Why are business majors likely to be financial trainwrecks?

[SeaEhm]

I wonder two things:

1.  How many people on this forum think "not pursuing RE/MMM path" = "pending financial disaster". There are lots of people who can save 10-20% AND live a "flashy" life with a little leverage (car payment, maybe carry a small CC balance for a splurge occasionally) but who aren't $500 away from living in a van down by the river. I sometimes wonder if MMMers can tell the difference.

2.  How many people, here and IRL, take at face value statements said in jest. I say all the time things like "my wife took my daughter shopping this weekend; I never wanted to retire anyways" as a joke but it has zero actual bearing on my real financial situation. It's just empty talk. Or "got no money till Friday again!" But that really means "because I don't want to transfer any out of savings."  It really can't be that everyone you know is a walking financial disaster, I think people downplay stuff all the time, or they say they "can't imagine retiring" because they don't want to think about retirement not being a million dollar beach house, not because they'd be eating cat food in week two.

Great points. 

If I talked about some of the things I purchased, I think some people here would have a heart attack, haha.

[clarkfan1979]

An undergrad degree in business is not very difficult and does not pay well, when first out of school. However, I would predict that CPA's & MBA's would have a better head on their shoulders.

[Papa Mustache]

I wonder two things:

1.  How many people on this forum think "not pursuing RE/MMM path" = "pending financial disaster". There are lots of people who can save 10-20% AND live a "flashy" life with a little leverage (car payment, maybe carry a small CC balance for a splurge occasionally) but who aren't $500 away from living in a van down by the river. I sometimes wonder if MMMers can tell the difference.

2.  How many people, here and IRL, take at face value statements said in jest. I say all the time things like "my wife took my daughter shopping this weekend; I never wanted to retire anyways" as a joke but it has zero actual bearing on my real financial situation. It's just empty talk. Or "got no money till Friday again!" But that really means "because I don't want to transfer any out of savings."  It really can't be that everyone you know is a walking financial disaster, I think people downplay stuff all the time, or they say they "can't imagine retiring" because they don't want to think about retirement not being a million dollar beach house, not because they'd be eating cat food in week two.

I was making use of a little dry humor in my post. To be serious I have seen people face a car or house repair bill and panic over a few hundred bucks. 

Lately I've been trying to unravel the median income stat I've seen a few times. People making ~$50K a year in the USA. I can see all the tax brackets around my town (by neighborhood) but it seems to me the well to do ought to drag that number up to at least $75K a year.

Must be alot of 72 month car loans and 30 year mortgages?

[Chris22]

An undergrad degree in business is not very difficult and does not pay well, when first out of school. However, I would predict that CPA's & MBA's would have a better head on their shoulders.

That's very degree specific.  An accounting degree is fairly rigorous and if you land with a Big 4 or Big 8 (? next step down) firm you can expect a starting salary around $60k +/-.

[MgoSam]

An undergrad degree in business is not very difficult and does not pay well, when first out of school. However, I would predict that CPA's & MBA's would have a better head on their shoulders.

That's very degree specific.  An accounting degree is fairly rigorous and if you land with a Big 4 or Big 8 (? next step down) firm you can expect a starting salary around $60k +/-.

Yup, and you generally don't need to have passed the CPA to earn that salary. The big 4 (and I presume the next level firms) will pay for your courses and give you study time to help you pass. Or I've heard of some firms giving a bonus if you have already passed (because you did so on your own dime...plus they don't need to worry about you not passing).

[Chris22]

An undergrad degree in business is not very difficult and does not pay well, when first out of school. However, I would predict that CPA's & MBA's would have a better head on their shoulders.

That's very degree specific.  An accounting degree is fairly rigorous and if you land with a Big 4 or Big 8 (? next step down) firm you can expect a starting salary around $60k +/-.

Yup, and you generally don't need to have passed the CPA to earn that salary. The big 4 (and I presume the next level firms) will pay for your courses and give you study time to help you pass. Or I've heard of some firms giving a bonus if you have already passed (because you did so on your own dime...plus they don't need to worry about you not passing).

My background is accounting, I never even took the CPA because by the time I had the hours I had progressed to a more finance-y type role and no one cares anymore if I have a CPA.  Accounting is a great way to lever yourself into finance or other related roles as well.

[Taran Wanderer]

The funny thing about these different educational backgrounds and viewpoints is that they assume everyone else thinks like them. So, MBA folks assume everyone plays fast and loose, and they don't trust anyone. Meanwhile, engineers assume that people look at things logically and comprehensively. It would be nice if everyone thought like engineers, or at the least appreciated and valued the way engineers think.

