What to do with all this MONEY ?

Non-investing personal finance issues including insurance, credit, real estate, taxes, employment and legal issues such as trusts and wills
shell921
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Re: What to do with all this MONEY ?

Post by shell921 »

shell921 wrote: Sat Jul 04, 2020 2:31 pm
KyleAAA wrote: Sat Jul 04, 2020 1:12 pm Donate your excess wealth to worthy causes. IMO it is unethical to leave large inheritances to offspring. Don’t wait until you’re dead, start donating now. Don’t put your retirement at risk, but you certainly don’t need $7.5mm to sustain $130k in living expenses.
I like this and many other answers you got. GIVE ! If you give while you are alive, you get the benefit of seeing other improve their life.
It's called "giving with a warm hand". A wealthy uncle of mine died in 2005. We knew he was well off but we didn't know HOW well off he was
until after he was gone. He left a VAST amount to charity ! Money he could have given some of --while alive-- or spent on home improvements. His wife had died 6 years earlier - his large rambling house had never been updated since 1962. He could have re-modeled it..but he never did. Or at least bought new guest room beds and sheets and towels. He wanted my husband and me to visit him often after his wife died - we were in CA and he was in Colorado and we would have gone more often than once a year if he'd had decent guest beds, sheets, towels. Even his kitchen towels were old and threadbare. Ugh.
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goodenyou
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Re: What to do with all this MONEY ?

Post by goodenyou »

I will agree with bltn above. This discussion is not trivial nor should it be fodder for criticism. The OP is reaching out for guidance and input from people who share similar experience. Inheritance can have a different effect on beneficiaries. I think I would have made different choices on where I lived and financial opportunity I pursued. I had a lot of education debt and a strong desire for financial independence, so I chose to live in a place that would have never been on my radar. I have chosen to embrace the positives that came from it. I achieved very early FI, and was able to gift my children comforts, privilege and a debt-free education. Had I inherited money and not earned it all on my own, I would have been denied the self-satisfaction of meeting goals. On the other hand, it came at a cost. Had I inherited money, I probably would not live where I live today. I may not have the same net worth either. Any inheritance now will skip a generation since we have no need for it. I am open with my kids about the value of hard work and financial independence. Being gifted money with “strings” attached and/or scrutinized is much less satisfying than earning it yourself.
"Ignorance more frequently begets confidence than does knowledge" | Do you know how to make a rain dance work? Dance until it rains.
Vanguard Fan 1367
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Re: What to do with all this MONEY ?

Post by Vanguard Fan 1367 »

novemberrain wrote: Sat Jul 04, 2020 1:56 pm
BolderBoy wrote: Fri Jul 03, 2020 5:18 pm
Rajsx wrote: Fri Jul 03, 2020 2:45 pmHere is the problem, we do not feel comfortable with extravagance, find it difficult to fly 1st class...
I would definitely start flying 1st Class or even by private jet.
I have a feeling people who have flown economy all their lives (by choice) till they are old, may find flying first-class / private-jet wrong in some way. Like in the back of their mind they will feel guilty throughout the flight and even afterwards probably.
I certainly have read and have experienced this myself that changing the spending habits once one gets into the 60s and beyond is pretty tough. I couldn't be comfortable in First Class unless it was like when I was a Pan Am dependent and sometimes got to fly First Class for free.
Upton Sinclair: "It is difficult to get a man to understand something when his salary depends on his not understanding it."
hmw
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Re: What to do with all this MONEY ?

Post by hmw »

OP, thanks for your post. It gave me a lot to think about regarding my own situation.

People have given you very good advice and I have nothing to add.

I am also a physician and about 20 years younger than you. If the current projection holds, I will also have "too much" money at age 65. To solve the "problem", I think I will retire at age 52 to 55 and work on gradually loosen the purse strings.

BTW, you will get used to flying business class on long haul flights. Try it. :D
bogledogle
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Re: What to do with all this MONEY ?

Post by bogledogle »

OP,

As you said, you worked your way up from humble beginnings. Your kids are born into that advantage with paid off schools and gifts from parents. Why would you want your kids to work as hard as you did? You worked hard for financial security and you will pass on what's left of that security to your kids and grand kids, so they can have a higher quality life. They will make fewer sacrifices than what you had to make.

I also think you are being hard on your Son. He is working and getting an MBA - that is an accomplishment within itself even though I am sure he got there with your generous assistance. Everyone makes bad financial choices, you should try to guide him and impart whatever wisdom you are able to. After that, it's his own choice.

What to do with the Money?

1) Enjoy your life. Do what brings you joy. (include charity here)
2) Pass on the rest to your kids/grand kids.
TropikThunder
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Re: What to do with all this MONEY ?

Post by TropikThunder »

Doug007 wrote: Fri Jul 03, 2020 5:30 pm Look into helping fund the world's biggest problem. Aging and death. This is an area that is desperate for adequate funding but so few people recognize this as the dire need it is, and the potential for vastly improved lives. This is science, not science fiction. Look into it. Start by watching Aubrey DeGrey videos to understand.
There are over 7 billion people in the world and you think the problem is that so few of them make it past 100?
raamakoti
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Re: What to do with all this MONEY ?

Post by raamakoti »

Create resources in your community to educate kids. Giving money to charity is a good thing but you don't know where it is spent. You may end up funding luxury life of a worthless CEO of a charitable organization.
Get involved in a temple, church of whatever religious organization you like to go to. See if you can teach young kids, not some religious scriptures, parents and pastors will do that job. You try to teach them useful real life skills.
1. Young kids teach them phonics to read
2. Teach kids simple math fun tricks so they learn to enjoy the subject
3. Create a happy learning environment.

If you think the community you are living is well to do, then spend your energy in a community that has less resources.
The Gift of Education is the best of all gifts.
afan
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Re: What to do with all this MONEY ?

Post by afan »

I cannot agree with the advice to "spend more money". $130,000 a year is a lot of money to spend. Spending more than double the median household pretax income is hardly frugal.

More importantly, OP made it clear that they buy what they want. Spending money on things they don't want is the definition of waste.

Puzzled about the concerns over the son. Late twenties soon to have two advanced degrees including an MBA, self supporting... Oh the horror!

Leave money for the kids in trusts, not outright. This will protect it from creditors, keep it out of their estates for estate tax purposes and make it easy to choose an independent trustee if necessary. For the kid who is a physician this is even more important given risk of malpractice suits.

Consider setting up irrevocable trusts now and making at least annual exclusion gifts while you are alive. These can accumulate to a sizeable amount for retirement, grandchildren education or other big ticket expenses.

Ignore the demands that you change your spending or charitable contributions. Give to charity at the level you feel comfortable.

Depending on your state there may be estate or inheritance taxes at your deaths. You will need to go through your options with an estate planning attorney.

To the extent that you have concerns about how your kids earn and spend (although you don't cite any issues with the physician), they are still young. They are not finished growing into adults and you are not finished being parents.

Our kids range from frugal and highly knowledgeable about money to frugal and completely uninterested.

I don't get the thinking that goes "child A is financially educated, good with money and earns a high income. I will reward this by leaving them a large inheritance. Child B chose a lower income career and struggles to support themselves. I will punish them by leaving a small bequest."

We give to charity as we go but plan to leave our assets to our kids. In trust.

As the time gets closer, we may consider charitable trusts for the tax savings but I have not investigated those enough to begin to make decisions. With the new rules on inherited retirement accounts, they have become more appealing.
We don't know how to beat the market on a risk-adjusted basis, and we don't know anyone that does know either | --Swedroe | We assume that markets are efficient, that prices are right | --Fama
DJZ
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Re: What to do with all this MONEY ?

Post by DJZ »

afan wrote: Sun Jul 05, 2020 9:14 am I cannot agree with the advice to "spend more money". $130,000 a year is a lot of money to spend. Spending more than double the median household pretax income is hardly frugal.

