Author Topic: Net worth $0 to $500K in 2 Years Challenge  (Read 4660 times)

musty$

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Net worth $0 to $500K in 2 Years Challenge
« on: January 09, 2013, 04:46:00 AM »
Hello!

In the last two years I grew my net worth from 0 (actually negative) to $500K. I challenge you to kick the other 95% ass! Basically I did it by saving aggressively, investing moderately (I have to admit my return is mediocre, not stellar like J.O.S.H in his Retire by 21 challenge), and reducing my cost of living. And I also reduced my tax by half.

I had special arrangements or circumstances to achieve this. But didn't MMM say you make your own "special arrangements" in life? See his Hawaii vacation article.

Back Story of my pre-Mustachian pre-ERE days
Two years ago I owned two mortgages (I never once owned two houses, just owned two mortgages :-), made an average programmer/engineer salary (6 figures, Silicon Valley), contributed about 10-15% to 401K for the last 7 years. My 401K was about $150K. The 2008 financial crisis gave my 401K a beating (though I never wavered in my contribution percentage) plus both houses were underwater.

Starting at Year 0:
Net worth = 150K + underwater mortgages = $0

Then I landed a overseas job. It included a sizable pay raise. It paid per diem. Started investing (haphazardly), reading a lot of finance books. Short sold my first house, started selling the other. Saved about 60-70% of pay. The 401K recovered a bit, also upped by 401K contribution from 15% to 30%

After Year 1:
Networth = 150K + 150K = ~300K

I found out about ERE. Got my second house sold. Started tracking my expenses more. Figured out my retirement year. Continued saving. Maxed 401K to $50K/year (using after-tax contribution)

After Year 2:
Net worth = 300K + 200K = 500K


Tips and Tricks

Get a high paying job even if it means moving.

If you move overseas, change your residence to a non-income tax state (ie, TX, FL...) I stopped paying 9% CA income tax.

If you can prove you reside overseas, your major federal deduction will by $92K. I paid federal tax on half my income.

Per diem gets taxed differently in the first year. Know your tax rules (or hire a good accountant).

Lastly, give yourself a goal by calculating your finance progress and end point. It helped me focus.

Good luck, hope to hear from you!!!


shadowmoss

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Re: Net worth $0 to $500K in 2 Years Challenge
« Reply #1 on: January 09, 2013, 06:55:01 AM »
I paid $50K of debt in a little over 2 years by moving to Central America.  My home state for tax purposes is WA, which doesn't have state income tax.  I may change it to Nevada next month, still investigating.  Contracting jobs overseas are a quick way to get more money.  However, you do deal with a new normal in day to day life.  This can go either way.
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Khanjar

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Re: Net worth $0 to $500K in 2 Years Challenge
« Reply #2 on: January 09, 2013, 06:59:19 AM »
Obvious troll is obvious. 1 post, impossible numbers, citing Josh, and this tidbit "Continued saving. Maxed 401K to $50K/year (using after-tax contribution)"

Please, go away.

For everyone else, yes, continue with your mustachianism. Spend less, kill the debt, don't clutter your life with "stuff", and for the love of god, don't ever say the 'l' word when talking about vehicles.

musty$

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Re: Net worth $0 to $500K in 2 Years Challenge
« Reply #3 on: January 09, 2013, 08:15:05 AM »
First time poster, been reading MMM for a while though. Its not impossible numbers. Just that there people that do make the 3% percentile payscale. Tenured managers and small business owners can make 250K/year if they been at it for a decade. I happen to work overseas and that increased my income by about double. Also had some 401K that was offset by two underwater houses. So really I went from 150K to 500K in 2 years after the houses were gone. So I saved 350K over two years, making 250K/year (plus that I pay less taxes).

I also quoted J.O.S.H. cause I thought he did pretty well to save young instead of spending.

