Is $100k a year a lot? Is it Fat FIRE? Used to think so but starting to wonder!

[nereo]

Median hh income is a good benchmark as I indicates previously, but the median is $64k for the US but in my example my town median hh is $95k and even more direct my neighborhood of 1600 houses is closer to $150k. Even the state has med hh income of $85k.  So for me in my area $100k isn't exorbitant and certainly not "Way over over the median"

I disagree that median income (or income in general) is a good benchmark for retirement spending for all the reasons listed above and many more that have been discussed at length on this forum.

Tax rates are vastly more favorable to investment income, work-related costs can be considerable (e.g. commuting, wardrobe, tech-devices, ‘social-networking’,), and the inflexibility and lack of time leads to cost inefficiencies. Additionally, people who are still working are (or at least should be) contributing towards their savings. 
Even non-mustachian individuals earning $100k might be spending less than $50k when you subtract taxes, retirement savings, and work-related costs.

[tooqk4u22]

Median hh income is a good benchmark as I indicates previously, but the median is $64k for the US but in my example my town median hh is $95k and even more direct my neighborhood of 1600 houses is closer to $150k. Even the state has med hh income of $85k.  So for me in my area $100k isn't exorbitant and certainly not "Way over over the median"

Say I live in St. Louis. Specifically I live in Ladue (median household income $214k/year) and have FIRED with a spend of $100k/year, half of the median for my neighborhood. For you is that leanFIRE? Then I buy a new house 15 minutes away in Kinloch (median household income $28k/year). Now my spend is 4x that of my neighborhood.

By moving a few minutes down the road, am I now fatFIRE?

Quite possibly, often times your locale and the company you keep is part of your desired lifestyle and influences spending.   But neighborhood is probably not the best guide and town is or moreso state or msa.  But overall US is not because that would would infer that you would likely have to move to be of similar level.   Incidentally when I say town it is misleading because its rather large at 75,000 compared to Ladue at 8,600

Median hh income is a good benchmark as I indicates previously, but the median is $64k for the US but in my example my town median hh is $95k and even more direct my neighborhood of 1600 houses is closer to $150k. Even the state has med hh income of $85k.  So for me in my area $100k isn't exorbitant and certainly not "Way over over the median"

I disagree that median income (or income in general) is a good benchmark for retirement spending for all the reasons listed above and many more that have been discussed at length on this forum.

Tax rates are vastly more favorable to investment income, work-related costs can be considerable (e.g. commuting, wardrobe, tech-devices, ‘social-networking’,), and the inflexibility and lack of time leads to cost inefficiencies. Additionally, people who are still working are (or at least should be) contributing towards their savings. 
Even non-mustachian individuals earning $100k might be spending less than $50k when you subtract taxes, retirement savings, and work-related costs.

Maybe, but then there are possibly still taxes depending on how the assets are allocated. There is likely a big increase in health care because employer isn't picking up most of it with a better plan.    There is probably more travel or hobby costs, which can be done more efficiently as you say, but still likely more.  Sure no social networking, but I expect and have experienced a significant increase in socializing, much done cheaply or no cost at all but still a lot more including spending more (when I was working I never wanted to see anybody on a Friday or Sunday), and also if it FIRE to socialize often means seeing people around their work schedules.

So while it is still probably more to than work income, it may not be as great as you suggest.   And still the point is about it being fat FIRE not lean or below all your network (no fun to watch all your friends go out somewhere only to say no because I can't afford it).  As I said the company you keep matters, so while I may not need or want to do some of these things I, and my wife and my kids, do like being around our friends and family and sometimes that comes with a cost.  And a big indicator of cost is household income because in the US spend spend spend is the way (even if we all don't spend it all).   So if household income for your area is $100k and even if that translates down to  $50k after taxes, retirement, work costs (I think it would be more like $65k)  it still wouldn't put $100K off the charts because its median which means that half the people are making more than $100k and half less. 

To me Fat FIRE is meeting all basic needs (including expensive health care), being able doing a lot of wants (travel, socializing), and being able to handle a big outlay in any given year for whatever (OOPM for health, roof, car, etc).  But still can't do it all, we have friends (two families of 3) that went to some island for spring break all inclusive and are probably spending $15k for the trip - aside from its not on my list of wants but the ask was decidedly declined. Not to mention for our family of five it would have been more like $20k.  Also something like this may be more typical for these two families and dear friends but is definitely not typical for most other families - they are the 1%ers of our neighborhood.

[FIRE 20/20]

Median hh income is a good benchmark as I indicates previously, but the median is $64k for the US but in my example my town median hh is $95k and even more direct my neighborhood of 1600 houses is closer to $150k. Even the state has med hh income of $85k.  So for me in my area $100k isn't exorbitant and certainly not "Way over over the median"

I don't buy the argument that someone who has an ability in retirement to spend significantly more than the median household income in one of the wealthiest countries in the world is somehow not FatFIRE regardless of where they live.  People live in those expensive places because they're willing to pay a tremendous about to take advantage of those benefits, whether they're great schools, parks, or other amenities. 

But if I do stipulate that idea - that somehow the local area's spending determines what FatFIRE is - I still don't accept that $100k isn't FatFIRE in the area you live in.  To use your example, in one of the wealthiest countries in the world, in one of the wealthiest states in that country, and in an above average income town within that wealthy state, $100k spending is STILL higher than the median income!  And given that $100k of spending is worth a lot more than $100k of income due to tax laws, no need to save more for retirement, and the money saving skills from this website that FIREd person is significantly more wealthy in real terms that that median household in a wealthy town in a wealthy state in a wealthy country. 

And the idea that living on $100k of spending in a neighborhood where the income is closer to $150k somehow means you're not FatFIRE just blows my mind.  You're living in an insanely wealthy area and you don't have to work!  How is that not the exact definition of FatFIRE?  I'm just flabbergasted at the idea. 

One last thing on location.  According to Wikipedia, a U.S. county with a median household income of $100k would rank as the 17th highest.  There are 3,006 counties in the U.S.  That means that if we had a FIRE'd county in the U.S. where the median household spending was $100k that county would essentially rank in the top 0.57% of counties in the country.  This county would be wealthier than 99.43% of counties in the U.S.  How can we have a FatFIRE definition where wealth on that scale isn't considered FatFIRE?

Note - I don't have any problem at all with FatFIRE.  I'm FatFIRE myself.  My numbers are somewhere in the ballpark that we're talking about here.  I'm not in any way criticizing FIREing on $100k or $200k or even more.  But we really should be aware of how spectacularly wealthy that really is. 

[neo von retorch]

Dictionary Attack
My impression is that FIRE is retiring with 25x your annual expenses.

fatFIRE means padding your budget, whether for unexpected changes in budget, concerns about (unforeseen?) risk, or some vague notion of spending you know you don't need to spend, but will enjoy spending.

leanFIRE is knowing that your FIRE number really has no wiggle room and might require cutting back on a few things early in retirement but gets you out of compulsory employment sooner.

baristaFIRE is leanFIRE but you have plans of some sort to find some source of income you enjoy but should keep you "retired" from a job you hate (while maintaining your investments so they have time to grow).

The United States dollar and multiples of it shouldn't be in this equation whatsoever. I mean we still define FIRE as 25x your annual expenses whether they are $7,000, $40,000 or $100,000. If you save up $2.5 million and your budget shows that you have a $100k in annual expenses, congrats, you can be called FIRE. Remember that just means Financially Independent, Retired Early.

Judgement Time
Trying to drag labels or judgement into it will of course result in disagreement. Pretty sure about 60% (made up statistic) of the forum threads are people trying to justify their spending decisions while others judge them for it. But to put it another way, you and I don't get to define what other people value. We only really get to do it for ourselves (or when other people ask us to do it for them!)

While it might not be pretty, I will balk a bit at anyone expecting to pay $100k every year for "things" in retirement. But I'm a healthy 41 year old, and with my spouse we have been mindful with our spending for a pretty long time, so we get a lot of enjoyment out of a $40-60k lifestyle - big house, two cars, a light mix of national and international travel. (The median home price in my county is about $380k and ours was just a pinch more than that... my mortgage is $1750 or $21k/year thanks to down payment, paying down PMI and refi'ing at 2.99%... $40k / year wouldn't include principal payments on our mortgage, but my nest egg would have to be large enough to pay off the principal before I'd pull the plug and call myself FIRE.) So from inside my personal bubble, $100k seems like "a lot of annual expenses" but in no way differentiates between leanFIRE, FIRE, and fatFIRE. Inflation will eventually make $100k feel like a different number than it feels like today. But it probably won't change the way people judge each other!

[never give up]

This is an interesting discussion. I always think some of the terms around FIRE are useful but may tend to generate different ideas depending on someone’s interpretation.

I tend to think of Lean FIRE as just covering my core costs plus a small proportion of my discretionary spending. Someone following the Lean approach may be willing to fit some part time work in here and there, or are just seeing if they hit a positive sequence of returns era. Regular FIRE would meet my total desired expenses, while Fat FIRE would be way more than I needed. This is very personal. Someone could Lean FIRE on 10k a year, FIRE on £25k a year and Fat FIRE on a stash that can generate £40k a year.

