I like the investment strategy , not really the lifestyle

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BigTom
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I like the investment strategy , not really the lifestyle

Post by BigTom » Thu May 08, 2014 5:29 am

I am new to the boglehead ideology . I have been lurking the site making posts when I have questions , and was thinking of reading a few of the many mentioned books .

I love the investment strategy that seems to be set it and forget it . I seem to have my doubts because it almost seems too simple . But I like it .

Now I'd love nothing more then to be debit free , and I am working as hard as I can go get there . When I get to that point I would like to enjoy some of the things I have been holding of for . I don't want to have a lot of money and never get to use it , or wait till I retire to use it . Not that I feel like I don't need a retirement plan , I think having one is important , I just can't put all my eggs in that basket

My biggest issue is what if I don't make it to retirement . I forgo living my life now to make sure I can live pretty when I am old , but what if my quality of life diminishes to the point I wouldn't be able use the money in a way I would like to . I feel there needs to be a happy balance , where you could still splurge on things during your working life and still plan for a fun active retirement .

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Re: I like the investment strategy , not really the lifestyl

Post by Achelois » Thu May 08, 2014 5:34 am

No one says it has to be all or nothing. Balance is the key.

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linuxology
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Re: I like the investment strategy , not really the lifestyl

Post by linuxology » Thu May 08, 2014 5:41 am

There should be a happy balance as Achelios says. One should not be eating Ramen their entire working life just to maximize their accounts as that is not enjoying life. No one can judge the future, but not planning for it can also be disastrous.

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Re: I like the investment strategy , not really the lifestyl

Post by BigTom » Thu May 08, 2014 5:56 am

linuxology wrote:There should be a happy balance as Achelios says. One should not be eating Ramen their entire working life just to maximize their accounts as that is not enjoying life. No one can judge the future, but not planning for it can also be disastrous.
I agree .

Just looking at a lot of responses in the engagement ring thread , and some threads about cars , makes me think you bogleheads just adapted this minds set and won't spend any money on anything outside of investing , and essentials .

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Re: I like the investment strategy , not really the lifestyl

Post by wesmouch » Thu May 08, 2014 6:02 am

Laurence Kotlikoff at Boston University writes about this. He calls this "consumption smoothing". You might want to google him to check out his work.

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Re: I like the investment strategy , not really the lifestyl

Post by dickenjb » Thu May 08, 2014 6:02 am

BigTom wrote:
linuxology wrote:There should be a happy balance as Achelios says. One should not be eating Ramen their entire working life just to maximize their accounts as that is not enjoying life. No one can judge the future, but not planning for it can also be disastrous.
I agree .

Just looking at a lot of responses in the engagement ring thread , and some threads about cars , makes me think you bogleheads just adapted this minds set and won't spend any money on anything outside of investing , and essentials .
Yes. Some Bogleheads are like that. And some seek to enjoy some of their money while they are younger. We are a diverse group. We all agree that costs matter, LBYM. etc. Some choose to live way below their means. Some don't.

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Re: I like the investment strategy , not really the lifestyl

Post by climber2020 » Thu May 08, 2014 6:08 am

BigTom wrote:
linuxology wrote:There should be a happy balance as Achelios says. One should not be eating Ramen their entire working life just to maximize their accounts as that is not enjoying life. No one can judge the future, but not planning for it can also be disastrous.
I agree .

Just looking at a lot of responses in the engagement ring thread , and some threads about cars , makes me think you bogleheads just adapted this minds set and won't spend any money on anything outside of investing , and essentials .
I think the important thing is to spend money on entities that truly add value and happiness to your life. For me, that means spending five figures a year traveling the world, which is possible partially because I have no house (which I don't need) and don't drive an expensive car (which I don't want). In essence, not buying things you don't want to impress people you don't like.

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Re: I like the investment strategy , not really the lifestyl

Post by neurosphere » Thu May 08, 2014 6:54 am

BigTom wrote:My biggest issue is what if I don't make it to retirement . I forgo living my life now to make sure I can live pretty when I am old , but what if my quality of life diminishes to the point I wouldn't be able use the money in a way I would like to .
Your problem is that you view retirement in the abstract, a "something" which is vague, in the distant future, unknowable, and with uncertain cost. That gives you wiggle room to get out of tough choices. You can spend that dollar now, or you can spend it later, but you can't do both. You have to choose. Yes there has to be balance, but...

