[britchard]

Didn't we have a thread recently of which the subject was an Aussie millionaire who said that Millennials can't afford houses because they were spending money on avacado toast (which I suspect is also a metaphor for pointless millennial things like hoverboards as well)?

And if I remember correctly, the general consensus with posters here was that he was mostly correct (I agree with him too). Yet now people in this thread are complaining that millennials are saving their money? I understand it might not be exactly the same posters but still...

[The Beast1]

(05-25-2017 04:24 PM)Laner Wrote:  

But I have to wonder why they are working shitty jobs for only $45k a year, when they could work shitty jobs for $72,000 year (construction). Or why would they have a quarter million in the bank other than thinking ahead to 'retirement' or what they think of as retirement. My neighbor is retired for 10 years, is 65 and works at Costco and makes more than these guys. It sounds like besides pinching pennies they don't have all that much ambition. Typical privilege really.

Because man, like money isn't everything!

This reminds me of this bagel shop in Boston called Bagelsaurus Rex. It's owned by some chick with a trust fund who doesn't have the foggiest idea of how to properly run a business.

She only opens from 8-1 every day and by the time 11:30 hits, she's run out of pretty much all of her bagels.

Instead of tracking how much she sells every day and upping the popular ones she just shuts up shop.

But that doesn't matter when you've duped social media idiots to rant and rave over the bloody place. She was interviewed on some local TV show and basically said," i'm not in it for the money, hence why i keep banker's hours and run out of product every day."

I can't stand these people. I went once and never went back.

[samsamsam]

I think everyone needs to keep in mind that we all evaluate utility differently. That is the term economists like to use to basically describe happiness. And this utility is also projected into the future when making longer term decisions like going to college.

I just thought the article was interesting to share, to provide some different perspective, because I have been guilty at times of getting annoyed when Millennials complain about their situations in life. Because we all have some suffering, it is part of life and we have to deal with it. But I liked reading that there are some pretty financially responsible millennials out there. Not just on RVF.

COLLEGE/UNIVERSITY
It hit me today regarding college (been brought up on other threads) and those who may regret it because of the debt they have from it. If you took advice from older people, that was what they thought was probably best based on what they knew. My father gives me advice that is out of touch with current times, but that is what worked for him. I don't mind him giving me advice because I know he cares and is trying to support me in my life. But ultimately, I have to decide what I think is best for me. I bring this up because that is probably what most older people told Millenials about college. It was good for them, so it is probably good for you. Few have the ability to see the future, hindsight is always 20/20.

So going back to projecting utility - I am sure if most guys thought that coming out of college there would be difficulty finding a job or having a lot of debt, some people wouldn't go. But you projected that it would be a positive thing in your life. The fact that you now regret the decision to go to college is besides the point because you couldn't have known 4 or 5 years ago when you decided to go to college that it would not work out. If you did think it was going to be a bad decision, then you are 100% responsible for any difficulties resulting from it.

I hope that make sense.
1) People don't generally give advice to hurt you (if it is someone who cares about you)
2) It is difficult to predict the future, but college decisions are based on projections of how well it will go. I have never heard anyone who chooses to go to college and say this will be the worse decision of my life.

OTHER STUFF
I personally think that having a decent income with plenty of free time and little stress is more enjoyable than a job that pays well but leaves you no time. I have done both. Maybe some minimalists take it too far, but that is just a judgement from someone who does not see the world like that person. I think that is often the problem with life, we fail to understand someone else's perspective or believe that we know better.

Much of what drives consumption is our internal stuff. You take 2 children, they experience the same exact shameful moment, like when they are told by their parents that they can't afford tennis shoes. One will take that moment and feel for the rest of his life that he doesn't deserve anything (so maybe he doesn't spend - his way of punishing himself), the other spends every penny trying to deal with that childhood moment to fix that hurt. That is because the children interpreted that moment and made a story about it. In reality, it was just the parents couldn't buy those shoes, not good or bad. Maybe the kids didn't know that mommy and daddy gave money for grandma's operation. Just like the half empty/full glass of water - just interpretation.

I was driven to work on financial freedom because I have never responded well to being told to do something. We can discuss matters, but no one better ever tell me what to do. Which made my corporate career an interesting one, while having done well, I never stayed long in one place. And being laid off early in my career reinforced the point that I don't ever want to be subject to anyone else's mood or opinions.

