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Thursday, March 30, 2017

If Not This, Then What?

Posted by Dave on May 1, 2012

This is a guest post by Dave, who is also looking to retire no later than 45, but unlike Tim has no kids and doesn’t want any. Dave is from Ontario and is working towards his CGA certification.

A week or so ago, Nelson from Financial Uproar wrote a post titled “In Defense of Normalcy“.  In it, he noted that people on early retirement blogs “cannot wait to throw off the shackles of (gasp!) having a normal job” – he goes on with a quite graphic description of what these type of blogs describe retirement as.  I’m not sure if he was specifically targeting this blog,  but I left a somewhat lengthy response on the post.  I really enjoy Nelson’s writing and would recommend his blog to anyone who enjoys penis jokes and intelligent personal finance discussion, including some excellent stock-purchasing insights which I find particularly informative.  My response to this post is essentially – what else will I spend my money on?

I don’t live a lavish life.  I don’t have very expensive tastes, and besides my wife’s love of essentially disposable clothing (which thankfully is also relatively inexpensive) she doesn’t really spend that much money either.  We like a nice dinner out sometimes, but “nice” to us is sometimes Swiss Chalet (which I’m sure would not qualify as nice to other people) or a relatively inexpensive dinner at a local diner.  Our vacations are generally inexpensive – with the main goal being to head someplace warm, rather than fancy, and other than that we don’t really spend that much money.  If I wasn’t saving for retirement I don’t know what else I would spend my money on:

I could work less hours: This isn’t really an option with my current job, but given my low expenses, I could probably live on about 1/3 of what I currently make and not have that much of a change in my lifestyle, if my house was paid off.  This wage would allow me to save for retirement over the next 30+ years with about a 10% savings rate.

I could spend more: Generally, people’s comments around high savings rates are something like “I want to live right now, not be poor forever”.   I don’t really equate my consumer purchases with a lot of happiness.  I could repeatedly by the newest Apple products like some people, get a fancy car, a bigger house, see more of the world or find some other way to spend the extra money.

I could stockpile it: If I didn’t save for an early retirement, and instead went for a more “normal” life, working until I’m 65 and having a massive war-chest of savings to ensure there are no money problems in my late years.

The problem with all 3 of these options is that I would essentially be working for nothing, just for the sake of working.  This outcome doesn’t seem all that exciting to me.  I have no end goal of being wealthy, of owning fancy things, nor of working to age 65 so I carry on with my current financial plan.  Nelson states that blogs like this are selling a “dream”.  Other than the blog’s name I don’t think this is the case.  I don’t think that the writers on this blog really try to sell the dream, we simply state what our particular choices are in some instances with regards to spending, as well as attempting to provide some guidance to individuals who are interested in following a similar financial plan.

Is your financial goal early retirement?  If not, where do you spend your money?  Are you choosing to live “in the now”, or feel you just can’t afford an early retirement?

Comments

7 Responses to “If Not This, Then What?”
  1. Jean Michel says:

    In my early years I began to work hard as a professional. At 25 I bought a condo, a car, computer and and start to spend for expensive european vacations. Something was wrong… I was missing my former student way of life… and still young professionnal I decided to sell the car, the condo … stop the cable contract… etc and I began to live by choice a simple life with few luxuries and continuing to work full time as professionnal by choice with more or less a 15% saving rate. I’m now 50 years old, never have a car and still working by pleasure, I share an apartment with 2 very good friends… and not attached to useless stuff. And I dont miss all the stuff I never have. I’m still working and at the same time I consider myself fully retired. To be retired is a state of mind, the one to work less every year by necessity, it is a feeling of freedom.

  2. Beardie says:

    Cars, vacations, gadgets — to my way of thinking, it’s people who buy these things who are living in dreamland.

    Get rid of the cable TV. Get rid of the car. Forget about pointless travel. Save your money!

