Author Topic: The death of the 'Millionaire Next Door' dream  (Read 34623 times)

zephyr911

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Re: The death of the 'Millionaire Next Door' dream
« Reply #100 on: April 02, 2015, 11:21:38 AM »
What? Do you read the blog? I think you may be in the wrong place, try the Ramsey forums.

I believe in the math much more than the motivation or the end goal.  Not long after reading this blog I actually cancelled cable service like so many of you have.  I also make above median income.  Meanwhile I know a couple who make less than me with more people to take care of who finally just got cable television service.  Situations like these make it look like I'm living poorer than the poor.  If you have the ability to save a million in investments and retire in your forties, you could comfortably fade into obscurity like the Millionaires Next Door.  Of course I could always focus my efforts on something more interesting, like being a state representative, a lawyer, or buying a big house and luxurious items.  Sounds more fun than me recently waiting 5 months before begrudgingly spending $250 for a new video game console and games.
If all you want is a pile of cool toys, why wait? If you're not interested in sprinting ahead of the curve by redefining popular needs/wants as unnecessary, it would seem you aren't being true to your own priorities. Don't let MMM or his cult-like following deter you, just get what you want right now.
Not joking/trolling. If that's what you'd prefer, then do it and by all means, good luck & more power to you.
I alone am pushing twice the median family income in my area and probably one of the few people on my street without cable. If that made me feel poor, I'd turn that shit back on in a heartbeat. Back to the heart of MMM and the fact that frugality is not intended as anything more than a side effect of stoicism - this was a decision that stemmed not just from crunching numbers but from a long and heartfelt consideration of what mattered most to me, and whether this particular recurring outlay actually made me any happier. I identified one possible aspect that I'd miss (live sports), made a backup plan to catch the games I cared most about, and I did it. I don't miss it.
I'm right with you on not fading into obscurity - I don't want independence just so I can wander off into the woods, or sit on my ass collecting dividends. I don't plan on running for office but I do actually have a friend who may, and FI is damn near vital for anyone who wants to run - or be on the think tank, without dragging down a marginally funded team with salary demands. On top of that, there are lots of nonprofit efforts I would love to be involved in. I want to leave a legacy of good things done and people helped for all the right reasons and nothing asked in return, just because I could.

RFAAOATB

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Re: The death of the 'Millionaire Next Door' dream
« Reply #101 on: April 02, 2015, 11:47:25 AM »
If all you want is a pile of cool toys, why wait? If you're not interested in sprinting ahead of the curve by redefining popular needs/wants as unnecessary, it would seem you aren't being true to your own priorities. Don't let MMM or his cult-like following deter you, just get what you want right now.
Not joking/trolling. If that's what you'd prefer, then do it and by all means, good luck & more power to you.
A few years ago I was spending more and making less and got my net worth $20k in the negative.  That has left me very risk averse, and so as I'm making more I'm cutting more to increase my safety margin. Even though my net worth is over 100k, if I lost my job I would be screwed.  Financial independence is important.  The cool toys are important too, but buying them now would be too risky.  I still believe there will be a Lexus and Rolex in my future, but they have to come after financial independence otherwise the toys become a trap.

What happens after you become financially independent is where the biggest philosophical split lies.  I'm surprised more people aren't planning for greatness considering this group typically has the intelligence and discipline to make it happen.

zephyr911

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Re: The death of the 'Millionaire Next Door' dream
« Reply #102 on: April 02, 2015, 12:02:31 PM »
If all you want is a pile of cool toys, why wait? If you're not interested in sprinting ahead of the curve by redefining popular needs/wants as unnecessary, it would seem you aren't being true to your own priorities. Don't let MMM or his cult-like following deter you, just get what you want right now.
Not joking/trolling. If that's what you'd prefer, then do it and by all means, good luck & more power to you.
A few years ago I was spending more and making less and got my net worth $20k in the negative.  That has left me very risk averse, and so as I'm making more I'm cutting more to increase my safety margin. Even though my net worth is over 100k, if I lost my job I would be screwed.  Financial independence is important.  The cool toys are important too, but buying them now would be too risky.  I still believe there will be a Lexus and Rolex in my future, but they have to come after financial independence otherwise the toys become a trap.

What happens after you become financially independent is where the biggest philosophical split lies.  I'm surprised more people aren't planning for greatness considering this group typically has the intelligence and discipline to make it happen.
I really want a Tesla someday, and not just because they're hot shit, but because I do EV advocacy on a regular basis and it'd be the ultimate showpiece. I could finance it easily, and would have already if not for these "nags" facepunching me. ;)

As far as greatness goes, we each define and pursue it in our own way, to an extent. For some people, having everything you need to care for your immediate family for the rest of your life is greatness in itself. For others, maybe more like your examples, or mine. But I wonder if the question has really been asked here. Maybe an interesting topic for another thread. The immediate result of FIRE is to be able to do whatever you want; so, what is the "whatever" for everyone here?

deborah

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Re: The death of the 'Millionaire Next Door' dream
« Reply #103 on: April 02, 2015, 02:00:45 PM »
MND does a good job dispelling the myth that most rich people spend a lot of money. Does anyone disagree with any of this?