Perhaps it would help if we use a example, albeit perhaps a reductio ad absurdum-type argument. You own a house. You have a mortgage. The mortgage is due at the end of the month. You have to limit your spending to pay the mortgage on time. But to turn your words around your biggest issue could be "what if I don't make it to the end of the month?"

Now go out a little further. You have a car which is on its last legs. It might last another year, maybe two if you are lucky. You need to save up for a new car. But what if YOU die before the car dies? You will have to "forgo" living your life now so that you can have a car later, but your quality of life would be diminished in order to have to save for a car you may never live to see.

Or perhaps this...you want to save for a down payment for a home in 3-5 years. What if you never make it?

Let's face it, none of us may live another day. But that doesn't mean retirement doesn't have some cost, some very real cost, which needs to be accounted for in case we do NOT die. You need to do your best to estimate your retirement needs (which admittedly is based on assumptions which can vary widely) and then work your way back to estimate what savings you need to get there. Only then can you try to decide on a "balance". But you can't get around the fact that the dollar you spend now is gone, and it's a dollar (or more) you don't have later. But you either calculated that you "needed" it later, or perhaps you didn't need it. If you spend more now, you should be able to estimate the consequences in terms of a decrease in your future standard of living.

What's the balance? That's different for every person. Your post mentions "living pretty" when you are old. Perhaps you don't want to live pretty, but are content to live meagerly when you are old and would rather "live pretty" now. That choice is up to you. Personally, I don't want to live it up now, and then be forced to dramatically drop my standard of living in retirement. I'm shooting for a consistent standard of living between now and age 90, and that shapes our savings/spending. My life today becomes MUCH nicer if I assume I have a heart-attack at 68. :?

Neurosphere

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Re: I like the investment strategy , not really the lifestyl

Post by HardKnocker » Thu May 08, 2014 6:57 am

Being old and poor is no fun.
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Re: I like the investment strategy , not really the lifestyl

Post by pointyhead » Thu May 08, 2014 7:04 am

I'm shooting for a consistent standard of living between now and age 90, and that shapes our savings/spending.
+1

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Re: I like the investment strategy , not really the lifestyl

Post by awval999 » Thu May 08, 2014 7:05 am

Please understand you have stumbled upon an investing/retirement forum. Like all other internet forums there are world class "fill-in-the-blanks" here. Whether it is a travel forum, gardening forum, motorcycle forum, you will find posts from the world class 1%'s of that field. Yes, we do have people who save >50% of gross income and deny themselves all the pleasures of life. But we also have a thread about $5000 watches and threads about Audi's and BMW's.

Truly, if you save 10-15% of your income into your 401k or Roth IRA for your entire working career you will do fine, no matter what the negative nannies here say.

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Re: I like the investment strategy , not really the lifestyl

Post by jimb_fromATL » Thu May 08, 2014 7:16 am

Like others say here, balance is the key. You might want to ask some of the elderly folks working as greeters at WalMart or cashiers at McDonald's if --knowing what they know now-- they would have saved more and spent less in their younger years. If you must work during retirement whether you want to or not, it ain't retirement.

You also have to allow for the possibility that you might live longer than the average 78 to 80 year life expectancy. Like my father-in-law (who was still mowing his yard and tilling his garden at age 97) and his older brother (who was still working full-time at age 100) used to say, "Its better to have it and not need it than to need it and not have it".

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Re: I like the investment strategy , not really the lifestyl

Post by ResearchMed » Thu May 08, 2014 7:27 am

There is also a general difference between those who have a desire to leave an inheritance for their children/grandchildren, and those who do not.

In the former case, it is a bit (or a lot) less of a trade-off between "using it now" and "using it later", because to a possibly substantial degree, they don't want to "use it" at all.
Not during their own lifetimes, anyway.

Those who are not planning on "leaving meaningful amounts behind" often have a rather different view on the "now vs later" decisions.

You'll see this also in some of the discussions about "withdrawal rate" threads.
In many cases, the so-called "safe" withdrawal rates of approx. 4% + inflation models have a low probability of ending up destitute. But that is at the "cost" of a high probability of leaving a huge amount behind.

The variable withdrawal rates models can be used to address some of this, although those discussions focus more on "retirement spending", and not so much on your concern, which is "lifetime spending".

