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Poll: How long could you survive without income?
218 points by jacquesm on Oct 8, 2014 | hide | past | favorite | 144 comments
Hello HN. I've been spending the last couple of weeks reading as much as I can on figuring out the right balance between what remains of my life (I'm very close to 50) and how much money I should save up. I have been self employed for the vast majority of my career and have always aimed at providing for my own pension rather than to have some external party take care of that (because I don't like to give that kind of control to institutions that I really do not trust and that lack transparency).

So I've been saving like a squirrel over the years and even though it's been adding up nicely I never could shake the feeling that it wasn't enough. I also do not have a disability insurance (it is absolutely un-affordable where I live).

Suppose all your income streams related to work would dry up tomorrow and you'd be stuck with withdrawing from savings or living off the interest / dividends of your money or investments (technically of course also a source of income), how long could you survive?

(reminder that a vote in the poll is not a vote for the poll!)

between one and 5 years
457 points
three months
303 points
a year
254 points
less than a month
169 points
a month
115 points
between 5 and 10 years
73 points
forever barring economic disasters or TEOTWAKI
55 points
between 10 and 20 years
50 points
between 20 and 30 years
18 points



I am both a recovering alcoholic (hit 90 days sober last month) and am getting moderately severe mental illness (depression and psychosis) under control with medication. I have done degrees in pure math and CS and have worked as a dev at places like AWS, startups and big enterprise software companies for about a decade.

My finances are disastrous. Irrational spending under the influence of both addiction and mental illness has led me down the path of serious debt. My major project over the next few years will be staying healthy and sober and rebuilding my savings.

Life pro tip: if you think you are having problems with either substances or irrational behaviour, tell somebody.

EDIT: typos galore!


First, congratulations on your sobriety, and on getting your mental illness under control. My stepfather battles both and it's not easy at all.

A lot of people dismiss it because of its religious overtones, but Dave Ramsey's financial advice is generally very good. He advocates an asset based, zero balance budget technique designed to get you weaned off of credit and within a few years, you'll have a stable nest egg and a good platform to build a retirement savings portfolio, not to mention a paid-for car and house in some situations (that's where we'll be in the next few years, the cars will be paid off this year and we just started the program a year ago). It's too much to go into in depth here, but I'd recommend getting his Financial Peace books as a start.


Thanks Morgan! It has not been easy as you say, but it certainly beats the alternative. :)

I've had a quick look at the book you recommended and it's gone on my "to read" list. I'd like to think that I've gotten rather good at ignoring religious overtones with my time spent in Alcoholics Anonymous.


> I'd like to think that I've gotten rather good at ignoring religious overtones...

And honestly, it's not that bad; as usual, the biggest critics are the people who haven't actually read his books and just make assumptions instead. He even says in some of his videotaped seminars that if you're not religious, instead of tithing to your church you should donate the same amount to your favorite charity.


Very similar to Ramsey's advice (as I understand it), I use and love YNAB, which encourages zero-balance budgeting and a month of "buffer", which boils down to paying this month's income into next month's budget. There are no religious overtones as far as I can tell. It is designed for people working their way out from under debt (especially from credit cards), but it's very useful outside that use case as well!


YNAB is nice for targeting savings goals as well, not just to get out of debt. Longterm goals like buying a house or car? Set a category for it and every month allocate $xxx to it. Have an upcoming trip? Create a category for it (Wedding in GA) with subcategories like hotel, clothing (purchasing, renting, cleaning, altering, it's a catchall), fuel, gift, misc. Let's say (real example) I have a 4 hour drive, in my car that's 1 tank of gas for there and back, about $40, call it $50 to be safe. I allocate $5/month to the fuel category for this trip. Now when I take the trip in November I don't have to find $50, it's already been "spent" in my allocations. And at the end of the trip I can take my savings (if any) and push it into other categories (a general trip fund, an extra dinner out that month, whatever). Then you just hide the "Wedding in GA" category and the spending is still there and tracked for historical purposes, but you don't see it again.


Actually, its medium-to-long-term savings goal functionality is the only thing I don't like about YNAB. It's good for the sort of "save $5/month for something that will eventually cost an indeterminate amount of money" use case, but not as good for the "I want to have exactly $X saved at exactly Y date, a single time", like for a car or house down payment. To do that, you have to manually figure out X / (Y - NOW) / 12, and then make sure to carry it forward each month, and cancel it after the time comes.

Hardly a death knell, but I think it could do better to encourage closed-ended known-amount savings than it does!


It could be easier, but it is an opinionated piece of software. Their main focus is budgeting one month out (this and next month). However, for calculating the amount to allocate each month for a longterm goal they do have a convenient tool. Once you enter a value (say $4800 for easy math), type '/12<enter>' and it'll replace $4800 with $400. Then once you have income to start budgeting next month you can copy that over.


Yeah, don't get me wrong, it isn't hard to do at all, and I think it reflects their focus on people living month-to-month, that just isn't me. I love that it is opinionated and that its opinions are so universally good, it's just one style of saving I wish were better encouraged by the interface.


