I’m not going to tell you that my current income is 33.6% less than what my pre-retirement income was. That’s what most other financial retirement bloggers do. Unless you know the actual numbers of what their pre-retirement income was, you have learned absolutely nothing. I’m also not going to tell you I saved 5% of my gross income over my working lifetime, or 10% or 20% or 50%. Again, if you don’t know the base-line figure amounts, you know absolutely nothing.
I’m not going to give you percentages of dollar cost averages. I’m going to give you the real, honest-to-goodness, actual dollar amounts DH and I are currently living on. Our figures will include one paid-for primary residence home, one paid-for vacation condo in paradise, two paid-for recent model vehicles (one is a luxury SUV and the other is a fuel-efficient mid-sized car), one recent 2017 RV purchase that carries an interest tax-deductible loan ($140 a month), two paid-for 6s iPhones, one food bill ($350 regardless of where we are residing at present) two bills each of: electricity, internet, cable and security as well as primary homeowner’s insurance, condo insurance, RV insurance, DH health insurance, my Medicare additional insurance policy, heating/air conditioning, sanitation. I even have a category thrown in for misc ($25), haircuts ($8), maintenance on the primary home ($75) and travel ($100 per month which carries over to about $1200 a year). Throw in a $272 a month credit card bill that covers two more zero-interest purchases of all brand new appliances for our primary residence and a brand new Apple iMac computer for me to continue with my photography hobby. Oh yes, toss in another zero-interest $48 a month to cover all the new furniture I purchased for my new condo for the next four years.
We can cover all of the above ($2125 per month) quite adequately and comfortably from our passive income. That’s what it costs us to own two homes and two cars and travel around America in our brand new RV.
I’m not finished yet. I didn’t mention property taxes and HOA fees. Those run us about $933 a month which boils down to $2800 per quarter or $11,200 a year, which we withdraw out of our saving accounts. I rather like paying these bills out of our increasing savings account. Any overflow from our passive income goes into savings, as well as future earnings. DH is always hustling for some extra cash. He likes his work income to cover the annual HOA fees and property taxes. So, in essence, we’re really not touching our savings account at all. I don’t consider property taxes and HOA fees part of our day-to-day living expenses.
Granted, if we sold one of our homes we’d have a helluva lot more money in the bank. But neither one of us right now thinks that’s important. What’s the point of having all that money in a bank or invested? Right now, we’re using just about everything we own and enjoying all our assets at the same time. Our annual expenses come to $36,720 and that’s just about right to what DH and I are currently living on. I’ll let you do the math. Our current living expenses comes to around 51% less than what DH and I earned AND lived on before retirement, when both our daughters were living with us at home.
Even if and when you figure that number out, you’ll come to realize DH and I lived on a lot less money together from what one person earns today. Our frugal lifestyle got us through everything. Intact and in my kind of luxury. DH and I have always owned two homes: one primary and one vacation, two cars and two cell phones. And we’ve gone through a few several RVs over our time. Additionally, every winter we took our annual February vacations in paradise.
When you master the fine art of frugality and you know and respect the value of an ordinary dollar, you can accomplish a lot in life.
Live well and prosper, my friend. Live well and prosper.