As pointed out, Kotlikoff addresses this in his "consumption smoothing" work. You should take a look at this, and see how it can be adapted to your own choices.
However, a big factor is going to be "do you want to leave much behind" or do you plan to "use it up safely" (with "safely" being a key factor you'll hear addressed here).
Annuities (Single Premium Immediate Annuities - SPIA's - or Deferred Annuities) can help provide a floor "for the rest of your life", which might then allow one to spend more of what's left.

RM

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Re: I like the investment strategy , not really the lifestyl

Post by 4th and Inches » Thu May 08, 2014 7:30 am

There are some very good points in here. Good comments. Balance is key!

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Re: I like the investment strategy , not really the lifestyl

Post by pennstater2005 » Thu May 08, 2014 7:35 am

This group is diverse. Some super savers. Some moderate savers. Some just starting out and some with plenty of experience and sage advice. I consider myself lucky I stumbled across this place.
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Re: I like the investment strategy , not really the lifestyl

Post by Johm221122 » Thu May 08, 2014 7:41 am

pointyhead wrote:
I'm shooting for a consistent standard of living between now and age 90, and that shapes our savings/spending.
+1
I'm shooting for constant income per year .But my current savings rate will be my play money or healthcare if needed

John

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Re: I like the investment strategy , not really the lifestyl

Post by Grt2bOutdoors » Thu May 08, 2014 7:47 am

Last year we figure we moved the Gross Domestic Product up about 1/1000th of a percent by dropping six figures on a new home addition. As a result, my quality of life has gone up, even though I'm still in the same geographic location I was prior to spending the money. Who say's you can't enjoy the lifestyle? Of course, many sacrifices were made to be able to undertake that project, but we think it was worth it. Balance is key.
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Re: I like the investment strategy , not really the lifestyl

Post by jimmyrules712 » Thu May 08, 2014 7:56 am

I think there is a tendency for the most extreme savers to be the most active on a finance message board like this and that is what you are seeing. There are lots of semi-active people like me that agree with the investment philosophy, and agree in principal that saving for retirement is important, but do not agree that most of life's pleasures should be avoided to get to that goal. As others have said balance is key. You seem to be evaluating 2 lifestyles, in lifestyle #1 you are buying whatever you want and not worrying about the future, in #2 you are saving everything and not living life at all. Find something in the middle.

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Re: I like the investment strategy , not really the lifestyl

Post by livesoft » Thu May 08, 2014 8:01 am

BigTom wrote:...
Now I'd love nothing more then to be debit free , and I am working as hard as I can go get there . When I get to that point I would like to enjoy some of the things I have been holding of for . I don't want to have a lot of money and never get to use it , or wait till I retire to use it .
OK, so you are not a Diehard, but want to Live Soft instead. I don't think there is anything wrong with that.
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Re: I like the investment strategy , not really the lifestyl

Post by 2b2 » Thu May 08, 2014 8:02 am

In my mind, this forum is about investing wisely.
I pay little attention to posters' spending habits or suggestions.

2b2

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Re: I like the investment strategy , not really the lifestyl

Post by pennstater2005 » Thu May 08, 2014 8:10 am

livesoft wrote:
BigTom wrote:...
Now I'd love nothing more then to be debit free , and I am working as hard as I can go get there . When I get to that point I would like to enjoy some of the things I have been holding of for . I don't want to have a lot of money and never get to use it , or wait till I retire to use it .
OK, so you are not a Diehard, but want to Live Soft instead. I don't think there is anything wrong with that.
Now I get it.
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Re: I like the investment strategy , not really the lifestyl

Post by wealthcare » Thu May 08, 2014 8:18 am

BigTom wrote:I am new to the boglehead ideology . I have been lurking the site making posts when I have questions , and was thinking of reading a few of the many mentioned books .

I love the investment strategy that seems to be set it and forget it . I seem to have my doubts because it almost seems too simple . But I like it .