Alternatively someone who for some bizarre reason needs to spend 1M a year would be in a Lean FIRE situation if their stash was ‘only’ generating 800k a year. So I don’t think it is possible to point to any given number and say if it is Lean, Regular or Fat. That has to be relative to stash size.

However I see that $100k is the equivalent of £72k. If I earned £72k I’d be in the top 5% of UK earners. As a global figure I’m guessing the top 1-2%? I’m not sure I could sit in a room full of people in that 95-98% and try to claim that £72k isn’t a lot to live on, when so many in the world live on so much less. It is a lot of money. It isn’t a lot of money if someone lives somewhere with a very high cost of living. But that is a choice. It is still an expensive lifestyle, but I certainly don’t mean to criticise anyone that spends that amount.

I’ve slightly cross posted with neo von retorch.

[Villanelle]

Due to inflation $100k is not what it used to be. It remains a significant amount of income on which one can lead a great life and retire early assuming you don’t live in a HCOL area like New York City or San Francisco.

Again, no one is talking about 100K work income, we're talking about 100K in retirement income, *after* all of the savings has been done, and likely when there's either a paid off house, or a ton of untouched equity in that house. 

Plus, if the person is retired, then there's no work obligation keeping them in an HCOL area, so choosing to stay there is a luxury decision, which is thankfully affordable on a generous 100K retirement income.

100K in retirement income is a lot. No one is saying it's too much, no one is saying it's an unreasonable goal, but also no one can safely argue that it's not a lot of retirement income.

And that's what OP said, that they used to think it was a lot, and now they are unsure. Well no, it's still a lot. It's still a hefty amount to be able to spend year over year, plus inflation, indefinitely in retirement.

As the OP I want to correct you I mean saying I was unsure if it was a lot, I said I still think it is a lot.  But I questioned whether or not it would still be Fat FIRE (again whatever that is).  Based on the thread the consistency is that it means different amounts to different people on different areas. 

Also, your counter to other posters in a lot of your responses is basically "Its a luxury" implying that they are stupidly fat fire and spendy. And that may in fact be the case but that is not the question.   Shit, even lean FIRE is a luxury.  Just living in the U.S. is a luxury (even with a feed up health system).   Typing this on a phone is huge luxury.   

Anyway, $100k in my mind is a lot of money but I am still not sure it is a level that is hugely fat especially when location is factored in.  Sure I could move to rural Alabama probably be stupidly fat but that's not happening.

You're the one implying that it's implying that being able to afford a luxury implies a stupid level of spending.

I never ever said or implied that and clearly stated the opposite multiple times.

fatFIRE doesn't have to connote a negative implication. I see nothing wrong with having 100K of retirement income I think I already mentioned that I expect more than that from my own stash. I'm simply recognizing that it is an extreme level of luxury, the amount of options that will be available to me with that level of retirement income.

I could choose to help my parents financially, there isn't a city I couldn't afford to live in, I have zero concerns about medical costs, etc, etc. My level of savings will provide me a profound level of retirement luxury that most can never have. That's a fact. Not an insult.

What I find really weird is that people seem to only want to call FIRE "fat" if they're spending on things they personally think are excessive and unnecessary. So spending 6 figures a year is not fat if there's no handbags or luxury cars? It's only luxury if it's something you wouldn't buy for yourself?

Seems unnecessarily judgmental and arbitrary to me.

The entire concept of "fat FIRE" is arbitrary.  So i'm not sure how it is any more arbitrary to say that certain things feed into that and others don't.  And you yourself keep harping on the fact that it isn't a negative term, so how is it then judgmental to apply it to certain behaviors and not others.  Because yes, I think someone who has adopted the 7 children of their deceased sibling and is raising them in SoCal so they can remain close to the deceased father's family to maintain that connect, is not living what *I personally* consider a fat FIRE lifestyle.  Someone traveling frequently (as I plan to do) is probably fat FIRE by my definition, even if they spend the same amount.  (So yes, I consider my FIRE plans and budget to be either fat, or at least chubby, and no, I don't consider that to be a negative thing.)

Yes, there is no definition, so why apply arbitrary metrics to be judgmental. I don't understand.

Because I'm not being judgmental, assuming your definition of "judgmental" means placing a negative value on something.  I'm not being judgmental when I say X is fat FIRE and Y isn't, because fat FIRE isn't a negative term for me.  You strongly imply it isn't negative to you either, but then you claim that using it in some cases is applying "judgement", which certainly makes it sound like you think it's negative, or being applied negative, and you balk at it being applied in some case and not others.  When I say that 'this apple is large and that one is not', there is no judgement (in any negative sense), even though "large apple vs not large apple" is an arbitrary and nebulous concept and people will disagree with exactly where the line is between large and not large.  .  So how is "fat FIRE vs not fat FIRE" judgmental (again, assuming you are applying a negative connotation to "judgmental").

You say you don't think it's negative, but it seems maybe you do, at least a bit, where as I truly don't.   

Also, are there some versions of FIRE you'd consider fat, and others you wouldn't, or do you just reject the term entirely.  It seems like you are fine with the term, you just object to my definition.  So you there are things you would say are fat FIRE and things you would say are not fat FIRE, then you too are making a "judgement".  it's just got different criteria then I'm using.

Not really.

I don't really define fatFIRE, and have exactly zero negative feelings towards the term.

I'm surprised that so many people seem to want to define it in terms that seem to me as judgemental. People seem to want to define fatFIRE as spending on unnecessary luxuries, but certain acceptable luxuries seem to not count, like choosing to live somewhere insanely expensive.

You have your particular examples of spending 100K that you don't think should be considered fatFIRE because what the person is spending on, to you, isn't a luxury, such as adopting a bunch of orphaned nieces and nephews. I, on the other hand, consider it a HUGE luxury to be able to adopt a bunch of orphaned nieces and nephews and raise them in a crazy expensive location so that they can stay close to other family. I would be like "thank fuck I'm fatFIREd enough to afford this!"

In all honesty, I actually prefer to use fat vs lean as relative terms to how much someone has saved compared to their lean expenses. I don't even like using actual amounts for fat vs lean FIRE, so I don't usually.

I was initially responding to OP implying that 100K in retirement income was possibly no longer considered "a lot". It's just so much more than most people could ever hope to have, I can't fathom a world where we don't consider it a huge luxury to have that much money to spend in retirement.

I feel like you aren't reading what I'm saying, because I have said that I readily acknowledge that living in a HCOL city or supporting parents (as two examples) are luxuries.  But you seem to claim I don't think they are luxuries. I do.  I just don't think that all luxuries are equal and that they all mean fat FIRE.  I also think that raising one's nieces and nephews is a luxury.  But what I don't think is that living a life with luxuries automatically constitutes fat FIRE.  As I've said, for me the difference is what I'd call extravagances, and for me, caring for mom or Sister, Jr. or living in SoCal because that's is where one's friends and family are is not extravagant (but yes, it is a luxury to be able to do so).   

I've also said that I think reasonable people can define all this differently.  But what I object to is the claim that I'm being judgmental.  Because, again, I plan on what is probably fat FIRE, with travel being a main luxury.  I think my FIRE will be far more fat than someone with the sam budget because they have a disable child then need to not only care for, but leave sufficient money to after they are gone.  I don't think they are better then me (so, no judgment), but I do think they are less "fat" than me. 

If you are seeing that as judgmental, that suggests you are the one placing positive and negative connotations on the term "fat FIRE", not me.

[Metalcat]

Due to inflation $100k is not what it used to be. It remains a significant amount of income on which one can lead a great life and retire early assuming you don’t live in a HCOL area like New York City or San Francisco.

Again, no one is talking about 100K work income, we're talking about 100K in retirement income, *after* all of the savings has been done, and likely when there's either a paid off house, or a ton of untouched equity in that house. 

Plus, if the person is retired, then there's no work obligation keeping them in an HCOL area, so choosing to stay there is a luxury decision, which is thankfully affordable on a generous 100K retirement income.

100K in retirement income is a lot. No one is saying it's too much, no one is saying it's an unreasonable goal, but also no one can safely argue that it's not a lot of retirement income.

And that's what OP said, that they used to think it was a lot, and now they are unsure. Well no, it's still a lot. It's still a hefty amount to be able to spend year over year, plus inflation, indefinitely in retirement.

As the OP I want to correct you I mean saying I was unsure if it was a lot, I said I still think it is a lot.  But I questioned whether or not it would still be Fat FIRE (again whatever that is).  Based on the thread the consistency is that it means different amounts to different people on different areas. 

Also, your counter to other posters in a lot of your responses is basically "Its a luxury" implying that they are stupidly fat fire and spendy. And that may in fact be the case but that is not the question.   Shit, even lean FIRE is a luxury.  Just living in the U.S. is a luxury (even with a feed up health system).   Typing this on a phone is huge luxury.   

Anyway, $100k in my mind is a lot of money but I am still not sure it is a level that is hugely fat especially when location is factored in.  Sure I could move to rural Alabama probably be stupidly fat but that's not happening.

You're the one implying that it's implying that being able to afford a luxury implies a stupid level of spending.

I never ever said or implied that and clearly stated the opposite multiple times.

fatFIRE doesn't have to connote a negative implication. I see nothing wrong with having 100K of retirement income I think I already mentioned that I expect more than that from my own stash. I'm simply recognizing that it is an extreme level of luxury, the amount of options that will be available to me with that level of retirement income.

