Author Topic: None of This Could Actually Work If Everyone Did It, Right?  (Read 3296 times)

DavidN

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None of This Could Actually Work If Everyone Did It, Right?
« on: August 07, 2018, 01:41:08 PM »
I very recently discovered this site and others like it that preach frugality and smart strategies to build wealth. All of this was a huge revelation to me. I've always been stuck in the ultra-consumer mindset up until now and for a long while, I was living paycheck to paycheck with a lot of debt like most other Americans. Wanting to break free of that and build wealth for myself and my family was a huge motivator to finally hunkering down and really taking a good look at all of this. The idea of being able to retire well before 60 and live off passive income was just too good to not at least give it an honest try.

However, one thing has always been nagging the back of my mind. While I have no delusions that most people out there will wise up to what consumer culture is doing to their lives and prospects for having wealth, I can't help but think that all of this frugality and investing would simply not work if everyone did it. Imagine if everyone applied the Mustachian principles of spending as little money as possible, buying only used when available, and investing the rest in index funds or retirement plans or real estate. The whole economy would collapse, wouldn't it? Companies would stop producing goods because people stopped buying them and those companies would quickly go out of business. The stock market would absolutely not grow at an average rate of 7% after inflation and that would then prevent all of us frugal folks from effectively building wealth.

I may be completely wrong, and I admit I am not terribly well versed in the subject of economics, but it feels like this whole approach is predicated on the fact that there are far more "losers" out there that live well above their means and drown in debt. The whole ultra-consumerist system that we all try to break free of or have successfully broken free of must remain in place for any of this to work, right? We're just taking advantage of an economy that is propped up on people borrowing to consume more than they should.

I hope I'm wrong, but would love to hear other people's thoughts on it.

FIRE@50

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Re: None of This Could Actually Work If Everyone Did It, Right?
« Reply #1 on: August 07, 2018, 01:49:02 PM »
http://jlcollinsnh.com/2012/05/16/stocks-part-vii-can-everyone-really-retire-a-millionaire/

Quote
The concern that everyone might suddenly become responsible is a classic “non-problem.” “Non” because:

It is unlikely to happen.
If it does it will be at a very gradual rate allowing for easy adjustments.
If it does it would be a very good thing.  Less consumption would make for a far more sustainable world. No small consideration with 6.5 billion of us running around.  Certainly such a change would cause a round of “creative destruction” as companies making and peddling trinkets and trash faced major adjustments.
In a society with frugal, debt free, financially independent people the necessary and highly beneficial process of “creative destruction” vital to a dynamic economy is far less traumatic.

Liberty Stache

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Ravenik

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Re: None of This Could Actually Work If Everyone Did It, Right?
« Reply #3 on: August 07, 2018, 01:49:34 PM »
I have no worries about the masses jumping in to a frugality mindset.  Consumerism has too tight a chokehold on them.  I think it would take a generation impacting event to change things, in which case the economy is screwed for a while anyways.

Welcome to the face punching club!

Mr. Green

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Re: None of This Could Actually Work If Everyone Did It, Right?
« Reply #4 on: August 07, 2018, 01:54:54 PM »
Most everything doesn't work if everyone does it. Going to a park at the same time, maxing out their internet bandwidth, driving on the highway. The list goes on and on. But people don't all do the same thing because they want different things. Many more people want to buy stuff than don't.

mozar

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Re: None of This Could Actually Work If Everyone Did It, Right?
« Reply #5 on: August 07, 2018, 01:58:28 PM »
If that did actually happen (everyone was frugal) growth would slow down. That's not necessarily a bad thing though. We all would adjust. Fun to think about but it's not going to happen.

solon

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Re: None of This Could Actually Work If Everyone Did It, Right?
« Reply #6 on: August 07, 2018, 02:12:58 PM »
Think about a packed freeway at rush hour.

Some people will stay in line, moving at the same speed as everyone else. (People who buy index funds.)
Some people will swerve in-and-out, trying to gain a car length here and there. (People who buy tech stocks and hedge funds.)
Some people will white-knuckle the steering wheel and hug the shoulder. (People who dump everything into savings accounts.)
We will NEVER get all the cars to behave the same way, which would be the most efficient thing for everyone.

FIRE@50

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Re: None of This Could Actually Work If Everyone Did It, Right?
« Reply #7 on: August 07, 2018, 02:16:25 PM »
Think about a packed freeway at rush hour.

