Author Topic: Anyone else mostly ignore the numbers and math?  (Read 12981 times)

Villanelle

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Anyone else mostly ignore the numbers and math?
« on: September 22, 2015, 08:00:36 AM »
I see threads all the time about savings rate and net worth and portfolio changes, and all sorts of other FIRE math.

I couldn't tell you my savings rate.  I'd could do some fairly simple math to figure out what % our automatic investments constitute, but with mortgage pay down, irregular payments to a HELOC, and other things, it would take a short while to get a real number, and I just don't care that much.  Similarly, my net worth means nothing to me.  The amount I have in investments is important to me because I know amount me SWR will give us, but net worth seems to have little practical application.

I don't know how much my portfolio goes up or down because I don't look at the numbers except when it is time for rebalancing. 

Am I the only one who doesn't care about all the numbers?

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Re: Anyone else mostly ignore the numbers and math?
« Reply #1 on: September 22, 2015, 08:08:02 AM »
Can't say that I don't care about the numbers - I do track my investments in Personal Capital, and I have several spreadsheets where I keep track of various metrics every few months. But, I definitely couldn't tell you what my savings rate is, or how much I spent on groceries/eating out last month, or any other minutiae. I'm more interested in the big picture, and I've found that I'm much less happy when I get bogged down trying to stick to a specific budget for various line items. I always feel like I'm much less in control than I really am when I'm unable (for example) to stick to a $400 grocery budget. The only thing that really matters to me at this point is that I max out all of my tax-deferred retirement vehicles (401k, HSA, 2 IRAs) and I'm definitely on track to do that. Everything else is just noise at this point.

Moostache

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Re: Anyone else mostly ignore the numbers and math?
« Reply #2 on: September 22, 2015, 08:24:54 AM »
I would like to be in a position where I didn't care but, due to a number of factors, it really feels like I haven't made any progress in two years and I would like to feel more comfortable that its all going to be OK when I do retire. :)


Villanelle

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Re: Anyone else mostly ignore the numbers and math?
« Reply #3 on: September 22, 2015, 09:37:11 AM »
Can't say that I don't care about the numbers - I do track my investments in Personal Capital, and I have several spreadsheets where I keep track of various metrics every few months. But, I definitely couldn't tell you what my savings rate is, or how much I spent on groceries/eating out last month, or any other minutiae. I'm more interested in the big picture, and I've found that I'm much less happy when I get bogged down trying to stick to a specific budget for various line items. I always feel like I'm much less in control than I really am when I'm unable (for example) to stick to a $400 grocery budget. The only thing that really matters to me at this point is that I max out all of my tax-deferred retirement vehicles (401k, HSA, 2 IRAs) and I'm definitely on track to do that. Everything else is just noise at this point.

I have a crazy spreadsheet that tracks my investments, so it's not that I don't care about *any* numbers.  I use it for rebalancing, play "what if" with new investments or moving money around, etc.  To me, those things have value because the are actionable items, and actionable in a specific way.  If too much of my portfolio is on bonds due to market movement, I need to know that so I can shift some dollars.  But if my overall market portfolio is down (or up) 1.4 percent from yesterday or last month, or if my total net worth is no $x more because the value of my house went up 3% and I also paid down some more principal, that changes nothing.  If my savings rate is 43% or 52%, I'm not going to do anything different because I base a need for change on how I feel about my lifestyle.  If I think I can not-too-uncomfortably squirrel away another $100 a month, I am going to do that no matter what % of my income I'm already saving.

The_path_less_taken

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Re: Anyone else mostly ignore the numbers and math?
« Reply #4 on: September 22, 2015, 09:40:47 AM »
I think if you max out your savings AND curb silly purchases AND try and be efficient with things....knowing to a decimal point how much you paid for toilet paper last year is  not, in the grand scheme of things, important.

The only advantage is for people who really can't figure out where the money is going, or are trying to have an actual FU date for work: but otherwise, I don't see the need for a precision spreadsheet that includes the purchase of toothpicks and hair pins.

I don't have time to build one and would hate doing it.

Some people go to a concert and watch the entire thing thru their phone...instead of just enjoying the concert, they're busy taping it. So they will only see it on the little screen...

Others (you and I) prefer to go with the big picture. Different paths...


humbleMouse

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Re: Anyone else mostly ignore the numbers and math?
« Reply #5 on: September 22, 2015, 09:41:09 AM »
I ignore the math.  I understand how compound interest works, and I manage to save about 50 percent of my income without tracking dollar amounts spent on food and other things.  Granted, I am a single guy so it's probably a lot easier than people with wives and families. 

