Poll

How Mustachian are you?

Mustachian. I bike everywhere, live in the cheapest house I could find, and spend less than $30k annually for the whole family!
50 (6.7%)
Kinda Mustachian. I think you're insane if you have a car payment or pay retail for anything, but I do splurge on some things I shouldn't.
227 (30.3%)
I'm LBYM FIRE-style. I save a ton of money and I spend a lot of money. I'll be FI long before normal retirement age.
252 (33.6%)
LBYM. I save a good percentage of my income and I'm frugal in other areas, but I still spend a lot more than a true Mustachian would and I'm fine with that because I'm still being fiscally responsible.
204 (27.2%)
None of the above. Someday I may become good with finances, but I'm here to learn how to dig myself out of this mountain of debt first.
17 (2.3%)

Total Members Voted: 750

Author Topic: Are you Mustachian, or just LBYM?  (Read 14310 times)

dj

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Re: Are you Mustachian, or just LBYM?
« Reply #100 on: March 13, 2018, 10:32:18 AM »

Well put. It sounds like your vacation spending is deliberate and does bring you the value in terms of joy for the investment.

What I had hoped to convey was that spending on things that make you truly happy isn't the problem, as much as spending on the things that you think will make you happy or keep up with the Jones's. That's the sort of spending that I used to do FAR too much of, and now try to work on. Personally, I struggle a lot with "what-will-people-think-itis" and so when I see spending choices that seem extravagant, I default to assuming that they're made to maintain appearances. These assumptions and not expressing myself well when I'm feeling philosophical are ongoing challenges.

Yeah, spending money just to impress others is wasteful imo. Perhaps there are people who derive happiness from impressing others though... if so I guess it wouldn't be a complete waste? I've never been of that opinion myself. I definitely agree with the sentiment that spending money to "keep up with the Jones's" is usually a really really ridiculous idea, however prevalent it may be.

I'm not sure why, but I can't fathom how spending money to impress others could create any kind of real happiness. Such a person has to be compensating for something... Low self esteem? Overall loneliness? Massive amounts of debt? I just don't know. I honestly would like to hear from someone that is actually happy as a result of "keeping up." Maybe it would open my mind up a bit. How can one be happy if they prioritize maintaining a good image in others' eyes before maintaining a good image in their own eyes?

jlcnuke

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Re: Are you Mustachian, or just LBYM?
« Reply #101 on: March 13, 2018, 10:43:03 AM »

Well put. It sounds like your vacation spending is deliberate and does bring you the value in terms of joy for the investment.

What I had hoped to convey was that spending on things that make you truly happy isn't the problem, as much as spending on the things that you think will make you happy or keep up with the Jones's. That's the sort of spending that I used to do FAR too much of, and now try to work on. Personally, I struggle a lot with "what-will-people-think-itis" and so when I see spending choices that seem extravagant, I default to assuming that they're made to maintain appearances. These assumptions and not expressing myself well when I'm feeling philosophical are ongoing challenges.

Yeah, spending money just to impress others is wasteful imo. Perhaps there are people who derive happiness from impressing others though... if so I guess it wouldn't be a complete waste? I've never been of that opinion myself. I definitely agree with the sentiment that spending money to "keep up with the Jones's" is usually a really really ridiculous idea, however prevalent it may be.

I'm not sure why, but I can't fathom how spending money to impress others could create any kind of real happiness. Such a person has to be compensating for something... Low self esteem? Overall loneliness? Massive amounts of debt? I just don't know. I honestly would like to hear from someone that is actually happy as a result of "keeping up." Maybe it would open my mind up a bit. How can one be happy if they prioritize maintaining a good image in others' eyes before maintaining a good image in their own eyes?

I gave up trying to understand what makes other people happy when I first learned that I had friends who enjoyed running. They'll run for hours, have to put on bandaids or some crap because the running would otherwise cause their bodies to actually blister and/or bleed. Not to mention the cramps and panting and sore muscles for days and ... well, suffice it to say that I consider running to be an activity you engage in because failure to run will cause your death, not something enjoyable. However, there are people who do it for fun... weirdos though they may be... lol
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dj

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Re: Are you Mustachian, or just LBYM?
« Reply #102 on: March 13, 2018, 10:47:25 AM »

Well put. It sounds like your vacation spending is deliberate and does bring you the value in terms of joy for the investment.

What I had hoped to convey was that spending on things that make you truly happy isn't the problem, as much as spending on the things that you think will make you happy or keep up with the Jones's. That's the sort of spending that I used to do FAR too much of, and now try to work on. Personally, I struggle a lot with "what-will-people-think-itis" and so when I see spending choices that seem extravagant, I default to assuming that they're made to maintain appearances. These assumptions and not expressing myself well when I'm feeling philosophical are ongoing challenges.

Yeah, spending money just to impress others is wasteful imo. Perhaps there are people who derive happiness from impressing others though... if so I guess it wouldn't be a complete waste? I've never been of that opinion myself. I definitely agree with the sentiment that spending money to "keep up with the Jones's" is usually a really really ridiculous idea, however prevalent it may be.

I'm not sure why, but I can't fathom how spending money to impress others could create any kind of real happiness. Such a person has to be compensating for something... Low self esteem? Overall loneliness? Massive amounts of debt? I just don't know. I honestly would like to hear from someone that is actually happy as a result of "keeping up." Maybe it would open my mind up a bit. How can one be happy if they prioritize maintaining a good image in others' eyes before maintaining a good image in their own eyes?

I gave up trying to understand what makes other people happy when I first learned that I had friends who enjoyed running. They'll run for hours, have to put on bandaids or some crap because the running would otherwise cause their bodies to actually blister and/or bleed. Not to mention the cramps and panting and sore muscles for days and ... well, suffice it to say that I consider running to be an activity you engage in because failure to run will cause your death, not something enjoyable. However, there are people who do it for fun... weirdos though they may be... lol

I am no runner by any means, but I have felt the "runner's high" that you hear people talk about. It's a real thing. Endorphins start flowing and the running becomes effortless. It is hard on your joints, which is why I don't do it often (I already have a form of arthritis at 26...sucks, but whatever). But I do it often enough to maintain decent cardiovascular shape (paired with the rowing machine). There was one time I was "feeling it" so much that I started to get scared because it felt like I was no longer controlling my own body.

teen persuasion

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Re: Are you Mustachian, or just LBYM?
« Reply #103 on: March 13, 2018, 11:01:26 AM »
It seems like there's never an option for: "Spends less than $30k/yr while living in a moderately priced home in a nice neighborhood rural area and driving cars like clowns and still having a decent savings rate while being 'low income' (<$50k for the purposes of this forum) with 5 kids."

Tweaked as above, I agree!

FWIW, I chose option 1.  We can't really bike here (distances too great, and tubas and upright basses are hard to transport), and big old farmhouses are cheap to buy but wasteful to heat, so those specifics are off.  However, I feel like we are living the spirit of Mustachianism - cook from scratch, DIY as much as possible, save 50%+, live an intentionally happy intentionally less wasteful life.

jlcnuke

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Re: Are you Mustachian, or just LBYM?
« Reply #104 on: March 13, 2018, 11:03:28 AM »
It seems like there's never an option for: "Spends less than $30k/yr while living in a moderately priced home in a nice neighborhood rural area and driving cars like clowns and still having a decent savings rate while being 'low income' (<$50k for the purposes of this forum) with 5 kids."

Tweaked as above, I agree!