Some people will stay in line, moving at the same speed as everyone else. (People who buy index funds.)
Some people will swerve in-and-out, trying to gain a car length here and there. (People who buy tech stocks and hedge funds.)
Some people will white-knuckle the steering wheel and hug the shoulder. (People who dump everything into savings accounts.)
We will NEVER get all the cars to behave the same way, which would be the most efficient thing for everyone.
100% self driving cars will destroy your whole theory. The FIRE movement is doomed! Burying your bitcoin server in the yard is the only thing that will save you.

Prairie Stash

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Re: None of This Could Actually Work If Everyone Did It, Right?
« Reply #8 on: August 07, 2018, 02:24:25 PM »
I think CPP in Canada, guaranteed retirement income, works for everyone in the same capacity as having a personal FIRE account. Pretty much everyone retires at some point, this site distinguishes between retiring at 70 or at 30 (my aim is 40-45)

What most people have trouble remebering is we're all going to achieve retirement at different times (in different years). At no time is everyone FIRE, just some of us older folks, my kids still need to work. Now, imagine a world where the retirement age is 65, then shifts to 60, 55 and 50. What would it take in each scenario to be sucessful? Obviously 65 works now, why not 60? If 60 works, why not 55? Keep in mind the retirement age of 65 was brought in when life expectance was 67 (fact check this), how come it works still and what has made the possibility of having more then 2 years of retirement feasiible?

It's hard to answer what would happen until you imagine small incremental change. I think 65 for retirement is high currently, how about you?

inline five

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Re: None of This Could Actually Work If Everyone Did It, Right?
« Reply #9 on: August 07, 2018, 02:29:47 PM »
Yes of course, this is kinda sorta what happened in 2008/2009. As personal spending was cut due to lack of money and employment the whole enchilada came crashing down, including the market.

Yet not even three years later we were back to the old crack habit again and it hasn't slowed.

People just love spending money and flaunting it. Very few well paid or even median income earners drive old beater cars and fix stuff themselves. Very few people have stoic personalities that allow us to save a large % of our income. It's just how it is. It's human nature.

Folks who were directly impacted by the Great Depression altered their spending for the rest of their lives. Same with those like me who were similarly effect by the financial recession. However that wasn't the entire country and of those that were affected many also have short memories.

RedmondStash

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Re: None of This Could Actually Work If Everyone Did It, Right?
« Reply #10 on: August 07, 2018, 02:33:56 PM »
I very recently discovered this site and others like it that preach frugality and smart strategies to build wealth. All of this was a huge revelation to me. I've always been stuck in the ultra-consumer mindset up until now and for a long while, I was living paycheck to paycheck with a lot of debt like most other Americans. Wanting to break free of that and build wealth for myself and my family was a huge motivator to finally hunkering down and really taking a good look at all of this. The idea of being able to retire well before 60 and live off passive income was just too good to not at least give it an honest try.

However, one thing has always been nagging the back of my mind. While I have no delusions that most people out there will wise up to what consumer culture is doing to their lives and prospects for having wealth, I can't help but think that all of this frugality and investing would simply not work if everyone did it. Imagine if everyone applied the Mustachian principles of spending as little money as possible, buying only used when available, and investing the rest in index funds or retirement plans or real estate. The whole economy would collapse, wouldn't it? Companies would stop producing goods because people stopped buying them and those companies would quickly go out of business. The stock market would absolutely not grow at an average rate of 7% after inflation and that would then prevent all of us frugal folks from effectively building wealth.

I may be completely wrong, and I admit I am not terribly well versed in the subject of economics, but it feels like this whole approach is predicated on the fact that there are far more "losers" out there that live well above their means and drown in debt. The whole ultra-consumerist system that we all try to break free of or have successfully broken free of must remain in place for any of this to work, right? We're just taking advantage of an economy that is propped up on people borrowing to consume more than they should.

I hope I'm wrong, but would love to hear other people's thoughts on it.

... and?

If everyone did it, the system would change, probably in ways we can't currently predict. It's no more likely that everything would fall apart catastrophically -- hellfire raining down, cats and dogs living in sin -- than that we'd end up in widespread financial nirvana.