Everyone is different, so I wouldn't spend a lot of time trying to prove how much smarter you are. My college comment was just to help give some perspective for those who have a lot of negative energy around that experience. The sooner a man can resolve or make peace with something, the sooner he can get onto other matters. I have always said think of your emotional energy as a container. It holds all of your emotional energy. This energy is limited and is used to deal with all the good and bad in your life.

If this limited energy is tied up with bad things, you have little energy to be productive. So the sooner you can take actions to eliminate the bad or make peace with it, the sooner you can be more productive. I was a bit redundant but I hope you get the point.

[Razor Beast]

(05-26-2017 04:16 AM)Zelcorpion Wrote:  

(05-25-2017 08:06 PM)Suits Wrote:  

Retiring at 34 might seem cool, but I suspect it will get boring fast when you've only got $22K to live on each year. Running a well-thought out business, while it might not allow you to retire quite as early, will keep you busy in an area of personal passion might be the better choice.

If the UN and global warming fanatics get their way, then those 22k won't be enough to live off in 20-30 years.

Frugal living is fine and I am all for it, but you should take good long-term considerations into account. Not all times will be the way they were in the last decades.

Many of those same leftists will advocate for a guaranteed minimum income in the near future. Especially as automation continues to eliminate most lower wage positions that involve lots of repetitive work. It will become a necessity at some point because more elaborate automated networks will cut into higher wage positions in 20-30 years (airline pilot, air traffic control, truck driving, etc.). There are too many people that will be displaced by and are holdovers from a much less automated world which will lead to long term structural unemployment issues in the economy.

Once machine learning gains more of a foothold it will even begin to eliminate many predictive and analytical oriented roles which are considered middle class corporate jobs. Even if it doesn't eliminate all jobs headcounts will be drastically reduced.

[jamaicabound]

(05-26-2017 10:46 AM)The Beast1 Wrote:  

(05-25-2017 04:24 PM)Laner Wrote:  

But I have to wonder why they are working shitty jobs for only $45k a year, when they could work shitty jobs for $72,000 year (construction). Or why would they have a quarter million in the bank other than thinking ahead to 'retirement' or what they think of as retirement. My neighbor is retired for 10 years, is 65 and works at Costco and makes more than these guys. It sounds like besides pinching pennies they don't have all that much ambition. Typical privilege really.

Because man, like money isn't everything!

This reminds me of this bagel shop in Boston called Bagelsaurus Rex. It's owned by some chick with a trust fund who doesn't have the foggiest idea of how to properly run a business.

She only opens from 8-1 every day and by the time 11:30 hits, she's run out of pretty much all of her bagels.

Instead of tracking how much she sells every day and upping the popular ones she just shuts up shop.

But that doesn't matter when you've duped social media idiots to rant and rave over the bloody place. She was interviewed on some local TV show and basically said," i'm not in it for the money, hence why i keep banker's hours and run out of product every day."

I can't stand these people. I went once and never went back.

I think for a lot of places this is the whole appeal of the place. I have a couple mexican joints, a bbq place, etc near me. They cook for the day, when they run out they run out. I always think the same thing why not serve more customers. They don't have to and people will still show up so why change. In some ways while it is mildly annoying, it's what keeps people comming back.

[Rhyme or Reason]

If they're not leeching off the taxpayers then I don't see any reason to hate on what they're trying to do. Sure, planning to retire that early is dumb. Won't they get bored?

But they are miles ahead of most irresponsible millenials in my view. If I could I'd live with as few bills as possible. In fact I'm working on making that a reality. But I'm also trying to make more money. Thrift is almost like an income but you should also strive to make as much as possible so you're not living hand to mouth.

[Phoenix]

They could just head over to India right now with what they already have.

Frugal is kind of the brother of Poor.

[MongolianAbroad]

(05-26-2017 01:23 PM)samsamsam Wrote:  

I personally think that having a decent income with plenty of free time and little stress is more enjoyable than a job that pays well but leaves you no time. I have done both. Maybe some minimalists take it too far, but that is just a judgement from someone who does not see the world like that person. I think that is often the problem with life, we fail to understand someone else's perspective or believe that we know better.

Much of what drives consumption is our internal stuff. You take 2 children, they experience the same exact shameful moment, like when they are told by their parents that they can't afford tennis shoes. One will take that moment and feel for the rest of his life that he doesn't deserve anything (so maybe he doesn't spend - his way of punishing himself), the other spends every penny trying to deal with that childhood moment to fix that hurt. That is because the children interpreted that moment and made a story about it. In reality, it was just the parents couldn't buy those shoes, not good or bad. Maybe the kids didn't know that mommy and daddy gave money for grandma's operation. Just like the half empty/full glass of water - just interpretation.

