- Joined
- Nov 23, 2014
- Messages
- 2,607
Hi Erik,
Not adding anything but my perspective as a new retiree (as of today, March 1, 2022). You know your finances better than anyone. This is a judgement-free forum, some may disagree with mortgaging "the farm" to outfit your shop. Hey, it's your money/debt, do as you see fit. Members here have your best interest at heart and will give you their advice.
Some tips toward a happy retirement (from my perspective). My wife and I had all of our debt paid off (house payment) 12 years ago. We didn't want to owe anyone anything before we even considered retiring. When paying off debt, tackle the one with the biggest interest rate first, then work down the line.
We also saved with a plan to retire with the same income we had during our working time. Mostly bragging at this point, but Fidelity tells me that if my 401K averages a gain of 2.5% a year, we can live on a pay raise of about 15% over what we were making while working. That's sustainable until I hit 93.
So how did we get there? For starters, we never put ourselves in a position of having credit card debt. Something about getting 0.25% interest on money saved at the bank vs. them charging 20+% for the "privilege" of borrowing money from them via plastic just irked me. We'd save up the money for the purchase and pay cash. We figured if we didn't already have it, we really didn't need it right away. However, if that's the route you chose, no problem. There is some value in getting what you want when you want it, that's why we work. It doesn't have to pay off or make sense if that's what you want.
Case in point for us is my wife has been talking about putting in solar panels for years. Her concern is I cut about 8 full cords of firewood a year to supplement our propane furnace (cuts our propane use in half). At 62 I can still handle the work. At 72 or 82, maybe not. We put in a geothermal "pump and dump" system last year ($15K) as an alternative to wood/propane. The cooling cycle makes perfect sense to me (more efficient) as it cools compressed freon with 55 F water instead of 90+ degree air. That lets the system run on a 15 A/220 V breaker (much smaller compressor because of the massive increase in efficiency) instead of a 40A/ 220V. However, the heating cycle doesn't make sense though the jury is still out. It's basically a refrigerator; compress the freon, and blow air over the coils to make heat. It made our electric bills go from ~$125 a month to >$350 or about $225 to heat the house in the winter. We've been going through 3 tanks of propane a year at about $1500. Our propane usage will probably drop to maybe one fill a year (hot water heater) so saving $1000 in propane at the cost of around $1000 in electricity (?, will tally the total at the end of the heating season). It does give us the option of heating with propane or electricity depending on the cost of the energy. If propane goes up to $4 a gallon, easy call and we'll pump and dump. Electricity goes up to $0.25 kW hour, we'll go back to the propane.
Long story longer, we're putting in a Power Home Solar (you've probably seen the ads with Jayson Waller) system. We're paying cash to get a 10% discount ($72K instead of $80K). They project our current average electric bill to be $175 a month throughout the year. They predict our bill will drop to an average of $45 a month with the system in place. That'll save us ~$1560 a year in electric bills (assuming their math is correct), but at a cost of $72,000. Payback assuming no interest on our $72K in the bank is 46 years. Of course there are many variables that'll throw the projections off like the current cost of electricity ($0.13 per kW hour for us currently). Does it make sense, ABSOLUTELY not! But my wife is passionate about the environment, we have the money, so we're doing it even though the math doesn't make sense. It's not taking any food off the table, not keeping us from doing any travelling, etc. It's our money and we'll spend it wherever/however we want (thank you very much)!
You obviously enjoy your shop and members here love seeing your projects. We wish you all the best with your place of work, it's a 4-letter word for good reason! But life is not all about work and saving money for the future. You have to enjoy yourself too! We just don't want to see you fall into the high-interest, gotta have it now trap.
Just my $0.02!
Bruce
Not adding anything but my perspective as a new retiree (as of today, March 1, 2022). You know your finances better than anyone. This is a judgement-free forum, some may disagree with mortgaging "the farm" to outfit your shop. Hey, it's your money/debt, do as you see fit. Members here have your best interest at heart and will give you their advice.
Some tips toward a happy retirement (from my perspective). My wife and I had all of our debt paid off (house payment) 12 years ago. We didn't want to owe anyone anything before we even considered retiring. When paying off debt, tackle the one with the biggest interest rate first, then work down the line.
We also saved with a plan to retire with the same income we had during our working time. Mostly bragging at this point, but Fidelity tells me that if my 401K averages a gain of 2.5% a year, we can live on a pay raise of about 15% over what we were making while working. That's sustainable until I hit 93.
So how did we get there? For starters, we never put ourselves in a position of having credit card debt. Something about getting 0.25% interest on money saved at the bank vs. them charging 20+% for the "privilege" of borrowing money from them via plastic just irked me. We'd save up the money for the purchase and pay cash. We figured if we didn't already have it, we really didn't need it right away. However, if that's the route you chose, no problem. There is some value in getting what you want when you want it, that's why we work. It doesn't have to pay off or make sense if that's what you want.
Case in point for us is my wife has been talking about putting in solar panels for years. Her concern is I cut about 8 full cords of firewood a year to supplement our propane furnace (cuts our propane use in half). At 62 I can still handle the work. At 72 or 82, maybe not. We put in a geothermal "pump and dump" system last year ($15K) as an alternative to wood/propane. The cooling cycle makes perfect sense to me (more efficient) as it cools compressed freon with 55 F water instead of 90+ degree air. That lets the system run on a 15 A/220 V breaker (much smaller compressor because of the massive increase in efficiency) instead of a 40A/ 220V. However, the heating cycle doesn't make sense though the jury is still out. It's basically a refrigerator; compress the freon, and blow air over the coils to make heat. It made our electric bills go from ~$125 a month to >$350 or about $225 to heat the house in the winter. We've been going through 3 tanks of propane a year at about $1500. Our propane usage will probably drop to maybe one fill a year (hot water heater) so saving $1000 in propane at the cost of around $1000 in electricity (?, will tally the total at the end of the heating season). It does give us the option of heating with propane or electricity depending on the cost of the energy. If propane goes up to $4 a gallon, easy call and we'll pump and dump. Electricity goes up to $0.25 kW hour, we'll go back to the propane.
Long story longer, we're putting in a Power Home Solar (you've probably seen the ads with Jayson Waller) system. We're paying cash to get a 10% discount ($72K instead of $80K). They project our current average electric bill to be $175 a month throughout the year. They predict our bill will drop to an average of $45 a month with the system in place. That'll save us ~$1560 a year in electric bills (assuming their math is correct), but at a cost of $72,000. Payback assuming no interest on our $72K in the bank is 46 years. Of course there are many variables that'll throw the projections off like the current cost of electricity ($0.13 per kW hour for us currently). Does it make sense, ABSOLUTELY not! But my wife is passionate about the environment, we have the money, so we're doing it even though the math doesn't make sense. It's not taking any food off the table, not keeping us from doing any travelling, etc. It's our money and we'll spend it wherever/however we want (thank you very much)!
You obviously enjoy your shop and members here love seeing your projects. We wish you all the best with your place of work, it's a 4-letter word for good reason! But life is not all about work and saving money for the future. You have to enjoy yourself too! We just don't want to see you fall into the high-interest, gotta have it now trap.
Just my $0.02!
Bruce
