Could You Live Paycheck-to-Paycheck?

[Dicey]

Many people don't have an income problem.  They have a spending problem.  This is a dynamic that plays out to even very high income people.

I have a pretty serious VTSAX buying problem. I have been stressed recently because I retired and our checking account is not going to be able to support the habit starting next month. Spouse makes great money, but a lot comes late in the year. It is going to sting going in and decreasing the amount.

Oh yes, 1st time i xferred $ INTO my bank acct to cover expenses after I Fired was painful.

I miss buying Roths, but not enough to go back to work. My BIL is retired, with a DB pension, and has more money than we do. He works some kind of side hustle every year so he can add to his Roth, which we think is bat-shit crazy. Knowing when enough is enough is a valuable mustachian skill.

[classicrando]

I could very easily live paycheck-to-paycheck.  I'd still max my 401k + Roth, but all I would largely have to do is live alone (or at least pay 100% of current household expenses by myself).

[Askel]

I have a friend into cycling and the way they do it, it is not cheap! The bike cost like 10k and they do all the races, travel for it, stay up to date on the bells and whistles. But I get it, by comparison, bikes are generally cheaper than cars. I like running, I need to buy a pair of shoes once a year. My running clothes don't seem to quit so I don't have to replace them often. I can't even remember when I bought those. I tend to buy good shoes, but at most they cost $150 retail, but I am on the "buy last years model" schedule so I tend to get them for under $100. I see it as a healthcare expense.

Oh for sure, this is a America. You can spend life wrecking amounts of money on anything.  :D 

Although if he really wants to be stupid about it, he should burn the candle from both ends by quitting his job and living out of his car while trying to make it on prize money and sponsorships.   

Still, the minimum cost to participate in a bicycle race is far, far lower than the minimum cost to make the start list of a rally.   

[rothwem]

I think the money incineration device I’d choose would be some kind of race car, maybe specE36 or rally…

Same, it wouldn't take much of a push for me to spend every last dime and then some on rally.   

I had my wakeup call years ago when I shared an elevator with a couple of long time competitors in the sport- they were discussing the costs involved when one said "Man, imagine if we had put all this money we've spent on rally into property or something...."

I got into bicycle racing shortly thereafter. Same amount of fun, but way cheaper.

I have a friend into cycling and the way they do it, it is not cheap! The bike cost like 10k and they do all the races, travel for it, stay up to date on the bells and whistles. But I get it, by comparison, bikes are generally cheaper than cars. I like running, I need to buy a pair of shoes once a year. My running clothes don't seem to quit so I don't have to replace them often. I can't even remember when I bought those. I tend to buy good shoes, but at most they cost $150 retail, but I am on the "buy last years model" schedule so I tend to get them for under $100. I see it as a healthcare expense.

Yeah, cycling is definitely something that can be done expensively.  There used to be this frugal streak that ran through bike racing back in the day though, I feel like its gone now.  20-some years ago, there was a mentality that if you couldn't win on mediocre gear, there was no way you would win on good gear.  If you showed up to a training group ride with carbon wheels, you'd be laughed out of the peloton.  Dura Ace was PRO ONLY.  I feel like a lot of my exposure to the "facepunch" style of frugality was from the bike racing community in the very early 2000s, but even then the sport was morphing from a frugal one to an expensive one. 

It's hard to attribute it to any one thing, but I do think the triathlon crossover/influence has caused road racing to get more expensive.  Traditionally, bike racing was the European version of NASCAR, the working poor racing in the streets of European towns similar to the working poor racing their moonshine transporting jalopies on the backroads of the south.  A lot of the Euro bike racing rules were focused on making sure that some expensive gadget would not unduely influence the sport--there are rules about the shape of bikes, the shape of the handlebars, a minimum weight requirement, etc, etc.  But when Greg Lemond won the TDF with aero bars in the final TT, I think a lot of people kinda realized they could get faster with gear and the culture changed. 

Bikes ARE so much better now.  More comfortable and objectively faster for a given power input, with brakes that actually work.  Its also a much more inclusive sport for women, and I think that the triathlon influence was important there.  But with those improvements have come hugely increased costs and it bums me out. 

[Much Fishing to Do]

Oh for sure, this is a America. You can spend life wrecking amounts of money on anything.  :D 

Heh, this does remind me that there was a time it was really hard to find things that I wanted.  We had to travel an hour to a Mall or other stores that carried much stuff other than the basics, and of course there was no amazon.  There was mail order stuff but it was so clunky and not very in your face I didnt think about it.

That must be a real difference now with saving/spending, as I can go online and find lots of really cool things I can get in a day, stuff I had no idea I needed yesterday!!

[rothwem]

I've never understood why so many parents who are genuinely smart and hard-working, whose positive traits got them in a position of wealth, are so obsessed with putting their kids into private schools so that the kids can be in 'elite' company, forgetting that none of it was required for the parents to achieve their riches in the first place. What does a private school give you that an elite public/gifted school wouldn't? I know that at a private school all the kids' parents will be rich, but that isn't going to make your kid a better student, or a better person. And if you really think networking is that important, (1) you have your own networks to give your kids; (2) it's trivially easy to network at university if you had good academic and social experiences in your youth, none of which require a private education.

I'm not sure if you have kids or not, but I'm guessing with this post you don't? 

Its less about having your kids associated with the elite and more about keeping them away from "the poors" and bad influences.  To some degree, I don't fully disagree.  Kids spend a ton of time at school, and its tough for them not to be influenced by the kids around them.  My son went to a daycare out in the country until he was 4, and the kid LOVES some camo.  We didn't pull him out of school because he loves camo, my wife just changed jobs and it was inconvenient, but it was a little startling that my son *needed* a "realtree jacket" when neither of us hunt or wear anything camo. 

Basically, there are a lot of self-defeating mindsets that exist among the poor, and rich people tend to try to keep their kids away from them.  That is what private schools are for. 

[TimCFJ40]

It'd be easy enough.  We live in a fairly affluent community.  Drive paid for older cars, send kids to public school, have one of the least expensive houses in the neighborhood paid for.  We eat out once or twice a week at most, and usually fairly inexpensively.  We save/invest a minimum of $4500/mo and still have unspent money each month beyond that. 

Compared to our neighbors (generically from observation, not a specific neighbor)  Just trying to keep up could easily burn $6-7k/mo more than we are...
Two high end cars with large car notes:  +$1500/mo
Two kids at high end private schools:  +$3000/mo (or more!)
Eat out multiple times a  week more: +$1000/mo
Home Equity line for large renovation we've been wanting:  $1500/mo

And there you go.  Back to paycheck to paycheck with some nicer stuff but nothing else to show. 

[GuitarStv]

I do live paycheck to paycheck.

Food, property tax, electricity, water, toiletries, gas, and investments.


After that there's never anything left to spend.

Such a "if I could have one wish granted I would wish for infinite wishes" response. You're better than that Steve.

:P

I've had times where my income was very minimal . . . but have been lucky enough to be able to change my circumstances so it was never quite paycheck to paycheck.  When rent was more than I could afford, I roomed with five other people in a small house.  Not ideal by any means, but I payed less than a quarter of what renting a single apartment would have cost.  When I started to run out of money for food in university I was able to change what I was eating to basically rice, beans, and pasta for a couple months.  I got by without a car for nearly a decade after starting my first job, even though bumming rides, taking public transit, and biking everywhere sometimes sucked.

Being able to do that sort of thing for periods of time helps an awful lot to open up a little extra space in the budget that prevents you from having to live paycheck to paycheck.  I think though that this is much easier when you're single (it's easy to tell yourself to deal with deprivation, but much more emotionally/socially complicated to try to get someone else on board) and don't have kids.  To some degree you can shelter yourself from this by carefully considering/planning life choices, but there are also definitely instances where life just happens and you've got to deal.

[tooqk4u22]

I think there’s some research out there that indicates families in smaller homes are happier than those in larger homes, but I don’t recall the details of what constitutes small v large and how happiness was measured.