Dave Ramsey's system is a great starting point.

It's not the most efficient thing out there, but it's psychologically effective -- designed to make small steps that build on each other. You can often do things more efficiently, but the other side of that coin is that it's a lot less efficient if you get discouraged and stop working toward financial stability. So he has you take little steps -- control spending, create a buffer to prevent new debts from forming, pay off small debts, use the boost in cash flow from getting rid of each debt to pay more on the next, and eventually own your house, car, and some long-term investments. (I apologize if I've gotten things out of order or misrepresented anything in his system; it's been a while since I've looked at it.)


> pay off small debts, use the boost in cash flow from getting rid of each debt to pay more on the next

http://unbury.me/

I believe this was posted here months ago, but this is helpful for examining different options of clearing out a set of debts. Helps with considering the option of paying off highest interest versus lowest balance. The former likely saves money, but the latter can help psychologically. (Ah! I'm finally free of that $1k @ 3% car loan, now I can focus on that $8k @ 16% CC debt!)


First off, congratulations, that's a pretty deep hole you've dug yourself out of. Where are you located?


Thanks Jacques! It's nice to hear from you, I've enjoyed your writing over the years.

I've spent most of my life in Vancouver BC. I've recently relocated to California to work for a startup.


If you ever make it to Europe consider yourself invited.


Well, this is a bit difficult because I'm not sure whether or not you're talking about maintaining your current standard of living or not.

For example, I have enough in my savings account to maintain my current standard of living for 6 months. I have enough in an investment account to maintain another 6 months after that. So I answered 1 year.

However, I live in an apartment in Manhattan and pay $2400 a month in rent. If I were seriously hard up and didn't see any good prospects for finding employment in the future, I could move to Oklahoma or Nebraska or somewhere super cheap and find a place for less than $600 a month, which would extend my savings at least another 6 months (depending on when I decided to make the move).

I'm also 20 years younger than you and have only recently started investing (in the last 5 years).

Looking at my own retirement plans, it's estimated that I'll need about $1.8 million in savings to retire the way I want. For most people, the number seems to be between $1-2 million. So if you're wondering if you've saved enough for retirement, I'd judge it by those numbers.

Also, at your age, I'd suggest talking to an actual professional that can help you plan for retirement. Companies like Fidelity have people who can help you compare how much money you have to how much money you'll need, and also help you figure out how much money you'll need based on your expected lifestyle.


Obligatory: Mr. Money Mustache[1] is a software engineer that retired on $800k, so it's possible to retire on less than $1M.

The investment rule he cites is that if you have 20x your annual expenses saved, you can live indefinitely off of the interest adjusting for inflation.

1. http://www.mrmoneymustache.com/


Probably going to get downvoted, but I am in Manhattan too, we should meet up sometime!


I am in nyc as well! Hit me up if you like - qbix.com/about has my email


I'm going to recommend you head over to https://www.reddit.com/r/personalfinance and https://www.reddit.com/r/financialindependence.

Emergency savings to live on should be 6 months to 1 year, depending on how easy it is for you to find work, and for retirement/voluntary reduction in hours worked, you'll want to plan on having saved up enough that you can draw 4% of the retirement savings every year; at that burn rate that should last until death.

Don't discount social security if you're entitled to it. You may not receive full benefits, but you will receive something. I suggest http://www.ssa.gov, calculating your benefit, and then reducing it by 25%. That takes into account the chance that Congress won't top of the SS trust fund with general tax revenue when the trust fund is exhausted.


r/personalfinance is useful but maybe a little too starter and repetitive for op's stage. r/financialindependence is better but not that active. I'd recommend bogleheads.org where a large portion of the community is approaching or in retirement and also the mrmoneymustache forums for frugality/advice on making the money last.


Hmm I could live a year off my savings, but shouldn't you be insured? If I lose my job tomorrow I get 3500 USD/month for a year. I pay 10 USD/month for this insurance. (Backed by the government). Don't you normally do it like this in the US? Where I live all people get an insurance like this. Or is this pretty much the same as social security?


U.S. has it.

State Unemployment Insurance

http://workforcesecurity.doleta.gov/unemploy/uifactsheet.asp


Yes, but I believe it really only applies to actual employees (W-2 employees in the US), not contractors. If your contract ends or is cancelled and you can't find anything else, Unemployment Insurance isn't going to help you.


> I pay 10 USD/month for this insurance

In EU it can be easily 1000 USD/month. Compulsory!


Why does SSA.gov need a bunch of personal information, then ask how much you made last year and base its estimate entirely on that single number?


The SSA (Social Security Administration) is concerned about the quality of their records, and in general want you to double check them against what you think is correct.


It receives your earnings information from the IRS, as your benefit is determined by credits earned, which is determined by your income during set periods of time.


That depends on what you're counting. Do I include 401k/IRA accounts even though I'm not able to access those easily for another 25 years?