FWIW, I chose option 1.  We can't really bike here (distances too great, and tubas and upright basses are hard to transport), and big old farmhouses are cheap to buy but wasteful to heat, so those specifics are off.  However, I feel like we are living the spirit of Mustachianism - cook from scratch, DIY as much as possible, save 50%+, live an intentionally happy intentionally less wasteful life.

Impressive! :)
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Helvegen

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Re: Are you Mustachian, or just LBYM?
« Reply #105 on: March 13, 2018, 11:19:07 AM »
LBYM.

Just Joe

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Re: Are you Mustachian, or just LBYM?
« Reply #106 on: March 13, 2018, 11:34:46 AM »

Well put. It sounds like your vacation spending is deliberate and does bring you the value in terms of joy for the investment.

What I had hoped to convey was that spending on things that make you truly happy isn't the problem, as much as spending on the things that you think will make you happy or keep up with the Jones's. That's the sort of spending that I used to do FAR too much of, and now try to work on. Personally, I struggle a lot with "what-will-people-think-itis" and so when I see spending choices that seem extravagant, I default to assuming that they're made to maintain appearances. These assumptions and not expressing myself well when I'm feeling philosophical are ongoing challenges.

Yeah, spending money just to impress others is wasteful imo. Perhaps there are people who derive happiness from impressing others though... if so I guess it wouldn't be a complete waste? I've never been of that opinion myself. I definitely agree with the sentiment that spending money to "keep up with the Jones's" is usually a really really ridiculous idea, however prevalent it may be.

I'm not sure why, but I can't fathom how spending money to impress others could create any kind of real happiness. Such a person has to be compensating for something... Low self esteem? Overall loneliness? Massive amounts of debt? I just don't know. I honestly would like to hear from someone that is actually happy as a result of "keeping up." Maybe it would open my mind up a bit. How can one be happy if they prioritize maintaining a good image in others' eyes before maintaining a good image in their own eyes?

I've met a few - they consider keeping up with the Joneses as the price of doing business. They want a big peer group that delivers invitations to social gatherings. To participate they need certain kinds of things (car, clothes, house in the right neighborhood) and only certain discussion topics are valid. The right politics and religion play into this as well. Some of these people participate for for so long that their "choices" are second nature and they can't imagine living any other way. Some stereotypes have been born out these groups of people.

Jrr85

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Re: Are you Mustachian, or just LBYM?
« Reply #107 on: March 13, 2018, 12:17:22 PM »

Well put. It sounds like your vacation spending is deliberate and does bring you the value in terms of joy for the investment.

What I had hoped to convey was that spending on things that make you truly happy isn't the problem, as much as spending on the things that you think will make you happy or keep up with the Jones's. That's the sort of spending that I used to do FAR too much of, and now try to work on. Personally, I struggle a lot with "what-will-people-think-itis" and so when I see spending choices that seem extravagant, I default to assuming that they're made to maintain appearances. These assumptions and not expressing myself well when I'm feeling philosophical are ongoing challenges.

Yeah, spending money just to impress others is wasteful imo. Perhaps there are people who derive happiness from impressing others though... if so I guess it wouldn't be a complete waste? I've never been of that opinion myself. I definitely agree with the sentiment that spending money to "keep up with the Jones's" is usually a really really ridiculous idea, however prevalent it may be.

I'm not sure why, but I can't fathom how spending money to impress others could create any kind of real happiness. Such a person has to be compensating for something... Low self esteem? Overall loneliness? Massive amounts of debt? I just don't know. I honestly would like to hear from someone that is actually happy as a result of "keeping up." Maybe it would open my mind up a bit. How can one be happy if they prioritize maintaining a good image in others' eyes before maintaining a good image in their own eyes?

Well, you could define "real happiness" to basically answer your question with a no true scotsman argument applied to happiness, but generally:

(1) it's validation.  Whatever insecurities they have, it sort of validates that they are at least as "successful" as their peer group (or aspirational peer group).
(2) it may satisfy a human, social desire to reciprocate:  If there is a peer group where it is routine for members of the group to invite the rest of the group to (a) go on boat outings, (b) visit their vacation property, (c) come to nice dinners at their nice home, (d) come to social events/parties/fundraiser that they sponsor or support, (e) use their tickets to sporting events, etc., and one person of the group cannot reciprocate, they are naturally going to feel left out. 
(3) It lubricates social interactions:  Sort of related to number 2, but People have a tendency to feel comfortable in groups of people who are like them, and keeping up with the jones provides some superficial indications that you are alike and maybe makes it easier to maintain social cohesion within a group.  If you show up to gatherings in clothes that are noticeably not as nice, it's a natural human tendency to feel insecure or out of place about it.  Similarly, if your social group has much nicer houses than yours, it would be a natural human tendency to be a little insecure about inviting people to come to say dinner.

 

savedough

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Re: Are you Mustachian, or just LBYM?
« Reply #108 on: March 13, 2018, 01:10:56 PM »
We are a solid LBYM - FIRE style family that enjoys some wants.
  • Cook at home 90% of the time and mostly from scratch.
  • DIY haircuts for the kids.
  • Max out 401ks, Roth IRAs, 529s (up to tax deduction max)
  • Inexpensive clothing worn until it is worn out (I'm wearing clothes from high school today and my 20 year reunion is in 2 years)
  • Habitual library users
  and so on....

But... we have two cars and one is a clown SUV, we have a face-punchable phone plan (we keep our phones for years and years and years), we ski every weekend in the winter (on season passes with used equipment and we bring our own lunch), our kids play sports (with used equipment when possible) and we have a dog.   Oh and we give quite a bit because we feel it is important and aligns with our values.

Basically, we hit our saving goals first and use the remainder responsibly and we are on track to retire in our 40s.   We could have been hard core and retired in our 30s, but we did not enjoy the hard core lifestyle and have found a happy middle-ground for us.

LorettaLynn

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Re: Are you Mustachian, or just LBYM?
« Reply #109 on: March 13, 2018, 02:42:32 PM »
I have a car note and a condo fee, sometimes get my condo cleaned by professionals, and get my toenails maintained by professionals.  BUT I don’t have expensive taste and I live in a modest place and drive a modest chariot in a HCOL area.  Working on making my luxurious expenses less frequent.
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cats

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Re: Are you Mustachian, or just LBYM?
« Reply #110 on: March 13, 2018, 03:00:57 PM »
I think MMM himself has made it pretty clear that his family was not denying themselves...they just took a hard look at what their spending was really doing for them and then eliminated spending that wasn't adding value to their lives.  So, as many others have commented, I think the descriptions in the poll are too restrictive or maybe missing the point :)

That said, I think my husband and I are mostly in the first category....although we spend more than $30k/yr.  This is because 1) we rent in a HCOL area, and 2) we choose to put our child in FT daycare (we have no family nearby and we both earn enough that the opportunity cost of a SAHP is quite high at this time).  Our non-childcare non-housing spending is less than the most recently reported MMM numbers.