I read the book and I don't recall any mention of savings rates by income group in the book.  In fact, it is indeed true that rich people spend a lot of money, just look at savings rates by income group.  I know I've read that those making in top 1 to 10% of income save only 10-15% of their incomes, that's just pathetic.   The top 1% saves 30-40% which is easy when you make that much.     
So you are saying that the more you make, the greater percentage you save? I know that lifestyle creep really affects the rich (the ones I know collect things like immaculate vintage cars and holiday houses in just about every location), especially given the proliferation of very expensive holiday destination resorts, so I think these stats actually prove the point you are refuting.

Luck12

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Re: The death of the 'Millionaire Next Door' dream
« Reply #104 on: April 02, 2015, 02:35:42 PM »
So you are saying that the more you make, the greater percentage you save? I know that lifestyle creep really affects the rich (the ones I know collect things like immaculate vintage cars and holiday houses in just about every location), especially given the proliferation of very expensive holiday destination resorts, so I think these stats actually prove the point you are refuting.

How so?  The hypothesis is rich people don't spend much.  I showed that they do.  They spend in a volcanicly wasteful manner in fact.  I'm tired of people lauding rich people's saving habits when their saving habits as a whole are not very good.   Obviously the top 1% can easily save bundles of money even if they are not particularly skillful at saving. 

It' the math, stupid.     

CCCA

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Re: The death of the 'Millionaire Next Door' dream
« Reply #105 on: April 02, 2015, 05:21:48 PM »
no doubt there is an uneven distribution of factors that will influence a person's ability to save money. 
Things like race/ethnicity, education, parental involvement, intelligence, physical disabilities, personality, disposition to obesity, etc. . . can all impact someone's ability to get a job, advance in that job, and amass a sizeable stash.  Many of these things are not factors that you have control over, so the extent to which you are given a hand (i.e. the mix of these attributes) that increases your chances, can be considered luck. 


However, I agree with other posters who say that acknowledging that luck plays a potentially large role doesn't mean that you can dismiss the mathematics that state that the more you save, the more likely you can save a million dollars.  Living below your means, especially well below your means can accelerate this.  If you can save 15,000/yr which is possible for people of many different salary levels (though obviously easier for high income folks), increase that savings level by 3%/yr, and then make a modest rate of return (3-8%) you can achieve a million dollars in your stash sometime between 21 and 28 years. 

I think this is what people here are arguing for. 

skunkfunk

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Re: The death of the 'Millionaire Next Door' dream
« Reply #106 on: April 03, 2015, 07:59:58 AM »
I'm surprised more people aren't planning for greatness considering this group typically has the intelligence and discipline to make it happen.

Greatness? I have everything I want. How would wearing a Rolex instead of a fossil make me greater? I am much more impressed with, say, a skillful trumpet solo (which, as is true for many skills, doesn't require a fancy trumpet - the best player in town here plays a $300 piece of shit he found in a pawn shop) than a Rolex.

I'd also be more taken with a car somebody saved from the scrapyard than a new Lexus, because again, I consider the skills required more "greatness" than a big purchase.

I'm just saying, learn a little stoicism and you won't need that Rolex to feel good about yourself.

arebelspy

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Re: The death of the 'Millionaire Next Door' dream
« Reply #107 on: April 03, 2015, 08:18:20 AM »
I'm surprised more people aren't planning for greatness considering this group typically has the intelligence and discipline to make it happen.

Greatness? I have everything I want. How would wearing a Rolex instead of a fossil make me greater?

Well said!

Besides the idea of greatness coming in many forms, one doesn't need consumerism trappings to do great things.  MND is about frugality, and Mustachianism is about happiness and enough.  Neither of those limit one's ability to do great things (whatever that means to the individual).

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zephyr911

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Re: The death of the 'Millionaire Next Door' dream
« Reply #108 on: April 03, 2015, 01:26:24 PM »
So you are saying that the more you make, the greater percentage you save? I know that lifestyle creep really affects the rich (the ones I know collect things like immaculate vintage cars and holiday houses in just about every location), especially given the proliferation of very expensive holiday destination resorts, so I think these stats actually prove the point you are refuting.

How so?  The hypothesis is rich people don't spend much.  I showed that they do.  They spend in a volcanicly wasteful manner in fact.  I'm tired of people lauding rich people's saving habits when their saving habits as a whole are not very good.   Obviously the top 1% can easily save bundles of money even if they are not particularly skillful at saving. 

It' the math, stupid.   
The more interesting question, and the more relevant question to the thesis of MND, is what they do while they're in the process of getting rich, isn't it?
After all, the guy died driving a Corvette.