[MgoSam]

The funny thing about these different educational backgrounds and viewpoints is that they assume everyone else thinks like them. So, MBA folks assume everyone plays fast and loose, and they don't trust anyone. Meanwhile, engineers assume that people look at things logically and comprehensively. It would be nice if everyone thought like engineers, or at the least appreciated and valued the way engineers think.

Actually I believe that most things would be better if everyone thought like an Economist...but yeah, I think thinking like an engineer might be better.

[Taran Wanderer]

I find that many economists assume everyone tries to optimize economically. There is actually a lot more emotion and sentiment involved.  Thinking like an engineer isn't best for every situation, but engineers have to actually think and plan out how things will work. Motivational speeches, vision, and goals can be helpful with people, but they don't work on equipment and electronics. The fundamental laws of physics and chemistry apply. Engineers win by working through those details and making things happen. Meanwhile they are criticized for being too literal and detail oriented.

[Chris22]

I find that many economists assume everyone tries to optimize economically. There is actually a lot more emotion and sentiment involved.  Thinking like an engineer isn't best for every situation, but engineers have to actually think and plan out how things will work. Motivational speeches, vision, and goals can be helpful with people, but they don't work on equipment and electronics. The fundamental laws of physics and chemistry apply. Engineers win by working through those details and making things happen. Meanwhile they are criticized for being too literal and detail oriented.

As a business person who supports engineers, I find too often engineers get caught down in the weeds on stuff that doesn't really matter, and on many occasions can fail to see the forest.  I also see engineers who ask very specific questions, get very specific answers to them, and fail to solve the problem because a broader question would have given them the answer they were looking for.  Many times I've written the email that said "you asked me for X, the answer is Y, but what I think you were after is Z and the answer to that is A, B, and C."

[yuka]

If she would have stayed out of the bank account and not fuck the neighbor, we might still be married.

Said every divorcee ever.

[runningthroughFIRE]

I find that many economists assume everyone tries to optimize economically. There is actually a lot more emotion and sentiment involved.  Thinking like an engineer isn't best for every situation, but engineers have to actually think and plan out how things will work. Motivational speeches, vision, and goals can be helpful with people, but they don't work on equipment and electronics. The fundamental laws of physics and chemistry apply. Engineers win by working through those details and making things happen. Meanwhile they are criticized for being too literal and detail oriented.

Engineers have the same issues with people as economists.  You just criticized economists for not taking emotions and sentiments into account, then praised the engineering mindset for focusing on the details of hard science.  Nothing and no one operates in a perfect vacuum, although I agree with you that it is frustrating when you're relying on people who don't think things through.

[Taran Wanderer]

I find that many economists assume everyone tries to optimize economically. There is actually a lot more emotion and sentiment involved.  Thinking like an engineer isn't best for every situation, but engineers have to actually think and plan out how things will work. Motivational speeches, vision, and goals can be helpful with people, but they don't work on equipment and electronics. The fundamental laws of physics and chemistry apply. Engineers win by working through those details and making things happen. Meanwhile they are criticized for being too literal and detail oriented.

As a business person who supports engineers, I find too often engineers get caught down in the weeds on stuff that doesn't really matter, and on many occasions can fail to see the forest.  I also see engineers who ask very specific questions, get very specific answers to them, and fail to solve the problem because a broader question would have given them the answer they were looking for.  Many times I've written the email that said "you asked me for X, the answer is Y, but what I think you were after is Z and the answer to that is A, B, and C."

As an engineer/business person with engineer tendencies who manages engineers, I hear you.  I am fortunate to work with a group of generally experienced engineers who are thinking broadly but don't communicate well sometimes and unfortunate to be working with a group of business people who are new to the business and uninformed in the technical areas, so my frustration is mostly with the business side but also with the communication challenges of the technical folks.

[MgoSam]

I find that many economists assume everyone tries to optimize economically. There is actually a lot more emotion and sentiment involved.  Thinking like an engineer isn't best for every situation, but engineers have to actually think and plan out how things will work. Motivational speeches, vision, and goals can be helpful with people, but they don't work on equipment and electronics. The fundamental laws of physics and chemistry apply. Engineers win by working through those details and making things happen. Meanwhile they are criticized for being too literal and detail oriented.

Engineers have the same issues with people as economists.  You just criticized economists for not taking emotions and sentiments into account, then praised the engineering mindset for focusing on the details of hard science.  Nothing and no one operates in a perfect vacuum, although I agree with you that it is frustrating when you're relying on people who don't think things through.