I think what really makes us "mustachian" is that we think pretty critically about our spending and lifestyle.  We've figured out that a lot of things that people spend money on (e.g. eating out, gym memberships, retail therapy, driving anywhere within 5 miles of home) don't really make us happier or healthier or give us more free time.  So we don't spend money on those things anymore and boom...savings.  For things we do enjoy that cost money, we're willing to spend a little effort first figuring out if there are ways of doing those things for free/less cost than you might initially expect.  Usually this comes down to being willing to plan more in advance or do things at off-peak times.  I think MMM has a blog post on this topic, A Peak Life is Lived Off Peak.  e.g. we love to visit beautiful national parks, and are willing to commit to going on certain dates months in advance to secure good (and cheap) camping spots, rather than planning at the last minute and getting stuck in some crummy overpriced hotel near the park.  Our toddler is now at an age where he really enjoys going to kid-oriented museums, I plan our trips in advance so we can use a library discount program and go for free or 50% off.  We like to be able to visit family members out of town/country, so we decide on the trips we want to do 1-2 years in advance and then my husband figures out the credit card churning we need to do to accumulate points/miles for a free or very cheap trip.  I guess some people would say oh, I like to be able to act spontaneously, but really...our system means we have a fun activity/outing/vacation planned at least once a month, which seems pretty sweet to me.  And because our planning in advance keeps the cost very low (or nonexistent), we still feel pretty free to cancel stuff if something better comes up at the last minute (rare!).

DreamFIRE

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Re: Are you Mustachian, or just LBYM?
« Reply #111 on: March 13, 2018, 05:35:54 PM »

Since some face-worthy comments about expensive cars and vacations costing thousands of dollars have been mentioned, I suppose I'll add my own here.  12 years ago, I bought a brand new car, my first and only.  I admit it.  It was in the low 20's for cost, and I paid ca$h, but that was tough to spend the dough at the time.  Well, all these years later, it has low miles and is still in great condition inside and out.  On the plus side, I haven't traveled for expensive vacations or blown much money on anything else since I bought that car.  Like Spartana, I'm able to have a great time without spending a lot of dough, although maybe not as much fun as her.  I've found that spending a lot of money doesn't necessarily mean it's going to be more fun or fulfilling.  Ironically, my projected FIRE budget for next year includes a nice cushion for fun/travel of nearly $30K/yr based on a 4% WR.  That doesn't mean I'll actually spend that much, but the growth of my stash has made it possible.  If history is any indication, my frugal tendencies will result in me spending well south of that requiring less than a 3% WR while still enjoying retirement.  But at least I have more options open to me by having the cash available.  I didn't want finances to be an impediment during FIRE.  I certainly wouldn't want to retire on bare bones.

Malkynn

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Re: Are you Mustachian, or just LBYM?
« Reply #112 on: March 14, 2018, 05:43:57 AM »
Honestly, the biggest part of “walking the walk” in terms of Mustachianism was quitting my very high paying job and taking a huge pay cut to work in a more ethical, better quality, more satisfying way.

Once I wrapped my mind around this whole thing being about happiness, health, and environmental responsibility, it became pretty easy to naturally gravitate towards frugal behaviours.

I can afford a major pay cut because I live frugally, and I live frugally because the frugal choice is almost always in line with my personal driving values. Consumerism is typically driven by dissatisfaction, and the more fulfilled and satisfied I am with my life, the less I’m drawn to consumerism.

So for me, Mustachianism isn’t about copying Pete, it’s about understanding that he lives the way he lives because that’s *his* best life. I’m figuring out my own and adapting my finances to make it happen. The finances aren’t the goal, they’re the tool you use to reach the goal.

Maenad

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Re: Are you Mustachian, or just LBYM?
« Reply #113 on: March 14, 2018, 07:17:33 AM »
What I had hoped to convey was that spending on things that make you truly happy isn't the problem, as much as spending on the things that you think will make you happy or keep up with the Jones's.

This is a really good point. While DH and I live well below our means (~65% savings rate) we're still nowhere near Mustachian by most measures. However, the members of this group that are Mustachian in ways that I am not are a great resource for helping me think about what spending truly makes me happy versus what I've been programmed to think will make me happy (or worse yet, spending I haven't really thought about at all!).

Rosy

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Re: Are you Mustachian, or just LBYM?
« Reply #114 on: March 14, 2018, 07:58:46 AM »
Mr. R. is Mustachian to the core - he's a natural:)
I bounce between being a creampuff Mustachian-LBYM and extreme frugality, but that's just me and depends entirely on my/our goals and focus at any given time.

What resonates with me the most is:
1. constant optimization - now that is something that comes natural to me:)
2. mindful examination of our values, lifestyle and ultimate goals - turned out to be a good thing for our relationship too:)
3. finding that there are plenty of people who care about the earth and our stewardship - especially young people are awesome in that regard.

Finances are missing from my list, because they are rolled up into point one and two - when you put your money where your values reside, your path becomes clear.

MMM is so much more than a blog about FIRE. I think all of us who are fully engaged in this forum find challenges, ideas, motivation and satisfaction in taking the next step - past money - the step to living our best life.
Thanks to this forum we have a solid plan for Mr. R's future RE and we have already reached basic FI. 

Copying Pete? Ha, that would be a laugh - we are in an entirely different situation-age group, but the lifestyle-philosophy and the math apply and rather magically produce the desired results.
Once I am done with one last goal you may firmly count me in the just LBYM category forever. Mr. R. will remain Mustachian forever, but will occasionally let himself be corrupted by me:) - that works for us.

 

Laura33

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Re: Are you Mustachian, or just LBYM?
« Reply #115 on: March 14, 2018, 08:30:30 AM »
I think I said LBYM-FIRE-style, because we hit FI around 50 and are currently at a 40-50% savings rate -- but damn we spend a lot of money.  I have zero desire to be MMM -- grew up poor and so had to DIY everything/live on a strict budget by necessity, and even all these years later it brings me pleasure to have someone else clean my house for me (seriously, sometimes I feel like doing a little happy dance because I do not need to scrub the toilet).  OTOH, I also have no desire to keep up with the Joneses and get much more happiness from knowing I have a big 'stache than I do from spending money. 

I am in it largely for the badassery -- I succumbed to lifestyle inflation and the ease of outsourcing everything, and I like the reminder that I am capable of handling whatever needs to get done, that I do not need all of the luxury to be happy, and that it is not healthy to have everything you want when you want it.  Except housecleaners, of course.  :-)  One of my coworkers just gave me one of those name things you put on your desk, like you see at the bank.  It says "unfuckwithable."  Highest praise I can possibly imagine, and I am ridiculously thrilled and feel like a total success. 

FWIW, hedonic adaptation is really, truly, a thing.  I have two happy places in my head:  hanging off the West Caicos Wall at about 90' down; and on the chair lift at Taos with the ridiculously blue sky and white snow.  But you know what?  I am not overall "happier" than I was before I could afford all of that.*  I am 100% confident that had DH never introduced me to skiing and scuba diving that I would have found other places and things that brought me that same feeling of inner peace -- because that comes from within me.  Heck, I can almost get there sitting on my back deck on a perfect early fall evening with the fire pit going and blue time overhead.

So, yeah, I am all about spending money on "experiences" that bring me happiness.  But I could have achieved the same level of happiness for a metric shit-ton less money if I had never taken up skiing or scuba diving and spent that time exploring cheap/free fun stuff closer to home.

Now, I am in no way an anti-consumer purist, and I do believe some "things" can bring extra happiness.  I truly cannot imagine being quite as happy on a daily basis without my StupidCar.  I love driving with the top down, I love the feel of downshifting into the corner, I love the sound of SportPlus mode (especially when the engine does that little blip when the revs drop), and I lovelovelove the security of knowing that my own "oh shit" level is maybe 10% of the car's.  But, (a), I wouldn't have enjoyed it nearly as much if I hadn't waited until FI to get it, because I would have been conscious that this "thing" was interfering with higher-priority needs and wants (e.g., kids' education).  And more to the point, (b), the list of "things that actually bring you happiness" is way, way shorter than the list of "things that you think will bring you happiness."  I can tell you from personal experience that the thing that brings the most happiness and contentedness in life, beyond a happy and healthy family, is knowing that you don't need this shit and can walk any time you want to.  All the other stuff is just the cherry on top of the sundae.