We are the edge cases, it's true. So what? We're not hoarding the truth for those who know the Sekrit Handshake. Anyone can learn and implement this stuff, as best they can in the lives they have. I suspect most folks share Mustachian philosophies freely with anyone who asks, because we think they're great, and we want more people to benefit.

DavidN

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Re: None of This Could Actually Work If Everyone Did It, Right?
« Reply #11 on: August 07, 2018, 02:52:48 PM »
Thanks for all of the responses! I'm still working my way through the blog in chronological order (in November of 2011 now) and hadn't made it to the post that addressed it yet.

Really insightful stuff in here. Since some people seemed to miss it in my original post, no I don't think it's likely or maybe even possible for everyone out there to follow Mustachian or other frugal/wealth building principles. I just wanted to confirm my suspicion that we are simply taking advantage of a system that only exists because people happily go into debt to acquire that which is well beyond their actual means.

No real "ands" or judgments. I just wanted to make sure I didn't have some fundamental misunderstanding of the economy.

inline five

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Re: None of This Could Actually Work If Everyone Did It, Right?
« Reply #12 on: August 07, 2018, 03:17:46 PM »
Most people aren't really "in debt". They may spend all the money they make, but the median credit card balance on balances carried from one month to another is fairly small, under $2,000, and only effects a minority of consumers.

okonomiyaki

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Re: None of This Could Actually Work If Everyone Did It, Right?
« Reply #13 on: August 07, 2018, 03:25:42 PM »
I’m actually reading a book called “Curing affluenza” right now, and most of the arguements the author posits for reducing our impact on the planet ... are actually mustachianism by a different name... so perhaps it’s actually a very GOOD way forward for us as a society, and as a civilization...

undercover

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Re: None of This Could Actually Work If Everyone Did It, Right?
« Reply #14 on: August 07, 2018, 10:14:03 PM »
The probability of everyone becoming frugal is virtually zero. There is a large portion of people that post here who aren’t very frugal even.

But no, the current setup wouldn’t work if everyone became frugal. Society would have to restructure and become much more socialistic.

Kyle Schuant

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Re: None of This Could Actually Work If Everyone Did It, Right?
« Reply #15 on: August 07, 2018, 10:29:37 PM »
I just wanted to confirm my suspicion that we are simply taking advantage of a system that only exists because people happily go into debt to acquire that which is well beyond their actual means.
You are correct. But you have not gone far enough, you have not gone beyond your own country.

Western consumer profligacy subsidises our investments. Likewise, Third World poverty subsidises our Western lifestyle generally, both for the frugal and the profligate. We do not have $100 mobile phones without children working in coltan mines in the Congo. We do not have $1,000 solar panels without Chinese workers dying from toxic waste in Xinjiang. We do not have $5 t-shirts without Bangladeshi women working in buildings which might collapse at any time.

Our wealth is built on the profligacy of other Westerners, and the poverty of those in the Third World. And so it goes.

And this is why I am more interested in spending less while continuing to earn money than I am in being able to put myself into a position of subsidised idleness.

PDXTabs

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Re: None of This Could Actually Work If Everyone Did It, Right?
« Reply #16 on: August 07, 2018, 11:25:55 PM »
I'm firmly on board that none of this would work if everyone did it, or at least that we would live in a radically different world. In particular, I would direct you to this article: On GDP vs Equity Returns, Bill Gross Is In Fact Right... With A Twist

With that said, if everyone was mustachian we might solve the global warming problem. As it stands today we are going to pass 500ppm of CO2 in the next 50 years and there will be so much CO2 in the atmosphere that it will start to make people cognitively impaired.

flower_girl

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Re: None of This Could Actually Work If Everyone Did It, Right?
« Reply #17 on: August 08, 2018, 04:55:34 AM »
Good topic.

I must confess that as someone who relies on the sale of goods to others for my income I wonder if I'm not shooting myself in the foot by being frugal myself and encouraging frugality in others.  Really I should be telling them spend, spend, spend ......because if people stop spending or reduce it considerably it can decimate my business and in fact every business in this town.   This then has a flow on effect - people lose their jobs, artisans and craftspeople and local stores go out of business and so on.

I think it should be about mindful - not mindless - consumption. 

For myself I try to live a lifestyle where I grow most of our food on our own small farm, hence I need less money.  I try to deal only in high quality goods, many of which I have made myself.   I have a set of ethics such as paying fair prices to others for their work and goods, only selling organic seeds, plants and produce, not buying anything if I suspect people or animals or the planet have been mistreated and so on.   But at the end of the day I still need a certain number of people to buy what I have to offer for sale and others rely on me to spend in their stores, on their products etc.