Now I'd love nothing more then to be debit free , and I am working as hard as I can go get there . When I get to that point I would like to enjoy some of the things I have been holding of for . I don't want to have a lot of money and never get to use it , or wait till I retire to use it . Not that I feel like I don't need a retirement plan , I think having one is important , I just can't put all my eggs in that basket

My biggest issue is what if I don't make it to retirement . I forgo living my life now to make sure I can live pretty when I am old , but what if my quality of life diminishes to the point I wouldn't be able use the money in a way I would like to . I feel there needs to be a happy balance , where you could still splurge on things during your working life and still plan for a fun active retirement .
This is very similar to the mindset my mother had in her younger years. While she would never go into debt she spent EXACTLY the same amount she earned. Each and every month, every single year. She would enable herself with the mantra that "Money is there to enjoy life", or "You can't buy this when you are dead, what does it matter?" and similar variations. Whenever she had something in her pocket she felt she has to spend it on the most trivial and unnecessary things you can imagine.

Now that she is getting older I can see that she finally understands what I have been telling her for years. She has lost her job and has absolutely 0 in savings. We are basically keeping her afloat, sacrificing a slice of our own financial future.

On the other hand, if she would have pocketed only 15% of her income she would be golden. This is such a small price to pay when you look at the big picture that it is straight up irresponsible to not save at least this much. If you have a $100K income, would you not be able to live on $85,000? What about $80,000? Do you think that you would have a DEPRIVED life on $80,000?

Of course there are extremes. I consider myself such, because I strive to save a lot more than 15%. But why not? There is still plenty left over to enjoy life, and I even have some luxury items like a BMW. Besides, you can always find more expensive items, and a richer guy to compare yourself to. If you can finally buy that $2M yacht then there is the next one in the port which is worth $4M. It never ends.

Point is to find the happy balance, but 15% is the bare minimum. You can still enjoy life on 85%. Good luck

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Re: I like the investment strategy , not really the lifestyl

Post by SC Hoosier » Thu May 08, 2014 8:24 am

Dave Ramsey suggests putting 15% of your income into retirement accounts. If you can't live content on 85% of your income, then you've got contentment issues.

I focused on paying off mortgage early in life instead of investing. So now I put about 50% of my income into retirement accounts. We still have enough to have fun. We are going on a week vacation next week. :D

I've read about studies that surveyed retired people. Their advice to younger people was to save more money for retirement. Google it.

Hoosier

PS. I love Neurosphere's shorter term examples. Well done, Sir!
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Re: I like the investment strategy , not really the lifestyl

Post by nedsaid » Thu May 08, 2014 8:26 am

The key to all of this is discipline. If you want a great retirement and a large portfolio to back it up, you are going to have to make some choices. And some sacrifices.

So you have to determine really what you want out of life. You want to do the things that are most important to you but there might be some secondary goals and things of lesser importance you will have to drop. We have limits on our time and resources and we have to create priorities and make choices.

So if you have to have your expensive vacations, your expensive cars, eat out at fancy restaurants every day, have your daily expensive starbucks coffee, indulge your every whim and expect a great retirement portfolio at the same time; you are just dreaming. Unless you are very wealthy, you are going to have to make choices.

But you can do the things you most want to do and have that great retirement. You just have to let go of the lesser stuff.
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Re: I like the investment strategy , not really the lifestyl

Post by investor1 » Thu May 08, 2014 8:35 am

Put

20% toward retirement
30% toward a home and other debt
The government will take about 25%

and live off of the rest. If you make enough money to enjoy luxuries after that, enjoy!

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Re: I like the investment strategy , not really the lifestyl

Post by WhyNotUs » Thu May 08, 2014 8:46 am

What Nedsaid +1

Not one for regrets and have had many blessings in life but it could have all been a little easier if I had put some money aside in my 20's in a set it and forget it retirement account. Instead, I was gambling with OEX futures as if the now was all that there was, negating my current now.

We have a passion for travel and try to be very active givers in our community of time treasure and talent, those two things mean that lots of other things are low priorities for us-- fancy dinners, nice clothes, cheap phone plan, no pay tv, don't buy anything that requires paying interest, (I used to be able to say cars as I drove a Toyota with 240,000 miles but bought a new Nissan Leaf this week). The people that I see floating down the river of consumerism seem, from my perspective, not to have their arms around what really brings them closer to fulfillment. Some for today, some for sharing, and some for tomorrow.
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Re: I like the investment strategy , not really the lifestyl

Post by nisiprius » Thu May 08, 2014 8:50 am

1) It's all balance.