When we turned 30, my wife and I had 10+ years of expenses saved up in accessible form -- specifically because we had plans to buy a house and wanted liquid cash for when the bubble burst (my friend Tim Ellis ran the popular "Seattle Bubble" real estate blog, which gave us a heads up about that.) We actually did buy the house -- we paid cash to my parents to move them into a new and completely paid off place, and took over their older, larger, less wheelchair-friendly house. But that killed our flexibility; we're down to a year and a half of expenses in easily available form. On the plus side, our post-tax income is over 4 times our baseline expenses, so now that the singularly expensive house-buying event has passed we can go back to saving.

There's an additional ~15 years of expenses in retirement accounts. We should hit age 40 in pretty good shape -- a paid off house and a couple decades of runway.


You're doing this very smart, kudos!


Thanks!

You may have seen my comments in other HN discussions about living in lower cost of living cities that still have decent tech scenes. Consider this exhibit A: the fully customized wheelchair-accessible 1600 sq.ft. condo I bought for my parents (in trade for their house) didn't break six figures. My sister bought a smaller condo in the same complex for under $40k. Literally, buying outright in their neighborhood is comparable to paying rent for a year or two on similar places in or near SF.

You can live a lot more luxurious than they do and still come out way ahead financially, and be ready to retire at 45 or 50, making an ordinary developer salary and not taking any unusual risks. You can make low six figures in Colorado or Texas or Georgia, pay off your house in 5 years, and have a family living on 25% of your take-home pay from there on out. It's not the right choice for everyone, but it's the right choice for some people -- find a place you love to live with low expenses, and you create a lot of flexibility and open up a lot of possibilities you wouldn't otherwise have.


> You can live a lot more luxurious than they do and still come out way ahead financially, and be ready to retire at 45 or 50, making an ordinary developer salary and not taking any unusual risks. You can make low six figures in Colorado or Texas or Georgia, pay off your house in 5 years, and have a family living on 25% of your take-home pay from there on out. It's not the right choice for everyone, but it's the right choice for some people -- find a place you love to live with low expenses, and you create a lot of flexibility and open up a lot of possibilities you wouldn't otherwise have.

I can't second this enough. I'm moving from Chicago (high cost of living) to Tampa, FL. Real estate is roughly 40% cheaper, and I can work remotely, paying off our new place in 3-5 years (we're ~30). It'll allow me to spend a lot more time with kids we plan on having soon.


Daniel Suelo renounced money in 2000, left his last $30 in a phone booth and walked into the desert to start a new life in Moab, Utah.

On his blog Suelo describes his philosophy: I don't use or accept money or conscious barter - don't take food stamps or other government dole.

My philosophy is to use only what is freely given or discarded and what is already present and already running (whether or not I existed).

As well as quitting cash, he threw away his passport and driving license and changed his legal name, Shellabarger, to Suelo, Spanish for soil.

Ever since then Suelo has lived outdoors, camped in the wilderness, lived in caves, stayed in communes and spent nights in stranger’s homes.

http://factlets.info/Suelo


One of the questions I always ask with endeavours like that is 'does it scale'.

If everybody adopted this then pretty soon there would be no more roads, no more people to discard anything and so on. So even though I think this is quite the statement against consumerism I don't think it survives the 'does it scale' test.

It's similar to how people in the UK live in 'eco-villages' that live of the discards of the rest of the society around them.


My understanding is that his goal is to show consumerism is overblown. He does so by taking it to extremes. You need one for such causes (like stallman who takes a completely overblown stance by not using anything non-free). And not that his way of life is what everyone should follow.


I don't think Stallmans stance is all that overblown. And his would definitely scale.


How? If everything were free, you hit the same problem that you're not investing into things like infrastructure.


"Free as in freedom".


Definatly. All aboard the rape/pillage/murdertrain -_-


Which part would scale best: the sleeping in the office part? Or the not necessarily bathing (too often) part?


Attack the ideas and not the person, the sleeping in the office and bathing thing has been beaten to death many times over and has very little to do with the open source ideas that Stallman has been relentlessly promoting. Effectively he's given up a normal life in order to do this promotion. You could for the same money laugh hard at the military, monks and anybody else that has given up the comforts of regular life in order to commit to a life of service (whether or not I agree with any of those is besides the point, it's just that once you decide your vocation matters more than you do that luxuries cease to matter).

Stallmans ideas are very much worth all our attention and his service has brought us as an industry enormous benefits.


My intuition is that if you really universalized this, everything is discarded and the idea of ownership would have to change.

How would pragmatically work, I don't know (probably terribly), but a maxim in which everyone suddenly stopped owning things beyond personal possessions at the same time took up an overriding ethical system which privileged ecology at least initially seems to be univeralizible.

At least, it seems to "scale" better than "I will declare this land as mine to own and control even when I don't actively use it", which is one of our current maxims.


I'm currently reading The Dispossessed by Ursula LeGuin and it's a very interesting contrast between a society of ownership and one of no ownership.


