Posted by Dave on July 20, 2010
Cashflow management is very important in early retirement, but is significantly more important when retirement is reached and large purchases need to be made, such as a car, a new roof on your home, furnaces etc. Most of these large purchases can be anticipated well in the future, for example my car will last approximately ten years (give or take a few years). To buy a large item, I’d prefer to pay cash rather than finance as I have a large aversion to paying other people interest.
The ten years between car purchases can be used as an example of a large purchase that our household will budget for. After retirement, it will be difficult to come up with the $10,000 to $20,000 needed to purchase a new car (this would be a large capital divestment from your portfolio). So to solve this issue our household has implemented a long-term savings plan for our next car. The same kind of system will likely be employed for other large items, but for us a car is the largest and most pressing purchase that will need to be made in the next year or two (but hopefully longer, as this would allow further savings to accrue).
If, for example, I retired at 45 that would mean purchasing 3 or 4 cars (anticipating our household’s ability to drive until approximately 85 years old). To pay for that I would rather save $150 per month as part of my budget for the next car rather than finance it. I personally don’t like financing because I don’t want any liabilities in retirement or alternatively taking the capital out of investments.
Planning like this when you are going into retirement, whatever your age, is very important. Too often it appears that people go into retirement with a huge pot of money and assume that everything will work itself out. If plans are made ahead of time that would mitigate foreseeable emergencies (loss of heat from a broken old furnace) retirement will go much smoother than going in with just a pot of money.
I will admit I may be an over-planner on purchases like this. Perhaps having a large pool of money sitting around would be easier. But I would rather know that I have a specific “necessary expense” covered so that if several of these things needed replaced in a short period, I would know that financially I would be okay.
So, that’s my plan to deal with large purchases in retirement– do you have something similar in your spending plan now or in your retirement? If not, how do you plan on making large purchases (I’m always open to ideas)?
Posted by Dave on July 13, 2010
With Tim in the middle of his $25 food challenge, I thought I would weigh in with how I am currently eating. I had previously written about my $50 grocery bill back in February, but much as changed since that time in my household budget. I became really interested in what was actually healthy to eat and started reading books (as I normally do). The first book I read was “Good Calories, Bad Calories” by Gary Taubes. The “story” (it is a non-fiction book) told was a real eye-opener to me – it essentially puts into question the vast majority of what could be described as conventional wisdom and the human diet. Essentially, the author of the book goes through dietary studies from the 1950’s and on and explains how, for example the fat-cholesterol hypothesis (eating fat and cholesterol makes you fat and increases your rate of heart disease) was formed as well as how the science used in the studies to reach what is now conventional wisdom, was incorrect.
Secondly, I read “The Primal Blueprint” which basically states that humans are not meant to eat grains of any kind, rather a diet of meat, vegetables and fruits is what we as a species ate as we evolved the consumption of grains, rice, legumes and other carbohydrates is making humans fat and unhealthy. An excellent summary of the argument can be seen here as a trailer to a similarly argued movie an excerpt is as follows:
“If you could pack all of human history into one year, we’ve only been farming and eating grain since about yesterday which is when we became shorter and fatter. We only started consuming processed vegetable oils about 10 minutes ago, which is when heart disease became our number one killer. So, after examining all this human history, the experts came to the obvious conclusion….we need to eat a lot more of these – and so they convinced us that human health depended on foods that we hadn’t eaten for more than 99% of our existence”
As a result of reading these two books, my diet changed significantly. I ate only meat, fruits and vegetables for a 4-week period. Over that same period I was monitored by my naturopath, having what is essentially a cellular health reading done at the beginning and end of period to see what my change in diet had done. Over the 4-week period, I lost approximately 10 lbs. Some of this weight was water, but approximately 11 lbs was fat. I gained 3 lbs of muscle, which was interesting as I had curtailed weightlifting from 2-3 times per week to once over the period (I ran a 10 km race in the middle with no training and didn’t want my legs to be sore for the run). Additionally, my internal cellular health had improved significantly over the 4-week period. Carrying the diet through to today, I have lost approximately 20 lbs and have noticed no loss in strength lifting weight (I’m actually lifting more mass than ever). My wife had very similar results, and there are many people on message boards all over the internet who have found that this diet has reversed their diabetes, significantly reduced cholesterol and blood pressure as well as other positive side effects.
