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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

#31

Post by potatolicious »

erejacob wrote: post #11
munin wrote: post #6

Earlier quoted context omitted.

he implies that he owns his own home. maybe he inherited it? he's also in his mid-30's. it's possible to have bought a property on a 15yr mortgage, paid it off on a modest salary, have some money saved up, and then just chill out. if you don't have kids, this works. if you don't have any medical problems that cause your insurance carrier to illegally drop you (what are you going to do, sue them?), this also works. my…

I like living in the US. We bought our home in cash. Our home is currently an RV---bear with me here. The cost of it was $16k. We pay a combined $6000/year in rent (half of which is my half). You need $200k in investments to support such a cash flow (which I have). So the total cost or asset base or our current living situation is about $216,000 (not counting repairs which I can mostly do myself). We're seriously thi…

What rorrr said, but not in quite such an inflammatory tone.

I think it's great that you've found a lifestyle you enjoy that also allows you to get by with very little money. What I take issue with is your judgmental tone in the article - as if there's something wrong with everyone else for not wanting to live in an RV.

This country faces a dire economic crisis, and there is no doubt that the income of the middle class has been getting shredded - and continues to drop. Unemployment is at an all-time high. It seems incredibly callous and foolish to sweep these all away with a "well, maybe they should be living like me".

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

#32

Post by scarmig »

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…

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.

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

#33

Post by ahsanhilal »

erejacob wrote: post #18
ahsanhilal wrote: post #15

Basic economics tells you that this is not a good growth strategy to adopt especially if you have a consumption-based economy, and not savings-based one (aka China, India). In short population is going to increase over time, resources are going to decrease over time, in order to keep GDP per capita in line with an increasing population, you cannot just decrease your spending (or tighten your belt). You have to grow b…

Well, not to worry, most people won't make "the sacrifice". Maybe if we transitioned to a production based economy but producing only quality items we needed. That way we wouldn't have to work so much. Unemployment would go down because people weren't scrambling for the the ability to consume. Concepts like planned obsolescence would go away. A lot of what we refer to as "growth" is just an indicator that the volume…

Well you have a point, and this model of an alternative economy based on self-sustenance, producing what we need is something that is being tested by a philosopher Frithjof Bergmann. Unlike most (read all) philosophers, Bergmann actually practices his ideas which are detailed in his book, "on Being Free". He talks about such an economy based on producing little and necessary items within communes and trading them amongst each other:

http://newworknewculture.com/content/frithjof-bergmann

They are actually applying New Work to various parts of the world including South Africa, Iraq (in Kurdistan) etc. I know this because in undergrad I worked with him on this project for a year.

However, the main problem regarding an alternate system is quite philosophical; that what is the basic human condition? Hobbes came up with an answer calling life "nasty, brutish and short" and that our animal spritis needed to be kindered. In government we did it through Rousseau's suggestions that we need a system through which we do not kill each other. I don't kill and take your money/land, and you do the same for me. In economics, we came up with an answer through capitalism, and saw the biggest implosion of wealth ever in the 20th century. So it is hard to argue against that capitalistic/democratic mindset unless there is a viable alternative especially in the US, where it has worked the best for the better part of the century. As far as crises go, we have seen destruction and subsequent creation of wealth throughout this century, so that is not a reason to give up I think.

http://www.economist.com/blogs/dailychart/2011/10/stockmarke...

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

#34

Post by scarmig »

nirvana wrote: post #30
scarmig wrote: post #28

Depends on your goals in life. $7,000 is definitely doable. But I don't want to live in an RV. Indeed, I want to live in a walkable neighborhood with groceries, low crime, and easily accessible entertainment. The site probably isn't a convincing case for a general audience. Which is a real pity, because a lifestyle of $10,000 to $12,000 a year is very doable, even for a single person, even in the Bay Area, even with…

Do you want to start a startup? Or do you want to live your life in the burbs?

Living "frugally" is so that I can bootstrap a startup. And I live within 5 blocks of an inner BART station. No desire to live in the burbs at all.

