Is it OK to take less risk and spend more money once you’ve reached your goals even if you are young?

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GrayS26
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Is it OK to take less risk and spend more money once you’ve reached your goals even if you are young?

Post by GrayS26 » Mon Nov 04, 2019 5:55 pm

I’ve reached a point where I’m able to afford the life I want, and so recently I decided to take less risk despite being young, ~30ish. I’ve also been spending more money, but my expenses fall within my budget.

I’m still saving money every month and not dipping into my principal.

When I was younger I saved more and spent less just to reach this point, and while this works for me it might not work for others.

Hoping to hear your thoughts and opinions. Thanks.

Caduceus
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Re: Is it OK to take less risk and spend more money once you’ve reached your goals even if you are young?

Post by Caduceus » Mon Nov 04, 2019 6:07 pm

It depends on how you define risk. I think a lot of people mistakenly define risk as "volatillity" - which is the prospect of investment prices going up and down - when the real risks are longer-term in nature - especially the risk of inflation, or having your investments not being able to sustain you for such a long period of retirement, etc.

Warren Buffett once mentioned that compared to stocks over the long run, bonds can be extraordinarily riskier compared to stocks.

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GrayS26
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Re: Is it OK to take less risk and spend more money once you’ve reached your goals even if you are young?

Post by GrayS26 » Mon Nov 04, 2019 6:14 pm

Ok but if I keep investments with the potential for a lot of volatility and things go badly, then I would lose my lifestyle anyway right?

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GrayS26
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Re: Is it OK to take less risk and spend more money once you’ve reached your goals even if you are young?

Post by GrayS26 » Mon Nov 04, 2019 6:15 pm

Caduceus wrote:
Mon Nov 04, 2019 6:07 pm
It depends on how you define risk. I think a lot of people mistakenly define risk as "volatillity" - which is the prospect of investment prices going up and down - when the real risks are longer-term in nature - especially the risk of inflation, or having your investments not being able to sustain you for such a long period of retirement, etc.

Warren Buffett once mentioned that compared to stocks over the long run, bonds can be extraordinarily riskier compared to stocks.

Ok but if I keep investments with the potential for a lot of volatility and things go badly, then I would lose my lifestyle anyway right?

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TomatoTomahto
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Re: Is it OK to take less risk and spend more money once you’ve reached your goals even if you are young?

Post by TomatoTomahto » Mon Nov 04, 2019 6:25 pm

GrayS26 wrote:
Mon Nov 04, 2019 6:15 pm
Caduceus wrote:
Mon Nov 04, 2019 6:07 pm
It depends on how you define risk. I think a lot of people mistakenly define risk as "volatillity" - which is the prospect of investment prices going up and down - when the real risks are longer-term in nature - especially the risk of inflation, or having your investments not being able to sustain you for such a long period of retirement, etc.

Warren Buffett once mentioned that compared to stocks over the long run, bonds can be extraordinarily riskier compared to stocks.

Ok but if I keep investments with the potential for a lot of volatility and things go badly, then I would lose my lifestyle anyway right?
I don’t know any of your numbers, but you’ve probably set your “goal” too low.
Okay, I get it; I won't be political or controversial. The Earth is flat.

TallBoy29er
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Re: Is it OK to take less risk and spend more money once you’ve reached your goals even if you are young?

Post by TallBoy29er » Mon Nov 04, 2019 6:26 pm

I'm in a similar place as you financially, but tack on a few years. :D We still save a significant portion of income each year (habits are hard to break completely), but we no longer sweat the small, or even medium, stuff. Want to take a little nicer vacation to somewhere international? Giddyup. Family needs a new paddleboard to get outside with each other during summer and float on the lake? Done without even thinking about the impact on the savings. Life is fun now.

For me, it was striking a balance between saving and spending. I had judiciously, to a fault, been focused on the former. It sounds like you are the same. Then I realized, in too many ways, I may not be around tomorrow, literally, and that changed my behavior, for the better.

I will say, we have kept it to where, should times get tough, we can turn off the spigot. We don't buy assets that are cash flow drains, such as a bigger house, a second house, subscriptions to clubs, etc. We focus on experiences that create memories. I would not trade any of the memories we made due to loosening up for a larger nest egg.

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Re: Is it OK to take less risk and spend more money once you’ve reached your goals even if you are young?

Post by stoptothink » Mon Nov 04, 2019 6:29 pm

Before attempting to answer this ambiguous question, should consider reading OP's previous threads.

TallBoy29er
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Re: Is it OK to take less risk and spend more money once you’ve reached your goals even if you are young?