Well, my tidbit was "continue saving". But that's just a tidbit since every knows "you have to save." Why beat people over the head about the obvious.  My main focus was to talk about tax advantages working overseas. Most people don't know that (I sure didnt before I got the job).


musty$

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Re: Net worth $0 to $500K in 2 Years Challenge
« Reply #4 on: January 09, 2013, 08:17:32 AM »
To Shadowmoss, congrats on lowering your debt!

what's the advantage to going to NV versus WA?


Phoebe

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Re: Net worth $0 to $500K in 2 Years Challenge
« Reply #5 on: January 09, 2013, 09:17:51 AM »
I don't think they are impossible numbers.  I increased my networth by $212,000 in 2012.  Great job musty!  Creating your own circumstances is great advice!

arebelspy

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Re: Net worth $0 to $500K in 2 Years Challenge
« Reply #6 on: January 09, 2013, 09:29:11 AM »
To anyone reading this and getting discouraged: don't be.

These people's salaries may make that "gauntlet challenge" of 250k/yr impossible for you, but plug away with what you can do.  You can easily ER while earning less than the median U.S. salary, you don't need to make 4X it, as spoken about here.

I increased my networth by $212,000 in 2012.

Yeah, I enjoy your blog otherwise, but find it really hard to relate to since the numbers are on such a different scale.

Saving 60-70% becomes fairly trivial when you make 200k or whatever.

That's the beauty of math though: it scales.  Regardless of circumstance, one can ER if they sufficiently work on what they can control. 
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Phoebe

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Re: Net worth $0 to $500K in 2 Years Challenge
« Reply #7 on: January 09, 2013, 10:06:04 AM »
Yeah, I understand that which is why a savings % is a better way to go challenge wise.
« Last Edit: January 09, 2013, 10:15:24 AM by Phoebe »

Phoebe

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Re: Net worth $0 to $500K in 2 Years Challenge
« Reply #8 on: January 09, 2013, 10:14:36 AM »
http://www.thesimpledollar.com/2013/01/03/living-below-your-means-is-a-challenge-for-everyone/

Arebelspy - an interesting article recently on The Simple Dollar about how living below your means is a challenge for everyone regardless of income.  I get where you're coming from saying that a higher salary means that it is easier to pay for the basics in life, but I don't think it's "trivial."

sol

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Re: Net worth $0 to $500K in 2 Years Challenge
« Reply #9 on: January 09, 2013, 10:15:45 AM »
Yeah, I understand that which is why a savings % is a better way to go challeneg wise.

I'm not sure it is.  A person saving 70% of a 200k/yr salary is still spending twice what MMM does, not exactly a frugal lifestyle.  A person saving 70% of 19k/yr is a hardened badass.

But I don't think the alternative dollar savings goal is really realistic either, since it can be so easily achieved by high earners.

One possible solution for evaluating your progress compared to others is to just compare the spending, not the savings.  If you can live on less than $25k/yr after housing like MMM's family, you're probably not too wasteful.  If you can live on less (Bakari, you rock star) then you're doing great.  But if you need 100k/year to cover your expenses, I don't think it matters if you save 90% of your million/yr salary, you're not very mustachian.  Sorry.

I suppose it depends on what your goals are though.  If you live on 25k/yr but only make 26k/yr, you're not on a path to early retirement. 

Phoebe

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Re: Net worth $0 to $500K in 2 Years Challenge
« Reply #10 on: January 09, 2013, 10:17:07 AM »
I stand corrected - you're right SOL.  And this is actually how we set goals for our family - bringing down our total spending.  Nice catch.

Another way that we track is based on how many years of retirement we've accumulated which takes into account both your savings and spending rates.
« Last Edit: January 09, 2013, 10:18:43 AM by Phoebe »

arebelspy

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Re: Net worth $0 to $500K in 2 Years Challenge
« Reply #11 on: January 09, 2013, 12:12:01 PM »
http://www.thesimpledollar.com/2013/01/03/living-below-your-means-is-a-challenge-for-everyone/

Arebelspy - an interesting article recently on The Simple Dollar about how living below your means is a challenge for everyone regardless of income.  I get where you're coming from saying that a higher salary means that it is easier to pay for the basics in life, but I don't think it's "trivial."

