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I wonder at what income range posters would accept someone who would be saving at least 25%-50% of their income and living debt free.
Apparently it isn't acceptable to make $20k and spend (a max) of $15k. Is it "better" to make $100k and spend $75k? The OP would be saving $25k a year then, but with $75k in expenses, the potential for big expenses would be higher too. Need a new roof/carpet/paint on an big house, costs way more than on a small house. Need a new car similar to what you've gotten accustomed to, would still cost a full year's savings (probably more). Percentage-wise, the two scenarios are identical. What makes one inherently better than the other?
At what dollar figure does saving 25%-50% of your income become acceptable? I would have guessed it was at any amount, but apparently that isn't true.
Also, what makes passive income inherently less moral than earned income (since that seems to be the consensus on this thread)? Passive income could include rental properties, dividends and interest from investments or an inheritance, lottery winnings, royalties from patents, etc. If the OP was getting his income from one of those sources, would that make a difference in the discussion?
I only know what minimumI would be satisfied with -- and that is -- as SINK -- 125K.
If someone else is willing to live on 20K Gd bless them. It ain't for me.
Yes, I'd rather make 125K and save 25%....or even save just 15 percent (and I'm willing to trade my time for that salary), than make 20K and save 25% (and have all the free time in the world)...'cause last time I checked the math....even TEN PERCENT of 125K was way more than 25% of 20K.
Why think of it in terms of being "robbed" of anything.
If a person is willing to trade their 'time' for a given salary so they can have things you apparently don't want or need -- why does that mean they have less 'power or freedom.'
You may have more free time. They have more money to spend or save than you. You've made one 'trade,' they've made another.
If a person is willing to 'trade time' for 50K disposable, instead of having more time and only 10K disposable, personally I think the person with 50K disposable will ultimately have more 'power and freedom' -- and OPTIONS -- than the one living off 20K with only 10K disposable. But that's just how how see it. You likely see to differently.
But just because YOU aren't willing to make that trade, doesn't mean that other person won't indeed end up in a better position financially than you. The more money one has, the more options one has in life -- I don't think there's really much debate about that -- at whatever given level of finances we're talking about.
You may have more options than someone with no -- or 5K disposable. Just as someone with 30K disposable has more options "freedom" than you do, just like someone with 100K disposable has more options than that person, and just as millionaires and billionaires have more options than damn near anyone.
Yeah, I'm not saying everyone values their time as I do.
"Stuff" motivates some more than others. Personally, from about age 15, I thought a lot about my wants/needs and the typical material possessions that keep us motivated. I decided those things really didn't appeal to me. A lot of the appeal was based on impressing others or maintaining the image of being successful. That's not a happy way to live, IMO. I believe success starts from the inside. Using the desire for stuff as motivation would in fact end up robbing me of time.
The security money offers did sound appealing. Who wants to worry if they'll have food in 6 months or be able to pay their power bill? Thus, I decided on a certain amount of money that would easily pay for my needs and most of my wants while also maximizing my time for the pursuit of happiness.
To me it's not a given that money ends up giving more power, freedom and options. It could go either way.
The person not working 50-60+ hrs/week has:
-more time to build better relationships with family/friends (no seeing children 1 hr day during week)
-more time to think about and pursue their interest (potential career options)
-more time to take care of their health (prepare healthy meals, exercise, relax, sleep, etc)
-more flexibility in their schedule
I believe those things add up to power, freedom and options.
I wonder at what income range posters would accept someone who would be saving at least 25%-50% of their income and living debt free.
Good question.
You make good points about higher expenses often creating higher maintenance cost. The cost of replacing your typical cathedral style roof on a 3500 sq ft home would likely be 4x what I paid to replace the roof on my simple ranch style home. Gutters x4, siding x4, windows x4, etc, etc. It all adds up.
On paper it may look like the person saving $25k/yr (income $100k) is saving a lot more than my measly $10k/yr.