Post by TallBoy29er » Mon Nov 04, 2019 6:32 pm

stoptothink wrote:
Mon Nov 04, 2019 6:29 pm
Before attempting to answer this ambiguous question, should consider reading OP's previous threads.
Uh-oh, sounds loaded. Fact is, I'm too busy (inefficient multi-tasking) and not interested enough to pursue that course of action. :beer

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TomatoTomahto
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Re: Is it OK to take less risk and spend more money once you’ve reached your goals even if you are young?

Post by TomatoTomahto » Mon Nov 04, 2019 6:52 pm

stoptothink wrote:
Mon Nov 04, 2019 6:29 pm
Before attempting to answer this ambiguous question, should consider reading OP's previous threads.
Titles were enough. Thanks.
Okay, I get it; I won't be political or controversial. The Earth is flat.

Helo80
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Re: Is it OK to take less risk and spend more money once you’ve reached your goals even if you are young?

Post by Helo80 » Mon Nov 04, 2019 6:56 pm

GrayS26 wrote:
Mon Nov 04, 2019 5:55 pm
I’ve reached a point where I’m able to afford the life I want, and so recently I decided to take less risk despite being young, ~30ish. I’ve also been spending more money, but my expenses fall within my budget.

I’m still saving money every month and not dipping into my principal.

When I was younger I saved more and spent less just to reach this point, and while this works for me it might not work for others.

Hoping to hear your thoughts and opinions. Thanks.

Yes, because you do not want to burn yourself out. At some point, watching the Vanguard numbers go up does nothing for you.

Go buy a new car, go on vacation, or do something crazy (within reason) that makes you want to continue to live life and work.

TallBoy29er
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Re: Is it OK to take less risk and spend more money once you’ve reached your goals even if you are young?

Post by TallBoy29er » Mon Nov 04, 2019 7:03 pm

TomatoTomahto wrote:
Mon Nov 04, 2019 6:52 pm
stoptothink wrote:
Mon Nov 04, 2019 6:29 pm
Before attempting to answer this ambiguous question, should consider reading OP's previous threads.
Titles were enough. Thanks.
Curiosity killed the Cat TallBoy.

Topic Author
GrayS26
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Re: Is it OK to take less risk and spend more money once you’ve reached your goals even if you are young?

Post by GrayS26 » Mon Nov 04, 2019 7:19 pm

Helo80 wrote:
Mon Nov 04, 2019 6:56 pm
GrayS26 wrote:
Mon Nov 04, 2019 5:55 pm
I’ve reached a point where I’m able to afford the life I want, and so recently I decided to take less risk despite being young, ~30ish. I’ve also been spending more money, but my expenses fall within my budget.

I’m still saving money every month and not dipping into my principal.

When I was younger I saved more and spent less just to reach this point, and while this works for me it might not work for others.

Hoping to hear your thoughts and opinions. Thanks.

Yes, because you do not want to burn yourself out. At some point, watching the Vanguard numbers go up does nothing for you.

Go buy a new car, go on vacation, or do something crazy (within reason) that makes you want to continue to live life and work.
Thank you for the helpful comment.

Yes, right now I’m doing everything I love and it is affordable.

I spent freely the last couple of months, and to my surprise I still ended up saving money. So I was pleased.

I’m dating someone very beautiful and we indulge on nice wines, restaurants, hotels, clothes, and so on. I’m back in school part time as well earning my masters- tuition is very affordable.

I do not save as much money or earn as much money as I did in the past but I do earn enough to live my life to where I’m happy with everything.

stoptothink
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Re: Is it OK to take less risk and spend more money once you’ve reached your goals even if you are young?

Post by stoptothink » Mon Nov 04, 2019 7:33 pm

Helo80 wrote:
Mon Nov 04, 2019 6:56 pm
GrayS26 wrote:
Mon Nov 04, 2019 5:55 pm
I’ve reached a point where I’m able to afford the life I want, and so recently I decided to take less risk despite being young, ~30ish. I’ve also been spending more money, but my expenses fall within my budget.

I’m still saving money every month and not dipping into my principal.

When I was younger I saved more and spent less just to reach this point, and while this works for me it might not work for others.

Hoping to hear your thoughts and opinions. Thanks.

Yes, because you do not want to burn yourself out. At some point, watching the Vanguard numbers go up does nothing for you.

Go buy a new car, go on vacation, or do something crazy (within reason) that makes you want to continue to live life and work.
Based upon previous threads, OP may or may not be in school, but doesn't appear to work (trust fund). Those previous threads are some of the best entertainment ever provided by this board.

donaldfair71
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Re: Is it OK to take less risk and spend more money once you’ve reached your goals even if you are young?

Post by donaldfair71 » Mon Nov 04, 2019 7:50 pm

Just keep in the back of your mind the idea that, the more you increase spending, the bigger your FI number increases. At the same time, your savings rate decreases. It’s kind of a double whammy in that way. You need more while saving less.

If FI isn’t part of your plan, then disregard.