I usually try to do a cost per day analysis in my head.  Like, if I buy a burrito for $6, but I made food I had the past few nights that cost $5 total, then my total cost for the 3 days of dinners is $11, which is $3.xx/day.  That comes out to around $100ish/month which is super cheap.  So I tend to keep running averages of my different categories of expenses in my head.  The main thing is to avoid going on craigslist and buying fancy bike parts.
« Last Edit: September 22, 2015, 09:42:41 AM by humbleMouse »

zephyr911

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Re: Anyone else mostly ignore the numbers and math?
« Reply #6 on: September 22, 2015, 09:42:28 AM »
HAHAHA WEIRDO *points and laughs*

But seriously...

I could do that at this point - everything's on autopilot and if I could just relax and stop fretting I'd still be fully retired within a few years. My problem is mostly that I can't make up my damn mind, and I think somehow crunching numbers and running scenarios will help me understand my options better so I can actually just settle on my exact path and stop worrying.

Anxiety is a bitch.

Kaspian

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Re: Anyone else mostly ignore the numbers and math?
« Reply #7 on: September 22, 2015, 11:12:07 AM »
I like the numbers!  Even if they weren't numbers for my account I'd probably still like them.  Playing with percentages, ratios, prices, projections is the bomb!  I even like the idea that everything is made of math.

hybrid

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Re: Anyone else mostly ignore the numbers and math?
« Reply #8 on: September 22, 2015, 11:18:44 AM »
Yet another example to give a hybrid answer!

I ignore the conventional math. Retirement calculators, even good ones, simply do not apply well to our individual circumstances. My wife is going to retire at least 10 years earlier than I will, there is an age gap between us, and we have a few other variables that make a retirement calculator not so useful.

That does not mean I have the luxury of ignoring the math however. I have had to do the hard work of figuring out what our projected income and expenses will be over the next 10 to 15 years and get a good idea about when I can retire. Since I have no idea what the next 10 to 15 years will hold, retirement for me is a goal while retirement for the dear wife is a plan. So I still have to do the math, but I have to customize the math to our circumstances.

Paul der Krake

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Re: Anyone else mostly ignore the numbers and math?
« Reply #9 on: September 22, 2015, 11:30:46 AM »
Yeah, I don't follow the math either. I spend money on what I value, save the rest, and watch the pile grow. I know I will leave full-time employment "for sure" in the next 5-10 years, but don't have the slightest idea of what my downshift/retirement will look like. Heck, I don't even know which country I will live in.

I like to set general trends in my life like eating well, being healthy, save, but just improvise the rest. It's worked very well so far.

#yolo

Moustachienne

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Re: Anyone else mostly ignore the numbers and math?
« Reply #10 on: September 22, 2015, 01:12:51 PM »
We've mostly ignored the math once we got all the basics on set and forget (paid off house, no debt, 50%+ savings rate) but as we're getting to within less than 2 years till RE (age 60, not that E but we're thrilled) I'm spending some time getting a handle on our real expenses to make sure we will be ready.  To tell the truth, I'm more worried about over saving in retirement because we might feel uneasy about spending.  We've optimized the saving and now we need to switch over to optimizing spending.  It's a real mind switch!  A bit of short term tracking will help, then we'll go back to set and forget.

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Re: Anyone else mostly ignore the numbers and math?
« Reply #11 on: September 22, 2015, 01:29:21 PM »
I never really was into the math other than 25 times what i needed. Just simply did / continue to do the best I can all the most i can in decision making.

Late_Bloomer

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Re: Anyone else mostly ignore the numbers and math?
« Reply #12 on: September 22, 2015, 09:32:03 PM »
I don't really track the numbers either. I know how much money I need to be FI, I know how much I need to put into investments per year to reach it, and I know how many  years I have left to get there. Outside of that, everything else is open to interpretation. If I sat down and added up every receipt for the week, or stopped the conveyor belt at the grocery once the magic number was reached, I'd end up having a nervous break down. You can only do so much with the money you have. I'm not going to break my back getting there. There is a whole life to live while you are doing this. If you make north of 100k, then yea, kiss all the ass you can to get it over with as fast as you can. But for most folk, we have decades to wade through before we see the light at the end of the tunnel.

somebody8198

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Re: Anyone else mostly ignore the numbers and math?
« Reply #13 on: September 22, 2015, 09:57:52 PM »
I don't pay too much attention to the numbers because I have too many unknowns in life to know exactly what I'm going to need. It seems like a lot of people here are married, some with kids, and own a home. I am single and don't own a home, so it's all just personal savings as far as I care.