I could choose to help my parents financially, there isn't a city I couldn't afford to live in, I have zero concerns about medical costs, etc, etc. My level of savings will provide me a profound level of retirement luxury that most can never have. That's a fact. Not an insult.

What I find really weird is that people seem to only want to call FIRE "fat" if they're spending on things they personally think are excessive and unnecessary. So spending 6 figures a year is not fat if there's no handbags or luxury cars? It's only luxury if it's something you wouldn't buy for yourself?

Seems unnecessarily judgmental and arbitrary to me.

The entire concept of "fat FIRE" is arbitrary.  So i'm not sure how it is any more arbitrary to say that certain things feed into that and others don't.  And you yourself keep harping on the fact that it isn't a negative term, so how is it then judgmental to apply it to certain behaviors and not others.  Because yes, I think someone who has adopted the 7 children of their deceased sibling and is raising them in SoCal so they can remain close to the deceased father's family to maintain that connect, is not living what *I personally* consider a fat FIRE lifestyle.  Someone traveling frequently (as I plan to do) is probably fat FIRE by my definition, even if they spend the same amount.  (So yes, I consider my FIRE plans and budget to be either fat, or at least chubby, and no, I don't consider that to be a negative thing.)

Yes, there is no definition, so why apply arbitrary metrics to be judgmental. I don't understand.

Because I'm not being judgmental, assuming your definition of "judgmental" means placing a negative value on something.  I'm not being judgmental when I say X is fat FIRE and Y isn't, because fat FIRE isn't a negative term for me.  You strongly imply it isn't negative to you either, but then you claim that using it in some cases is applying "judgement", which certainly makes it sound like you think it's negative, or being applied negative, and you balk at it being applied in some case and not others.  When I say that 'this apple is large and that one is not', there is no judgement (in any negative sense), even though "large apple vs not large apple" is an arbitrary and nebulous concept and people will disagree with exactly where the line is between large and not large.  .  So how is "fat FIRE vs not fat FIRE" judgmental (again, assuming you are applying a negative connotation to "judgmental").

You say you don't think it's negative, but it seems maybe you do, at least a bit, where as I truly don't.   

Also, are there some versions of FIRE you'd consider fat, and others you wouldn't, or do you just reject the term entirely.  It seems like you are fine with the term, you just object to my definition.  So you there are things you would say are fat FIRE and things you would say are not fat FIRE, then you too are making a "judgement".  it's just got different criteria then I'm using.

Not really.

I don't really define fatFIRE, and have exactly zero negative feelings towards the term.

I'm surprised that so many people seem to want to define it in terms that seem to me as judgemental. People seem to want to define fatFIRE as spending on unnecessary luxuries, but certain acceptable luxuries seem to not count, like choosing to live somewhere insanely expensive.

You have your particular examples of spending 100K that you don't think should be considered fatFIRE because what the person is spending on, to you, isn't a luxury, such as adopting a bunch of orphaned nieces and nephews. I, on the other hand, consider it a HUGE luxury to be able to adopt a bunch of orphaned nieces and nephews and raise them in a crazy expensive location so that they can stay close to other family. I would be like "thank fuck I'm fatFIREd enough to afford this!"

In all honesty, I actually prefer to use fat vs lean as relative terms to how much someone has saved compared to their lean expenses. I don't even like using actual amounts for fat vs lean FIRE, so I don't usually.

I was initially responding to OP implying that 100K in retirement income was possibly no longer considered "a lot". It's just so much more than most people could ever hope to have, I can't fathom a world where we don't consider it a huge luxury to have that much money to spend in retirement.

I feel like you aren't reading what I'm saying, because I have said that I readily acknowledge that living in a HCOL city or supporting parents (as two examples) are luxuries.  But you seem to claim I don't think they are luxuries. I do.  I just don't think that all luxuries are equal and that they all mean fat FIRE.  I also think that raising one's nieces and nephews is a luxury.  But what I don't think is that living a life with luxuries automatically constitutes fat FIRE.  As I've said, for me the difference is what I'd call extravagances, and for me, caring for mom or Sister, Jr. or living in SoCal because that's is where one's friends and family are is not extravagant (but yes, it is a luxury to be able to do so).   

I've also said that I think reasonable people can define all this differently.  But what I object to is the claim that I'm being judgmental.  Because, again, I plan on what is probably fat FIRE, with travel being a main luxury.  I think my FIRE will be far more fat than someone with the sam budget because they have a disable child then need to not only care for, but leave sufficient money to after they are gone.  I don't think they are better then me (so, no judgment), but I do think they are less "fat" than me. 

If you are seeing that as judgmental, that suggests you are the one placing positive and negative connotations on the term "fat FIRE", not me.

Yep, we're clearly not understanding each other, and that's fine. We both agree this is largely arbitrary.

[Zikoris]

I think 100K is generally going to be VERY "fat" in terms of consumption and environmental destructiveness, which is ultimately the entire thing MMM created his blog to fight back against. With a few exceptions (like charitable donations, very high rent, 6+ children, or costly schooling) I just don't see how a person could spend that much without producing massive amounts of pollution and garbage, and general being pretty awful to planet earth. I would be very interested in seeing a 100K budget that was actually sustainable and didn't involve trashing the planet, and also did not contribute to the human rights issues that are endemic to overconsumption (child/slave labor to produce goods, workers dying in nasty ways due to lack of regulation overseas, cartels, sweatshops, etc). I just don't see how a person could ethically consume at that rate, but I would be interested to see if a person could manage to.

[use2betrix]

I think 100K is generally going to be VERY "fat" in terms of consumption and environmental destructiveness, which is ultimately the entire thing MMM created his blog to fight back against. With a few exceptions (like charitable donations, very high rent, 6+ children, or costly schooling) I just don't see how a person could spend that much without producing massive amounts of pollution and garbage, and general being pretty awful to planet earth. I would be very interested in seeing a 100K budget that was actually sustainable and didn't involve trashing the planet, and also did not contribute to the human rights issues that are endemic to overconsumption (child/slave labor to produce goods, workers dying in nasty ways due to lack of regulation overseas, cartels, sweatshops, etc). I just don't see how a person could ethically consume at that rate, but I would be interested to see if a person could manage to.

In some ways spending more money can be better for the environment and economy, no?

Take my lawn for example. On a weekly or bi-weekly basis I can pay someone to come and mow, blow leaves, edge, and trim. That is 4 separate pieces of equipment I would need to buy (more stuff) that is only used weekly or bi-weekly.

In turn, I can pay someone to do all that stuff and not need to buy any of that equipment. The money I spend also helps support a small private business.

Boots can be another example. My $230 steel toed thorogood American made work boots last 2-3x longer than the $150 foreign boots I used to buy. The same can be said for many types of well made clothes, leathers, etc.

In other comparison - does a $50 tenderloin harm the environment any more than a $10 strip?

Does a $50 bottle of wine hurt the environment more than a $10 bottle?

My blender may cost 6x more than my old one, but even if it lasts 3x as long, isn’t that actually better for the environment than buying a new blender and tossing an old one every 2 years?

I have a set of $1200 Milwaukee brushless power tools - fairly confident they’ll last far longer than a $300 set.

List goes on with most things I own..

People can spend a LOT more money simply buying high quality items that last longer as opposed to being frugal and buying cheap crap.

I spend a lot, seemingly more than anyone posting in this thread, yet I just moved into my first house (still renting) in my whole life. Prior to that we had an apartment. You can only own so much living in an apartment.

I don’t have a LOT compared to many others in terms of quantity, but most things I buy are deeply researched and nearly the best of the best. I’m hoping many of the high quality things I own will last me well into FIRE. That was my intention of buying such high quality things while I’m working and making a lot.

[Zikoris]

I think 100K is generally going to be VERY "fat" in terms of consumption and environmental destructiveness, which is ultimately the entire thing MMM created his blog to fight back against. With a few exceptions (like charitable donations, very high rent, 6+ children, or costly schooling) I just don't see how a person could spend that much without producing massive amounts of pollution and garbage, and general being pretty awful to planet earth. I would be very interested in seeing a 100K budget that was actually sustainable and didn't involve trashing the planet, and also did not contribute to the human rights issues that are endemic to overconsumption (child/slave labor to produce goods, workers dying in nasty ways due to lack of regulation overseas, cartels, sweatshops, etc). I just don't see how a person could ethically consume at that rate, but I would be interested to see if a person could manage to.

In some ways spending more money can be better for the environment and economy, no?

Take my lawn for example. On a weekly or bi-weekly basis I can pay someone to come and mow, blow leaves, edge, and trim. That is 4 separate pieces of equipment I would need to buy (more stuff) that is only used weekly or bi-weekly.

In turn, I can pay someone to do all that stuff and not need to buy any of that equipment. The money I spend also helps support a small private business.

Boots can be another example. My $230 steel toed thorogood American made work boots last 2-3x longer than the $150 foreign boots I used to buy. The same can be said for many types of well made clothes, leathers, etc.

In other comparison - does a $50 tenderloin harm the environment any more than a $10 strip?

Does a $50 bottle of wine hurt the environment more than a $10 bottle?

