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How I live on $7,000 per year

earlyretirementextreme.com

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Re: How I live on $7,000 per year

#121

Post by erejacob »

phamilton wrote: post #116
msbarnett wrote: post #75

Earlier quoted context omitted.

Well, the "no lifetime limits" is thanks to the legislative healthcare reforms that were driven by a need to reduce the number of medical bankruptcies, so obviously that's a good step towards making healthcare more affordable to people who previously would have been driven into bankruptcy. But a $3000 yearly deductible is still likely to be utterly unaffordable to a significant portion of the uninsured, and it would…

Read his post about HSA and how it plays into his retirement. Most high deductible plans have full coverage ( 100% ) when the deductible is reached. Worst case scenario it costs him $4000 ($3000 of which is pre tax) a year. Thats ~300/month. Best case he doesn't visit the doctor once and it cost him $1000 and he puts $3000 into his rainy day / retirement account. You need to have $3000 available day one of each year…

And I have enough savings to pull this off for decades should it come to that.

Granted if one gets so sick so as to max out the deductible every year consistently, one's life expectancy is probably not that long

If one stays healthy, unused money in the HSA becomes the equivalent of an IRA and can be used for nonhealth-related expenses after a certain age (I forget whether it's 59.5 or slightly higher).

I actually opted out of my employee plan when I was working in order to get in on this for the tax deduction. (My employer wasn't offering HSA eligible plans.)

Re: How I live on $7,000 per year

#122

Post by sliverstorm »

tryitnow wrote: post #45
rorrr wrote: post #25

Sorry, but this story is garbage. Rent/mortgage, retirement completely ignored. Plus he has the shittiest $82 health insurance plan he could find, and he doesn't calculate the costs of what will happen if he gets sick. On average people after 65 spend $2,920 per year on medical out of pocket expenses (Source: http://www.newretirement.com/Planning101/Rising_Medical_Cost... ) Then his food comes from his garden, which…

It disappoints me, but I have to agree with you (at least in part, I wouldn't call his story garbage). I say it's disappointing because his blog really inspired me to make some changes and I agree with the overall thrust of what he's saying. But the problem I have is figuring out how he accumulated his wealth. Of course, being a former physicist you'd think spelling that out in a simple spreadsheet would be a trivial…

He is a former physicist? Good god, the waste... He attended a public school for free. I wonder if he has factored in the price his government paid for only 10 years of physiking out of him...

Companies allegedly don't recoup the cost of hiring you for at least a year. Public schools are offered because it is seen as a worthwhile investment in the future, and graduates help pay for the next generation's schooling. In other words, there was a lot of good-faith investment in him. He essentially took the money and ran.

I mean, I'm not saying he is scum or that he is contractually obligated to his country, but this is much less impressive when you realize part of what he did was offload much of the burden. It seems unlikely he'd have been able to amass the seed funding for the investments he lives on by age 33 without the tens of thousands invested in him by others.

Re: How I live on $7,000 per year

#124

Post by sliverstorm »

rorrr wrote: post #78
erejacob wrote: post #74

Earlier quoted context omitted.

As does working for $40k a year and investing 30k annually which is what I did. There's no stock market magic required.

I think that's just impossible. On 40K you will pay $580 medicare $1,680 FICA $3,410 federal $1,824 state (NY), and maybe some local, depending on where you live. If you can invest $30K after that, you're some motherfucking frugal genius.

Under the table ftw?

Re: How I live on $7,000 per year

#125

Post by philwelch »

jergason wrote: post #119
philwelch wrote: post #118

Earlier quoted context omitted.

I've never seen a $3000 blood test. A family member got an exceptionally rare blood test this summer though; I'll try and look through his paperwork, but I'd be shocked to hear even that test cost so much.

It is actually really difficult to find out how much stuff costs at a hospital. That is one of my main complaints about the healthcare system. It is wasteful because the hospital environment makes you forget that things cost money, and that some tests have a very low probability of doing anything other than costing you money (not saying that was the case with your family member, just in general). Hospitals really mes…

In this case the exceptionally rare blood test was actually the crux of solving a major, chronic condition. That wasn't obvious until after the fact though.

Re: How I live on $7,000 per year

#126

Post by erejacob »

sliverstorm wrote: post #122
tryitnow wrote: post #45

Earlier quoted context omitted.

It disappoints me, but I have to agree with you (at least in part, I wouldn't call his story garbage). I say it's disappointing because his blog really inspired me to make some changes and I agree with the overall thrust of what he's saying. But the problem I have is figuring out how he accumulated his wealth. Of course, being a former physicist you'd think spelling that out in a simple spreadsheet would be a trivial…

He is a former physicist? Good god, the waste... He attended a public school for free. I wonder if he has factored in the price his government paid for only 10 years of physiking out of him... Companies allegedly don't recoup the cost of hiring you for at least a year. Public schools are offered because it is seen as a worthwhile investment in the future, and graduates help pay for the next generation's schooling. In…

Fun fact: One third of scientists (on a global basis) do not live in the country they were born in. (See http://www.fasebj.org/content/18/9/936.full) This comes from a lack of opportunities. For example, there are no groups working on what I was trained for in myCountry other than the one I was in. I would essentially have to replace my supervisor by competing with the other students he graduated with only one winner. This is what happens when each professor trains 10 people to replace him and proceed to determine the winner by whoever can work the hardest. This is not good faith investment. That's a callous winner-takes-all system with a built in oversupply to lower prices---like those competitions where you get webdesigners to work for free to make a logo. I don't feel any moral obligation to participate in that Ponzi scheme. Ever noticed how people hawking university degrees aren't exactly upfront about placement ratios and things like that and how students usually have to learn about what's really going after they're already committed?