Daniel Suelo sounds like he has given up a consumerist lifestyle with the limitation that he doesn't have any assets, such as a car or house or bulky belongings.

I doubt that he would be able to work in a computer related industry at all, even if someone gave him a computer with free electricity and internet.


Mr Money Mustache has a great take on this:

http://www.mrmoneymustache.com/2012/01/13/the-shockingly-sim...

Simple rule of thumb: 25x your yearly expenses is enough to live off your savings.


Yikes, that's about twice my calculations. Mr. Money Mustache must not be earning very much on his investments.


25x is another way of stating the commonly-cited 4% Safe Withdrawal Rate. It wasn't invented by MMM, it's from the well-researched Trinity Study[1].

If you're planning on a higher withdrawal rate you're probably heading for trouble. One big market downturn and you'll end up eating so much capital that you won't be able to recover. It's sort of like playing blackjack without a sufficiently large bankroll - if you hit one bad run of luck you're done even if you should've won according to the averages. A good way of visualizing this is playing with numbers at FireCalc[2].

[1] - http://en.wikipedia.org/wiki/Trinity_study [2] - http://www.firecalc.com


Thanks for Firecalc! Saves me from having to build it myself.


If you're ahead of the market for a short time then that's great but it usually means you just simply haven't been running your program long enough to average out the ups and downs. The guy running mr Moneymustache is pretty savvy and has already weathered a couple of fairly bad storms in his personal finances without losing too much speed.

If you're consistently earning on the order of 10% after inflation then you're doing spectacularly well, way better than the 5% that most people assume.

This means you're investing either in a high risk high return asset classes or you have an error in your math somewhere, in that case better be careful!


4% interest is about what one can reliably get through all scenarios. Sure, a hot stock may give you 20% this year; but it could also give -20% next. No one wants to take that much risk.


25x (or 4%) is widely accepted as a safe withdrawal rate for retirement assets. It leaves enough that your investments can still grow over the long term to keep pace with inflation. If your investments have been doing better than that in the short term then bully for you. I wouldn't count on it in the long term however.


Long run return of the US stock market is a tad under 7%, accounting for inflation and dividends. Expecting 8% is unrealistic, although I suppose you could be invested in real estate directly.


I agree that 8% is unrealistic, but it's what many pension plans are using. [1]

The article I linked to (found via a quick Google) discusses using values of 6.25% to 6.75%. But IMO even that is unlikely, because one of the traditional investment pillars for pension funds is "fixed income" aka bonds, and those are way under that. Thirty yr US Treasury paper is just over 3%. A moderately risky company I follow (low investment grade) recently issued thirty year paper for 5.75%. [2]

[1] http://www.foxbusiness.com/economy-policy/2014/04/17/public-... [2] http://www.enscoplc.com/Newsroom/Press-Releases/Press-Releas...


Here's a problem that makes it difficult to answer. I make money off my brain. One way to totally cut off all possible labor income would be a massive stroke. But massive strokes are kinda expensive.

If I don't have a stroke but perma-lose all income (uh, why?), I'm a pretty smart dude and will find ways to live rather cheaply. Can I spend 4 hours a day in my garden and 4 hours a day fishing as long as I don't sell the proceeds for cash? Move the family into mother in law's basement, and go all viking on the wilderness bringing in produce and hunted/fished animals? That might stretch me out quite a bit, like until I have a medical incident or my clothes wear out?

If I do have a stroke, I assure you my uncle-in-law's assisted living facility would drain my savings dry quite a bit quicker at the $8500/month facility he is currently at (actually Alzheimers not stroke, but its the same argument in the end). He will soon be going state aid, then again hes a couple years older than his brothers and sisters who died of unrelated causes, so who knows. But as a young-ish dude my family would go bankrupt in only a couple years, best case perhaps. This is assuming no unpaid medical bills (well, sorry we don't cover that particular thing even through we say we do in writing, and yes that is a valid charge that we do cover but we were hoping to fool you into not noticing and paying that, all stuff the medical industrial complex is famous for).

Worst case I guess would be having a stroke the day after medical insurance expires due to no employement/income stream. Then it would be insta-bankrupcty of course.


Both my parents have had strokes and this is definitely on my mind a lot these days. My mom when she was in her 50's, my dad early 60's. My mom made a near total recovery, fairly incredible given the state she was in at one point.


A few years ago I took 2 years off and drove Alaska->Argentina.

Right now I'm gearing up to drive a 2 year lap of Africa, then Europe->SE Asia, then likely a lap of Australia/NZ.

Should be ~5 years without any income, and my savings will cover it nicely.


That's so cool! Are you blogging about your travels? I'd love to do something like this in the next few years.


totally cool man! Wanna be like you someday


Depends. Am I going to continue on my current standard of living? Then it would be two years. I could go on much longer without a car, some memberships etc., so with a slight reduction in comfort it would raise to about 8 years. Eating cheaper stuff, selling the house, canceling my monthly donations and so on would be a big ouchie, but then it would be a dozens of years.


