, there is no goddang program that will give her the meds for free for three months!

So if you have not learned about what medical gap really means in old or chronically ill peoples lives or even your moms and dads lives - now you know - so save up, all you young people! ... better yet - do something about the pharma industries power grip and I don't mean investing:)
When you are old and sick, it's all over:)

[Axecleaver]

Hi Rosy, with respect to your nurse friend, she should competitively shop for Medigap insurance, which can cover the delta between what part B covers and the cap price. Some Medigap plans have worse benefits for more money, due to being older plans with an older recipient pool, so it's important to shop for the best deal every year during open enrollment.

There is also a service called Sirum that recovers and distributes donated medication. She might try calling around to clinics to see if there is a potential low-cost or free source of the drug. More info here:
http://opinionator.blogs.nytimes.com/2015/03/20/recycling-unused-medicines-to-save-money-and-lives/?_r=0

Finally, she may want to try Medicaid in her state who covers dual eligible (Medicare + Mediciaid) recipients. She may be eligible for coverage based on her high expenses or medical condition. Some state plans will pay a recipient's premiums for medigap coverage.

[2ndTimer]

Definitely do this.  Every time I fill the thermos with coffee instead of buying it by the cup, I tell myself that is almost a lb. of coffee beans (CostCo price) we will be able to buy after RE.  Somehow the coffee now to coffee then link makes it seem real.

[Rosy]

Hi Axecleaver - The meds in question are around $2500 to $3000 a month - so if she could get access for three months that would be wonderful - thank you!
Thanks for the link - that may prove helpful, I will pass it on to her son (an ER nurse and so his his wife).
However, it may be illegal in Florida - at least it was a few years back.

I do know, because my SIL (also a retired nurse) checked into it, that there is a law in Florida that the meds must be destroyed and cannot be passed on to someone else. A doctor cannot accept them and pass them on either.  We tried it with giving morphine and other cancer meds away, after my DH passed away.
I think we even tried Vet clinics for those meds that were already opened, but not out of date. I mean critter vet - not the VA VET). Also illegal in Florida.

You are right, things change every year but she always gets caught in that gap, regardless.

She has a nice house (her DH was a contractor and died young from a heatstroke while working on a roof in the Florida sun) and she has the full support of her 5 children. So she is not destitute and I'm guessing has just enough assets preventing her from getting into any programs.

She had her first heart attack on the job at the hospital she worked at, but it was only a part time job, due to family obligations and her health in general deterioating. She is one of those unfortunate souls who should have been able to retire at 50 for health reasons, but couldn't because she needed the money to provide for her kids.

Part-time work meant with no insurance - which meant she now had a pre-existing condition..... you get the picture. She is stuck with very expensive insurance and not enough coverage for her meds.

Will definitely follow up on your link - thank you again.

[Rosy]

Sorry mohawk - I apologize for hijacking your fine thread - I promise to stay out of it after this:), but this is good information and you never know who might see it and find it helpful.

Axecleaver - found the information for Florida - still illegal to donate or receive heart meds. However, I was glad to see cancer drugs and supplies are now allowed. That bill was proposed in 2003 and is effective as of 2006 after we tried donating in 1999 - still, good to know and I will pass it on since most everyone in our family and friend circle is working in the medical field.

Thanks again.

Florida
SB22A
(2003)

HB 371
Rep. Harrell
(2006)
 
What Rx: Unused cancer drugs or supplies in its original, unopened, sealed and tamper-evident unit dose packaging.
Who can donate: A person, health care facility, hospital, pharmacy, drug manufacturer, medical device manufacturer or supplier, wholesaler of drugs or supplies, or any other entity may donate.
Who accepts:  A physician's office, pharmacy, hospital, hospice, or health care clinic that participates in the program.
Donated to: Residents, except those Medicaid-eligible or under any other prescription drug program funded in whole or in part by the state are ineligible to participate.
Restrictions: All drugs submitted to the program will be administered by a pharmacist to determine the drugs and supplies are not adulterated or misbranded. Additionally a cancer drug may not be accepted or dispensed under the program if such drug bears an expiration date that is less than six months after the date the drug was donated.
Program Status:  Fla. Stat. §409.908.  The act took effect July 1, 2006; Program currently Operational.