But in my experience most people do spend mindlessly...so the chances of it all grinding to a halt seem minimal.

As it is most people do have the opportunity to be frugal and begin to save - and most don't.   Their choice. Some people like to just live for today.  I've been like that a lot of my life too but now I'm trying to get my act together.

Malkynn

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Re: None of This Could Actually Work If Everyone Did It, Right?
« Reply #18 on: August 08, 2018, 06:43:42 AM »
Human behaviour doesn’t change overnight.

If as a society we start moving towards frugality, then we will slowly do so and industries will slowly adapt. The same way we will adapt to AI, 3D printing, and the way we’ve adapted to the internet.
Look at the past 200 years and look at the MASSIVE technological and social changes that we’ve adapted to. 

So yeah, a mass movement towards frugality is indeed possible, but incrementally, through slow generational changes. The people of today aren’t about to do it, so there’s no point in projecting the affects of mass-Mustachianism on the systems of today since they won’t EXIST in the future.

Everything changes. There’s no point worrying about hypothetical future changes on the system of today.




matchewed

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Re: None of This Could Actually Work If Everyone Did It, Right?
« Reply #19 on: August 08, 2018, 06:46:08 AM »
So the whole taking advantage of the system portion wouldn't work very well because the inefficiency in it would be eliminated. But the whole living a more efficient lifestyle that is better overall for the world would work.

So some of it could actually work if everyone did it and some of it wouldn't.

Malkynn

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Re: None of This Could Actually Work If Everyone Did It, Right?
« Reply #20 on: August 08, 2018, 07:04:25 AM »
So the whole taking advantage of the system portion wouldn't work very well because the inefficiency in it would be eliminated. But the whole living a more efficient lifestyle that is better overall for the world would work.

So some of it could actually work if everyone did it and some of it wouldn't.

If everyone became Mustachian, the system would probably be so wildly different that it would be hard to even conceptualize what that would look like on a functional level.

Maybe eliminating the pre-FIRE accumulation phase altogether and implementing a universal basic income/standard of living where everyone is fundamentally lean-FIRE by default and everyone is left to do their best and most creative work from day 1 while robots and AI take care of all repetitive and tedious grunt work? And personal 3D printing eliminates most manufacturing and makes status from ownership of goods obsolete.

I know, I’m being purposefully extreme, but the point is that again, you really can’t project possible future ideologies onto the systems of the present. Technological change outpaces social change, so it’s more likely that massive technological advancement is more likely to drive changes to how we interact with our economic systems than a massive, independently social shift while maintaining the exact same economic structure.

Essentially, there’s no way a large scale social shift would occur and with our economic models staying the same. It just wouldn’t happen.

But yes, obviously a strategy that is based on being a minority in a current system isn’t going to “work” if everyone starts doing it, because the entire system will adapt to what everyone starts doing, so everything changes.

matchewed

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Re: None of This Could Actually Work If Everyone Did It, Right?
« Reply #21 on: August 08, 2018, 07:30:35 AM »
So the whole taking advantage of the system portion wouldn't work very well because the inefficiency in it would be eliminated. But the whole living a more efficient lifestyle that is better overall for the world would work.

So some of it could actually work if everyone did it and some of it wouldn't.

If everyone became Mustachian, the system would probably be so wildly different that it would be hard to even conceptualize what that would look like on a functional level.

Maybe eliminating the pre-FIRE accumulation phase altogether and implementing a universal basic income/standard of living where everyone is fundamentally lean-FIRE by default and everyone is left to do their best and most creative work from day 1 while robots and AI take care of all repetitive and tedious grunt work? And personal 3D printing eliminates most manufacturing and makes status from ownership of goods obsolete.

I know, I’m being purposefully extreme, but the point is that again, you really can’t project possible future ideologies onto the systems of the present. Technological change outpaces social change, so it’s more likely that massive technological advancement is more likely to drive changes to how we interact with our economic systems than a massive, independently social shift while maintaining the exact same economic structure.

Essentially, there’s no way a large scale social shift would occur and with our economic models staying the same. It just wouldn’t happen.