It's a "challenge"because of lifestyle inflation.  If one consciously chooses to keep spending low, saving a lot doesn't become a challenge at all, especially in the six-figure income.

I think Sol nailed it - spend like a Mustachian, save the rest, regardless of if you earn 30k, 100k, or 250k.
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Phoebe

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Re: Net worth $0 to $500K in 2 Years Challenge
« Reply #12 on: January 09, 2013, 12:51:56 PM »
I completely agree that it's simply because of lifestyle inflation, just thought it was an interesting perspective.

Quote
I think Sol nailed it - spend like a Mustachian, save the rest, regardless of if you earn 30k, 100k, or 250k.

Totally agree.

For what it's worth, while I make a six figure income my husband makes $29,000 a year.  Our goal is to save for big purchases (a house, college for our fugure kids) while working on bringing our spending down so that I can retire to stay home with the future kiddos while my husband provides for our family.  So while it is easy to save a ton on my salary, we don't lose sight of the need to minimize our spending.

arebelspy

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Re: Net worth $0 to $500K in 2 Years Challenge
« Reply #13 on: January 09, 2013, 12:59:39 PM »
For what it's worth, while I make a six figure income my husband makes $29,000 a year.  Our goal is to save for big purchases (a house, college for our fugure kids) while working on bringing our spending down so that I can retire to stay home with the future kiddos while my husband provides for our family.  So while it is easy to save a ton on my salary, we don't lose sight of the need to minimize our spending.

Well done.  :D

With you making the majority of the money, you may want to consider working an extra few years.. if you live on your husband's income and saving 100k+ from yours, you working an extra few years really pad the portfolio and let you hit FI.
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Phoebe

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Re: Net worth $0 to $500K in 2 Years Challenge
« Reply #14 on: January 09, 2013, 01:06:41 PM »
Good suggestion and I think I'll end up doing just that.  More motivation to keep our spending down so that I can get out of the rate race as soon as possible (my husband works in a creative field and loves his job so he doesn't mind keeping it, but hitting FI would mean he could take time off to focus on interesting projects when he want to).

Herbert Derp

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Re: Net worth $0 to $500K in 2 Years Challenge
« Reply #15 on: January 09, 2013, 10:25:37 PM »
Tips and Tricks

Get a high paying job even if it means moving.

I'm pretty sure this is the only way to satisfy the challenge... Even if I spent no money and paid zero taxes I couldn't reach half of that in two years.
« Last Edit: January 09, 2013, 10:29:56 PM by Herbert Derp »

dragoncar

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Re: Net worth $0 to $500K in 2 Years Challenge
« Reply #16 on: January 09, 2013, 10:39:19 PM »
Obviously possible, but not a realistic "challenge".  That's why people react negatively.

It's like Buzz Aldrin coming on here and "throwing down the gauntlet" to walk on the moon.

sol

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Re: Net worth $0 to $500K in 2 Years Challenge
« Reply #17 on: January 09, 2013, 11:44:52 PM »
Obviously possible, but not a realistic "challenge".  That's why people react negatively.

It's like Buzz Aldrin coming on here and "throwing down the gauntlet" to walk on the moon.

Reminds me of this: http://m.youtube.com/#/watch?v=6X9tuwH9I5Q&desktop_uri=%2Fwatch%3Fv%3D6X9tuwH9I5Q

velocistar237

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Re: Net worth $0 to $500K in 2 Years Challenge
« Reply #18 on: January 10, 2013, 11:03:01 AM »
It's like Buzz Aldrin coming on here and "throwing down the gauntlet" to walk on the moon.

That would be more like $0 to $750M by about age 50.

This should be posted under Share Your Badassity instead of Throw Down the Gauntlet. It would have been better received there. Take note, people who have accomplished something major through special circumstances.

tooqk4u22

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Re: Net worth $0 to $500K in 2 Years Challenge
« Reply #19 on: January 10, 2013, 01:39:15 PM »
Zero to $1 million in 30 seconds by winning the lottery - now that is a challenge!

musty$

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Re: Net worth $0 to $500K in 2 Years Challenge
« Reply #20 on: January 10, 2013, 02:53:48 PM »
Money is always relative. And if you take the challenge as $50K net worth increase in two years because of your salary limit, MORE power to you! You did just as well as me because you challenged yourself by increasing income while reducing expenses.

