Author Topic: MMM 2016 Budget  (Read 43103 times)

Cassie

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Re: MMM 2016 Budget
« Reply #50 on: May 22, 2017, 05:22:27 PM »
I am not disagreeing with you. Some of his expenses are 1 time occurrences though.  He won't build a shed or buy a new car every year.  I agree that retirement is time for fun and I worry about young people that quit too young on such a small budget. I know a few people that did that and by their 50's were very unhappy but unable to re-enter work force.   We actually spend more since retiring on entertainment, eating out, travel, etc because we now have the time and energy for such things.   We spend less on cars and clothes, etc.

dragoncar

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Re: MMM 2016 Budget
« Reply #51 on: May 22, 2017, 05:24:52 PM »

It rubs me the wrong way when someone screams A LOT "I live a hyper-luxurious life for $25k/yr!!!" and then admits in the footnotes that a lot of what makes the life hyper-luxurious (travel, new car, fancy home improvements) is not counted in that $25k/yr.  MMM is obviously free to spend whatever he wants, and I don't begrudge him any of it, but that doesn't mean I won't throw the BS flag when he uses accounting tricks to disguise a lot of his spending.  It's a shame, because I think a lot of his luxurious spending is done on the cheap in intelligent ways (DIY, looking for arbitrage on purchases, etc) and is a model for how to live well inexpensively but it cheapens the message when he just fails to account for it because "it's a business expense" or whatever. 

I think it would be more instructive to do a side by side on what he spent (all of it) and then a list of what others might pay to live the same way less intelligently (i.e., "MMM workshop, DIY, $30k....Normal person workshop, paid contractor, $80k").  THAT would be a comparison worth reading.

I always thought that MMM should actually focus on the fact that he effectively gets all this "consumerism" for free just by virtue of the way he's organized his business.  It's a feature, not a bug.  He should just straight up say "I live a $100k lifestyle on $25k by having a hobby business in retirement."

When I was working, I had a lot of perks like free food and travel that I certainly didn't count towards my monthly spending, but on the other hand likely offset some similar spending I will be doing in retirement. 

Either way, I can't begrudge the accounting of a guy who is spending only 10% of his blog profits.  If it was me, I would be spending WAY more no matter which way you cut it.  I obviously don't fall into the "I spend whatever I like and it's still under the poverty line" camp.  I spend less because it allows me to quit work earlier, not because I can't find a reason to spend more.
« Last Edit: May 22, 2017, 05:26:59 PM by dragoncar »

Cassie

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Re: MMM 2016 Budget
« Reply #52 on: May 22, 2017, 05:31:46 PM »
If I was making that much $ from a blog I would be spending more $ too.  I think it is great the amount he has given to charity. I think he is living his values.  We are semi-retired so our income can vary widely each year. Some years we spend more then others.

boarder42

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Re: MMM 2016 Budget
« Reply #53 on: May 22, 2017, 05:36:34 PM »
I would fly first class if I could fly free too. However, most normal people would not choose to spend 11k on airfare unless they were very wealthy.

Yes I know that is why I said it's disingenuous to state we did the vacation on so little amount of money. Sort of like how it's (kinda) disingenuous for MMM to state he spends $25k a year living like he does, which was my point.

He doesn't. He does a lot of things outside of just subsisting in life. One could "retire" on very little money if they lived in CA, and had a VW bus, and lived in it and begged for food.

MMM core basic $25k spending level is a good shock point to get people down to, it's a nice round number that most people, if they make enough effort, can obtain. It gets them thinking about what really matters and supercharges their savings/retirement plans. But it's not, IMO, a lifelong goal to only spend that amount. One would go completely nuts living in your house, just eating, sleeping, and sh!ting around and posting on forums all day. Hardly a way to live one's life, and certainly not the "retirement" most imagine.

IMO.

Your vacation was expensive 2x what my wife and I spent flying first class and staying in 5 star hotels. See grand wailea and a Jeep rental car. For 10days in Maui. It's not disingenuous to state this bc this is easily obtained travel hacking no job required.
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Re: MMM 2016 Budget
« Reply #54 on: May 22, 2017, 05:37:11 PM »
It's a shame he diminishes his credibility by choosing to omit so many expenses through his creative accounting. Makes comparisons to normal people meaningless.
Agreed


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mm1970

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Re: MMM 2016 Budget
« Reply #55 on: May 22, 2017, 06:13:52 PM »
I only read that thread from last year because he mentioned it in his post. I thought that his adding in a bit more about business expenses was a way of dealing with some of the comments. In particular when he mentioned that both he and Mrs. MMM end up spending money on business stuff or travelling for business and that that probably satisfies any desire for spending/travelling, whereas if they weren't doing so for business, they might end up spending/travelling a bit more for personal fun. As always, I feel like he is as genuine and up-front as he seems to be.

Liked the shout-out for Quiet as well. That book made a big difference to me when I read it.

Pretty much this.

I think that a lot of people who complain about how he gets a luxurious lifestyle because of his blog, and note that it's a benefit compared to "hanging out at the park" - well, actually LIKE that sort of thing.  But, what if you don't?

I mean, you can go on business travel, and enjoy it, but still recognize that you wouldn't spend the money otherwise.  Maybe I'm reading a lot of wanking into it, but it seems like several people on this thread feel this way.  Like "SURE you'd be happy camping".

But what if you were?  I really like the IDEA of travel.  I grew up never vacationing as a kid. But you want to know something?  I don't really like travel.  The whole fancy-pants vacations to ... Ecuador that MMM goes on, or others go on to Maui, or Europe, or Bali, or whatever by travel hacking.  It doesn't sound like fun to me.

So when he says that his costs would go up a little without these trips...I believe him.  And when he says his wife's craft costs would go up a bit without the business...I believe him.  Because I'm pretty much the same way. 

I love crafting, and years ago spent a crap ton of money on it.  Now?  A lot less.  Certainly wouldn't affect my budget more than a few hundred bucks a year.

And travel.  I've been some places.  I prefer simple trips like short road trips, and mid-level hotels with a kitchenette (or an Air-BNB), or camping.
- I don't have enough vacation time to go a lot of places.
- Traveling with kids kind of sucks. 
- My husband used to travel a lot with kids.  And, his old boss used to invite me (pre-kid).  I didn't go!  Florida, DC, whatever.  I could have grabbed a plane ticket and had a cheap vacation!  I didn't do it!  (I did take my then-5-year old for a long weekend to DC once, when hubby was there for 1.5 weeks.  Because we had friends there.  And we flew on miles.)
- I NEVER travel for work.  But the thing is - I could probably head off to Japan a couple of times a year for work.  But whenever someone mentions  in passing "it might be good for you go head to Japan some day for XYZ" I run and hide.  Seriously.


And I just thought the whole rent thing was ridiculous too.

And I agree with whomever else mentioned free food at work.  I don't work for google.  But we have free coffee and tea at work.  The occasional free lunch.  Spouse gets a free lunch once a month.  Does it affect our spending?  No.  It doesn't mean I "get my fill of takeout" at work.

GU

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Re: MMM 2016 Budget
« Reply #56 on: May 22, 2017, 06:23:51 PM »
Couple critique comments:

- I don't see where he is including Colorado state income tax. IMO he needs to include that since property tax rates are very much tied whether a state has state income tax. He could certainly move to a state without state income tax so that's an optional expense in my book. Some how the state income tax should be expressed in an amount a normal early retiree would pay from investment income in Colorado.

- No home owners insurance which to the best of my knowledge means no umbrella type insurance policy. IMO, not a good thing given his wealth and future wealth.

Furthermore, CO has low property taxes.  States that lack income taxes tend to have high property taxes (e.g., TX and FL).  But the two highest property tax states, NJ and IL, both also have income taxes. And, if we're going to focus on state and local taxes, sales tax is pretty important as well. 