My blender may cost 6x more than my old one, but even if it lasts 3x as long, isn’t that actually better for the environment than buying a new blender and tossing an old one every 2 years?

I have a set of $1200 Milwaukee brushless power tools - fairly confident they’ll last far longer than a $300 set.

List goes on with most things I own..

People can spend a LOT more money simply buying high quality items that last longer as opposed to being frugal and buying cheap crap.

I spend a lot, seemingly more than anyone posting in this thread, yet I just moved into my first house (still renting) in my whole life. Prior to that we had an apartment. You can only own so much living in an apartment.

I don’t have a LOT compared to many others, but most things I buy are deeply researched and nearly the best of the best.

I think that's true to an extent, but when you're talking about spending 100K per year, EVERY YEAR, I feel like there's a limit to how much of that could be going towards buy-it-for-life stuff, because even buying more expensive products, your home would very quickly be filled to the rafters with all that stuff at that rate of spending. You could get away with that excuse for maybe one year tops, but I just can't see someone seriously claiming that over 5 years they spent 500K on mostly buy-it-for-life type stuff, because there's just no way someone could possibly need or use so much.

As far as lawns go, it's an interesting example to use, because the process you're describing is actually pretty bad environmentally regardless of whether you do it yourself or hire it out - burning gasoline to blow leaves around, using a lot of water, etc. A lot of people these days instead design their lawns to use native plants that are suited to the local environment and don't need watering or fussing, which is the obvious environmental choice (that or gardening).

[use2betrix]

I think 100K is generally going to be VERY "fat" in terms of consumption and environmental destructiveness, which is ultimately the entire thing MMM created his blog to fight back against. With a few exceptions (like charitable donations, very high rent, 6+ children, or costly schooling) I just don't see how a person could spend that much without producing massive amounts of pollution and garbage, and general being pretty awful to planet earth. I would be very interested in seeing a 100K budget that was actually sustainable and didn't involve trashing the planet, and also did not contribute to the human rights issues that are endemic to overconsumption (child/slave labor to produce goods, workers dying in nasty ways due to lack of regulation overseas, cartels, sweatshops, etc). I just don't see how a person could ethically consume at that rate, but I would be interested to see if a person could manage to.

In some ways spending more money can be better for the environment and economy, no?

Take my lawn for example. On a weekly or bi-weekly basis I can pay someone to come and mow, blow leaves, edge, and trim. That is 4 separate pieces of equipment I would need to buy (more stuff) that is only used weekly or bi-weekly.

In turn, I can pay someone to do all that stuff and not need to buy any of that equipment. The money I spend also helps support a small private business.

Boots can be another example. My $230 steel toed thorogood American made work boots last 2-3x longer than the $150 foreign boots I used to buy. The same can be said for many types of well made clothes, leathers, etc.

In other comparison - does a $50 tenderloin harm the environment any more than a $10 strip?

Does a $50 bottle of wine hurt the environment more than a $10 bottle?

My blender may cost 6x more than my old one, but even if it lasts 3x as long, isn’t that actually better for the environment than buying a new blender and tossing an old one every 2 years?

I have a set of $1200 Milwaukee brushless power tools - fairly confident they’ll last far longer than a $300 set.

List goes on with most things I own..

People can spend a LOT more money simply buying high quality items that last longer as opposed to being frugal and buying cheap crap.

I spend a lot, seemingly more than anyone posting in this thread, yet I just moved into my first house (still renting) in my whole life. Prior to that we had an apartment. You can only own so much living in an apartment.

I don’t have a LOT compared to many others, but most things I buy are deeply researched and nearly the best of the best.

I think that's true to an extent, but when you're talking about spending 100K per year, EVERY YEAR, I feel like there's a limit to how much of that could be going towards buy-it-for-life stuff, because even buying more expensive products, your home would very quickly be filled to the rafters with all that stuff at that rate of spending. You could get away with that excuse for maybe one year tops, but I just can't see someone seriously claiming that over 5 years they spent 500K on mostly buy-it-for-life type stuff, because there's just no way someone could possibly need or use so much.

As far as lawns go, it's an interesting example to use, because the process you're describing is actually pretty bad environmentally regardless of whether you do it yourself or hire it out - burning gasoline to blow leaves around, using a lot of water, etc. A lot of people these days instead design their lawns to use native plants that are suited to the local environment and don't need watering or fussing, which is the obvious environmental choice (that or gardening).

All very good points. I was waiting for someone to chime in and be like.. “why mow your lawn at all” or, “why not just put rock and pea gravel down over your yard.” There are certainly more environmentally factors to nearly everything... I could ride my bike on the 2 lane 50 mph hwy with no shoulder 12 miles to/from work in the dark, but that doesn’t seem too appealing (although it would be the best from an environmental standpoint).

You are right though in regards to the “buy for life” stuff. There is eventually a limit to that, you’d be surprised how long it could take to get to that limit... While I generally have nice things, our TV is still a low level Vizio (although good sized). I could easily drop $5k on a new TV, but don’t mind the current one. I used to play the guitar but haven’t in a decade, my dream guitar/amp combo would be about $9k... Haven’t pulled the trigger on that yet either.

Also, for those that spend a lot, you have to consider how much of that money can be for purely “convenience” spending and hiring others to do things you don’t want to do. It’s not like everyone that spends a lot just fills a garage which plastic Chinese garbage that will go to a landfill every year.

There’s a LOT of stuff that I don’t do myself (car maintenance, etc.) for the sheer fact that I work a ton and I make enough that the opportunity cost is not worth spending my free time doing tasks I can pay others to do.

Last week I worked 57 hours. I lifted weights 4x, did 20 minutes of yoga 4x and went to a birthday part for friends both weekends. I was pretty busy doing things for both enjoyment and self improvement outside of work. I listen to audiobooks to/from work and do guided meditations during my lunch.

In my limited down time, I don’t want to do maintenance on my car or my lawn. My take home pay for those 57 hours will be $5840. I’ll be damned if i’m going to spend 1.5 hrs doing my own lawn when I can pay some guy to come do it for $25 and probably do a far better job than I will do. Alternatively, I could work the standard 40 hrs, take home about $2k/wk less, and then doing all the other crap myself? I don’t think that would balance out...

When I am FIRE, I expect my spending to go down a TON. I genuinely want to take care of my own lawn. I want to do my own car maintenance (I have in the past a lot, especially when my income was lower). I LIKE doing that stuff, but I’m not willing to cut back on work, exercise, or downtime with my wife, so that I can do my own lawn care.

For now, my focus is on making as much as I can, and spending to a level to support enough downtime and enjoyment outside of work that I can find a good balance.

[Zikoris]

All very good points. I was waiting for someone to chime in and be like.. “why mow your lawn at all” or, “why not just put rock and pea gravel down over your yard.” There are certainly more environmentally factors to nearly everything... I could ride my bike on the 2 lane 50 mph hwy with no shoulder 12 miles to/from work in the dark, but that doesn’t seem too appealing (although it would be the best from an environmental standpoint).

You are right though in regards to the “buy for life” stuff. There is eventually a limit to that, you’d be surprised how long it could take to get to that limit... While I generally have nice things, our TV is still a low level Vizio (although good sized). I could easily drop $5k on a new TV, but don’t mind the current one. I used to play the guitar but haven’t in a decade, my dream guitar/amp combo would be about $9k... Haven’t pulled the trigger on that yet either.

Also, for those that spend a lot, you have to consider how much of that money can be for purely “convenience” spending and hiring others to do things you don’t want to do. It’s not like everyone that spends a lot just fills a garage which plastic Chinese garbage that will go to a landfill every year.

There’s a LOT of stuff that I don’t do myself (car maintenance, etc.) for the sheer fact that I work a ton and I make enough that the opportunity cost is not worth spending my free time doing tasks I can pay others to do.

Last week I worked 57 hours. I lifted weights 4x, did 20 minutes of yoga 4x and went to a birthday part for friends both weekends. I was pretty busy doing things for both enjoyment and self improvement outside of work. I listen to audiobooks to/from work and do guided meditations during my lunch.

In my limited down time, I don’t want to do maintenance on my car or my lawn. My take home pay for those 57 hours will be $5840. I’ll be damned if i’m going to spend 1.5 hrs doing my own lawn when I can pay some guy to come do it for $25 and probably do a far better job than I will do. Alternatively, I could work the standard 40 hrs, take home about $2k/wk less, and then doing all the other crap myself? I don’t think that would balance out...

When I am FIRE, I expect my spending to go down a TON. I genuinely want to take care of my own lawn. I want to do my own car maintenance (I have in the past a lot, especially when my income was lower). I LIKE doing that stuff, but I’m not willing to cut back on work, exercise, or downtime with my wife, so that I can do my own lawn care.

For now, my focus is on making as much as I can, and spending to a level to support enough downtime and enjoyment outside of work that I can find a good balance.

For the most part I'm not really saying you should do X versus pay someone to do X, I'm saying you could just eliminate X altogether, often with much better results and more happiness. I get not wanting to fuck around with a lawn after work - I don't want to either, so I don't have a lawn. But if I did, personally, I think xeriscaping looks so, so much better than a lawn - lawns are ugly and boring, in addition to being useless and environmentally destructive. And for stuff like the $5K TV, a lot of people find that their quality of life improves dramatically by just getting rid of the television entirely and doing other things instead.