Altons Bobs

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Re: Anyone else mostly ignore the numbers and math?
« Reply #14 on: September 22, 2015, 10:53:33 PM »
You guys told me approximates were good enough, so I'd go by that.  :-D

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Re: Anyone else mostly ignore the numbers and math?
« Reply #15 on: September 23, 2015, 06:25:59 AM »
Well,  I guess I'm a numbers person, but I'm not a maths nerd or very good a spread sheets so I have limitations! When I first became moustached I was appallingly ignorant about Finances and the planning math.  I spent the first 2 or 3 years  being inspired to look at things differently by a thread here resulting in a period of intense thinking and calculating in response to that, and I'd arrive at a different  and better space. I just would think I had it all figured out and someone would put out another thread and I'd be off again.   Its only really this year I've had no major breakthroughs that have propelled me forward and I feel like I'm just cruising along.  Even so, I like to brush off the math  at fairly regular intervals. Its kind of soothing and I get a big kick out of seeing how far I've come.

Frugal D

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Re: Anyone else mostly ignore the numbers and math?
« Reply #16 on: September 23, 2015, 06:43:33 AM »
I love looking at my spreadsheet on a daily basis. The numbers serve no other purpose than to tell a story of where you've been and where you're going. They also help with rebalancing your investments and spending habits when needed. No, staring at the sheet won't by itself get me to FIRE any quicker, but I do think it provides valuable insights.

It's difficult to achieve a financial goal without yardsticks and metrics along the way. For a community of people dedicating themselves to some level of FIRE, it makes sense that Mustachians would generally be very analytical people.


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Re: Anyone else mostly ignore the numbers and math?
« Reply #17 on: September 23, 2015, 07:09:21 AM »
I think there's a large number of people on the forums who are very analytical and in general like numbers. They are more likely to have complicated spreadsheets. Personally, I don't. I use Quicken and will run expense reports periodically to tell how I'm doing expense wise. I also have a spreadsheet that is primarily used to make sure I pay all the bills, but also has amortization schedules for my loans (working on them...).

Whatever works for you, go for it. And that may change over time as well.

Thegoblinchief

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Re: Anyone else mostly ignore the numbers and math?
« Reply #18 on: September 23, 2015, 07:32:19 AM »
I'm definitely a numbers person. Our cashflow is still far too spare to spend without tracking it.

Will I feel differently in a few years? Maybe, but probably not. I'll still be wanting to invest as aggressively as I can, getting my little green employees out into the market early and often.

I also NEED budgeting software like YNAB to make our lifestyle work. Our grocery budget, for example, is $700/month. Many months we'll only spend $300 or so, I need to track the carryover for the months where we'll have large bulk purchases (grains, meat, certain fruits) as we follow the seasons.

Many other categories are also laid out the same way, setting aside a certain amount per month and investing the rest.

Lady Fordragon

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Re: Anyone else mostly ignore the numbers and math?
« Reply #19 on: September 23, 2015, 07:54:05 AM »
I love looking at my spreadsheet on a daily basis. The numbers serve no other purpose than to tell a story of where you've been and where you're going. They also help with rebalancing your investments and spending habits when needed. No, staring at the sheet won't by itself get me to FIRE any quicker, but I do think it provides valuable insights.

It's difficult to achieve a financial goal without yardsticks and metrics along the way. For a community of people dedicating themselves to some level of FIRE, it makes sense that Mustachians would generally be very analytical people.

Totally agree!  The highlight of my morning is updating my spreadsheet and finding ways that I can improve it.  Also, I'm always looking to increase our savings rate by playing with the numbers in the spreadsheet.  To me it's a game!  :-)

Gone Fishing

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Re: Anyone else mostly ignore the numbers and math?
« Reply #20 on: September 23, 2015, 08:11:52 AM »
From about 2008-2013, I pretty much ignored the numbers.  Between having kids, getting a new job, starting a small farm, and the job/stock market turmoil, I was crazy busy and pretty stressed.  Looking back on it, ignoring the numbers was probably an attempt to manage both my time and stress levels.  Given the time, I actually enjoy running the numbers.  Ignoring it resulted in our spending creeping up a good bit (33% over current levels) and some pretty costly tax/investment errors.  Although, I can say that time seemed to pass quicker when I wasn't watching the numbers.

Giro

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Re: Anyone else mostly ignore the numbers and math?
« Reply #21 on: September 23, 2015, 08:16:45 AM »
I like watching my investments grow, but I don't really care about tracking my spending.

As long as we are investing $100k a year and it's all set on automatic, I don't really care about the savings rate or the excess spending.  That's probably not the most ideal way to be, but it works for me for now.

I should really try to do better.


Dicey

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Re: Anyone else mostly ignore the numbers and math?
« Reply #22 on: September 23, 2015, 08:26:28 AM »
Am I the only one who doesn't care about all the numbers?
I only care about the numbers that are important and only when they are important...