Our home is 2300 sqft. Not sure if that’s large, it’s all relative.


In the topic at hand, my family could easily spend $100-$150k annually.  We easily spend $80-$105K annually, but there are some big home maintenance and improvement expenses in there.

Us too and we spent so much - I can't believe how much we spend. 

In the last 12 months we have some doozies:
- about $20k on home/auto stuff that came up of which $18K was need to do and not want to do. It hurts and if we were paycheck to paycheck it would have been devastating. 
- about $10k on medical, dental and orthodontia.  Ugh
- about $20k on travel, but at least this is fun spending, and the reality is that the $ really rack up when traveling for family of five and not driving (airfare, larger rental needed, airbnb or two hotel rooms, etc) but this wouldn't have been done if paycheck to paycheck.

That is $50k right there in a blink of an eye, $30k of which was basically unplanned/unexpected.   

[Laura33]

So assuming this is a "WTF could you spend that much money on?!?!" question, and avoiding obvious things like big new houses/saving tons/giving away a bunch and such, I can say, with confidence, that I could find a way to spend almost any amount of income.

First, I'd "buy" a whole mess of help around the house -- full-time gardeners, housekeeper, chef.  That's a couple hundred grand a year.  And of course the lawyer and accountant fees to make sure it's all done legally and taxes are paid, etc.  Oh, and a personal assistant to manage all logistics for me.  And more private training sessions at my gym.  Dietician, concierge medicine, etc.  I could easily spend $500K/yr making my daily life easier and healthier. 

Then I'd increase my travel standards.  Depending on how much money I'd need to spend, I'd fly business every time or upgrade to private, hire a car to drive me around, maybe use a helicopter to do things conveniently.  I would take many, many more weekends up in NYC and stay in nicer places, get really excellent seats to shows and events, so that's easily like $5K/pop without even trying. 

I would also very happily and easily get season tickets to my favorite hockey and NFL teams -- maybe a suite!  And we haven't even talked about hobbies -- hell, I'd have to build a workshop just to store all the stained glass I'd buy, and boy it would be lovely to cook with some white Alba truffles in season, you know?  And DH's hobbies aren't cheap:  woodworking, all sorts of techie stuff, mountain biking, skiing, scuba diving -- you name it, if it involves expensive gear, he's into it.

All of these things allow fun with little of my own time/effort, along with plenty of privacy.  I could look out at a beautiful yard without having to spend hours and hours myself.  I could pop over to a game without having to schlep through the big long public entrance lines or wait in the interminable pile of cars trying to leave after.  And I wouldn't ever have to spend my own time on planning all that shit, which is my total kryptonite and causes a ridiculous amount of mental stress.

Really, I'd have to get to hedge fund levels before I'd struggle with how to spend all that money.  And then I'd just start buying more homes anyway, maybe a plane . . . . 

Of course, if I really did make, say, $10M/year and was living paycheck to paycheck, the first thing I'd do is put like 95% of it into savings, because spending that amount of money without a safety net would make me throw up.  But my larger point is that there is always a higher level of something out there; we just have no insight into anything beyond the folks who are maybe two steps up the ladder from us, so we can't conceive of how folks further up spend all that money and assume that if we had that same money, we'd spend completely differently and not be nearly as stupid.  But the human capacity for greed, sloth, and immediate gratification cannot be overestimated.  If someone has extra money floating around, someone else is going to figure out a way to get it, no matter the amount.  And if someone has created something that only the richest can have, someone is going to spend the money to get it, regardless of how stupid and unnecessary it is.

FWIW, I know this because we now make something like 15-20x what I made 40 years ago.  And I very clearly remember back then thinking about how, well, 2-3x my salary would be fantastic and allow me to have everything I wanted.  And I can still think of other stuff I would be more than happy to get if I made 2-3x our current salary. 

This is why I'm here, btw.  Not because it comes naturally to me not to want stuff.  But because I am really, really good at coming up with more ideas for cool stuff I do want.*  I need to remind myself regularly that I have a ridiculous amount of luxury already and adding metric shit-tons more wouldn't actually make me happier -- and that the world isn't one giant Powerball jackpot and doing the things I'd need to to get all that extra stuff would "cost" me far more than it would ever be worth.


*You know what the #1 thing on my Powerball list is?  You give me $100M, I am sending someone around to all the flea markets to buy up all of the cutesy Hummel-type figurines, and then I am going skeet shooting with them.  I figure it's a service to humanity.  Like I said, I am very, very good at coming up with creative ways to spend money.

[twinstudy]

I've never understood why so many parents who are genuinely smart and hard-working, whose positive traits got them in a position of wealth, are so obsessed with putting their kids into private schools so that the kids can be in 'elite' company, forgetting that none of it was required for the parents to achieve their riches in the first place. What does a private school give you that an elite public/gifted school wouldn't? I know that at a private school all the kids' parents will be rich, but that isn't going to make your kid a better student, or a better person. And if you really think networking is that important, (1) you have your own networks to give your kids; (2) it's trivially easy to network at university if you had good academic and social experiences in your youth, none of which require a private education.

I'm not sure if you have kids or not, but I'm guessing with this post you don't? 

Its less about having your kids associated with the elite and more about keeping them away from "the poors" and bad influences.  To some degree, I don't fully disagree.  Kids spend a ton of time at school, and its tough for them not to be influenced by the kids around them.  My son went to a daycare out in the country until he was 4, and the kid LOVES some camo.  We didn't pull him out of school because he loves camo, my wife just changed jobs and it was inconvenient, but it was a little startling that my son *needed* a "realtree jacket" when neither of us hunt or wear anything camo. 

Basically, there are a lot of self-defeating mindsets that exist among the poor, and rich people tend to try to keep their kids away from them.  That is what private schools are for.

I don't have kids, but in relation to keeping kids away from "the poors" - you could do this by sending them to a gifted school or an elite public school. Sure, it's not going to preclude *all* poor children - there will still be some gifted poor kids who sneak in - I could only see that as a good thing, not a bad thing, for your children to hang around those kids. For as much as there are self-defeating mindsets among certain poor people, there are equally insular and contemptible mindsets among the idle rich, and those aren't avoided by sending them to a private school.

[wageslave23]

So assuming this is a "WTF could you spend that much money on?!?!" question, and avoiding obvious things like big new houses/saving tons/giving away a bunch and such, I can say, with confidence, that I could find a way to spend almost any amount of income.

First, I'd "buy" a whole mess of help around the house -- full-time gardeners, housekeeper, chef.  That's a couple hundred grand a year.  And of course the lawyer and accountant fees to make sure it's all done legally and taxes are paid, etc.  Oh, and a personal assistant to manage all logistics for me.  And more private training sessions at my gym.  Dietician, concierge medicine, etc.  I could easily spend $500K/yr making my daily life easier and healthier. 

Then I'd increase my travel standards.  Depending on how much money I'd need to spend, I'd fly business every time or upgrade to private, hire a car to drive me around, maybe use a helicopter to do things conveniently.  I would take many, many more weekends up in NYC and stay in nicer places, get really excellent seats to shows and events, so that's easily like $5K/pop without even trying. 

I would also very happily and easily get season tickets to my favorite hockey and NFL teams -- maybe a suite!  And we haven't even talked about hobbies -- hell, I'd have to build a workshop just to store all the stained glass I'd buy, and boy it would be lovely to cook with some white Alba truffles in season, you know?  And DH's hobbies aren't cheap:  woodworking, all sorts of techie stuff, mountain biking, skiing, scuba diving -- you name it, if it involves expensive gear, he's into it.

All of these things allow fun with little of my own time/effort, along with plenty of privacy.  I could look out at a beautiful yard without having to spend hours and hours myself.  I could pop over to a game without having to schlep through the big long public entrance lines or wait in the interminable pile of cars trying to leave after.  And I wouldn't ever have to spend my own time on planning all that shit, which is my total kryptonite and causes a ridiculous amount of mental stress.