*Well, I am, but it's not because of the fancy stuff I can afford to do.  It's because I no longer have sufficient fucks to spare about a lot of the stupid stuff I used to get so worried about.

Laugh while you can, monkey-boy

JoJo

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Re: Are you Mustachian, or just LBYM?
« Reply #116 on: March 14, 2018, 06:31:42 PM »
I'm shocked by these results - only 7% true mustaches.  The way people jump on people on this forum I would have thought this would be way higher.

I am somewhere between categories 2-3 but picked 3 because I take some pretty expensive trips.

redbird

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Re: Are you Mustachian, or just LBYM?
« Reply #117 on: March 14, 2018, 10:31:28 PM »
I don't know. What defines Mustachian? DH and I spend less than $30k/year, though we can afford to spend more. We are only in our 30s and already FIRE. Bikes? No. My town isn't bikeable unless you live close to downtown, where houses cost more. But we only own 1 fuel-sipping car and only drive it an average of once per week. In some ways, I splurge on fancy things. But in other ways, I'm more frugal than even MMM himself.

MMM is trying to teach being frugal and that you don't need as much as you think you do to retire. As long as you can apply that to your life, I don't think it matters if you bike a couple of miles through the snow to buy groceries or not.
FIREd! as of Sep 4, 2015

fantabulous

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Re: Are you Mustachian, or just LBYM?
« Reply #118 on: March 15, 2018, 03:48:43 AM »
I suppose just LBYM. I went in for a laser hair removal consultation recently, and decided to just go ahead and start the sessions instead of shopping around. So I guess I wasn’t mustachian about my own facial hair.

FYI, this is necessary for my mental health and not just me being too lazy to continue shaving the lasered areas.

Malkynn

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Re: Are you Mustachian, or just LBYM?
« Reply #119 on: March 15, 2018, 03:59:49 AM »
I'm shocked by these results - only 7% true mustaches.  The way people jump on people on this forum I would have thought this would be way higher.

I am somewhere between categories 2-3 but picked 3 because I take some pretty expensive trips.

“True Mustachians” as categorized by the OP.
I don’t subscribe to the OP’s definitions.

remizidae

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Re: Are you Mustachian, or just LBYM?
« Reply #120 on: March 15, 2018, 07:06:45 PM »
I was really excited about MMM when I started reading. It was a good fit for me because I already live at a lower standard than my peers, would *never* car commute and I believe intentionally designing my life. Plus I think he makes the important point that choosing to have kids or pets is a consumption choice like any other. You do not need multiple dogs or kids, or any dogs or kids, just because other people are doing it.

BUT I've gotten turned off by some of the extreme stuff on the forum. Going to six grocery stores to save on food. People who keep their houses at less than 70 degrees in the winter and make everyone suffer to save a few dollars! And you can pry my gym membership out of my cold, dead hands. Frugality is about intentionally spending on things that matter to you--not cutting every luxury out of your life. My gym spending is less than $100 a month (for two gyms!) and in exchange, I get health, fitness, self-confidence, and energy. How is that not worth it? Yeah, yeah, I know I could just do ten million pushups at home, but you can't get the motivation and inspiration of a gym, or the same level of fitness, at home.

I know I could save more if I cut all the wine out of my life and replaced it with water (which I mean both literally and metaphorically). But I like work, and the idea of giving up every luxury in order to quit sooner has no appeal. After all, the purpose of life is to enjoy life.

DreamFIRE

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Re: Are you Mustachian, or just LBYM?
« Reply #121 on: March 15, 2018, 07:23:05 PM »
I was really excited about MMM when I started reading. It was a good fit for me because I already live at a lower standard than my peers, would *never* car commute and I believe intentionally designing my life. Plus I think he makes the important point that choosing to have kids or pets is a consumption choice like any other. You do not need multiple dogs or kids, or any dogs or kids, just because other people are doing it.

BUT I've gotten turned off by some of the extreme stuff on the forum.
There are people of all degrees of Mustashianism here.  Don't let a few extremist comments turn you off.

SC93

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Re: Are you Mustachian, or just LBYM?
« Reply #122 on: March 15, 2018, 10:07:24 PM »
We live below our means.... we spend a lot and we save a lot. I'm already retired but I have other businesses now. The lil woman will never retire she says. Most of the people that work at the museum are in their 50-60-70-80's and have made high 6 figures for many years.

It's been so long for me since I had a job I'm not sure how it would feel but I can tell you this, even when you own a business, if all you have to pay for is electric/food/water/cable/etc, your work day feels so different. I still start work like an employee but I know that if I want to take off a day or a week or a year.... I can. Even if I had a job..... I could take off ever how long I wanted.


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Re: Are you Mustachian, or just LBYM?
« Reply #123 on: March 15, 2018, 11:08:47 PM »
Funny, when people mention Mustachian, it is totally a fabricated online thing.  I've met a few Mustachians through the site, but nobody really knows what it means or how to quantify how Mustachian Mustachians are.

On the other hand, LBYM is a well known path to riches.  You have your income, you save some or most of it, and you are good to go once your savings start to cover your need for income.  It becomes a judgement call, on how much passive income you want and how much you are wanting to part ways with the active income requirement.  It's more what I will teach my children than 'Mustachianism'.
Transitioning to FIRE'd albeit somewhat cautiously...

kelvin

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Re: Are you Mustachian, or just LBYM?
« Reply #124 on: March 16, 2018, 06:03:38 AM »
I'm very good with my income, which is the reason I survived the last 10 years well below the poverty line. Finally making middle class wages, but it'll be a few years before I have capital. (Student debt.)

Clean CC, car's paid off, bike everywhere in the summer months. I'm on track to rent a cheap 1bdrm within walking distance of work by next winter.  Currently renting a room in a shitbox apartment with a roommate. Really tired of not having my own space.

There's been some lifestyle expansion since I got my current job - I own a TV now! Netflix! - but every once in a while I'll have the "so where did you go on vacation this year?" conversation at work and realize I'm nowhere near what my coworkers consider "normal".

Paul der Krake

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Re: Are you Mustachian, or just LBYM?
« Reply #125 on: March 16, 2018, 08:00:58 AM »
I think I said LBYM-FIRE-style, because we hit FI around 50 and are currently at a 40-50% savings rate -- but damn we spend a lot of money.  I have zero desire to be MMM -- grew up poor and so had to DIY everything/live on a strict budget by necessity, and even all these years later it brings me pleasure to have someone else clean my house for me (seriously, sometimes I feel like doing a little happy dance because I do not need to scrub the toilet). 
Complete opposite here, growing up we had hired help clean our home and iron our shirts. It's always struck me as completely undesirable, irrespective of cost.