In fact, DH and I had to complete an asset statement for a mortgage on a new rental property. (We could pay cash, but we're eagerly grabbing for some of that cheap mortgage money before it's gone, even though a root canal while undergoing a colonoscopy would probably be more fun.) When we completed the worksheet, we were both pleasantly surprised at the final number. Who knew? Once you learn to live on less and invest the rest, it really is astonishing what happens over time.

For those who do not care about being able to math, all you need to know is 1.) Spend less than you earn and 2.) Invest what you don't spend in a broad spectrum of low-cost index funds and don't touch it except to rebalance. Sure, there are many paths to FIRE, but math is not mandatory.

iamlittlehedgehog

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Re: Anyone else mostly ignore the numbers and math?
« Reply #23 on: September 24, 2015, 01:21:46 PM »
For now I'm ignoring the math. We're still in the process of paying off debt (and will be for the next year). I do know 48% of my paycheck goes to our debt. Once we start the hardcore saving and investment I'll zero in on the numbers first, for now I just wanna get out of the red!

Quokka

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Re: Anyone else mostly ignore the numbers and math?
« Reply #24 on: September 24, 2015, 07:58:34 PM »
There's some good points on this thread, and I think there is a lot to be said about being a little vague on the tracking.

I think I may be guilty of over-analysing and spending too much time on the numbers. I have the sort of personality where I'm always focussed on the future, sometimes to the detriment of enjoying the present. Realistically FIRE is 7-10 years away for us, so I'm trying to take more of a 'set and forget' approach, get everything automated and tax efficient where possible, then just focus on enjoying day-to-day life. Will review seriously in 2020 and think about a transition strategy.

As John Lennon sang "Life is what happens to you while you're busy making other plans"!

powskier

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Re: Anyone else mostly ignore the numbers and math?
« Reply #25 on: September 25, 2015, 12:21:20 AM »
The main thing is to avoid going on craigslist and buying fancy bike parts.

But carbon!!!!!!!!!!!!!!!

Kinda what everyone else says, got the big picture. Save as much as possible, invest. Take a gander every 6 months. Project into future, refine loose plan, repeat every 6 months.

Villanelle

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Re: Anyone else mostly ignore the numbers and math?
« Reply #26 on: September 27, 2015, 05:49:29 PM »
There's some good points on this thread, and I think there is a lot to be said about being a little vague on the tracking.

I think I may be guilty of over-analysing and spending too much time on the numbers. I have the sort of personality where I'm always focussed on the future, sometimes to the detriment of enjoying the present. Realistically FIRE is 7-10 years away for us, so I'm trying to take more of a 'set and forget' approach, get everything automated and tax efficient where possible, then just focus on enjoying day-to-day life. Will review seriously in 2020 and think about a transition strategy.

As John Lennon sang "Life is what happens to you while you're busy making other plans"!

I guess to me, the even bigger issue is that it seems like some of the things that people track have almost no affect on FIRE.  Net worth?  Unless you plan on liquidating it, it doesn't matter whether you house is worth $50k or $500k.  That doesn't get you income on which you can live during FIRE.  Or the fact that a portfolio lost 5.72% in the last month.  5.72% doesn't mean anything. The total value of that portfolio is meaningful because that is what most base their FIRE plans on--needing to get to a stache of $X amount.  But the % lost in the last day/month/quarter?  Unless someone has a strategy where they reallocated if they hit a certain loss, it's a meaningless number.

I track the numbers that seem like they are meaningful, like the value of our investments, the rough value of DH's pension (since that is money I can subtract from future needs), occasionally things like how much we are investing and where that has us in 5, 7, 10, 15 years (to see if we are in track for our larger plan), and things like that.  Because those numbers show me whether we need to make changes, so they seem to have value.  But figuring out the equity in our rentals ad other possessions so I can get a net worth estimate?  It's not a number that tells me much. 

stripey

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Re: Anyone else mostly ignore the numbers and math?
« Reply #27 on: September 27, 2015, 10:10:49 PM »
I pretty much agree with you, Vilanelle!*

I did about 6 months of tracking expenses to see what the major expenses were, then it fell by the wayside. I decided that basically there's enough noise in my income (and expenditure) that close tracking is not particularly encouraging for me. I do make a quick note in a spreadsheet where all my account balances are at at the first of the month, but that's about it. I do a quick calculated estimate of annual savings rate when I do stuff for my tax return** each year, but that's about it. I try and make intentional purchases when I need to purchase something, and review insurance, etc. when the annual fees are due.

It's not that I'm not an optimiser- I certainly am in other areas of my life, but I would prefer to concentrate my energies elsewhere.


*Love the forum name, by the way.

**Last annual savings rate was 71%, probably bolstered by a large ($10k) tax return which I may or may not get next time around. Who knows.