Really, I'd have to get to hedge fund levels before I'd struggle with how to spend all that money.  And then I'd just start buying more homes anyway, maybe a plane . . . . 

Of course, if I really did make, say, $10M/year and was living paycheck to paycheck, the first thing I'd do is put like 95% of it into savings, because spending that amount of money without a safety net would make me throw up.  But my larger point is that there is always a higher level of something out there; we just have no insight into anything beyond the folks who are maybe two steps up the ladder from us, so we can't conceive of how folks further up spend all that money and assume that if we had that same money, we'd spend completely differently and not be nearly as stupid.  But the human capacity for greed, sloth, and immediate gratification cannot be overestimated.  If someone has extra money floating around, someone else is going to figure out a way to get it, no matter the amount.  And if someone has created something that only the richest can have, someone is going to spend the money to get it, regardless of how stupid and unnecessary it is.

FWIW, I know this because we now make something like 15-20x what I made 40 years ago.  And I very clearly remember back then thinking about how, well, 2-3x my salary would be fantastic and allow me to have everything I wanted.  And I can still think of other stuff I would be more than happy to get if I made 2-3x our current salary. 

This is why I'm here, btw.  Not because it comes naturally to me not to want stuff.  But because I am really, really good at coming up with more ideas for cool stuff I do want.*  I need to remind myself regularly that I have a ridiculous amount of luxury already and adding metric shit-tons more wouldn't actually make me happier -- and that the world isn't one giant Powerball jackpot and doing the things I'd need to to get all that extra stuff would "cost" me far more than it would ever be worth.


*You know what the #1 thing on my Powerball list is?  You give me $100M, I am sending someone around to all the flea markets to buy up all of the cutesy Hummel-type figurines, and then I am going skeet shooting with them.  I figure it's a service to humanity.  Like I said, I am very, very good at coming up with creative ways to spend money.

This a great response. I think it also highlights the silliness of the question. If you really can't imagine how to spend hundreds of thousands of dollars a year, you lack imagination. Same for the people who can't imagine what they would do with their time if they quit working.

I mean quickly off the top of my head, I'd hire Kristen Bell to sing Ana's songs from Frozen for my daughter's birthday party for $1 million.  I'd rent a new sports car to drive around every few weeks.  I'd hire someone to helicopter/fly me around to remote vacation destinations.  I'd hire Scottie Scheffler to give me personal golf lessons.  I.e, I could easily be one of those NBA players who goes brokes after making a hundred million.

[twinstudy]

I could imagine spending a great deal, but I don't think I would ever do it, even with infinite money. For me, my utility curve just doesn't go there. Flying economy is about a 50/100 for me, fairly painful. Business class is around 85/100. Would I spend another $10k to go first class? Maybe. But $100k to go private? No. Too marginal. I'd rather just not spend the money, even if I had no reason to 'keep' the money.

Likewise I enjoy a Boxster/911 for $80k-$200k. That's like 90/100 for me. Would I spend $500k on a Ferrari for 96/100? Probably. But spending $4m on a Bugatti? No, to me that's just not there.

There's a point for me, like the helipad-at-your-home or 2-carat-diamond-ring stage, where the extra money is not buying anything of worth and is just becoming a white elephant. If I was really pushed to, I could probably spend $200k a year, if I really tried to be wasteful. But I don't think I could ever spend $1-2m a year. It would be on the negative side of the utility curve. I'd rather just hoard the money at that stage.

[charis]

I've never understood why so many parents who are genuinely smart and hard-working, whose positive traits got them in a position of wealth, are so obsessed with putting their kids into private schools so that the kids can be in 'elite' company, forgetting that none of it was required for the parents to achieve their riches in the first place. What does a private school give you that an elite public/gifted school wouldn't? I know that at a private school all the kids' parents will be rich, but that isn't going to make your kid a better student, or a better person. And if you really think networking is that important, (1) you have your own networks to give your kids; (2) it's trivially easy to network at university if you had good academic and social experiences in your youth, none of which require a private education.

I'm not sure if you have kids or not, but I'm guessing with this post you don't? 

Its less about having your kids associated with the elite and more about keeping them away from "the poors" and bad influences.  To some degree, I don't fully disagree.  Kids spend a ton of time at school, and its tough for them not to be influenced by the kids around them.  My son went to a daycare out in the country until he was 4, and the kid LOVES some camo.  We didn't pull him out of school because he loves camo, my wife just changed jobs and it was inconvenient, but it was a little startling that my son *needed* a "realtree jacket" when neither of us hunt or wear anything camo. 

Basically, there are a lot of self-defeating mindsets that exist among the poor, and rich people tend to try to keep their kids away from them.  That is what private schools are for.

I don't have kids, but in relation to keeping kids away from "the poors" - you could do this by sending them to a gifted school or an elite public school. Sure, it's not going to preclude *all* poor children - there will still be some gifted poor kids who sneak in - I could only see that as a good thing, not a bad thing, for your children to hang around those kids. For as much as there are self-defeating mindsets among certain poor people, there are equally insular and contemptible mindsets among the idle rich, and those aren't avoided by sending them to a private school.

Agreed.  I went to private school and while there were some definite networking pluses, as a parent I would much rather send my kids send my kids to a decent "poor" school than an elite public or private school.  A) we are able to guide our kids so there isn't an issue of them drifting through school or college under informed about their education and B) I've personally seen many more kids succumb to the bad influence of their elite school friends (drugs and cheating are the big ones) than wealthier students being brought down their less wealthy peers.  Quite the opposite actually.

[classicrando]

I thought the question was about if you could stretch your spending to live paycheck to paycheck on your current situation as it stood right now; not what extravagant bullshit could you blow millions of dollars on if you magically became a billionaire tomorrow.  Those are two different questions.

To answer the second one, I could spend a whole ton of money funding each of the 4 boxes of liberty.

[tooqk4u22]

So assuming this is a "WTF could you spend that much money on?!?!" question, and avoiding obvious things like big new houses/saving tons/giving away a bunch and such, I can say, with confidence, that I could find a way to spend almost any amount of income.

First, I'd "buy" a whole mess of help around the house -- full-time gardeners, housekeeper, chef.  That's a couple hundred grand a year.  And of course the lawyer and accountant fees to make sure it's all done legally and taxes are paid, etc.  Oh, and a personal assistant to manage all logistics for me.  And more private training sessions at my gym.  Dietician, concierge medicine, etc.  I could easily spend $500K/yr making my daily life easier and healthier. 

Then I'd increase my travel standards.  Depending on how much money I'd need to spend, I'd fly business every time or upgrade to private, hire a car to drive me around, maybe use a helicopter to do things conveniently.  I would take many, many more weekends up in NYC and stay in nicer places, get really excellent seats to shows and events, so that's easily like $5K/pop without even trying. 

I would also very happily and easily get season tickets to my favorite hockey and NFL teams -- maybe a suite!  And we haven't even talked about hobbies -- hell, I'd have to build a workshop just to store all the stained glass I'd buy, and boy it would be lovely to cook with some white Alba truffles in season, you know?  And DH's hobbies aren't cheap:  woodworking, all sorts of techie stuff, mountain biking, skiing, scuba diving -- you name it, if it involves expensive gear, he's into it.

All of these things allow fun with little of my own time/effort, along with plenty of privacy.  I could look out at a beautiful yard without having to spend hours and hours myself.  I could pop over to a game without having to schlep through the big long public entrance lines or wait in the interminable pile of cars trying to leave after.  And I wouldn't ever have to spend my own time on planning all that shit, which is my total kryptonite and causes a ridiculous amount of mental stress.

Really, I'd have to get to hedge fund levels before I'd struggle with how to spend all that money.  And then I'd just start buying more homes anyway, maybe a plane . . . . 