Topic Author
GrayS26
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Re: Is it OK to take less risk and spend more money once you’ve reached your goals even if you are young?

Post by GrayS26 » Mon Nov 04, 2019 7:56 pm

donaldfair71 wrote:
Mon Nov 04, 2019 7:50 pm
Just keep in the back of your mind the idea that, the more you increase spending, the bigger your FI number increases. At the same time, your savings rate decreases. It’s kind of a double whammy in that way. You need more while saving less.

If FI isn’t part of your plan, then disregard.
I’m sorry but what is FI?

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GrayS26
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Re: Is it OK to take less risk and spend more money once you’ve reached your goals even if you are young?

Post by GrayS26 » Mon Nov 04, 2019 7:59 pm

stoptothink wrote:
Mon Nov 04, 2019 7:33 pm
Helo80 wrote:
Mon Nov 04, 2019 6:56 pm
GrayS26 wrote:
Mon Nov 04, 2019 5:55 pm
I’ve reached a point where I’m able to afford the life I want, and so recently I decided to take less risk despite being young, ~30ish. I’ve also been spending more money, but my expenses fall within my budget.

I’m still saving money every month and not dipping into my principal.

When I was younger I saved more and spent less just to reach this point, and while this works for me it might not work for others.

Hoping to hear your thoughts and opinions. Thanks.

Yes, because you do not want to burn yourself out. At some point, watching the Vanguard numbers go up does nothing for you.

Go buy a new car, go on vacation, or do something crazy (within reason) that makes you want to continue to live life and work.
Based upon previous threads, OP may or may not be in school, but doesn't appear to work (trust fund). Those previous threads are some of the best entertainment ever provided by this board.
I work for myself and pay taxes despite any help I have.

And I mentioned I’m in school (masters).

And then just my dating life and enjoying nice things.

I don’t want to lose my lifestyle and so I was thinking less risk might be a good idea which is why I’m asking for opinions on here.

lukestuckenhymer
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Re: Is it OK to take less risk and spend more money once you’ve reached your goals even if you are young?

Post by lukestuckenhymer » Mon Nov 04, 2019 8:00 pm

It's seems you're saving enough to come out ahead every month. That's a good thing, but it can all change in an instant. If you're asking whether or not at age 30 to sacrifice savings in order to spend money on things that you may not need, the answer is "no."

TheDDC
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Re: Is it OK to take less risk and spend more money once you’ve reached your goals even if you are young?

Post by TheDDC » Mon Nov 04, 2019 8:11 pm

GrayS26 wrote:
Mon Nov 04, 2019 7:59 pm
stoptothink wrote:
Mon Nov 04, 2019 7:33 pm
Helo80 wrote:
Mon Nov 04, 2019 6:56 pm
GrayS26 wrote:
Mon Nov 04, 2019 5:55 pm
I’ve reached a point where I’m able to afford the life I want, and so recently I decided to take less risk despite being young, ~30ish. I’ve also been spending more money, but my expenses fall within my budget.

I’m still saving money every month and not dipping into my principal.

When I was younger I saved more and spent less just to reach this point, and while this works for me it might not work for others.

Hoping to hear your thoughts and opinions. Thanks.

Yes, because you do not want to burn yourself out. At some point, watching the Vanguard numbers go up does nothing for you.

Go buy a new car, go on vacation, or do something crazy (within reason) that makes you want to continue to live life and work.
Based upon previous threads, OP may or may not be in school, but doesn't appear to work (trust fund). Those previous threads are some of the best entertainment ever provided by this board.
I work for myself and pay taxes despite any help I have.

And I mentioned I’m in school (masters).

And then just my dating life and enjoying nice things.

I don’t want to lose my lifestyle and so I was thinking less risk might be a good idea which is why I’m asking for opinions on here.
Egoboost(TM) lifestyle thread? But I digress...

I would pile 100% VTSAX and not look back.

-TheDDC
Refreshingly, a double barrel shotgun blast of truth...

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GrayS26
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Re: Is it OK to take less risk and spend more money once you’ve reached your goals even if you are young?

Post by GrayS26 » Tue Nov 05, 2019 3:34 am

lukestuckenhymer wrote:
Mon Nov 04, 2019 8:00 pm
It's seems you're saving enough to come out ahead every month. That's a good thing, but it can all change in an instant. If you're asking whether or not at age 30 to sacrifice savings in order to spend money on things that you may not need, the answer is "no."
The majority of my spending is on non-essentials but that’s the point of the money. That’s why I saved up and took on risk earlier in my life to be able to sustainably afford the things I want and to enjoy a nice lifestyle with the girl of my dreams.

I need very little - a decent place in a safe neighborhood, decent car like a Honda would do, and a few clothes but realistically nobody who can afford more would actually want to live like that.