Is mere survival enough? Or do you mean if I maintain my current standard of living?


Maybe some belt tightening but nothing drastic.


Two years ago, I gave up all of my securities and shiny things to experience life without depending on finance from a moralistic/philosophical point of view from someone who has had the privilege to ignore such. For the last few months, I've been considering changing that as it's getting cold again and I'm losing energy, technology, patience, and motivation to continue, given this depression I'm beginning to fall into. I'm 25, and looking at job postings everywhere, I've become really discouraged by the insane requirements for what I presume, Human Resources, have managed to standardize in some weird way, and the fact that I'm becoming older and less ideal in the managerial sense.

I had thought finding remedial work would help me out whenever I needed cash, and it could still be true, but I didn't realize how insanely closed off the world has become given the openness(lesser so) of the internet. These days, if financially secure, it would be very helpful to have a good $15k in the case something strange consumes your focus for the only way to advance securely is by needlessly consuming. It's lamentable in living without the imposed means of finance means we're going to constantly audition for our existence, but refusing monies is increasingly starting to remind me of few religious themes.


My personal savings pillow is rather large compared to my expenses (20+ years on a good standard), but I would not want to count on it to spend my golden years. Money (even large sums) can be gone really really quick. Every self sustaining elderly person I admire is doing it on renting out paid off property. If you can aquire a couple of houses/flats in your lifetime before you stop working taking care of those alone will let you live really well and also provide for the next generation.


1 day, if you mean having a place to sleep.

I have 30 dollars, and desktop PC and phone I could sell. I'm 25, never had any income.

I live with parents, so they would have to kick me out of the house.


This is oddly relevant to me right now.

I'm a freelancer, and a scare came up yesterday where one of my main income streams was about to dry out... just after going through a summery dry spell and just before the obligatory Christmas dry spell.

So, currently? A month, but considerably less once UK tax time comes in January.

(In case you're wondering, I've got a couple of more smaller income streams sorted, and as of an hour ago it turned out the main one might not be that dry after all.)


I have zero savings. I live on a tight budget. I have just reached the position of being able to save a small amount of money and I'm working on better frugality.

But if my income stopped tomorrow I'd be homeless and hungry real quick.

I used to see recommendations of one fifth of your income for safety and one third of your income for comfort. That was a long time ago so things might be different now.


Depends on what you consider income. I live in a tight-knit community (expats) in a medium sized city in the Philippines and I could get pretty close to cashless living here. But the catch is that I would have to help out friends and local restaurant owners with technical skills. I do some of that and in return I'm often able to eat for free at the restaurants I most enjoy going to. Additionally, I have a lot of retired friends who LOVE to cook and are happy to have someone join them for dinner. If I really needed to, I could probably work out a place to stay as well.

Of course, I couldn't really do any of the above as an actual way of life. One hour of client work is the equivalent of more food than I could eat here PLUS a place to stay. An hour actually working for someone here would be an opportunity cost. There wouldn't be many good client fits here as the income these businesses bring in isn't enough to justify my rates.

I could do it if I had to though!


I think the poll needs an additional an option: "I got the next meal covered…"


That shows you how much I'm out of touch with the world. But I would have discarded the idea had I thought of it thinking that if you're reading this and have a working internet connection that you most likely have at least a little bit of money. I really need to be more inclusive with my thinking, thanks for pointing this out.


I'm very close to 50 also. I'm not a very good saver and have relied on the institutions you don't trust (401K, universal life, mutual funds) to build up my savings. I don't trust them either, but they get a far better return on my money than I could. My bank is very transparent in letting me know that I'm getting less than 0.5% interest. You're a little more than halfway through your working career, unless you retire early. There is still plenty of time to take some of your savings and be a little risky to get greater returns. Even a mediocre, safe, fund will return 5%+ a year over the long haul.


Maybe I should make a followup question, but if you had $1M in cash right now what's the best possible low risk investment you could make, and what would be the actual rate of return?

To ask in another way, is there actually a safe investment right now that can get you that %4 target return?

I think the typical answer is just dump it in a Vanguard index fund. Assume you believe the stock market is going to crash at some point so an index fund is too risky, but civilization will generally survive so gold is also too risky. What other option is there?


I've suffered so much wage theft in southern california tech scene that despite all my skills I wind up with employers telling me to pay myself off a credit card, well after being an engineer in la for 18 years I'm so impoverished I can't get a credit card, in 2012 I literally nearly died from starvation due to severe wage theft. Unlike the bay area engineers in Los Angeles are essentially treated as slaves and disposable labor, as much as the dude standing in front of Home Depot.


> I've suffered so much wage theft...

> ...employers telling me to pay myself off a credit card

That sounds terrible and I've certainly heard the last part of your comment echoed many times before (about the slave labour in tech positions in California) but I'm not understanding the first part about wage theft and paying yourself with a credit card.