Of course, if I really did make, say, $10M/year and was living paycheck to paycheck, the first thing I'd do is put like 95% of it into savings, because spending that amount of money without a safety net would make me throw up.  But my larger point is that there is always a higher level of something out there; we just have no insight into anything beyond the folks who are maybe two steps up the ladder from us, so we can't conceive of how folks further up spend all that money and assume that if we had that same money, we'd spend completely differently and not be nearly as stupid.  But the human capacity for greed, sloth, and immediate gratification cannot be overestimated.  If someone has extra money floating around, someone else is going to figure out a way to get it, no matter the amount.  And if someone has created something that only the richest can have, someone is going to spend the money to get it, regardless of how stupid and unnecessary it is.

FWIW, I know this because we now make something like 15-20x what I made 40 years ago.  And I very clearly remember back then thinking about how, well, 2-3x my salary would be fantastic and allow me to have everything I wanted.  And I can still think of other stuff I would be more than happy to get if I made 2-3x our current salary. 

This is why I'm here, btw.  Not because it comes naturally to me not to want stuff.  But because I am really, really good at coming up with more ideas for cool stuff I do want.*  I need to remind myself regularly that I have a ridiculous amount of luxury already and adding metric shit-tons more wouldn't actually make me happier -- and that the world isn't one giant Powerball jackpot and doing the things I'd need to to get all that extra stuff would "cost" me far more than it would ever be worth.


*You know what the #1 thing on my Powerball list is?  You give me $100M, I am sending someone around to all the flea markets to buy up all of the cutesy Hummel-type figurines, and then I am going skeet shooting with them.  I figure it's a service to humanity.  Like I said, I am very, very good at coming up with creative ways to spend money.

This a great response. I think it also highlights the silliness of the question. If you really can't imagine how to spend hundreds of thousands of dollars a year, you lack imagination. Same for the people who can't imagine what they would do with their time if they quit working.

I mean quickly off the top of my head, I'd hire Kristen Bell to sing Ana's songs from Frozen for my daughter's birthday party for $1 million.  I'd rent a new sports car to drive around every few weeks.  I'd hire someone to helicopter/fly me around to remote vacation destinations.  I'd hire Scottie Scheffler to give me personal golf lessons.  I.e, I could easily be one of those NBA players who goes brokes after making a hundred million.

Both responses are great and on point, I think it is generally easier to spend it all than save even a little for most people. You have to be some kind of weirdo to get a thrill out of saving money (looks in mirror and says hello) and even I could spend on many of the things mentioned and my DW would go to the moon with spending if she could.  It makes me wonder about the population of this forum a bit......as it relates to discretionary spending are we collectively more financially disciplined but would spend more if we prudently could (i.e. have a bigger stash) or are we collectively more content and do not have a desire or need to spend more?

I just watched the first episode of "Your Friends & Neighbors" starring Jon Hamm on Apple TV (free 7 day trial)....pretty much on point with the paycheck to paycheck storyline for hedge fund money.

[tooqk4u22]

I could imagine spending a great deal, but I don't think I would ever do it, even with infinite money. For me, my utility curve just doesn't go there. Flying economy is about a 50/100 for me, fairly painful. Business class is around 85/100. Would I spend another $10k to go first class? Maybe. But $100k to go private? No. Too marginal. I'd rather just not spend the money, even if I had no reason to 'keep' the money.

Likewise I enjoy a Boxster/911 for $80k-$200k. That's like 90/100 for me. Would I spend $500k on a Ferrari for 96/100? Probably. But spending $4m on a Bugatti? No, to me that's just not there.

There's a point for me, like the helipad-at-your-home or 2-carat-diamond-ring stage, where the extra money is not buying anything of worth and is just becoming a white elephant. If I was really pushed to, I could probably spend $200k a year, if I really tried to be wasteful. But I don't think I could ever spend $1-2m a year. It would be on the negative side of the utility curve. I'd rather just hoard the money at that stage.

Maybe or maybe not....maybe not too long ago when you might of had less means you would have said......

Likewise I enjoy a Mazda Miata for $35-40k. That's like 90/100 for me. Would I spend $80k-$200k on a Boxster/911 for 96/100? Probably. But spending $500k on a Ferrari? No, to me that's just not there.


And in few years when you have even greater means you might say.......

Likewise I enjoy a Ferrari of $500k. That's like 90/100 for me. Would I spend $4M on a Bugatti for 96/100? Probably. But spending $30m on a Rolls Royce Droptail? No, to me that's just not there.

[rothwem]

I'm not sure if you have kids or not, but I'm guessing with this post you don't? 

Its less about having your kids associated with the elite and more about keeping them away from "the poors" and bad influences.  To some degree, I don't fully disagree.  Kids spend a ton of time at school, and its tough for them not to be influenced by the kids around them.  My son went to a daycare out in the country until he was 4, and the kid LOVES some camo.  We didn't pull him out of school because he loves camo, my wife just changed jobs and it was inconvenient, but it was a little startling that my son *needed* a "realtree jacket" when neither of us hunt or wear anything camo. 

Basically, there are a lot of self-defeating mindsets that exist among the poor, and rich people tend to try to keep their kids away from them.  That is what private schools are for.

I don't have kids, but in relation to keeping kids away from "the poors" - you could do this by sending them to a gifted school or an elite public school. Sure, it's not going to preclude *all* poor children - there will still be some gifted poor kids who sneak in - I could only see that as a good thing, not a bad thing, for your children to hang around those kids. For as much as there are self-defeating mindsets among certain poor people, there are equally insular and contemptible mindsets among the idle rich, and those aren't avoided by sending them to a private school.

Sure, no doubt, though those high schools don't really exist everywhere.  I know they didn't exist in my school district coming up. 

Agreed.  I went to private school and while there were some definite networking pluses, as a parent I would much rather send my kids send my kids to a decent "poor" school than an elite public or private school.  A) we are able to guide our kids so there isn't an issue of them drifting through school or college under informed about their education and B) I've personally seen many more kids succumb to the bad influence of their elite school friends (drugs and cheating are the big ones) than wealthier students being brought down their less wealthy peers.  Quite the opposite actually.

As someone who went to a private school, how can you say that a public school would avoid those things better than a private one?  FWIW, I went to a public school and there was plenty of cheating and drugs, we just had poor people problems to with them.  Private schools don't eliminate all the problems with schooling, they just cut out the ones related to wealth (or lack thereof). And for a lot of parents that can afford it, cutting out some of those problems with money is a decent solution.   

[Dee_the_third]

Five years ago (two professional incomes, no kids, Midwest) I would have said we literally could not have spent our entire paycheck if we tried.

Now- two young kids, HCOL, and we are actually going to be cash flow negative for a year, until my oldest starts public school.

Monthly gross- about 11k/month, minus 1,500 for the tax deferred account
Outgoing - preschool/daycare for two (5,500), rent and utilities (3,500), everything else 2-3,000

[roomtempmayo]

Somewhat inspired by a post from another thread:

As someone who speaks to highly paid IT guys who have worked in IT 30-40 years on a regular basis, you may or may not be surprised to discover that a lot of these guys have virtually no money to their name because they spent it all.

Not even sure how it's physically possible to spend, say, $100k-$150k after tax in a year and leave nothing left over in savings. What would you even spend on?

It got me wondering about about the bolded as an idea of living paycheck to paycheck.

I think the most common answer is that you can easily upsize your house until there's no more money left.  Failing that, you can buy a vacation house or a Suburban.

Pretty commonly:
30+% taxes off the top
45% primary mortgage
40-70k/year for 2-3 kids in daycare

If you start with some approximation of that ^ as your baseline, you don't even have to make many or any additional bad choices to burn through 200-300k gross in many major cities.

I don't think it's that most people who bring home a fair bit of W2 income are burning through it with a zillion stupid consumption decisions, it's that they made one very big, very bad decision with their housing that basically doomed them financially.

[VanillaGorilla]

I don't think it's that most people who bring home a fair bit of W2 income are burning through it with a zillion stupid consumption decisions, it's that they made one very big, very bad decision with their housing that basically doomed them financially.

I agree with this. Anybody who bought in my neighborhood a decade ago pays roughly $2000 a month for housing. Anybody buying today is paying $7k monthly. That's the difference between a 50% savings rate and a 0% savings rate for many, or most.