I was driven to work on financial freedom because I have never responded well to being told to do something. We can discuss matters, but no one better ever tell me what to do. Which made my corporate career an interesting one, while having done well, I never stayed long in one place. And being laid off early in my career reinforced the point that I don't ever want to be subject to anyone else's mood or opinions.

Did you achieve it?

Or are you still working on it?

-- EDIT --

Just read that you're working part time to make a full time living, so it looks like you're still working on it, but getting closer.

Good stuff.

[MongolianAbroad]

(05-25-2017 08:06 PM)Suits Wrote:  

There are all things that I'm trying to put more time into, because once you get yourself to a point (as I have) where you only work a few hours most days and still get a fulltime income, binge watching TV shows gets boring real fast.

Nice work, and agreed, that does get boring real fast, so you've got to come up with things you're passionate about to devote your energies to.

For me, it's getting my dick sucked, and I hope I never lose my passion for that.

I really, really, really hope I never lose my passion for getting my dick sucked, because the day that happens, I'll be fuck out of ideas for how to spend my time.

[Yeti]

It gets old. Find something else part-time to devote your energies to now.

(06-22-2017 05:23 PM)Spaniard88 Wrote:  

(05-25-2017 08:06 PM)Suits Wrote:  

There are all things that I'm trying to put more time into, because once you get yourself to a point (as I have) where you only work a few hours most days and still get a fulltime income, binge watching TV shows gets boring real fast.

Nice work, and agreed, that does get boring real fast, so you've got to come up with things you're passionate about to devote your energies to.

For me, it's getting my dick sucked, and I hope I never lose my passion for that.

I really, really, really hope I never lose my passion for getting my dick sucked, because the day that happens, I'll be fuck out of ideas for how to spend my time.

[bootyhuntah]

Money is certainly great and it buys you freedom from having to work more and/or luxury, basically.

I just found out recently that if you earn less than $35k per year USD, you're officially in the top 1% of the world in terms of yearly income.

[url=http://www.investopedia.com/articles/personal-finance/050615/are-you-top-one-percent-world.asp][/url]

I'm of the crowd that believes in making money doing something you're actually interested in and passionate about (assuming you can get a living wage for yourself), because making a lot of money doing something you really don't give a shit about does slowly kill you inside after a while...though the short-term $$ and lifestyle benefits is addicting for most people.

[lavidaloca]

Thats the thing though. When you hear about someone with say even 500k. In the West that really doesn't do a lot. In poorer countries though that could give you a sustainable long term good living.

[MongolianAbroad]

(06-22-2017 09:27 PM)Yeti Wrote:  

It gets old. Find something else part-time to devote your energies to now.

(06-22-2017 05:23 PM)Spaniard88 Wrote:  

(05-25-2017 08:06 PM)Suits Wrote:  

There are all things that I'm trying to put more time into, because once you get yourself to a point (as I have) where you only work a few hours most days and still get a fulltime income, binge watching TV shows gets boring real fast.

Nice work, and agreed, that does get boring real fast, so you've got to come up with things you're passionate about to devote your energies to.

For me, it's getting my dick sucked, and I hope I never lose my passion for that.

I really, really, really hope I never lose my passion for getting my dick sucked, because the day that happens, I'll be fuck out of ideas for how to spend my time.

When it gets old, I'll get viagra.

[MongolianAbroad]

(06-22-2017 10:46 PM)lavidaloca Wrote:  

Thats the thing though. When you hear about someone with say even 500k. In the West that really doesn't do a lot. In poorer countries though that could give you a sustainable long term good living.

If someone can't find a way to become financially independent with the use of 500k, they either have very high expenses (which is perfectly cool, everyone's drives are different) or they don't know enough about business/investing, which is also ok, it just means they have to keep working longer. If they enjoy their job, it's all good, but if they don't, that unhappiness leads to all kinds of ancillary issues.

[MongolianAbroad]

(06-22-2017 10:33 PM)bootyhuntah Wrote:  

Money is certainly great and it buys you freedom from having to work more and/or luxury, basically.

I just found out recently that if you earn less than $35k per year USD, you're officially in the top 1% of the world in terms of yearly income.

http://www.investopedia.com/articles/per...-world.asp

That should be more than 35k, and it's probably higher now, but yeah, exactly, and think about all those guys that are making that much money, do you think they're dating girls that are near their world SMV? That is to say, do you think they're dating girls in the top 1% of looks? Or, since guys usually date below their SMV and women date above their SMV, do you think those guys making over 35k or whatever than number is are dating the top 10% of the world's women?