More importantly, OP made it clear that they buy what they want. Spending money on things they don't want is the definition of waste.

Puzzled about the concerns over the son. Late twenties soon to have two advanced degrees including an MBA, self supporting... Oh the horror!

Leave money for the kids in trusts, not outright. This will protect it from creditors, keep it out of their estates for estate tax purposes and make it easy to choose an independent trustee if necessary. For the kid who is a physician this is even more important given risk of malpractice suits.

Consider setting up irrevocable trusts now and making at least annual exclusion gifts while you are alive. These can accumulate to a sizeable amount for retirement, grandchildren education or other big ticket expenses.

Ignore the demands that you change your spending or charitable contributions. Give to charity at the level you feel comfortable.

Depending on your state there may be estate or inheritance taxes at your deaths. You will need to go through your options with an estate planning attorney.

To the extent that you have concerns about how your kids earn and spend (although you don't cite any issues with the physician), they are still young. They are not finished growing into adults and you are not finished being parents.

Our kids range from frugal and highly knowledgeable about money to frugal and completely uninterested.

I don't get the thinking that goes "child A is financially educated, good with money and earns a high income. I will reward this by leaving them a large inheritance. Child B chose a lower income career and struggles to support themselves. I will punish them by leaving a small bequest."

We give to charity as we go but plan to leave our assets to our kids. In trust.

As the time gets closer, we may consider charitable trusts for the tax savings but I have not investigated those enough to begin to make decisions. With the new rules on inherited retirement accounts, they have become more appealing.
+1 Many good ideas here. I especially like “Consider setting up irrevocable trusts now and making at least annual exclusion gifts while you are alive. These can accumulate to a sizeable amount for retirement, grandchildren education or other big ticket expenses.“
JackoC
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Re: What to do with all this MONEY ?

Post by JackoC »

RocketShipTech wrote: Fri Jul 03, 2020 7:21 pm
TheDDC wrote: Fri Jul 03, 2020 7:13 pm What on earth are you spending $130k a year on??? For two people? Start there.
-TheDDC
Lol. And at the same time decrying their son’s spending habits.
I guess it’s true what they say about apples falling from trees.
Again I wonder if a post of yours (and the previous one too) is a joke. A person already in their 60's has $7.5mil, and it's implied spending $130k/yr is too much? :shock:
New Providence
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Re: What to do with all this MONEY ?

Post by New Providence »

DJZ wrote: Sun Jul 05, 2020 10:24 am
afan wrote: Sun Jul 05, 2020 9:14 am I cannot agree with the advice to "spend more money". $130,000 a year is a lot of money to spend. Spending more than double the median household pretax income is hardly frugal.

More importantly, OP made it clear that they buy what they want. Spending money on things they don't want is the definition of waste.

Puzzled about the concerns over the son. Late twenties soon to have two advanced degrees including an MBA, self supporting... Oh the horror!

Leave money for the kids in trusts, not outright. This will protect it from creditors, keep it out of their estates for estate tax purposes and make it easy to choose an independent trustee if necessary. For the kid who is a physician this is even more important given risk of malpractice suits.

Consider setting up irrevocable trusts now and making at least annual exclusion gifts while you are alive. These can accumulate to a sizeable amount for retirement, grandchildren education or other big ticket expenses.

Ignore the demands that you change your spending or charitable contributions. Give to charity at the level you feel comfortable.

Depending on your state there may be estate or inheritance taxes at your deaths. You will need to go through your options with an estate planning attorney.

To the extent that you have concerns about how your kids earn and spend (although you don't cite any issues with the physician), they are still young. They are not finished growing into adults and you are not finished being parents.

Our kids range from frugal and highly knowledgeable about money to frugal and completely uninterested.

I don't get the thinking that goes "child A is financially educated, good with money and earns a high income. I will reward this by leaving them a large inheritance. Child B chose a lower income career and struggles to support themselves. I will punish them by leaving a small bequest."

We give to charity as we go but plan to leave our assets to our kids. In trust.

As the time gets closer, we may consider charitable trusts for the tax savings but I have not investigated those enough to begin to make decisions. With the new rules on inherited retirement accounts, they have become more appealing.
+1 Many good ideas here. I especially like “Consider setting up irrevocable trusts now and making at least annual exclusion gifts while you are alive. These can accumulate to a sizeable amount for retirement, grandchildren education or other big ticket expenses.“
So you skip your children and leave it all to grandchildren? It seems to me highly illogical. Why not an irrevocable trust to great, great grand children...that way it will accumulate even more.
JackoC
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Re: What to do with all this MONEY ?

Post by JackoC »

afan wrote: Sun Jul 05, 2020 9:14 am 1. I cannot agree with the advice to "spend more money". $130,000 a year is a lot of money to spend. Spending more than double the median household pretax income is hardly frugal.

More importantly, OP made it clear that they buy what they want. Spending money on things they don't want is the definition of waste.

2. Puzzled about the concerns over the son. Late twenties soon to have two advanced degrees including an MBA, self supporting... Oh the horror!

3. Leave money for the kids in trusts, not outright. This will protect it from creditors, keep it out of their estates for estate tax purposes and make it easy to choose an independent trustee if necessary. For the kid who is a physician this is even more important given risk of malpractice suits.

4. Ignore the demands that you change your spending or charitable contributions. Give to charity at the level you feel comfortable.
1. If after careful reflection on all aspects of spending the last part is true, then I agree, don't spend on stuff you really don't want from some arbitrary desire to avoid spending is too low a % of assets per year. But, there might be room for reflection on reticence to spend is truly because you don't want more or it could also itself be some subconscious fear or habit that no longer fits your situation. I'd say think it through continuously. And, as another response mentioned, spending on 'yourself' could include things like generous family vacations (a separate topic, but my tax/estate guy's conclusion is that that does not count as a gift for tax purposes). There isn't any particular virtue in 'frugality' as a standalone: it's a means to an end. It's irrelevant IMO if $130k is 'not frugal', or what multiple of median income. Again though I agree that if after thorough reflection one decides, 'this is the lifestyle I want', and it only requires 1.7%/yr of assets in retirement, or less, so be it. This is partly advice to myself. :happy

2. This is natural IME to some extent with a lot of successful people. But it's also OK to point out to somebody expressing such opinions about their kids when it could be a *lot* worse, as seems the case here.

3. I agree, it's a important area to think about. It's not a cure all for the basic question of what to spend v. leave to kids (or other family) v. give to strangers, but a very important tool box. To deal with issues like spendthrifts (though per point 2. not sure OP's son really is one), giving to generations yet born (dynasty trust*). Many posts have mentioned various aspects. Somebody at this asset level should read up on the general topic, at least.

4. see 1 on own spending, and reflection on charitable giving likewise. However while I saw no specific demands to greatly increase consumption, some of the ones about giving more to charity were pretty aggressive. I would indeed ignore those if I were OP. OP didn't mention charity that I recall. Maybe that means OP hasn't considered it or maybe a well thought out plan on charity so wasn't asking for opinions about that. I wonder if the people suggesting OP should give away down to where the portfolio just supports the $130k spend for rest of life have actually done this, or would if as successful as OP.

*this isn't skipping children to give to grandchildren or g-grands, it's some structure that gives out some benefits (% of assets per yr, educational or home downpayments etc) for each generation. It doesn't necessarily just split it up and give it all out to any generation (except when/if it gets too small to practically carry on).
harrychan
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Re: What to do with all this MONEY ?