2) You just have to accept the fact that the future is unknown--both your future investment returns and your future life story. Unfortunately, in order to plan it's necessary to make assumptions, and in the financial planning community it seems to be absolutely standard to make those assumptions to three decimal places and put them into a computer and blend them to fare-thee-well, and in the process completely forgetting that none of the numbers you plug in is even known to one significant place.

My current pet financial statistic is that of the 22 national stock markets whose returns were analyzed by Dimson & al, 9% of them went to zero--the stock market actually went to zero due to poltiical revolution--between 1900 and today. I don't know what the statistics are on the amount of financial misery that created, in the sense that I don't know what percentage of the people who actually lost personal fortunes in those stock markets were made unhappy by it--some of them probably got killed in the same events that destroyed their stock market investments, and thus didn't know their losses.

3) You have to watch out for bias. A lot of people have a sort of ego-interest in getting you to accept your authority by showing you that they can draw a way more detailed map than you can. Their map is full of distorted coastlines, missing continents, and mythological beasts, but you don't know that, and the map is so detailed, pretty, and represents so much work that it is hard to believe most of it is just artistic decoration.

And a lot of people have a money interest in showing you the map in hope of your choosing the course that is profitable for them.

So, strike a balance between math and fatalism.

P.S. It's my own pet theory that what does you in is not the splurges, it's the leakage of ongoing monthly expenses. (Of course, there's a danger in treating yourself to a "once-in-a-lifetime" splurge annually...)
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Re: I like the investment strategy , not really the lifestyl

Post by KlangFool » Thu May 08, 2014 8:58 am

BigTom wrote:I am new to the boglehead ideology . I have been lurking the site making posts when I have questions , and was thinking of reading a few of the many mentioned books .

I love the investment strategy that seems to be set it and forget it . I seem to have my doubts because it almost seems too simple . But I like it .

Now I'd love nothing more then to be debit free , and I am working as hard as I can go get there . When I get to that point I would like to enjoy some of the things I have been holding of for . I don't want to have a lot of money and never get to use it , or wait till I retire to use it . Not that I feel like I don't need a retirement plan , I think having one is important , I just can't put all my eggs in that basket

My biggest issue is what if I don't make it to retirement . I forgo living my life now to make sure I can live pretty when I am old , but what if my quality of life diminishes to the point I wouldn't be able use the money in a way I would like to . I feel there needs to be a happy balance , where you could still splurge on things during your working life and still plan for a fun active retirement .
BigTom,

You are thinking in a binary fashion.

1) Why does saving and investment necessary only has to do with retirement?? In fact, if your investment earn a hell lot more than your salary income, you could spend more and it would not make a difference to your retirement.

2) Why do you think that you will have consistent job and salary income?? Most of us will have some period of unemployment or under-employment. The investment will smooth out and maintain your life style in spite of inconsistent employment.

3) By delaying buying something, you could use your investment income to buy it versus going into debt. In one case, the compounding interest help you. In another case, you are paying for compounding interest of your debt.

Last year, my investment income exceeded my salary. But, you do not need to reach that level in order to enjoy the extra freedom / income from your investment.

Having more money (income) is a good thing. You get to choose what to do with it.

KlangFool

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Re: I like the investment strategy , not really the lifestyl

Post by DouglasDoug » Thu May 08, 2014 8:58 am

It is indeed hard to save money for retirement. The one colossal issue is to give in to the idea of one day being old. This is why automatic investing is a good thing, even though you're still convinced, like Sally Bowles, you'd rather be good looking corpse.

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Re: I like the investment strategy , not really the lifestyl

Post by Fallible » Thu May 08, 2014 9:14 am

Wonderful posts here on the need to balance spending for the present and the future. I can add only one more thought, which is that no matter whether one decides to spend now (on a want vs. a need) rather than save that money for retirement, it's almost impossible to know for certain whether you've made the right decision because you can't know the future, i.e., exactly how much you'll need in retirement or whether you'll even get there. Fortunately, it's not entirely a guessing game either, thanks to guidelines such as the Bogleheads' philosophy - and posts like the ones on this thread.