But for most early retirees, I don't think state and local taxes will be that big of deal.  Probably worth factoring in some rough estimates, but probably not worth a really in-depth analysis.

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Re: MMM 2016 Budget
« Reply #57 on: May 22, 2017, 08:46:38 PM »
Quote
My wife and I recently did a week vacation in Maui for around $2,000. But it's disingenuous to say that because airfare was free (I work for an airline). That value of the airfare on that trip was roughly $11,000.

But it's even more disingenuous to say that the airfare is $11K - since if it wasn't free, you wouldn't have gotten first class. I don't know how much airfare to Hawaii is, but I've paid around $1K (Canadian dollar) for Canada-Asia / Asia-Asia flight - / Asia-Canada flight.

So you would only add maybe $600 or $700 per person for the airfare.
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obstinate

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Re: MMM 2016 Budget
« Reply #58 on: May 22, 2017, 09:59:25 PM »
Well this thread became exactly what I expected. :) I think the purpose of the budget is to show what it would cost to live the core of his lifestyle, and it fulfills its purpose admirably. This year he couched it in many layers of caveats and full disclosures, but it doesn't surprise me that that's not enough for some folks.

I see people here saying things like, "could he really do without travel if he didn't have the business travel??" Uh, yes. Literally billions of people do. Ditto on the backyard studio and the Leaf.

dragoncar

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Re: MMM 2016 Budget
« Reply #59 on: May 22, 2017, 11:02:56 PM »
I think he does enjoy the travel because in the end he does travel instead of staying home and going to the park.  Dude can do whatever he wants, but still travels extensively. If he was completely indifferent, he would just stay home

boarder42

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Re: MMM 2016 Budget
« Reply #60 on: May 23, 2017, 05:24:57 AM »
Well this thread became exactly what I expected. :) I think the purpose of the budget is to show what it would cost to live the core of his lifestyle, and it fulfills its purpose admirably. This year he couched it in many layers of caveats and full disclosures, but it doesn't surprise me that that's not enough for some folks.

I see people here saying things like, "could he really do without travel if he didn't have the business travel??" Uh, yes. Literally billions of people do. Ditto on the backyard studio and the Leaf.

i mean yes he could but the underlying message here is he really doesnt practice what he preaches.  could he if he had to probably but he doesnt and i dont have a problem with it, but many newcomers and the general population will point to all this as to why it cant be done.  VS if he did practice 100% what he preached then many more people may jump on the band wagon.  Instead his wife is satisfying her need to buy things crafty by running a craft business online, he is satisfying his need to build things by buying supplies and building a studio.  Hell he just bought a downtown building for other things.  the guy clearly is buying alot of things and this just makes it easier for outsiders to look in and go what a crock of shit.
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Re: MMM 2016 Budget
« Reply #61 on: May 23, 2017, 06:11:10 AM »
Quote
My wife and I recently did a week vacation in Maui for around $2,000. But it's disingenuous to say that because airfare was free (I work for an airline). That value of the airfare on that trip was roughly $11,000.

But it's even more disingenuous to say that the airfare is $11K - since if it wasn't free, you wouldn't have gotten first class. I don't know how much airfare to Hawaii is, but I've paid around $1K (Canadian dollar) for Canada-Asia / Asia-Asia flight - / Asia-Canada flight.

So you would only add maybe $600 or $700 per person for the airfare.

And you could camp on the beach for free instead of staying in a condo.

And you can dumpster dive and not have to buy food.

OUR vacation experience would be a lot different than others. OUR vacation experience was valued a lot higher than someone else, doesn't mean it can't be done cheaper.

former player

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Re: MMM 2016 Budget
« Reply #62 on: May 23, 2017, 06:41:23 AM »
Well this thread became exactly what I expected. :) I think the purpose of the budget is to show what it would cost to live the core of his lifestyle, and it fulfills its purpose admirably. This year he couched it in many layers of caveats and full disclosures, but it doesn't surprise me that that's not enough for some folks.

I see people here saying things like, "could he really do without travel if he didn't have the business travel??" Uh, yes. Literally billions of people do. Ditto on the backyard studio and the Leaf.

i mean yes he could but the underlying message here is he really doesnt practice what he preaches.  could he if he had to probably but he doesnt and i dont have a problem with it, but many newcomers and the general population will point to all this as to why it cant be done.  VS if he did practice 100% what he preached then many more people may jump on the band wagon.  Instead his wife is satisfying her need to buy things crafty by running a craft business online, he is satisfying his need to build things by buying supplies and building a studio.  Hell he just bought a downtown building for other things.  the guy clearly is buying alot of things and this just makes it easier for outsiders to look in and go what a crock of shit.
You know, I'm really not understanding the level of criticism here.  MMM has been putting his household budget up for years, and long ago proved the point of principle: if you save and invest enough to cover your expenses at 4% you can retire early.  Yes, he and Mrs MMM have moved on from simple retirement to running two successful businesses, which wasn't in their original plan, but why should any of us constitute ourselves as his internet retirement police?  He has used his financial freedom first to retire early (although always keeping himself busy with various projects) and now to keep a business going which helps other people get their financial and personal lives in order.  I'm not seeing anything wrong with any of that.
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boarder42

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Re: MMM 2016 Budget
« Reply #63 on: May 23, 2017, 06:43:19 AM »
Quote
My wife and I recently did a week vacation in Maui for around $2,000. But it's disingenuous to say that because airfare was free (I work for an airline). That value of the airfare on that trip was roughly $11,000.

But it's even more disingenuous to say that the airfare is $11K - since if it wasn't free, you wouldn't have gotten first class. I don't know how much airfare to Hawaii is, but I've paid around $1K (Canadian dollar) for Canada-Asia / Asia-Asia flight - / Asia-Canada flight.

So you would only add maybe $600 or $700 per person for the airfare.

And you could camp on the beach for free instead of staying in a condo.

And you can dumpster dive and not have to buy food.

OUR vacation experience would be a lot different than others. OUR vacation experience was valued a lot higher than someone else, doesn't mean it can't be done cheaper.

did you read above ... you way overspent getting your flights free - travel hacking allows you to do everything you did for free.  we spent half and stayed at luxurious resorts you act as if the only way to get free perks is some business benefit or dumpster diving and camping on a beach.

hawaii 10 days 2 adults
grand wailea - free including have to valet park and a 250 dollar dinner
First class flights - free
Jeep rental car - Free
Food - negligible since we would have to eat back home - and we got free gormet buffet at the grand wailea.

and everyone elses point is that i shouldnt sum that up and say it costs 20k to spend 10 days in hawaii. b/c thats what it would have cost.  NO b/c its not what i would have spent.
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boarder42

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Re: MMM 2016 Budget
« Reply #64 on: May 23, 2017, 06:45:33 AM »
Well this thread became exactly what I expected. :) I think the purpose of the budget is to show what it would cost to live the core of his lifestyle, and it fulfills its purpose admirably. This year he couched it in many layers of caveats and full disclosures, but it doesn't surprise me that that's not enough for some folks.

I see people here saying things like, "could he really do without travel if he didn't have the business travel??" Uh, yes. Literally billions of people do. Ditto on the backyard studio and the Leaf.

i mean yes he could but the underlying message here is he really doesnt practice what he preaches.  could he if he had to probably but he doesnt and i dont have a problem with it, but many newcomers and the general population will point to all this as to why it cant be done.  VS if he did practice 100% what he preached then many more people may jump on the band wagon.  Instead his wife is satisfying her need to buy things crafty by running a craft business online, he is satisfying his need to build things by buying supplies and building a studio.  Hell he just bought a downtown building for other things.  the guy clearly is buying alot of things and this just makes it easier for outsiders to look in and go what a crock of shit.
You know, I'm really not understanding the level of criticism here.  MMM has been putting his household budget up for years, and long ago proved the point of principle: if you save and invest enough to cover your expenses at 4% you can retire early.  Yes, he and Mrs MMM have moved on from simple retirement to running two successful businesses, which wasn't in their original plan, but why should any of us constitute ourselves as his internet retirement police?  He has used his financial freedom first to retire early (although always keeping himself busy with various projects) and now to keep a business going which helps other people get their financial and personal lives in order.  I'm not seeing anything wrong with any of that.

did you read what i wrote.  i said I DONT HAVE A F"n Problem with how he lives his life BUT if his goal is to really get this to the masses he shouldnt give joe blow 50k on an SUV a reason to look at this and go well he's full of shit.
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Laura33

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Re: MMM 2016 Budget
« Reply #65 on: May 23, 2017, 07:32:47 AM »
the underlying message here is he really doesnt practice what he preaches.