I had a lucky break. But you have an advantage over me. I stumbled into this two years ago. Where as now I'm telling explicitly what you can do to increase your earning potential.

The key to meet this challenge (for most people) is get a good overseas job. And if you are up to the challenges of not only qualifying for those jobs, deciding to move, and deal with a new country/language -- its well worth it!

Even if you make 50K /year now (average US median salary) and relocate, your employer will probably pay for some of your living expenses. The move, lodging, food stipend, transportation may be covered.

Here are you savings:

1. Housing is usually cheaper overseas. Some employers pay partial rent, some your actual, and some pay you a fixed rate based on local hotel rates (you keep the balance and your income goes over the roof!) Say they pay $100/day lodging. You stay in a decent condo for $700. You keep the balance 30*100 - 700 = $2300/month!
+27K/yr

2. Medical expenses are cheaper outside of US.
+2K/yr

3. Transportation is either more public, or buildings and city centers are closer together.
+3K/yr

4. Travel is cheaper. You are already in a foreign country. Take a short hop to visit nearby countries.
+1K/yr

5. Lifestyle deflation. The people I meet in countries outside of US (especially CA) don't really focus as much on materialism. So you'll probably spend less by osmosis.
+1K/yr

6. Tax: you reduce your tax liability by 92K (you just have to be a "bona fide" foreign resident or don't come back to US soil more than 35 aggregate days in a year) If your gross income is 100K, then after deductions, your Adjusted Gross Income is 8K. You pay income tax on 8K!
Instead of 25% or more marginal tax rate, you go to 0%
+20K/yr

7. State Tax: Change your tax domicile (where you claim your home state) to one of the income tax free state. Like WA, FL, NV, TX, AK, SD. Skip the paying state tax when you live abroad!
+5K/yr (about 9-10% if you lived in CA)
 
So far its all about overseas and living abroad. I have more suggestions about how to deal being a high earner. Yes, being a high earning carry some disadvantages, like:

1. rental property and depreciation phase out after AGI above $100,000.

2. Can't contribute to Roth IRA or IRA. Though a way around it is maxing your 401K to IRS limit of $50K/yr. Then do conversion when you leave your employer.

3. Lifestyle inflation. Try not to go crazy even though you make more than the locals.

Good luck!

Even though some of you expect me to give an advert, by now, on a overseas company doing shady hiring, its not going to happen. I'm not an agent. I'm just a regular dude that figured some things out. (Like my favorite: "The amount of your salary is almost "arbitrary"") I just thought to spread some info to Mustachians.

musty$

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Re: Net worth $0 to $500K in 2 Years Challenge
« Reply #21 on: January 10, 2013, 02:57:38 PM »
Playing the lottery is a BAD investment....

Herbert Derp

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Re: Net worth $0 to $500K in 2 Years Challenge
« Reply #22 on: January 10, 2013, 11:12:09 PM »
Even if I had your savings the income boost would be nowhere near enough to meet the challenge. The only way to satisfy it is a drastic increase in overall income, not savings.
« Last Edit: January 11, 2013, 01:51:46 AM by Herbert Derp »

Anner

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Re: Net worth $0 to $500K in 2 Years Challenge
« Reply #23 on: January 11, 2013, 09:59:52 AM »

2. Can't contribute to Roth IRA or IRA. Though a way around it is maxing your 401K to IRS limit of $50K/yr. Then do conversion when you leave your employer.


How do you get a 401K limit of $50K/year?

tooqk4u22

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Re: Net worth $0 to $500K in 2 Years Challenge
« Reply #24 on: January 11, 2013, 01:03:11 PM »

2. Can't contribute to Roth IRA or IRA. Though a way around it is maxing your 401K to IRS limit of $50K/yr. Then do conversion when you leave your employer.