They aren't, due to the worldwide dating market not being efficient. Humans, by and large, are restricted in their ability to move from one region of the world to another. If you can find a way to get around those restrictions via location independent income and a country with visa rules reasonably friendly to your own, you can make that market more efficient, and date much closer to your global SMV than you can in the west, where women's SMV is artificially inflated and men's SMV is artificially deflated.

The West is like a prison, where some guys will start thinking a dude with a wig and makeup on is pretty hot. Although outside of an actual prison, a 200 pound woman substitutes for the dude with a wig on. That is, in the metaphorical prison of the West, that water buffalo is the only game in town. Location, location, location.

You could build a mansion with a pool in the middle of the Sahara Desert, but you'd be hard pressed to sell it for anything. That's the American male, the mansion in the Sahara Desert. We're the most coveted male in the world, the top 1%, but we're living in the Sahara Desert, in other words, all our potential buyers are far, far away.

Get location independent, realize the value of your global SMV.

[Australia Sucks]

Spaniard88 you said "If someone can't find a way to become financially independent with the use of 500k, they either have very high expenses (which is perfectly cool, everyone's drives are different) or they don't know enough about business/investing, which is also ok, it just means they have to keep working longer. If they enjoy their job, it's all good, but if they don't, that unhappiness leads to all kinds of ancillary issues."

If we are talking about purely passive investments I am not sure I agree with you 100%. For example if you invest in quality real estate or stocks that will give you good capital growth/appreciation over the long-term with not too much risk or involvement, then a realistic yield to expect might be something like 3% after tax (of course depends on your tax situation). Which means after-tax income of $15,000 per year.

Sure, if you invest wisely the stocks/real estate will get capital growth and generate rising dividends/rent over time but assuming you are not selling your assets and only living off the income (because you need the growth to offset inflation and to gradually increase your wealth) then $15,000 is only enough for a cheap-skate retirement in a poor country.

For example if you invest in real estate or stocks which are not too risky and you get an after tax yield of 3% plus your capital doubles (capital growth) every ten years (i.e. roughly 7.25% compound price growth). If we assume inflation of 5% because firstly government CPI figures as we all know understate reality, second inflation is likely to rise over time from current low levels. Further let's assume that rent/dividends grow in line with price growth also at 7.25% per annum. After ten years of being retired, adjusted for inflation you will have capital of around $603,000 which at a 3% yield would give you around $18,000 income.

Now you could argue that the above figures are too conservative and a skilled investor could do better but I think its always better to err on the side of caution and be pleasantly surprised by any upside.

If you want an upper middle class type retirement for a single man, even in most poor countries you probably need something more like $25,000 after tax. Alternatively the $15,000 supplemented with a modest amount of work e.g. English teaching, tour guiding, etc is enough to produce a good semi-retirement. Just look at some of the relocation threads which discuss different figures for living in places like Bangkok, etc Most guys agree that to live at a "semi-baller" level (depending on how you define it) that $2000 USD per month is the minimum.

I think the vast majority of people wanting 100% passive retirement on $500,000 of capital, even in a poor country will be able to do it only by being a tight ass and foregoing most luxuries.

[testos111]

The frugal approach is right when the direction of your endeavor is correct.

If the direction is leading to retirement, then it's worse than being a spendthrift.

If the direction is leading to creating something you're passionate about, then it leads to a fulfilling life.

Saving money to invest in yourself is a strategy that really turned my life around. It gave me the guts to leave jobs I did not like and start a successful boot-strapped business that COMPLETELY changed my life for the better.

[lavidaloca]

Australia Sucks your numbers are too conservative in terms of investment spending for North America in my opinion.

Use http://www.firecalc.com.

After some period of time keep in mind you should be able to generate some income on the location independent side or in a recession get work so as not to deplete your capital.

Personally I think 5-6% is doable depending on the time period. For example based on firecalc if I keep the inflation at 3% which will match my spending increases year over year, have a 100% equities portfolio for a sum of $500,000 and start with spending $25,000...I'd have a 96.1% chance it lasts 20 years. Keep in mind uf there was actually a bear market...I'd go work rather than deplete capital which would raise that. Additionally, in 20 years you should be able to build up a passive income.