Post by harrychan »

barefootjan wrote: Sat Jul 04, 2020 12:08 am
If I was sure I had way more money than I needed, I'd want to leave my kids with something I can only dream of at this point: real hope that they and their children will have a habitable place to live.
This needs to be raised more. We're seeing this in certain Asian countries where it is virtually impossible for the current young generation to buy BASIC properties. Look at what is happening in Hong Kong. in 2019, homes avg 20 times the medium income. With home prices increasing and wages not keeping up, what you leave may be their way of entering a housing market where they find a job or desire to live (near you perhaps).
This is not legal or certified financial advice but you know that already.
Aku09
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Re: What to do with all this MONEY ?

Post by Aku09 »

Congrats on winning the race. I’m 35 and can see your dilemma. As someone not too much older than your son I’d suggest using some of your money for lasting memories with your family. Try to plan a nice family vacation 1-2 times a year. Find out something your kids may want to do for their birthday and make it special (fly to New York and go see a broadway show on the weekend for instance). The memories will last much longer than any one gift of money and hopefully give you insight into each of their lives a little closer.

When I was 28 I had 0 in retirement. I got married fairly young and had kids starting at 25. Made 40k a year after college and went back to grad school and make 200k now but I’m still paying off all my debt from grad school. Living off 60k and going to school isn’t easy. Much less trying to save for retirement and everything else.
afan
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Re: What to do with all this MONEY ?

Post by afan »

New Providence wrote: Sun Jul 05, 2020 11:24 am

So you skip your children and leave it all to grandchildren? It seems to me highly illogical. Why not an irrevocable trust to great, great grand children...that way it will accumulate even more.
I don't understand the question. I was not suggesting a generation skipping gift.
From what the OP posted, I would not suggest skipping the children. On the other hand, years from now, if OP is still around and the children are successful in their careers, then it may be the case that all the children would do with an inheritance is pass it on to the grandchildren. If that were the case, then this would require careful estate planning. Under those circumstances skipping the children's generation might be the right move.

As the OP described the situation now, it does not seem the children have that level of assets. Things might be different in 10-20 years.
Why not an irrevocable trust to great, great grand children...that way it will accumulate even more.
Not clear there is enough money to plan for it lasting that long. The amounts per individual get diluted, the costs of maintaining the trusts still must be paid and the odds that all those people for all those years will never feel a reason to touch the assets get lower with each generation.

But the trusts should be set up so that they can benefit later generations if the finances work out that way.
Last edited by afan on Sun Jul 05, 2020 2:28 pm, edited 1 time in total.
We don't know how to beat the market on a risk-adjusted basis, and we don't know anyone that does know either | --Swedroe | We assume that markets are efficient, that prices are right | --Fama
MathIsMyWayr
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Re: What to do with all this MONEY ?

Post by MathIsMyWayr »

afan wrote: Sun Jul 05, 2020 9:14 am I cannot agree with the advice to "spend more money". $130,000 a year is a lot of money to spend. Spending more than double the median household pretax income is hardly frugal.
Why is it difficult to spend more, much more, than $130,000 a year? OP may hop on a business class flight for dinner and shopping in NYC over a weekend. Or he may have lunch and go to a concert in SF or LA. Or Paris. OP may easily burn additional $100k a month.
Out-of-town excursions will be felt like in-town strolls soon. It may be difficult to spend millions a year without being foolish, but a few hundreds of thousands will be no sweat. The possibilities are endless.
afan
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Re: What to do with all this MONEY ?

Post by afan »

I was not saying that is impossible to spend more than $130,000. I was not making any suggestions about how much OP should spend- none of my business.
OP buys what they want, with their own money, and finds that the resulting level of spending is less than they can afford. Good for them!

I was just contesting the characterization of that level of spending as frugal. It may be affordable, but it is not frugal.
I am sure there are bogleheads who have more and spend less than the OP. Some of them are frugal.
We don't know how to beat the market on a risk-adjusted basis, and we don't know anyone that does know either | --Swedroe | We assume that markets are efficient, that prices are right | --Fama
MathIsMyWayr
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Re: What to do with all this MONEY ?

Post by MathIsMyWayr »

afan wrote: Sun Jul 05, 2020 2:36 pm I was not saying that is impossible to spend more than $130,000. I was not making any suggestions about how much OP should spend- none of my business.
OP buys what they want, with their own money, and finds that the resulting level of spending is less than they can afford. Good for them!

I was just contesting the characterization of that level of spending as frugal. It may be affordable, but it is not frugal.
I am sure there are bogleheads who have more and spend less than the OP. Some of them are frugal.
The level of frugality is not universal or set in stone. It should depend on the wealth of an individual. When I was starting out and the kids were little, we used to go to fast food restaurants for treats. After I took them to a neighborhood Italian family restaurant once, they refused to go to a fast food restaurant any more, but I had to watch out what we ordered. Now I do not pay much attention to what we order. I don't think we are any less frugal than we used to be. I assume I may not care what kinds of restaurant we go to if our wealth increases. Well, it is all relative.
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FIREchief
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Re: What to do with all this MONEY ?

Post by FIREchief »

MathIsMyWayr wrote: Sun Jul 05, 2020 2:26 pm
afan wrote: Sun Jul 05, 2020 9:14 am I cannot agree with the advice to "spend more money". $130,000 a year is a lot of money to spend. Spending more than double the median household pretax income is hardly frugal.
Why is it difficult to spend more, much more, than $130,000 a year? OP may hop on a business class flight for dinner and shopping in NYC over a weekend. Or he may have lunch and go to a concert in SF or LA. Or Paris. OP may easily burn additional $100k a month.
Out-of-town excursions will be felt like in-town strolls soon. It may be difficult to spend millions a year without being foolish, but a few hundreds of thousands will be no sweat. The possibilities are endless.
For some of us, it would be difficult to spend over $130,000 on ourselves without being less happy. I would rather just stay home than do any of those things you mentioned. Travel is tiring and at times can get complicated. I never enjoyed crowds and noisy restaurants. I enjoy short, domestic vacations and usually am looking forward to getting home after a week. We downsized from the big house to a smaller rental unit and it has been great. We drive the exact vehicle we want, and it didn't cost $40K plus. I have all the "stuff" I want and still at times am working on incremental downsizing. I suppose we could fly first class, but I rarely fly for more than two to four hours, so it would be of marginal benefit. For many of us, life is most enjoyable when it is simple, peaceful, quiet. Where I live, that can be had for about $60K per year for a retiree.
I am not a lawyer, accountant or financial advisor. Any advice or suggestions that I may provide shall be considered for entertainment purposes only.
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FIREchief
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Re: What to do with all this MONEY ?

Post by FIREchief »

MathIsMyWayr wrote: Sun Jul 05, 2020 2:58 pm When I was starting out and the kids were little, we used to go to fast food restaurants for treats. After I took them to a neighborhood Italian family restaurant once, they refused to go to a fast food restaurant any more, but I had to watch out what we ordered.
Refused?? :confused
I am not a lawyer, accountant or financial advisor. Any advice or suggestions that I may provide shall be considered for entertainment purposes only.
student
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Re: What to do with all this MONEY ?

Post by student »

MathIsMyWayr wrote: Sun Jul 05, 2020 2:58 pm
afan wrote: Sun Jul 05, 2020 2:36 pm I was not saying that is impossible to spend more than $130,000. I was not making any suggestions about how much OP should spend- none of my business.
OP buys what they want, with their own money, and finds that the resulting level of spending is less than they can afford. Good for them!

I was just contesting the characterization of that level of spending as frugal. It may be affordable, but it is not frugal.
I am sure there are bogleheads who have more and spend less than the OP. Some of them are frugal.
The level of frugality is not universal or set in stone. It should depend on the wealth of an individual. When I was starting out and the kids were little, we used to go to fast food restaurants for treats. After I took them to a neighborhood Italian family restaurant once, they refused to go to a fast food restaurant any more, but I had to watch out what we ordered. Now I do not pay much attention to what we order. I don't think we are any less frugal than we used to be. I assume I may not care what kinds of restaurant we go to if our wealth increases. Well, it is all relative.
Smart kids.
MathIsMyWayr
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Re: What to do with all this MONEY ?

