I'm one of those oblivious and penurious cheapskate cranks that wants to live more or less forever and spend only portfolio income and then die with way too much unconsidered legacy that will go to the ungrateful and the unaware. You know, an ex South FL girlfriend once even called me a parsimonious tightwad and killjoy. Ok, she didn't really say that exactly and "parsimonious" was not in her stunted vocabulary anyway. (Heh, Sorry X) Also, it turned out she was only miffed because I wasn't pointing a flow of nest egg units towards her (this being So FL and all) but rather towards present-me, future-me and my kids -- what I call my razor's edge path. Another "heh" (sorry again X, my kids and razor's edge trumped your self interest!)
On Twitter this type of cheap, tight-spend behavior is reviled, of course, but the reviling is usually done by 29 year old big-ego dude-naifs that have never done anything of note, never been married, never had kids, never been retired, and are probably making just north of 10k a year by selling an "only 9 left..." self help or lifting program: "dude, you can't save your way to a better life." First: BS on that. Second, we play a different game in decumulation. Mis-match spending, resources, and horizon at your own peril "dude," not mine.
About two years after my divorce, at a time I had consciously decided not to re-enter a career -- in order to maintain continuity of care for young children that had known almost only me for their whole life and who had been ripped out of their home and community so that mom could romance another dude in another state but now with the kids closer...an unknown scenario to any of us other than her, btw -- at a "retirement" age for me that I consider way too young, I finally started to get a sense of my real risk. I then did a very very rapid version of an OODA-loop or a Deming-Cycle of spend cuts. I had been maybe $Nk under water in my P&L and so I proceeded to cut 1/2 of my lifestyle out -- anyone who knows this kind of stuff, knowns that 1/2 is a very very deep cut and pretty painful -- and then I also reconfigured my income profile in an additive and sustainable way that did not make my portfolio risk and future optionality suffer much, if at all. Cut spend, raise income. I am now a turnaround expert.
I thought all this was a pretty bold and deft move at the time. I mean, I did move the needle from -Nk to +Nk or so, something I maintained thereafter (well, I mean, 2021 had some weird stuff happen). But, if I were to have been a consultant, and I used to be, I would have wanted to be paid on that incremental value I created back at the beginning by way of all that cash flow genius (Ok I was a bit of a moron for putting myself in that position in the first place but you get the general point). The usual way to do that is to project the incremental cash flow value created over x future years by the change, discount and price it, and then ask for some money. In this case, if I had projected and discounted the change over, say, 10 or 20 or more years in the future -- I don't remember what the exact value was -- it was something on the order of x figures depending on my assumptions (esp the time in years and the presumption of stability of the increment). Either way, and I know I am not throwing out real numbers here: it was not chump change. Big. Life changing. And the Twitter bros that say you can't create wealth by changing spending can go pound. They have no idea what they are talking about. How I paid myself is next...
I am way better off with my diminished lifestyle now. This is the thing that no one gets. Even I didn't get it at first. I now have less, I need less, my footprint in the world is smaller, my house is smaller and will get smaller yet, relative status is of zero interest anymore, the value I get from life is not from things but from people and ideas and art and kids. My left and right brain might fight for dominion now but my materialist brain has atrophied to a respectable nothing. I found a big fat $x bill in the street, I picked it up, and I made a down payment on the future world I really want to live in.
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