Greystache

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Re: Anyone else mostly ignore the numbers and math?
« Reply #28 on: September 28, 2015, 07:52:32 AM »
I was like you during most of the accumulation phase. Now I am in the first year of ER and I have been paying much closer attention to the numbers.  Part of it is because there is no new money coming in except for investment yield and some part time work.  The other part is because I am dancing on the edge of the Obama care cliff. I have had to carefully manage my MAGI in order not to lose about $4K in subsidies.

zephyr911

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Re: Anyone else mostly ignore the numbers and math?
« Reply #29 on: September 28, 2015, 07:59:36 AM »
**Last annual savings rate was 71%, probably bolstered by a large ($10k) tax return which I may or may not get next time around. Who knows.

You mean a large refund?

This is a large tax return:



/sorryformertaxpreparerpedantry

pbkmaine

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Re: Anyone else mostly ignore the numbers and math?
« Reply #30 on: September 28, 2015, 08:07:43 AM »
I did the numbers to death a long time ago. Figured out savings rate and target $. Set the savings rate to automatic. Quarterly I would input investable assets into a spreadsheet. I also had DH's pension calcs on a different page of the spreadsheet. When DH got an offer for a retirement package, the work was already done. All I had to do was glance at it to see that the numbers worked.

We don't budget. We track expenses from time to time and adjust things that are out of whack. Usually books for me and technology for DH.

Tetsuya Hondo

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Re: Anyone else mostly ignore the numbers and math?
« Reply #31 on: September 28, 2015, 08:40:26 AM »
I'm a reformed spreadsheet addict. I tracked expenses religiously for over a year. I updated my net worth spreadsheets bimonthly. I loved it.

Then it got boring. Now, as long as I hit my savings numbers, I don't sweat the other stuff. If you're doing the right things, there's no need to obsess over it as long as you're not oblivious to where you're moneys at and what it's doing.

BTDretire

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Re: Anyone else mostly ignore the numbers and math?
« Reply #32 on: September 28, 2015, 09:33:19 AM »
I've kept track of my net worth for many years.
I have net worth forms from the late 80's.
We never used a budget, but we were conscious of
what we spent money for, meaning we lived frugally.
 I watch the stock market and those numbers are put on the
net worth form.
 In the last couple years I've got a rough estimate of how much
money we spend.  Analyzed a 4% WR, also ran
Firecalc to see where we stand.
 I'm 60, so we have had more years to save and closer to SS.
 So no, haven't really ignored the numbers, but never did any spread sheets either.

stripey

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Re: Anyone else mostly ignore the numbers and math?
« Reply #33 on: September 29, 2015, 07:31:22 AM »
**Last annual savings rate was 71%, probably bolstered by a large ($10k) tax return which I may or may not get next time around. Who knows.

You mean a large refund?

This is a large tax return:



/sorryformertaxpreparerpedantry

Yes, sorry :)

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Re: Anyone else mostly ignore the numbers and math?
« Reply #34 on: September 29, 2015, 01:38:03 PM »
I'm great with numbers but I don't track. My NW is meaningless, I don't have enough to retire so why bother? I'd rather spend time on more useful pursuits than watching investments fluctuate; buy and hold works. I have a long term view, it doesn't matter much what happens this year. I just try my best and trust that I'll retire someday.

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Re: Anyone else mostly ignore the numbers and math?
« Reply #35 on: September 29, 2015, 01:57:29 PM »
I can see not caring about specific numbers on a monthly or even yearly time span, but I do think you have to look at the number in the beginning. Like, it's not enough for me to say 'I'll save as much as possible,' because once I considered the a goal savings rate of 50%, which would involve quadrupling the amount I was saving, I suddenly was able to do it. Before I would have sworn I was saving as much as I could. When I was motivated to meet a 50% amount, I made all sorts of big changes that now make it easy.

AlwaysLearningToSave

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Re: Anyone else mostly ignore the numbers and math?
« Reply #36 on: September 29, 2015, 02:52:29 PM »
Well,  I guess I'm a numbers person, but I'm not a maths nerd or very good a spread sheets so I have limitations! When I first became moustached I was appallingly ignorant about Finances and the planning math.  I spent the first 2 or 3 years  being inspired to look at things differently by a thread here resulting in a period of intense thinking and calculating in response to that, and I'd arrive at a different  and better space. I just would think I had it all figured out and someone would put out another thread and I'd be off again.   Its only really this year I've had no major breakthroughs that have propelled me forward and I feel like I'm just cruising along.  Even so, I like to brush off the math  at fairly regular intervals. Its kind of soothing and I get a big kick out of seeing how far I've come.

