How long can your household maintain its lifestyle if you had zero income?

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justbrowsing_IHB

justbrowsing_IHB

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Lots of interesting polls lately.



Everyone in your household gets fired, no severance package, no unemployment benefits, no welfare. No prospects for employment. Literally, zero income.

For some reason, you still have to keep spending money pre-armageddon style.

How long till you're out of cash?



Savings / monthly burn rate = X number of months



To keep things simple:



1. Savings is cold hard cash only, whether it's under your mattress or FDIC-backed: bank accounts, CDs, money markets. No stocks, bonds, or marking your house/BMW/jewelry to model. Obviously HELOCs and credit card limits do not count. For simplicity, gold doesn't count.



2. Assume your burn rate is unchanged, so use your most recent average monthly negative cash flow. Realistically we would cut back, but we could also move in with parents.
 
Dude!!! it isn?t me? Seriously! I am getting beaten up by tmare, stepping up, no vas, and now from Winex OMG!!! Poor little innocent Panda.
 
[quote author="PANDA" date=1232344273]Poor little innocent Panda.</blockquote>


<img src="http://media.ebaumsworld.com/picture/karatechop/Innocent.png" alt="" />
 
Having been blessed with an extended layoff of close to 12 months after the dotcom crash and a second shorter one recently, I can honestly say I was completely stunned at how little money it took to maintain, if not improve, my quality life when I wasn't supporting a typical 45+ hour week.



My morning commute went from rushing off to work and Starbucks for a scone and mocha to a quiet home brewed coffee and leisurely drive to HB to catch a few waves. Lunch, no more daily $10 runs. No more $1+ sodas from the machine or afternoon stress-out vending run. No more weekly gas ups. No more peak pricing for flights and rooms. Dry cleaning... next to nil. Gadget envy, gone. Seasonal fresh up of the wardrobe? Basically gone. Car envy? Gone. Paid the car off and laughed my way to the beach behind the new cars rushing to work in the morning.



Taxes, gone. Literally, that's 30% off the top effective and literally 50% off at margin. Add in 401K contribution and it's another 10% off the top. No more saving out of the net for retirement/down payment/emergency. It's an emergency. That's another 10-20%. Reward dinners out at Flemings, gone, along with the $200 tab. Having the prime fire pit and take out for sunset? About $20 including the smuggled bottle of wine. Flights, car rentals and rooms to Napa? Nah, take a leisurely drive mid-week...



Honestly, I found myself living on 25% of my former gross and my quality of life went up.
 
My figure is just shy of six years, but I assumed a couple of things. I would collect UI for a year and we would fire the nanny. Wouldn't make a whole lot of sense for two of us to be out of work and still drop $2200 cash on a nanny...
 
[quote author="awgee" date=1232357696]Are you excluding capital gains, royalties, dividends, rents, and interest?</blockquote>
To keep things simple, I meant a grand total of zero income, even interest on savings accounts.



If we all cut back, lived with parents, liquidated 401k's, liquidated anything worth liquidating, got welfare- we'd all last quite a while.

But that's not as fun.
 
[quote author="ipoplaya" date=1232356016]My figure is just shy of six years, but I assumed a couple of things. I would collect UI for a year and we would fire the nanny. Wouldn't make a whole lot of sense for two of us to be out of work and still drop $2200 cash on a nanny...</blockquote>


Your lifestyle would change. Kids are a lot of work. Some days, the real work begins when I get home. Not that I don't enjoy every moment, it's just a little tiring.
 
[quote author="PANDA" date=1232344273]Dude!!! it isn?t me? Seriously! I am getting beaten up by tmare, stepping up, no vas, and now from Winex OMG!!! Poor little innocent Panda.</blockquote>


Sure, we believe you....



<img src="http://i62.photobucket.com/albums/h111/bisquick06/pedo_bear.jpg" alt="" />
 
[quote author="biscuitninja" date=1232363356][quote author="PANDA" date=1232344273]Dude!!! it isn?t me? Seriously! I am getting beaten up by tmare, stepping up, no vas, and now from Winex OMG!!! Poor little innocent Panda.</blockquote>


Sure, we believe you....



<img src="http://i62.photobucket.com/albums/h111/bisquick06/pedo_bear.jpg" alt="" /></blockquote>


Bix, what did i do now to deserve that?
 
Thanks for the responses. I didn't think this poll was too invasive as you'd need to know the numerator and denominator to figure out someone's savings, and even then it's not net worth.



I'm impressed by the results. Even if some of the responses were fake, it looks like there are a decent number of people who can live comfortably for the next 2 years off liquid savings.

So if you were somehow scraping by on minimum wage, spending at most 20K/year just to survive, that means you still saved 40K. Or, if you need 10K/month for your lifestyle,

you still have around 250K sitting in cash (instead of in some hedge fund that's imploding).

For those that have 6 years of savings, then multiply the above by 3. Not bad.



So it looks like there are people who have been living within their means and saving, either for a down payment or for a rainy day.
 
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