So, what do I eat? Most mornings for breakfast, I eat 3-4 scrambled eggs with a vegetable smoothie. For lunch, I eat some kind of meat (usually from the previous night’s dinner) and some raw vegetables, and for dinner, I’ll usually have meat with a salad or cooked vegetable.
What is the impact on my $50 per week budget? From tracking it over the past few weeks, it has gone up approximately 50% (from $50 to around $75 per week). This number should get lowered significantly over the next couple of months, as I ordered and should receive approximately 300 lbs of meat from the half a cow from a local farm, which will reduce the cost per pound of meat significantly.
The total impact on our household food budget is basically $0 however, as we don’t eat out at all anymore, as most restaurants that we would normally go to don’t offer the food at a cheap enough price to make it worth eating there (2 steaks at a restaurant is very expensive).
Although gimicky, the diet itself makes sense – why eat food that we aren’t meant to eat? Why not eat like the cavemen? Just because we can eat grain, doesn’t mean we should – it doesn’t really seem to be helping the health of North Americans over the past century.
Although secondary to eating “properly”, “The Primary Blueprint” also advises to workout like a caveman, as in short bursts. Rather than running on a treadmill as hard as you can go for an hour (as I used to do) – going on a brisk walk for an hour or so a few times a week is a better way to lose fat. To increase cardiovascular capacity, sprint like our ancestors did after their food once or twice a week. Lift heavy weights once or twice a week to build and maintain muscle and you should be in pretty good shape – it’s worked for me.
Have you heard of this way of eating? Would you try it? Would you spend more money on food to gain better health?
*Another good video can be found here describing the primal/paleo way of eating
Posted by Canadian Dream on July 9, 2010
It’s been another week into my $25 challenge of eating on the cheap and you can tell we are going to have to start facing the hard decisions next week because this is what our spending looks like to date:
- Margarine $4
- 8 L of Milk $8
- 1lb Coffee $1.98
- Fruit (5 nectarines, 4 plums, 3 apples, 5 peaches) $5.82
- TOTAL $19.80 (79% of budget)
If the fruit numbers look weird there is a story behind that. We had done our camping trip and have a lot of left over fruit which I was planning on buying anyways. So rather than cheat I just transferred what was left from the trip to the challenge budget. The coffee I will admit was a purely luxury item. I don’t need it, but I REALLY like having a cup in the morning and we had run out. I might regret this choice, but only time will tell.
Overall the diet has been very similar to how we normally eat, we have just been forced to consider how we organize our meals to avoid waste. For example, last night supper was roast chicken, potato salad and carrot sticks. The leftover chicken will now be used for supper tonight in some rice paper wraps and then in some sandwiches for lunch on the weekend. Also we have had our meals planned out a full week in advance to ensure we are only buying what we need.
The other odd thing I’ve noticed is we are very careful not to overeat on our ‘treats’ that we have in the house. Anything like chips, nuts, candy or ice cream we are taking care to string out over the challenge so we don’t run out of all of that. Of course the backup plan can be to do some baking (cookies or a cake) but I tend to avoid doing that when it is hot out. I absolutely hate heating up the house on hot days when I don’t have to.
That last five dollars will likely be spent early this next week on some veggies. I’ve noticed we are approaching a lack of choice on those in the house (we have run out of frozen). So I’ll have to carefully shop for some more choices next week which don’t break the $25 dollar mark which likely means sticking to fresh veggies.
I think the easy part of the challenge is rapidly coming to a close and I’m going to have to start getting a bit more creative on what we are eating based on what I have in the house. It’s not like eating is actually hard, but rather its adjusting my thinking to eating around what you have rather than what you feel like.
So any shopping advice on what vegetables I should buy? I’ve still have some garlic, onions, carrots, potatoes from the pantry and then green onion, radish and lettuce from my farmer.