Post by MathIsMyWayr »

FIREchief wrote: Sun Jul 05, 2020 3:02 pm
MathIsMyWayr wrote: Sun Jul 05, 2020 2:58 pm When I was starting out and the kids were little, we used to go to fast food restaurants for treats. After I took them to a neighborhood Italian family restaurant once, they refused to go to a fast food restaurant any more, but I had to watch out what we ordered.
Refused?? :confused
Yes.
"Let's go to McDonald's." "Nooooooo" :oops:
"About La C...?" "Yessssss" :D
afan
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Re: What to do with all this MONEY ?

Post by afan »

FIREchief wrote: Sun Jul 05, 2020 3:01 pm
MathIsMyWayr wrote: Sun Jul 05, 2020 2:26 pm
afan wrote: Sun Jul 05, 2020 9:14 am I cannot agree with the advice to "spend more money". $130,000 a year is a lot of money to spend. Spending more than double the median household pretax income is hardly frugal.
Why is it difficult to spend more, much more, than $130,000 a year? OP may hop on a business class flight for dinner and shopping in NYC over a weekend. Or he may have lunch and go to a concert in SF or LA. Or Paris. OP may easily burn additional $100k a month.
Out-of-town excursions will be felt like in-town strolls soon. It may be difficult to spend millions a year without being foolish, but a few hundreds of thousands will be no sweat. The possibilities are endless.
For some of us, it would be difficult to spend over $130,000 on ourselves without being less happy. I would rather just stay home than do any of those things you mentioned. Travel is tiring and at times can get complicated. I never enjoyed crowds and noisy restaurants. I enjoy short, domestic vacations and usually am looking forward to getting home after a week. We downsized from the big house to a smaller rental unit and it has been great. We drive the exact vehicle we want, and it didn't cost $40K plus. I have all the "stuff" I want and still at times am working on incremental downsizing. I suppose we could fly first class, but I rarely fly for more than two to four hours, so it would be of marginal benefit. For many of us, life is most enjoyable when it is simple, peaceful, quiet. Where I live, that can be had for about $60K per year for a retiree.
+ 1,000,000

Living the life you want without feeling an obligation to spend on things you don't want.

You have truly won the game.
We don't know how to beat the market on a risk-adjusted basis, and we don't know anyone that does know either | --Swedroe | We assume that markets are efficient, that prices are right | --Fama
RocketShipTech
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Re: What to do with all this MONEY ?

Post by RocketShipTech »

FIREchief wrote: Sun Jul 05, 2020 3:01 pm
MathIsMyWayr wrote: Sun Jul 05, 2020 2:26 pm
afan wrote: Sun Jul 05, 2020 9:14 am I cannot agree with the advice to "spend more money". $130,000 a year is a lot of money to spend. Spending more than double the median household pretax income is hardly frugal.
Why is it difficult to spend more, much more, than $130,000 a year? OP may hop on a business class flight for dinner and shopping in NYC over a weekend. Or he may have lunch and go to a concert in SF or LA. Or Paris. OP may easily burn additional $100k a month.
Out-of-town excursions will be felt like in-town strolls soon. It may be difficult to spend millions a year without being foolish, but a few hundreds of thousands will be no sweat. The possibilities are endless.
For some of us, it would be difficult to spend over $130,000 on ourselves without being less happy. I would rather just stay home than do any of those things you mentioned. Travel is tiring and at times can get complicated. I never enjoyed crowds and noisy restaurants. I enjoy short, domestic vacations and usually am looking forward to getting home after a week. We downsized from the big house to a smaller rental unit and it has been great. We drive the exact vehicle we want, and it didn't cost $40K plus. I have all the "stuff" I want and still at times am working on incremental downsizing. I suppose we could fly first class, but I rarely fly for more than two to four hours, so it would be of marginal benefit. For many of us, life is most enjoyable when it is simple, peaceful, quiet. Where I live, that can be had for about $60K per year for a retiree.
No one is saying you should spend money you don’t want to spend.

But the question should really be, if you have such low expenses why did you work so long and save so much?

In other words, the answer to OP’s original question “What to do with all this MONEY?” should be a cautionary tale to others.
MathIsMyWayr
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Re: What to do with all this MONEY ?

Post by MathIsMyWayr »

afan wrote: Sun Jul 05, 2020 3:16 pm
FIREchief wrote: Sun Jul 05, 2020 3:01 pm
MathIsMyWayr wrote: Sun Jul 05, 2020 2:26 pm
afan wrote: Sun Jul 05, 2020 9:14 am I cannot agree with the advice to "spend more money". $130,000 a year is a lot of money to spend. Spending more than double the median household pretax income is hardly frugal.
Why is it difficult to spend more, much more, than $130,000 a year? OP may hop on a business class flight for dinner and shopping in NYC over a weekend. Or he may have lunch and go to a concert in SF or LA. Or Paris. OP may easily burn additional $100k a month.
Out-of-town excursions will be felt like in-town strolls soon. It may be difficult to spend millions a year without being foolish, but a few hundreds of thousands will be no sweat. The possibilities are endless.
For some of us, it would be difficult to spend over $130,000 on ourselves without being less happy. I would rather just stay home than do any of those things you mentioned. Travel is tiring and at times can get complicated. I never enjoyed crowds and noisy restaurants. I enjoy short, domestic vacations and usually am looking forward to getting home after a week. We downsized from the big house to a smaller rental unit and it has been great. We drive the exact vehicle we want, and it didn't cost $40K plus. I have all the "stuff" I want and still at times am working on incremental downsizing. I suppose we could fly first class, but I rarely fly for more than two to four hours, so it would be of marginal benefit. For many of us, life is most enjoyable when it is simple, peaceful, quiet. Where I live, that can be had for about $60K per year for a retiree.
+ 1,000,000

Living the life you want without feeling an obligation to spend on things you don't want.

You have truly won the game.
You don't have to spend for the sake of spending. However, the realization and the idea that you may afford niceties in life you denied in your life out of habit before is liberating. You don't have to look for a football ticket in the end zone. Go for a seat on the 50 yard line. No more balcony seats. Go for box seats. If you can afford without breaking a bank, you are still frugal. OP may join a special membership of a museum as many physicians do. They hold many special events for privileged members.
Last edited by MathIsMyWayr on Sun Jul 05, 2020 4:05 pm, edited 1 time in total.
UnitaryExecutive
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Re: What to do with all this MONEY ?

Post by UnitaryExecutive »

Stormbringer wrote: Fri Jul 03, 2020 8:05 pm
Rajsx wrote: Fri Jul 03, 2020 2:45 pm What to do with all this MONEY ?
Take your family on an annual vacation. You will get some quality time with them, create some memories, and relieve them of the stress of funding a vacation. Go to great places, like Hawaii or London. Rent a big house where you can all stay together. Make sure the grand kids get to visit Disney. Buy wonderful experiences that everyone will look forward to each year and remember forever.
I second this. Use the money to buy quality experiences with your family.
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Re: What to do with all this MONEY ?

Post by UnitaryExecutive »

One other thought. If you're going to splurge on something splurge on health related things like personal trainers, exercise equipment, good nutrition.
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Re: What to do with all this MONEY ?