Many of us here simply had good luck, good timing, and modestly good judgement with housing.

That said, after driving cheap used cars all my life and finally buying a (not inexpensive!) new car, and financing it (at a low enough rate to provide guaranteed arbitrage) I am absolutely shocked at how painful a car payment is and cannot imagine normalizing such a ludicrous expense.

[charis]

I'm not sure if you have kids or not, but I'm guessing with this post you don't? 

Its less about having your kids associated with the elite and more about keeping them away from "the poors" and bad influences.  To some degree, I don't fully disagree.  Kids spend a ton of time at school, and its tough for them not to be influenced by the kids around them.  My son went to a daycare out in the country until he was 4, and the kid LOVES some camo.  We didn't pull him out of school because he loves camo, my wife just changed jobs and it was inconvenient, but it was a little startling that my son *needed* a "realtree jacket" when neither of us hunt or wear anything camo. 

Basically, there are a lot of self-defeating mindsets that exist among the poor, and rich people tend to try to keep their kids away from them.  That is what private schools are for.

I don't have kids, but in relation to keeping kids away from "the poors" - you could do this by sending them to a gifted school or an elite public school. Sure, it's not going to preclude *all* poor children - there will still be some gifted poor kids who sneak in - I could only see that as a good thing, not a bad thing, for your children to hang around those kids. For as much as there are self-defeating mindsets among certain poor people, there are equally insular and contemptible mindsets among the idle rich, and those aren't avoided by sending them to a private school.

Sure, no doubt, though those high schools don't really exist everywhere.  I know they didn't exist in my school district coming up. 

Agreed.  I went to private school and while there were some definite networking pluses, as a parent I would much rather send my kids send my kids to a decent "poor" school than an elite public or private school.  A) we are able to guide our kids so there isn't an issue of them drifting through school or college under informed about their education and B) I've personally seen many more kids succumb to the bad influence of their elite school friends (drugs and cheating are the big ones) than wealthier students being brought down their less wealthy peers.  Quite the opposite actually.

As someone who went to a private school, how can you say that a public school would avoid those things better than a private one?  FWIW, I went to a public school and there was plenty of cheating and drugs, we just had poor people problems to with them.  Private schools don't eliminate all the problems with schooling, they just cut out the ones related to wealth (or lack thereof). And for a lot of parents that can afford it, cutting out some of those problems with money is a decent solution.

Not sure what problems you are referring to here, if you have any specific examples.  And parents that can afford to solve problems with money can generally still do that regardless of whether their kids go to a poor or a rich school.  And it's also not really an apples to apples comparison.  I'm certainly not saying public school is all roses (far from it), but there are also a lot of issues at private schools, many of which stem from a bunch of entitled people gathering in one spot.

As to the topic of this thread, we are reaching an expensive period with two tweens and an old house - we could easily spend all of our current savings on those line items and some extra travel.

[roomtempmayo]

Not sure what problems you are referring to here, if you have any specific examples. 

I'm not the subject of the question, but talking with friends in public education, if they could simply not have to include the 10-20% of the most disruptive/problematic students in their classes, in their telling the learning environment would be massively improved for the remaining students.

As an outsider, the ability to not have to put up with disruptive students seems like a massive tailwind in education.

[Villanelle]

I thought the question was about if you could stretch your spending to live paycheck to paycheck on your current situation as it stood right now; not what extravagant bullshit could you blow millions of dollars on if you magically became a billionaire tomorrow.  Those are two different questions.

To answer the second one, I could spend a whole ton of money funding each of the 4 boxes of liberty.

But they are kind of the same question.  I think the point people are making is that of course they could spend every penny they make now (however many pennies that is), because there are nearly infinite ways to spend money.  Even if their current budget wouldn't allow them to fly in [insert celeb of choice] to give them weekly foot massages and pep talks, the point stands:  really, no matter how much money you have, there's stuff to spend it on that you would probably get at least some teeny, tiny bit of pleasure or utility out of. 

When DH and I were first starting out, every once in a while we'd decide to have him drive through Taco Bell on his way home from work. We probably did this once every 3 months, give or take.  That was somewhat of an extravagence for us.  Back then, I suspect we'd have initially responded, "if we were suddenly making $400k/yr, I don't know what we'd do with it." Until we sat and thought about it.  Back then, the upgrades probably would have been a SF or townhouse instead of our condo, eating out 1/mo, or paying someone to paint our walls instead of DIY. We still don't make $400k/year, but we are much closer to it than we were back then. And the list of things we'd do with more money has different items, but is still quite easy to imagine. 

I think some people answered the way they did--with crazy extravagances--because their point is that no matter the price point, there are always things to spend money on.  And while I'm sure there are exceptions, I think most if us--if we're being honest--would get something more than 0 benefit from them.  It's just that the tradeoffs are too great.  I'm not going to work another 5 years so I can have weekly massages and a personal assistant and someone to rake leaves every week. But if we had to spend that money in some weird hypothetical, it would be quite easy to do. 

[Laura33]

I could imagine spending a great deal, but I don't think I would ever do it, even with infinite money. For me, my utility curve just doesn't go there. Flying economy is about a 50/100 for me, fairly painful. Business class is around 85/100. Would I spend another $10k to go first class? Maybe. But $100k to go private? No. Too marginal. I'd rather just not spend the money, even if I had no reason to 'keep' the money.

Likewise I enjoy a Boxster/911 for $80k-$200k. That's like 90/100 for me. Would I spend $500k on a Ferrari for 96/100? Probably. But spending $4m on a Bugatti? No, to me that's just not there.

There's a point for me, like the helipad-at-your-home or 2-carat-diamond-ring stage, where the extra money is not buying anything of worth and is just becoming a white elephant. If I was really pushed to, I could probably spend $200k a year, if I really tried to be wasteful. But I don't think I could ever spend $1-2m a year. It would be on the negative side of the utility curve. I'd rather just hoard the money at that stage.

Maybe or maybe not....maybe not too long ago when you might of had less means you would have said......

Likewise I enjoy a Mazda Miata for $35-40k. That's like 90/100 for me. Would I spend $80k-$200k on a Boxster/911 for 96/100? Probably. But spending $500k on a Ferrari? No, to me that's just not there.


And in few years when you have even greater means you might say.......

Likewise I enjoy a Ferrari of $500k. That's like 90/100 for me. Would I spend $4M on a Bugatti for 96/100? Probably. But spending $30m on a Rolls Royce Droptail? No, to me that's just not there.

Precisely.  It's all a matter of perspective.

When I started work and bought a $12K car, it was worth more than my total net worth (which was of course negative).  The idea of a car that cost 10x that was unreal -- who wastes money like that when you can get a perfectly lovely car for a fraction of the price?

A few years ago I was looking at cars around that 10x figure, and my first car seemed soooooo cheap -- I could just buy one of those any time I wanted without affecting my finances at all.  My StupidCar required thought and planning, but my first car now feels like play money.  OTOH, the idea of a Bugatti is still unreal.  And even if I could afford one, I don't see whatever small additional increase in happiness it might provide as worth the money.

But what if I had so much money that a Bugatti was the same percent of my net worth as a $100K car is now?  Would I really feel the same way about it?  Or would I say, man, I have so much money this cost is meaningless, might as well spend a teensy bit of it to get that little extra thrill?  Given what happened with the first 10x, how can I say the same thing wouldn't happen with another 10x?  Which is, of course, exactly why I'm here:  when the treadmill is endless, there's really no point staying on it.

But I've said "I would never" -- and proven myself wrong -- far too many times to ever assume I can predict what I would do in completely different circumstances.

[tooqk4u22]

I thought the question was about if you could stretch your spending to live paycheck to paycheck on your current situation as it stood right now; not what extravagant bullshit could you blow millions of dollars on if you magically became a billionaire tomorrow.  Those are two different questions.

To answer the second one, I could spend a whole ton of money funding each of the 4 boxes of liberty.

