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We’re cash heavy at the moment since we’ll start a new home in Jan. Any extra currently goes into interest-bearing accounts for now. If my wife takes a new job where she can work remotely, I’m leaning towards taking out a mortgage and investing that cash. Next, I’ll decide on synthetic versus dino oil for our vehicles.
The only monthly income we have, other than draws from my business, is Social Security. We should be getting $2.5k/month from a TIAA annuity but they goofed and gave DH too many choices to choose from, thus pushing him into analysis paralysis.
I suppose we could sell the California house and turn the proceeds into an immediate annuity, but so far we've been doing fine managing funds without getting a pseudo-paycheck every month.
We did get a $100k payout from one of my MIL's life insurance policies. A sensible person would invest it, I guess. We'd agreed we would use it to buy a bigger RV, so we could travel extensively and have room for the specialized medical equipment I will need in the near future. But a bigger RV creates bigger problems, like where to store it and how much that would cost. Plus, a bigger RV you can buy for $100k is bound to have some mechanical issues.
I suggested we buy a small cargo trailer instead to pull with the camper van. When not in use, it can just live in our garage where there's plenty of room for it.
Like another poster, I have no interest in more investing than what I already have. Extra money is for travel, travel and experiences. Well, at least when there is a safe vaccine and things open back up.
kind of like what we do . the money is invested until its not ....
while our non discretionary spending is only about 1/2 our yearly expenditure somehow we end up spending any excess eventually . usually anything we did not spend or we had a good market year just ends up going out again at some point as an expense .
if it is not a new car every four to five years we are giving distributions to the kids , or major dental work , etc .
but there is always something lurking that will consume any excess not ear marked for anything .
I've been keeping my withdrawals to an average of 3.5%/year (and that's trending down- 2015 was a very expensive year due to moving and downsizing). This year travel, which is usually a big portion of my budget, is down significantly and over half of next year's major travel (if it happens) will be funded by a credit from a trip curtailed early this year. It's just as well- I paid cash for a new car this year after the old one developed transmission problems not worth repairing. I also stashed a lot more than usual in my grandchildren's 529 accounts and have given more to charity.
I don't feel any real compulsion to spend x%- I may withdraw less next year if I don't need it. I'm planning on having a deck torn out and rebuilt, though, so that will eat up a lot.
"Extra money" is a strange concept, like "spare change"... there is only the money I have & how I will use it, I suppose non-discretionary/discretionary spending is a bit more precise. Like most I'm laying low with the pandemic right now, buying the odd thing now & then on Amazon to pass the time or subscribing to something that might entertain me through the dark & chill plague months at the door step.
Recently I resubscribed to Ancestry to flesh out the family tree more during the long, socially-isolated winter coming up, it also helps that I'm mildly obsessive, I also subscribed to Apple Music & the Washington Post, all 3 were on sale. Current digital subscriptions: HBO, Netflix, Amazon, NY Times, Wall St Journal, The New Yorker. I also eat out or have deliveries from local restaurants several times per week. But I don't have cable tv or own a vehicle so I'm not profligate with spending.
After a vaccine I plan to travel right away, probably next summer, for an extended period: several weeks in Ireland to visit extended family & then several months in Portugal to decide if I should move there permanently or just seasonally & exactly where, Lisbon leads at the moment. This February on my last trip I met a retired fellow from the upper midwest who spends his winters on Madeira (a really lovely place btw).
To this end I have hundreds of thousands of "points" in airline & travel schemes that I've accumulated over years as a hobby to cover costs of travel & hotels & will use my "extra money" on upgrades & luxuries I have never really been able to afford in the past. When I return home I plan to have a new kitchen put in with extra money from finally collecting SS.
We currently have an excess income from our pensions and SS most months, and we transfer that into our savings account at the end of the month. It's used primarily for big lump purchases. We sold our very old cars over the last 2 years, and purchased new vehicles, nothing exotic, but just what we needed and wanted. So that depleted the account somewhat, and we are rebuilding it this year. We have one more vehicle to sell this year, and it will bring enough to purchase a travel trailer we've been wanting.
Our rental income goes into a separate account that is used for rental property expenses, and the net after expenses stays in that acount for potential big emergency rental property expenses, and we take a draw from that account occasionally of a few thousand to pay for other large personal expenses like major travel. Naturally travel has gone by the wayside this year (and so did our income on that property for a few months). So we are putting some money from that account into home improvement on our own place.
Next year I will start collecting SS, and that will be more $$ into the savings account (or my investment account), so we may be able to accelerate our home improvements. At some point we will eventually run out of projects, so I'm really hoping we get a vaccine so we can spend more on travel. With no kids, building a huge portfolio, only to leave it when we die, is not in our plans. We save to cover our future needs and potential emergencies, and try to live our best life, while we can, on the rest.
Last edited by TheShadow; 10-11-2020 at 09:09 AM..
We live on husband's pension and Social Security, and what's left at the end of the month gets transferred to online savings. My smaller pension goes directly into online savings, and I don't collect Social Security yet. We are conservative with money, and for now, sending the excess to online savings makes us comfortable.
This year a lot of the extra has gone to the dogs. We have (2) 13-year-old dogs, and one needed a major (big bucks) operation this year. We have always spent a lot on them with good food and healthcare.
While I haven't been contributing to investment funds over the past year, every now and then I'll buy a little stock. This April was the last time buying anything, and I picked up some DKNG at $18.40 per share.
I have essentially no income. I have about 300k in cash that I’ve been pushing around to various banks to capture signup bonuses. It’s from this pile of money that I pay my expenses.
I’ll be 62 in about 3 years, and will start SS then. At that point, I probably won’t touch this pile unless I have big one time expenses like, I don’t know, dental implants? Who knows, my newest car is a 2019 with 5k miles and another has 14k, so probably nothing there.
The rest of my assets will probably never need to be tapped into unless I decide to upsize my home (unlikely) or need long term care.
I just keep things simple. Extra income (from rental property and social security) goes into one account. It is used as a reserve fund to cover large rental building expenses (i.e. I did the roof and painted exterior last year. No large building expenses this year so far). The funds stay there until I want to use them for whatever reason.
we don't think about what to do with it . like water it just seeks its own level and gets spent one way or another
Ha ha! You have often used this metaphor of water seeking its own level. For some people like me, there are some dams built long ago which have holding off our spending.
It's hard for me to spend money on something which I consider wasteful, frivolous or more than what I should. For example, I set a limit on how much that I should pay for an item and would not pay more unless when it is absolutely needed.
My husband loves fresh blueberries but I have been feeding him frozen ones when they are out-of-season. Last week during a quick grocery stop to pick up some fruits, I saw some nice, juicy fresh berries but could not find the price. I decided just to buy a box and not even look at the price on the receipt! This is the first time that I had succumbed to an impulsive buying. Well, it's just a box of fresh blueberries and not a Lamborghini ;-)
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