Post by FIREchief »

RocketShipTech wrote: Sun Jul 05, 2020 3:43 pm
FIREchief wrote: Sun Jul 05, 2020 3:01 pm For some of us, it would be difficult to spend over $130,000 on ourselves without being less happy. I would rather just stay home than do any of those things you mentioned. Travel is tiring and at times can get complicated. I never enjoyed crowds and noisy restaurants. I enjoy short, domestic vacations and usually am looking forward to getting home after a week. We downsized from the big house to a smaller rental unit and it has been great. We drive the exact vehicle we want, and it didn't cost $40K plus. I have all the "stuff" I want and still at times am working on incremental downsizing. I suppose we could fly first class, but I rarely fly for more than two to four hours, so it would be of marginal benefit. For many of us, life is most enjoyable when it is simple, peaceful, quiet. Where I live, that can be had for about $60K per year for a retiree.
No one is saying you should spend money you don’t want to spend.

But the question should really be, if you have such low expenses why did you work so long and save so much?
How does a person in their 30's or 40's have any idea what they will have saved at 60? Also, while we can live comfortably (and happy) for $60K now, who knows what that number will be in 10 or 20 years? Life happens. :annoyed Sure, you can make plans and run projections. You know what they say about "making plans" though, right? :P I worked exactly 25 days longer than I had to (driven by retirement plan vesting). I also happen to be among those (perhaps in the minority) that places a high priority on leaving something behind for heirs/charity.
In other words, the answer to OP’s original question “What to do with all this MONEY?” should be a cautionary tale to others.
I'm just not understanding the concern here. If a person is happy living below their means and saving while providing adequately for their families and performing whatever work they have without killing themselves, I see little need for caution.
I am not a lawyer, accountant or financial advisor. Any advice or suggestions that I may provide shall be considered for entertainment purposes only.
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FIREchief
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Re: What to do with all this MONEY ?

Post by FIREchief »

afan wrote: Sun Jul 05, 2020 3:16 pm
FIREchief wrote: Sun Jul 05, 2020 3:01 pm
MathIsMyWayr wrote: Sun Jul 05, 2020 2:26 pm
afan wrote: Sun Jul 05, 2020 9:14 am I cannot agree with the advice to "spend more money". $130,000 a year is a lot of money to spend. Spending more than double the median household pretax income is hardly frugal.
Why is it difficult to spend more, much more, than $130,000 a year? OP may hop on a business class flight for dinner and shopping in NYC over a weekend. Or he may have lunch and go to a concert in SF or LA. Or Paris. OP may easily burn additional $100k a month.
Out-of-town excursions will be felt like in-town strolls soon. It may be difficult to spend millions a year without being foolish, but a few hundreds of thousands will be no sweat. The possibilities are endless.
For some of us, it would be difficult to spend over $130,000 on ourselves without being less happy. I would rather just stay home than do any of those things you mentioned. Travel is tiring and at times can get complicated. I never enjoyed crowds and noisy restaurants. I enjoy short, domestic vacations and usually am looking forward to getting home after a week. We downsized from the big house to a smaller rental unit and it has been great. We drive the exact vehicle we want, and it didn't cost $40K plus. I have all the "stuff" I want and still at times am working on incremental downsizing. I suppose we could fly first class, but I rarely fly for more than two to four hours, so it would be of marginal benefit. For many of us, life is most enjoyable when it is simple, peaceful, quiet. Where I live, that can be had for about $60K per year for a retiree.
+ 1,000,000

Living the life you want without feeling an obligation to spend on things you don't want.

You have truly won the game.
Well stated. Thanks afan. :beer
I am not a lawyer, accountant or financial advisor. Any advice or suggestions that I may provide shall be considered for entertainment purposes only.
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Re: What to do with all this MONEY ?

Post by RocketShipTech »

FIREchief wrote: Sun Jul 05, 2020 4:10 pm
RocketShipTech wrote: Sun Jul 05, 2020 3:43 pm
FIREchief wrote: Sun Jul 05, 2020 3:01 pm For some of us, it would be difficult to spend over $130,000 on ourselves without being less happy. I would rather just stay home than do any of those things you mentioned. Travel is tiring and at times can get complicated. I never enjoyed crowds and noisy restaurants. I enjoy short, domestic vacations and usually am looking forward to getting home after a week. We downsized from the big house to a smaller rental unit and it has been great. We drive the exact vehicle we want, and it didn't cost $40K plus. I have all the "stuff" I want and still at times am working on incremental downsizing. I suppose we could fly first class, but I rarely fly for more than two to four hours, so it would be of marginal benefit. For many of us, life is most enjoyable when it is simple, peaceful, quiet. Where I live, that can be had for about $60K per year for a retiree.
No one is saying you should spend money you don’t want to spend.

But the question should really be, if you have such low expenses why did you work so long and save so much?
How does a person in their 30's or 40's have any idea what they will have saved at 60? Also, while we can live comfortably (and happy) for $60K now, who knows what that number will be in 10 or 20 years? Life happens. :annoyed Sure, you can make plans and run projections. You know what they say about "making plans" though, right? :P I worked exactly 25 days longer than I had to (driven by retirement plan vesting). I also happen to be among those (perhaps in the minority) that places a high priority on leaving something behind for heirs/charity.
In other words, the answer to OP’s original question “What to do with all this MONEY?” should be a cautionary tale to others.
I'm just not understanding the concern here. If a person is happy living below their means and saving while providing adequately for their families and performing whatever work they have without killing themselves, I see little need for caution.
If you are one of those who would continue going into work even if you won the lottery, great, good for you. That is not most of us.

Money is renewable. Time is not.
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Re: What to do with all this MONEY ?

Post by TomatoTomahto »

RocketShipTech wrote: Sun Jul 05, 2020 3:43 pm No one is saying you should spend money you don’t want to spend.

But the question should really be, if you have such low expenses why did you work so long and save so much?

In other words, the answer to OP’s original question “What to do with all this MONEY?” should be a cautionary tale to others.
We don’t have low expenses, but spend proportionally to OP. Why did my wife work so long and continues to work? Predominantly because she gets gratification from working. Perhaps that’s the case with OP also.
Okay, I get it; I won't be political or controversial. The Earth is flat.
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Re: What to do with all this MONEY ?

Post by JackoC »

MathIsMyWayr wrote: Sun Jul 05, 2020 2:58 pm
afan wrote: Sun Jul 05, 2020 2:36 pm I was not saying that is impossible to spend more than $130,000. I was not making any suggestions about how much OP should spend- none of my business.
OP buys what they want, with their own money, and finds that the resulting level of spending is less than they can afford. Good for them!

I was just contesting the characterization of that level of spending as frugal. It may be affordable, but it is not frugal.
I am sure there are bogleheads who have more and spend less than the OP. Some of them are frugal.
The level of frugality is not universal or set in stone. It should depend on the wealth of an individual. ... Well, it is all relative.
I think afan's most important point there is not telling OP what to spend, with which I agree.

On the secondary issue of defining 'frugal' I agree with you the person's own means are the most relevant comparison. Commonly the implicit comparison is a national US one (it's not 'everyone', almost all spending levels ever discussed here are lavish with regard to a couple or few billion people) which isn't altogether ridiculous but can cause strange outcomes at the limits. Definitely saying $130k for 7.5mil NW person isn't 'frugal' would be one, surely if the NW were say $25mil. And who thinks Buffett, for all his folksy schtick, spends less than a large multiple of $130k/yr? Not that there's any reason he shouldn't IMO, and he might still be called 'frugal' relatively. Also even in a comparison to other people the whole country is an arbitrary grouping just like it's arbitrary to use own country not the world. The median household income in my town is right around $130k.

Anyway as mentioned above I think OP's spend is right around the after expense, tax and inflation expected return on that size portfolio. Those with a more optimistic take on expected returns might think the spend is below expected return, and they might also be neglecting taxes as we do when considering 401k etc. But for big portfolio's mainly in taxable tax on investment returns has a serious effect. Anyway if intending to leave the whole (inflation adjusted) egg to kids, $130k isn't *that* low a spending level. It is low if the intention is to spend down a good portion of it. Whether you attach the label 'frugal' doesn't actually matter much.
Last edited by JackoC on Sun Jul 05, 2020 4:26 pm, edited 1 time in total.
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Re: What to do with all this MONEY ?

