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Screw it — time to spend

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  • CM CM 
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    If someone is saving adequately for retirement and paying for indulgences in cash, I don’t see any reason to question what they spend their money on.

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    This is reasonable, but I approach the value proposition a little differently. I’ll only buy if I’d make the same decision as a retired person living off my portfolio at <= 3% withdrawal rate.

    I never assume that I’ll have the opportunity to continue to work under my current conditions for my current compensation.

    Erstwhile Dance Theatre of Dayton performer cum bellhop. Carried bags for Cyd Charisse (gracious). Hosted epic company parties after Friday night rehearsals.

    #220347 Reply
    Rogue Dad, M.D. Rogue Dad, M.D. 
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    If someone is saving adequately for retirement and paying for indulgences in cash, I don’t see any reason to question what they spend their money on.

    Click to expand…

    This is reasonable, but I approach the value proposition a little differently. I’ll only buy if I’d make the same decision as a retired person living off my portfolio at <= 3% withdrawal rate.

    I never assume that I’ll have the opportunity to continue to work under my current conditions for my current compensation.

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    @cm — I see your point and think about it that way on occasion. But then I also remember exactly that — I may not be able to do this in 30 years for financial or other reasons.

    The <= 3% withdrawal rate is certainly lower than average but not part of this discussion so I won’t ask for details why, but I may lose my “current conditions” — with the ability to work harder to pay for things on any given day.

    If you are currently spending on what you value and don’t spend big on things you don’t value then you are doing it right. If highly value something but then devalue it because you have to spend, there’s a philosophical issue rather than a financial one.

    I have things I won’t spend a lot on and things I go out of my way to do frugally and sometimes cheaply. Actually my wife has often accused me of being cheap beyond what she considers reasonable. But it’s selective spending to me. I’ve got my family eating Aldi’s cheese pizzas most of the time we do a pizza night. It turns out their $5 cheese pizza is better than any delivery place. I hate spending $20-30 for delivery on an inferior product when I can just store a couple of Aldi’s pizza in our deep freeze or grab one on the way home from work.

    http://www.RogueDadMD.com

    An alt-brown look at medicine, money, faith, and family

    #220350 Reply
    CM CM 
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    Joined: 01/14/2017

    I see your point and think about it that way on occasion. But then I also remember exactly that — I may not be able to do this in 30 years for financial or other reasons.

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    My approach probably isn’t reasonable for a younger person in the accumulation phase with a long runway ahead. Otherwise, that younger person wouldn’t buy anything but the bare essentials of life for at least a decade or two.

    The <= 3% withdrawal rate is certainly lower than average but not part of this discussion so I won’t ask for details why, but I may lose my “current conditions” — with the ability to work harder to pay for things on any given day.

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    I think you’ll find that 3% is the new 4% over on bogleheads. 🙂

    Big ERN has looked at historical US data and 3.25% would have worked for long retirements (my wife should outlive me by 14 or so years) in the past.

    https://earlyretirementnow.com/2016/12/07/the-ultimate-guide-to-safe-withdrawal-rates-part-1-intro/

     

    However, there are very few, if any periods in the historical data with such high combined stock and bond valuations as today. That implies both a higher sequence of returns risk and lower than historical future returns. If the historical record contained only today’s circumstances, it’s highly likely that success rates would be much lower for any given withdrawal rate, and the SAFEMAX (i.e., highest safe withdrawal rate) would be lower.

    Further, US success rates have been unusually good relative to the rest of the developed world. See this screenshot of a table from work by Pfau: https://3a05ty2ohkvc1zboze4eczal-wpengine.netdna-ssl.com/wp-content/uploads/2016/06/Screen-Shot-2016-06-24-at-2.56.44-PM.png

    I don’t think it is reasonable to count on this sort of out-performance in the future. It might happen. I just don’t want to depend on it.

    Now, back to your regularly scheduled splurge thread …

    Erstwhile Dance Theatre of Dayton performer cum bellhop. Carried bags for Cyd Charisse (gracious). Hosted epic company parties after Friday night rehearsals.