[mohawkbrah]

All I can tell you is that my medical insurance has doubled in 8 years. I opted to add Medicare Part B in retirement (you pay a monthly premium - only Part A (hospitalization) is free). I am fortunate in that I can afford to have both insurance plans.
Apart from having a roof over your head and food on the table being able to afford good health care is the most important consideration.

Here in the US medical costs are insane - the pharma industry has a firm choke hold on prices. It is mind boggling what they get away with. Here is just one story out of many that I am personally aware of - it ain't pretty and it is deathly reality:

I see the financial havoc peoples lives are in, because they have a heart condition with expensive medications. A good friend of mine, registered nurse, worked all her life, not smart with money, but a sweet, caring person - she pays exorbitant medical premiums for very basic coverage, because that is all she can get and has Medicare.

Yet, the coverage for the insanely expensive heart meds stops in October - because that is when the limit is reached that Medicare will pay!
So she tries to save up enough pills throughout the year to have a couple of extra and saves up enough to cover one month herself!

It is a death sentence to not have adequate medical insurance - right here in the good ole USA... and no, there is no goddang program that will give her the meds for free for three months!

So if you have not learned about what medical gap really means in old or chronically ill peoples lives or even your moms and dads lives - now you know - so save up, all you young people! ... better yet - do something about the pharma industries power grip and I don't mean investing:)
When you are old and sick, it's all over:)

live in UK. got NHS healthcare to look after my old decrepit body later in life

[kvaruni]

Interesting way of looking at your savings. We do something similar: we have different stash goals set out. So for example stashing £100,000 will allow us to survive (no travel, living off noodles, no pets, no house repairs), whereas £300,000 will allow us to live within our current means.

Just one thing ... £750 a year? Are you single? How? Even assuming some cornflakes in the morning (branded, can't stomach Asda :p), 3 slices of bread and some jam, and a portion of noodles in the evening will make you hit £400. Honest to goodness question, as we have been looking to reduce our food budget!

[mohawkbrah]

Interesting way of looking at your savings. We do something similar: we have different stash goals set out. So for example stashing £100,000 will allow us to survive (no travel, living off noodles, no pets, no house repairs), whereas £300,000 will allow us to live within our current means.

Just one thing ... £750 a year? Are you single? How? Even assuming some cornflakes in the morning (branded, can't stomach Asda :p), 3 slices of bread and some jam, and a portion of noodles in the evening will make you hit £400. Honest to goodness question, as we have been looking to reduce our food budget!

ALDI is a mustachians best friend.

I only buy food for myself and i don't buy branded food, i buy aldi's own stuff. It tastes just as good but 50% - 75% cheaper. I also eat a very protein rich diet but i still keep costs below £20 a week. I also make most of my food instead of prepackaged stuff

[Two9A]

ALDI is a mustachians best friend.

I only buy food for myself and i don't buy branded food, i buy aldi's own stuff. It tastes just as good but 50% - 75% cheaper. I also eat a very protein rich diet but i still keep costs below £20 a week. I also make most of my food instead of prepackaged stuff

Aldi is indeed astonishingly good value. My notoriously wasteful family fills a trolley up there on a weekly basis, and the whole thing barely passes £40 to feed five (and another five on weekends, when the relations drop by).

There's a reason there are two Aldi's within a mile of my folks' place, and a third being built.

[kvaruni]

Sorry, I'm just not buying it. I have always been skeptical about ALDI, always overspending when I visited those stores, so I did the test. I went there just now (and did LIDL as well), and compared prices with Tesco/Sainsbury. We use a biweekly menu for each season, so I just went shopping for all the ingredients I need for summer (40-ish items). I would be loosing money each and every time I went to ALDI/LIDL. Roughly, on a £50 trip in Tesco, Sainsburys comes in at £55, with LIDL and ALDI coming in at £60. Some caveats of course. NI doesn't have deals like the mainland. I would always have to make a trip to Tesco/Sainsbury's anyways because ALDI/LIDL don't (always) stock some items such as loose oranges, loose garlic, gruyere cheese ... . And even if I did only buy the things that were cheaper in ALDI/LIDL, I would only shave some £.50 off of my groceries.