But yes, obviously a strategy that is based on being a minority in a current system isn’t going to “work” if everyone starts doing it, because the entire system will adapt to what everyone starts doing, so everything changes.

Your tone seems argumentative to me but your substance seems to agree. :)

Malkynn

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Re: None of This Could Actually Work If Everyone Did It, Right?
« Reply #22 on: August 08, 2018, 08:20:53 AM »

Your tone seems argumentative to me but your substance seems to agree. :)

Only lightly argumentative, and not necessarily with your point specifically ;)

Cranky

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Re: None of This Could Actually Work If Everyone Did It, Right?
« Reply #23 on: August 08, 2018, 10:32:48 AM »
We can't manage to cut back enough to save the friggin' planet we live on, so I'm pretty sure that nothing is going to motivate people to become generally frugal.

Much Fishing to Do

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Re: None of This Could Actually Work If Everyone Did It, Right?
« Reply #24 on: August 08, 2018, 02:12:14 PM »
Curing an illness, preventing a death, is a great goal, a great success.  But if we cure all illness, and prevent all deaths, we may very well end up with a huge problem.  I'm not gonna worry about that until its a whole lot closer.  And frankly I see that as more likely to happen than people spending a lot less than they make ;-)

FireLane

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Re: None of This Could Actually Work If Everyone Did It, Right?
« Reply #25 on: August 08, 2018, 05:04:40 PM »
Even if everyone became frugal, the economy wouldn't grind to a halt. There would be a lot fewer companies selling junk food, plastic crap and useless status symbols, but there are basic needs that will always have to be satisfied.

People will always need houses to live in and office buildings to work in. They'll always need food to eat, clothes to wear, energy for heating and cooling. They'll always need transportation, whether it's a suburban two-car garage or a fleet of autonomous taxis. They'll probably always want the internet, personal electronic devices, and books, music, movies and TV for entertainment. They'll definitely want new drugs, new medical therapies, new ways to cure things we can't cure right now, and new labor-saving devices that make our lives even easier.

As long as there are smart people figuring out how to produce new things and figuring out how to produce the old things faster or more efficiently, economic growth will continue. And as long as there's any economic growth at all, the basic Mustachian logic of "spend less than you earn, invest the difference" will always work.

It's true that if everyone were frugal, economic growth would slow down, in the sense that the berserk rush to consume as many of the planet's resources as possible as fast as possible would come to a stop. The 4% rule might become the 3% rule or the 2% rule, and true early retirement might be more limited to high earners and harder for the general population to reach.

But if, in exchange, we had fewer bullshit jobs, less devastation of our planet, less plundering of the future to feed the present, and a slower-paced life with less stress... well, that's a tradeoff that I, and probably most people on this board, would be happy to make.
« Last Edit: August 08, 2018, 05:06:35 PM by FireLane »

Prairie Stash

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Re: None of This Could Actually Work If Everyone Did It, Right?
« Reply #26 on: August 09, 2018, 08:31:17 AM »
Even if everyone became frugal, the economy wouldn't grind to a halt. There would be a lot fewer companies selling junk food, plastic crap and useless status symbols, but there are basic needs that will always have to be satisfied.

People will always need houses to live in and office buildings to work in. They'll always need food to eat, clothes to wear, energy for heating and cooling. They'll always need transportation, whether it's a suburban two-car garage or a fleet of autonomous taxis. They'll probably always want the internet, personal electronic devices, and books, music, movies and TV for entertainment. They'll definitely want new drugs, new medical therapies, new ways to cure things we can't cure right now, and new labor-saving devices that make our lives even easier.

As long as there are smart people figuring out how to produce new things and figuring out how to produce the old things faster or more efficiently, economic growth will continue. And as long as there's any economic growth at all, the basic Mustachian logic of "spend less than you earn, invest the difference" will always work.

It's true that if everyone were frugal, economic growth would slow down, in the sense that the berserk rush to consume as many of the planet's resources as possible as fast as possible would come to a stop. The 4% rule might become the 3% rule or the 2% rule, and true early retirement might be more limited to high earners and harder for the general population to reach.