Now, despite being young, I was thinking it might be a good idea to take on less risk so I don’t lose what I’ve made and saved and can continue the same lifestyle. I am also spending more quite simply because there’s more to spend so my net savings after taking on lower yielding investments and saving less is not as much as it used to be.

But I’m still growing my assets bc I’m still positive at the end of the month. I have no debt.

I’m also getting a masters so I have something to fall back on if I should need it. My masters will give me more earning potential than my bachelors only.
Last edited by GrayS26 on Tue Nov 05, 2019 3:41 am, edited 1 time in total.

Thesaints
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Re: Is it OK to take less risk and spend more money once you’ve reached your goals even if you are young?

Post by Thesaints » Tue Nov 05, 2019 3:40 am

Maybe the OP has simply set his sights too low...

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GrayS26
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Re: Is it OK to take less risk and spend more money once you’ve reached your goals even if you are young?

Post by GrayS26 » Tue Nov 05, 2019 3:54 am

Thesaints wrote:
Tue Nov 05, 2019 3:40 am
Maybe the OP has simply set his sights too low...
Maybe I have. What would determine that?

smectym
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Re: Is it OK to take less risk and spend more money once you’ve reached your goals even if you are young?

Post by smectym » Tue Nov 05, 2019 4:24 am

The "less risk" part is fine. The "free spending" part is shortsighted, and I omit several other pungent adjectives that probably should be added. The young investor must deliberately elect to shun superfluous spending. The young investor must show restraint, avoid vapid, thoughtless waste of assets, and focus on capital formation. The idea that "I deserve" this or that pricey takeout, when a meal prepared at home could be had at 1/10th the cost; or that a "splurge" on clothing that will 2 months later wind up disregarded at the bottom of the closet is OK somehow because...uh...only young once, heh heh...all wrong.

The idea that because you're young, it's cute to overspend, excusable as part of being young, wrong. The urge toward prestation, i.e. putting on a show to your cool, hip, trendy friends that you have money to spend, should be strangled in the crib. Skip the single malt whisky bars, the concerts with jacked up ticket prices: why go on. Instead, not to be redundant, focus on capital formation with a view to achieving minimal financial independence at the earliest possible date: and thenceforth, continue to augment capital so that your state of financial independence is not minimal, but even comfortable. At that point, when passive income is flowing in, and begins to surprise you by how fast and how much is rolling in, then you can start loosening the reins on discretionary consumption.

smectym
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Re: Is it OK to take less risk and spend more money once you’ve reached your goals even if you are young?

Post by smectym » Tue Nov 05, 2019 4:36 am

>And then just my dating life and enjoying nice things.

>I don’t want to lose my lifestyle


Following up. I suggest you quit with the "enjoying nice things" problem you have, and flip on the lifestyle: "Just Lose It," as Nike might say.

You will ignore this obnoxious advice. 20 years will go by. The advice will look less obnoxious. But by then: too late

lazyday
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Re: Is it OK to take less risk and spend more money once you’ve reached your goals even if you are young?

Post by lazyday » Tue Nov 05, 2019 5:13 am

GrayS26 wrote:
Mon Nov 04, 2019 5:55 pm
Hoping to hear your thoughts and opinions.
Are you ok posting your portfolio and your income from other sources?

If you don’t want to share amounts, it might still be helpful to show portfolio percentages, and also to explain for us the percentages of your spending coming from the portfolio itself and from other sources.

It’s difficult to give opinions on risk and spending without knowing your financial situation. Many people spend too much and invest too little, but here on Bogleheads, some people might be too frugal.

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Re: Is it OK to take less risk and spend more money once you’ve reached your goals even if you are young?

Post by Dottie57 » Tue Nov 05, 2019 5:23 am

OP,

Set a savings/investment goal of 20-25% of gross. The rest is spendable. As your income increases so will savings and spending. This should get you a pretty good retirement. The danger in spending more now is that you will want more in retirement too . Keep spending in check.

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Re: Is it OK to take less risk and spend more money once you’ve reached your goals even if you are young?

Post by Tamarind » Tue Nov 05, 2019 6:10 am

OP, given the larger context you are making decisions in (the trust), there is only one thing in your control that will affect your outcome.

Can you set a budget that is less than your income and (just as importantly) stick to it? Live below your means. This is predictive of your ability to handle the trust money. If you can do this (and understand why when not working you should limit yourself to 2-3% of your invested funds) then you'll be just fine and could reset and recover if the trust disappeared. If you can't then it doesn't matter what your goal number is because you'll blow through any amount.

You would not get this advice in the absence of the trust fund, because you have a parachute that almost no other people your age have. We typically advise people to discount future inheritances, but yours has already been set aside, barring major events outside your control. For most readers it is not sufficient to hit your goal number and spend all the rest on lifestyle, because doing so increases the size of your goal number again.