Your description of your life honestly sounds pretty bad to me. You're working so hard to buy all this stuff, and you don't have time to do stuff you want, when you could instead learn to be happy with less stuff, work way less, and have so much more time to devote to the things you actually want to spend time on.

[use2betrix]

All very good points. I was waiting for someone to chime in and be like.. “why mow your lawn at all” or, “why not just put rock and pea gravel down over your yard.” There are certainly more environmentally factors to nearly everything... I could ride my bike on the 2 lane 50 mph hwy with no shoulder 12 miles to/from work in the dark, but that doesn’t seem too appealing (although it would be the best from an environmental standpoint).

You are right though in regards to the “buy for life” stuff. There is eventually a limit to that, you’d be surprised how long it could take to get to that limit... While I generally have nice things, our TV is still a low level Vizio (although good sized). I could easily drop $5k on a new TV, but don’t mind the current one. I used to play the guitar but haven’t in a decade, my dream guitar/amp combo would be about $9k... Haven’t pulled the trigger on that yet either.

Also, for those that spend a lot, you have to consider how much of that money can be for purely “convenience” spending and hiring others to do things you don’t want to do. It’s not like everyone that spends a lot just fills a garage which plastic Chinese garbage that will go to a landfill every year.

There’s a LOT of stuff that I don’t do myself (car maintenance, etc.) for the sheer fact that I work a ton and I make enough that the opportunity cost is not worth spending my free time doing tasks I can pay others to do.

Last week I worked 57 hours. I lifted weights 4x, did 20 minutes of yoga 4x and went to a birthday part for friends both weekends. I was pretty busy doing things for both enjoyment and self improvement outside of work. I listen to audiobooks to/from work and do guided meditations during my lunch.

In my limited down time, I don’t want to do maintenance on my car or my lawn. My take home pay for those 57 hours will be $5840. I’ll be damned if i’m going to spend 1.5 hrs doing my own lawn when I can pay some guy to come do it for $25 and probably do a far better job than I will do. Alternatively, I could work the standard 40 hrs, take home about $2k/wk less, and then doing all the other crap myself? I don’t think that would balance out...

When I am FIRE, I expect my spending to go down a TON. I genuinely want to take care of my own lawn. I want to do my own car maintenance (I have in the past a lot, especially when my income was lower). I LIKE doing that stuff, but I’m not willing to cut back on work, exercise, or downtime with my wife, so that I can do my own lawn care.

For now, my focus is on making as much as I can, and spending to a level to support enough downtime and enjoyment outside of work that I can find a good balance.

For the most part I'm not really saying you should do X versus pay someone to do X, I'm saying you could just eliminate X altogether, often with much better results and more happiness. I get not wanting to fuck around with a lawn after work - I don't want to either, so I don't have a lawn. But if I did, personally, I think xeriscaping looks so, so much better than a lawn - lawns are ugly and boring, in addition to being useless and environmentally destructive. And for stuff like the $5K TV, a lot of people find that their quality of life improves dramatically by just getting rid of the television entirely and doing other things instead.

Your description of your life honestly sounds pretty bad to me. You're working so hard to buy all this stuff, and you don't have time to do stuff you want, when you could instead learn to be happy with less stuff, work way less, and have so much more time to devote to the things you actually want to spend time on.

I’m 32 years old and my savings/investments went up $279k last year off my single income.

I could find a less stressful job with less hours and one I enjoy more, but I’d probably make $250k less per year.. On my current path of income and spending I’d hit around $2.6MM by the time I turn 40, but I plan to dial it way back before then.

I’m cruising to FIRE pretty quick.. spending the extra amount I am right now isn’t much of an impact.

Also, my wife doesn’t work (1st baby on the way) so I don’t have to worry about any errands, cleaning, laundry, etc.. I work a lot, but my time spent not working is doing things I enjoy.

I consider myself and my life very fortunate. Different people have different interests and goals though.

[keyvaluepair]

I live in the Seattle area and when we look at taxes, health insurance, home insurance, earthquake insurance, it is already about 45K or so. Consequently, 100K doesn't seem FAT to me (though I am perfectly contented at that spending level - call me pleasantly rounded, though not FAT). Given the recent changes to the obamacare cliff, I think that our yearly spend will go down a bit, but health insurance for a family of 3 adds up.

Of course if I was single and in the same financial situation, I'd certainly be feeling rather stout.

[lhamo]

Definitely not in my area. Depending on what link you chose, 81k is the average salary in Seattle so 100k puts you barely above average.
https://www.payscale.com/research/US/Location=Seattle-WA/Salary

Housing is also absurd here, 1+ Mil for a free standing house in Seattle proper with more than 2 bedrooms. So taxes alone are going to be 15k in this region.

That in mind, I'd say 150k draw is more like fatfire to me. 100k is still pretty lean since 30k for income taxes, 15k for property taxes (assuming you own your home outright), leaving barely 50k for spending.

We are a family of four in Seattle. We own our home outright. We have structured our finances so that we do not owe federal income taxes, and qualify for the senior exemption on our property taxes starting in 2020 (dropped our bill from 8k to 2400/year). Our overall spending last year was under 60k, including 20k+ on sewer line repairs.

[nereo]

Definitely not in my area. Depending on what link you chose, 81k is the average salary in Seattle so 100k puts you barely above average.
https://www.payscale.com/research/US/Location=Seattle-WA/Salary

Housing is also absurd here, 1+ Mil for a free standing house in Seattle proper with more than 2 bedrooms. So taxes alone are going to be 15k in this region.

That in mind, I'd say 150k draw is more like fatfire to me. 100k is still pretty lean since 30k for income taxes, 15k for property taxes (assuming you own your home outright), leaving barely 50k for spending.

We are a family of four in Seattle. We own our home outright. We have structured our finances so that we do not owe federal income taxes, and qualify for the senior exemption on our property taxes starting in 2020 (dropped our bill from 8k to 2400/year). Our overall spending last year was under 60k, including 20k+ on sewer line repairs.

You must be impoverished.

[Arbitrage]

People seem to frequently grossly overestimate their taxes.

Someone withdrawing $100k to pay for FIRE doesn't pay $30k in income taxes.  Worst-case scenario is just over $15k in taxes (single, no dependents, no deductions or credits, all income is fully taxable income).  Reality is probably much lower - if they're married, have kids, have any deductions/credits, and especially if they're FIRE a huge chunk of the spending is not counted as earned income - it could be return of principal, Roth withdrawals, or capital gains tax rates. 

Even if you add state taxes on top (and the example given was Seattle, WA, which has no state income tax), there isn't a state in the union with tax rates higher than federal on $100k of income. 

Property taxes are also not going to average anywhere near $15k, even in Seattle.  They have complicated property tax laws, but as I understand it the taxes only rise by about 1% per year.  I think you'd have to be buying new construction of a fancy house to approach that level.

Per the OP, I think that $100k of spending is pretty clearly fatFIRE if it includes a paid-off house, no matter where you live.  If not, I admit there could be some grey area for VHCOLAs.  As others have stated, though, it's all completely subjective, and likely just anchored to your own experiences. 

[effigy98]

I hope UBI pays for all my expenses. I don't want to have to work anymore and have naïve suckers work and pay for me to RE.

If UBI is say, 24k a year, then I only need to come up with the spending delta. Most of us are probably closer to RE then we think.

[Tigerpine]

People seem to frequently grossly overestimate their taxes.

Hear, hear!
I live in the city of Boston, MA.  Property tax last year on our single family home was nowhere even close to $15k.  It wasn't even a third of that.  Here's a hint if you want to save money on property taxes in Boston:  live in Boston.  They charge more to people who own property here but don't live here.

EDIT:  specified that I'm talking about last year's property taxes.

[PDXTabs]

To me, that would be Fat.

Another way to look at it is that 100k/yr USD at a 4% withdrawal would be $2.5M. That would put you squarely in the global 1%.

[JLee]

People seem to frequently grossly overestimate their taxes.

Someone withdrawing $100k to pay for FIRE doesn't pay $30k in income taxes.  Worst-case scenario is just over $15k in taxes (single, no dependents, no deductions or credits, all income is fully taxable income).  Reality is probably much lower - if they're married, have kids, have any deductions/credits, and especially if they're FIRE a huge chunk of the spending is not counted as earned income - it could be return of principal, Roth withdrawals, or capital gains tax rates. 

Even if you add state taxes on top (and the example given was Seattle, WA, which has no state income tax), there isn't a state in the union with tax rates higher than federal on $100k of income. 

Property taxes are also not going to average anywhere near $15k, even in Seattle.  They have complicated property tax laws, but as I understand it the taxes only rise by about 1% per year.  I think you'd have to be buying new construction of a fancy house to approach that level.

Per the OP, I think that $100k of spending is pretty clearly fatFIRE if it includes a paid-off house, no matter where you live.  If not, I admit there could be some grey area for VHCOLAs.  As others have stated, though, it's all completely subjective, and likely just anchored to your own experiences.

Mine are $14,500 for a ~1925 sq ft house in northern NJ.  Now I wouldn't FIRE here, but there are absolutely places where a reasonably normal house will cost ~$15k in property taxes. They also go up by 2-3% a year :(   Average statewide is just over $9k.

