Budget Be Damned

[valhalla360]

That's around a 10% annual return...which is consistent with the long term market. If you are only planning to live for more than about 15yr, you do have a real risk in the even of a market downturn. A 20% drop over 2 yr while pulling 10%/yr out and you are at 60% of your original amount and will have a tough time recovering as you are now pulling closer to 18% per year out and ROI will not likely keep up. Plus this doesn't account for inflation.

Of course, you can tighten the belt in down years to compensate to a degree. Personally, I would be more comfortable keeping it around 6-7% annual withdrawals with 2-3yrs of expenses kept out of the market to avoid having to liquidate on a downturn. Plus long term, this covers inflation.

A big question (Assuming US citizen) is when and how much SS you are expecting.

[sailorboy1]

Originally Posted by valhalla360

big question (Assuming US citizen) is when and how much SS you are expecting.

in 4 years a little over $3k/mo

if our 401ks etc stopped making money right now and/or we moved it all to "money" and assuming a 3% inflation rate we get to 0 assets well in our 90s

don't worry about us, that's our job

[chuckr]

As you may or may not know we have been underway 12 years and covered a lot of miles and for the past 10 years have published our costs in this forum. Until last year we have done it on our social security only never dipping into saving.


I guess our question would be you have income of $4k+ and your intended budget is $3k but you are actually spending over $4k. What is wrong with the original budget that you are so far over. What are you spending the money on?

[kmacdonald]

Originally Posted by sailorboy1

guess the thread topic is over and I didn't even have to put it on my ignore list :-)

If I didn't have two strikes and a target on my back we could have a lot of fun with this thread. Oh well, I guess cruising is serious business and not to be taken lightly.

[sailorboy1]

Originally Posted by chuckr

What are you spending the money on?

Fun and ........... the BOAT

Your boat is only 12 years old and mine is 18. I didn’t any “refit” when preparing to cruise. We just left with boat close to as brought used 6 years prior.

[thomm225]

Originally Posted by kmacdonald

If I didn't have two strikes and a target on my back we could have a lot of fun with this thread. Oh well, I guess cruising is serious business and not to be taken lightly.

Yep!

Too bad for you.

I think I'm off probation now!

Btw, here's that Lighthouse aboard NAS Pensacola right in front of the pass that the jogging trail goes by. ICW passes right by it.

There's a range marker right in front of it also for those coming in the pass.

Well, the range marker in the photo is a newer one, and the jogging trail was wood chips back a few years. How time flies

[sailorboy1]

And it drifts off again into some other topic

[sailorboy1]

Originally Posted by chuckr

What is wrong with the original budget that you are so far over. What are you spending the money on?

I looked at my spreadsheet to be sure. The months over budget are all but 1 month related to:

- the Boat! By far the largest budget buster and it isn't always repairs or maintenance as we still are doing "improvements/upgrades" that make boat living nicer and they add up

- Medical/Dental. While this has only hit hard 3 times it adds up to around $5k

- Gifts (christmas and birthdays) as we haven't gone full Scrooge yet

The only other "buster" was the other month when went on vacation and flew to Cancun.

We could mostly still stay on budget if we didn't go out to eat/drink and at same time switched to a beans/rice meal plan with water drinks. I never have said cruising can't be done for less than us, just that this how we spent OUR money.

[Chotu]

Originally Posted by sailorboy1

I realize this was a poorly worded statement and/or it is because I wrote it after being at happy hour.

It has cost us $120,500 plus the lost ROI on that money to cruise the past 2.5 years. But currently we have $10,274 less in assets than we started with.

And that $10k is what actually matters.

You're looking at finances holistically, rather than just looking at the liability side.

There are lessons to be learned here by people who are trying to do the same. It's all about that net worth. That's what most of the people need to understand regarding cruising costs.

[kmacdonald]

It's important not to ride a bear market to the bottom. For example: if you have $100K invested in the market and the market drops 50% you now have $50K. If the market then rises 50% you only have $75K. The market would have to rise 100% to get back to the $100K. Something I'm sure you already know but reminders never hurt.

[valhalla360]

Originally Posted by sailorboy1

in 4 years a little over $3k/mo

if our 401ks etc stopped making money right now and/or we moved it all to "money" and assuming a 3% inflation rate we get to 0 assets well in our 90s

don't worry about us, that's our job

With SS factored in, not nearly as risky as that will replace a large percentage.

[kmacdonald]

Originally Posted by thomm225

Yep!

Too bad for you.

I think I'm off probation now!

There's no light at the end of this tunnel.

[sailorboy1]

someone on the "other forum" asked and it was a good question

My asset $$$$ numbers does not include the boat. I treat the boat financially like some do a mistress, it is a non asset you spend money on.

[gonesail]

when does the price of the boat get factored into your budget formula?

[kmacdonald]

Originally Posted by valhalla360

With SS factored in, not nearly as risky as that will replace a large percentage.

The only reason not to factor in SS is if your retirement savings and income dwarfs SS, unless of course you are one of the believers SS may go away. I'd say at about $4,000,000 in a 401K you could disregard SS without tightening the belt too much.