I disagree.  He has never been an ERE guy; his message was more along the lines of "save 75%+ of what you earn and you can be RE within a decade and do whatever the hell you want," flavored by a good chunk of stoicism, DIY, and environmentalism.  The underlying dollar signs have gotten larger on some of the extras, but none of those fundamental tenets have changed. 
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boarder42

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Re: MMM 2016 Budget
« Reply #66 on: May 23, 2017, 07:36:52 AM »
the underlying message here is he really doesnt practice what he preaches.

I disagree.  He has never been an ERE guy; his message was more along the lines of "save 75%+ of what you earn and you can be RE within a decade and do whatever the hell you want," flavored by a good chunk of stoicism, DIY, and environmentalism.  The underlying dollar signs have gotten larger on some of the extras, but none of those fundamental tenets have changed.

can none of you take 2 steps back and look at this from an average joe perspective.  you come to a site of a guy claiming all this can be done then you see he's spent another 50k or more this year on stuff he isnt counting.  makes it seem much more daunting a task.

yes all of the people here in the forums can see past all that to read the real message.  but every internet retirement police blogger is probably typing away after the release of his post to show why this is dumb and cant be done.

IF he truly practiced what he preached 100% of all revenues from "fun things" he's doing now in FIRE would be going to charity and he'd be living on exactly what he retired with.  but he's not b/c the safety of that money. 
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Chris22

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Re: MMM 2016 Budget
« Reply #67 on: May 23, 2017, 07:39:34 AM »
the underlying message here is he really doesnt practice what he preaches.

I disagree.  He has never been an ERE guy; his message was more along the lines of "save 75%+ of what you earn and you can be RE within a decade and do whatever the hell you want," flavored by a good chunk of stoicism, DIY, and environmentalism.  The underlying dollar signs have gotten larger on some of the extras, but none of those fundamental tenets have changed.

But he's always trumpeted pretty loudly his "we spend ~$25k/yr and live luxuriously and I don't want for more"; only half of that is really true. 

That's kinda always been the problem with MMM, to be honest; his IDEAS are fine and his philosophy is fine, but when he tries to put numbers to things he generally uses wacky math that doesn't add up under scrutiny and for numbers people like me, that really adversely affects his message. 
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boarder42

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Re: MMM 2016 Budget
« Reply #68 on: May 23, 2017, 07:48:58 AM »
the underlying message here is he really doesnt practice what he preaches.

I disagree.  He has never been an ERE guy; his message was more along the lines of "save 75%+ of what you earn and you can be RE within a decade and do whatever the hell you want," flavored by a good chunk of stoicism, DIY, and environmentalism.  The underlying dollar signs have gotten larger on some of the extras, but none of those fundamental tenets have changed.

But he's always trumpeted pretty loudly his "we spend ~$25k/yr and live luxuriously and I don't want for more"; only half of that is really true. 

That's kinda always been the problem with MMM, to be honest; his IDEAS are fine and his philosophy is fine, but when he tries to put numbers to things he generally uses wacky math that doesn't add up under scrutiny and for numbers people like me, that really adversely affects his message.

yes and it hurts and takes away from more people adopting this lifestyle or listening to the ideas etc.

if you go back to day one he didnt just "quit" his job to go be retired.  he quit to start a house building business.  i mean its all there and the IDEAS appear to work but he doesnt follow them by any stretch of the imagination.  be really good to see someone who is actually using a roth ladder etc. to fund their FIRE.  but if they get popular then you run into the whole same situation.
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Re: MMM 2016 Budget
« Reply #69 on: May 23, 2017, 07:49:11 AM »
Well this thread became exactly what I expected. :) I think the purpose of the budget is to show what it would cost to live the core of his lifestyle, and it fulfills its purpose admirably. This year he couched it in many layers of caveats and full disclosures, but it doesn't surprise me that that's not enough for some folks.

I see people here saying things like, "could he really do without travel if he didn't have the business travel??" Uh, yes. Literally billions of people do. Ditto on the backyard studio and the Leaf.

Yes many people go without travel to Ecuador, but then they might spend money on iphones or SUVs to satisfy their need for fun/spending/feeling-rich or whatever. The kind of behavior MMM rail against. Is'nt hat just a different kind of entertainment, one is not better/worse than the other? Isn't he just contradicting his point of "you only need to spend $25k to be happy"? No travel, no fancy phones or cars don't seem to work for him either..

Oh you could say he has enough so he can afford it. Well that just prove the point some people make that MMM was only able to retire because they made (and make) $150k/year, and now life off stock market gains like a filthy capitalist (#occupyWS. #audtithefed .. /s)

I don't think he's disingenuous per say, and certainly free to spend what he wants. But it does weaken his point some. Maybe they lived off $25k when they were working, and never traveled or drove or bought anything. I honestly don't remember i read it so long ago. But "modern" MMM seems a bit different, frankly I'm not very interested what he's up to now.

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Re: MMM 2016 Budget
« Reply #70 on: May 23, 2017, 07:49:54 AM »
the underlying message here is he really doesnt practice what he preaches.

I disagree.  He has never been an ERE guy; his message was more along the lines of "save 75%+ of what you earn and you can be RE within a decade and do whatever the hell you want," flavored by a good chunk of stoicism, DIY, and environmentalism.  The underlying dollar signs have gotten larger on some of the extras, but none of those fundamental tenets have changed.
My read as well.
I don't know how many blog posts MMM has written where he tries to shred the notion that they somehow don't live a life surrounded in luxury. His message is constantly "look at all the fancy toys we have, the luxurious life we live, the awesome food we eat - we still have a car and fly in airplanes etc. And its all possible because we routinely eliminate BS spending (which is most of the average Joe's paycheck) and invest the difference, and you can too!."

Our lives don't seem to differ much from the MMM family, and we actually do spend a similar amount with no external income from blogs or side businesses.  We still manage a few plane-ride vacations per year, own a too-nice car, and want very little. I don't agree that our last trip to Scotland should be considered to have cost $10k+ because we used airmiles and looped it in with a work conference.

What keeps it 'authentic' for me is that the MMM family could still lead this awesome life if Pete walked away from the blog (and Mrs. MM from her etsy shop), and this lifestyle would be obtainable to most any able-bodied young adult in the developed world. A family of 3-4 can live very well on $25k/year (after rent/mortgage) if they just choose sensibility over consumerism, and be happier and healthier for it.
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boarder42

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Re: MMM 2016 Budget
« Reply #71 on: May 23, 2017, 08:09:50 AM »
the underlying message here is he really doesnt practice what he preaches.

I disagree.  He has never been an ERE guy; his message was more along the lines of "save 75%+ of what you earn and you can be RE within a decade and do whatever the hell you want," flavored by a good chunk of stoicism, DIY, and environmentalism.  The underlying dollar signs have gotten larger on some of the extras, but none of those fundamental tenets have changed.
My read as well.
I don't know how many blog posts MMM has written where he tries to shred the notion that they somehow don't live a life surrounded in luxury. His message is constantly "look at all the fancy toys we have, the luxurious life we live, the awesome food we eat - we still have a car and fly in airplanes etc. And its all possible because we routinely eliminate BS spending (which is most of the average Joe's paycheck) and invest the difference, and you can too!."