Lis

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Re: Are you Mustachian, or just LBYM?
« Reply #126 on: March 16, 2018, 03:29:39 PM »
I'm in my late 20's and said LBYM FIRE. I actually sat down for the first time and estimated my spending and savings rate (which I've avoided doing since that risks putting me in a downward spiral of budgeting to strictly then saying fuck it and not budgeting at all). I didn't go too detailed, but my spending is $25-$30k for a HCOL area, which leaves me at a 50-60% savings rate. Maxed out my 401k and my IRA last year with plans to do so again this year, have all my insurance payments planned out already, as well as a slush/shit-hit-the-fan fund. I drive my paid off 2011 car and my only debt is my mortgage. I've figured out a good balance of eating out and going out with friends and staying in.

Honestly, real plans of FIRE are pretty far from my mind right now. Other than making sure I save a lot, I'm not giving it much thought right now.

gimp

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Re: Are you Mustachian, or just LBYM?
« Reply #127 on: March 16, 2018, 04:19:14 PM »
~50% pre-tax savings rate but I buy race parts for a sports car, so, whatever

PhilB

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Re: Are you Mustachian, or just LBYM?
« Reply #128 on: March 17, 2018, 09:20:09 AM »
I voted LBYM - FIRE, but I think a huge part of it comes down to who you are comparing yourself too.  Peers with a similar income would consider me as tight as a duck's arse with my 2/3rds savings rate.  When I read the blogs of young people on here with 1/3 the income we have and I see how much effort they are putting in to save money I feel like a bloated plutocrat and wouldn't feel comfortable calling myself mustachian in their company.

dude

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Re: Are you Mustachian, or just LBYM?
« Reply #129 on: March 26, 2018, 06:50:28 AM »

I'd rather be retired younger to do all the stuff I want to do every single day then work years longer in order to have a week or 2 of luxury travel or a few expensive things. Finding ways once retired to spend weeks, months or even years living and diving (or skiing or climbing or hiking or travelling or whatever) in cool places as often as you want in much less expensive ways is better for some of us then being stuck in a job everyday for years longer to have some short lived luxuries. I was joking with another forum member @dude that while my ER life might not be about heliskiing off a live aboard sailboat in Iceland for my week off work vacation, I'm able to live and ski cheaply in a ski town every single day of the week all season long. Can't do that when you're stuck at your job for many extra years so you can get to FIRE much later so you can quit to go ski every single day all season long ;-).

Amen, spartana! As you know, my FIRE date is a function of my LEO retirement date (i.e., 20 years of LEO service), so I've always known I had to grind it out until then. But the payoff is enormous in terms of a pension, benefits, and high salary during working years. And though I'll be retiring at the relatively old age of 54, fourteen of the years between H.S. and now were spent in the Navy, college, and law school, such that I'll have only really worked in my career for @ 21.5 years. I think I've gamed the system pretty well! Now I get to go be a ski/climbing/surfing bum in my 50's with a firehose of passive income for the rest of my life.

dude

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Re: Are you Mustachian, or just LBYM?
« Reply #130 on: March 26, 2018, 07:24:59 AM »

It's not about being unable to enjoy life without spending more, it's about enjoying life more with things that cost more. I enjoy my life now. I enjoyed my life when I lived on a submarine with 150 other people and spent practically nothing for months at a time (well, I still paid my rent and nominal utility costs for a vacant apartment). I enjoyed my life when I shared a small 2 bedroom apartment with a friend and my girlfriend at the time. I've enjoyed the overwhelming majority of my life, whether I was earning next to nothing or I was earning six-figures a year.

I can say unequivocally that I, personally, find my life MORE enjoyable now that I can afford more luxurious activities/things/experiences that I find enjoyable. When my vacations cost a couple tanks of gas so I could go stay with family for a week and sleep in, maybe playing some video games or swimming in my parent's pool, that was enjoyable. It wasn't nearly as enjoyable to me as my week in the Bahamas diving 3-4 times a day on an all-inclusive live-aboard dive trip however. The former cost less than $200 for the week and the latter was thousands for the same time period, but my enjoyment of the latter made it "worth it" to me. I can also afford to do those things and still save enough to retire in my 40's, so I don't see a good reason to not spend the money on those things I enjoy just to retire a year or two earlier in my 40's. It's all about balancing desires - the desire to be financially independent vs the desire to have the things/experiences/activities that more money can afford. Others may dislike working enough that they would rather forego such experiences and that's fine. I'm not going to tell anyone they have to spend $XYZ in order to have an enjoyable life.  Conversely, however, I'm not going to tell anyone that they are screwing up by, in my opinion, responsibly spending their money to have the things that bring them joy in life.

I'm not spending money to impress other people, I'm spending money on the things that bring me joy and comfort. Doing that while still saving and investing responsibly seems like a pretty good balance between the extremes of saving and spending to me. I'm not going to look down on people for choosing a different balance between savings and spending though (well, I'll look down on those that don't save at all and I probably think negatively about the far extreme savers as well, but I don't think such people are represented here in general).

My brother from another mother! This is me to a T. My favorite things in life to do are rock/ice climb, snowboard (esp. in the backcountry), surf, dive, hike, camp. Some of these things I can do within a 2-3 hour drive of where I live. But there are vastly superior opportunities to do these things in other locations, like the intermountain west, Costa Rica, Mexico, etc., etc. So I spend money (some would say a lot, but relative to my income, it's not) traveling to these places to pursue these passions. THAT'S what I want to do more of in retirement - a LOT more of. So I've leveraged a high-income career and some reasonably frugal measures into a shitload of savings (that will be in addition to a pension and SS), such that I'll have a lot of money to do these things with in retirement. Though even there, I choose the cheapest flight/rental car/hotel options. I'm not a 4-star accommodations kind of guy ; just need a clean bed and a shower in a decent location. I personally just couldn't ever see myself living (alone, even!) on $25k, but for those who do, I'm impressed and psyched for them. So for sure I'm LBYM-FIRE, and not "Mustachian" (as it applies to MMM himself).

FreshPrincess

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Re: Are you Mustachian, or just LBYM?
« Reply #131 on: March 26, 2018, 08:07:49 AM »
wait a second... I live in one of the best neighborhoods of Columbus, Ohio... and i also drink red wine and eat "clean food"...


I drive a new SUV with a 3 year loan, live in a 4 year old 3,000 sq foot house in one of the best neighborhods of Columbus, Ohio, vacation multiple times per year and my savings rate (in terms of student loan principle(paid off this year)  plus home principle plus 401k plus savings account) is almost 60%. Central Ohio is cheap. Sometimes I don’t realize how cheap it is until I come here. I guess I’m lbym with a Mustachian savings rate. I would give that stuff up or red wine or “clean” food or about 50 other wants to FIRE in 5 years instead of 8. My advice to mustacheans is leave the coasts for 10 years and go back there when you can afford it. I’d venture I could hit 75-80% savings rate in Ohio if I gave up 95% of my wants.

stoaX

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Re: Are you Mustachian, or just LBYM?
« Reply #132 on: March 26, 2018, 12:01:15 PM »
I voted LBYM - FIRE, but I think a huge part of it comes down to who you are comparing yourself too.  Peers with a similar income would consider me as tight as a duck's arse with my 2/3rds savings rate.  When I read the blogs of young people on here with 1/3 the income we have and I see how much effort they are putting in to save money I feel like a bloated plutocrat and wouldn't feel comfortable calling myself mustachian in their company.

I chose "kinda mustachian" but "LBYM FIRE style" could've been my answer as well.   And I agree that who you are comparing yourself too makes quite a difference.

