Quote:
Originally Posted by ocean.jedi
Otherwise, income driving spending is not going to work in a down market. |
Not sure who you are responding to, but in theory you’ve already planned for that, and don’t decrease spending as the ups and downs average out over time.
But, assume an historic event, ala the crash of 29, then yes, I’d decrease spending because even though I’ve 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, “deals” 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.
It’s 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 don’t Retire, certainly not early
Retirement.
Those that do and regularly spend over the planned amount I assume go back to work at some time.
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