    #220361 Reply
    Liked by q-school
    Avatar G 
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    Status: Physician, Small Business Owner
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    Slide 0

    next time I find 6K sitting idle, this is what i will blow it on.

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    I like it!  I have a Guerini and that sucker was worth every penny.  A work of art and a pleasure to shoot.  In my state, you are allowed to keep a gun in bankruptcy, so that is my tenuous wrap-around connection to personal finance.

    Birkin bag, very fun to learn about, thank you.

    Regarding airfare or tix, as far as I can tell, it is classic supply and demand at work.

    As I read this thread, it makes me realize how fortunate I am and also how everything is relative.  I have single bottles of whisky that could literally buy a year’s worth of ethanol for the hardest of alcoholics and yet there are folks like that Warriors guy mentioned above who could spend that for a single dram!

    I literally keep a “wishlist” of splurges on my finance spreadsheet.  It is interesting to see how it has evolved.

    #220364 Reply
    jfoxcpacfp jfoxcpacfp 
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    I bought myself a bag for about $1500 dollars when I came back from my first deployment.  I had saved/invested at least 60k during that deployment.  It was a designer I have liked and followed for years.   However, I subsequently discovered I am not a designer bag sort of person and it generally sits in my closet in its dustbag while I throw my phone and wallet into my jacket pockets.  My niece seems to be growing into a fashionista and the bag is a classic so hopefully someday she will want it.

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    I could have written that post, except mine was a gorgeous red Louis Vuitton bag. Packed it away when we moved 10 years ago and it still hasn’t shown up – would love to find it and give it to my DIL. I would say it was stolen but I don’t know if anyone around here would even know the worth. And we still have boxes we haven’t unpacked😂.

    Johanna Fox Turner, CPA, CFP: I am not your financial advisor; any responses are for general purposes only
    http://www.fox-cpas.com/for-doctors-only ~ [email protected]

    #220374 Reply
    Avatar bean1970 
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    Status: Physician
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    If I enjoy setting $100 bills ablaze

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    well get ready…it’s almost the 4th of July… you can take your $100 bills and buy smoke bombs and sparklers…about the next closest thing to lighting money on fire directly……

    #220376 Reply
    jfoxcpacfp jfoxcpacfp 
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    Splash Refinancing Bonus
    I on the other hand can only think about poor Uncle Scrooge getting a cervical spinal cord injury whenever I see that avatar.

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    2nd belly laugh of the day! Keep ’em coming, friends!

    Johanna Fox Turner, CPA, CFP: I am not your financial advisor; any responses are for general purposes only
    http://www.fox-cpas.com/for-doctors-only ~ [email protected]

    #220387 Reply
    Avatar drbisco 
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    Status: Physician
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    I just paid $29.99 to live stream the Dead concert tonight…does that count?

    Re Stanley Cup tix, it is possibly a once in a lifetime opportunity. If you are a fan, you should do it. Hawaii with your wife? Go for it. I am a bad influence for sports and vacations.

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    you mean John Mayer and friends?   That’s my splurge – going to Wrigley next week.

    As far as Stanley cup tix, that was my splurge a few years ago, plus the airline fees to fly back from SF early to make it to the game, but we got caught in rain and my flight was diverted and I had to watch the game on a plane seat on a runway in Madison as opposed to live……worst trip ever.

     

    #220393 Reply
    Liked by Vagabond MD
    Rogue Dad, M.D. Rogue Dad, M.D. 
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    I think you’ll find that 3% is the new 4% over on bogleheads. Big ERN has looked at historical US data and 3.25% would have worked for long retirements (my wife should outlive me by 14 or so years) in the past. https://earlyretirementnow.com/2016/12/07/the-ultimate-guide-to-safe-withdrawal-rates-part-1-intro/

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    I’ve read his stuff and others on this in the past.  Not trying to be dismissive of the topic as it is relevant to retirement finances, but I do think it’s irrelevant to this discussion.  Essentially we’re just talking about % savings and a budget.