OurTown

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Re: Are you Mustachian, or just LBYM?
« Reply #133 on: March 26, 2018, 12:13:12 PM »
I'm LBYM.  I think my quality of life is extraordinarily luxurious, but for an attorney it's somewhat modest.  In reality it is a form of arbitrage; I pull in an attorney salary while keeping a middle-class lifestyle in a LCOL city. 

dude

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Re: Are you Mustachian, or just LBYM?
« Reply #134 on: March 27, 2018, 06:58:14 AM »

I've actually worked longer then you (22 years) even though FIREd younger.

If I was in your position I probably would have worked longer too but I was chaffing at the bit and, not being high income, the extra years wouldn't have made a huge difference in my finances as they would a low spending high earner. Plus I was worried I wouldn't hevable to keep my fitness levels up to a high level to do things later in life. You have managed to do that while working and are super fit so won't be an issue for you. Not sure I could have managed the same working an extra 10 or more years. Glad I quit when I did but my FIRE is probably leaner then most people would like even though its pretty damn luxurious to me.
[/quote]

Yeah, my no-nonsense 40-hour workweek has allowed me plenty of free time to stay fit, pursue hobbies and stay sane. Though I'm currently on the DL! Wrecked myself pretty good on my snowboard out in Utah a week and a half ago. Out of work last week and this week, hopefully go back next week. 6-8 week recovery time though, so no adventures for me for the next few months (have to bail on an April snowboarding trip to Colorado, hoping to be healthy enough to surf in Mexico in June!). SUUUUUCKS being injured!

MaybeBabyMustache

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Re: Are you Mustachian, or just LBYM?
« Reply #135 on: March 27, 2018, 06:29:26 PM »
We're high earners, so still able to save a significant amount of money/month, while indulging in plenty of face punch worthy behaviors. (Kids in sports, house in HCOL bay area, own cars, etc). We're saving about $125K/year, plan to retire early (me, husband is happy to keep working) & have evaluated all of the tradeoffs of fundamentally rethinking our lives to spend less. We are as satisfied as we can be with our current prioritization & tradeoffs. 

On the biking thing, I actually enjoy biking to work. However, biking adds commuting time, and I pay a nanny for my time, so my mustachian identity is in conflict. :-)

dude

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Re: Are you Mustachian, or just LBYM?
« Reply #136 on: March 28, 2018, 07:03:04 AM »
^^ sorry to hear that but any reason for time off work ;-).

I wreaked myself in Utah a couple of weeks ago too - and then wreaked myself in Vegas in...um...a different way (brain cells RIP). Now also recuperating and binge posting here. Just wanted to show that us ERE-level mustache have fun too. It's not just a bleak life of thin gruel and lukewarm tap water ;-).

HAHAHA! Oh, believe me, I've never thought otherwise about you!


imadandylion

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Re: Are you Mustachian, or just LBYM?
« Reply #137 on: April 01, 2018, 12:22:13 PM »
I'm more "LBYM," especially considering how I want to travel often, and plane tickets and lodgings aren't really cheap, even if you get "deals" it's still spending money. So for this reason I can't be "Mustachian." I can't live life just not traveling and seeing the world. I've read some blogs where people who have a high savings rate say they're content with just watching netflix at home - it's just not for me. I also prefer to eat well and don't focus on solely what is the cheapest food.

shelivesthedream

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Re: Are you Mustachian, or just LBYM?
« Reply #138 on: April 02, 2018, 01:06:08 AM »
I chose Kinda Mustachian, because we have a relatively low savings rate and are still not quite there on the expenses downward curve.

I know not all polls can reflect all people, but the major option I feel is missing is something like "Early Downshifter. Your savings rate is low and you're not aiming for FIRE, but that's because you use Mustachianism to be able to work fewer hours at a lower-paying job you like right now, rather than frontloading your working life and then retiring completely."

We do follow most of MMM's advice about the expenses side of the equation. No car, buy second hand, cook at home, keep utilities low... But that means my husband can work at his lower-paying job and I can be a part-time feckless artist and take time off to look after children RIGHT NOW. We're certainly on track to retire at 65, and maybe earlier depending on how things go, but we have minimal grind. I look at the friends we graduated with who are working crazy hours in stressful jobs and think about how glad I am that we don't do that.

I also often think about how rich we are. Sure, I'm conscious of our expenses and there are a few things we could do but don't (cleaner...), but whenever we have a real problem we always have the option of just throwing money at it. I was worrying the other day about whether we should take our whole hospital bag while staying a few nights with a friend as I'm 37 weeks pregnant. My husband pointed out that if it comes to it, we'll just give our friend our debit card and a shopping list and spend a few hundred quid on stuff we don't really need. Oh, what a hard and deprived life we lead!

I know that time is your greatest friend and that lots of people don't discover MMM until they're already in debt and drowning in financial commitments, but I really wish early downshifting were talked about more. Once you have an emergency fund and some retirement savings (to compound until conventional retirement age), it's perfectly Mustachian to go part-time or change careers immediately. And it might seem safer and more "reasonable" to some of the 4% rule naysayers who dismiss the whole of Mustachianism because they don't want to work-then-FIRE. Downshifting is a lot more accessible as an idea.
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Ynari

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Re: Are you Mustachian, or just LBYM?
« Reply #139 on: April 02, 2018, 09:02:08 AM »
I feel like I'm between the 2nd and 3rd options, so I rounded 'up' to LBYM FIRE-style. We are frugal in the traditional ways (cooking at home, small place, 11 year old car + biking, etc.) but we spend a bit on things that we consider quality-of-life entries (hobbies, travel, charity).

I agree with shelivesthedream about downshifting. Being frugal means that 1. I can take time to go to grad school to get my education license, 2. SO and I spend less than a teacher's salary, so 2 incomes makes us feel crazy rich, and 3. I have the option of going half-time if I want more time to myself. It doesn't mean I have to give up my favorite things just because they're expensive; it DOES mean I can afford the time to make the most of my favorite things. It's pretty great.

use2betrix

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Re: Are you Mustachian, or just LBYM?
« Reply #140 on: April 02, 2018, 04:32:04 PM »
Why do so many people, think that those who buy nice things, ONLY do it to impress others? It’s like -
No one “actually” enjoys sports cars as a hobby, they “only” buy them to impress their friends. Or no one ever enjoyed a track day, or zooming through a quarter mile at 11 seconds? But about just an appreciation for the high quality?

I’ve ALWAYS loved cars and the sorts. I haven’t been able to have a sports car due to my traveling lifestyle and this no permanent home. I’d love to have a sports car some day and it would have nothing to do with impressing anyone. In fact, since I’m more frugal than I used to be, I’d almost be slightly embarrassed by it for that reason. The sports car I really want right now would cost me exactly 10 weeks in savings to buy at my current rate. I still don’t have it.

There are many other “nice” things I buy and appreciate that virtually no one I even know has ever heard of or would even know it costs a lot. Some of my clothing items for example are $$, yet most people would never know. I appreciate the quality, details, texture, etc.

Nothing nice that I buy has any intention of impressing anyone.

As for my spending, right now I could live comfortable off about $5k a month which is so so to me. I do contract work and wouldn’t accept a job under $12k/mo take home (currently at about 18-19k/mo take home) so I have a decent savings rate.

Since I work a ton, I’m fine splurging on some things. We go out to a nice date night every weekend (dinner.) we have steak usually 2 meals a week. Eat insanely healthy otherwise (count all our calories and macros).

I’m not mustachian but do live below our means. My wife is way more frugal than me (though she doesn’t work.)