How do you get a 401K limit of $50K/year?

IRS allows up to a maximum of $51K to be contributed to a 401k including pre-tax, employer matches, and after-tax contributions. Your employer may not necessarily allow this though. 


Anner

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Re: Net worth $0 to $500K in 2 Years Challenge
« Reply #25 on: January 11, 2013, 01:13:12 PM »
Got it, thanks.  Yup, my employer does not allow the after tax contributions.

StashtasticMomo

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Re: Net worth $0 to $500K in 2 Years Challenge
« Reply #26 on: January 14, 2013, 10:21:29 AM »
@ musty$: Tthanks for sharing your story and the ideas!

@ tooqk4u22: To the extent you know, which IRS code cites the $51,000 combined 401k limits? Thanks.
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tooqk4u22

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Re: Net worth $0 to $500K in 2 Years Challenge
« Reply #27 on: January 14, 2013, 11:08:43 AM »
@ tooqk4u22: To the extent you know, which IRS code cites the $51,000 combined 401k limits? Thanks.

For some reason I haven't been able to get on the IRS site but it is Section 415(c)(1)(A)

StashtasticMomo

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Re: Net worth $0 to $500K in 2 Years Challenge
« Reply #28 on: January 14, 2013, 12:53:49 PM »
@ tooqk4u22: To the extent you know, which IRS code cites the $51,000 combined 401k limits? Thanks.

For some reason I haven't been able to get on the IRS site but it is Section 415(c)(1)(A)

Excellent! Thanks tooqk4u22. Let the good times learning, ROLL!
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Undecided

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Re: Net worth $0 to $500K in 2 Years Challenge
« Reply #29 on: January 18, 2013, 09:22:27 AM »

It's a "challenge"because of lifestyle inflation.  If one consciously chooses to keep spending low, saving a lot doesn't become a challenge at all, especially in the six-figure income.

I think Sol nailed it - spend like a Mustachian, save the rest, regardless of if you earn 30k, 100k, or 250k.

But does "spend[ing] like a Mustachian" mean living on a specific budget, or the smallest "possible" budget, or does it mean understanding the consequences of your spending and the extent to which working longer justifies a higher annual FI budget? There's some tendency on this board to veer too far toward thinking the one particular set of values (or type of utility curve) is "right" for everyone. There's no reason everyone's goal has to be to get to FI at a $37k/year (or whatever) budget as quickly as possible.  Someone who makes $250k and lives on $100k with a goal of reaching FI at that amount can still take a lot from MMM; maybe they can contribute some, too, even if their specific targets are very different from most readers'.

Undecided

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Re: Net worth $0 to $500K in 2 Years Challenge
« Reply #30 on: January 18, 2013, 09:27:37 AM »

If you move overseas, change your residence to a non-income tax state (ie, TX, FL...) I stopped paying 9% CA income tax.


Just know that it's not as simple as deciding that your residence changed. If you intend to return to CA, or later appear to have so intended, the CA tax authority can consider you to have continued to be a resident. Owning property in CA, having a professional license there or otherwise maintaining contacts in the state can all be factors in causing you to be taxed there as a "resident" even while being physically present overseas.

arebelspy

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Re: Net worth $0 to $500K in 2 Years Challenge
« Reply #31 on: January 18, 2013, 09:29:40 AM »
I didn't say 25, or 37, or whatever, and save the rest.

You seem to have a quite loaded definition of what you think "Mustachian spending" is, and you may want to open up your mind a little bit on that.

Spend consciously, knowing the effects of your spending, understanding that spending more doesn't make you happier.  Optimize and reduce waste.  Live a healthy, happy life.

That could entail spending of 6k, 30k, 50k, whatever. 

Naturally someone making 250k and spending 100k can take a lot from MMM, but one of the big things they can take is that they don't need to spend 100k to be happy.  If they are optimizing their life and choices, more power to them.