Sure you should have some fun when you're young. But I suspect that you will be a better and happier person (and meet people who will make better spouses) if you exercise the capacity to reduce spending on yourself.

Thesaints
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Re: Is it OK to take less risk and spend more money once you’ve reached your goals even if you are young?

Post by Thesaints » Tue Nov 05, 2019 11:16 am

GrayS26 wrote:
Tue Nov 05, 2019 3:54 am
Thesaints wrote:
Tue Nov 05, 2019 3:40 am
Maybe the OP has simply set his sights too low...
Maybe I have. What would determine that?
There is no algorithmic way to make such a determination. You have to clearly understand that avoiding risk will also reduce your expected return for the future.
The question is whether you need more return, or you can be happy with a risk-less (or lower risk) rate of return.
That in turn depends on your desired lifestyle.

Now, you might think that you are happy since you can travel to Europe/Asia twice a year. But how much happier would you be if you could travel in business class ? And how much if you could travel on a personal jet ?
These are question only you can answer and your answer may change as time goes by.

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GrayS26
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Re: Is it OK to take less risk and spend more money once you’ve reached your goals even if you are young?

Post by GrayS26 » Tue Nov 05, 2019 2:26 pm

smectym wrote:
Tue Nov 05, 2019 4:24 am
The "less risk" part is fine. The "free spending" part is shortsighted, and I omit several other pungent adjectives that probably should be added. The young investor must deliberately elect to shun superfluous spending. The young investor must show restraint, avoid vapid, thoughtless waste of assets, and focus on capital formation. The idea that "I deserve" this or that pricey takeout, when a meal prepared at home could be had at 1/10th the cost; or that a "splurge" on clothing that will 2 months later wind up disregarded at the bottom of the closet is OK somehow because...uh...only young once, heh heh...all wrong.

The idea that because you're young, it's cute to overspend, excusable as part of being young, wrong. The urge toward prestation, i.e. putting on a show to your cool, hip, trendy friends that you have money to spend, should be strangled in the crib. Skip the single malt whisky bars, the concerts with jacked up ticket prices: why go on. Instead, not to be redundant, focus on capital formation with a view to achieving minimal financial independence at the earliest possible date: and thenceforth, continue to augment capital so that your state of financial independence is not minimal, but even comfortable. At that point, when passive income is flowing in, and begins to surprise you by how fast and how much is rolling in, then you can start loosening the reins on discretionary consumption.
My “state of financial independence” is comfortable already. That is the entire the point. I saved and spent less and took on more risk to be able to be comfortable. I’ve done what you suggested already in terms of not wasting cash. I just feel like I’ve reached a point where I can spend on things bc more money feels like just a new number on the screen without actually getting to live life and enjoy it.

SCb&b
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Re: Is it OK to take less risk and spend more money once you’ve reached your goals even if you are young?

Post by SCb&b » Tue Nov 05, 2019 2:39 pm

OP, are you still receiving $100,000/year from your parents? How much of that are you saving? Is that guaranteed to continue indefinitely?

Re: title of your post: what specifically were the goals you've reached?

dh
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Re: Is it OK to take less risk and spend more money once you’ve reached your goals even if you are young?

Post by dh » Tue Nov 05, 2019 2:40 pm

GrayS26 wrote:
Mon Nov 04, 2019 5:55 pm
I’ve reached a point where I’m able to afford the life I want, and so recently I decided to take less risk despite being young, ~30ish. I’ve also been spending more money, but my expenses fall within my budget.

I’m still saving money every month and not dipping into my principal.

When I was younger I saved more and spent less just to reach this point, and while this works for me it might not work for others.

Hoping to hear your thoughts and opinions. Thanks.
Congratulations. It sounds like you are doing great! You discovered what it took me a long time to understand. Specifically, defining enough.

I strongly believe in the mantra: Meet income needs, by taking as little risk as possible

Topic Author
GrayS26
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Re: Is it OK to take less risk and spend more money once you’ve reached your goals even if you are young?

Post by GrayS26 » Tue Nov 05, 2019 2:51 pm

smectym wrote:
Tue Nov 05, 2019 4:36 am
>And then just my dating life and enjoying nice things.

>I don’t want to lose my lifestyle


Following up. I suggest you quit with the "enjoying nice things" problem you have, and flip on the lifestyle: "Just Lose It," as Nike might say.

You will ignore this obnoxious advice. 20 years will go by. The advice will look less obnoxious. But by then: too late
Can you please explain why I would be worse off in twenty years? I’m still growing my net worth and I have no debt.

Susannaself
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Re: Is it OK to take less risk and spend more money once you’ve reached your goals even if you are young?