I also agree that people usually get accustomed to a certain way of living and anything less would make them very unhappy. If we say standards typically follow income, the person making $100k probably wouldn't be happy replacing their 5-series with a Corolla. Therefore, their car replacement fund needs to be $50-75k. You could argue that the 5 series provides them with 5x the enjoyment, but it's debatable.
heres a secreat. rich or poor its still nice to have money .
nothing in life is a problem if you can throw money at it and its done. i don't care what your lifestyle is. the less money you have the more problems and stress you will have if they are money related and i think you don't have enough money to comfortably make many of those issues go away without burning to much cash..
lack of choices at times can be pretty miserable too. you think you have all the bases covered with your back of the envelope scratchings.
the reality is stuff not even on the radar is just waiting to greet you and make your financial life a misery if you don't have a substantial cushion which based on your savings and income you do not, especially owning a home which has unlimited budget busters just lurking.
i will say it again, there is a huge difference in retiring at 62 or 66 and planning for 30-35 years of survival and unexpected expenses . it is quite a nother planning for 70-80 years.
once you fail not only would you have blown through your savings but good luck starting a decent paying career down the road too.
but anyway like i said earlier good look.
Last edited by mathjak107; 12-31-2013 at 05:07 AM..
Yeah. I think you'll be alright. I worked all my life (retired now) and did it mostly because of a knee jerk reaction. It was what I was supposed to do. So I did it.
I was good at it too. Made plenty of money, got the houses and cars paid for and all that stuff.
I couldn't do what you propose, but I have known a few who could. And did. They were happy enough, and maybe you'll be happy, too.
Don't get married. Don't have kids. You'll be alright.
Thanks.
I would only take issue with the no wife/kids part. A wife, kids and myself likely couldn't live on $20k, but as long as my wife brings in at least $20k, I don't see a problem.
heres a secreat. rich or poor its still nice to have money .
nothing in life is a problem if you can throw money at it and its done. i don't care what your lifestyle is. the less money you have the more problems and stress you will have if they are money related and you don't have enough money to comfortably make those issues go away.
lack of choices at times can be pretty miserable too. you think you have all the bases covered with your back of the envelope scratchings.
the reality is stuff not even on the radar is just waiting to greet you and make your financial life a misery if you don't have a substantial cushion which based on your savings and income you do not, especially owning a home which has unlimited budget busters just lurking.
but anyway like i said earlier good look.
But this seems to be the attitude that keeps 90% of America scratching, clawing, fighting and working. This is why your $40k/year dad trying to climb the ladder is sitting in backed up traffic sweating because the A/C in his 15 yr old car only "kinda works".
Very few will ever get to the point where they can throw money at their problems. The illusion of this being possible certainly keeps the slaves working for their masters though.
not true at all. most folks who are under-funded just pull the plug on the pay checks and end up just stressing and worrying over making their money last.
they just traded the stress of work for the stress of sweating every expense.
there are lots of ways to predict a comfortable margin of financing so at least the odds are on your side.
not true at all. most folks who are under-funded just pull the plug on the pay checks and end up just stressing and worrying over making their money last.
they just traded the stress of work for the stress of sweating every expense.
This is why I decided to depart from the rat race and live on enough to be comfy - eliminate trying to climb the latter and eliminate sweating every expense. It's that not to crowded grey area between the rich and the "strivers".
i am retiring and to judge how much i need to sustain a comfortable life i used this method. when i say comfortable i mean not having to stress over every unexpected expense in fear it will have me spending down more than i anticipated cutting next years income.
i added up all my non-descretionary expenses . those are bills that we must pay with no flexibility.
rent, home costs ,utilitys,insurance etc....
no food, no clothes ,no extra expenses we don't need like the gym, gifts,travel etc etc are included.
now i double that amount to allow for our descretionary spending.
lets take some easy hypothetical numbers.
so lets say its 20k non descretionary. the pretax budget i would set would be 40k.
i would subtract out any other income. lets say its 20k.. so 20k inflation adjusted income additional would have to be generated from savings.
if i picked a comfortable mix of 40/60 equities/fixed income i would need about 500k saved to generate that in a safe,secure and consistant manner..
want a little less guarantee of it being safe consistand and secure , figure 400k in savings.
the numbers will all be based on your own situation.
now the beauty of this plan is with 50% slack in my descretionary income i can have flexibility to cut back any time i get hit with the unexpected. there is always enough slack in the plan to cover many money stresses .
it also gives me the ability to cut back by 5% in my income if we are hit with bad markets so each year i would take 4% of my balance as income or 95% of what i took the previous year ,which ever is higher.
thats what i mean by having a plan. that is just my plan but there are dozens of plans out there that can structure you. but i think most will require additional savings or run the risk of self destructing to early on..
sure you can do it with alot less savings but the less savings you have and still trying to draw that income level you need the greater your financial stresses will be as well as the greater the chances of running out of money before you run out of time..
the trick is to be poor enough so tax payers support you and then you have no more stresses.
.
Last edited by mathjak107; 12-31-2013 at 05:55 AM..
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