But if, in exchange, we had fewer bullshit jobs, less devastation of our planet, less plundering of the future to feed the present, and a slower-paced life with less stress... well, that's a tradeoff that I, and probably most people on this board, would be happy to make.
That sounds a lot like Keynes 15 hour work week scenario...I found the esay, its an interesting diversion. Keep in mind it was written in 1930 and was meant to come to pass in 2030.
https://www.marxists.org/reference/subject/economics/keynes/1930/our-grandchildren.htm

What would you rather have;
a) a 20 hour work week for 40 years or
b) FIRE in 15 years at 40 hours per week?

Both sound better then the current system.

cats

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Re: None of This Could Actually Work If Everyone Did It, Right?
« Reply #27 on: August 09, 2018, 09:24:02 AM »

If everyone was mustachian we might solve the global warming problem.

Yes, this is my main motivation also.  At the moment, the ability to FIRE is a nice bonus, but I would happily give that up if the trade-off was a meaningful decline in greenhouse gas emissions. 


markbike528CBX

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Re: None of This Could Actually Work If Everyone Did It, Right?
« Reply #28 on: August 09, 2018, 11:18:47 AM »
I'm firmly on board that none of this would work if everyone did it, or at least that we would live in a radically different world. In particular, I would direct you to this article: On GDP vs Equity Returns, Bill Gross Is In Fact Right... With A Twist

With that said, if everyone was mustachian we might solve the global warming problem. As it stands today we are going to pass 500ppm of CO2 in the next 50 years and there will be so much CO2 in the atmosphere that it will start to make people cognitively impaired.
Reference for bolded statement?
https://ehp.niehs.nih.gov/15-10037/. notes correlation between 500 to 1200 ppm CO2 and cognitive function.  Indoor air/office setting.

If one assumes the CO2 -cognitive link, then it might be offset by IQ increases
http://www.apa.org/pubs/books/431712a.aspx

It is interesting to note that IQ rises are noted at a time of rising CO2.
Correlation is not causation, but what if it was?

Of course IQ tests are limited in time.

PDXTabs

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Re: None of This Could Actually Work If Everyone Did It, Right?
« Reply #29 on: August 09, 2018, 01:39:36 PM »
I'm firmly on board that none of this would work if everyone did it, or at least that we would live in a radically different world. In particular, I would direct you to this article: On GDP vs Equity Returns, Bill Gross Is In Fact Right... With A Twist

With that said, if everyone was mustachian we might solve the global warming problem. As it stands today we are going to pass 500ppm of CO2 in the next 50 years and there will be so much CO2 in the atmosphere that it will start to make people cognitively impaired.
Reference for bolded statement?
https://ehp.niehs.nih.gov/15-10037/. notes correlation between 500 to 1200 ppm CO2 and cognitive function.  Indoor air/office setting.

That is actually the study that I'm afraid of. You can draw a different conclusion than me, but I don't want to be living in a world with any more than 500ppm, ever, and it isn't even the sea level rise and the famine that I'm worried about. Especially since indoor air is always going to have a meaningfully higher co2 concentration than the average outdoor air (which in cities will still have a higher co2 level than the air that you see climate scientists quoting - because they take their samplest as far away from point sources as they can get).
« Last Edit: August 09, 2018, 01:41:38 PM by PDXTabs »

undercover

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Re: None of This Could Actually Work If Everyone Did It, Right?
« Reply #30 on: August 11, 2018, 08:27:32 AM »

If everyone was mustachian we might solve the global warming problem.

Yes, this is my main motivation also.  At the moment, the ability to FIRE is a nice bonus, but I would happily give that up if the trade-off was a meaningful decline in greenhouse gas emissions.

At the same time, it's silly to think that any one person reducing their carbon footprint actually does anything to prevent global warming. The only way to prevent global warming is for systemic change to occur in the form of much more efficient or renewable energy or incentives to limit the amount of emissions until a sustainable amount of emissions are reached (through taxes or other policy change). And of course a single person can do what they can to influence policy change but all I'm saying is the mere act of refraining from doing something doesn't do jack in terms of sustainable change.

Frugality and CO2 emissions are very much related. They're both a function of human psychology. The more you understand how people overall operate, the more you realize that this question of "what if everyone" is pointless...you can't change people without incentives to restrict their natural behavior. But you can sure exploit them if you have a basic understanding of psychology and you can flat out become mega rich if you have a deep understanding like Buffett/Munger.

Cranky

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Re: None of This Could Actually Work If Everyone Did It, Right?
« Reply #31 on: August 11, 2018, 08:40:44 AM »
I walked into Times Square one time and thought, "Wait! Why am I bothering to go around turning off the lights in my house when there are one billion lights left on all night here?"