I've been in a bad spot where my employer used her credit card to cover payroll and then did immediate layoffs (and I think she put her house against the debt too in case she didn't pay up). Are you talking about that, or a situation where your boss refuses to pay you for labour completed and so you dip into debt on your own with the promise of a (soon) coming payday?

Either way it sounds to me like if you've got a trade (you mention engineers) you should be able to find work online from around the world and not have to work for the employers in LA. Is your job something you can freelance or contract?


I'm really sorry about your experiences as an engineer in LA. I also live in LA and as a sysadmin/network engineer my experiences have been completely different. There are some great companies in LA that do pay well, maybe not as high as in the bay area, but if you're a capable engineer you shouldn't have any problems getting a well paying stable engineering job.


What do you mean by wage theft?


Died of starvation??????? Seriously, No friends or co-workers?????


I find it hard to believe that a majority of respondents could survive between 1 and 5 years. CNN has an article about how 76% of Americans live paycheck to paycheck. Is HN over-repesented in the 24%? (even that remaining 24% might have only two paychecks saved up, so it's still not even close)

http://money.cnn.com/2013/06/24/pf/emergency-savings/


> " Is HN over-repesented in the 24%?"

Very likely. Or at least, people on HN who answered this poll. HN is not a cross-section of American society; HN is a cross-section of hackers, coders, developers, intellectuals, and people with serious curiosity. HN polls also show a median salary approaching 6 figures, which is not normal for the US as a whole. I would not expect HN finances to look like average US finances.

We certainly have people here living paycheck to paycheck, and even some homeless, but HN is not usually a favorite site among those demographics.


Keep in mind it's also not only people from the US responding.


Are we including cashing out a 401k/IRA in these results?


You should add 6 months. Its the commonly suggested minimum.


Yep, I was looking for 6 month as well.


In mid 30s, spending $35k / year, have about $400k saved (of which I made about 25% by hard work and 75% through dumb luck). Mostly saved in a rather randomly picked stock portfolio. I am making more than I spend ATM, but I guess if all income stopped, I could survive... ? Around 13 years?

Not sure if I'm doing this wrong: http://pastebin.com/H18JijjM


Hard to answer. One answer is forever because of some rental houses which bring in $2000 a month profit. Life would be less fun, and things would be tight with 4 kids.

Another answer would be a few months, because the Great Recession kicked the crap out of my savings and investments. Of course if I got to that point I would start selling assets and tightening spending, and thus extend my personal runway. So back to forever.


At my current standard of living: 2-3 years but if I moved somewhere cheap sold my car and doubled down on beans and rice: 5.

Side note:current liquid savings: 16000.


You spend a total of 500 dollars a month and you don't live somewhere cheap?


No I spend ~700 a month but about 100 of that is insurance and gas which is entirely me going to and from work. I live in Austin TX.

But yeah I know some college towns where I could get down to 3-400 a month with out too much deprivation. And I could probably get a grand out of my car.

Which okay is more like 2 and 4 years I guess. Although I'd be due at least some tax return and a couple paychecks+unused vacation if it was me quiting to pursue the great american novel.


Rice, beans, ramen, potatoes, etc. There are many inexpensive foods that can keep you alive. But you have to buy in bulk, i.e. 50 pound bags.

I think you would also want supplements, vitamins, etc.

Plus I think that while your body can theoretically make all the protein it needs from rice and beans, I think you'd also need to have fresh fruits and vegetables in your diet. I certainly wouldn't want to risk it without those. And unless you grew your own, they would probably cost more than the rice and beans.

But you shouldn't need to buy meat, which is comparatively very expensive.


I lived on $1000/month two years ago. My rent right now is $300/month.

My current standard of living, which I blow through money, has me go through $1500/month. I save the rest (which is about the same amount). I have about $13,000 saved but am hesitant to put them in RRSPs (Canadian 401k) because I may need to pull that money for surgery.


> am hesitant to put them in RRSPs (Canadian 401k) because I may need to pull that money for surgery.

Aren't you covered through 'OHIP' or the local equivalent?


Officially yes.

First I need to fill out a huge document in which I state why I need this. Then I wait. The wait time right now is two years to see someone, likely three by the time I get there as it keeps getting longer. Then I have to travel for five hours to a specific facility - there's only one in Ontario - to prove to someone that I need this. Then they'll either have me come back (more wait) to prove again that I need this. Or they'll set-up the surgery - which would then be maybe 3-6 months away.

They're paying a private medical facility to perform the work; if I have the means I could just as well skip the three years and pay for it myself. Or spend a fraction of the cost and do it overseas.

Note that this isn't for all things in Ontario, but is true for gender affirmation surgeries.


Can you post some more details on your situation - location, jobtype etc ?


I'm a software developer in Ontario, Canada. I live with three roommates, which is why rent is cheap. I'm just shy of my thirties.

A few years ago I was looking to get out of my workplace where I also worked as a software developer. They had suffered five years of consecutive lay-offs and the environment had really suffered. Months of job hunting proved fruitless. So I made a return to university hoping to prop up my credentials. That's when I was making $1,000/mo (I was still working my other job - part time hours, full time load.) Fast forward a year, life events made it so I could no longer afford it, and I went back to work full-time.

