no way up

To leave, or not to leave, that is the question: Whether tis bolder in the mind to suffer the pains and sorrows of squandered fortune, or to take alms across a sea of bubbles and by disposing elude them? To sigh, to weep, no more; and by escape we may portend the rejections and thousand humiliations that futile applications dare: tis a consolation devoutly to be missed. To lie, to cheat; to steel a chance to dream, aye there's the rub: For in that life in exile what joys may come, as undiscovered country to those not born, whence no one may return until their day of jubilee. Thus social conscience indentures us all, and the firmly tendered yearend resolution is puzzled o'er by a veiled cast of doubt, when aspirations to glorious achievement, return as dust of diminished expectation, to vex and spurn their sole attraction. Be all my youthful dreams remembered.

from: [name withheld]
to: jacob@earlyretirementextreme.com
date: Sat, Feb 19, 2011 at 12:26 PM
subject: idea for post

Jacob, if you are still in the market for ideas (ref your 05Nov2009 post), I believe I have one that I haven't seen in my recently initiated web surfing research into the after-life (work life that is). I'm by no means certain that this is a new idea, only that in my limited reading I haven't seen it.

This idea I'm calling the "retirement rainbow" which I envision to be a simple planning tool. My perception is that retirement planning can be a difficult sell because it rapidly devolves into a mathematical exercise and we all know "math is hard", unfortunately especially for those who need it most. If we can simplify some of the decision process with pictures, I think we can get a wider audience to take interest, and hopefully make decisions that will benefit their future.

Your site has carried several posts regarding the "how much is enough" question and of course the answer depends on many variables. In this rainbow I've boiled it down to just two-- namely retirement location and living standard. In the attached figure, the columns are net investable assets (excluding primary residence) expressed in US dollars at present value. The rows are a description of living location-- for example you and I currently live in the top row, and you and I once lived in the middle row. The third row "AP/EZ" refers to Anglophone/Eurozone, which we exclude because this arena overlaps with the first two rows. The concept of non-AP/EZ is for low-cost alternatives such as South America and Southeast Asia. Finally the third dimension is cell color which along with the cryptic abbreviations is used to denote living standard-- starting from the upper left these are "early retirement extreme" in red, "beer & pretzels" in orange, "steak & wine" in yellow, "champagne & caviar" in blue, and finally "lifestyles of the rich and famous" in green. Note this refers to living standard very specifically, and not to happiness or fulfillment, which we both know are only marginally related.

The way to use this board is that once you select two items, the third is fixed. Which two are selected may depend on constraints or tastes unique to the individual or couple. For example if your pension has maxed out, or if you are fluent in Spanish and want to make wine in Uruguay, these could focus your choices. On the other hand fresh graduates who have just recently started working may be open to any cell. This could also be a useful exercise for dating couples who are getting serious and wondering about life compatibility-- if they both aspire to the same target cell, then this is probably a sign of a harmonious long-term future together. As a follow up to this rainbow, once the column is decided, we can probably come up with a stacked graph that shows how much annual savings need to be set aside depending upon current and target position, rate of return, and time horizon.

Another area where this matrix could be very useful is getting real-life essays written by people who sit in each of the nine cells, what their day to day living is like, how they feel about it, what mistakes they've made, and pleasant surprises along the way. This sharing of experience could be of enormous value to those who are sitting on the fence (like me) and who need to have an idea of what it'll be like before jumping in. The benefit of having separate cells is that we can save effort by focusing on those that occupy the same target. And for the younger crowd who are completely up in the air, they can read these stories and maybe they will come to realize that certain cells can be excluded, which will help direct their preparations.

Anyway if this concept can be useful to you, please feel free to run with it, only you will have to do your own research with respect to its originality. I also request that you not use my real name in any connection with this material. My motivation is that I would like to see this idea developed, but I do not have the time or talent to pursue it.

Sincerely, [name withheld]

P.S. some of the acronyms I did steal from an article I read in the WSJ maybe 20 years ago-- these would be for B&P, S&W, and C&C. In that article these terms were attached to specific dollar figures and there was no adjustment for location, which I view as a serious shortcoming. This plus I think the dollar figures they came up with were highly inflated (to keep the minions locked in the ratrace far longer than necessary, I'm sure;)

below is the icon version--

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