If somebody was looking for a great example of how to live lean, to truly be efficient in spending and maximize savings… we would not be it. Or at least, we wouldn’t be a good example today
It just takes a quick look at our detailed expenses to see that we are by no means a frugal household. We rent 5-star accommodations, eat out 2 to 3 times a day, and buy whatever we want whenever we want.
This is one reason that I find it a little humorous when the idea of early retirement gets some mainstream press, and people go nuts in the comments.
“Yeah, right. Like I’m going to live like I’m in poverty now, so I can save enough to allow me to live like I’m in poverty forever. No thanks. I’m going to work forever and live a little”
“Yeah, you can do that in Whereverville, but here in my high cost of living area it is impossible (turns on TV)”
Besides ignoring the effects of compound interest, or the value of time and freedom, this type of comment ignores the obvious. A person that lives well below their means can always choose to increase spending. A person that is already spending everything they earn has few options, in spending or in life
So I thought I would look back and see what we were spending while we were still accumulating, to see what 10 years of “living like we were in poverty” in a “high cost of living area” looked like
Welcome back for the 2nd post in our series of Go Curry Cracker Reader Financial Reviews, where we dig deep into the finances and ambitions of a lucky anonymous reader. Together, we can overcome limiting beliefs, change the rules, and exceed our goals
This month we go to Manhattan where Mr and Mrs NYC have discovered that lifestyle inflation is one of the world’s most powerful forces, second only to compound interest.
We will also learn a little about the difference between owning real estate and investing in real estate, the high tax burden of NYC, and why the Backdoor Roth is not necessarily a great investment choice.
We exchanged many emails over the past several weeks, which inspired a lot of creative thinking on both sides. Let’s see how it turned out
Two year’s ago Valentine’s Day, Winnie and I celebrated our love by going to a small pastry shop for afternoon tea. I remember our conversation like it was yesterday
Winnie: “We were really lucky to find each other. I have never met anybody that fits me so well.”
Me: “I know, I feel the same way.”
Winnie: “I bet we feel so comfortable with each other because we have been together in past lives, like soul mates”
Me: “You think so? I believe that”
Winnie: “Yeah, and maybe in our next life we will be together again. I could even be the man and you be the woman”
Me: “You think?”
Winnie: “Yeah… but, maybe you could lose some weight first. I’m not really into fat chics”
Over the past few years, taxes have become a bit of a passion obsession.
I had always assumed our tax rate would be lower in retirement, and therefore followed the mainstream advice to max out my 401k each year. This definitely helped to Turbocharge our Savings, and saved a ton in taxes during the accumulation phase
Then in our first years of early retirement, it became clear just how low our taxes could be. Infinitesimally low. Completely non existent. Zero
Now I’m on a mission to Never Pay Taxes Again, not for any politically or financially motivated reason… but just because we can
“What?! The IRS can take nearly 50% of my Retirement Fund in taxes?! How am I supposed to live on only half of my savings? With taxes like this, how can I ever retire, let alone early?”
There is a dangerous nuance in the US Tax Code code that is going to sink and destroy your retirement! There is nothing you can do when the Tax Torpedo strikes, taking nearly half of your income with it!