Post by MathIsMyWayr »

RocketShipTech wrote: Sun Jul 05, 2020 4:15 pm
FIREchief wrote: Sun Jul 05, 2020 4:10 pm
RocketShipTech wrote: Sun Jul 05, 2020 3:43 pm
FIREchief wrote: Sun Jul 05, 2020 3:01 pm For some of us, it would be difficult to spend over $130,000 on ourselves without being less happy. I would rather just stay home than do any of those things you mentioned. Travel is tiring and at times can get complicated. I never enjoyed crowds and noisy restaurants. I enjoy short, domestic vacations and usually am looking forward to getting home after a week. We downsized from the big house to a smaller rental unit and it has been great. We drive the exact vehicle we want, and it didn't cost $40K plus. I have all the "stuff" I want and still at times am working on incremental downsizing. I suppose we could fly first class, but I rarely fly for more than two to four hours, so it would be of marginal benefit. For many of us, life is most enjoyable when it is simple, peaceful, quiet. Where I live, that can be had for about $60K per year for a retiree.
No one is saying you should spend money you don’t want to spend.

But the question should really be, if you have such low expenses why did you work so long and save so much?
How does a person in their 30's or 40's have any idea what they will have saved at 60? Also, while we can live comfortably (and happy) for $60K now, who knows what that number will be in 10 or 20 years? Life happens. :annoyed Sure, you can make plans and run projections. You know what they say about "making plans" though, right? :P I worked exactly 25 days longer than I had to (driven by retirement plan vesting). I also happen to be among those (perhaps in the minority) that places a high priority on leaving something behind for heirs/charity.
In other words, the answer to OP’s original question “What to do with all this MONEY?” should be a cautionary tale to others.
I'm just not understanding the concern here. If a person is happy living below their means and saving while providing adequately for their families and performing whatever work they have without killing themselves, I see little need for caution.
If you are one of those who would continue going into work even if you won the lottery, great, good for you. That is not most of us.

Money is renewable. Time is not.
BHs are heavily tilted toward to the monetary aspect of work. John Bogle worked until the last minute of his life. Apparently Mr. Bogle was not chained by the mantra "Money is renewable. Time is not."
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FIREchief
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Re: What to do with all this MONEY ?

Post by FIREchief »

RocketShipTech wrote: Sun Jul 05, 2020 4:15 pm
FIREchief wrote: Sun Jul 05, 2020 4:10 pm
RocketShipTech wrote: Sun Jul 05, 2020 3:43 pm
FIREchief wrote: Sun Jul 05, 2020 3:01 pm For some of us, it would be difficult to spend over $130,000 on ourselves without being less happy. I would rather just stay home than do any of those things you mentioned. Travel is tiring and at times can get complicated. I never enjoyed crowds and noisy restaurants. I enjoy short, domestic vacations and usually am looking forward to getting home after a week. We downsized from the big house to a smaller rental unit and it has been great. We drive the exact vehicle we want, and it didn't cost $40K plus. I have all the "stuff" I want and still at times am working on incremental downsizing. I suppose we could fly first class, but I rarely fly for more than two to four hours, so it would be of marginal benefit. For many of us, life is most enjoyable when it is simple, peaceful, quiet. Where I live, that can be had for about $60K per year for a retiree.
No one is saying you should spend money you don’t want to spend.

But the question should really be, if you have such low expenses why did you work so long and save so much?
How does a person in their 30's or 40's have any idea what they will have saved at 60? Also, while we can live comfortably (and happy) for $60K now, who knows what that number will be in 10 or 20 years? Life happens. :annoyed Sure, you can make plans and run projections. You know what they say about "making plans" though, right? :P I worked exactly 25 days longer than I had to (driven by retirement plan vesting). I also happen to be among those (perhaps in the minority) that places a high priority on leaving something behind for heirs/charity.
In other words, the answer to OP’s original question “What to do with all this MONEY?” should be a cautionary tale to others.
I'm just not understanding the concern here. If a person is happy living below their means and saving while providing adequately for their families and performing whatever work they have without killing themselves, I see little need for caution.
If you are one of those who would continue going into work even if you won the lottery, great, good for you. That is not most of us.

Money is renewable. Time is not.
Did you miss the part about 25 days?
I am not a lawyer, accountant or financial advisor. Any advice or suggestions that I may provide shall be considered for entertainment purposes only.
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Re: What to do with all this MONEY ?

Post by RocketShipTech »

FIREchief wrote: Sun Jul 05, 2020 4:28 pm
RocketShipTech wrote: Sun Jul 05, 2020 4:15 pm
FIREchief wrote: Sun Jul 05, 2020 4:10 pm
RocketShipTech wrote: Sun Jul 05, 2020 3:43 pm
FIREchief wrote: Sun Jul 05, 2020 3:01 pm For some of us, it would be difficult to spend over $130,000 on ourselves without being less happy. I would rather just stay home than do any of those things you mentioned. Travel is tiring and at times can get complicated. I never enjoyed crowds and noisy restaurants. I enjoy short, domestic vacations and usually am looking forward to getting home after a week. We downsized from the big house to a smaller rental unit and it has been great. We drive the exact vehicle we want, and it didn't cost $40K plus. I have all the "stuff" I want and still at times am working on incremental downsizing. I suppose we could fly first class, but I rarely fly for more than two to four hours, so it would be of marginal benefit. For many of us, life is most enjoyable when it is simple, peaceful, quiet. Where I live, that can be had for about $60K per year for a retiree.
No one is saying you should spend money you don’t want to spend.

But the question should really be, if you have such low expenses why did you work so long and save so much?
How does a person in their 30's or 40's have any idea what they will have saved at 60? Also, while we can live comfortably (and happy) for $60K now, who knows what that number will be in 10 or 20 years? Life happens. :annoyed Sure, you can make plans and run projections. You know what they say about "making plans" though, right? :P I worked exactly 25 days longer than I had to (driven by retirement plan vesting). I also happen to be among those (perhaps in the minority) that places a high priority on leaving something behind for heirs/charity.
In other words, the answer to OP’s original question “What to do with all this MONEY?” should be a cautionary tale to others.
I'm just not understanding the concern here. If a person is happy living below their means and saving while providing adequately for their families and performing whatever work they have without killing themselves, I see little need for caution.
If you are one of those who would continue going into work even if you won the lottery, great, good for you. That is not most of us.

Money is renewable. Time is not.
Did you miss the part about 25 days?
How early could you have retired without waiting for your retirement plan to vest? And what financial condition would you be in now? Something tells me not penurious on the streets?
Last edited by RocketShipTech on Sun Jul 05, 2020 4:41 pm, edited 1 time in total.
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Re: What to do with all this MONEY ?

Post by RocketShipTech »

MathIsMyWayr wrote: Sun Jul 05, 2020 4:26 pm
RocketShipTech wrote: Sun Jul 05, 2020 4:15 pm
FIREchief wrote: Sun Jul 05, 2020 4:10 pm
RocketShipTech wrote: Sun Jul 05, 2020 3:43 pm
FIREchief wrote: Sun Jul 05, 2020 3:01 pm For some of us, it would be difficult to spend over $130,000 on ourselves without being less happy. I would rather just stay home than do any of those things you mentioned. Travel is tiring and at times can get complicated. I never enjoyed crowds and noisy restaurants. I enjoy short, domestic vacations and usually am looking forward to getting home after a week. We downsized from the big house to a smaller rental unit and it has been great. We drive the exact vehicle we want, and it didn't cost $40K plus. I have all the "stuff" I want and still at times am working on incremental downsizing. I suppose we could fly first class, but I rarely fly for more than two to four hours, so it would be of marginal benefit. For many of us, life is most enjoyable when it is simple, peaceful, quiet. Where I live, that can be had for about $60K per year for a retiree.
No one is saying you should spend money you don’t want to spend.