BTW, I'm a retiree and when I look back on my life, I can finally know which balancing decisions were right and which were wrong. I sometimes agonize over the wrong ones, but then remember that I had to decide about a future I couldn't know but at least did take into account, and I can forgive myself, a little.
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Re: I like the investment strategy , not really the lifestyl

Post by LowER » Thu May 08, 2014 9:18 am

.....
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Re: I like the investment strategy , not really the lifestyl

Post by bucksfan2 » Thu May 08, 2014 11:26 am

The people on this forum aren't normal, not in a negative way, just in the way most people operate. Most of the advice given is good, sound, textbook solid advice. The problem I have found is that often this advice can be taken to the extreme's by some, mostly the fervent bogleheads. I have found at my stage in life that isn't for me. The discussion on a wedding ring had me shaking my head in disbelief, I wish I could have gone back in time, gave my wife a cubic zirconium wedding ring and a ROTH IRA contribution just to see what she would have done. Her reaction may have been trending on youtube for a while.

I have found things on this site that have helped me out greatly. Ideas, suggestions, goals, anything positive you can take away from here and introduce into your life is a good thing. If you can incorporate a small amount of the boglehead philosophy into your life you are going to be ahead of the game. But for me, most importantly is to get the fullest enjoyment out of my life at every stage.

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Re: I like the investment strategy , not really the lifestyl

Post by Zabar » Thu May 08, 2014 11:29 am

Sometimes even the nomenclature is misleading. Yes, a retirement account is primarily for retirement. But I try to tell people in their 20s, for example, that staying out of debt and contributing to a retirement account now means that you'll also have more money available for the things and experiences you want in your 30s and 40s because you won't have to make up for lost time. The overall benefits reach you much earlier than at age 65.

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Re: I like the investment strategy , not really the lifestyl

Post by IlliniDave » Thu May 08, 2014 11:47 am

BigTom wrote:I am new to the boglehead ideology . I have been lurking the site making posts when I have questions , and was thinking of reading a few of the many mentioned books .

I love the investment strategy that seems to be set it and forget it . I seem to have my doubts because it almost seems too simple . But I like it .

Now I'd love nothing more then to be debit free , and I am working as hard as I can go get there . When I get to that point I would like to enjoy some of the things I have been holding of for . I don't want to have a lot of money and never get to use it , or wait till I retire to use it . Not that I feel like I don't need a retirement plan , I think having one is important , I just can't put all my eggs in that basket

My biggest issue is what if I don't make it to retirement . I forgo living my life now to make sure I can live pretty when I am old , but what if my quality of life diminishes to the point I wouldn't be able use the money in a way I would like to . I feel there needs to be a happy balance , where you could still splurge on things during your working life and still plan for a fun active retirement .
I'm an optimist. I bet on life. I don't live in monastic squalor, but I'm making sacrifices to achieve an early retirement. If I wind up drawing a short straw, I'll just have to suck it up knowing I made what I believed to be the optimal choices I could make at the time they were made, and that I did the best I could. One character quirk I have is that I don't have a compelling need/desire to "enjoy" my money. So that maybe makes me abnormal.
Don't do something. Just stand there!

HurdyGurdy
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Re: I like the investment strategy , not really the lifestyl

Post by HurdyGurdy » Thu May 08, 2014 12:47 pm

A sense of the need for thrift has a root in the financial model at the base of this approach. The financial model recognizes the risks of the market and categorically rejects the illusion of obtaining extraordinary returns. What can be done? save a lot, lower your costs. What can be expected? a slow path to, hopefully, moderate wealth.

staythecourse
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Re: I like the investment strategy , not really the lifestyl

Post by staythecourse » Thu May 08, 2014 1:14 pm

IlliniDave wrote:One character quirk I have is that I don't have a compelling need/desire to "enjoy" my money. So that maybe makes me abnormal.
My wife finds that odd about me as well.

I save so much NOT just for delayed consumption, but because I don't want anything when I look at my paycheck at the end of the month. Once the necessities are covered like shelter and food there are not much stuff I like beyond spending time with my wife and child. Luckily that doesn't cost me anything!! :D

Good luck.
"The stock market [fluctuation], therefore, is noise. A giant distraction from the business of investing.” | -Jack Bogle

Quickfoot
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Re: I like the investment strategy , not really the lifestyl

Post by Quickfoot » Thu May 08, 2014 1:23 pm

It's more making sure you make good financial choices and make savings (both for short and long term) a priority. We have a family of 5 and our base living expenses are 28% of our gross income, it'd be about 15% if we didn't have kids. We do that through having no debt other than housing and two cars and being blessed on the income department (though not as much as some on this forum).