Again, spend like a Mustachian, save the rest, regardless of if you earn 30k, 100k, or 250k.
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Undecided

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Re: Net worth $0 to $500K in 2 Years Challenge
« Reply #32 on: January 18, 2013, 09:47:03 AM »

You seem to have a quite loaded definition of what you think "Mustachian spending" is, and you may want to open up your mind a little bit on that.

How so, or what do you take my "loaded" definition to be?  As I suggested by my question above, I think the understanding-the-consequences-and-making-conscious-choices aspect is much more important than any specific numbers.

And I agree that one doesn't need to spend $100k to be happy, but often the presumption on these boards that someone who chooses to spend a relatively greater amount is "wrong" comes through loud and clear, without differentiating between wastefully spending every penny one makes vs. living on considerably less than income and applying the type of decision-making process that features so prominently within MMM's blog.

arebelspy

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Re: Net worth $0 to $500K in 2 Years Challenge
« Reply #33 on: January 18, 2013, 10:34:58 AM »
I'll let someone else take that up if they so desire, I don't really have an interest in arguing with you.

I wish you well.
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sol

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Re: Net worth $0 to $500K in 2 Years Challenge
« Reply #34 on: January 18, 2013, 11:01:43 AM »
I'll let someone else take that up if they so desire, I don't really have an interest in arguing with you.

That's quitter talk!

You can call yourself a Mustachian or a Mouseketeer or whatever else you like, regardless of your spending, but that doesn't make it so.  If you're burning through 100k/year on personal expenses, you lifestyle is grossly inflated relative to your needs, relative to the amount needed to live a rich and fulfilling life, and relative to the amounts that 99% of the planet lives on. 

Jamie Dimon makes roughly $20 million dollars per year (roughly $10,000 per HOUR) to sit at his desk and be in charge of Chase bank.  Would anybody consider him a hardcore Mustachian for saving 90% of his income and only blowing $2 million per year on his personal expenses, say manicures and remodeling his private jet?  Of course not, because that would be ridiculously wasteful.

Speaking as someone who's been hanging around here for a while now, I can with some confidence claim that the philosophy espoused on this site isn't just about conscious spending or savings percentages.  It's also about stewardship, of your money and your time and your environment.

Herbert Derp

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Re: Net worth $0 to $500K in 2 Years Challenge
« Reply #35 on: January 18, 2013, 01:55:15 PM »
I think we can define Mustachian spending as the actual minimum dollar amount required to live comfortably relative to the area you live and the size of your family. It should be completely decoupled from your income. Otherwise we end up with the above situation where someone spends a small percentage of their income, yet is still spending vastly more than is required to live comfortably.

However, if you made so much money that the difference between a Mustachian lifestyle and a lavish lifestyle is only a single percentage point or two of your total income, I think the Mustachian lifestyle becomes pointless. You would be giving up a lot of (unnecessary) things for almost zero financial benefit.
« Last Edit: January 18, 2013, 02:00:08 PM by Herbert Derp »

Undecided

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Re: Net worth $0 to $500K in 2 Years Challenge
« Reply #36 on: January 18, 2013, 02:25:53 PM »
I generally agree with what Sol's said, although I think the stewardship aspect is embraced more consistently among the forum contributors and comment leavers with respect to their own time and money than with respect to more external things (viz the environment). But as regards budgets, there's a lot of sentiment that sometimes seems like "everyone who drives slower than me is an idiot and everyone who drives faster than me is a maniac" thinking (e.g., Jacob at ERE is "too extreme," and spending $X is necessarily wasteful). It's inherent in what Herbert said about "living comfortably," given how widely the meaning of that can vary from person to person.

dragoncar

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Re: Net worth $0 to $500K in 2 Years Challenge
« Reply #37 on: January 18, 2013, 03:21:32 PM »
I think we can define Mustachian spending as the actual minimum dollar amount required to live comfortably relative to the area you live and the size of your family.

