Petruchio

• PetruchioMay 24, 2013, 12:29 PM

  6 points

  in reply to: someonewrongonthenet’s comment on: Max­i­miz­ing Fi­nan­cial Utility and Frugality

  Two excellent suggestions.

  1) Very good point, and I will be changing the name of this post. I named it Rational Financial Planning Overview as a counter to another discussion post Preparing for a Rational Financial Planning Sequence, the ideas which I disagree with. I did not expect for my post to be taken as well as it has (a very pleasant surprise) so I will be changing the name to more accurately reflect its contents.

  2) I did not think of this, though I should have. Cutting your expenses and saving/​investing the greater majority of your income is applicable in any financial endeavor. I will be adding an edit to this effect.

  Thank you very much.

• PetruchioMay 24, 2013, 1:47 AM

  4 points

  in reply to: gjm’s comment on: Max­i­miz­ing Fi­nan­cial Utility and Frugality

  Like you said, that is a very conservative estimate, but entirely accurate. If we experience a horrible depression which gives me no investment returns for 20 years, I still will be able to retire at age 43.

  The rule of thumb is that you need (Current_Expenses x 25). This is a 4% withdrawal rate, and should last you forever. If you want to go even safer (the Trinity Study suggests that 4% is plenty safe) go with 3% and multiple your expenses by 33.

  Implication: You must save 25 dollars or so for each dollar you spend. So you go out and earn an extra 25 dollars, or figure out how to spend one dollar less.

• PetruchioMay 24, 2013, 1:39 AM

  8 points

  in reply to: Lumifer’s comment on: Max­i­miz­ing Fi­nan­cial Utility and Frugality

  Depends. Who I marry will be the biggest determiner of success. If my future spouse is not only on board, but shares the vision for EER, then our combined incomes and shared expenses will actually make things go quicker. If my spouse is uncooperative, then all my effort may very well be for nil. Both ERE and MMM have spouses who not only supported their endeavor, but adopted it themselves. Not surprising, non-consumerist people tend not to group with consumers.

  As for kids, there is also great variation. You will obviously need to save additional money to feed, clothe and care for your children. ERE is childless, but MMM and Mrs. MM decided to first retire then start a family. It worked out pretty good for them; they avoided expensive daycare costs, and their child grew up in a home where both the mother and father were active, full-time caretakers. MMM has several articles about having a child post-EER.

• PetruchioMay 24, 2013, 1:25 AM

  4 points

  in reply to: HungryHippo’s comment on: Max­i­miz­ing Fi­nan­cial Utility and Frugality

  Excellent questions: 1) There has been adjustments, such as cutting out fast foods and eating/​drinking out. Also, I delayed purchasing a new computer by a few months (paid with my tax refund). Also, I am stingy with using my car, and I am more apt to carpooling whenever I do go out (a generally rare occasion). I have cut out alot of impulse purchases. For instance, I would buy a $1 package of gummy worms around four times a week. Gone. Lastly, I pack a lunch for work each day. Nothing too big, just several small habit changes. This lead to aot of excess cash. It became really easy to do these changes since I transferred my cash at the beginning of the month, and forced myself to live on the remainder. All these changes have been for the better, and I have not notice a real decrease in happiness or satisfaction. It would be pretty ridiculous to expect my satisfaction to go down because of less fast food and candy in my life.

  2) I do not know for sure that I will enjoy not working, and I can certainly see having “mini-retirements” of Tim Ferriss. As of current, I do not have any particular attachment to my jobs now. This may change in the future, and I hope it does. Post-retirement, I do not plan on sitting on my butt watching TV, going to the golf course each day, or moving to Florida and sipping alcoholic beverages on the beach. I will have projects to do (I would like to build a house, exercise more frequently, and run a psychology laboratory) and if I receive income for those things, I will be glad to. Most importantly, I hope to have a wife and children one day, and I hope that I will prefer to spend time with them over working.

  3) This is pretty murky. I am currently severely underemployed, and in a recovering economy. I am completing a course in webdesign, then doing another one for programming, and that will translate into new career opportunities. I may move, and have my expenses go up, I will pay my student loans ahead of schedule, and lower my expenses considerably. And I may get into a serious relationship and start a family. That may slow it down, but if my potential spouse shares my vision, we may wait on children and in fact may speed up the timeline to retirement.

  All together, I think my income will outpace my expenses. One of the links above, here, gives a straight forward chart comparing your savings rate to the number of years till you are able to retire (presuming average returns, and living off the interest alone, not touching the principal at all). I am at 65%, putting me at 10.5 years, or 34 years old. I think my expenses will end up increasing in the shorter term, then my income will catch up, before my student loans drop out of my life forever, freeing up another $500 or so a month. My ideal situation would a 75-80% savings rate, allowing me to retire before I’m 30.

  All said I think I will retire by age 35 with 65% confidence, age 30 with 10% confidence and age 40 with 80% confidence. My income prospects in the next year and my spouse are the biggest factors in determining my success.

• PetruchioMay 23, 2013, 5:06 PM

  2 points

  in reply to: Vaniver’s comment on: Max­i­miz­ing Fi­nan­cial Utility and Frugality

  Corrected. Thank you.