A year later all the interviews came in. I changed companies, got a huge pay boost, and have been pretty happy since.


I believe I have almost 100EUR on my bank account. My monthly income is less than that.

I've slept outdoors before and I didn't die, although the mosquito noise and sucking came close to frustrating me to death... I've also lived in a monastery with basically zero budget.

So it's hard to say. But I'd survive for quite a while, no doubt.


what do you do????


I study.


8 months off of my bank accounts, then another 4 years 3 months from less liquid non-retirement savings. That's assuming current lifestyle with no vacations or capital purchases like a new computer. Realistically I'd probably move to a cheaper apartment at the end of my lease if I were still unemployed then.


I see references to Dave Ramsey and Mr. Money Mustache (MMM). I would add financialintegrity.org and for the Entrepreneurial type, Robert Kiyosaki's RichDad.

As seems usual to me, the more I read of different approaches to a given task, the more similarities I am able to sift out, what I consider key underlying truths. My wife and I have been following Kiyosaki's recommendations, but we see similar ideas in the other three references above, as well as other sources of financial management.

We are accumulating cash-flowing assets, while maintaining a service business for basic income and tax benefits. We hope to retire in 6 more years or so, if all goes well. At that point we will be independently wealthy, which basically means our passive income is greater than our expenses.

Retirement for us just means working on different things and no longer being attached to a financially profitable outcome. I have discovered that I am a perpetual student, so this seems to be one of the few ways I can support that without debt for tuition.


I currently could only hold for 3 months but that's because I invested all of my savings in a company that crashed. I'm slowly rebuilding my savings now...

A word of advice for anyone who wants to start a company, do not go into debt doing it. You'll regret it.


Is there any other (realistic) way of doing it though?

EDIT: I added realistic, as not just anybody can get venture capital or have rich friends/family willing to invest a little.


Is there any other (realistic) way of doing it though?

Yes: go slowly but stay within your means.

Whether this is a good strategy depends on the nature of the business and the people involved with running it.


Organic growth.


Yes, and if you really need investment to grow faster, do not necessarily take it out of your pocket, seek investors, it's important to plan for the potential failure of your startup.

Being broke and in dept, after your startup failed and you closed, it is not a good situation to be in.


Keeping the same standard of living? Am I allowed to move and adhere to government programs?


more than 3 months, less than a year. It would depend on how much warning I had and what time of the year it was. If I was given warning before May I could plant a larger garden than normal and get more livestock so that food would not be an issue. I have enough savings and liquid investments that I could cover other costs comfortably for 9 months.

If my income dried up tomorrow then probably only 3-6 months.

Of course there's always a lot of contingencies in questions like this. In my case I could fall back on trade skills pretty quickly as they are always in demand in my area and thus would have an income of sort though probably less than half of what I make as a developer.


If you're 65(ish), the answer needs to be "the rest of your life."


A little less than 3 years (which is the same amount of time I've been working full-time) if I give up the rent for my apartment and get a single room in the same city (Padua, Italy, for the sake of information).


Used to be about 3 years, but I'm about to put some money into buying a house, so it's back to 1 year or so. Also, I'm not including retirement savings which I'll only get when I'm 67.


Well, if you wanted to retire earlier you could do a roth conversion ladder or Rule 72t.


I'm not sure why you think I live in the US.


Many of my savings are illiquid. The amount of folks on 3 months or less should be very careful. You never know when disaster can hit. (That said, it took me 9 years out of undergrad to get a cushion)


Right now: we could move out of the city and live for decades on our savings.

In a month: most of our savings will have gone into a down payment on a house and we'll have about six months savings.


I've heard the rule of thumb is that a withdrawal rate of 4% is as likely as not to last 30 years, and a withdrawal rate of 3% is likely to last longer than a lifetime.


Survive? As in how long till I would die of impoverishment?


I guess the OP means the time it would take to run out of cash while keeping reasonable monthly expenses ("reasonable" would be slightly lower than they are now for you).


Not very long because I'd be bored and run down from not having any important work to do. Also, social isolation would be a problem.


All he asked was if the income stopped. He didn't suggest not working (important work can yield 0 income too...). Nor did he suggest social isolation.


If it's important someone will pay you for it. This is even more true in today's crowdfunding era with kickstarter and co.


In my case I have a part-time job, and study full-time. Everything I earn just goes to gas and food. There is no savings in my case.


3 months without lifestyle changes. Busy preparing to emigrate though so that buffer is going to get murdered.


I own my house. Does this include selling it or only liquid savings?


For this poll, I'm assuming it means liquid savings, although you could use a reverse mortgage to live off the equity if you had a plan for when the equity was exhausted (use the last of the proceeds to live on a boat 30-40ft in size off a mooring ball somewhere warm, which costs next to nothing).