Post by Susannaself » Tue Nov 05, 2019 3:18 pm

Congratulations! Glad you seem to be enjoying your life and have the wherewithal to do it. I am in also in a financially independent position, but keep working part time because I enjoy it, and am still reinvesting dividends. Something that really helped me determine that "safety" threshold was talking with a CFP at Vanguard (NOTE: I'm a musician and do not work for them!). Before this, I heard so much advice and never felt confident I was in a proper asset allocation for my age, lifestyle, expenses, etc. After rebalancing my portfolio (all index funds) 65%/33%/2% cash, and have had time to live through ups and downs in the market, I have a peace of mind I've never had before with money. I would recommend spending the money for an independent, fee only, fiduciary CFP to make a sound plan, and then give it time. The plan we set up cuts through the noise whenever doubts may arise for me. Good luck!

P.S. I like the quote, "When you win the game, stop playing." For me, this doesn't mean holding only bonds, but then having only "safe" investments that won't grow much isn't safe in my book.

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GrayS26
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Re: Is it OK to take less risk and spend more money once you’ve reached your goals even if you are young?

Post by GrayS26 » Tue Nov 05, 2019 3:23 pm

lazyday wrote:
Tue Nov 05, 2019 5:13 am
GrayS26 wrote:
Mon Nov 04, 2019 5:55 pm
Hoping to hear your thoughts and opinions.
Are you ok posting your portfolio and your income from other sources?

If you don’t want to share amounts, it might still be helpful to show portfolio percentages, and also to explain for us the percentages of your spending coming from the portfolio itself and from other sources.

It’s difficult to give opinions on risk and spending without knowing your financial situation. Many people spend too much and invest too little, but here on Bogleheads, some people might be too frugal.
Right now I’m mostly getting a safe ~3% in cash guaranteed. Of course this may not be right for others but I’m happy with it.

As far as amounts it varies and comes from various sources but I’m able to spend low 5 digits a month comfortably and [hopefully] sustainably (*knock on wood*). But I usually don’t even spend that much and end up saving money and then that adds up too over time which I could use for whatever.

I’ve been actually able to leave my investments alone reinvesting whatever I make on them (so far).

I would say I’m still frugal but just less frugal than before.

NewMoneyMustBeSmart
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Re: Is it OK to take less risk and spend more money once you’ve reached your goals even if you are young?

Post by NewMoneyMustBeSmart » Tue Nov 05, 2019 3:34 pm

GrayS26 wrote:
Mon Nov 04, 2019 5:55 pm
Is it OK to take less risk and spend more money once you’ve reached your goals even if you are young?
Sure. It's okay. What you may want to do is project the likelihood of your current wealth working for you long term. You can backtest against historical data.

https://www.firecalc.com/ does a neat monte carlo analysis.

You are fine do start decreasing effort, but recognize that less isn't more when it comes to risk reduction. The more you have, the lower the probability you'll have problems in the future.

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Re: Is it OK to take less risk and spend more money once you’ve reached your goals even if you are young?

Post by DesertDiva » Tue Nov 05, 2019 3:36 pm

TomatoTomahto wrote:
Tue Nov 05, 2019 5:52 am
TallBoy29er wrote:
Mon Nov 04, 2019 8:32 pm
nydoc wrote:
Mon Nov 04, 2019 7:57 pm
Quarterly bogleheads entertainment thread. Please take us for a ride.
Hear! Hear!
Oh; I’m remembering now. Pause for a moment while I start a fire in the fireplace and make some popcorn. I was going to watch 90 Day Fiancé, but this will do.
I'd like mine sprinkled with Parmesan cheese and a glass of cabernet. 8-)

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Re: Is it OK to take less risk and spend more money once you’ve reached your goals even if you are young?

Post by JoeRetire » Tue Nov 05, 2019 3:38 pm

GrayS26 wrote:
Mon Nov 04, 2019 5:55 pm
I’ve reached a point where I’m able to afford the life I want, and so recently I decided to take less risk despite being young, ~30ish. I’ve also been spending more money, but my expenses fall within my budget.

I’m still saving money every month and not dipping into my principal.

When I was younger I saved more and spent less just to reach this point, and while this works for me it might not work for others.

Hoping to hear your thoughts and opinions. Thanks.
Everyone gets to decide for themselves.

You can afford the life you want now. At 30, can you already afford the life you want in retirement?
Have you accounted for inflation?
Have you accounted for Long Term Care?
Have you accounted for spouse and/or children?

If so, no need to take any risks at all, and well done!
Don't be a lemming.

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Re: Is it OK to take less risk and spend more money once you’ve reached your goals even if you are young?

Post by MotoTrojan » Tue Nov 05, 2019 4:17 pm

If you can’t share your portfolio size and expenses then this is a waste of a thread.

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Re: Is it OK to take less risk and spend more money once you’ve reached your goals even if you are young?