But they are kind of the same question.  I think the point people are making is that of course they could spend every penny they make now (however many pennies that is), because there are nearly infinite ways to spend money.  Even if their current budget wouldn't allow them to fly in [insert celeb of choice] to give them weekly foot massages and pep talks, the point stands:  really, no matter how much money you have, there's stuff to spend it on that you would probably get at least some teeny, tiny bit of pleasure or utility out of. 

When DH and I were first starting out, every once in a while we'd decide to have him drive through Taco Bell on his way home from work. We probably did this once every 3 months, give or take.  That was somewhat of an extravagence for us.  Back then, I suspect we'd have initially responded, "if we were suddenly making $400k/yr, I don't know what we'd do with it." Until we sat and thought about it.  Back then, the upgrades probably would have been a SF or townhouse instead of our condo, eating out 1/mo, or paying someone to paint our walls instead of DIY. We still don't make $400k/year, but we are much closer to it than we were back then. And the list of things we'd do with more money has different items, but is still quite easy to imagine. 

I think some people answered the way they did--with crazy extravagances--because their point is that no matter the price point, there are always things to spend money on.  And while I'm sure there are exceptions, I think most if us--if we're being honest--would get something more than 0 benefit from them. It's just that the tradeoffs are too great.  I'm not going to work another 5 years so I can have weekly massages and a personal assistant and someone to rake leaves every week. But if we had to spend that money in some weird hypothetical, it would be quite easy to do.

And the bolded part is the key differentiator that separates the FIRE community from the masses. 

I struggle with playing the fantasy game unless its qualified with "If you had x more $ what would spend it on and if you don't spend it you lose it?"

[GilesMM]

Quite a few people said they would be happy to use extra spending capacity on staff.  It may sound nice or look nice when you see others doing it, but it's not always a bed of roses.  Decent staff is difficult to find and even decent staff is a chore to manage.  They don't do what you want, how you want, when you want, even as you pummel them about the head and shoulders with instructions.  We had a housecleaner that was a dynamo and did a great job, but she was a fierce gossip and rubbed The Boss the wrong way so I had to let her go.  Now we clean the place ourselves and peace is restored in the house.  I'm fiercely defending the gardener, however, as I have no intention of resuming yard drudgery. And the notion of a cook making a mess in the spotless kitchen is a complete non-starter - they would have to cook at home and bring food here.

[wageslave23]

Quite a few people said they would be happy to use extra spending capacity on staff.  It may sound nice or look nice when you see others doing it, but it's not always a bed of roses.  Decent staff is difficult to find and even decent staff is a chore to manage.  They don't do what you want, how you want, when you want, even as you pummel them about the head and shoulders with instructions.  We had a housecleaner that was a dynamo and did a great job, but she was a fierce gossip and rubbed The Boss the wrong way so I had to let her go.  Now we clean the place ourselves and peace is restored in the house.  I'm fiercely defending the gardener, however, as I have no intention of resuming yard drudgery. And the notion of a cook making a mess in the spotless kitchen is a complete non-starter - they would have to cook at home and bring food here.

Hmm, seems like problem isn't the help... 😉

[Villanelle]

Quite a few people said they would be happy to use extra spending capacity on staff.  It may sound nice or look nice when you see others doing it, but it's not always a bed of roses.  Decent staff is difficult to find and even decent staff is a chore to manage.  They don't do what you want, how you want, when you want, even as you pummel them about the head and shoulders with instructions.  We had a housecleaner that was a dynamo and did a great job, but she was a fierce gossip and rubbed The Boss the wrong way so I had to let her go.  Now we clean the place ourselves and peace is restored in the house.  I'm fiercely defending the gardener, however, as I have no intention of resuming yard drudgery. And the notion of a cook making a mess in the spotless kitchen is a complete non-starter - they would have to cook at home and bring food here.

Part of the personal assistant's job would be managing the staff.  I'd pay them very, very generously, and then they could be the one to tell the gardener to stop trampling the roses (I don't have roses, but you get the point) or even to let the gossipy housekeeper go if necessary. 

But also, I'm quite not-picky about most house and yard work projects, so I'd be pretty easy to work for.  As long as the clearer didn't start running the vacuum or the yard person start the leaf blower before 9am, I think I'd be pretty please. 

And yes, the cook would either need to clean up, or I'd schedule the cleaner to come immediately following the cooking session.  (Note to self: when having the personal assistant do cleaning-person intervirews, ensure the cleaner is willing to do dishes.  Hmm, I think I might also need a life guard to stand watch while I swim in my gold coins.)

[twinstudy]

Both responses are great and on point, I think it is generally easier to spend it all than save even a little for most people. You have to be some kind of weirdo to get a thrill out of saving money (looks in mirror and says hello)

I think a lot of it is cultural. In East Asia most people save a great deal of their income, because there's a cultural expectation that you will provide for your family and also an expectation that the state isn't going to give you more than bare-bones safety net, with some exceptions. Whereas here in Australia because welfare is generous and universal there is no need or expectation that you will save more than the bare minimum.

Maybe or maybe not....maybe not too long ago when you might of had less means you would have said......

Likewise I enjoy a Mazda Miata for $35-40k. That's like 90/100 for me. Would I spend $80k-$200k on a Boxster/911 for 96/100? Probably. But spending $500k on a Ferrari? No, to me that's just not there.


And in few years when you have even greater means you might say.......

Likewise I enjoy a Ferrari of $500k. That's like 90/100 for me. Would I spend $4M on a Bugatti for 96/100? Probably. But spending $30m on a Rolls Royce Droptail? No, to me that's just not there.

Yeah true, there's usually a degree of hedonic adaptation, but I'd like to think it's asymptotic :)

[EvenSteven]

I don't think it's that most people who bring home a fair bit of W2 income are burning through it with a zillion stupid consumption decisions, it's that they made one very big, very bad decision with their housing that basically doomed them financially.

I agree with this. Anybody who bought in my neighborhood a decade ago pays roughly $2000 a month for housing. Anybody buying today is paying $7k monthly. That's the difference between a 50% savings rate and a 0% savings rate for many, or most.

Many of us here simply had good luck, good timing, and modestly good judgement with housing.

That said, after driving cheap used cars all my life and finally buying a (not inexpensive!) new car, and financing it (at a low enough rate to provide guaranteed arbitrage) I am absolutely shocked at how painful a car payment is and cannot imagine normalizing such a ludicrous expense.

This is what jumped out at me right away, too. I pay about $2500 a month for housing, and about 2k for daycare. If I bought my current house at todays prices at todays interest rates, it would be ~5k a month. If I still had two kids in daycare, that would be ~3.5k per month. So without changing anything, just using todays rates, I would be spending 8.5k per month on housing and child care alone.

I boggles my mind that people can't even imagine spending 10k per month. As others said, that is just an immense lack of imagination.

[tooqk4u22]

I don't think it's that most people who bring home a fair bit of W2 income are burning through it with a zillion stupid consumption decisions, it's that they made one very big, very bad decision with their housing that basically doomed them financially.

I agree with this. Anybody who bought in my neighborhood a decade ago pays roughly $2000 a month for housing. Anybody buying today is paying $7k monthly. That's the difference between a 50% savings rate and a 0% savings rate for many, or most.

Many of us here simply had good luck, good timing, and modestly good judgement with housing.

That said, after driving cheap used cars all my life and finally buying a (not inexpensive!) new car, and financing it (at a low enough rate to provide guaranteed arbitrage) I am absolutely shocked at how painful a car payment is and cannot imagine normalizing such a ludicrous expense.

This is what jumped out at me right away, too. I pay about $2500 a month for housing, and about 2k for daycare. If I bought my current house at todays prices at todays interest rates, it would be ~5k a month. If I still had two kids in daycare, that would be ~3.5k per month. So without changing anything, just using todays rates, I would be spending 8.5k per month on housing and child care alone.

I boggles my mind that people can't even imagine spending 10k per month. As others said, that is just an immense lack of imagination.