But, at the end, I want to know that I did what I could. I voted for more, I spoke up for more, and I turned off those lights in my house when I wasn't using them.

RetiredAt63

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Re: None of This Could Actually Work If Everyone Did It, Right?
« Reply #32 on: August 11, 2018, 08:55:48 AM »
Mustachian living is a lot like living in the 1950's, without the bad parts of the 50's.

Our levels of consumption would be obviously insane if we had jumped from 1958 to 2018.   Instead consumption and easy credit have slowly crept up, so people don't really notice - financially we are the lobster in the pot.


bendixso123

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Re: None of This Could Actually Work If Everyone Did It, Right?
« Reply #33 on: August 11, 2018, 10:53:19 AM »
Even if everyone became frugal, the economy wouldn't grind to a halt. There would be a lot fewer companies selling junk food, plastic crap and useless status symbols, but there are basic needs that will always have to be satisfied.

People will always need houses to live in and office buildings to work in. They'll always need food to eat, clothes to wear, energy for heating and cooling. They'll always need transportation, whether it's a suburban two-car garage or a fleet of autonomous taxis. They'll probably always want the internet, personal electronic devices, and books, music, movies and TV for entertainment. They'll definitely want new drugs, new medical therapies, new ways to cure things we can't cure right now, and new labor-saving devices that make our lives even easier.

As long as there are smart people figuring out how to produce new things and figuring out how to produce the old things faster or more efficiently, economic growth will continue. And as long as there's any economic growth at all, the basic Mustachian logic of "spend less than you earn, invest the difference" will always work.

It's true that if everyone were frugal, economic growth would slow down, in the sense that the berserk rush to consume as many of the planet's resources as possible as fast as possible would come to a stop. The 4% rule might become the 3% rule or the 2% rule, and true early retirement might be more limited to high earners and harder for the general population to reach.

But if, in exchange, we had fewer bullshit jobs, less devastation of our planet, less plundering of the future to feed the present, and a slower-paced life with less stress... well, that's a tradeoff that I, and probably most people on this board, would be happy to make.
That sounds a lot like Keynes 15 hour work week scenario...I found the esay, its an interesting diversion. Keep in mind it was written in 1930 and was meant to come to pass in 2030.
https://www.marxists.org/reference/subject/economics/keynes/1930/our-grandchildren.htm

What would you rather have;
a) a 20 hour work week for 40 years or
b) FIRE in 15 years at 40 hours per week?

Both sound better then the current system.

I would totally take the 20 hour a week option, however given the nature of the work I do (iPhone apps), there's just no way the client would ever be satisfied with that. I think that's part of the problem. Even though we probably don't need to work as much given the amount we get paid, some jobs seem to have this totalizing effect where you can't get a certain hourly rate unless you commit to a typical 40 hour work schedule (or more).

If you're in a high-value profession, people generally can't get enough of you. They can oftentimes afford to pay you more for more hours if you're willing to give that to them. 40 hours seems to be the balance we've struck so people can raise kids.

Unfortunately, the people getting those sweet part-time gigs are also getting paid a lot less per hour. You can easily go be a part-time clerk at Target or Starbucks. They're just looking for a totally replaceable cog. But if you're going to make a great hourly rate, you'll need to be irreplaceable in some regard, and that means you've gotta give them some more availability.

I think that's why so many people here settle on FIRE. It's the only reasonable thing to do given our high-value professions where most of us are utterly indispensable. It's hard enough to keep a 40 hour week. Shooting for 20 seems utterly egregious

Hargrove

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Re: None of This Could Actually Work If Everyone Did It, Right?
« Reply #34 on: August 11, 2018, 11:59:57 AM »
I'll play!

If the impossible "everyone did it" occurred, and another political or social movement didn't erase it or make it irrelevant, supply would shrink to fit demand more closely as demand shrank. Your ability to retire would be dramatically slowed vs the current system initially, but the work you needed to do would be tremendously diminished, which would speed retirement back up again as prices stayed level or decreased from current levels. The Fed would be apoplectic the entire time.

The financial sector would lose all its speculative customers. Wall Street would be an arrangement of low-fee Edward Jones outfits that wanted to be your buddy, to get you to invest in their index fund brand, functionally as nearly-free as every other index fund brand.

