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December 01, 2009


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seems like this site is into the "rerun" season...

I gotta disagree again.. without a decent income, all the defense in the world won't get you rich.

When my husband and I were living off of less than $20,000 a year because that was all we had, I thought having more money would make us happier. Now that we do earn more and have doubled our living expenses, I have come to these conclusions:

1. Earning enough money to have padding, save for retirement, and live on our own terms really did take a load off our backs.
2. More money will just lead to reaching our goals doesn't really effect my current happiness levels.
3. I have to get out and do things to be happy. Walks in the woods, volunteering, hanging with friends, taking a day with my grandparents, spontaneous trips with my husband, and hobbies...these are the things that make me happy.

FMF, I think you hit the nail on the head.

You are very wise for such a young person.
Yesterday I received some nice interest payments from some of my municipal bonds that were due today, but they meant next to nothing to me because they just get reinvested and our net worth just gets a little larger.

The REAL pleasure yesterday came from a wonderful hike that cost me $30. There was no official hike scheduled because of Thanksgiving but our instructor arranged a hike that we cannot do with the large 55 passenger bus that we usually have. Instead he took 11 of us in his 12 passenger van to the summit of the highest mountain in the Bay Area, which is Mount Diablo, 3864 ft. It was a wonderfully clear and beautiful day and seven of us which are the gung ho hikers did the Grand Loop around the upper parts and then down to an area called Rock City where there is a hike called "A Journey through Time" that passes through rock formations that span 160 million years. He was waiting there to take us home after a very invigorating, but exhausting day spent in great company. Along the way we passed one hiker. Going up the road to the summit we passed one overweight young man cycling to the top. He did reach the top but that's a drastic way to lose weight.

The only downer was that compared with 24 years ago when my wife and I hiked to the top and back down in one day, she now has physical limitations that prevent her from going on such a demanding hike. That's the worst part of getting rich, you also get old unfortunately.

I agree with Terry that a good defense will only get you so far and you need a solid income to match it. There are plenty of people that live frugally, but most Americans still do not make anywhere close to what is considered "rich." The average income is just over $50,000.

Old Limey:
The hiking trips you post about sound fantastic!

When we lived in Argentina, my parents took us hiking to the top of Sierra La Ventana (a little mountain with a hole in it at the top). It was exhausting and invigorating. We handed my youngest sister back and forth for the last hour on the way up (she was 3) while my other younger sister and I whined (she was 8 and I was 16). We took tons of pictures standing in front of the "window" at the top. I raced down in half the time and even surprised myself on how awesome I felt. Even though I was a stubborn, emotional teenager, it is one of my favorite memories ever.

Next month, I'm planning on joining a local hiking group for a camping trip in Brazos Bend Park. I love walking that park during the summer and seeing alligators, but it is only cool enough to camp from December-April. It will be my first real camping trip ever...if it is as fun as it sounds, I'll be joining the group every month. If camping doesn't work out for me, I'll still meet the group for the hikes. :)

My husband does not share my enthusiasm for "passive" activities like walking just to walk or talking for hours with friends. He appreciates activities with a purpose like sports officiating. I'm definitely more a people person anyway, so it all seems to work out just fine.

We do try to fit in as many activities as possible during our annual vacations (like snorkeling during the cruise or walking the strip while we're in Las Vegas) since we do see through our grandparents that with age comes physical limitations. Life is just too short not to have a good time while you can.

Crystal, I had to chuckle a little about Sierra La Ventana... I'm assuming its name is a play on words, cuz in spanish that means "close the window" if you were to say it out loud :) Cool story though.. reminds me of when I was a kid and would run up trails and leave my family behind, and then run down as well. I was quite active back then...and I'm slowly getting back into things now.

J in FL:
How about "Sierra Nevada", Webster's defines that as meaning "Snowy Range". Are you sure that "Sierra" means "Close". Maybe there's another word that sounds like Sierra but is spelled differently. I don't know much Spanish, at school I only took French and Latin.

Old Limey:
You two are both right. "Cierre la ventana" means "close the window". "Sierra" refers to a mountain or mountain region. Technically Sierra La Ventana translated into Window Mountain, but said aloud it was a type of joke. :)

I'm actually starting to get more active now just because I want to feel the way I did when I ran back down that was a rush that I'm not in shape for right now. We'll see how this next year goes.