A significant portion of housing sales over the last few years has either been bought with cash and/or the buyers received large "gifts" from parents to purchase followed with ongoing support. Sort of an early transfer of wealth. 

It is crazy and likely foretells the future of housing values being flat to down for quite a while until the inflation adjusted incomes catch up with the valuations and resulting mortgage payments, which would be aided by lower interest rates.  Housing values basically doubled or more in most markets in two years time due to artificially low interest rates that will likely never be seen again so that has to be corrected. At the end of the day, housing is highly correlated to incomes and the corresponding debt / income ratio.   Sure there are exceptions in some markets where values are way above incomes but they tend to be where there is significant capital (finance, tech, government) or where wealthy immigrants/foreign nationals desire to park their wealth in real estate (and those two areas overlap quite a bit).   

The problem is that while all this works itself out it will further exasperate the US demographic issues because it simple to expensive to house and care for kids right now so births will decline and at the moment immigration policy won't help us out to offset it. 

[Fomerly known as something]

In part at the end of the day the reason why I “can’t” actually live paycheck to paycheck is that I have a lot of larger projects that I know I’ll want to do and so I must account (save) for them.  I just can’t fathom buying something that I don’t have a viable plan to pay for.  The project will have to wait until I have the money, I know I want to do the project so I set aside the money etc.

[mistymoney]

Many people don't have an income problem.  They have a spending problem.  This is a dynamic that plays out to even very high income people.

I have a pretty serious VTSAX buying problem. I have been stressed recently because I retired and our checking account is not going to be able to support the habit starting next month. Spouse makes great money, but a lot comes late in the year. It is going to sting going in and decreasing the amount.

Oh yes, 1st time i xferred $ INTO my bank acct to cover expenses after I Fired was painful.

I miss buying Roths, but not enough to go back to work. My BIL is retired, with a DB pension, and has more money than we do. He works some kind of side hustle every year so he can add to his Roth, which we think is bat-shit crazy. Knowing when enough is enough is a valuable mustachian skill.

Words of wisdom!

I'll be resigning in the next 3 months, and I am battling with myself over if I really have enough. I'm pretty sure I do. I might have a lot more than enough. Or maybe a bit too little. Worry how a lost decade or so would erode things. I somehow have to be ok with not continuing to increase the pot and maybe putting some serious dings into it.

And to still feel ok about it.

still working on that. to feel ok.

[Dicey]

Many people don't have an income problem.  They have a spending problem.  This is a dynamic that plays out to even very high income people.

I have a pretty serious VTSAX buying problem. I have been stressed recently because I retired and our checking account is not going to be able to support the habit starting next month. Spouse makes great money, but a lot comes late in the year. It is going to sting going in and decreasing the amount.

Oh yes, 1st time i xferred $ INTO my bank acct to cover expenses after I Fired was painful.

I miss buying Roths, but not enough to go back to work. My BIL is retired, with a DB pension, and has more money than we do. He works some kind of side hustle every year so he can add to his Roth, which we think is bat-shit crazy. Knowing when enough is enough is a valuable mustachian skill.

Words of wisdom!

I'll be resigning in the next 3 months, and I am battling with myself over if I really have enough. I'm pretty sure I do. I might have a lot more than enough. Or maybe a bit too little. Worry how a lost decade or so would erode things. I somehow have to be ok with not continuing to increase the pot and maybe putting some serious dings into it.

And to still feel ok about it.
 
still working on that. to feel ok.

This helps me when I feel that way: At no point will you be taking all of your money at once.  The bulk of your resources will still be hard at work for you, through all of the future's downs and ups. Bonus: thirteen years in, it rarely crosses my mind.

[Cranky]

Could I imagine how people would be set up to do this in my area?  Yes, easily.

A large mortgage for a "prestigious" address in a good (read absolute best, by whatever standard) school district
Two leased vehicles, plus a third for weekend fun.  At least one, and possibly all 3, are a giant truck.
Two kids, with their day care and after-school activities
Season tickets / club membership / professional development
travelling based on the school schedule, which is always surge priced
Private school, even though you spent to be in an amazing school district
Saving up for a big name school, maybe your alma mater.  Extra prep and activities to increase chances for said school
Dining at the latest fancy place.  There always seems to be more.

My area is the kind of striving area where the after Christmas sale starts two days before Christmas.  (I'm not kidding)  If you want a hot Halloween costume for your kid, you better have shopped in September.

It also is one of the few places in Houston with trees.  Lots of trees.  So, it was the closest thing to Ireland that we could find.  And, fortunately, enough people who do not strive in the ways above for us to have found a lot of friends.  Even if not quite Mustachian, they boggle at the externally-driven consumption that goes on.

I've never understood why so many parents who are genuinely smart and hard-working, whose positive traits got them in a position of wealth, are so obsessed with putting their kids into private schools so that the kids can be in 'elite' company, forgetting that none of it was required for the parents to achieve their riches in the first place. What does a private school give you that an elite public/gifted school wouldn't? I know that at a private school all the kids' parents will be rich, but that isn't going to make your kid a better student, or a better person. And if you really think networking is that important, (1) you have your own networks to give your kids; (2) it's trivially easy to network at university if you had good academic and social experiences in your youth, none of which require a private education.

I’m a big fan of public schools, but not every place offers “elite” public schools or specialized gifted schools. Not every school is a good fit for every kid. Some parents want specific values, or Montessori or Waldorf, or just the prep school where everyone in the family goes.

[Arbitrage]

We *sort of* did this by cutting back on our work (and salaries) by 50-60%.  Now, we do still max our retirement accounts - or at least we did prior to this year when we've pivoted to beefing up taxable savings - but it has been a change of perspective not to have a continuously increasing savings account...which then was used to invest in taxable brokerage. 

Without that surplus, it has felt mildly uncomfortable to have to track cash flows when big, lumpy expenses line up, even though we know we're fine and have a big stash backstopping our relatively meager part-time income.  I can't fathom all of the people who choose to live that way without savings backing them up. 

Our constant source of head-shaking disbelief - my wife's boss lives paycheck-to-paycheck, and worse (borrowing money from his parents and parents' company that he will never pay back), no matter how high his salary and benefit levels get.  His benefits are substantial, too - company-paid luxury cars + insurance + gas + moving expenses + medical bills + 'self-help' seminars + therapy bills + meals + credit card that gets used for all sorts of non-business expenses.  He just got a 50% raise, and immediately spent it all on renting a nicer house.  Worse than that, really, as he demanded the raise because it was necessary in order to qualify to rent the house.  He has no savings despite all of this (salary now over $200k, ~40 with no children), and frequently needs paycheck advances for things like rent.  He recently got married, his wife makes a comparable amount, and they needed both salaries to afford to rent that new house.

So...some people are just wired that way.  They will spend every cent available, no matter how much it is. 

[J.P. MoreGains]

I was never a big spender but I also wasn't a big earner. Now that I got my earnings up it would be tough to not have all the extra money every month saved. It feels so good to save a lot of money. This hasn't worn off for me. All this extra money makes me feel like I can make it in the world and that I can get by on so little.

I have to say I would HATE spending all of my money the way some big earners. The thought of working hard and burning through all the money in a month just to have to do it again the next month sounds like torture. I'm into money for the freedom.

Single people in good health have no excuses. Even in a low paying job. Cut expenses, work more jobs. The savings are there to be had.

[Laura33]

I've never understood why so many parents who are genuinely smart and hard-working, whose positive traits got them in a position of wealth, are so obsessed with putting their kids into private schools so that the kids can be in 'elite' company, forgetting that none of it was required for the parents to achieve their riches in the first place. What does a private school give you that an elite public/gifted school wouldn't? I know that at a private school all the kids' parents will be rich, but that isn't going to make your kid a better student, or a better person. And if you really think networking is that important, (1) you have your own networks to give your kids; (2) it's trivially easy to network at university if you had good academic and social experiences in your youth, none of which require a private education.

I’m a big fan of public schools, but not every place offers “elite” public schools or specialized gifted schools. Not every school is a good fit for every kid. Some parents want specific values, or Montessori or Waldorf, or just the prep school where everyone in the family goes.