Our lives don't seem to differ much from the MMM family, and we actually do spend a similar amount with no external income from blogs or side businesses.  We still manage a few plane-ride vacations per year, own a too-nice car, and want very little. I don't agree that our last trip to Scotland should be considered to have cost $10k+ because we used airmiles and looped it in with a work conference.

What keeps it 'authentic' for me is that the MMM family could still lead this awesome life if Pete walked away from the blog (and Mrs. MM from her etsy shop), and this lifestyle would be obtainable to most any able-bodied young adult in the developed world. A family of 3-4 can live very well on $25k/year (after rent/mortgage) if they just choose sensibility over consumerism, and be happier and healthier for it.

he readily admitted that the etsy shop was satisfying consumerism as well as him building the studio and buying the leaf and buying the downtown building ... he's full of consumerism.  And i'd submit their lives would be much less fullfilling with out this spending. 
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Re: MMM 2016 Budget
« Reply #72 on: May 23, 2017, 08:24:07 AM »
the underlying message here is he really doesnt practice what he preaches.

I disagree.  He has never been an ERE guy; his message was more along the lines of "save 75%+ of what you earn and you can be RE within a decade and do whatever the hell you want," flavored by a good chunk of stoicism, DIY, and environmentalism.  The underlying dollar signs have gotten larger on some of the extras, but none of those fundamental tenets have changed.
My read as well.
I don't know how many blog posts MMM has written where he tries to shred the notion that they somehow don't live a life surrounded in luxury. His message is constantly "look at all the fancy toys we have, the luxurious life we live, the awesome food we eat - we still have a car and fly in airplanes etc. And its all possible because we routinely eliminate BS spending (which is most of the average Joe's paycheck) and invest the difference, and you can too!."

Our lives don't seem to differ much from the MMM family, and we actually do spend a similar amount with no external income from blogs or side businesses.  We still manage a few plane-ride vacations per year, own a too-nice car, and want very little. I don't agree that our last trip to Scotland should be considered to have cost $10k+ because we used airmiles and looped it in with a work conference.

What keeps it 'authentic' for me is that the MMM family could still lead this awesome life if Pete walked away from the blog (and Mrs. MM from her etsy shop), and this lifestyle would be obtainable to most any able-bodied young adult in the developed world. A family of 3-4 can live very well on $25k/year (after rent/mortgage) if they just choose sensibility over consumerism, and be happier and healthier for it.

he readily admitted that the etsy shop was satisfying consumerism as well as him building the studio and buying the leaf and buying the downtown building ... he's full of consumerism.  And i'd submit their lives would be much less fullfilling with out this spending.
I'm not sure what you mean.
He's repeatedly talked about how he has all this stuff, how he's 'soft' and 'drowning in luxury'.
i don't understand what level you are talking about when you say 'their lives would be much less fulfilling without this spending'.
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Re: MMM 2016 Budget
« Reply #73 on: May 23, 2017, 08:28:37 AM »
Quote
My wife and I recently did a week vacation in Maui for around $2,000. But it's disingenuous to say that because airfare was free (I work for an airline). That value of the airfare on that trip was roughly $11,000.

But it's even more disingenuous to say that the airfare is $11K - since if it wasn't free, you wouldn't have gotten first class. I don't know how much airfare to Hawaii is, but I've paid around $1K (Canadian dollar) for Canada-Asia / Asia-Asia flight - / Asia-Canada flight.

So you would only add maybe $600 or $700 per person for the airfare.

And you could camp on the beach for free instead of staying in a condo.

And you can dumpster dive and not have to buy food.

OUR vacation experience would be a lot different than others. OUR vacation experience was valued a lot higher than someone else, doesn't mean it can't be done cheaper.

did you read above ... you way overspent getting your flights free - travel hacking allows you to do everything you did for free.  we spent half and stayed at luxurious resorts you act as if the only way to get free perks is some business benefit or dumpster diving and camping on a beach.

hawaii 10 days 2 adults
grand wailea - free including have to valet park and a 250 dollar dinner
First class flights - free
Jeep rental car - Free
Food - negligible since we would have to eat back home - and we got free gormet buffet at the grand wailea.

and everyone elses point is that i shouldnt sum that up and say it costs 20k to spend 10 days in hawaii. b/c thats what it would have cost.  NO b/c its not what i would have spent.
Congrats on the travel hacking! Fortunately we don't need to spend points on travel so we can use them for other things.


EscapeVelocity2020

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Re: MMM 2016 Budget
« Reply #74 on: May 23, 2017, 09:22:48 AM »

I'm not sure what you mean.
He's repeatedly talked about how he has all this stuff, how he's 'soft' and 'drowning in luxury'.
i don't understand what level you are talking about when you say 'their lives would be much less fulfilling without this spending'.

I'm pretty sure everyone takes MMM's claims of exploding volcanos of luxury in his life as hyperbole.  People seemed pretty surprised when he admitted that his little blog was making over 400k/yr.
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Re: MMM 2016 Budget
« Reply #75 on: May 23, 2017, 09:36:00 AM »
I only read that thread from last year because he mentioned it in his post. I thought that his adding in a bit more about business expenses was a way of dealing with some of the comments. In particular when he mentioned that both he and Mrs. MMM end up spending money on business stuff or travelling for business and that that probably satisfies any desire for spending/travelling, whereas if they weren't doing so for business, they might end up spending/travelling a bit more for personal fun. As always, I feel like he is as genuine and up-front as he seems to be.

Liked the shout-out for Quiet as well. That book made a big difference to me when I read it.

Pretty much this.

I think that a lot of people who complain about how he gets a luxurious lifestyle because of his blog, and note that it's a benefit compared to "hanging out at the park" - well, actually LIKE that sort of thing.  But, what if you don't?

I mean, you can go on business travel, and enjoy it, but still recognize that you wouldn't spend the money otherwise.  Maybe I'm reading a lot of wanking into it, but it seems like several people on this thread feel this way.  Like "SURE you'd be happy camping".

But what if you were?  I really like the IDEA of travel.  I grew up never vacationing as a kid. But you want to know something?  I don't really like travel.  The whole fancy-pants vacations to ... Ecuador that MMM goes on, or others go on to Maui, or Europe, or Bali, or whatever by travel hacking.  It doesn't sound like fun to me.

So when he says that his costs would go up a little without these trips...I believe him.  And when he says his wife's craft costs would go up a bit without the business...I believe him.  Because I'm pretty much the same way. 

I love crafting, and years ago spent a crap ton of money on it.  Now?  A lot less.  Certainly wouldn't affect my budget more than a few hundred bucks a year.

And travel.  I've been some places.  I prefer simple trips like short road trips, and mid-level hotels with a kitchenette (or an Air-BNB), or camping.
- I don't have enough vacation time to go a lot of places.
- Traveling with kids kind of sucks. 
- My husband used to travel a lot with kids.  And, his old boss used to invite me (pre-kid).  I didn't go!  Florida, DC, whatever.  I could have grabbed a plane ticket and had a cheap vacation!  I didn't do it!  (I did take my then-5-year old for a long weekend to DC once, when hubby was there for 1.5 weeks.  Because we had friends there.  And we flew on miles.)
- I NEVER travel for work.  But the thing is - I could probably head off to Japan a couple of times a year for work.  But whenever someone mentions  in passing "it might be good for you go head to Japan some day for XYZ" I run and hide.  Seriously.

Well, I don't totally disagree with you but I would say there is a big differnce between most peoples "work travel" and MMM's. I mean sales pitches, meeting, trade shows vs hanging out with other interesting FIRE'd people, doing hikes, etc. like they do at the camps and chataquas.

I personally love camping; but I also loved my trips to Europe, and cruises, and ski trips and and so sure I try to spend less on travel then I used to pre finding MMM but I could certainly spend more.