"proceeds to live on a boat"

As an older guy who was into sailing and boating as a youth, possibly the only positive effect of the hyperinflation in housing prices / "housing bubble" is spending $5000 to install a toilet has gone from an insane outrageous expense to "you got a pretty good deal compared to what home depot wanted to charge". And the permanent long term decline in wealth/income means what used to be "middle class" sailboats are getting really cheap, what with the decline of the middle class. A used 30 footer used to cost about 4 of my dad's new commuter cars in better economic decades, now its less than the cost of my commuter car because the buyer pool is drying up.

The old line about a boat being a hole in the water you throw money into doesn't sound so bad now that houses are an even worse "investment".


A couple of days ago I met a 60-ish year old man who did just that. Sold his house, bought a 30 footer, found a nice place to anchor it along a small (pop. 700) fishing community in the state of Rio (not the big city, somewhere around 100 miles south of it). He used to sail 30 years ago, so he can go out a bit, but uses the boat mainly to live a nice, simple and cheap retirement.


  "proceeds to live on a boat"
This fits you perfectly ;)

Actually, I've been designing my own small cabin[1]; nothing fancy, solar panels, a decent cooker, pellet stove heat etc... And it occurred to me that the thing would fit perfectly atop an old steel work barge. I never thought about living in a houseboat, but considering how little I'd have to spend for land use, it seems like a good idea.

I just need a bit of extra space for supplies and I'm good to go already.

[1] http://eksith.wordpress.com/2014/08/02/cabin-progress/


I'm 31 and my long term plan is to live on a the water on a 40-50ft sailboat. Sure, I'm going to spend at least $100-150K on it between purchase, retrofit, etc, but that's less than the purchase price of most inventory in major metro areas. I can anchor off the coast of most of Florida or SFBA, or pickup and head anywhere in the world. I can even take a tax deduction on the interest as my primary residence.

The economics have definitely shifted in favor of that scenario, something I wouldn't have imagined 10-15 years ago.


What happens if a storm wrecks your boat and you need cancer treatment? These are the things that retirement needs to account for imo. Everyone can live on wellfare and ramen indefinetly, but when the fecal matter hits the rotating air moving device id rather have the cash to stay alive a few more years.


Storms don't wreck boats when you live on them.

Life is more complicated when have contract jobs or live on land, but if you retire on a boat, you simply move out of the way. If you have a couple days warning, hurricanes simply aren't big enough.

Boats are destroyed in hurricanes when the owner is freaking out about his house on land, or frankly, insurance scams. So some hull insurance won't pay out in tropical waters during hurricane season. So don't go there or get a different policy.

You can run into sudden squall issues, that is true.

One thing to think about is it might not be 10% cheaper it might be 75% cheaper. Even if you had to buy a completely new boat every decade because it sank (unlikely), it still might be cheaper than living on some land.


1) Boat insurance (inexpensive)

2) Health insurance (moderate to expensive, depending on my income and available subsidies). Or possibly seeking care in a country with a real (i.e universal) healthcare system. Cuba is in the Caribbean, and fairly accessible by boat.

You can't plan for every scenario; if I have terminal cancer I'd rather die surrounded by family and friends then exhaust my retirement in weeks or months to extend my life <1 year.


I have a friend who is living on a house boat in DC. The marina is on the Potomac downtown. It's at least as cheap as a studio apartment if not cheaper.


Marinas usually charge $500-600/month for a slip (maybe a little more if you live aboard), but there isn't any need to be at a slip if you have a wind generator, diesel generator/engine, or don't require constant shore power and fresh water.


forever barring economic disasters or TEOTWAKI

Bought 5000 bitcoins for ~$5 each. Have 2000 left and sold the rest for $1 million late last year. Live pretty frugally so that should be me.


i've only just got myself back into a position where saving is possible. so only a few months


Probably about six months.


Need a < 1 day option


TEOTWAWKI


Forever. Like Gloria Gaynor.


What is this post doing on HN? This is more appropriate on reddit.


HN subsumes reddit (on hacker topics).


Savings is useless. The idea is to try and outlive your savings. It's a race to dying before you're broke. Real estate investment is the key -- passive income steams, then you don't ever have to worry about money again.


The poll talks about investments as valid sources of income (unrelated to "work"). If this is your case, then you can choose the "forever" answer.


Savings are useless now because interest rates are low. Investment is the key, real estate investment is one type of investment, which carries both high risk and high reward potential. There are many other investment vehicles available, and most people should pursue a diversified portfolio of investments.


Diversified portfolios are the common suggestion of financial gurus, but in the Great Recession I doubt any of them lost less than 25% if they beat inflation beforehand. (That is, they weren't so diversified after all.) I don't put much weight in their recovery since then, given the near-free money available from the gov't.


https://en.wikipedia.org/wiki/Casey_Serin

edit: https://twitter.com/ckserin/status/515172557532975104


I agree with a part of this. I live for today. Although I would have issues if I lost insurance coverage and something happened. Otherwise I figure I'll start saving and planning after I get my pilot's license.




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