I think it totally depends on what stage of the game you are in.  As a convert to MMM within the last year, I feel a need to look very critically at our spending and future financial plans.  Thus, I have a spreadsheet that tracks every dollar in and dollar out that helps us identify areas for improvement.  I'm also learning to use spreadsheets to run calculations to learn the best way to allocate available funds to student loan repayment versus savings, etc.  Spending time in the numbers helps me ensure we are allocating money in the most efficient ways possible, moving us closer to our target 50% savings rate.  The more I look at the numbers, the better I understand the numbers, which, paradoxically, will ultimately result in me not needing to pay as much attention to the numbers. 

For now, early in the game, watching the the numbers closely is an absolute necessity.  My goal later on in the accumulation phase is to have our financial life mostly on autopilot, comfortable that we are automatically making good decisions.  Someday when we are thinking about pulling the trigger on FIRE it will again become necessary to carefully analyze the numbers. 

steveo

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Re: Anyone else mostly ignore the numbers and math?
« Reply #37 on: September 29, 2015, 03:04:53 PM »
I can see not caring about specific numbers on a monthly or even yearly time span, but I do think you have to look at the number in the beginning. Like, it's not enough for me to say 'I'll save as much as possible,' because once I considered the a goal savings rate of 50%, which would involve quadrupling the amount I was saving, I suddenly was able to do it. Before I would have sworn I was saving as much as I could. When I was motivated to meet a 50% amount, I made all sorts of big changes that now make it easy.

I think savings rate is critical. If you focus on that you increase your savings and decrease your spending. Once your WR gets down to a low enough level you are FI. I think these figures are important. I don't think you need to focus on how much your investments are earning assuming that you are investing in something as simple as index funds.

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Re: Anyone else mostly ignore the numbers and math?
« Reply #38 on: September 29, 2015, 03:28:13 PM »
I'm a numbers person, but I also really believe that if you don't look at the numbers, you don't really optimize.  Knowing that saving $X/year is boosting your savings by some percentage and reducing expenses by another lets you see the benefit of small changes.  People are not inherently good with big numbers and intentionally working with them is a good way to get a handle on both sides of your cash flow equation.

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Re: Anyone else mostly ignore the numbers and math?
« Reply #39 on: September 29, 2015, 04:12:52 PM »
Since hitting FI early this year I've really become a slacker. Not interested in the budget etc.

Things will pick up when I switch us in January to living off our passive income and saving all my income. THEN I will be watching things like a hawk.

DH cannot really wrap his head around the fact that we no longer need my income at this point. Sure we have some majore purchases to make before I RE, but we really are "here" right now.

Next year will be fun! We are not stock investors so don't have to stress about a crash. We do worry about how rents are doing in our area (they are booming).

We have milestones where that income will increase by alot (say when we pay off the first rental and our income from that property doubles... Or if we decide to sell one off for less work (when we are much older)

So for now I mostly ignore the budget.

retireatbirth

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Re: Anyone else mostly ignore the numbers and math?
« Reply #40 on: September 29, 2015, 05:10:40 PM »
I did the math and built a spreadsheet at first to get a rough projection of when I can retire (in about 7 years). I still play with the spreadsheet on occasion and I'm sure if I get a new job or do something major that will have a real impact on my income/expenses I'll re-visit it, but it's mostly just out of curiosity at this point. What I learned from the spreadsheet is that the stock market is going to determine when I retire. It could easily add or subtract 2-3 years from my projected retirement date, but there's little I can do on the income/expenses front unless I happen upon some financial windfall.

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Re: Anyone else mostly ignore the numbers and math?
« Reply #41 on: September 29, 2015, 09:43:11 PM »
I can see not caring about specific numbers on a monthly or even yearly time span, but I do think you have to look at the number in the beginning. Like, it's not enough for me to say 'I'll save as much as possible,' because once I considered the a goal savings rate of 50%, which would involve quadrupling the amount I was saving, I suddenly was able to do it. Before I would have sworn I was saving as much as I could. When I was motivated to meet a 50% amount, I made all sorts of big changes that now make it easy.

I think savings rate is critical. If you focus on that you increase your savings and decrease your spending. Once your WR gets down to a low enough level you are FI. I think these figures are important. I don't think you need to focus on how much your investments are earning assuming that you are investing in something as simple as index funds.

But why do I need to know whether I save 58% or 49% to do that?  I look at my electric bill and if it is high, I strive to cut it.  Or more specifically, each time I consider turning on the A/C, I stop and ask myself whether I really, truly need it. The resulting change in my savings % is inconsequential, as far as specific numbers.