My uncle told me just tonight that a relative in our family won a very large sum of money in the lottery. I have thought often about what it would mean to become super weatlhy overnight, and I'm not sure it's a good thing. I think I prefer a less complicated and anonymous life than what comes with incredible wealth. Honestly, I think the best situation is to be able to do work that you enjoy that helps easily pay your bills, raise kids, pay for college, and save for retirement.

Old Limey,

When I lived in Baltimore I'd join a group every Tuesday (this was when I could work from home) called the Vigorous hikers- they would typically hike 16-20 miles with lots of elevation gain and loss. These guys were ultrafit. Oh and about half the group were in their 70's. Me as a 29 year old man had a lot of trouble keeping up with these guys.

The goal was training for a 50 km hike called the Dogwood Half Hundred that went through the Applachain trail around Northern Virginia. The actual race was on the AT and some side trails and was 55 km long due to some last minute changes with a total of 6000 feet of elevation gain and loss although we never got higher than 2800 feet above sea level. Took me 11 hours and 40 minutes to finish. One guy who was 71 finished it in 11 hours... that was pretty humbling.

You sound like you should be in this group.



You mentioned in another post that you and the husband would like to retire with $3 million but also mentioned your combined income is about $80K or so... Is your plan to increase your income dramatically soon or are you expecting investing returns to get you to that number in 25 years?

Just curious since you seem like you have your numbers and plan in order...


@Mike Hunt
The $3 million goal is our ideal retirement amount...that is an aim much higher than our concrete plan.

Here's a breakdown of what we think we can achieve realistically based on what we have and invest in currently - our "conservative" plan:

-12% to my 401k with an average 3% raise a year at an 8% annual return for the next 26 years = $562,702
-$5000 a year to a Roth IRA with an 8% annual return for the next 26 years = $480,688
-$2500 a year to our Scottrade investments with a 5% annual return for the next 26 years = $169,729
-$6000 a year to our either our savings account or other investments with a 3% average annual return for the next 26 years = $256,626

That comes to $1,469,745 to retire on in those accounts plus my husband's pension which is set to be 70% of my husband's salary if he retires in 26 years (which would be about $3000 a month if he can raise his salary $6500 in the next 26 years...very conservative guess). Since we currently live on less than $40,000 a year including a mortgage we overpay and can plan to get medical through the Teacher Retirement Plan, we can comfortably retire on the above.

BUT, we made a goal for ourselves for $3 million to push ourselves to do better, which could end up be a combo of the below scenarios.

If we simply make no changes to our lives but make 10% returns on my 401k and Roth IRA, 8% returns on the Scottrade account, and 5% returns on the savings and miscellaneous investments, the total would be $2,098,168 plus the $3000 a month pension.

If we proceed as planned and use part of the money we are currently paying for my husband's graduate school to open and fully fund another Roth IRA for the next 24 years, that would be $360,529 extra if we can make 8% annually or $486,735 extra if we can make 10% annually.

We also should be able to increase our savings or investments with the remaining $200 a month . That could be an extra $83,960 at 3% annually or $109,675 at 5% annually.

Lastly, we will also be freeing up $350 a month next May for investment, $330 a month no later than 2012 since we pay off his car, and $900 a month no later than 2015 since we'll pay off our mortgage. Plus, I most probably will be moving into a better paying career soon after my husband has a stable position since we didn't want both our jobs up in the air at the same time...this is obviously the least guaranteed although I've started looking into several options.

We plan realistically but make our goals optimistically. It pushes us to do better without giving up everything that makes our lives enjoyable.


Your math seems sound- it sure seems like you are on a good trajectory...

Do you have a plan also to grow your salary and if so what would the rate of increase be- 3% a year or 5% a year or what?



Until this last year, my company automatically gave a 2-3% raise every 6 months during our bi-annual reviews if you were a solid employee. Since I'm the top employee in my small department, it was the norm for 4 years until the recession hit and all salaries were frozen. The raises will hopefully resume by the next review in April. That was my assumed 3% raise a year (after 7 years, we only get one review a year).

But, a change in career would bring a significant raise as well. I currently make $35,000 a year after about 5 years. I'm pretty sure that with my job history and recommendations (and university GPA) that I could pursue almost any career I'd like and make the same or more than I already do...the problem is that I don't know what I want to do. I'm currently looking into a variety of career areas including credit management and real estate...but we still have about a year before my husband's career can be squared away.

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