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August 13, 2012


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My wife and I call that number our Drop Dead Money: enough money to tell our customers or bosses to drop dead. :) Just a fun term for financial independence. Retirement is probably OK to use as a name for it, but it sounds so Palm Springs - nothing but golf by day and bridge by night. :)

We're there.

We were fortunate that the last recession gave us a tremendous boost. We learned a while ago that could happen. Recessions are inevitable: in our lifetime they've come every 7-10 years, like clockwork.

We also noticed those are the times with the biggest bargains. There are bargains on everything, from houses and cars to cruises. And here's the thing about those bargains: you'd think that's when everyone buys, right? wrong.

The reason all those bargains go unsold isn't because nobody has money, because factually that just is never true. The reason they go unsold is people FEEL like they have no money, and they get a mindset of uncertainty and fear. As Joe Theisman once famously said: half the game is 90% mental.

The good times, by contrast usually have bubbles, when prices spiral out of control. And, funnily enough, that's when people buy the most... instead of selling. So, we started selling in the good times to build up a cash reserve to do our buying when the recession came.

What a difference that made!

When we tell people this, they just stare at us and say, wow, wish I thought of that! Sounds so simple. It is.

They also told us to share how we did it, and that's why I just recently started my blog called, what else? Drop dead money :)

But you are right - the first thing people need to do is calculate their drop dead money number. Everybody's is different. Jamie Dimon has a few hundred mil and it's not enough for him yet. My parents had a much lower number and it worked for them. You can make anything work - the question is how you want to live your years of doing what you want...

I have used so called "calculators" on websites 20 to 25 years go and had numbers that are unrealistic and a few that are possible. I am getting older and closer to retirement more answers of possible numbers that unrealistic numbers now.

Either way I am going to save as much as I can, for as long as I can and live life with what savings I acheive.

There are too many factors that can change your course and change that number over my 10 to 17 year period before the earliest I can retire (10) and what the government says I can collect SS (17)

Inflation, illness, job loss, career change all can influence "that number"

I have used calculators on man to see what I would have with my current strategy and it puts me between 4 and 5 million in about 40 years. I need to make a more in depth plan though and it is on the list of things to do.

No, retirement is not on my radar yet. I do everything in my might now to put myself in position of financial independence. IMHO calculators are wholly inaccurate for my age.

We're so far away from retirement that it's unrealistic to try to calculate a number at this point. How will I know how much money I'll need/want in 20-25 years. I know I'd like a higher standard of living than we currently experience. I have no idea where we'll be living in 20-25 years. We try to balance saving with having fun in the present. As we get closer to retirement we'll definitely be calculating our "number."

I never did calculate a retirement number. One critical point in your life comes when the children have left the nest. In our case, travelling was something that we both wanted to do very much indeed. I didn't retire until 1992 but starting in 1981, with 5 weeks vacation/year we were finally free to start the trips that were at the top of our "Bucket List".

These trips weren't Carribean cruises with our children, they can explore the world without us, instead they were exciting trips of the type that few people ever do. Three examples were a camping trip using porters, with "Mountain Travel" through the Annapurna villages in Nepal in 1985, a trip with the Smithsonian called "Climbing the Sacred Peaks" in China in 1986. Another example was a camping trip with "Wilderness Travel" in Africa in 1989 where a small group of us travelled in a converted South African army personnel carrier towing a mobile kitchen with our guide and two native workers through parts of Kenya, Zimbabwe, and Botswana.

After retiring, and as we got older, the trips gradually became easier, culminating with many small boat cruises down the Great Rivers of Europe, and the Volga river in Russia, before calling it quits after our 2010 trip because my wife's walking abilities had deteriorated after two hip replacements.

Bottom Line
Don't put off the exciting and strenuous stuff until you're retired. You only go around once - Make the most of it!

The number is meaningless because it is based upon having all your money in stocks and bonds. Better to plan for income replacement from a number of sources.

I love that advice, Old Limey. I try to do strenuous/more adventurous destinations now -- central america, south east asia. I figure I can see Europe just as you did, on boat cruises down the rivers, when I am no longer as physically fit as I am now.

William, the other term I've heard is "f**k you money". The idea is that if the boss/customer/whoever is paying you does something you don't like, you can say F YOU and walk away.

The number I've calculated is my "semi-retirement number". I know how much we'd like to build up in order to feel comfortable doing significantly reduced work.

Brooklyn money@
There's another reason that I didn't mention.
The more remote and more interesting destinations in the world have changed significantly since we visited. When we visited China in 1986, cars were rare and thousands of black bicycles clogged the main streets. We watched a large building being constructed in Western China and they were hauling pebbles to the site from the nearby river, smashing them by hand into gravel, and mixing up concrete in buckets which were then hauled up to the top of the building by block & tackle. Outside of Beijing and Shangai it was rare to see an internal combustion engine being used - instead it was horses, carts, bicycles, and manual labor. When I would stop on the street to load a new roll of film into my camera a crowd would gather just to watch.

On treks in Nepal our group of maybe 15 trekkers would start off with maybe 100 Nepalese porters, sherpas, cooks, and other workers. While we slept in nice tents, had goosedown sleeping bags, air mattresses and the latest boots, parkas and other equipment from REI, most of the help slept without tents and huddled together under blankets. The porters even carried a large tent, tables and chairs for our whole group to dine in. When we would arrive at a village, all the villaqers would come out to take a look at the strange looking "Sahibs", and were happy to have their pictures taken with us. When we crossed a snow covered pass, often requiring the use of crampons, many of the porters, both male and female, wore thongs made from a section of an old tire. Today some of the most interesting destinations now have roads and electricity and many of the other, often annoying changes, like radios and TV that are part of "progress".

When we visited Kunming in Western China there was a small army of women in the main street using small paint brushes to paint a white line down the center, even though you hardly ever saw a car. We had our guide ask why they were doing this and the reply was, "We have been told that in your country and in England that you have such white lines and since we are honored to be having Queen Elizabeth vist Kunming very soon we want to show her that we are also modern.

The 3rd. world is changing rapidly so the later you leave visiting those countries, the less unique and interesting they will be.

Is there any point in "calculating a retirement number" if you know there is no possible way you can ever retire? I make so little money, and have so little, that i already know there is no way I can ever retire. I really hope and pray to die early, cause I think that's the only thing that will keep me from being homeless, in the event I can no longer work.

@BD - I'm sorry to hear your situation is so dire. I can understand why you might feel it is pointless to calculate a retirement number. I have found that sometimes just the act of setting a goal, no matter how far fetched it might seem, helps me keep moving. Maybe it's putting faith in God, fate, the universe (whatever you believe) or just staying positive, but it always helps!

Best of luck to you - I've seen other comments from you about your financial situation and I really hope things turn around!

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