Maybe it's the same reason I don't have a specific budget.  If I need to spend $350 this month on groceries because I want to make something special or we entertain a lot or anything else, that's totally fine.  But if I can get by spending only $225, then that's great.  Allowing myself $300 almost invites waste, because it gives an excuse not to optimize as long as I stay below that cap.  To me, it should always be about optimizing each and every expense, and evaluating every outgoing penny on the merits of that choice. 

If my choices have me at a 90% savings rate, and yet there are still expenses and income that aren't optimized, then there's more I can do.  And if I'm at 14% and there's truly nothing more I can do at the time to cut expenses or raise income, then there's also nothing I can do.  So those 90% and 14% numbers don't mean anything, and in fact seem to invite either waste or unproductive stress.

I'm not suggesting everyone need to see it like I do.  That's just the way my mind works, I guess. 

thd7t

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Re: Anyone else mostly ignore the numbers and math?
« Reply #42 on: September 30, 2015, 06:59:41 AM »
I can see not caring about specific numbers on a monthly or even yearly time span, but I do think you have to look at the number in the beginning. Like, it's not enough for me to say 'I'll save as much as possible,' because once I considered the a goal savings rate of 50%, which would involve quadrupling the amount I was saving, I suddenly was able to do it. Before I would have sworn I was saving as much as I could. When I was motivated to meet a 50% amount, I made all sorts of big changes that now make it easy.

I think savings rate is critical. If you focus on that you increase your savings and decrease your spending. Once your WR gets down to a low enough level you are FI. I think these figures are important. I don't think you need to focus on how much your investments are earning assuming that you are investing in something as simple as index funds.

But why do I need to know whether I save 58% or 49% to do that?  I look at my electric bill and if it is high, I strive to cut it.  Or more specifically, each time I consider turning on the A/C, I stop and ask myself whether I really, truly need it. The resulting change in my savings % is inconsequential, as far as specific numbers.

Maybe it's the same reason I don't have a specific budget.  If I need to spend $350 this month on groceries because I want to make something special or we entertain a lot or anything else, that's totally fine.  But if I can get by spending only $225, then that's great.  Allowing myself $300 almost invites waste, because it gives an excuse not to optimize as long as I stay below that cap.  To me, it should always be about optimizing each and every expense, and evaluating every outgoing penny on the merits of that choice. 

If my choices have me at a 90% savings rate, and yet there are still expenses and income that aren't optimized, then there's more I can do.  And if I'm at 14% and there's truly nothing more I can do at the time to cut expenses or raise income, then there's also nothing I can do.  So those 90% and 14% numbers don't mean anything, and in fact seem to invite either waste or unproductive stress.

I'm not suggesting everyone need to see it like I do.  That's just the way my mind works, I guess.
I bolded where you mentioned "nothing more I can do", because a lot of people don't think that there's any way that they can lower their expenses without impacting their quality of life, but what they really mean is that they don't want to look at the numbers or try (I need to be totally clear that I don't mean you, here). 

If a person doesn't look at numbers and compare them to other people's numbers, they may have a hard time seeing that they can cut costs.  Again, this doesn't apply to everyone, but it shows that the numbers can have direct value.

By the way, I love this thread.  Very interesting to see where people are coming from, mentally!

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Re: Anyone else mostly ignore the numbers and math?
« Reply #43 on: September 30, 2015, 07:23:39 AM »
Hi Villanelle!

I do now! As you can read on my journal -> http://forum.mrmoneymustache.com/journals/lerolero's-journal-saving-in-london/

I used to enjoy updating the numbers and checking the percentages but the response would always be "gosh, that much for groceries?" and "I'm behind my target, I'll have to save in transport and see if I can squeeze the groceries expenses".

Now I'm getting my priorities right, I'm less anxious and as many have said, I'm on autopilot.

*it's worth noting that tracking is important until you understand your expenses, your habits; once figured out, all can go on autopilot.

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Re: Anyone else mostly ignore the numbers and math?
« Reply #44 on: September 30, 2015, 04:25:33 PM »
Villanelle what you're describing is often called "budgeting from zero" and it's a totally cool way to see things.

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Re: Anyone else mostly ignore the numbers and math?
« Reply #45 on: October 01, 2015, 08:41:09 AM »
I can see not caring about specific numbers on a monthly or even yearly time span, but I do think you have to look at the number in the beginning. Like, it's not enough for me to say 'I'll save as much as possible,' because once I considered the a goal savings rate of 50%, which would involve quadrupling the amount I was saving, I suddenly was able to do it. Before I would have sworn I was saving as much as I could. When I was motivated to meet a 50% amount, I made all sorts of big changes that now make it easy.

I think savings rate is critical. If you focus on that you increase your savings and decrease your spending. Once your WR gets down to a low enough level you are FI. I think these figures are important. I don't think you need to focus on how much your investments are earning assuming that you are investing in something as simple as index funds.