And I do disagree with you on the traveling with kids, I love traveling with my kids and showing them new stuff and seeing how happy they are. They talk about our trips for months after and love looking through the photo albums as well as planning/anticipating the upcoming ones.

Anyway, to each their own on the travel thing.

Just in general running your own small business and having write offs is different then having a "normal" job and expens-ing things; lots more leeway which as others have mentioned I think he down plays.
Well, work travel is going to depend. My husband travels for work, and it sucks for him usually.  He doesn't go to very fun places, and he's pretty much minimizing his time there so he can get home to his family.  Otherwise, he could stay some extra days in DC and see old friends, or swing by his parent's houses in NY, or visit his Aunt & Uncle in AZ.  And likewise with international travel, it wouldn't be any big deal to just delay your trip home and see some sights while in Japan, or wherever.

Traveling with kids sucks - well, it depends on your kids, their ages, and their need for routine.  My big kid (11) gets carsick.  Not barfing carsick, but very nauseous carsick, and the ONLY thing that works is dramamine, and that knocks him out.  So, it's not fun.  Even driving to the airport is not fun.  Flying on a plane for 5 hours with his brother, who is 4, is not fun.  Flying to visit family, which often requires 2-3 flights, plus a couple of long drives, totalling an 11 to 14 hour day, is ... bear with me ... not fun.  Sure, when we GET there, it's likely to be fun.  But the travel part itself... we are at the point right now where I'm not certain it's worth the effort to get there.

Plus our kids really like routine.

"He gets to travel and write it off".  Yes, yes he does.  But you are looking at it from the lens of someone who LIKES that kind of travel.  Not everyone would CHOOSE that type of travel.  Would he CHOOSE that if it weren't for the blog?  He seems to say no.  And being of similar personality, I'm not going to doubt him.

tyort1

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Re: MMM 2016 Budget
« Reply #76 on: May 23, 2017, 09:37:36 AM »
I think some people on this board would very much like to spend lots of money and only cut their costs to achieve FI.  So any time MMM (or anyone else) spends more than the bare minimum, they pop up and say "See!!!  You have to spend $$ to be happy!  Even MMM does it!!!"  And then I think they feel better about themselves and their secret resentment at being frugal.
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Re: MMM 2016 Budget
« Reply #77 on: May 23, 2017, 09:41:47 AM »
I think some people on this board would very much like to spend lots of money and only cut their costs to achieve FI.  So any time MMM (or anyone else) spends more than the bare minimum, they pop up and say "See!!!  You have to spend $$ to be happy!  Even MMM does it!!!"  And then I think they feel better about themselves and their secret resentment at being frugal.

Maybe for some.  For me, it's the cherry picking that pisses me off.  He's very "4 legs good, 2 legs better" when it comes to justifying things HE wants to spend money on, and very preachy when it comes to things HE doesn't value.  If he wasn't so goddamn outspoken it wouldn't be a big deal, but when he wants to dole out facepunches so often, he should stand by to get some back. 
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tyort1

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Re: MMM 2016 Budget
« Reply #78 on: May 23, 2017, 09:48:35 AM »
I think some people on this board would very much like to spend lots of money and only cut their costs to achieve FI.  So any time MMM (or anyone else) spends more than the bare minimum, they pop up and say "See!!!  You have to spend $$ to be happy!  Even MMM does it!!!"  And then I think they feel better about themselves and their secret resentment at being frugal.

Maybe for some.  For me, it's the cherry picking that pisses me off.  He's very "4 legs good, 2 legs better" when it comes to justifying things HE wants to spend money on, and very preachy when it comes to things HE doesn't value.  If he wasn't so goddamn outspoken it wouldn't be a big deal, but when he wants to dole out facepunches so often, he should stand by to get some back.

I dunno Chris, I've rarely seen any happy or optimistic posts from you.  You seem kind of pissed off all the time.  Maybe MMM is just an easy target for your pre-existing anger?
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Chris22

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Re: MMM 2016 Budget
« Reply #79 on: May 23, 2017, 09:50:34 AM »
I think some people on this board would very much like to spend lots of money and only cut their costs to achieve FI.  So any time MMM (or anyone else) spends more than the bare minimum, they pop up and say "See!!!  You have to spend $$ to be happy!  Even MMM does it!!!"  And then I think they feel better about themselves and their secret resentment at being frugal.

Maybe for some.  For me, it's the cherry picking that pisses me off.  He's very "4 legs good, 2 legs better" when it comes to justifying things HE wants to spend money on, and very preachy when it comes to things HE doesn't value.  If he wasn't so goddamn outspoken it wouldn't be a big deal, but when he wants to dole out facepunches so often, he should stand by to get some back.

I dunno Chris, I've rarely seen any happy or optimistic posts from you.  You seem kind of pissed off all the time.  Maybe MMM is just an easy target for your pre-existing anger?

LOL!  I'm a tremendously happy and optimistic person in real life.  I think it's your debbie downers bringing me down :p
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tyort1

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Re: MMM 2016 Budget
« Reply #80 on: May 23, 2017, 09:54:29 AM »
LOL!  I'm a tremendously happy and optimistic person in real life.  I think it's your debbie downers bringing me down :p

As am I, so we have that in common :)

OK, back to the budget, I tend to think that uber frugality is useful for becoming FI as soon as possible.  To me, that's the main goal and main message.  Once your FI?  Eh, do what you want.  You earned it.
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Re: MMM 2016 Budget
« Reply #81 on: May 23, 2017, 09:58:26 AM »
I think some people on this board would very much like to spend lots of money and only cut their costs to achieve FI.  So any time MMM (or anyone else) spends more than the bare minimum, they pop up and say "See!!!  You have to spend $$ to be happy!  Even MMM does it!!!"  And then I think they feel better about themselves and their secret resentment at being frugal.

I feel more like there is confusion in MMM's message when he claims not to think about his spending, that his life is awesome, that he only spends 25k to achieve all this, then his real world life includes loads of business spending.  Financial Independence IS pretty awesome if spending 25k, 100k, or 300k any given year doesn't matter.  Of course people like that message, which is actually the underpinning for Pete to enjoy his FI as much as he does on this blog.  Broken arm costs a few thousand - no worries.  30k home office project, sure thing.  Still have a fire hose of cash.  I'm still actually surprised he went for a Leaf and not a Tesla, but I won't be surprised if he does have more expensive experiments coming up - and why not, YOLO!  Except I guess that wasn't supposed to happen...
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Re: MMM 2016 Budget
« Reply #82 on: May 23, 2017, 10:45:17 AM »
Yeah, OK, I'm going to say one more thing, then shut up. :-)  The thing that I have seen in my own life (and one of the reasons I am here now) is increasing income = lifestyle creep.  I grew up frugal and have clung to that mental image of myself (hah); when DH and I got married, I was very conscious of lifestyle creep and intent on avoiding it, because I know it's a hedonic treadmill that is ultimately unsatisfying. 

And yet every car I have bought has been nicer and more expensive than the one before.  Yes, DH is spendy, so it's a balancing act; and yes, I am a car girl, so it is something that I in particular value; but it is also completely true that the increases in our incomes allowed me to dream of certain luxuries that I literally could not even conceive of as a kid, and I have given in to that temptation more than I should have. 

And that kind of lifestyle creep interferes with FIRE, because it increases your baseline expectation of what daily life needs to be like, and therefore increases the 'stache you need to FIRE (not to mention leaving you less to save to start with).  I am now living the consequences of my earlier choices:  I joined the grocery spend challenge early this year, at a fairly ridiculous budget, and yet the amount of whining and pushback I am getting from the kids and DH about wanting takeout or going to CFA or whatever is both ridiculous and incredibly annoying.  Because they got used to a life where if someone wanted to go out, I just said yes, and so now eating in 6 nights out of 7 feels like deprivation instead of a pretty damn luxurious life. 