We are early 30's and plan to retire around 55, while we consider what our financial decisions do to our plan to retire early we don't make saving for retirement our sole purpose in life. We lease new cars every 36 months because we like new cars and have no interest in driving them into the ground. We eat at eat expensive restaurants more often than most, go on weekend get aways, and I send her flowers once or twice a month. We do those things because they make us happy and because we can afford it but we also don't blow our money or spend it because we have it.

Once we retire 30-40% of our portfolio will be converted to SPIAS (payouts starting around 60 to 65) because we want to enjoy our early retirement without worrying (too much) about running out of money or where our money will come from. Sure leaving something to the kids would be nice but we aren't going to stress about what we leave behind through our entire retirement and we'd rather help them while we are living than leave them millions in the bank.

Life is a balancing act, hyper-fixating on retirement and saving for retirement is just as bad as not planning or thinking about retirement at all.

sls239
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Re: I like the investment strategy , not really the lifestyl

Post by sls239 » Thu May 08, 2014 1:36 pm

but what if my quality of life diminishes to the point I wouldn't be able use the money in a way I would like to
Being sick or disabled and being broke is worse than being retired and being broke. If something did happen to you and you couldn't spend the money the way you'd want, you'd probably be very grateful to have the money to give you a little more mobility and a little more luxury, rather than living in isolated government housing where your only luxury is watching endless hours of TV and the rural transit bus that takes you on your weekly trip to Wal-Mart and your doctor appointments.

I don't know how to explain it if you've never seen it, but it isn't pretty.

That doesn't mean you have to save every dime, but a dollar when you are young and active might not buy as much happiness as it could buy later. Being young and active, I can enjoy many things that are free or near free - hiking, swimming, building snowmen, what have you. That too is a luxury, so it takes the place of some of the spending.

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Doom&Gloom
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Re: I like the investment strategy , not really the lifestyl

Post by Doom&Gloom » Thu May 08, 2014 4:00 pm

I've been lurking on this forum for a few weeks now, and just had to register to respond in this thread. Aside from the obvious benefits of funding a retirement if you live long enough, early and aggressive savings/investing affords one many more options far prior to retirement age. I'm sure there are many examples, but in my case I was able to accept offers for jobs that I enjoyed rather than ones that offered slightly higher pay.

Most importantly, I was able to quit a job when I became frustrated with it and pursue other part-time interests which I had wanted to do but never could have done if I did not have the "cushion" of a solid retirement plan already in place. When one is young, it is far easier than one believes to have a portion of one's paycheck directly deposited for retirement purposes. It becomes quite easy to "adjust" to the new standard of living. In hindsight, I can not think of very many meaningful things that I would have done or would have acquired had I not made those contributions. Frankly, most of that money would have been squandered.

Being able to walk away from a "safe" job at age 52, pursue a part-time but profitable second career on my own terms, then ease myself out of that at my own pace, and still have a solid base for retirement has been worth far more to me than anything I would have acquired or done with those deductions from my paychecks.

pingo
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Re: I like the investment strategy , not really the lifestyl

Post by pingo » Thu May 08, 2014 4:23 pm

Welcome to the Forum! We'll take you exactly as you are. :D

I'll add that investing for retirement doesn't have to be about extremes, although sometimes we may make it seem that way. Life should be enjoyed, as should retirement. How you weigh your options is unique to you.

Sometimes the benefit of receiving input from others is that you are confronted with want will not work for you. For me, that kind of clarity can be priceless. On occasion, someone offers an idea that you'd never conceived and it is exactly what you need. It's nice when that happens, too.

All the best!

:beer
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fareastwarriors
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Re: I like the investment strategy , not really the lifestyl

Post by fareastwarriors » Thu May 08, 2014 4:47 pm

I just don't post about my non-Boglehead behavior. :D

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Re: I like the investment strategy , not really the lifestyl

Post by ryk1861 » Thu May 08, 2014 6:14 pm

This is an important topic, indeed.

Certainly, being financially prepared for retirement, college, emergencies, weddings, and whatever else life throws at you, big expense or small, is important, living and enjoying is, also.

One of the things I enjoy most is travel, and if I can save a few basis points here and there, it allows me to have some really great vacations!