But why do I need to know whether I save 58% or 49% to do that?  I look at my electric bill and if it is high, I strive to cut it.  Or more specifically, each time I consider turning on the A/C, I stop and ask myself whether I really, truly need it. The resulting change in my savings % is inconsequential, as far as specific numbers.

Maybe it's the same reason I don't have a specific budget.  If I need to spend $350 this month on groceries because I want to make something special or we entertain a lot or anything else, that's totally fine.  But if I can get by spending only $225, then that's great.  Allowing myself $300 almost invites waste, because it gives an excuse not to optimize as long as I stay below that cap.  To me, it should always be about optimizing each and every expense, and evaluating every outgoing penny on the merits of that choice. 

If my choices have me at a 90% savings rate, and yet there are still expenses and income that aren't optimized, then there's more I can do.  And if I'm at 14% and there's truly nothing more I can do at the time to cut expenses or raise income, then there's also nothing I can do.  So those 90% and 14% numbers don't mean anything, and in fact seem to invite either waste or unproductive stress.

I'm not suggesting everyone need to see it like I do.  That's just the way my mind works, I guess.
I bolded where you mentioned "nothing more I can do", because a lot of people don't think that there's any way that they can lower their expenses without impacting their quality of life, but what they really mean is that they don't want to look at the numbers or try (I need to be totally clear that I don't mean you, here). 

If a person doesn't look at numbers and compare them to other people's numbers, they may have a hard time seeing that they can cut costs.  Again, this doesn't apply to everyone, but it shows that the numbers can have direct value.

By the way, I love this thread.  Very interesting to see where people are coming from, mentally!

That's, personally, what I was trying to get at, that I couldn't see my way towards living on less until the numbers showed me a different way of looking at it.

But in terms of, like, my savings rate some month is only going to be 40% rather than 50% because of our vacation rental so I have to, like, not eat to make up the money elsewhere, no, I don't worry about that, I'm not a slave to the numbers.

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Re: Anyone else mostly ignore the numbers and math?
« Reply #46 on: November 08, 2015, 08:40:26 AM »
I'm right there with you--don't care much about the numbers at all.

I update my net worth spreadsheet once/month out of some sort of weird obligation, but only update my other spreadsheets every few months, at most (it gets further and further apart each time), and only look at my spending (monthly/annual by category) once/year, once the previous year has ended (and it usually takes me a few months, February or March, to even get around to that).

We track our spending via Mint, but just don't look at it ever, because we don't care--we spend what we want, and save all the rest.

So when I'd update the spreadsheets every few months, I'd look and go "oh, our savings rate is X% this year" just because that's a line on the spreadsheet, but I wouldn't do anything to try and increase that, or change our behavior in any way.

As far as FIRE numbers and math, our income is unpredictable due to real estate (not a typical SWR scenario) and our spending is unpredictable cause we're traveling full time now, and are having a kid, that we pretty much ignored the numbers on those as well when we decided to pull the plug, and just figured we'll have enough, but if not, we'll go make more.

Numbers can be fun, but they don't have to drive anything, if you don't want them to.  :)
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Eric222

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Re: Anyone else mostly ignore the numbers and math?
« Reply #47 on: November 08, 2015, 08:46:20 AM »
I'd love to be advanced enough to ignore the numbers!  I'm still a reforming spendthrift - with a hair on fire debt emergency, that will take lots of willpower and time to put out.  For me, the numbers encourage me to change and not slip into old habits. 

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Re: Anyone else mostly ignore the numbers and math?
« Reply #48 on: November 08, 2015, 08:56:19 AM »
When I retired money was tight, due to circumstances mostly beyond my control.  I really analyzed my spending,and with the help of the forums I found some low-hanging fruit.  Now I don't track - the circumstances have changed, and I am comfortable living on a lot less than I had originally had thought I would need.

Tracking expenses really carefully for a while is massively useful, because getting a recurring expense lower (best low is zero) is more useful long-term than pinching pennies - and we are here on the Forums to enjoy life, not be cheap.  Personal example - my Bell bill (phone and Expressvu) in November, 2010, was $129.78.  Now it is $0.00.  My cell phone bill is up $10.15 to provide a house phone number (with better service than I had with Bell), so my gain was $119.63.  Every month! So that is $1435.56 I have not spent every year - it adds up.

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Re: Anyone else mostly ignore the numbers and math?
« Reply #49 on: November 08, 2015, 09:58:17 AM »
The numbers I focus on most are the recurring monthly/yearly bills, which are mostly services like cell, electricity, internet, insurance, subscriptions to netflix, etc. Getting those as low as I can is a big fat target for me and the payback is huge over 10 years.