Originally Posted by ocean.jedi
driving spending is not going to work
in a down market.
Not sure who you are responding to, but in theory youíve already planned for that, and donít decrease spending as the ups and downs average out over time.
But, assume an historic event, ala the crash of 29, then yes, Iíd decrease spending because even though Iíve planned and am covered for that event, my nature is conservative. But you know what, I think my purchasing
power may be the same. When times are real hard, you get more for your money
, ďdealsĒ are more widespread, everything is on sale
What I did I guess was to determine what my assets would provide with a real conservative return, your 4% as an example.
That drove the budget, not the reverse. So far since Retirement
we have stayed within budget, and have had some significant life changing events
to cover, but we have been able to do that because the budget is realistic, and in fact we stay under it every month, so that when that oh crap moment comes, we have a cushion to deal with it.
If you budget X amount of money every month, and spend that amount of money on average every month, yes, there will be a day where you say to heck with the budget, cause unplanned stuff happens, and happens with some regularity.
Itís no different than how you have been living your whole life, most people have a set income when working, that they have to stay within that amount, if they regularly spend all their income, likely before long they will be carrying debt.
Then they not only have to live on less, but have live on an amount that allows them to service
that debt, many chose not to do that, and those donít Retire, certainly not early Retirement
Those that do and regularly spend over the planned amount I assume go back to work at some time.