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

#35

Post by ahsanhilal »

awongh wrote: post #23
ahsanhilal wrote: post #15

Basic economics tells you that this is not a good growth strategy to adopt especially if you have a consumption-based economy, and not savings-based one (aka China, India). In short population is going to increase over time, resources are going to decrease over time, in order to keep GDP per capita in line with an increasing population, you cannot just decrease your spending (or tighten your belt). You have to grow b…

I would say that the OP understands that a growth economy is not the end-all be-all of human progress, and in the end may not be ideal. Maybe it's not about imposing a way of life on other people, but realizing that the underlying philosophy of a growth economy is flawed- it's inherently true that limitless growth is impossible, so in some sense we are all just waiting until we either slide over the top of that curve…

It is hard to argue against the underlying principle of the growth economy because it is the ONLY principle that has served has so well over the past century and gotten so many people out of poverty, and increased overall wealth, distribution of wealth is still a problem though. We are unequivocally better off today in standard economic terms than we were a 100 50 or 25 years ago. Growth can be tempered and slowed but you cannot look at growth in entirety.

In Europe, Japan, Singapore you have a shrinking population and as such you need to create less wealth to support growth, whereas in China India you absolutely need exemplary growth to make those lives better off.

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

#36

Post by ahsanhilal »

nirvana wrote: post #29
ahsanhilal wrote: post #15

Basic economics tells you that this is not a good growth strategy to adopt especially if you have a consumption-based economy, and not savings-based one (aka China, India). In short population is going to increase over time, resources are going to decrease over time, in order to keep GDP per capita in line with an increasing population, you cannot just decrease your spending (or tighten your belt). You have to grow b…

I'm sorry, that's not "basic economics". That's neo-keynesian economics. (They call themselves keynesians, but they aren't following what keynes said.) The word "capitalism" comes from the word Capital. You accumulate capitals so that you can invest it in productive assets. You could blow your money on a consumptive lifestyle, as you advocate. Or you could save that money, and use it to start a business. Notice, your…

Ok let's all save money and try to be entrepreneurs, is that what you are advocating? Lets see, in your economy we are going to have a lot of producers, but who is going to consume these products if people are saving. Now if you say China does it, then I would answer back that China does it because it has the US and Europe as huge consumption bases for its produced goods.

You are trying to give me an economics lesson, I actually have an advanced degree in economics, and I know every economics model there is in and out. Your talking about producing things somehow making lives better by increasing productivity, and then everyone lives happily ever after. I dont what kool aid your drinking but I can share with you a hundred papers which repudiate what you are saying.

Next time you want to argue regarding economics, please argue with actual theoretical knowledge rather than some flimsy theoretical base that you have created in your own mind.

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

#37

Post by rorrr »

scarmig wrote: post #32
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…

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.

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

#38

Post by munin »

potatolicious wrote: post #31
erejacob wrote: post #11

Earlier quoted context omitted.

I like living in the US. We bought our home in cash. Our home is currently an RV---bear with me here. The cost of it was $16k. We pay a combined $6000/year in rent (half of which is my half). You need $200k in investments to support such a cash flow (which I have). So the total cost or asset base or our current living situation is about $216,000 (not counting repairs which I can mostly do myself). We're seriously thi…

What rorrr said, but not in quite such an inflammatory tone. I think it's great that you've found a lifestyle you enjoy that also allows you to get by with very little money. What I take issue with is your judgmental tone in the article - as if there's something wrong with everyone else for not wanting to live in an RV. This country faces a dire economic crisis, and there is no doubt that the income of the middle cla…

especially when your lifestyle was enabled (albeit, in this specific instance), apparently, by public spending (grad school, postdoc, and subsidized higher education in his country of origin)

you're effectively a net neutral on the system, however, when you factor in all that society has invested in you, you're very much a net negative.

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

#39

Post by learc83 »

potatolicious wrote: post #27
erejacob wrote: post #13

Earlier quoted context omitted.

I am aware of inflation. I did not intentionally imply anything about CPI. I was referring to the old generations attitude of "make it do or do without" compared to the current attitude of "just charge it on the card".

Both are straw men that represent the extremity of a population. There's a bit of rose-tinted glasses going on here, isn't there? I don't particular buy into this notion that the previous generation was oh so virtuous, while this one is just daft as a brick.

Well they existed before the concept of easy credit, so it's not really a matter of them being more self disciplined--just sort of the way things were. For most people, you saved up and paid cash for everything b/c that was the only option.
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