Tag: t_BR]US

$400/M comfy lifestyle ] c++US #S.Liu

Posted on by tiger40490

You wrote

A research found that a sudden setback of your financial situation could be one of the most severe causes of stress (the other top ones are finding yourself in a terminal disease, death of your child, divorce, etc.).

Yeah.. adjusting to a 20% drop in net asset is stressful, detrimental… (What if an earthquake inflicts a 20% drop in most your peers’ net asset? See https://tanbinvest.dreamhosters.com/wp-admin/post.php?post=14830&action=edit.)

In my case, adjusting to lower living standard is no big deal. In 2017-2019 when I worked in U.S. alone, my burn rate was $11,400 over 28 months ($400/M) excluding rentals and transport [+driving practice].

Very comfortable living near huge beautiful parks, abundant yoga classes + gym visits + cinemas, sightseeing trips in NY/NJ, Chinese and Indian restaurants at least once a month in U.S. and Singapore.

Q: What did I sacrifice? How was my spending different from peers?
A: No car (except zipcar), no health insurance, no big home, no repairs, no utilities. My reunion trips to Singapore provided enough vacation + fine dining.

Result? I saved a lot, and became really healthy, almost fighting fit both physically and on coding tests.

On one 16-hour flight I took no nap, and spent half the hours reading c++ and laptop-coding in my tiny seat. 5 years earlier I tried several times but could never achieve the same as it required tremendous mental and physical stamina. So after that 16H trip I knew that I had reached possibly the apex wellness of my life.

During that period, I moved home and stayed in 4 locations, and stayed/worked in 4 cities, and maintained a $400/M burn rate.

Actually I was not extremely vigilant, and probably overspent occasionally on food, cinema,,,

Coming back to your point, iFF indeed I can cope with cashflow constraint, then I would have a lot of built-in flexibility in my career and financial situation.

Q: is my $400/M lifestyle realistic for the average Americans?
A: I think so. Remember the FIRE leading lights like MMM? Fundamental adjustments needed.

Q: as a family of four, how about USD 1600/M burn rate [excluding housing + transport]? Not the focus of this blogpost. My kids may be very different from me. I have an uphill battle to train them up.

BR]US^ cflowPrjn]US^ outlay_figure^ cmcUS

Posted on by tiger40490
  • t_outlay_figure .. covers Singapore, Chn and country-agnostic topics.
  • .. burn-rate and beyond
  • .. Not_suitable for U.S. because there are many other tags/categories for U.S. burn rate.
  • .. If “overcrowded”, then I will pick some frequently reviewed posts for possible untagging, provided they are under cflowPrjn or t_BR]US
  • t_BR]US .. all-encompassing burn rate
  • cflowPrjn … includes any incomes or burn rate, in a projection. Not_suitable for past burn rate analysis in the U.S.
  • t_midClassUS .. is more specific, about middle class

[18]Y I feel ffree !!US cohort despite higher pay #Deepak

Posted on by tiger40490

See also big discretionary spends

Background, by definition, my “peers” all have kids, and working in (financial) IT, often with 2 incomes.

Q: why am I feeling financially free but not the U.S. peers despite their higher income
A: My advantages are 1) burn rate 2) nonwork income
A: For their USD 90k burn rate supported by employee health benefit, at 4% reliable return, they need 2.25M invested.
A: For my SGD 36k burn rate supported by medishield, at 6% rental yield, I only need SGD 600k invested

  • passive income — i.e. the incoming side —
    • my projected real-estate passive incomes add up to S$4k+. Do some of my peers have a similar income? Not sure
    • I think too few of my peers have seriously focused on reliable, consistent passive income
  • burn rate — i.e the outgoing side  —
    1. My burn rate is 20-30% lower than my peers in the same location. For example, during the initial stabilization period after my family comes, my burn rate is possibly 7k, including rent + med bx + car
    2. my actual SGP burn rate of S$4-6k is less than their USD9k, largely due to location difference and childcare. Rural China, Malaysia, India .. would be even lower. I think Rural America is somewhat lower but not sure how much. I can ask some U.S. colleagues
    3. In terms of “minimum” burn rate, I think their average in the U.S. is 2 to 4 times higher than mine in Singapore, largely due to medical, transport and rental cost.
    4. SG citizenship — offers cost advantages in terms of medical, college ..
    5. In the job loss scenario, my confidence about reducing burn rate is not echoed by U.S. peers. Can some of them cut from USD9k to USD5k? I assume yes but none of them shows confidence.
    6. I don’t aim to buy a 700k home or send my kids to private colleges. Free of these burdens.
    7. My minimalist lifestyle is rare among my peers. This lifestyle is not theoretical, but visible in action
    8. my confidence about my household burn rate is rare among my peers

— After the analysis, now a more casual look at peer’s burn rate:

I discussed with grandpa about a huge difference between me and my colleagues’ burn rates.
This difference is rooted in their long-term optimism about their earning growth and stock market returns.

(In contrast, my self-confidence about my salary sustainability is based on IV.)

One thing easy and really useful to do with money matters is break-down analysis.
I can see my younger (and some in 40’s) colleagues spending more than I do on food, rent, mortgage, car, vacations, entertainment, gadgets, kids’ enrichment ..
These are often big-ticket items or creature-comfort spending, and clearly luxury IMO

Many believe food is never a big ticket item, but I think they spend $40/D i.e. $15k/Y vs my 4k/Y.

Q: sometimes I feel I can’t (allow myself to) cut further down below my peers because my family could then feel deprived, but can I?
A: I think I some capacity to ignore the peer pressure and maintain my superior brbr.

— In Sep 2020, I discussed “livelihood pressure” with DeepakCM. I described a fictitious family earning 250k [1] combined. Deepak said after-tax 150k/Y or 12.5k/M.

If they spend 10k/M then Brbr is stressful not comfortable. I feel comfortable brbr is 2.0+ but I guess the typical family is unlikely to save half the income.

Deepak pointed out that immigrants leave their home countries behind, and come to U.S. in search for a better life, so these high-income families would spend to enjoy. Lifestyle creep — a stark contrast to my financial discipline.

Q: If these immigrants are able to “accept/cope with” a simpler life but choose to enjoy a better, more /comfortable/ (actually lavish) life, then why do they complain about livelihood pressure like depicted in 中年男士40-50压力最高@@?
A: It depends on the acceptance — like my carefree acceptance vs reluctant, grudging acceptance. I think exclub and FOMO are fundamental /drivers/ in these high-earning immigrants. They are driven to spend, and driven to endure livelihood pressure. Some are unable to say NoThanks, as I described to my sis.

Q: Are they on cashflow high ground, with their high income?
A: No necessarily.

Q[1]: 250k … what if combined income is 300k? I think by most wealth-management standards that income would put the family in a different league . Indeed, some of my U.S. (I didn’t write “SG”) friends, my ex-classmates, and possibly my sister are in the “wealthy” exclub and not comparable to the rest of us. Their livelihood pressure, their Brbr, their assets are not comparable to mine.