Inequality would begin to reverse as money was no longer funneled into junk, and everyone enjoyed the gains of the stock market. Creators would still have a lot more, but it would no longer be possible for the new iPhone to create a megacorp.

Vanguard would face a crisis as Facebook has today. Eventually it is forced to admit it has too much control over the world to be neutral, since it technically owns everything, and too many naughty actors are afoot. It begins voting its shares to oust CEOs and boardmembers engaged in the sort of practices that create situations like the opioid epidemic of the previous century. This creates the biggest political crisis of the era, as people debate whether we have entered a cyberpunk utopia or dystopia, the winner of which determines whether Vanguard incorporates governments or governments nationalize Vanguard.

Aforementioned crisis eventually leads to the banning of the production of most firearms, and another, similar crisis. Heavily armed nations fractionalize and collapse in the last world war, while the remaining nations form the United Earth Administration.

We stop making the planet uninhabitable, so going to other planets to ruin them instead no longer sounds reasonable to anyone, anywhere. Space exploration returns to the cozy idealism of the 1970s, moderated by the presence of hostile aliens, which conveniently all look almost the same as we do.

Radicals with strong opinions about friendly aliens are ignored, because campaign finance reform at the United Earth Administration finally disincentivized pandering to a radical base. No one remembers what gerrymandering is, and it falls in the linguistic dustbin of the "hanging chad."

To everyone's surprize, cyberware implants never take off, because people enjoy spending time with their neighbors instead of having datajacks in their heads that cause cancer.

We cure cancer, because what else will we spend the money on? Datajacks still don't take off, and Sony goes out of business.

Somehow, Ford, having sold off its remaining vehicle assets to Enterprize Honda GmbH, successfully transfers its remaining assets into the production of the Ford Galacticar, which licenses the new interplanetary space engine from Lockheed-Wesson. Ford eventually merges with Saeder-Dupont, creating Ford Global.

Marketing would gasp and die or transform into a kind of positive social propaganda - advertising would be skewed towards sustainability resources and community organizations.

Competition would reignite for national pride projects in the absence of war., but these would skew towards civilization milestones rather than monuments. Lockheed-Wesson would lead the space race, and an antitrust action would force them to divest assets to Ford Global, creating the two most profitable companies of the 22nd century.

Diageo-Forman would develop a drug like alcohol that didn't affect your lifespan. There would be a "lost decade" as the world was forced to relearn moderation.

Scientists discover that Galacticar magnetic stabilizers can break up amyloid plaques in the brain, harmlessly, leading to a cure for Alzheimers and a new medical technique for everything from MS to autism. The human lifespan being barely limited does not lead to famine, because nobody would even think about wasting food anymore.

In 10 billion years, everyone has to come up with something to stop the universe from shrinking or expanding too much. M Knight Shaymalan and Doctor Who reveal they already fixed the problem.

markbike528CBX

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Re: None of This Could Actually Work If Everyone Did It, Right?
« Reply #35 on: August 11, 2018, 12:45:26 PM »
https://www.barrons.com/articles/the-u-s-stock-market-is-now-worth-30-trillion-1516285704

divided by US population ~350million. make up you own numbers or add  or subtract foreign investors etc.

=$ 86,000/person.   * 0.04=3500/year.


Although I do like Hargrove's take on it.

PDXTabs

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Re: None of This Could Actually Work If Everyone Did It, Right?
« Reply #36 on: August 11, 2018, 03:29:32 PM »
I would totally take the 20 hour a week option, however given the nature of the work I do (iPhone apps), there's just no way the client would ever be satisfied with that. I think that's part of the problem. Even though we probably don't need to work as much given the amount we get paid, some jobs seem to have this totalizing effect where you can't get a certain hourly rate unless you commit to a typical 40 hour work schedule (or more).

If you're in a high-value profession, people generally can't get enough of you. They can oftentimes afford to pay you more for more hours if you're willing to give that to them. 40 hours seems to be the balance we've struck so people can raise kids.

I definitely agree with you as far as the W-2 world goes (I'm a full time W-2 software engineer). I think that there is probably an opportunity to be an independent contractor and to either work 6mo on/ 6 mo off, or to tell people that you have other clients and that you can only work 20 hours per week.
« Last Edit: August 11, 2018, 03:31:32 PM by PDXTabs »