Not to mention that behavioral economics is growing in popularity.

[Taran Wanderer]

I find that many economists assume everyone tries to optimize economically. There is actually a lot more emotion and sentiment involved.  Thinking like an engineer isn't best for every situation, but engineers have to actually think and plan out how things will work. Motivational speeches, vision, and goals can be helpful with people, but they don't work on equipment and electronics. The fundamental laws of physics and chemistry apply. Engineers win by working through those details and making things happen. Meanwhile they are criticized for being too literal and detail oriented.

Engineers have the same issues with people as economists.  You just criticized economists for not taking emotions and sentiments into account, then praised the engineering mindset for focusing on the details of hard science.  Nothing and no one operates in a perfect vacuum, although I agree with you that it is frustrating when you're relying on people who don't think things through.

My point was that economists develop models based on expected rational behavior, but the models are inexacy because behavior is not always rational in the way assumed by the model, and sometimes not rational in any discernible way at all. An engineer, on the other hand, develops a technical solution while focusing on details with technical constraints. So, say you're programming a control system to automatically control a process. You are either successful or not in keeping the process operating within defined control limits. From a technical standpoint, it either works or it doesn't. Now the human interface (screen) is a different story as it involves the operators' needs.  And the programming style and documentation can be done a number of "right" ways. But the process is either in control or it's not.  So, the engineer either got the details right or he/she didn't.

None of it works if you don't get the human factors right, but some of the engineering work is fairly deterministic.  And for those that live in a 100% human factors world, the deterministic stuff is something they don't seem to understand or appreciate (sometimes).

Now, can we switch to my complaints about lawyers?

[Indexer]

Why do you get an MBA?

The passion for management... or the assumption of a high paying job?

I have a business degree, finance to be specific. The most financially irresponsible people I've met are people I've worked with.

One guy went to close a deal with a Mercedes dealership. He went to have them sign papers. He came back with a Mercedes SL550(insanely expensive sports car). After everyone congratulated him on the new car I asked how he was going to handle it. He admitted he was already regretting the decision. He also owned a brand new SUV. Last time I talked to him he had a high end sports car and a luxury sedan, both brand new.

I know one that was flabbergasted that someone making 50k a year could have a million dollar portfolio. I've also overheard a conversation where someone with a CFP designation is only contributing 2% to his 401(k). The match is 6%...

I'll admit I went into that career with the same mindset. Make tons of money, buy a Porsche!  However it hit me in a finance course. I could have a job just managing my own portfolio if that portfolio was big enough. What I needed to get there was saving more now. No Porsche for me...

[FiguringItOut]

My ex is definitely someone you want to run your business finances.  However, if I gave her $1 out of the family budget she would figure out a way to spend $2.  She said the she dealt with this crap all day at work, doesn't want to deal with it at home.  If she would have stayed out of the bank account and not fuck the neighbor, we might still be married.

This is my ex.  He is a CPA and Sr Manager of Finance and he can't figure out how to keep his own accounts in the black.  What I've learned over the years is that his mentality has been that he viewed personal accounts as business accounts, credit card debt was "accruals" and "debt leveraging", new electronic toys were "investments"/"fixed assets" and so on.
As for the  neighbor random stranger, well, that is the whole 'nother story which I won't get into here.

[cheapass]

I have a business degree, finance to be specific. The most financially irresponsible people I've met are people I've worked with.

It is pretty remarkable. The cobbler's children have no shoes.

One guy went to close a deal with a Mercedes dealership. He went to have them sign papers. He came back with a Mercedes SL550(insanely expensive sports car). After everyone congratulated him on the new car...

I always find it hilarious when people congratulate someone on a massive purchase. "Congratulations on sinking a shitload of money into a depreciating asset, probably financed!" "Great job sacrificing your family's financial security for a toy to boost your ego!" "Hey, your credit wasn't abysmal, congratulations!!"

Now if someone graduates college, climbs Mount Everest, or some other feat worthy of congratulation that's another story. Pat on the back, buddy.

[MgoSam]

One guy went to close a deal with a Mercedes dealership. He went to have them sign papers. He came back with a Mercedes SL550(insanely expensive sports car). After everyone congratulated him on the new car...

I always find it hilarious when people congratulate someone on a massive purchase. "Congratulations on sinking a shitload of money into a depreciating asset, probably financed!" "Great job sacrificing your family's financial security for a toy to boost your ego!" "Hey, your credit wasn't abysmal, congratulations!!"