With that said, I do agree $500,000 may not be the right amount for many (myself included) to quit their jobs / businesses and just go live off of the investment returns. I could do that already but that level of spending isn't very appealing to me in all honesty. To me I think the sweet spot is closer to $50,0000 year in annual spending. That should get you a flight or two home and then allow you to spend $4,500 a month which is a nice amount to live on in many countries.

One of the reasons I'd personally prefer a number much higher than many people is I would expect it's much easier to get connected in your local country with the actual business peopleif you can actually spend at a level similar to what they spend.

[Apoc]

(06-23-2017 02:15 AM)Australia Sucks Wrote:  

Now you could argue that the above figures are too conservative and a skilled investor could do better but I think its always better to err on the side of caution and be pleasantly surprised by any upside.

When I see conservative calculations like this I can't help but to think: what is the imagined disaster that you are playing safe for?

Let's say I retire with 500k. What's the worst that could happen to me (that I could have prepared against)? Two years into retirement I might notice that due to miscalculations about spendings and passive income I now have only 400k left of my stash and it won't last. Unless cutting expenses is an option, I would need to go back to work and gather a sum that is actually sufficient. In the end this "test retirement" would probably cost me a couple more total working years compared to if I had played it safe to begin with.

So if being "risky" could at worst case cost me a couple more years at work, then what's the point of being conservative and waste those extra years anyway (by accumulating the more conservative capital up front)?

It probably comes down to predictability: for some people predictable but otherwise imperfect solution wins any that contains more unpredictability. It comes down to your adaptability, as well as how much you actually enjoy your current life and job.

Also the disaster scenario might be worse for some people than in my example. Like switching from retirement back to work might not be trivial. In general terms, the more feasible your plan B is, the less conservative you need to be when planning your withdrawal margin.

[Australia Sucks]

lavidaloca you said "if I keep the inflation at 3% " We will have to agree to disagree with that one. Government figures are known to be bullshit. Inflation is in reality already at least 3% if not higher, and given the way things are there is every chance they will go even higher still over the long-term. Also another point is that for a young guy you hopefully want your capital to last forever rather than running out eventually. Also that calculator does not take taxation into account. For most people who retire early in their 30s or 40s they would likely have to pay some sort of tax (because they are not at "retirement age" yet).

I think 5% is a more reasonable long-term (10+ years) inflation figure to use. I think that Shadow stats is somewhat flawed and over-estimating actual inflation but I also think the government understates actual inflation (it's probably somewhere in the middle). The U.S. government has every incentive to show lower inflation/CPI figures because there are TIPS (Treasury Inflation Protected Securities) as well as certain government pensions and benefits that are indexed to CPI, so if they show lower CPI they will pay less.

Here is a good article explaining why inflation is understated:
https://www.forbes.com/sites/periannebor...f58654200b

[lavidaloca]

Fair enough Australia Sucks. In Canada taxes are pretty nill if due to Canadian owned public companies. I've seen several examples of individuals with $60,000 in dividends paying less than $2,000 in tax.

I haven't noticed that much inflation in my goal destination for things that have any relevance to me. (Cuba) Hotels have seen massive price increases. The other stuff like food, appropriate accommodation and night clubs have been the same price since I was a teenager.

Also keep in mind your more likely to spend more when you start your early retirement than a few years into when your more settled down.

Apoc it's more a risk for a business owner to leave than an employee. Restarting up a business takes a lot of time and effort. Going and finding new employment in most fields shouldn't be overwhelmingly difficult if you have the appropriate qualification / experience.

I tend to be on the conservative side. I could make the jump now but the risk is I'm back here in my 40s. I could retire at 28 or work till 31 and be very secure without the risk. Giving up 3 or so years for that extra security is tough but the terrible thought of coming back to the West is not worth dipping in 3 years. In 3 years physically the changes to me won't be all that great. I still look the same I did 3 years ago. I'll still be a young man.

With that said I'm constantly considering doing just that and going yolo.

[Apoc]

(06-23-2017 01:19 PM)lavidaloca Wrote:  

With that said I'm constantly considering doing just that and going yolo.

If it makes you feel any better, US stock market history and current Shiller PE predicts that right now would be an absolutely horrible time to retire, suggesting a safe withdrawal rate of 3.3% (Shiller PE ~30) while all time average is 6%. See mad fientist article for more info about the science behind this.

[MongolianAbroad]

DELETE

[Handsome Creepy Eel]

While I find this sort of lifestyle and goal appealing, I'm also put off by most of these people being fucking weirdos or even (for the lack of a better word) creepy. Why does financial prudence have to be combined with being a devotee of a death cult that keeps removed Fallopian tubes on the wall?