One of the good things about the traveling for my work is we live in a 5th wheel typically. So no standard garage, super small living space. Keeps us from buying too much stuff knowing we live in about 350 sq ft between my wife and our dog.
« Last Edit: April 02, 2018, 04:35:09 PM by use2betrix »

ender

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Re: Are you Mustachian, or just LBYM?
« Reply #141 on: April 02, 2018, 08:35:02 PM »
If we were fully frugalized we could retire likely earlier.

We save a lot right now either way so if it comes to a point where I end up hating my job in the future accelerating to "full Mustachian" would not be too hard.

Imma

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Re: Are you Mustachian, or just LBYM?
« Reply #142 on: April 03, 2018, 08:18:57 AM »
I chose Kinda Mustachian, because we have a relatively low savings rate and are still not quite there on the expenses downward curve.

I know not all polls can reflect all people, but the major option I feel is missing is something like "Early Downshifter. Your savings rate is low and you're not aiming for FIRE, but that's because you use Mustachianism to be able to work fewer hours at a lower-paying job you like right now, rather than frontloading your working life and then retiring completely."

We do follow most of MMM's advice about the expenses side of the equation. No car, buy second hand, cook at home, keep utilities low... But that means my husband can work at his lower-paying job and I can be a part-time feckless artist and take time off to look after children RIGHT NOW. We're certainly on track to retire at 65, and maybe earlier depending on how things go, but we have minimal grind. I look at the friends we graduated with who are working crazy hours in stressful jobs and think about how glad I am that we don't do that.

You describe our situation perfectly, but I still chose Mustachian because the description is 100% accurate for us. We don't own a car, we have a super cheap house and we make 30k , so we spend a lot less.

Our savings rate is of course "relatively" low (about 50% in the best months, but often more like 30-40%) but it's massive compared to most people on our income level and we live an extremely frugal live compared to almost everyone. We're not going to retire anytime soon because we're low income, but I guess you could say we're already parttime retired. I don't think you need to have a very high income  / high savings rate to be considered mustachian.

robartsd

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Re: Are you Mustachian, or just LBYM?
« Reply #143 on: April 03, 2018, 09:45:43 AM »
I don't think a savings rate of 10% really qualifies as living below your means.  Unless you assume that you are going to die early or pretty significantly decrease your spending later on, can you really save 10% and keep your spending roughly stable in retirement?  Maybe for some low earners, that plus social security will allow you to avoid a drop in spending.  How many years would you have to save 10% to replace your income?  Would 40 years do it? 
Assuming a 6% real return on investments 10% savings rate for 40 years might be enough.

If you start out living on 90% of income, assume no real wage growth and 6% real investment returns, you end up with savings about 17x spending after 40 years. Social Security should be enough to cover the other 31% of spending in this case (you'd have to have income well beyond the second SS bend point for it to not be enough - somewhere around $11,000/mo in today's dollars)

The problem with a 10% savings rate is with lifestyle inflation. If wages and spending both grow 1% more than inflation, you only end up with savings about 13x spending. Social Security might not be able to cover the other 47% of your spending (SS fails with starting wage > $2300/mo, final wage > $3400/mo, retirement spending > $3000/mo - not too bad in a LCOL area). If real wage growth and lifestyle inflation are just 2% above inflation, savings would only be about 10x spending and SS would be very unlikely to cover the gap. Of course if real investment returns turn out better than 6% the lifestyle inflation might still work out with a 10% savings rate.

Someone who starts with 10% savings rate, experiences modest 1% real wage growth but does not increase real spending can easily retire in 35 years without relying on SS.

Nudelkopf

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Re: Are you Mustachian, or just LBYM?
« Reply #144 on: April 04, 2018, 02:51:56 PM »
I do bike everwhere. And my share of rent is $25/week. And I spend less than $30k.... but I don't think I'm very Mustachian. Despite my cheap rent, my savings rate isnonly about 65%. I have high hopes of kicking it up a notch!

I picked the 2nd option.
« Last Edit: April 04, 2018, 02:55:42 PM by Nudelkopf »

PiobStache

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Re: Are you Mustachian, or just LBYM?
« Reply #145 on: April 05, 2018, 03:11:35 PM »
LBYM, save a ton, but based on what I've read here we're no where near "true mustachian" and we're pretty good with that.

shelivesthedream

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Re: Are you Mustachian, or just LBYM?
« Reply #146 on: April 06, 2018, 03:07:38 AM »
I chose Kinda Mustachian, because we have a relatively low savings rate and are still not quite there on the expenses downward curve.

I know not all polls can reflect all people, but the major option I feel is missing is something like "Early Downshifter. Your savings rate is low and you're not aiming for FIRE, but that's because you use Mustachianism to be able to work fewer hours at a lower-paying job you like right now, rather than frontloading your working life and then retiring completely."

We do follow most of MMM's advice about the expenses side of the equation. No car, buy second hand, cook at home, keep utilities low... But that means my husband can work at his lower-paying job and I can be a part-time feckless artist and take time off to look after children RIGHT NOW. We're certainly on track to retire at 65, and maybe earlier depending on how things go, but we have minimal grind. I look at the friends we graduated with who are working crazy hours in stressful jobs and think about how glad I am that we don't do that.

You describe our situation perfectly, but I still chose Mustachian because the description is 100% accurate for us. We don't own a car, we have a super cheap house and we make 30k , so we spend a lot less.

Our savings rate is of course "relatively" low (about 50% in the best months, but often more like 30-40%) but it's massive compared to most people on our income level and we live an extremely frugal live compared to almost everyone. We're not going to retire anytime soon because we're low income, but I guess you could say we're already parttime retired. I don't think you need to have a very high income  / high savings rate to be considered mustachian.

I'll be honest: I don't actually know what our savings rate is! Our income situation is a bit complicated - Mr SLTD has a regular salary but also gets free accommodation as part of his compensation, and my freelance income varies wildly. So I would calculate savings rate differently depending on whether I was looking at how much we put into investments or whether I was trying to ballpark years to FIRE (because of the house thing) - but then it's also different every year depending on my earnings, and we've had a bumpy few years with being given some money by relatives but also buying a house full of furniture at once in 2017 (which even if you do it all on the cheap has a big impact on a lower income) so our apparent savings situation keeps changing. Depending on how you look at it, it could be between 10% and 40% as a guess.

But I do think we have a little way to go on the expenses front, which was the main reason for only kinda Mustachian.
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Do I seem curt or like I've missed the point? Please forgive me - I've probably been typing attached to a baby.

Jrr85

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Re: Are you Mustachian, or just LBYM?
« Reply #147 on: April 06, 2018, 08:05:00 AM »
I don't think a savings rate of 10% really qualifies as living below your means.  Unless you assume that you are going to die early or pretty significantly decrease your spending later on, can you really save 10% and keep your spending roughly stable in retirement?  Maybe for some low earners, that plus social security will allow you to avoid a drop in spending.  How many years would you have to save 10% to replace your income?  Would 40 years do it? 

If you start out living on 90% of income, assume no real wage growth and 6% real investment returns, you end up with savings about 17x spending after 40 years. Social Security should be enough to cover the other 31% of spending in this case (you'd have to have income well beyond the second SS bend point for it to not be enough - somewhere around $11,000/mo in today's dollars)

The problem with a 10% savings rate is with lifestyle inflation. If wages and spending both grow 1% more than inflation, you only end up with savings about 13x spending. Social Security might not be able to cover the other 47% of your spending (SS fails with starting wage > $2300/mo, final wage > $3400/mo, retirement spending > $3000/mo - not too bad in a LCOL area). If real wage growth and lifestyle inflation are just 2% above inflation, savings would only be about 10x spending and SS would be very unlikely to cover the gap. Of course if real investment returns turn out better than 6% the lifestyle inflation might still work out with a 10% savings rate.

