Author Topic: Financial independence in the Hamptons  (Read 3991 times)

grantmeaname

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Financial independence in the Hamptons
« on: August 17, 2012, 10:41:29 AM »
Investopedia has a humor piece called Two Roads: Debt or Financial Independence. Among the reasons financial independence can't be done: owning a place in the Hamptons. Yes, really.

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If you are living the upscale lifestyle of an investment banker to the rich and famous, driving to a client meeting in a Ford Focus is out of the question. Similarly, if everyone in your social network has a housekeeper and vacations in the Hamptons, those items become an expected part of the lifestyle in order to maintain your social network and class. That correlation between standard of living vs. quality of life is very common.
I was almost following it about the Focus, almost. You could buy an old 7-series and you would be classy as hell, in a cheap car. Or drive an S2000, for that matter. They do that over and over and over again: here's one possible way that an expense could come up. Therefore everyone can't meet their expenses, because everyone must keep up with the Joneses and not try and be clever about their consumption decisions.

Point two: your professional clients don't give two shits whether you have a housekeeper. They just don't.

Nevermind the fact that the last sentence is a total non sequitir. More stuff doesn't mean more quality of life, and they never supported that assertion anywhere else in the article.

grantmeaname

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Re: Financial independence in the Hamptons
« Reply #1 on: August 17, 2012, 10:43:01 AM »
The other half of the article is very positive though.  I loved this part, which reminds us that all of us have spurious consumption, not just the yacht-owning crowd:
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That said, before class envy takes hold, those of us at the lower end are also not skipping our lattes, nights on the town, cable television, cell phones, cigarettes, alcohol, new cars, and other nice-to-have-but not-strictly-necessary expenses

And it closed with one of the best summaries of FI I've seen, emphasizing its rewards.
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The Bottom Line
Sticking to the seemingly simple plan of earning more and saving more requires serious discipline and sacrifice. It means living below your means, regardless of the level of your means, and making savings a priority. If requires having a plan, saving and maximizing the amount you invest in our 401(k) and other savings vehicles before spending on the extras. It may not sound like fun, but years from now, when you look back at all the people who seemed to have it all but were really just getting by, you'll be one of the ones laughing all the way to the bank.

Maybe this should have gone in the "Mustachianism around the web" category. It's equal party Mustache and Anti-Mustache, in the same article.

Jamesqf

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Re: Financial independence in the Hamptons
« Reply #2 on: August 17, 2012, 12:30:11 PM »
It's all about attitude.  I don't consider myself to be anywhere near the lower end, but I am "skipping our lattes, nights on the town, cable television, cell phones*, cigarettes, alcohol, new cars".  Thing is, I am not sacrificing at all by skipping those things.  Not having them, and not having to pay for them, improves my quality of life.

I do spend money on what it calls "nice-to-have-but not-strictly-necessary expenses", but they're things I want and enjoy, not stuff society says I ought to have.

*Ok, I do have a pay-as-you-go cell phone now, but only because it's cheaper than a land line.


arebelspy

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Re: Financial independence in the Hamptons
« Reply #3 on: August 17, 2012, 12:45:30 PM »
My second home in the Hamptons may mean I don't hit FI, but I use it several times per year!  Plus it sounds great dropping it into conversations.

You can't put a price on that.
We are two former teachers who accumulated a bunch of real estate, retired at 29, and now travel the world full time with two kids.
If you want to know more about me, or how we did that, or see lots of pictures, this Business Insider profile tells our story pretty well.
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keith

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Re: Financial independence in the Hamptons
« Reply #4 on: September 07, 2012, 12:04:44 AM »
My second home in the Hamptons may mean I don't hit FI, but I use it several times per year!  Plus it sounds great dropping it into conversations.

You can't put a price on that.

I'm going to go with George Costanza's route - lie and say you have a place in the hamptons, when you actually don't.

Richard3

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Re: Financial independence in the Hamptons
« Reply #5 on: September 07, 2012, 08:56:32 AM »
I have a second place in the hamptons, a third place in Vegas, a fourth place in Thailand, a fifth place in New Zealand etc

Best part is I only pay for them when I am actually living there and someone else does all the upkeep. This awesome financial secret is called renting a holiday house.