+1.  I like to try to avoid stereotypes in every direction when I can.  I have a lot of friends who chose to live in the city for all its vibrant neighborhoods and benefits.  But with city, neighborhoods change by the block.  Their ES is great; their zoned HS is literally guns and knives and metal detectors.  I can't exactly blame them for sending their kids to private schools after ES.

My two kids attended different MS -- my DD got a waiver into the nearby one in the wealthier neighborhood, my DS did not and went to the poorer neighborhood nearby.  Why did I want them to go to the closer one?  So they could fucking walk home safely when they wanted/needed to stay late and couldn't take the bus.  The farther one we were zoned to required walking down a long street with no sidewalks, then crossing a highway entrance; the other school was fully-sidewalked through neighborhood streets.  But there was a difference in education, too:  the short version is that DS' school had fewer resources and devoted more of those resources to the kids who needed help to catch up.  DS was well above most of the kids there academically, so he sort of just coasted for three years.  Luckily, he's the kind of kid who can just coast and then catch up quickly; if it had been my DD, she'd have been in constant trouble just from the boredom. 

Yeah, I was annoyed at the moms who were calling me worrying about sending their kids to DS's MS (most went private for those 3 years), particularly without even investigating the schools -- the MS was perfectly safe, DS was adored by the teachers, and there were many good things about it (we still donate to the PTA there, because damn do they need the money).  OTOH, once I was able to see both kids' experiences, and then been through the giant college admissions race that followed, I can't really blame parents who want a more challenging academic environment for their kid.

[GilesMM]

Quite a few people said they would be happy to use extra spending capacity on staff.  It may sound nice or look nice when you see others doing it, but it's not always a bed of roses.  Decent staff is difficult to find and even decent staff is a chore to manage.  They don't do what you want, how you want, when you want, even as you pummel them about the head and shoulders with instructions.  We had a housecleaner that was a dynamo and did a great job, but she was a fierce gossip and rubbed The Boss the wrong way so I had to let her go.  Now we clean the place ourselves and peace is restored in the house.  I'm fiercely defending the gardener, however, as I have no intention of resuming yard drudgery. And the notion of a cook making a mess in the spotless kitchen is a complete non-starter - they would have to cook at home and bring food here.

Part of the personal assistant's job would be managing the staff.  I'd pay them very, very generously, and then they could be the one to tell the gardener to stop trampling the roses (I don't have roses, but you get the point) or even to let the gossipy housekeeper go if necessary. 

But also, I'm quite not-picky about most house and yard work projects, so I'd be pretty easy to work for.  As long as the clearer didn't start running the vacuum or the yard person start the leaf blower before 9am, I think I'd be pretty please. 

And yes, the cook would either need to clean up, or I'd schedule the cleaner to come immediately following the cooking session.  (Note to self: when having the personal assistant do cleaning-person intervirews, ensure the cleaner is willing to do dishes.  Hmm, I think I might also need a life guard to stand watch while I swim in my gold coins.)

Sounds like you have quite a fabulous income (or live in a VLCOL country).

[GuitarStv]

Quite a few people said they would be happy to use extra spending capacity on staff.  It may sound nice or look nice when you see others doing it, but it's not always a bed of roses.  Decent staff is difficult to find and even decent staff is a chore to manage.  They don't do what you want, how you want, when you want, even as you pummel them about the head and shoulders with instructions.  We had a housecleaner that was a dynamo and did a great job, but she was a fierce gossip and rubbed The Boss the wrong way so I had to let her go.  Now we clean the place ourselves and peace is restored in the house.  I'm fiercely defending the gardener, however, as I have no intention of resuming yard drudgery. And the notion of a cook making a mess in the spotless kitchen is a complete non-starter - they would have to cook at home and bring food here.

Part of the personal assistant's job would be managing the staff.  I'd pay them very, very generously, and then they could be the one to tell the gardener to stop trampling the roses (I don't have roses, but you get the point) or even to let the gossipy housekeeper go if necessary. 

But also, I'm quite not-picky about most house and yard work projects, so I'd be pretty easy to work for.  As long as the clearer didn't start running the vacuum or the yard person start the leaf blower before 9am, I think I'd be pretty please. 

And yes, the cook would either need to clean up, or I'd schedule the cleaner to come immediately following the cooking session.  (Note to self: when having the personal assistant do cleaning-person intervirews, ensure the cleaner is willing to do dishes.  Hmm, I think I might also need a life guard to stand watch while I swim in my gold coins.)

Sounds like you have quite a fabulous income (or live in a VLCOL country).

I feel that way any time I hear about someone hiring servants to do stuff they could easily do for themselves - cooking, cleaning, gardening, etc.

[Villanelle]

Quite a few people said they would be happy to use extra spending capacity on staff.  It may sound nice or look nice when you see others doing it, but it's not always a bed of roses.  Decent staff is difficult to find and even decent staff is a chore to manage.  They don't do what you want, how you want, when you want, even as you pummel them about the head and shoulders with instructions.  We had a housecleaner that was a dynamo and did a great job, but she was a fierce gossip and rubbed The Boss the wrong way so I had to let her go.  Now we clean the place ourselves and peace is restored in the house.  I'm fiercely defending the gardener, however, as I have no intention of resuming yard drudgery. And the notion of a cook making a mess in the spotless kitchen is a complete non-starter - they would have to cook at home and bring food here.

Part of the personal assistant's job would be managing the staff.  I'd pay them very, very generously, and then they could be the one to tell the gardener to stop trampling the roses (I don't have roses, but you get the point) or even to let the gossipy housekeeper go if necessary. 

But also, I'm quite not-picky about most house and yard work projects, so I'd be pretty easy to work for.  As long as the clearer didn't start running the vacuum or the yard person start the leaf blower before 9am, I think I'd be pretty please. 

And yes, the cook would either need to clean up, or I'd schedule the cleaner to come immediately following the cooking session.  (Note to self: when having the personal assistant do cleaning-person intervirews, ensure the cleaner is willing to do dishes.  Hmm, I think I might also need a life guard to stand watch while I swim in my gold coins.)

Sounds like you have quite a fabulous income (or live in a VLCOL country).

I think you missed the fact that this was a hypothetical, and is how I would spend the money if I absolutely had to (use it or lose it, no saving or investing or donating), and I had an super high salary.

I thought it went without saying, but maybe not.  So, FTR, I do not actually have a gold coin pool.  (DH and I have a nice, but not obscene, income, and are in a H/VHCOL area.

[cpa cat]

As an accountant, I get to witness a lot of people living paycheck to paycheck. In my business, I see the evidence first hand mostly with high earners or business owners. There are people out there making hundreds of thousands a year who overdraft every single month.

The top culprits are extravagant houses. A lot of people will buy the biggest house they can qualify for, often during the first or second year of making a lot of money. Of course, then they have a hard time repeating that level of income consistently and the house and its associated costs starts making up a bigger percentage of their budget. People basically bankrupt themselves on houses on a semi regular basis. Give them a couple years of high earning years, and they’ll build a custom home, buy a lake house, buy a house for their kids, or find some other way to overspend on housing.

Now that you’re in a fancier neighborhood, you will of course now need new cars every year, a country club membership, private school for kids, private university for kids, a boat, a place to put the boat. When you buy new cars, it doesn’t do to be unequal, so both spouses will get a new cars every year. But you won’t trade in, because your children will be given your “old” car. Their old car will inevitably have a low value due to damage.

If you own a business, you can find all sorts of great ways to waste money. One of the biggest is food. People will eat out morning, noon, and dinner and justify it by saying they’re busy. Where I live, the best way to cripple a business fast though is commercial real estate. Property taxes are about four times residential tax rates and no one realizes it until after they buy.

Gambling and day trading are great ways to destroy wealth, but significantly less common than general irresponsible spending on big ticket items and real estate.

Almost anyone can live paycheck to paycheck if they buy the right real estate!!