But the question should really be, if you have such low expenses why did you work so long and save so much?
How does a person in their 30's or 40's have any idea what they will have saved at 60? Also, while we can live comfortably (and happy) for $60K now, who knows what that number will be in 10 or 20 years? Life happens. :annoyed Sure, you can make plans and run projections. You know what they say about "making plans" though, right? :P I worked exactly 25 days longer than I had to (driven by retirement plan vesting). I also happen to be among those (perhaps in the minority) that places a high priority on leaving something behind for heirs/charity.
In other words, the answer to OP’s original question “What to do with all this MONEY?” should be a cautionary tale to others.
I'm just not understanding the concern here. If a person is happy living below their means and saving while providing adequately for their families and performing whatever work they have without killing themselves, I see little need for caution.
If you are one of those who would continue going into work even if you won the lottery, great, good for you. That is not most of us.

Money is renewable. Time is not.
BHs are heavily tilted toward to the monetary aspect of work. John Bogle worked until the last minute of his life. Apparently Mr. Bogle was not chained by the mantra "Money is renewable. Time is not."
No doubt because he enjoyed his work and would be doing it without monetary incentive.
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Re: What to do with all this MONEY ?

Post by MathIsMyWayr »

RocketShipTech wrote: Sun Jul 05, 2020 4:41 pm
MathIsMyWayr wrote: Sun Jul 05, 2020 4:26 pm
RocketShipTech wrote: Sun Jul 05, 2020 4:15 pm
FIREchief wrote: Sun Jul 05, 2020 4:10 pm
RocketShipTech wrote: Sun Jul 05, 2020 3:43 pm

No one is saying you should spend money you don’t want to spend.

But the question should really be, if you have such low expenses why did you work so long and save so much?
How does a person in their 30's or 40's have any idea what they will have saved at 60? Also, while we can live comfortably (and happy) for $60K now, who knows what that number will be in 10 or 20 years? Life happens. :annoyed Sure, you can make plans and run projections. You know what they say about "making plans" though, right? :P I worked exactly 25 days longer than I had to (driven by retirement plan vesting). I also happen to be among those (perhaps in the minority) that places a high priority on leaving something behind for heirs/charity.
In other words, the answer to OP’s original question “What to do with all this MONEY?” should be a cautionary tale to others.
I'm just not understanding the concern here. If a person is happy living below their means and saving while providing adequately for their families and performing whatever work they have without killing themselves, I see little need for caution.
If you are one of those who would continue going into work even if you won the lottery, great, good for you. That is not most of us.

Money is renewable. Time is not.
BHs are heavily tilted toward to the monetary aspect of work. John Bogle worked until the last minute of his life. Apparently Mr. Bogle was not chained by the mantra "Money is renewable. Time is not."
No doubt because he enjoyed his work and would be doing it without monetary incentive.
Correction: If you are one of those who would continue going into work even if you won the lottery, great, good for you. That is not most of us me.
afan
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Re: What to do with all this MONEY ?

Post by afan »

MathIsMyWayr wrote: Sun Jul 05, 2020 4:01 pm You don't have to look for a football ticket in the end zone. Go for a seat on the 50 yard line. No more balcony seats. Go for box seats. If you can afford without breaking a bank, you are still frugal. OP may join a special membership of a museum as many physicians do. They hold many special events for privileged members.
I can watch football at home. No crowds. No ear splitting noise, food I want to eat, peace and quiet is just a mute button away.

Depending on the opera house, the sound may be better far back from the box seats. Certainly true at the Metropolitan Opera. The sound is not so good at Met in HD but one can get dvd's for less than one ticket at the movie theater. A tiny fraction of the price of a trip to NY. Or check out for free from the library.

We go to our favorite museum about 6 times a year. Our bank offers free admission one weekend every month. So we use half the access we have. No need for a membership at all. No time or interest in going to special events for privileged members. We go for the art, not to be seen with those of privilege.

I agree one could buy skybox tickets to football games. Hire a car service to take us there and back home. But I could not imagine devoting that amount of time to a football game. Even if the skybox seats were free. Turn on the TV at kick off. Read or do paperwork while watching. Turn it off when I lose interest. Take a walk. Read a book.

These expensive things just are not priorities. The things I actually want are cheap or free.
We don't know how to beat the market on a risk-adjusted basis, and we don't know anyone that does know either | --Swedroe | We assume that markets are efficient, that prices are right | --Fama
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FIREchief
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Re: What to do with all this MONEY ?

Post by FIREchief »

RocketShipTech wrote: Sun Jul 05, 2020 4:40 pm
FIREchief wrote: Sun Jul 05, 2020 4:28 pm Did you miss the part about 25 days?
How early could you have retired without waiting for your retirement plan to vest? And what financial condition would you be in now? Something tells me not penurious on the streets?
I'm not going to share personal financial details. That said, you may not be aware of how vesting works with many traditional pension plans. I'm not referring to full retirement age vesting. I'm referring to vesting of early retirement options.
I am not a lawyer, accountant or financial advisor. Any advice or suggestions that I may provide shall be considered for entertainment purposes only.
Seasonal
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Re: What to do with all this MONEY ?

Post by Seasonal »

Different people have different desires and have different amounts of money they can or want to spend on those. Who knew.
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Re: What to do with all this MONEY ?

Post by barefootjan »

harrychan wrote: Sun Jul 05, 2020 1:37 pm
barefootjan wrote: Sat Jul 04, 2020 12:08 am
If I was sure I had way more money than I needed, I'd want to leave my kids with something I can only dream of at this point: real hope that they and their children will have a habitable place to live.
This needs to be raised more. We're seeing this in certain Asian countries where it is virtually impossible for the current young generation to buy BASIC properties. Look at what is happening in Hong Kong. in 2019, homes avg 20 times the medium income. With home prices increasing and wages not keeping up, what you leave may be their way of entering a housing market where they find a job or desire to live (near you perhaps).
Harrychan your concern about housing is well-founded and I don't disagree. But when I said habitable place to live, I was actually referring to the planet upon which their homes will rest. You know, save the world. LOL
I realize it's an ambitious goal. :wink:
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Rajsx
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Re: What to do with all this MONEY ?

Post by Rajsx »

- Thanks for a lot of helpful replies -, let me address one at a time

1) No one is saying you should spend money you don’t want to spend.
But the question should really be, if you have such low expenses why did you work so long and save so much?
[/quote]

- One (At least I did not) does not take up a job or profession by setting up your retirement number. You keep working hard long hours & get your highs when a sick person recovers in part due to your efforts & then you keep going on to the next & then next. This is what kept me going as it does most of my peers every day. As an aside, you keep saving regularly 401ks, some taxable & such .... after providing for & keeping the family comfortable, & your savings keep multiplying & in 30 yrs time with some luck & a favorable market turn into Millions. Money is important no doubt but there is more to it than just money.
In the mean time habits get formed & in some cases like mine one starts getting comfortable in their familiar ways of living & spending. Changing your patterns of living & spending as the income & savings build up does not come natural for some, so much so that it becomes uncomfortable and it takes effort to up spend on newer things, once you get used to & set in your ways.
This is not uncommon if you observe people around you, just an example of Warren Buffet comes to mind, he still lives in his old house but can probably buy the whole town & more. He probably feels comfortable, likes it there & does not want to change.
There are many people who do not need to work to earn a living, but still show up because they like what they do, take pride in what they do, helping others.
As I am sure you know many Bogleheads right here on the forum & many in my work circle have better than $10 m net worth & still keep working hard & long.

2) Thanks for the advice of setting up Irrevocable Trusts, I will research them as they are new to me & get them done.