Someone who starts with 10% savings rate, experiences modest 1% real wage growth but does not increase real spending can easily retire in 35 years without relying on SS.

You are describing somebody with a much higher than 10% savings rate.  At the end of thirty-five years, you're talking about a savings rate of over 35%.  If somebody experiences real wage growth and keeps their savings rate at 10%, then their ability to retire actually gets pushed out.  Obviously what actually happens is somewhere between the two, but much closer to the second approach than the first. 

I guess my point is that if you are saving 10%, you are basically living exactly within your means, as it will take around 40 years to be able to replace your spending.  But that's probably not right because I think I did the calculation using 4%, and a better comparison would be how long it takes to buy an annuity that replaces your spending. 

jlcnuke

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Re: Are you Mustachian, or just LBYM?
« Reply #148 on: April 06, 2018, 08:26:28 AM »
I don't think a savings rate of 10% really qualifies as living below your means.  Unless you assume that you are going to die early or pretty significantly decrease your spending later on, can you really save 10% and keep your spending roughly stable in retirement?  Maybe for some low earners, that plus social security will allow you to avoid a drop in spending.  How many years would you have to save 10% to replace your income?  Would 40 years do it? 

If you start out living on 90% of income, assume no real wage growth and 6% real investment returns, you end up with savings about 17x spending after 40 years. Social Security should be enough to cover the other 31% of spending in this case (you'd have to have income well beyond the second SS bend point for it to not be enough - somewhere around $11,000/mo in today's dollars)

The problem with a 10% savings rate is with lifestyle inflation. If wages and spending both grow 1% more than inflation, you only end up with savings about 13x spending. Social Security might not be able to cover the other 47% of your spending (SS fails with starting wage > $2300/mo, final wage > $3400/mo, retirement spending > $3000/mo - not too bad in a LCOL area). If real wage growth and lifestyle inflation are just 2% above inflation, savings would only be about 10x spending and SS would be very unlikely to cover the gap. Of course if real investment returns turn out better than 6% the lifestyle inflation might still work out with a 10% savings rate.

Someone who starts with 10% savings rate, experiences modest 1% real wage growth but does not increase real spending can easily retire in 35 years without relying on SS.

You are describing somebody with a much higher than 10% savings rate.  At the end of thirty-five years, you're talking about a savings rate of over 35%.  If somebody experiences real wage growth and keeps their savings rate at 10%, then their ability to retire actually gets pushed out.  Obviously what actually happens is somewhere between the two, but much closer to the second approach than the first. 

I guess my point is that if you are saving 10%, you are basically living exactly within your means, as it will take around 40 years to be able to replace your spending.  But that's probably not right because I think I did the calculation using 4%, and a better comparison would be how long it takes to buy an annuity that replaces your spending.

People with a savings rate of ~0% retire every year. A savings rate of 10% will allow someone to retire with minimal (if any) change in their lifestyle when "normal" assumptions about changes in life situation are considered (such as paying off a home about the same time as retiring, getting SS, medicare, etc etc, non-linear salary changes, etc).  Here's an article on the 10% savings rule from a pretty well-respected financial expert of the research into it that he and Kitces did https://www.marketwatch.com/story/is-saving-10-for-retirement-enough-maybe-2018-01-04.

I'll post a summary quote from in the article:
Quote
Once these dynamics are accounted for, saving rates of 10% or less were “safe” for all but the highest earners over 40-year savings periods based on historical market returns and income provided by Social Security. Further, for the lowest-earning Americans, Social Security alone was sufficient for retirement, while earners at the 90th percentile had a safe savings rate of 13.1%.

For most of those retiring at "normal" retirement age, 10% is just fine generally. That doesn't mean it isn't helpful to save more or that it isn't necessary to save more if you want to retire early, but for the "average" person out there, a 10% savings rate is likely to work out just fine.
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lizfish

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Re: Are you Mustachian, or just LBYM?
« Reply #149 on: April 06, 2018, 09:00:04 AM »
I chose Kinda Mustachian, because we have a relatively low savings rate and are still not quite there on the expenses downward curve.

I know not all polls can reflect all people, but the major option I feel is missing is something like "Early Downshifter. Your savings rate is low and you're not aiming for FIRE, but that's because you use Mustachianism to be able to work fewer hours at a lower-paying job you like right now, rather than frontloading your working life and then retiring completely."

We do follow most of MMM's advice about the expenses side of the equation. No car, buy second hand, cook at home, keep utilities low... But that means my husband can work at his lower-paying job and I can be a part-time feckless artist and take time off to look after children RIGHT NOW. We're certainly on track to retire at 65, and maybe earlier depending on how things go, but we have minimal grind. I look at the friends we graduated with who are working crazy hours in stressful jobs and think about how glad I am that we don't do that.

I also often think about how rich we are. Sure, I'm conscious of our expenses and there are a few things we could do but don't (cleaner...), but whenever we have a real problem we always have the option of just throwing money at it. I was worrying the other day about whether we should take our whole hospital bag while staying a few nights with a friend as I'm 37 weeks pregnant. My husband pointed out that if it comes to it, we'll just give our friend our debit card and a shopping list and spend a few hundred quid on stuff we don't really need. Oh, what a hard and deprived life we lead!

I know that time is your greatest friend and that lots of people don't discover MMM until they're already in debt and drowning in financial commitments, but I really wish early downshifting were talked about more. Once you have an emergency fund and some retirement savings (to compound until conventional retirement age), it's perfectly Mustachian to go part-time or change careers immediately. And it might seem safer and more "reasonable" to some of the 4% rule naysayers who dismiss the whole of Mustachianism because they don't want to work-then-FIRE. Downshifting is a lot more accessible as an idea.

I wholeheartedly agree with this. My SO earns decent money, but deliberately chose a job that was less hours, shorter commute and less pay than either his previous job or the alternatives in Central London (although travel costs to the City start to outweigh additional salary anyway) He’d been through a period of lots of overtime, higher salary long hours and he was exhausted.

I am self employed and work quite a relaxed schedule. I bring in good money for the hours I do but I believe my mental health would suffer if I was doing a different job or more hours. I have choices because of financial decisions we made in the past (and, admittedly, some windfalls due to close family deaths)

We too are having a baby and came to MMM about 5 years ago. I see whatever mustachian principles we’ve manage to absorb as a way to make our lives have more ROOM in them. Retiring very early might not be an option for us, as our savings rate is not high enough. But MMM gave us direction and purpose to the LBYM ways we already had (we started investing shortly after we found him)

I like MMM’s uncompromising attitude, it gives the movement shape and character. But everyone is free to take what they need from the philosophy. And while we are not fully mustachian in many senses of the word,  we don’t spend anywhere near the money that our peers do. And we have the benefit of knowing what can be achieved, if we were to choose to do some things differently in future.

Having the time and space *now* to raise a child or children, at 35 and 44, is much more valuable to us then working our arses off and spending much less to achieve a greater savings rate. Had we’d been given the kick up the bum 5 years earlier, before I went self employed and dropped income, things might be different. But we are still in a gloriously comfortable financial/working position compared to 99% of people we know and I’m very pleased with that.