Now, one car, one decision to get takeout, is irrelevant in the larger scheme of things.  But it adds up over time.  And the result of 20+ years of "trivial" decisions is that we have sacrificed freedom to the pernicious creep of invisible luxury.

That is specifically why I continue to be impressed by MMM.  His income has clearly skyrocketed beyond what he ever would have dreamed when he started this thing.  But he keeps his daily lifestyle basically the same -- biking everywhere, shopping at the bulk discount stores, cooking at home, doing his own projects, etc.  Sure, he has used play money to do interesting projects, but those can all go away if the shit hits the fan.  It is more important to me that he has not given in to takeout, or hiring contractors, or all the other stuff that makes life easier and becomes so tempting (and seems so innocuous) when you can suddenly afford it; he has found a way to resist that most insidious of temptations. 

Tl;dr:  it's not the overall budget that impresses me, it's the fact that he has managed to keep the basic lifestyle expenses so low, because I know from personal experience just how hard that is, even with the best of intentions.

But I also understand that different people get different things out of it, and so might view these changes differently.
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Re: MMM 2016 Budget
« Reply #83 on: May 23, 2017, 10:50:38 AM »
There sure are a lot of whiny complainypants in this thread.

The underlying message is the same every year: a normal middle class American lifestyle costs between 5 and 10 thousands dollars per year per person in a family, after housing costs, if you live efficiently.

Then there are additional costs for luxury items.  If you want to fly your family around the planet on vacations, that of course will cost more and it doesn't really matter of you pay out of pocket or use miles or call it a business expense.  In any case it's not included in the base budget.

My family is significantly larger than MMM's but our basic budget is very similar.  Except we still carry a mortgage so that we can invest the difference, so our ongoing housing costs are higher as part of a strategy to maximize savings during our accumulation phase.  We buy some luxuries out of pocket instead of with business income, like family trips and our EV.  And we still have child care expenses, because we have full time jobs.

But those are details.  The real power in this message is for people who currently spend $50k/yr on just two people (after housing)  because they have a $450/mo cable/phone package and shop at whole foods every three days.  Or are dropping $15k/year on hobby expenses, or private school, or supporting a deadbeat relative.  Those are the folks who don't realize that what feels like easy spending within their "budget" is actually ruining them, or adding decades to their required career length.

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Re: MMM 2016 Budget
« Reply #84 on: May 23, 2017, 10:58:40 AM »
There sure are a lot of whiny complainypants in this thread.

The underlying message is the same every year: a normal middle class American lifestyle costs between 5 and 10 thousands dollars per year per person in a family, after housing costs, if you live efficiently.

Then there are additional costs for luxury items.  If you want to fly your family around the planet on vacations, that of course will cost more and it doesn't really matter of you pay out of pocket or use miles or call it a business expense.  In any case it's not included in the base budget.

My family is significantly larger than MMM's but our basic budget is very similar.  Except we still carry a mortgage so that we can invest the difference, so our ongoing housing costs are higher as part of a strategy to maximize savings during our accumulation phase.  We buy some luxuries out of pocket instead of with business income, like family trips and our EV.  And we still have child care expenses, because we have full time jobs.

But those are details.  The real power in this message is for people who currently spend $50k/yr on just two people (after housing)  because they have a $450/mo cable/phone package and shop at whole foods every three days.  Or are dropping $15k/year on hobby expenses, or private school, or supporting a deadbeat relative.  Those are the folks who don't realize that what feels like easy spending within their "budget" is actually ruining them, or adding decades to their required career length.

the message gets lost on the general population when he obviously is not living all of that. i'm trying to state what others outside of here who havent seen the light would see when presented that.  people who arent frugal by nature.  well MMM just chooses to build a workshop i chose to buy an SUV. etc.

His volcano of awesomeness is greatly filled with much more than 5-10k per person and its "business expenses"

But i dont give two shits about that really, just that if he lived it the general population may be more receptive.
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tyort1

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Re: MMM 2016 Budget
« Reply #85 on: May 23, 2017, 11:10:13 AM »
But i dont give two shits about that really, just that if he lived it the general population may be more receptive.

His blog made $400k last year, I think we don't have to worry much about the 'general population'. 

The way I see it, MMM is an ideal.  Pete is a person.  People don't always live by to their ideals.  So what?
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EnjoyIt

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Re: MMM 2016 Budget
« Reply #86 on: May 23, 2017, 12:01:00 PM »
How did you come up with that figure?

Here is how: regular spending 30k, shed 30k, car 9k, travel 4k and etsy shop 20k. Grand Total = 93k. Oops sorry not 98k.  Still many things are not going to be reoccurring every year and so next years spending may be much lower.

I would deduct the Etsy shop from that list since items were bought and then sold for a profit for the wife.  So lets get that down to $73k.  I fully agree adding the travel and like you said the other expenses are not every year expenses so maybe amortizing them over X years should be more appropriate.  Lets make it over 5 years to be somewhat fair so lets add that to about $10k/yr.  So his expenses are about $44k/yr.  I think that is pretty damn good for the very comfortable lifestyle he has.

MMM's numbers prove having more money makes life easier and more fun.

tyort1

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Re: MMM 2016 Budget
« Reply #87 on: May 23, 2017, 12:07:48 PM »
How did you come up with that figure?

Here is how: regular spending 30k, shed 30k, car 9k, travel 4k and etsy shop 20k. Grand Total = 93k. Oops sorry not 98k.  Still many things are not going to be reoccurring every year and so next years spending may be much lower.

I would deduct the Etsy shop from that list since items were bought and then sold for a profit for the wife.  So lets get that down to $73k.  I fully agree adding the travel and like you said the other expenses are not every year expenses so maybe amortizing them over X years should be more appropriate.  Lets make it over 5 years to be somewhat fair so lets add that to about $10k/yr.  So his expenses are about $44k/yr.  I think that is pretty damn good for the very comfortable lifestyle he has.

MMM's numbers prove having more money makes life easier and more fun.

And the way to "get" more money in the first place is to be frugal and save a boatload of money during the accumulation phase.  That's what's been most helpful for me in the MMM message.
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Re: MMM 2016 Budget
« Reply #88 on: May 23, 2017, 12:20:51 PM »

Traveling with kids sucks - well, it depends on your kids, their ages, and their need for routine.  My big kid (11) gets carsick.  Not barfing carsick, but very nauseous carsick, and the ONLY thing that works is dramamine, and that knocks him out.  So, it's not fun.  Even driving to the airport is not fun.  Flying on a plane for 5 hours with his brother, who is 4, is not fun.  Flying to visit family, which often requires 2-3 flights, plus a couple of long drives, totalling an 11 to 14 hour day, is ... bear with me ... not fun.  Sure, when we GET there, it's likely to be fun.  But the travel part itself... we are at the point right now where I'm not certain it's worth the effort to get there.

Plus our kids really like routine.

"He gets to travel and write it off".  Yes, yes he does.  But you are looking at it from the lens of someone who LIKES that kind of travel.  Not everyone would CHOOSE that type of travel.  Would he CHOOSE that if it weren't for the blog?  He seems to say no.  And being of similar personality, I'm not going to doubt him.

ehh, you seem confused. No sane person likes to sit in an airplane! That's not the part of "travel" (most) people enjoy. It's getting there, being there, looking around, experiencing stuff.

Frankly your whole post is the definition of complainypants. Traveling with and without our kid we've had many great experiences, both adults and kids. The trip isn't easy, but in the end it's worth it. But if you can't be positive, flexible and make the best of it when traveling with kids then you definitely shouldn't do it. You can always find reasons why it's just easier to stay home..