3) Thanks for the posts calling me out on my unnecessary meddling in my son's affairs, DW too has long been on my back on this one, I will correct myself
We do not stop laughing because we grow old, we grow old because we stop laughing !!
chicagoan23
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Re: What to do with all this MONEY ?

Post by chicagoan23 »

Rajsx wrote: Sun Jul 05, 2020 7:12 pm 3) Thanks for the posts calling me out on my unnecessary meddling in my son's affairs, DW too has long been on my back on this one, I will correct myself
Respectfully, it seems like this is the time where you most want to be involved in your son’s affairs, at least financially.

Think of it this way—if you had a thriving private medical practice, and your son was a newly minted med school grad, you wouldn’t just hand him the office key and retire. You would work alongside him for years, transition your patients, introduce him to your vendors, give him tons of advice, etc.

The same should occur with managing money. There is a good chance each child will inherit $5 million. You should work with them to make sure they know how much they will be getting, how to structure the holdings, what your intentions are for the money, etc. To me, collaboration is critical. It helps to make them informed, honors your wishes and allows the decisions that are made to be well thought out and part of a plan.

You and your children have a responsibility to be good stewards of what you spent a lifetime building. I suggest you do that now so that things run smoothly over the coming decades.
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WildBill
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Re: What to do with all this MONEY ?

Post by WildBill »

Rajsx wrote: Sun Jul 05, 2020 7:12 pm - Thanks for a lot of helpful replies -, let me address one at a time

1) No one is saying you should spend money you don’t want to spend.
But the question should really be, if you have such low expenses why did you work so long and save so much?
- One (At least I did not) does not take up a job or profession by setting up your retirement number. You keep working hard long hours & get your highs when a sick person recovers in part due to your efforts & then you keep going on to the next & then next. This is what kept me going as it does most of my peers every day. As an aside, you keep saving regularly 401ks, some taxable & such .... after providing for & keeping the family comfortable, & your savings keep multiplying & in 30 yrs time with some luck & a favorable market turn into Millions. Money is important no doubt but there is more to it than just money.
In the mean time habits get formed & in some cases like mine one starts getting comfortable in their familiar ways of living & spending. Changing your patterns of living & spending as the income & savings build up does not come natural for some, so much so that it becomes uncomfortable and it takes effort to up spend on newer things, once you get used to & set in your ways.
This is not uncommon if you observe people around you, just an example of Warren Buffet comes to mind, he still lives in his old house but can probably buy the whole town & more. He probably feels comfortable, likes it there & does not want to change.
There are many people who do not need to work to earn a living, but still show up because they like what they do, take pride in what they do, helping others.
As I am sure you know many Bogleheads right here on the forum & many in my work circle have better than $10 m net worth & still keep working hard & long.

2) Thanks for the advice of setting up Irrevocable Trusts, I will research them as they are new to me & get them done.

3) Thanks for the posts calling me out on my unnecessary meddling in my son's affairs, DW too has long been on my back on this one, I will correct myself
[/quote]

Howdy

I am in a similar position to you with two kids who I worry way too much about, for no particularly good reason. I also grew up poor and then made more money than I ever expected too, without really meaning too. Takes some getting used to.


Please extend the careful consideration and energy you use on your patients to yourself and address your own health problems. You are a valuable individual and an excellent father and you should make sure you are around as long as possible to contribute to your profession and enjoy your family.

The trust stuff is easy. Just get a decent estate planning attorney and set it up. Might as well do it now.

My experience is that careful attention to my wife’s opinion is invaluable. She is way smarter than me.

Good luck

W B
"Through chances various, through all vicissitudes, we make our way." Virgil, The Aeneid
delamer
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Re: What to do with all this MONEY ?

Post by delamer »

I’ve read only a few of the other replies, so the below may be repetitious.

But with your resources, if I or my spouse was overweight and/or diabetic then I’d do everything money can buy to correct those problems.

Personal trainer, personal chef, etc., what it takes.

A wise person on this forum has pointed out that, ultimately, someone is going to spend your money — you (and your spouse), your heirs, your preferred charities, or the government entities that you pay taxes to support.

How do you want it spent?
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goodenyou
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Re: What to do with all this MONEY ?

Post by goodenyou »

I wouldn’t worry about having all this MONEY just yet. You have some time for your grandchildren to develop some seriously expensive interests. For example, you could be lucky enough to fully fund 10 years of travel hockey for several grandkids. That will set you back 6-figures +. Maybe private golf lessons. Private education as well may be in the future. There is plenty of time to spend. Don’t worry about it so much.

You are brave to post your yearly budget. I wouldn’t be as brave because it would be flamed to a crisp. Comparing your spending to the average spending in the USA or to an average third world citizen is meaningless.

The struggle to teach your adult children the virtues of responsible savings and spending is challenging. It is a behavior that provides balance and stability. We all hope our children gravitate to healthy behaviors.

Milton Friedman once opined in a lecture that he found it curious that we, as parents, value the ability of our children to consume much more than we do ourselves. It was in response to a question about capitalism, individualism and the societal value of family.
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FIREchief
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Re: What to do with all this MONEY ?

Post by FIREchief »

goodenyou wrote: Sun Jul 05, 2020 10:58 pm You are brave to post your yearly budget. I wouldn’t be as brave because it would be flamed to a crisp. Comparing your spending to the average spending in the USA or to an average third world citizen is meaningless.
LOL. Ironically, my suggestion that I can live happily/comfortably on $60K was only met with criticism that I should spend more (and be less happy). Strange (first) world we live in.... :P
I am not a lawyer, accountant or financial advisor. Any advice or suggestions that I may provide shall be considered for entertainment purposes only.
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celia
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Re: What to do with all this MONEY ?

Post by celia »

You mentioned that you are retiring soon. Do you know how you will then spend your time? It may not be just money that you haven't yet decided on, but also your time.

Possibly they can work together on some goal if you spend your time and your money on the same thing. What does your wife think? Would you like to make part of the world a little better?
EnjoyIt
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Re: What to do with all this MONEY ?

Post by EnjoyIt »

delamer wrote: Sun Jul 05, 2020 10:53 pm I’ve read only a few of the other replies, so the below may be repetitious.

But with your resources, if I or my spouse was overweight and/or diabetic then I’d do everything money can buy to correct those problems.

Personal trainer, personal chef, etc., what it takes.

A wise person on this forum has pointed out that, ultimately, someone is going to spend your money — you (and your spouse), your heirs, your preferred charities, or the government entities that you pay taxes to support.

How do you want it spent?
I'm glad you brought that up. This is exactly what my advice would be. I would spend my time, money, and energy on being healthier and living longer so that I can enjoy all the great things life has to offer.
A time to EVALUATE your jitters: | https://www.bogleheads.org/forum/viewtopic.php?f=10&t=79939&start=400#p5275418
politely
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Re: What to do with all this MONEY ?

Post by politely »

Rajsx wrote: Fri Jul 03, 2020 2:45 pm But the question is still there, what do we do with this Piggy Bank of ours ?
Having similar thoughts and issues, I wanted to add that you're still relatively young. Absent health issues, you and your wife could still have several decades to enjoy. If you don't have a will, that would be a good place to start. Other than that, I think you have plenty of time to figure out what to do with the money. There's no rush to spend your savings. Your kids are not in need, and you're comfortable with your spending. I think the biggest questions that you have to deal with is (a) whether to give now or later and (b) to whom you should give to. My current thinking is that I'll help my kids through their education and weddings, at which point any help will be ad-hoc, other than the future grandkids' college expenses, which I hope to be able to fund. While I think it's ok to help adult children with unexpected or one-time events, I will try to avoid regular or periodic funding. And there's no point in spending for spending's sake.

Congratulations. Your problem is a nice one to have - the result of a lifetime of hard work and savings.
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