1) Environmentalism - A large number of members here believe that climate change and increasing pollution is real and it is being driven by over consumption (yours truly included). We push back on mindless consumerism where is does not add value to one's life. Does buying the new version on the S-class over last years model really add that much extra value to your life? Could you be doing something more productive with that money (charity, etc)?
I come from a relatively poor background (was born in an eastern european country during the soviet collapse) and due to the scarcity I experienced as a kid I probably value luxury and excess more than if I would've been pampered. Caring about the environment is important, however in this regard I think a lot of people are either misinformed or live in cognitive dissonance. For example if you look at the studies and data - eating a meatless diet makes a far bigger positive impact than driving an S63.
2) Challenging yourself (also referred to as Badassity) - Just because you can afford to drive around in an S-class doesn't mean that it will bring you the most happiness. Read up on Stoicism and hedonic adaptation. I can afford to do most (not all) of what you listed, I don't because, for me, I find more value in growing NW that will ultimately be set up as a perpetual 'endowment' for certain charities.
Any good reads you would recommend regarding Stoicism?
Overall, you've accomplished what most haven't: built a decent sized business with sizable cash flow and saved 80-90% of it. I wholeheartedly agree with you that people should focus on both parts of the equation, income and expenses, and not just get stuck on expenses. I personally have always put more effort on income than on lowering expenses. However, not everyone has the risk tolerance or business acumen to create what you've created or land a $250K+/yr corporate job and therefore, putting a heavier emphasis on frugality makes sense for them.
True, I realize that my risk tolerance is way higher as a guy with no kids in my 20s compared to someone with 3 kids and in his 40s. For someone in his 20s with even an ounce of ambition I would recommend focusing on the earning part of the equation though rather than eating noodles and cutting coupons.
Some people don't want to trade the freedom of having to pursue additional education, and work harder/ take on more risk and responsibility, to reach that level. Frugality does buy them something; in lieu of nice things, it buys them time, which in my opinion is more valuable, simply because you can't earn it back.
But what is that time worth if it's just idled away? I guess it comes down to personal preference..
I'm not sure if you've seen this blog post http://www.mrmoneymustache.com/2013/04/25/why-should-i-be-frugal-when-im-so-rich/ but it addresses your question pretty well. You may also benefit from some reading on stoicism and the hedonic treadmill.
Thank you, checking it out.
Here's one life lesson - never count your eggs until they hatch, and change will be constant. If I were you, I'd be socking away as much as possible for a rainy day, because you never know when that sunny day will end. If you run businesses, chances are the businesses will stop generating cash someday. There is a lot of volatility and risk in the world, it never hurts to sock away money for that rainy day.
Thank you and yes I've been trying to keep that in mind.
Enjoy the knowledge here, and if you care to share, it would be interesting to find out what types of businesses you run and how you generate so much cash. One point of clarification - what's your net income monthly / annually?
100% of them are online businesses. Most of them are based on a rebill model. Price points vary though from low $xx to mid $xxx. Once I had the blueprint down I scaled to multiple markets (mainly health related) and eventually to multiple geos. In 2016 I cleared roughly ~4m in profits. In 2017 it'll probably be in the ~6m range.
I prefer minimalism, simplicity, low environmental impact, and spending as much of my life as possible doing whatever I want with my time. Your high consumption lifestyle sounds honestly horrifying to me.
I'm not the one to judge.
If I have the conversion rates close, it sounds like you’re spending about $500,000 per year. That is WAY more than a Mercedes and a boat. I won’t bring up the fact that your current income is by no means guaranteed to be future income (I’m sure others will cover that topic in this thread). I will ask you this: Is that spending aligning with what your values are? For example, if you consider yourself a person who cares deeply for his community, how is that reflected in your spending choices? Could the money you are spending on another car, or another piece of jewelry or another trip be used in a way that further benefits your community?
A lot goes on travel. If I finally settle down I would probably save at least another €10-€15k/mo. I also financially support my family (paid off parents mortgage, bought them new cars and give them a monthly allowance for occasional travel, hobbies etc.). I have a few causes I donate to and yes part of what motivates me to work these days is so I could further contribute to these causes.
They're happier compared with those spending lavishly every month on new "things".
Are they really? How do you know? Sure, overspending and living above your means is one thing but if your NW is €100m+ and the new "things" you buy are only a fraction of your NW then what's the issue? Who are you to say that they're miserable and wrong?
2. Money earned and invested early in life is more valuable than money earned later -- compound interest; you know what I'm talking about.
I agree with the compound interest part, the earlier - the better. But again no need to take it to the extreme, I would rather die as a relatively poor man who lived a great life full of adventure than someone who has millions stacked away but lived like a miser.
400k per month? That's nothing, I earn 400k per second!
Jokes aside, I know a guy in his late 20s doing relatively stable low 6 figure profit days in media buying.
Also, consider the future. While living it up may be so glamorous right now while you're 26 and impressing your lady, one day you may have children and a wife. One day those children and that wife may mean way more to you than slaving away to make money to sail on fancy yachts
Thank you for the insight. I'm trying to have both though.
One day, as you mature a bit and become more selfless, it will click. All I thought about was myself in my twenties. Then I had children and that changed drastically.
I suspect you are right. I can only comment in 20 years.
Anyway, thank you for all of the insights!
I think my main take-aways have been:
- Financial Freedom > Keeping up with Joneses. Duh.
- Security > Living the high-life and overspending.
- However if you can save enough while still being able to spend in the NOW then why not do it? Frugality depends on the context.
- My values and spending habits will probably shift as I get older.