The average American household apparently pays under $2500. I'm looking forward to when I can move.

[TheAnonOne]

Been stated on this thread a few times, here and there but SPENDING 100k is completely different from earning 100k

Someone, in MOST places in the USA, earning 100k is "well off" and basically wants for nothing. Sure they are flying economy and probably buying NICER used cars but still, they will have a nice house, international vacations, eat out 5 nights a week etc.

Someone SPENDING 100k a year, can fly first class domestically, have a new car, motorcycle and a sports car AND probably have a 3,000-6,000 sqft newer home.

These are two people on entirely different levels. Paying taxes on 100k salary, saving from it, and having to build FIRE from it will cause this person to live a more modest lifestyle.

I would damn near say, earning 200k or nearly 2x probably puts you on the same level.

[Sid Hoffman]

I don't buy the argument that someone who has an ability in retirement to spend significantly more than the median household income in one of the wealthiest countries in the world is somehow not FatFIRE regardless of where they live.  People live in those expensive places because they're willing to pay a tremendous about to take advantage of those benefits, whether they're great schools, parks, or other amenities.

But if I do stipulate that idea - that somehow the local area's spending determines what FatFIRE is - I still don't accept that $100k isn't FatFIRE in the area you live in.  To use your example, in one of the wealthiest countries in the world, in one of the wealthiest states in that country, and in an above average income town within that wealthy state, $100k spending is STILL higher than the median income!

I read through a lot of posts and I think you've said much of what I was thinking with your post - I can't count how many times I've seen posts on non-FIRE money management forums where people define the COL by their neighborhood rather than their country or state. Another element I think was rarely spoken of is having paid off housing versus a mortgage, or to a lesser common degree in FIRE, renting. Like I look at my retired parents and they're spending something like $90k/year but they still have 14 years left on their mortgage. It's just how life worked out for them. Their P&I is something like $2100/mo so really with a paid off house their spending is more in the $65k range for the couple, which is $32.5k per person. Numbers everyone is much more accustomed to working with.

While I think $100k of spending in FIRE sounds exceptionally high, there's plenty of variables, just as many have pointed out. I do think the point "Fire 20/20" was making above about people declaring their cost of living based on their neighborhood is a big point though. It's basically just luxury for people to declare that not only are they unwilling to move to a different city, they won't even move to a different house/neighborhood in order to cut their expenses. I view housing as the #1 biggest area where people box themselves into prisons of their own making.

[Abe]

While I think $100k of spending in FIRE sounds exceptionally high, there's plenty of variables, just as many have pointed out. I do think the point "Fire 20/20" was making above about people declaring their cost of living based on their neighborhood is a big point though. It's basically just luxury for people to declare that not only are they unwilling to move to a different city, they won't even move to a different house/neighborhood in order to cut their expenses. I view housing as the #1 biggest area where people box themselves into prisons of their own making.

I agree. Almost no one needs to live in a specific super-expensive area after retirement, they just want to. Either they can downsize to save money or move out of the area completely. Needs != wants. Spending > needs = fat fire. We can dress it up however we want, but $100k spending a year is what most people here (and in the world) would consider excess.

Am I currently spending a silly (and I mean silly) amount of money on housing? Yes. Do I expect anyone to tell me that it's anything other than ridiculous? No. But I realize money isn't everything, so I am currently setting that pile of cash on fire for now. Because real estate is weird and very local, the pile probably won't burn to a complete crisp. In the mean time, I just don't expect anyone to say it smells nice and pat me on the back. Same thing applies even more in retirement, when I won't have a monsoon of money raining on me. 

[SimpleCycle]

Been stated on this thread a few times, here and there but SPENDING 100k is completely different from earning 100k

Someone, in MOST places in the USA, earning 100k is "well off" and basically wants for nothing. Sure they are flying economy and probably buying NICER used cars but still, they will have a nice house, international vacations, eat out 5 nights a week etc.

Someone SPENDING 100k a year, can fly first class domestically, have a new car, motorcycle and a sports car AND probably have a 3,000-6,000 sqft newer home.

These are two people on entirely different levels. Paying taxes on 100k salary, saving from it, and having to build FIRE from it will cause this person to live a more modest lifestyle.

I would damn near say, earning 200k or nearly 2x probably puts you on the same level.

Do you mean a single person spending $100k?  Because it’s a lot of spending, but it’s not really fly first class regularly spending.  It’s more like a $500k mortgage, two in daycare or private school, a couple moderate trips a year, and eating out too much with your family of four.  Those are all lifestyle choices to be sure, but not things that would be perceived as extravagant by many upper middle class folks.

I think people underestimate the amount of money you need to really spend on crazy extravagances.

[jrhampt]

People seem to frequently grossly overestimate their taxes.

Hear, hear!
I live in the city of Boston, MA.  Property tax last year on our single family home was nowhere even close to $15k.  It wasn't even a third of that.  Here's a hint if you want to save money on property taxes in Boston:  live in Boston.  They charge more to people who own property here but don't live here.

EDIT:  specified that I'm talking about last year's property taxes.

$15k doesn't sound that far fetched to me, depending on the town - mill rates vary widely.  We had a $250k ish house in CT and property taxes on house + cars was about $10k each year.  We don't have new or fancy cars, either.

[Arbitrage]

People seem to frequently grossly overestimate their taxes.

Hear, hear!
I live in the city of Boston, MA.  Property tax last year on our single family home was nowhere even close to $15k.  It wasn't even a third of that.  Here's a hint if you want to save money on property taxes in Boston:  live in Boston.  They charge more to people who own property here but don't live here.

EDIT:  specified that I'm talking about last year's property taxes.

$15k doesn't sound that far fetched to me, depending on the town - mill rates vary widely.  We had a $250k ish house in CT and property taxes on house + cars was about $10k each year.  We don't have new or fancy cars, either.

The post I was (indirectly) responding to was discussing property taxes in Washington State, where I found the numbers/assumptions to be objectionable.  I'm well aware that there are regions with higher property taxes where $15k is definitely not far-fetched.  New Jersey always seems to make that list, as it combines both fairly high property prices with high tax rates; most other states might have one or the other (for example, CA has high prices but a lower rate; Texas has high rates but low prices), but not both. 

[joe189man]

Been stated on this thread a few times, here and there but SPENDING 100k is completely different from earning 100k

Someone, in MOST places in the USA, earning 100k is "well off" and basically wants for nothing. Sure they are flying economy and probably buying NICER used cars but still, they will have a nice house, international vacations, eat out 5 nights a week etc.

Someone SPENDING 100k a year, can fly first class domestically, have a new car, motorcycle and a sports car AND probably have a 3,000-6,000 sqft newer home.

These are two people on entirely different levels. Paying taxes on 100k salary, saving from it, and having to build FIRE from it will cause this person to live a more modest lifestyle.

I would damn near say, earning 200k or nearly 2x probably puts you on the same level.

Do you mean a single person spending $100k?  Because it’s a lot of spending, but it’s not really fly first class regularly spending.  It’s more like a $500k mortgage, two in daycare or private school, a couple moderate trips a year, and eating out too much with your family of four.  Those are all lifestyle choices to be sure, but not things that would be perceived as extravagant by many upper middle class folks.

I think people underestimate the amount of money you need to really spend on crazy extravagances.

$100k of earned income, while maxing retirement accounts, with $500k mortgage, and 2 kids in daycare wouldn't be enough income. Our mortgage is less than $500k but in the ball park, PITI is around $2300, Daycare for two is ~$2800. Those two expenses are $61,200 in annual post tax spending. Add $19,500 and $7,000 for 401k and HSA and you get ~$87,700 or $12,300 a year for taxes and money to live on, i would argue not enough.

However, this thread has changed my mind, i used to think $100k/year in retirement distributions wasn't that much, but i think i was wrong and its "a lot", not fly business class internationally multiple times a year (for a couple) lot but a fun retirement.

[lhamo]

In Seattle/King County the property tax rate is around 1% -- there might be a slight surcharge for more expensive properties.  But the assessed values of most properties will be 10-20% lower than market value.   If we put our house on the market today we would probably get between 1-1.2 million (hot market, limited inventory, crazy bidding wars).   But our assessed value is only 770k.  And since we are able to manage our income so that we look poor on paper, and since my SO is now over the age limit, we qualify for the highest level of the senior property tax exemption and are only taxed on 308k of that.  You can get some level of property tax exemption the year you turn 62 if your income is lower than something like the 60th percentile now in Washington state?   In King County, the cutoff is near 60k/year.

Washington has one of the most regressive tax structures in the US -- no income tax, fairly high exemption levels for estate taxes (I think around 2 mill?  No limit for spousal transfers).   Sales tax is around 10%, but IIRC the sales tax in NYC and other places with high tax rates is not much less.  No sales tax on food.  So if you make it to age 62 you can spend all your property tax savings on making gourmet cuisine!

[use2betrix]

Been stated on this thread a few times, here and there but SPENDING 100k is completely different from earning 100k

Someone, in MOST places in the USA, earning 100k is "well off" and basically wants for nothing. Sure they are flying economy and probably buying NICER used cars but still, they will have a nice house, international vacations, eat out 5 nights a week etc.