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Re: MMM 2016 Budget
« Reply #89 on: May 23, 2017, 12:50:50 PM »

Traveling with kids sucks - well, it depends on your kids, their ages, and their need for routine.  My big kid (11) gets carsick.  Not barfing carsick, but very nauseous carsick, and the ONLY thing that works is dramamine, and that knocks him out.  So, it's not fun.  Even driving to the airport is not fun.  Flying on a plane for 5 hours with his brother, who is 4, is not fun.  Flying to visit family, which often requires 2-3 flights, plus a couple of long drives, totalling an 11 to 14 hour day, is ... bear with me ... not fun.  Sure, when we GET there, it's likely to be fun.  But the travel part itself... we are at the point right now where I'm not certain it's worth the effort to get there.

Plus our kids really like routine.

"He gets to travel and write it off".  Yes, yes he does.  But you are looking at it from the lens of someone who LIKES that kind of travel.  Not everyone would CHOOSE that type of travel.  Would he CHOOSE that if it weren't for the blog?  He seems to say no.  And being of similar personality, I'm not going to doubt him.

ehh, you seem confused. No sane person likes to sit in an airplane! That's not the part of "travel" (most) people enjoy. It's getting there, being there, looking around, experiencing stuff.

Frankly your whole post is the definition of complainypants. Traveling with and without our kid we've had many great experiences, both adults and kids. The trip isn't easy, but in the end it's worth it. But if you can't be positive, flexible and make the best of it when traveling with kids then you definitely shouldn't do it. You can always find reasons why it's just easier to stay home..

I love short flights with a window seat!  Looking at the way different cities are laid out, terrain, etc.  Interesting clouds, too.  Yeah I don't like transatlantic flights where all you see is water and marine layer, but a nice 1 hour flight down the coast with a beverage service... sign me up!

PoutineLover

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Re: MMM 2016 Budget
« Reply #90 on: May 23, 2017, 01:32:56 PM »
I'm still impressed that he manages to feed and house his family for that amount, but I don't think that amount is necessarily realistic for someone who doesn't have some of the stuff he starts out with in that case. I'm just one person and I spend about 21K a year, but I can't afford to buy yet so I rent, and I can't deduct my travel for business, and my taxes are way higher than his. However, I do bike everywhere, and don't own a car, and don't eat out too much, so my expenses are still lower than they could be. Everyone looking at that breakdown can see where they can improve and where they just have to suck up the costs, based on their individual situations. It's still useful to see it, even if he is omitting certain things.
He probably wouldn't have built that studio or bought that car if he was still in the accumulation phase, and he would probably facepunch someone who did spend that kind of money while in debt, and rightly so because they were extras that he didn't need and couldn't afford. But now that he has the money, more than he could ever need, he decided to use that excess to try out different things and tell his fans about it, because that's the kind of person he is choosing to be. I personally like seeing his projects, and in the end, it's his life and he is not obligated to live a certain way just because a bunch of random people on the internet are judging him.

nereo

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Re: MMM 2016 Budget
« Reply #91 on: May 23, 2017, 01:33:17 PM »

I love short flights with a window seat!  Looking at the way different cities are laid out, terrain, etc.  Interesting clouds, too.  Yeah I don't like transatlantic flights where all you see is water and marine layer, but a nice 1 hour flight down the coast with a beverage service... sign me up!

Can't you, like, fly on your own? What do you need an airplane for?
:-P
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Chris22

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Re: MMM 2016 Budget
« Reply #92 on: May 23, 2017, 01:38:32 PM »
He probably wouldn't have built that studio or bought that car if he was still in the accumulation phase, and he would probably facepunch someone who did spend that kind of money while in debt, and rightly so because they were extras that he didn't need and couldn't afford. But now that he has the money, more than he could ever need, he decided to use that excess to try out different things and tell his fans about it, because that's the kind of person he is choosing to be. I personally like seeing his projects, and in the end, it's his life and he is not obligated to live a certain way just because a bunch of random people on the internet are judging him.

Again, no one is saying he shouldn't have the car or the shed.  We're just saying you can't buy them and then say you didn't spend that money because "it's an investment" or "it's for the blog" or whatever other reasoning.  It's spending, plain and simple, so count it as such.  ESPECIALLY if you're going to preach about the merits of downsizing your house and not having a car/car payment. 
"If I could get all the money back I ever spent on cars, I'd spend it on cars." - Nick Mason

PoutineLover

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Re: MMM 2016 Budget
« Reply #93 on: May 23, 2017, 01:45:05 PM »
Again, no one is saying he shouldn't have the car or the shed.  We're just saying you can't buy them and then say you didn't spend that money because "it's an investment" or "it's for the blog" or whatever other reasoning.  It's spending, plain and simple, so count it as such.  ESPECIALLY if you're going to preach about the merits of downsizing your house and not having a car/car payment. 
Yeah fair enough, but the way I read it was more like "this is what it costs us to live" and "this is what I spent extra money on"
because he did list it, he just didn't put it in the core expenses. They were also more like one-off costs, not regular spending that will show up every year. So if his point is about living simply for a certain price, he isn't wrong to separate out the living costs from the extras, but it is more honest if he mentions all of it.

Chris22

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Re: MMM 2016 Budget
« Reply #94 on: May 23, 2017, 02:17:29 PM »
Again, no one is saying he shouldn't have the car or the shed.  We're just saying you can't buy them and then say you didn't spend that money because "it's an investment" or "it's for the blog" or whatever other reasoning.  It's spending, plain and simple, so count it as such.  ESPECIALLY if you're going to preach about the merits of downsizing your house and not having a car/car payment. 
Yeah fair enough, but the way I read it was more like "this is what it costs us to live" and "this is what I spent extra money on"
because he did list it, he just didn't put it in the core expenses. They were also more like one-off costs, not regular spending that will show up every year. So if his point is about living simply for a certain price, he isn't wrong to separate out the living costs from the extras, but it is more honest if he mentions all of it.

I thought the shed was the most spurious, and the most likely to receive facepunches if someone else said it to him.  Go say "I'm going to spend $20k upgrading my kitchen and putting in granite, stainless appliances, etc, but it's okay because it's an investment and I'll get it back" and watch his head explode at the wastefullness of it.  But in reality, money spent in a kitchen is probably MORE likely to see a pay back than money spent on a fancy shed when the time comes to sell a house. 
"If I could get all the money back I ever spent on cars, I'd spend it on cars." - Nick Mason

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Re: MMM 2016 Budget
« Reply #95 on: May 23, 2017, 02:26:54 PM »
the message gets lost on the general population when he obviously is not living all of that. i'm trying to state what others outside of here who havent seen the light would see when presented that.  people who arent frugal by nature.  well MMM just chooses to build a workshop i chose to buy an SUV. etc.

His volcano of awesomeness is greatly filled with much more than 5-10k per person and its "business expenses"

But i dont give two shits about that really, just that if he lived it the general population may be more receptive.

Yeah, I don't really care either, since for me MMM is more about the general concept/way of life, not about the specifics. But it is clear that his "hook" is "You only need to live on X amount"--that's a huge part of what brought the blog so much attention. And yet, because of the blog income, early retirement looks very different for him than it would for many people.

mm1970

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Re: MMM 2016 Budget
« Reply #96 on: May 23, 2017, 02:51:03 PM »
Yeah, OK, I'm going to say one more thing, then shut up. :-)  The thing that I have seen in my own life (and one of the reasons I am here now) is increasing income = lifestyle creep.  I grew up frugal and have clung to that mental image of myself (hah); when DH and I got married, I was very conscious of lifestyle creep and intent on avoiding it, because I know it's a hedonic treadmill that is ultimately unsatisfying. 

And yet every car I have bought has been nicer and more expensive than the one before.  Yes, DH is spendy, so it's a balancing act; and yes, I am a car girl, so it is something that I in particular value; but it is also completely true that the increases in our incomes allowed me to dream of certain luxuries that I literally could not even conceive of as a kid, and I have given in to that temptation more than I should have. 