Post by stoptothink » Tue Nov 05, 2019 4:20 pm

MotoTrojan wrote:
Tue Nov 05, 2019 4:17 pm
If you can’t share your portfolio size and expenses then this is a waste of a thread.
Again, see OP's previous threads.

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Re: Is it OK to take less risk and spend more money once you’ve reached your goals even if you are young?

Post by Thesaints » Tue Nov 05, 2019 4:23 pm

GrayS26 wrote:
Tue Nov 05, 2019 3:23 pm
I would say I’m still frugal but just less frugal than before.
Mmmh... if you are frugal that's a big risk. If things go south for whatever reason (think of 1929 all over again, with a 1981 inflation on top) the next step down from frugal is "destitute". It would be a lot better if your finances were allowing you to live la vida loca presently. Then you could easily downgrade to a "measured lifestyle" without suffering too much.

When projecting finances several decades ahead, being currently able to overspend like a drunken sailor is a safety factor and not a small one, although standard personal finance tenets don't recognize it.

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Re: Is it OK to take less risk and spend more money once you’ve reached your goals even if you are young?

Post by MotoTrojan » Tue Nov 05, 2019 4:24 pm

stoptothink wrote:
Tue Nov 05, 2019 4:20 pm
MotoTrojan wrote:
Tue Nov 05, 2019 4:17 pm
If you can’t share your portfolio size and expenses then this is a waste of a thread.
Again, see OP's previous threads.
I have skimmed some but my point still stands. Does OP provide those numbers?

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Re: Is it OK to take less risk and spend more money once you’ve reached your goals even if you are young?

Post by MotoTrojan » Tue Nov 05, 2019 4:24 pm

Thesaints wrote:
Tue Nov 05, 2019 4:23 pm
GrayS26 wrote:
Tue Nov 05, 2019 3:23 pm
I would say I’m still frugal but just less frugal than before.
Mmmh... if you are frugal that's a big risk. If things go south for whatever reason (think of 1929 all over again, with a 1981 inflation on top) the next step down from frugal is "destitute". It would be a lot better if your finances were allowing you to live la vida loca presently. Then you could easily downgrade to a "measured lifestyle" without suffering too much.

When projecting finances several decades ahead, being currently able to overspend like a drunken sailor is a safety factor and not a small one, although standard personal finance tenets don't recognize it.
Frugal for OP is occasionally staying under 5 figures monthly. I don’t think they’ll make it to destitute.

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Re: Is it OK to take less risk and spend more money once you’ve reached your goals even if you are young?

Post by greg24 » Tue Nov 05, 2019 4:30 pm

I would say the OP wants someone to confirm his choices.

Gives vague statements, seeking agreement.

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Re: Is it OK to take less risk and spend more money once you’ve reached your goals even if you are young?

Post by lazyday » Tue Nov 05, 2019 4:52 pm

GrayS26 wrote:
Tue Nov 05, 2019 3:23 pm
Right now I’m mostly getting a safe ~3% in cash guaranteed. Of course this may not be right for others but I’m happy with it.

As far as amounts it varies and comes from various sources but I’m able to spend low 5 digits a month comfortably and [hopefully] sustainably (*knock on wood*). But I usually don’t even spend that much and end up saving money and then that adds up too over time which I could use for whatever.

I’ve been actually able to leave my investments alone reinvesting whatever I make on them (so far).

I would say I’m still frugal but just less frugal than before.
It sounds like your situation is too complicated for me to easily evaluate your risk.

But I can say that there are some advantages to spending less than you are safely able to. It helps to grow your portfolio, which can either increase your safety or allow for more spending at some future date. You can also leave more to charity after your death.

I feel that I can safely spend more than I do. But I have what I need, and a few minor luxuries that I don’t need. Much of my money if spent by a good charity could do far more good for others than it would for me. I’m not so certain I don’t need the money that I’ll give it away today, but I plan to die with significant assets, mostly left to charity.

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Re: Is it OK to take less risk and spend more money once you’ve reached your goals even if you are young?

Post by LadyGeek » Tue Nov 05, 2019 5:21 pm

I removed a number of off-topic posts and replies. As a reminder, see: General Etiquette
We expect this forum to be a place where people can feel comfortable asking questions and where debates and discussions are conducted in civil tones.

...At all times we must conduct ourselves in a respectful manner to other posters.
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Re: Is it OK to take less risk and spend more money once you’ve reached your goals even if you are young?

Post by donaldfair71 » Tue Nov 05, 2019 9:17 pm

GrayS26 wrote:
Mon Nov 04, 2019 7:56 pm
donaldfair71 wrote:
Mon Nov 04, 2019 7:50 pm
Just keep in the back of your mind the idea that, the more you increase spending, the bigger your FI number increases. At the same time, your savings rate decreases. It’s kind of a double whammy in that way. You need more while saving less.