Since the salary for an academic scientist is rather low, I could have made the money MUCH faster as a long haul trucker. At $17.5/hr a framing carpenter apprentice is paid substantially better than a grad student. At $37/hour a journeyman level carpenter (after 4 years as an apprentice) would make nearly twice as much as a postdoc. A watchmaker (2 year education) makes 40k. Yes, skilled tradesmen make that much. I never knew.

Had I known back then what I know now, I would never ever have gotten the degrees I did. It was and is one of the most inefficient means of making money I can imagine. Other than being a sign spinner or a dancing pizza (which still pays more than being a research assistant with a MSc, no kidding). I would have way more resentment towards the system if it wasn't for the fact that I enjoyed my work at the time. This enjoyment probably saved me from wasting my money on stuff to compensate for my lack of happiness working.

Re: How I live on $7,000 per year

#127

Post by schiptsov »

It is so funny to see how american people rediscovering the way of life 2/3 of the planet population enjoy from the beginning of a time.

One should visit any Himalayan country to see how it works, or African country if you really want what they call 'extreme'. ^_^

Re: How I live on $7,000 per year

#128

Post by rorrr »

msbarnett wrote: post #120
phamilton wrote: post #116

Earlier quoted context omitted.

Read his post about HSA and how it plays into his retirement. Most high deductible plans have full coverage ( 100% ) when the deductible is reached. Worst case scenario it costs him $4000 ($3000 of which is pre tax) a year. Thats ~300/month. Best case he doesn't visit the doctor once and it cost him $1000 and he puts $3000 into his rainy day / retirement account. You need to have $3000 available day one of each year…

I'm not talking about him, I'm talking about why these $85/month plans aren't the blanket answer to the question of solving medical bankruptcies among the uninsured.

Because most people get denied. $85 is only for healthy and relatively young, no pre-existing conditions.

Re: How I live on $7,000 per year

#129

Post by todsul »

tryitnow wrote: post #43
nirvana wrote: post #10

I've been living on $13,754 per year for the past 4 years. (Average as of last month.) There are two of us, so, double that and you have the average cost over that period. While we've been doing it, we've been traveling full time, spent the last year in europe living in AirBNB pads, and doing our startup. We buy a MacBook Pro each year and an iPad or iPhone each year as needed, with the old one going to the other per…

Thanks. This pretty much aligns with my philosophy. If your budget is readily available, could you post it? I've been seeing a lot of "we live on $XX,XXX" online. That's nice, but what really inspired me was when people just posted their budgets, which since you already have one, would probably take less time than articulating the philosophy. I personally don't set a budget (I've tried it but I spend just as much wit…

We pretty much do the same thing: live country-to-country, for 3-6 months at a time, buy a new MacBook each year, run a startup, etc.

Budgets differ between country. Not just in the value of line items, but the line items themselves. For example, in Thailand you may have a budget for massages, because they're so plentiful. When you go to buy pork from a street vendor, you can have your feet massaged while eating. Then in India, you need a line item for trains, because the whole country is interconnected. Then in Berlin, you need a line for beer, of course.

So your budget changes place to place, which is why it's not easy to just "post my budget".

That said, I write a blog post in each city comparing our costs. It's not a perfect science, but hey, it's a start. I'm not sure if Nirvana's budget is for just one person. If so, we spend about the same.

Anyway, apologies in advance for the plug, but here are our costs of living in different countries. We've lived in Australia, Canada, Peru, Bolivia, Argentina, India, Thailand, and now Germany. Next stop, who knows?

http://globetrooper.com/notes/cost-of-living-sydney-montreal...

http://globetrooper.com/notes/cost-of-living-in-india/

http://globetrooper.com/notes/cost-of-living-thailand/

http://globetrooper.com/notes/cost-of-living-europe/

As an aside, there are two types of people who live cheaply:

  1) those who are forced to, and 
  2) those that choose to.
There's nothing worse than living in poverty. I've lived out of cars, or house-to-house, basically as an itinerant for a little while, and it was really depressing. I've also worked in high-finance and made 6 figures, and clearly, that's not so bad.

But when you choose to live cheaply, it's not much different to living extravagantly. People who've never owned a fast sports car, made lots of money, or lived in a nice house, tend not to see this, but it's true.

Before I even left work to launch my startup, I scaled right back. I sold everything: cars, clothes, furniture, stuff. And you know what, I was even happier. Not jumping for joy, but just pretty content with the way things were going. I felt lightweight. I was free of bullshit. It's a nice feeling. Right now, everything I own (except websites and real estate), fits into a 32 litre bag. That's two-thirds the carry-on limit. I still don't use everything in my bag. I even have cufflinks.

Where I think this really makes a difference is with a startup. When there's just less of everything, there's more mental space for your startup.

Re: How I live on $7,000 per year

#130

Post by [deleted] »

rorrr wrote: post #37
scarmig wrote: post #32

Earlier quoted context omitted.

I believe he does account for rent/mortgage, by doing an RV. And his idea is that he has handled retirement--he's living in retirement now. The catch is that he had six figures saved up beforehand (he lives off the investment income), which doubles as a rainy day fund in case of serious illness.

Then you have to calculate the amortization costs for the next RV (when this one dies), RV insurance, gas (which RVs needs a lot of), maintenance, sewage pumping costs, water costs. I wouldn't call living in an RV a retirement most people envision.

[deleted]
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