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Re: I like the investment strategy , not really the lifestyl

Post by poker27 » Thu May 08, 2014 6:18 pm

There are many people on this board that are too extreme to saving, and others that are well balanced. Buts it's an investing forum, what do you expect? Personally, I put my % into my 401k, throw some money in taxable, and do whatever I want with the rest. I just bought a $350 pair of shoes, and will be going on a mini vacation next week and I'm sure I will spend a few $100 on booze since we are wine tasting. Find out what makes you happy, and spend money on it after you have saved

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neurosphere
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Re: I like the investment strategy , not really the lifestyl

Post by neurosphere » Thu May 08, 2014 6:50 pm

I assumed that the OP is single. But another benefit of delayed gratification is that it's a form of life insurance if one has a spouse or kids. Or if one plans to have a spouse or kids. Your spouse and kids might "marry into" your retirement money. And you may die younger than expected, but that money saved for your retirement might provide for others after you're gone, in one fashion or another.

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Re: I like the investment strategy , not really the lifestyl

Post by freebeer » Thu May 08, 2014 7:01 pm

HardKnocker wrote:Being old and poor is no fun.
This is exactly the part of the Bogleheads psyche I too take issue with.

Being the "richest man in the cemetery" is no fun.

Being old and rich, but in poor health, after having worked longer and taken less enjoyment when in good health in order to get and stay rich, is no fun.

Being dead is no fun (less fun than being alive and poor).

I worry more about health than wealth. I live below my means, but don't take it to an extreme. And I don't try to optimize for "100% safe" retirement when there's absolutely not a 100% guarantee of being alive at age 90 or age 100, far from it, sadly.

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Re: I like the investment strategy , not really the lifestyl

Post by BigTom » Thu May 08, 2014 7:39 pm

neurosphere wrote:I assumed that the OP is single. But another benefit of delayed gratification is that it's a form of life insurance if one has a spouse or kids. Or if one plans to have a spouse or kids. Your spouse and kids might "marry into" your retirement money. And you may die younger than expected, but that money saved for your retirement might provide for others after you're gone, in one fashion or another.
Nope . I am married with 2 little boys I have $750k in life insurance. I think people are are thinking I am wanting to spend like a drunken sailor , that's not the case I just think splurging here and there is healthy .

Although being on this board and reading of you guys that are really good at not wasting money is a good thing for me , because to be honest I like spending money .

With that said my big spending days are over . I think I am pretty much done with my expensive hobbies I used to have and am just enjoying my kids . That's really all u have time for :beer

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black jack
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Re: I like the investment strategy , not really the lifestyl

Post by black jack » Thu May 08, 2014 8:42 pm

For your amusement, regarding our present and future selves: see Tim Kreider's cartoon "My Worst Enemy - Past Tim" at http://www.huffingtonpost.com/tim-kreid ... de=1082731
"Why should I do anything for Future Tim? What'd Past Tim ever do for me? Present Tim looks out for Present Tim!"
By the way, Kreider's book "We Learn Nothing" is wonderful. http://www.amazon.com/We-Learn-Nothing- ... 1439198713
We cannot absolutely prove [that they are wrong who say] that we have seen our best days. But so said all who came before us, and with just as much apparent reason. | -T. B. Macaulay (1800-1859)

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Post by Curlyq » Thu May 08, 2014 9:06 pm

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Go Blue 99
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Re: I like the investment strategy , not really the lifestyl

Post by Go Blue 99 » Thu May 08, 2014 9:29 pm

OP, I am similar in my thinking. I've been a Boglehead since the early '00s and the Morningstar days. I love the site for all of the investing knowledge that I have picked up. However, I don't necessarily follow the Boglehead view of extreme saving. For example, we only save 15% of income for retirement, which pales in comparison to many on this board. I spend more on housing, cars, vacations, eating out, and clothing than many Bogleheads would advise. But at the end of the day, you just have to be happy and sensible with your spending today vs saving for tomorrow.

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Re: I like the investment strategy , not really the lifestyl

Post by Ice-9 » Thu May 08, 2014 11:19 pm

It's "personal finance," with emphasis on the personal.

Saving is important. Living is important. It is up to you to decide where the best value is on things you will spend now. Also up to you how much will be saved for later. The key word that several posters have already said is balance.

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