• PetruchioMay 23, 2013, 5:00 PM

  12 points

  in reply to: maia’s comment on: Max­i­miz­ing Fi­nan­cial Utility and Frugality

  As a background, I am a 23-year old security guard and janitor. Between the two jobs (total 60 hours a week) I make about $30,000 before taxes. I have been practicing this as of the New Years, so almost 5 months. In this time, I have saved $50 a day, $350 a week. This comes out to approximately 65% of my post tax income. The biggest help to that is that my largest expense is my student loans, followed by rent and transportation (I take the bus for work). I have an investment account with Vanguard, I rarely eat out, I act as the DD when I go out with friends, and I just received my first (though meager) dividend.

  I am currently taking a course in web design, so this will (hopefully) translate into a larger income and speed up the process. At the first Friday of each month, I transfer $350 to Vanguard for each week since my last transfer, and live off the remainder. I have $5,950 in principal and a bit more from dividends and capital gains, which are automatically reinvested.

  So far, I have been doing pretty well for myself, better than many of my peers, and I feel pretty optimistic for future success.

Max­i­miz­ing Fi­nan­cial Utility and Frugality

• PetruchioMay 22, 2013, 5:52 PM

  1 point

  in reply to: Aharon’s comment on: Prepar­ing for a Ra­tional Fi­nan­cial Plan­ning Sequence

  He also spoken about rental real estate, and he has an ongoing experiement with microlending.

• PetruchioMay 22, 2013, 1:49 PM

  0 points

  in reply to: MugaSofer’s comment on: Ed­u­ca­tion con­trol?

  IIRC, when public education was first debated, the arguement was that it would create good citizens. Hence the focus of social studies and history.

  And I concur, the main purpose for school seems put children into a society and let them develop from there. Not that it does its job particularly well, but there you go.

• PetruchioMay 22, 2013, 1:37 PM

  0 points

  in reply to: DanArmak’s comment on: Ed­u­ca­tion con­trol?

  That is very interesting. Why is that?

  [Edit] A quick browse through the list, it seems that western europe has homeschooling with very strong restrictions, while Eastern european nations have it banned totally. Exceptions in eastern europe include Russia (post-1992) and Ukraine.

• PetruchioMay 22, 2013, 1:18 PM

  0 points

  on: [LINK]s: Who says Wat­son is only a nar­row AI?

  Watson sounds cool, but this is a far step from General Artifical Intelligence. But how general is Watson as of now?

• PetruchioMay 22, 2013, 12:35 PM

  9 points

  on: Prepar­ing for a Ra­tional Fi­nan­cial Plan­ning Sequence

  I like the idea, but I think it has been done before on other blogs. Mr. Money Mustache and Early Retirement Extreme come to mind, which were written by a (now) retired software engineer and a physicist, respectively. Their advice may bear repeating, but I do not think I would purchase a book on the subject. There are so many free resources online; it seems financially unwise to spend more on a book.

  But may I ask, who are you, and what are your qualifications to speak on this subject?

• PetruchioMay 22, 2013, 12:24 PM

  0 points

  in reply to: bogdanb’s comment on: [LINK] Soylent crowdfunding

  That was “meat” cultured in a petridish. It is awhile away from being a food replacement. But you are right, this is an exciting time.

• PetruchioMay 22, 2013, 12:17 PM

  0 points

  in reply to: Qiaochu_Yuan’s comment on: [LINK] Soylent crowdfunding

  And right now, this product is in its pre-early adoption stage. There is little need to criticize the product, since the formula will most probably be tweaked and updated after its first public release. Unless there is some question about the utility of the idea, or the capability of the inventor, I think optimism is warranted.

• PetruchioMay 22, 2013, 11:55 AM

  6 points

  in reply to: Eliezer Yudkowsky’s comment on: [LINK] Soylent crowdfunding

  I’m tired of eating, preparing food and cleaing up afterwards.

  And pooping. After saving time and money, this is my biggest hope from soylent.

• PetruchioMay 22, 2013, 11:46 AM

  5 points

  in reply to: Kaj_Sotala’s comment on: [LINK] Soylent crowdfunding

  Not to mention, worst case scenario, if you experience a deficiency, you are still in civilization and may switch back to a normal diet.

• PetruchioMay 22, 2013, 11:41 AM

  0 points

  on: [LINK] Soylent crowdfunding

  The blog referenced is down at this time.

• PetruchioMay 22, 2013, 11:35 AM

  2 points

  in reply to: sanddbox’s comment on: [LINK] Soylent crowdfunding

  Food is good, but not that good. For instance, 95% of the time, I settle for eating something unhealthy and not particularly appetizing, because it is easy and quick to make. If I were cooking for someone else, this may be a different story. When I first read the Odyssey by Homer, my professor told me the Greek behaved as though sharing a meal was a spiritual experience, which is reflected in our culture (dinner dates, family meals, holidays etc.)

  But as I currently do not eat with others on a regular basis, I think it would be of greater utility to go with whole food replacement, and eat with others on rare occasions, provided the cost for food replacement is low enough. Or I can explore new post-food psycho-social opportunities, which should be interesting in of itself.

• PetruchioMay 22, 2013, 11:22 AM

  1 point

  in reply to: Kaj_Sotala’s comment on: [LINK] Soylent crowdfunding

  Hopefully, mass producing Soylent will drive down the price. As of now, it is close, but not cutting it as a total replacement for me. Temporay adoption on the other hand...

• PetruchioMay 17, 2013, 6:28 PM

  0 points

  in reply to: TimS’s comment on: Mo­ral­ity should be Moral

  Straw-man relativism is not catholic (with a lower-case c, but universal would be better). Strict utilitarianism is subjective, and what is applicable in one situation is not universally applicable, and isn’t universal in that way.