And that kind of lifestyle creep interferes with FIRE, because it increases your baseline expectation of what daily life needs to be like, and therefore increases the 'stache you need to FIRE (not to mention leaving you less to save to start with).  I am now living the consequences of my earlier choices:  I joined the grocery spend challenge early this year, at a fairly ridiculous budget, and yet the amount of whining and pushback I am getting from the kids and DH about wanting takeout or going to CFA or whatever is both ridiculous and incredibly annoying.  Because they got used to a life where if someone wanted to go out, I just said yes, and so now eating in 6 nights out of 7 feels like deprivation instead of a pretty damn luxurious life. 

Now, one car, one decision to get takeout, is irrelevant in the larger scheme of things.  But it adds up over time.  And the result of 20+ years of "trivial" decisions is that we have sacrificed freedom to the pernicious creep of invisible luxury.

That is specifically why I continue to be impressed by MMM.  His income has clearly skyrocketed beyond what he ever would have dreamed when he started this thing.  But he keeps his daily lifestyle basically the same -- biking everywhere, shopping at the bulk discount stores, cooking at home, doing his own projects, etc.  Sure, he has used play money to do interesting projects, but those can all go away if the shit hits the fan.  It is more important to me that he has not given in to takeout, or hiring contractors, or all the other stuff that makes life easier and becomes so tempting (and seems so innocuous) when you can suddenly afford it; he has found a way to resist that most insidious of temptations. 

Tl;dr:  it's not the overall budget that impresses me, it's the fact that he has managed to keep the basic lifestyle expenses so low, because I know from personal experience just how hard that is, even with the best of intentions.

But I also understand that different people get different things out of it, and so might view these changes differently.

This really spoke to me, so much that I thought about it on my lunchtime walk.

We went from used cars to new cars.  Sure they are still small cars, and we paid cash, but we bought them new in 2006 and 2009.  And now, boy what I wouldn't do for a small SUV.  It would be so much more comfy for 4-person road trips than our "big" car (Matrix).

Our schedule has been busy, so eating out has crept up in and around baseball and soccer.  And more easily prepared foods.

Then there is the kid's snacks and toys.

And vacation.  I don't tend to vacation much (see my previous posts on vacationing with kids). But even something like camping, that I enjoy...locally, you have to book months in advance.  I just picked 2 local state parks, one non-local state park, and one national park for camping, and there's literally nothing available on weekends until November. So it's no wonder that if we want to "get away" we end up paying $$ for a hotel.  Even though I don't feel like I can unplug as easily.

nereo

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Re: MMM 2016 Budget
« Reply #97 on: May 23, 2017, 03:09:03 PM »
Again, no one is saying he shouldn't have the car or the shed.  We're just saying you can't buy them and then say you didn't spend that money because "it's an investment" or "it's for the blog" or whatever other reasoning.  It's spending, plain and simple, so count it as such.  ESPECIALLY if you're going to preach about the merits of downsizing your house and not having a car/car payment. 
Yeah fair enough, but the way I read it was more like "this is what it costs us to live" and "this is what I spent extra money on"
because he did list it, he just didn't put it in the core expenses. They were also more like one-off costs, not regular spending that will show up every year. So if his point is about living simply for a certain price, he isn't wrong to separate out the living costs from the extras, but it is more honest if he mentions all of it.

I thought the shed was the most spurious, and the most likely to receive facepunches if someone else said it to him.  Go say "I'm going to spend $20k upgrading my kitchen and putting in granite, stainless appliances, etc, but it's okay because it's an investment and I'll get it back" and watch his head explode at the wastefullness of it.  But in reality, money spent in a kitchen is probably MORE likely to see a pay back than money spent on a fancy shed when the time comes to sell a house.
Are you sure? I think not... I've often heard Pete describe himself as a 'housing junkie' who regularly renovates both his own home and friends/rentals primarily because he likes a high degree of fit and finish.  No idea what kind of a ROI a swanky stand-alone shed would bring in his neighborhood, but it wouldn't surprise me if he got all his money back and then some.  Regardless, it seems in line with years of blog posts - once you've eliminated debt and set up a fat stache spend money on what matters to you and cut out the waste.

This paragraph from MMM himself seems apt i describing his philosophy:
Quote from: MMM in May, 2011
The Mr. Money Mustache way is not about living on the cheap. Itís about living the GOOD LIFE on the cheap. The fundamental lesson of this blog is that there is plenty of money to go around in this country, so you donít have to eliminate your spending on everything to become financially independent. You just have to cut out your waste. And for the most part, buying yourself a home is not a waste.
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EnjoyIt

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Re: MMM 2016 Budget
« Reply #98 on: May 23, 2017, 03:23:47 PM »

This paragraph from MMM himself seems apt i describing his philosophy:
Quote from: MMM in May, 2011
The Mr. Money Mustache way is not about living on the cheap. Itís about living the GOOD LIFE on the cheap. The fundamental lesson of this blog is that there is plenty of money to go around in this country, so you donít have to eliminate your spending on everything to become financially independent. You just have to cut out your waste. And for the most part, buying yourself a home is not a waste.

Right on. We spend more than the MMM family, but by cutting out the waste a few years back we have set in motion a rapid run for FI. We still live the "GOOD LIFE," but without the waste we enjoy it even more.
Frankly, it would be really silly for MMM to not build that shed.  He has the money, he uses that shed, and has purchase happiness with that cash.  Good for him.  Why have all that money and not make good use of it?

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Re: MMM 2016 Budget
« Reply #99 on: May 24, 2017, 03:39:19 AM »
I understand the objections here, and I empathize with the idea of "hidden spending" turning off some readers, but lets stop for a sec and think about this. 

To me the whole idea of Mustachianism isn't just being frugal, clipping coupons, credit card bonuses, etc.  It's about designing an efficient lifestyle, one that make you happy. We are so quick to use spending as a way to measure, we forget, that's not even the point. Our goal is to fulfill our needs without "throw a bunch of cash at the problem" as our first option.  MMM designed his life so that his need for travel, buying electric cars, etc are fulfilled.  At the same time he is writing articles and promoting an agenda/lifestyle important to him, earning income he gets to divert to large scale donations to other causes important to him, meet friends with similar values, ect.  IOW, one action works towards several goals at once, all without directly costing him money. He has parlayed his financial independence into a more efficient lifestyle.

We are comparing apples to oranges in that we are trying to compare the accounting of a 50hr a week salaryman to someone who is financially independent.  None of MMM's endeavors would have been possible if his baseline needs weren't covered (aka financial independence).  No blog, no trips, no electric car, no six figure donations to charity.

In essence I agree his spending is a poor comparison for the average new reader, because the average reader is not financial independent and works a salary job, then uses that income to provide for needs, very inefficiently.  MMM has all needs already covered and just works to reach is goals, financial accounting is really just not that important anymore, as long as his actions make him happy and help him work towards his goals.  I would hope the longer-term participants on this forum understand these not so nuanced differences.

EDIT:  I fear I was terribly unclear with my point as I'm working an overnight shift and not functioning at 100 % cognitive ability at the moment, so, analogy time.  A common hobby around here is gardening. Someone who gardens for enjoyment gets the chance to be outside in the sun, gets a little exercise, promotes local food sourcing, decreases carbon footprint, and reaps the benefit of the produce. We wouldn't argue that the gardener is being dishonest about spending because the budget included seed costs, but no "imputed grocery costs for fresh veggies", "imputed costs for tanning salon and gym", or imputed cost for donations to green charity" because non-gardeners don't enjoy these fringe benefits and would have to pay for them.  Instead we acknowledge this persons efficient lifestyle has provided these things to them at no dollar cost, while simultaneously meeting personal goals and enhancing happiness.  We acknowledge they put themselves in a position to garden instead of extra hours at the office to buy the same outcome.
« Last Edit: May 24, 2017, 04:28:41 AM by Classical_Liberal »