Someone SPENDING 100k a year, can fly first class domestically, have a new car, motorcycle and a sports car AND probably have a 3,000-6,000 sqft newer home.

These are two people on entirely different levels. Paying taxes on 100k salary, saving from it, and having to build FIRE from it will cause this person to live a more modest lifestyle.

I would damn near say, earning 200k or nearly 2x probably puts you on the same level.

Do you mean a single person spending $100k?  Because it’s a lot of spending, but it’s not really fly first class regularly spending.  It’s more like a $500k mortgage, two in daycare or private school, a couple moderate trips a year, and eating out too much with your family of four.  Those are all lifestyle choices to be sure, but not things that would be perceived as extravagant by many upper middle class folks.

I think people underestimate the amount of money you need to really spend on crazy extravagances.

$100k of earned income, while maxing retirement accounts, with $500k mortgage, and 2 kids in daycare wouldn't be enough income. Our mortgage is less than $500k but in the ball park, PITI is around $2300, Daycare for two is ~$2800. Those two expenses are $61,200 in annual post tax spending. Add $19,500 and $7,000 for 401k and HSA and you get ~$87,700 or $12,300 a year for taxes and money to live on, i would argue not enough.

However, this thread has changed my mind, i used to think $100k/year in retirement distributions wasn't that much, but i think i was wrong and its "a lot", not fly business class internationally multiple times a year (for a couple) lot but a fun retirement.

If you and your spouse were both FIRE’d, you would still spend $2800/mo in daycare?

A big part of my FIRE calculations will involve doing things myself, that I currently pay others to do (such as lawn maintenance, car maintenance, etc.)

[joe189man]

Been stated on this thread a few times, here and there but SPENDING 100k is completely different from earning 100k

Someone, in MOST places in the USA, earning 100k is "well off" and basically wants for nothing. Sure they are flying economy and probably buying NICER used cars but still, they will have a nice house, international vacations, eat out 5 nights a week etc.

Someone SPENDING 100k a year, can fly first class domestically, have a new car, motorcycle and a sports car AND probably have a 3,000-6,000 sqft newer home.

These are two people on entirely different levels. Paying taxes on 100k salary, saving from it, and having to build FIRE from it will cause this person to live a more modest lifestyle.

I would damn near say, earning 200k or nearly 2x probably puts you on the same level.

Do you mean a single person spending $100k?  Because it’s a lot of spending, but it’s not really fly first class regularly spending.  It’s more like a $500k mortgage, two in daycare or private school, a couple moderate trips a year, and eating out too much with your family of four.  Those are all lifestyle choices to be sure, but not things that would be perceived as extravagant by many upper middle class folks.

I think people underestimate the amount of money you need to really spend on crazy extravagances.

$100k of earned income, while maxing retirement accounts, with $500k mortgage, and 2 kids in daycare wouldn't be enough income. Our mortgage is less than $500k but in the ball park, PITI is around $2300, Daycare for two is ~$2800. Those two expenses are $61,200 in annual post tax spending. Add $19,500 and $7,000 for 401k and HSA and you get ~$87,700 or $12,300 a year for taxes and money to live on, i would argue not enough.

However, this thread has changed my mind, i used to think $100k/year in retirement distributions wasn't that much, but i think i was wrong and its "a lot", not fly business class internationally multiple times a year (for a couple) lot but a fun retirement.

If you and your spouse were both FIRE’d, you would still spend $2800/mo in daycare?

A big part of my FIRE calculations will involve doing things myself, that I currently pay others to do (such as lawn maintenance, car maintenance, etc.)

No we wouldn't spend anything on daycare, because we are retired and able to watch the kids, i said earned income above.

my point was that $100k+ in earned income can get gobbled up quickly while working and in many cases may not be enough depending income depending upon where you live and how big your family is.

Once retired, $100k in distributions seems like more than enough money

[TheAnonOne]

Been stated on this thread a few times, here and there but SPENDING 100k is completely different from earning 100k

Someone, in MOST places in the USA, earning 100k is "well off" and basically wants for nothing. Sure they are flying economy and probably buying NICER used cars but still, they will have a nice house, international vacations, eat out 5 nights a week etc.

Someone SPENDING 100k a year, can fly first class domestically, have a new car, motorcycle and a sports car AND probably have a 3,000-6,000 sqft newer home.

These are two people on entirely different levels. Paying taxes on 100k salary, saving from it, and having to build FIRE from it will cause this person to live a more modest lifestyle.

I would damn near say, earning 200k or nearly 2x probably puts you on the same level.

Do you mean a single person spending $100k?  Because it’s a lot of spending, but it’s not really fly first class regularly spending.  It’s more like a $500k mortgage, two in daycare or private school, a couple moderate trips a year, and eating out too much with your family of four.  Those are all lifestyle choices to be sure, but not things that would be perceived as extravagant by many upper middle class folks.

I think people underestimate the amount of money you need to really spend on crazy extravagances.

I don't think so, sometimes I even fly first class NOW and my spending for 2 is still only around 60k. Talking round trip for two being in that 300-500 range for economy and sometimes you can nab first class for another $200-400 on major carriers. Even if you fly once a month, we're talking $2400-$4800 more per year. (Again, pricing varies wildly and sometimes the same $300 flight is $3000, in that case, you sit in back)

[Metalcat]

Been stated on this thread a few times, here and there but SPENDING 100k is completely different from earning 100k

Someone, in MOST places in the USA, earning 100k is "well off" and basically wants for nothing. Sure they are flying economy and probably buying NICER used cars but still, they will have a nice house, international vacations, eat out 5 nights a week etc.

Someone SPENDING 100k a year, can fly first class domestically, have a new car, motorcycle and a sports car AND probably have a 3,000-6,000 sqft newer home.

These are two people on entirely different levels. Paying taxes on 100k salary, saving from it, and having to build FIRE from it will cause this person to live a more modest lifestyle.

I would damn near say, earning 200k or nearly 2x probably puts you on the same level.

Do you mean a single person spending $100k?  Because it’s a lot of spending, but it’s not really fly first class regularly spending.  It’s more like a $500k mortgage, two in daycare or private school, a couple moderate trips a year, and eating out too much with your family of four.  Those are all lifestyle choices to be sure, but not things that would be perceived as extravagant by many upper middle class folks.

I think people underestimate the amount of money you need to really spend on crazy extravagances.

$100k of earned income, while maxing retirement accounts, with $500k mortgage, and 2 kids in daycare wouldn't be enough income. Our mortgage is less than $500k but in the ball park, PITI is around $2300, Daycare for two is ~$2800. Those two expenses are $61,200 in annual post tax spending. Add $19,500 and $7,000 for 401k and HSA and you get ~$87,700 or $12,300 a year for taxes and money to live on, i would argue not enough.

However, this thread has changed my mind, i used to think $100k/year in retirement distributions wasn't that much, but i think i was wrong and its "a lot", not fly business class internationally multiple times a year (for a couple) lot but a fun retirement.

If you and your spouse were both FIRE’d, you would still spend $2800/mo in daycare?

A big part of my FIRE calculations will involve doing things myself, that I currently pay others to do (such as lawn maintenance, car maintenance, etc.)

No we wouldn't spend anything on daycare, because we are retired and able to watch the kids, i said earned income above.

my point was that $100k+ in earned income can get gobbled up quickly while working and in many cases may not be enough depending income depending upon where you live and how big your family is.

Once retired, $100k in distributions seems like more than enough money

Yeah, this thread is about 100K in retirement income.

Although Financial Samurai would probably call it "poverty"

[mathlete]

$100K of spend probably is plenty to retire on. Though I do again want to reiterate that retirement income pre and post 65 are very different in the United States.

People should also do a lot of thinking about the difference between being a high income person who spends a nominal amount of money, and being locked into low spending in perpetuity.

[Arbitrage]

In Seattle/King County the property tax rate is around 1% -- there might be a slight surcharge for more expensive properties.  But the assessed values of most properties will be 10-20% lower than market value.   If we put our house on the market today we would probably get between 1-1.2 million (hot market, limited inventory, crazy bidding wars).   But our assessed value is only 770k.  And since we are able to manage our income so that we look poor on paper, and since my SO is now over the age limit, we qualify for the highest level of the senior property tax exemption and are only taxed on 308k of that.  You can get some level of property tax exemption the year you turn 62 if your income is lower than something like the 60th percentile now in Washington state?   In King County, the cutoff is near 60k/year.

Washington has one of the most regressive tax structures in the US -- no income tax, fairly high exemption levels for estate taxes (I think around 2 mill?  No limit for spousal transfers).   Sales tax is around 10%, but IIRC the sales tax in NYC and other places with high tax rates is not much less.  No sales tax on food.  So if you make it to age 62 you can spend all your property tax savings on making gourmet cuisine!

Yes, thanks, that's what I was getting at without spelling it out as concisely or with concrete examples.  We're moving to Washington State this year from California.  I was pleased to realize these sorts of details about a month ago, when I had previously been budgeting 1% of the purchase price; our new property will have an assessed value about 2/3 of what we're buying it for, so our property taxes will be dropping quite a bit even though we're spending $100k more than I was planning on the house. 

I did discover one area where WA taxes are much higher than CA - real estate transfer taxes.  Thankfully for us, those are paid by the seller, and we're hoping to stay put for a very long time after the move.