Now if someone graduates college, climbs Mount Everest, or some other feat worthy of congratulation that's another story. Pat on the back, buddy.

The sad part is that I know that if I had posted pictures of me buying a house I would have gotten way more likes than me posting pictures on top of Everest. I think people like applauding commercial "achievements" over real actual ones.

That said, I know that when I FIRE, if I chose to post it publicly I'll probably get an insane amount of likes (and possibly an equal amount of hates).

[franklin w. dixon]

I wonder two things:

1.  How many people on this forum think "not pursuing RE/MMM path" = "pending financial disaster". There are lots of people who can save 10-20% AND live a "flashy" life with a little leverage (car payment, maybe carry a small CC balance for a splurge occasionally) but who aren't $500 away from living in a van down by the river. I sometimes wonder if MMMers can tell the difference.

2.  How many people, here and IRL, take at face value statements said in jest. I say all the time things like "my wife took my daughter shopping this weekend; I never wanted to retire anyways" as a joke but it has zero actual bearing on my real financial situation. It's just empty talk. Or "got no money till Friday again!" But that really means "because I don't want to transfer any out of savings."  It really can't be that everyone you know is a walking financial disaster, I think people downplay stuff all the time, or they say they "can't imagine retiring" because they don't want to think about retirement not being a million dollar beach house, not because they'd be eating cat food in week two.

but, but that means im not a brilliant iconoclast whose enormous brain towers over the mere peasants who surround me

and THAT means im actually a smug obnoxious asshole who lords his weird thrift store nykes over everyone like an unrelateable space alien

no no im pretty sure everyone else is stupid and im v. smart and handsome and have a huge weiner

[kayvent]

I know one that was flabbergasted that someone making 50k a year could have a million dollar portfolio. I've also overheard a conversation where someone with a CFP designation is only contributing 2% to his 401(k). The match is 6%...

I work for a Fortune 500 in a development office (only developers and project managers in the office, and one admin executive). Except for one person, I am a decade to two younger than everyone else in the office. During my first few months of getting to know the people on the various teams we house I asked some of them "What one mistake did you make that I should be weary of?" I was expecting pearls of developer wisdom. More than one said not taking advantage of the RRSP matching earlier.

I follow the MotleyFool's podcasts and on more than a number of them they have cited numbers on the staggering number of people who don't max out their 401k match.

One guy went to close a deal with a Mercedes dealership. He went to have them sign papers. He came back with a Mercedes SL550(insanely expensive sports car). After everyone congratulated him on the new car...

I always find it hilarious when people congratulate someone on a massive purchase. "Congratulations on sinking a shitload of money into a depreciating asset, probably financed!" "Great job sacrificing your family's financial security for a toy to boost your ego!" "Hey, your credit wasn't abysmal, congratulations!!"

Now if someone graduates college, climbs Mount Everest, or some other feat worthy of congratulation that's another story. Pat on the back, buddy.

The sad part is that I know that if I had posted pictures of me buying a house I would have gotten way more likes than me posting pictures on top of Everest. I think people like applauding commercial "achievements" over real actual ones.

That said, I know that when I FIRE, if I chose to post it publicly I'll probably get an insane amount of likes (and possibly an equal amount of hates).

Honest question: you think so? I've fantasized about a particular number and if I reach it I've determined that the only one I'd tell is my sister or charities. I'd worry about "rubbing it in" or upsetting our human brothers and sisters who have different priorities or who through misfortune had no opportunity to do likewise. I digress. Keen financial stewardship is seen as a defect in modern society (ex. serial entrepreneurs, seed/angel investors, stock investors, and unicorn entrepreneurs are all vilified) imho but you think you'd get likes instead of being reported for offensive material?

[MgoSam]

One guy went to close a deal with a Mercedes dealership. He went to have them sign papers. He came back with a Mercedes SL550(insanely expensive sports car). After everyone congratulated him on the new car...

I always find it hilarious when people congratulate someone on a massive purchase. "Congratulations on sinking a shitload of money into a depreciating asset, probably financed!" "Great job sacrificing your family's financial security for a toy to boost your ego!" "Hey, your credit wasn't abysmal, congratulations!!"

Now if someone graduates college, climbs Mount Everest, or some other feat worthy of congratulation that's another story. Pat on the back, buddy.

The sad part is that I know that if I had posted pictures of me buying a house I would have gotten way more likes than me posting pictures on top of Everest. I think people like applauding commercial "achievements" over real actual ones.