    Whatever withdrawal rate you plan to use, you just have to live within your means during the accumulation phase and retirement/spend-down phase.  If buying expensive entertainment during the accumulation means one can’t save enough now to have the desired retirement lifestyle, then one doesn’t buy that expensive entertainment (or starbucks or whatever it is that you deem not valuable and worth cutting/never having).

    http://www.RogueDadMD.com

    An alt-brown look at medicine, money, faith, and family

    #220425 Reply
    Vagabond MD Vagabond MD 
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    Status: Physician
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    Joined: 01/21/2016

    One caution to the OP and anyone purchasing expensive tickets to the big game. It certainly enhances the experience when your team wins. I have experience in this at one Super Bowl, one WS Game 7, and two NCAAF national championships. It also deepens the misery when your team loses.

    That said, #LGB

    #220452 Reply
    Liked by CordMcNally
    Rogue Dad, M.D. Rogue Dad, M.D. 
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    Joined: 03/07/2016
    One caution to the OP and anyone purchasing expensive tickets to the big game. It certainly enhances the experience when your team wins. I have experience in this at one Super Bowl, one WS Game 7, and two NCAAF national championships. It also deepens the misery when your team loses. That said, #LGB

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    Trust me, I’m expecting a loss.  I am a Blues fan after all.

    My biggest fear isn’t a loss, it’s getting blown out so early that I can’t even enjoy the first period.  I think there’s about a 30% chance of that — pretty sure the refs gonna call extra penalties on the Blues and the Bruins going to come out hard.

    http://www.RogueDadMD.com

    An alt-brown look at medicine, money, faith, and family

    #220457 Reply
    Liked by Vagabond MD
    Avatar Kamban 
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    Cats on Broadway as a med student, Cats in the front row. One of the dancers crawled out of a tunnel practically into my lap. I can’t remember what I paid, but it wasn’t outrageous, even for a student.

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    The Cats post reminds me of taking some friends from Canada who came to see NYC in late 80’s to the matinee at same-day, cut rate price tickets that they used to sell in Times square. I got one of the exit row seats and the musical started and the theater turned pitch dark. Twenty or so seconds passed and I wondered what was going to happen and something made me turn my head to aisle besides me. Suddenly i was staring into a pair of red cat-eye lights of the cat, which was inches away from my face. I must have screamed and if I was any older, I might have had an MI from the shock.

    Will never forget that performance, which probably cost me $10 or so.

    #220486 Reply
    Liked by Neuro-doc, CM
    CM CM 
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    Joined: 01/14/2017

    Cats on Broadway as a med student, Cats in the front row. One of the dancers crawled out of a tunnel practically into my lap. I can’t remember what I paid, but it wasn’t outrageous, even for a student.

    Click to expand…

    The Cats post reminds me of taking some friends from Canada who came to see NYC in late 80’s to the matinee at same-day, cut rate price tickets that they used to sell in Times square. I got one of the exit row seats and the musical started and the theater turned pitch dark. Twenty or so seconds passed and I wondered what was going to happen and something made me turn my head to row besides me. Suddenly i was staring into a pair of red cat-eye lights of the cat, which was inches away from my face. I must have screamed and if I was any older, I might have had an MI from the shock.

    Will never forget that performance, which probably cost me $10 or so.

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    Take a trip down memory lane: https://www.youtube.com/watch?v=5mlllRdIfqw

    Edit: At 1:24, What. A. Stunner.

    Theatre people are a breed apart, much more charismatic than dancers. 🙂

    Erstwhile Dance Theatre of Dayton performer cum bellhop. Carried bags for Cyd Charisse (gracious). Hosted epic company parties after Friday night rehearsals.

    #220498 Reply
    Liked by Kamban
    Rogue Dad, M.D. Rogue Dad, M.D. 
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    This outcome isn’t looking good for me

    http://www.RogueDadMD.com

    An alt-brown look at medicine, money, faith, and family

    #220582 Reply
    Liked by Neuro-doc
    Vagabond MD Vagabond MD 
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    Right about now, the OP is thinking that he wished he would have skipped the hockey game and instead upgraded his Hawaii plane tix to business class. 😉

    #220583 Reply
    Liked by Neuro-doc, CM

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