So, to me, there is no savings in shopping at ALDI/LIDL. Even more so, since Tesco/Sainsbury offer home delivery I don't need a car at all. I think that the only real savings to be had in ALDI/LIDL is because it forces you to buy the house-brand. Of course, no one prevents you to do exactly the same thing in the big supermarkets ...

[nobodyspecial]

Aldi is indeed astonishingly good value.

Food shopping was a big shock moving to the left side of the pond.

When I used to travel to the USA for business the shopping was a bargain, £30 pairs of jeans were $15 in Walmart, DVDs and computers were half the price. But when you live here - there are no fruit+veg markets (except ridiculously priced upmarket "farmers markets") and basic food in supermarkets is easily 2x the price.

Fortunately you also get paid 2x what an engineer would get in the UK and the scenery is better !

[Rosy]

Aldi is cheaper than Walmart and we have one around the corner and two more about 3-4 miles away.

I don't know, after my last trip to Germany in April this year - I think the living here in Florida is tipping in favor of Germany for the first time. You have to really pay attention to save a few bucks. Florida has it's perks, some of the best beaches for one:) It is hard to beat sipping a Margarita watching the sunset over the ocean with your bare feet in the white sand:)

Wish they had the healthcare set up like in Germany, but I am not complaining since my personal set up is rather sweet due to being eligible for civil service government plan insurance and Medicare picks up the remainder.

Food in Florida has gone up at least 30% overall, but the wages are firmly stuck on the low end. Meat is really expensive, with calf hard to find. But at least one can go fishing and crabbing and enjoy nature's bounty:)

[psinguine]

I do something similar. I've broken up FIRE into four distinct milestones based on multiples/percentages of needed return.

F - $300,000 in investments. This is the point at which the entire potential market return allows us to survive on our bare minimum spending in an absolute worst case scenario without drawing down principal. Assumptions made: 7% return providing $18,000 per annum.

I - $500,000 in investments. This is the point at which the 4% rule should cover us with our spending slightly increased. Assumptions made: 4% return providing $20,000 per annum.

R - $750,000 in investments. This is the point at which we could inflate our lifestyle up to what I would consider a level of debt free luxury. Pretty much the comfortable worry free version of the lifestyle we lead now, except with vacations. The 4% rule creates this number. Assumptions made: 4% return providing $30,000 per annum.

E - $1,200,000 in investments. This is, to be honest, an arbitrary number. It was found by almost doubling the 4% rule and utilizing the same income level mentioned previously. To be honest it is incredibly unlikely that we would actually wind up spending the full $30,000 per year, but that is just a further degree of built in safety. Assumptions made: 2.5% market return providing $30,000 per annum.

Of course I'm aware that safety is an expensive illusion. I am fully aware that my "E" level is well outside the realms of necessity. This is further compounded by the fact that my wife and I are both young (not yet 30) and both have jobs with pensions. And that we don't actually intend to stop working. And that we live in an incredibly low cost area. It's more so intended to give us something crazy to shoot for, with the expectation that even if we fall short we'll still be more than okay.

[lagniappe]

I did something like this all the way to FI.  I ordered my expenses from most to least necessary (food at home, shelter and medical care first, followed by everything else in an order that reflected my values).  As I updated my net worth, the cells would turn green when I had enough to cover the item.

This helped me in two ways.  The rank ordering relly helped me think about what I valued. I realized that a minimum amount of travel was more important to me than eating out, for instance.  The changing colors of the cells in my spreadsheet helped me stay motivated much more than a single number net worth did. If I was so close to the next cell (let's say, utilities) turning green, maybe if I really upped my savings for the next three months I could get there!

This helped me to get from zero to basic, followed by (to me) comfortable FI, in about ten years.