2 Responses to October 2014 Expenses

1. My Dividend PIpleine says:

   November 14, 2014 at 5:23 pm

   Great to see you back! Awesome month. It looks like you really have your expenses under control. I hope to hit $15k in yearly passive income going into next year. Rather than try to build up a portfolio to generate the other $13k via dividends I need to reach FI, I think I’m going to create a hybrid retirement plan that includes the $15k in dividends (which should increase with time) along with a “withdrawal type” component. Maybe save $180k in cash over the next couple of years and then withdraw $10k a year for 15 years. By the end of the first 15 years of FI, I will be 59 1/2 so I can then access the 401k (60/40 Vanguard 500/bond mix) or if need sooner a 72t. Finally whatever SSI that is available can be used at around 67. I haven’t worked out all the details, but I feel better about using this hybrid method to accelerate FI.

   MDP

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   • livingafi says:

     November 17, 2014 at 10:29 pm

     Nice to hear from you MDP! It’s really been a good year overall, no major issues with spending over here. Although in a few weeks, when I do my November post, you’ll see my spend is quite a bit higher — I went on a short vacation and also we’re planning on hosting a largish T-Day gathering that’s going to cost a few bucks. It sounds like you’re doing great though, which is awesome.

     It’s interesting that you’ve mentioned holding such a large amount of cash to cover, at least, about 50% of your first decade+ expenses. I recently met with a Fidelity adviser (for the first time in my life, I might add — I don’t really trust the advice of so-called “experts”) and he mentioned he would also hold a 10-year cash buffer. it sounds ridiculous to me, and I’m still chewing on the ramifications of this recommendation, but the clear signal he was presenting was that he’s paranoid about the overvaluation of the US Market and the immediate future for the global economy. Now, I’m not going to let the advice of one silly adviser change my entire RE plan, but still, it’s food for thought.

     The main thing to keep in mind when considering holding such a large percentage of your assets in cash is that if we do hit an inflationary period, the value of those holdings will be at risk. Yeah, we haven’t had serious inflation since the 80’s but you never know when it’ll strike again.

     BTW, for the record, I don’t consider these financial updates to be proper blog posts. The only two posts I’m doing for the remainder of this year are similar accounting records.

     Keep up the incredible work.

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