  3. First off, thanks for the mention, and I`m glad I inspired a post.

    “I’m not sure if he was specifically targeting this blog”

    I was not. I generally like this blog. I’ve been a subscriber for a while. Believe me, if I want to call someone out, I have no problem mentioning them by name.

    If I could, I’d like to offer a suggestion. Feel free to ignore it, that’s what I do with a full 81% of the suggestions I get. But, I’d like to see less of the psychology behind why you want to retire early and more of the specifics of what you’re actually doing. How do you achieve such a high savings rate? What do you invest in? What are you doing to achieve passive income?

    Maybe you guys have already talked about that stuff and I wasn’t paying attention.

    Oh, and to the commenter above me who has no car, shares a place and has no cable, how are you only saving 15% of your income?

  4. Jean Michel says:

    humm good point. The thuth is I dont have any idea. I just know i have not been able to spend my biweekly pay for so many years and never take time to check what % that could represent exactly… as I have written, I have enough for now and the future to cover my limited expenses.

  5. I think the ideal scenario is somewhere in the middle of “living in the now” and focusing solely on retirement. Yes, its important to focus on enjoying your life as it happens, and this means spending some money on things now. At the same time, you can’t focus solely on the future, or you will wind up retiring early to realize that you wasted all the years up to that point. There is a balance somewhere in there that we should all be striving to achieve, where we both enjoy our life now and are comfortable in retirement. To be honest, the even better ideal is to find a job that you like so much, you don’t want to retire.

  6. Lorain says:

    Sorry…there are some “luxuries” that I want….retirement set at 56 years….I will not give up my gym pass and I double dog dare ya or anyone to convince me otherwise. I also want/need a yearly holiday to the tropics. I sorta like my car, my dog, and the pretty flowers in my garden–and yes, we spend money to buy bird seed…..
    Now, surprisingly we live quite frugally besides that. I work only part time and that may have ended at the end of the past semester. Hubby works for the government and they really pay on the low end of the scale, so we are not high income earners. I would say that, on average, we save about 47% of hubby’s take home. Our mortgage is long paid off and with the house being only 4 years old there is not much maintenance–but we are well aware of the costs in the future.
    I am happy to live the way we live now and how we lived in the past. I would never give up the memories of fabulous holidays for a few more dollars in the bank–you never know what tomorrow will bring.
    One cold December day about 5 years ago that “you never know” event happened to me. A serious and life threatening medical emergency smacked us into reality. Since that time we made a deal that we will celebrate the life that I was given back with a great trip….
    Early retirement is great, just don’t live for the future all the time…..

  7. greg says:

    > Is your financial goal early retirement?

    No – it is freedom, aka financial independence; that is something upon which both me and my ridiculously-high-spending friend agree. I simply look at numbers and put a higher value on stability.

    > If not, where do you spend your money?

    Only on things I need. Before I moved, I needed a car and began to see how much depending on a mechanical beast I couldn’t fix myself would cost. After I moved, I no longer needed a car. I was enthralled with an iPhone when I got one, but just recently killed my cell phone plan with data because when I looked at how much it cost per week, I would clearly prefer to take half of that for a roll of sushi and save the rest. I agree with experiences. Aside from rent and food, my largest expense is membership at a more expensive gym … but I’m there 15 hours a week, and it’s less than others.

    > Are you choosing to live “in the now”, or feel you just can’t afford an early retirement?

    I can’t remember any time I’ve lived “in the now” for the past 7 years, and would characterize my world view before that as very limited. Now I try to learn about what’s around me, read a lot, spend time to talk with and understand people worth knowing, and work towards a more stable future.

    But one valid criticism I do accept from friends and posts like the one you mention are that I *am* giving up some things that I’d like to try out in the context of hobbies. However, I would argue I’ll have more overall time for what I want to do after I get to the point when I can make those decisions without having to worry about the financial repercussions; making some spreadsheets and playing with numbers over a 20-year time horizon will get to anybody who wants to try to seriously understand what those numbers could mean for their future.

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