[TomTX]

[Spits out my water] Yes, in my mind $100k per year is clearly Fat FIRE.

Not gonna lie, that was my reaction too.  I can't even imagine what I'd have to be doing to spend upwards of 100k a year.  Maybe if I decided to eat out for lobster & steak every meal, travel internationally every other month, buy a McMansion AND a Tesla AND idk a flock of exotic birds?

Shovel quite a bit of money at great causes like the Nature Conservancy.

https://www.nature.org/en-us/what-we-do/our-priorities/

[TomTX]

Yes it's a lot. No it's not FatFIRE. I would call it ChubbyFIRE. But obviously just one person's opinion, there is no standard definition and depends on location and blah blah blah

I'm puzzled by this opinion. With a paid off house in a mid-COL area, the whole MMM family (pre-divorce) was spending ~$25k/year for everything.

[ixtap]

Yes it's a lot. No it's not FatFIRE. I would call it ChubbyFIRE. But obviously just one person's opinion, there is no standard definition and depends on location and blah blah blah

I'm puzzled by this opinion. With a paid off house in a mid-COL area, the whole MMM family (pre-divorce) was spending ~$25k/year for everything those things MMM decided should be counted in a sample budget, but not everything.

FTFY

[mathlete]

Yes it's a lot. No it's not FatFIRE. I would call it ChubbyFIRE. But obviously just one person's opinion, there is no standard definition and depends on location and blah blah blah

I'm puzzled by this opinion. With a paid off house in a mid-COL area, the whole MMM family (pre-divorce) was spending ~$25k/year for everything.

You have to squint really hard to accept that at face value though. If his blog posts were treated as financial statements, there would be accruals and deferrals for buying half million dollar homes with cash, self-insuring them, and self-insuring his family.

This amounts to tens of thousands of dollars a year.

It's a fun exercise, but I strongly discourage anyone from taking anything concrete or actionable from it.

[mall0c]

Yes it's a lot. No it's not FatFIRE. I would call it ChubbyFIRE. But obviously just one person's opinion, there is no standard definition and depends on location and blah blah blah

I'm puzzled by this opinion. With a paid off house in a mid-COL area, the whole MMM family (pre-divorce) was spending ~$25k/year for everything.

Even if that were true, which it's not, that would be more like PovertyFIRE. I mean literally that is below the federal poverty line.

$100k is the 64th percentile for household income, not even in the top 1/3 (almost, but not quite).

https://dqydj.com/household-income-percentile-calculator/

That is a very comfortable retirement, and I'm sure some people could live FAT on that, but to me personally, no that is not FatFIRE, it's Chubby:

https://www.reddit.com/r/ChubbyFIRE/

About Community

Those who don't fit into r/leanfire or r/fatFire, we have a place to talk. Basic outline is a retirement portfolio target of ~2.5MM-5MM, think of it as the upper middle class of retirement

[Sid Hoffman]

^^ Using the same link as above, but for wealth instead of income, to get $100k/year from investments at 4% a year means $2.5M of investments. Plug it in with ignoring home equity (since that doesn't generate income) and you get the top 95.5 percentile. That is a much more realistic picture of where you're at in society if you're getting $100k/year from safe, passive investments.

https://dqydj.com/net-worth-percentile-calculator-united-states/

[nereo]

Yes it's a lot. No it's not FatFIRE. I would call it ChubbyFIRE. But obviously just one person's opinion, there is no standard definition and depends on location and blah blah blah

I'm puzzled by this opinion. With a paid off house in a mid-COL area, the whole MMM family (pre-divorce) was spending ~$25k/year for everything.

Even if that were true, which it's not, that would be more like PovertyFIRE. I mean literally that is below the federal poverty line.

$100k is the 64th percentile for household income, not even in the top 1/3 (almost, but not quite).

First, *spending* $25k/year with a paid off home is no where near the federal poverty line.  It’s actually very close to the typical middle-class retiree’s budget.

Second, we are discussing $100k in spending in retirement, not earnings

In both cases you’ve conflated income with retirement spending, which are two very different things.

[Cassie]

100k spending in retirement would be fat indeed especially if the house is paid for. I live in a MCOL and am newly divorced. If I had to rent I would not have the level of income that I would be comfortable at. Luckily I have the money to buy a condo and am choosing a small mortgage of 85k. I will be comfortable on my income of 31k and will be able to travel, etc. 

[Blackeagle]

^^ Using the same link as above, but for wealth instead of income, to get $100k/year from investments at 4% a year means $2.5M of investments. Plug it in with ignoring home equity (since that doesn't generate income) and you get the top 95.5 percentile. That is a much more realistic picture of where you're at in society if you're getting $100k/year from safe, passive investments.

https://dqydj.com/net-worth-percentile-calculator-united-states/

The flip side of that is even MMM FIRE ($25k/yr) requires a stache of $625k, which puts you in the 86.5 percentile.  Anyone who can FIRE, fat or lean is going to be near the top of the wealth distribution.

[tooqk4u22]

^^ Using the same link as above, but for wealth instead of income, to get $100k/year from investments at 4% a year means $2.5M of investments. Plug it in with ignoring home equity (since that doesn't generate income) and you get the top 95.5 percentile. That is a much more realistic picture of where you're at in society if you're getting $100k/year from safe, passive investments.

https://dqydj.com/net-worth-percentile-calculator-united-states/

The flip side of that is even MMM FIRE ($25k/yr) requires a stache of $625k, which puts you in the 86.5 percentile.  Anyone who can FIRE, fat or lean is going to be near the top of the wealth distribution.

 

Yeah, wealth shouldn't be part of this discussion bc as you say anybody FIRE or close to it will be considered wealthy.  Even anybody just thinking that they may be able to FIRE will put them up there.   

Avg social security is $1543/mo and up to $3100 at full retirement, at 4% that would be $463k to $930k (not really the value bc there is no actual wealth and nothing to transfer but it is guaranteed and cola'd) .  So just by having a job and contributing you will be globally wealthy at some point.   

Although I do so much enjoy when people say you are so wealthy compared to someone in Zimbabwe.   I really don't give two caps about the relative argument.   If my life is designed in a higher COL area with some of the social trappings why would I care if I can FIRE IN Zimbabwe with $14 or Mississippi with $14k.....I don't, it's a nonsense argument.   Location matters, relativity to others locations only matters if I plans don't work out and I don't want to go back to work.   Or if I am tired of my area and can move to a lower COL and thereby increase travel budget or charitable.

[By the River]

Just saw a Forbes article from September 2019, discussing 13 ways to make your money last in retirement.  Nothing earthshaking, but there was one line that was basically "If you are using a 4% withdrawal rate, you need $7,500,000 saved to take out $300,000"   I'm not sure of the right medical term to describe that level of fire. 

[tooqk4u22]

Just saw a Forbes article from September 2019, discussing 13 ways to make your money last in retirement.  Nothing earthshaking, but there was one line that was basically "If you are using a 4% withdrawal rate, you need $7,500,000 saved to take out $300,000"   I'm not sure of the right medical term to describe that level of fire.

Crap, I am in trouble then, now I have to go back to work or move to Zimbabwe!  😉

[RWD]

why would I care if I can FIRE IN Zimbabwe with $14 or Mississippi with $14k.....

Haha, I must be vastly overspending for living in Mississippi.

[mall0c]

Yes it's a lot. No it's not FatFIRE. I would call it ChubbyFIRE. But obviously just one person's opinion, there is no standard definition and depends on location and blah blah blah

I'm puzzled by this opinion. With a paid off house in a mid-COL area, the whole MMM family (pre-divorce) was spending ~$25k/year for everything.

Even if that were true, which it's not, that would be more like PovertyFIRE. I mean literally that is below the federal poverty line.

$100k is the 64th percentile for household income, not even in the top 1/3 (almost, but not quite).

First, *spending* $25k/year with a paid off home is no where near the federal poverty line.  It’s actually very close to the typical middle-class retiree’s budget.

Second, we are discussing $100k in spending in retirement, not earnings

In both cases you’ve conflated income with retirement spending, which are two very different things.

Family of three living on $25k is def poverty level in my book. Paid off house or no.

In retirement, your withdrawal is your income, they are logically equivalent. Whether I'm getting my $100k from a job or that is my portfolio draw per my safe withdrawal rate, that is what I have to live on per year. And for me, $100k is not FAT. Key words there being "for me"

[joe189man]

^^ Using the same link as above, but for wealth instead of income, to get $100k/year from investments at 4% a year means $2.5M of investments. Plug it in with ignoring home equity (since that doesn't generate income) and you get the top 95.5 percentile. That is a much more realistic picture of where you're at in society if you're getting $100k/year from safe, passive investments.

https://dqydj.com/net-worth-percentile-calculator-united-states/

The flip side of that is even MMM FIRE ($25k/yr) requires a stache of $625k, which puts you in the 86.5 percentile.  Anyone who can FIRE, fat or lean is going to be near the top of the wealth distribution.

These two posts seem to highlight how extraordinary everyone is on this site, just being here, actively thinking and planning about your future or already reaping the rewards of years of hard work so you can step away from a "regular" life and live on your own terms. Pretty awesome accomplishment on any personal FIRE budget $25k-$100k+