Cool... now define "comfortably"

Herbert Derp

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Re: Net worth $0 to $500K in 2 Years Challenge
« Reply #38 on: January 18, 2013, 03:50:36 PM »
Cool... now define "comfortably"

Spending such that your physical and emotional needs are met. Since pretty much everyone has the same physical needs it is very easy to define a baseline for that amount. As far as emotional needs go, you can compare them to other people. If many people can live emotionally fulfilling lives despite not spending much money, why shouldn't anyone be able to live the same way? I think that is one of the fundamentals of Mustachianism.

grantmeaname

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Re: Net worth $0 to $500K in 2 Years Challenge
« Reply #39 on: January 20, 2013, 03:51:40 PM »
However, if you made so much money that the difference between a Mustachian lifestyle and a lavish lifestyle is only a single percentage point or two of your total income, I think the Mustachian lifestyle becomes pointless. You would be giving up a lot of (unnecessary) things for almost zero financial benefit.
I think there's a real emotional benefit to living Mustachianly as well. There may be little financial benefit to Jamie Dimon for his frugality, but that doesn't mean he wouldn't learn something from it.

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Re: Net worth $0 to $500K in 2 Years Challenge
« Reply #40 on: January 21, 2013, 12:53:03 AM »
+1 Mustachianism develops character, self awareness and discipline.  I don't want to sound all oomy-goomy here, but there is a spiritual aspect to it. Even if you have, or especially if you have a ton of money, the lessons are worthwhile, and cannot be purchased. There are other traditions/philosophies/lifestyles  that could teach these lessons, but they tend to come from within the person, take some commitment and character. Otherwise if we think rich people don't need them, you end up with this: http://www.mrmoneymustache.com/forum/antimustachian-wall-of-shame-and-comedy/the-pinnacle-of-antimustachianism/msg45618/#msg45618

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Re: Net worth $0 to $500K in 2 Years Challenge
« Reply #41 on: January 21, 2013, 08:56:20 AM »
I am just getting back to this thread.  I get what the OP is saying.  I didn't really think that overseas contracting was anything I could do.  I had people mention it, but it never seemed like something this middle aged hippie Indiana-raised girl could do.  I fell into it accidentally.  I was a Dell field service tech (I work on computers...) and when a friend's son who was in the Army at Ft. Campbell was called to go to Iraq I felt badly that I had never really done anything in my life to help my country.  I started specifically asking for the Ft. Campbell route, which made sense as I lived on that side of Nashville anyway.  I was going into one of the contractor's offices to fix their computers on semi-regular basis and was kidding them about hiring me.  I never would have done so except I had the idea that they only hired former military folks, which I am so far away from that it was funny to me.  They asked for my resume, and I was hired!  Fast forward a couple of years, and an overseas job came open and I decided to try it.  I've been down here 2 years and 4 months now.

As the OP said, the financial incentives are good.  I was already a resident in WA, which is state tax free and doesn't require vehicle emissions tests to renew the plates each year.   I haven't been back to WA since I left, but to be fair I haven't been in any state longer than a week since I left.  I was thinking of changing my residency to Nevada because it can meet the same requirements I have, and I may actually go there occasionally.  I will be there for 5 days next month but my Jeep won't (I'm flying) so I may not change.  It is crazy enough with a mailing address of WA, my stuff in storage near my Mom in MO, and living in Honduras.  Don't need my Jeep plates to be a different state than my drivers license.

No Federal Income Tax is the main advantage for me.  A lower cost of living helps as well.  The down sides are, for me, living in a 3rd world country where there aren't a lot of options for entertainment.  The lack of options for shopping has helped my mustache.  However, boredom tends to lead me astray in the world of internet shopping.  Having an APO box (there isn't really any public mail here), a mail forwarder at a UPS store in WA, and a Mom who is helpful to send me what I need make living here a lot easier.  Mail sometimes doesn't make it, though.  Things get stolen.  A 'Gorilla Box' plastic footlocker I sent home had the entire end broken out of it when it arrived.  So day to day life is different than living in the States.

My take on the OP's post is that opening one's eyes to possibilities for the short term to gather money to be FI is something that most folks only take so far.  Look around with a really open mind and there may be more options that are obvious at first.
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