If FI isn’t part of your plan, then disregard.
I’m sorry but what is FI?
Financial Independence

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GrayS26
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Re: Is it OK to take less risk and spend more money once you’ve reached your goals even if you are young?

Post by GrayS26 » Tue Nov 05, 2019 11:42 pm

MotoTrojan wrote:
Tue Nov 05, 2019 4:17 pm
If you can’t share your portfolio size and expenses then this is a waste of a thread.
My target is to spend low 5 digits per month which would enable me to still save some money, but so far I’ve been under that which has enabled me to save even more money. I spend high 4 digits per month the last several months except last month because of tuition. I am making around that every month right now from all my sources of income.

In fact, I have not needed to touch my investments (so far) - they have been reinvesting any money made.

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GrayS26
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Re: Is it OK to take less risk and spend more money once you’ve reached your goals even if you are young?

Post by GrayS26 » Tue Nov 05, 2019 11:43 pm

lazyday wrote:
Tue Nov 05, 2019 4:52 pm
GrayS26 wrote:
Tue Nov 05, 2019 3:23 pm
Right now I’m mostly getting a safe ~3% in cash guaranteed. Of course this may not be right for others but I’m happy with it.

As far as amounts it varies and comes from various sources but I’m able to spend low 5 digits a month comfortably and [hopefully] sustainably (*knock on wood*). But I usually don’t even spend that much and end up saving money and then that adds up too over time which I could use for whatever.

I’ve been actually able to leave my investments alone reinvesting whatever I make on them (so far).

I would say I’m still frugal but just less frugal than before.
It sounds like your situation is too complicated for me to easily evaluate your risk.

But I can say that there are some advantages to spending less than you are safely able to. It helps to grow your portfolio, which can either increase your safety or allow for more spending at some future date. You can also leave more to charity after your death.

I feel that I can safely spend more than I do. But I have what I need, and a few minor luxuries that I don’t need. Much of my money if spent by a good charity could do far more good for others than it would for me. I’m not so certain I don’t need the money that I’ll give it away today, but I plan to die with significant assets, mostly left to charity.
You make a good point about charity, but about spending on yourself at what point do you say, “I have enough to splurge on myself. I don’t need to save as much anymore or take risk”

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GrayS26
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Re: Is it OK to take less risk and spend more money once you’ve reached your goals even if you are young?

Post by GrayS26 » Tue Nov 05, 2019 11:45 pm

greg24 wrote:
Tue Nov 05, 2019 4:30 pm
I would say the OP wants someone to confirm his choices.

Gives vague statements, seeking agreement.
Well yes if what I’m saying makes sense, which I hope I am explaining clearly, I would love to get feedback whether or not it’s good and what are the problems with it

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GrayS26
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Re: Is it OK to take less risk and spend more money once you’ve reached your goals even if you are young?

Post by GrayS26 » Tue Nov 05, 2019 11:47 pm

Thesaints wrote:
Tue Nov 05, 2019 4:23 pm
GrayS26 wrote:
Tue Nov 05, 2019 3:23 pm
I would say I’m still frugal but just less frugal than before.
Mmmh... if you are frugal that's a big risk. If things go south for whatever reason (think of 1929 all over again, with a 1981 inflation on top) the next step down from frugal is "destitute". It would be a lot better if your finances were allowing you to live la vida loca presently. Then you could easily downgrade to a "measured lifestyle" without suffering too much.

When projecting finances several decades ahead, being currently able to overspend like a drunken sailor is a safety factor and not a small one, although standard personal finance tenets don't recognize it.
Well currently I feel like I can sustainably spend low 5 digits per month. I hope I’m right in my judgement and math. I am not needing that much right now but that’s what my target is. I used to spend a lot less but feel like I don’t have to penny pinch anymore

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GrayS26
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Re: Is it OK to take less risk and spend more money once you’ve reached your goals even if you are young?

Post by GrayS26 » Tue Nov 05, 2019 11:49 pm

JoeRetire wrote:
Tue Nov 05, 2019 3:38 pm
GrayS26 wrote:
Mon Nov 04, 2019 5:55 pm
I’ve reached a point where I’m able to afford the life I want, and so recently I decided to take less risk despite being young, ~30ish. I’ve also been spending more money, but my expenses fall within my budget.

I’m still saving money every month and not dipping into my principal.

When I was younger I saved more and spent less just to reach this point, and while this works for me it might not work for others.

Hoping to hear your thoughts and opinions. Thanks.
Everyone gets to decide for themselves.

You can afford the life you want now. At 30, can you already afford the life you want in retirement?
Have you accounted for inflation?
Have you accounted for Long Term Care?
Have you accounted for spouse and/or children?

If so, no need to take any risks at all, and well done!
In retirement? Yes

Inflation? Yes

Long term care? No

Spouse/children? No but I will likely get a prenup

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