That said, I know that when I FIRE, if I chose to post it publicly I'll probably get an insane amount of likes (and possibly an equal amount of hates).

Honest question: you think so? I've fantasized about a particular number and if I reach it I've determined that the only one I'd tell is my sister or charities. I'd worry about "rubbing it in" or upsetting our human brothers and sisters who have different priorities or who through misfortune had no opportunity to do likewise. I digress. Keen financial stewardship is seen as a defect in modern society (ex. serial entrepreneurs, seed/angel investors, stock investors, and unicorn entrepreneurs are all vilified) imho but you think you'd get likes instead of being reported for offensive material?

I think I would get both. If I were to publicly share it in social media I would list it as a slam on people that have other priorities, but I know that I would get a ton of likes from people. I also know that I will get slammed by other people, some of whom are complainypants. They'll say things like, "Must be nice to make ___ (amount is probably far less than what I earn)," or "Must be nice to not have children," or other things, so in other words I fear that people will take my success as a form of criticism.

Either way I don't really care, I didn't tell FB that I bought a house, I just told family and friends. The same will likely happen when I FIRE. My immediate FIRE plans are to move to South America to study Spanish, I might post something about that. Even if I don't, I'll likely post pictures of Peru or Equator and I'm guessing that someone will ask me how I'm able to do this, and I'll tell them that I'm FIREd.

[Cpa Cat]

I always find it hilarious when people congratulate someone on a massive purchase. "Congratulations on sinking a shitload of money into a depreciating asset, probably financed!" "Great job sacrificing your family's financial security for a toy to boost your ego!" "Hey, your credit wasn't abysmal, congratulations!!"

I bought a new car the other day - and this kept happening to me. Ten different people congratulated me, asked me what kind it was, what year it was, etc. Someone even asked when I was going to put pictures on Facebook. It was like I had a baby.

"Congratulations... It's a Buick!!"

[joleran]

This is my ex.  He is a CPA and Sr Manager of Finance and he can't figure out how to keep his own accounts in the black.  What I've learned over the years is that his mentality has been that he viewed personal accounts as business accounts, credit card debt was "accruals" and "debt leveraging", new electronic toys were "investments"/"fixed assets" and so on.

If only his credit cards only charged corp bond rates and he used them to buy things to make more money...

[TheGrimSqueaker]

I always find it hilarious when people congratulate someone on a massive purchase. "Congratulations on sinking a shitload of money into a depreciating asset, probably financed!" "Great job sacrificing your family's financial security for a toy to boost your ego!" "Hey, your credit wasn't abysmal, congratulations!!"

I bought a new car the other day - and this kept happening to me. Ten different people congratulated me, asked me what kind it was, what year it was, etc. Someone even asked when I was going to put pictures on Facebook. It was like I had a baby.

"Congratulations... It's a Buick!!"

I can just imagine what's next... brand reveal parties set up like the fashionable "gender reveal" gift grabs parties for parents who are expecting? You slice into a cupcake, and wow: it's got an Audi symbol baked into it somehow.

[chesebert]

Do upper middle class people really buy 100k+ plus cars on credit? I see a bunch of SL550, M6 and their equivalents where I live and I have always wondered. 

I am also curious the percentage of McLarens, Ferarris, Aston Martins that are purchased on credit.

[Dancing Fool]

Now, can we switch to my complaints about lawyers?

YES. Every conversation with a lawyer is the most expensive "maybe" my company has ever paid for.

[chesebert]

Now, can we switch to my complaints about lawyers?

YES. Every conversation with a lawyer is the most expensive "maybe" my company has ever paid for.

Your company needs to ask the right question. "Do you think we can win the case/get the deal signed before shit hits the fan" is not a valid question.

[Chris22]

Do upper middle class people really buy 100k+ plus cars on credit? I see a bunch of SL550, M6 and their equivalents where I live and I have always wondered. 

I am also curious the percentage of McLarens, Ferarris, Aston Martins that are purchased on credit.

Lots of what I've seen is that half are leased and half are paid cash, and only a small amount are financed to purchase. 

[Taran Wanderer]

I always find it hilarious when people congratulate someone on a massive purchase. "Congratulations on sinking a shitload of money into a depreciating asset, probably financed!" "Great job sacrificing your family's financial security for a toy to boost your ego!" "Hey, your credit wasn't abysmal, congratulations!!"

I bought a new car the other day - and this kept happening to me. Ten different people congratulated me, asked me what kind it was, what year it was, etc. Someone even asked when I was going to put pictures on Facebook. It was like I had a baby.

"Congratulations... It's a Buick!!"

I can just imagine what's next... brand reveal parties set up like the fashionable "gender reveal" gift grabs parties for parents who are expecting? You slice into a cupcake, and wow: it's got an Audi symbol baked into it somehow.

I got a new (to me) car recently. My old one was getting up in miles and its list of quirks had grown so large I couldn't take it anymore. I could have held on a little longer, but I can across the perfect replacement - same model, same color, 7 years younger, and 90% fewer miles. Even though it is 8 years old, people assume it is brand new because it looks like it is. They are really taken aback when I tell them it is used and old.  I can't tell if they think it's cool or if I'm crazy. I might prefer the latter.

[Papa Mustache]

Eight years ain't nothin'!

A 20 year old car is OLD. ;)

[Simpli-Fi]

Hell, I have two cars over 40 years old, but on the other hand I have another I paid over $8k for, buy new clothes...when I need clothes, eat lunch with coworkers, have two houses over 1000sqft...guess I'm a financial disaster

[Trudie]

Not everyone with nice things is a walking financial disaster ready to implode.

Here is the easiest way to spot financial disasters
They:
1) eat lunch with coworkers and order drinks on top of that
2) drive a car that they paid more than $8,000 for
3) buy new clothes
4) have engagement rings/wedding bands that costs more than $300
5) had a wedding that was at a venue
5) have a house larger than 1,000 sq ft in a LCOL area and 200 sq. ft in a HCOL area
6) want to work until they are over 50
7) have two cars (see #2)
8) have their kids in preschool

Ummmm... I occasionally buy new clothes, paid more than $8K cash for my car, own two of them, and want to work until I'm 51.  Yet, I'm 80% of the way to FIRE and would hardly consider myself a "financial disaster."  Different strokes.

[Taran Wanderer]

My score:

1) FAIL - eat lunch with coworkers and order drinks on top of that
2) FAIL - drive a car that they paid more than $8,000 for
3) FAIL - buy new clothes
4) FAIL - have engagement rings/wedding bands that costs more than $300
5) FAIL - had a wedding that was at a venue
5) FAIL - have a house larger than 1,000 sq ft in a LCOL area and 200 sq. ft in a HCOL area
6) PASS - (intend to FIRE at 45 to 50) want to work until they are over 50
7) FAIL - (three cars, actually) have two cars (see #2)
8) FAIL - (all 3 of them) have their kids in preschool

It's an interesting set of criteria, but fairly narrow. If I had wanted to FIRE at <40 or ERE at <30ish, I could see using these criteria, but to simply FIRE in my forties?  Not necessary if you have a decent income. Whether to earn more or spend less is a big factor in financial management in general.

[JetBlast]

Not everyone with nice things is a walking financial disaster ready to implode.

Here is the easiest way to spot financial disasters
They:
1) eat lunch with coworkers and order drinks on top of that
2) drive a car that they paid more than $8,000 for
3) buy new clothes
4) have engagement rings/wedding bands that costs more than $300
5) had a wedding that was at a venue
5) have a house larger than 1,000 sq ft in a LCOL area and 200 sq. ft in a HCOL area
6) want to work until they are over 50
7) have two cars (see #2)
8) have their kids in preschool

1) Pass (?) - Drinking ( I assume you meant alcohol) during lunch is highly discouraged at my job. Do often have lunch or dinner with coworkers at restaurants, so sort of fail.
2) Fail. Bought it new, but plan to keep for a decade or more.
3) Fail, though most new clothes are bought 50% off. Wife works part-time retail gig. Do have some things from secondhand stores.
4) Fail. $300? Even with another zero on the end we'd still fail. Man, we suck at money.
5) Fail, unless there's an odd expansionary zone for moderate COL areas.
6) Probably Fail. I like my job. If I can scale back a little then I'll likely keep going after 50. Still many years down the road.
7) Pass. Woohoo! Found one!
8) Pass, but no kids so that's not really applicable.

I guess we're mostly a financial disaster. I never would have guessed by our net worth.

[chesebert]

Not everyone with nice things is a walking financial disaster ready to implode.

Here is the easiest way to spot financial disasters
They:
1) eat lunch with coworkers and order drinks on top of that
2) drive a car that they paid more than $8,000 for
3) buy new clothes
4) have engagement rings/wedding bands that costs more than $300
5) had a wedding that was at a venue
5) have a house larger than 1,000 sq ft in a LCOL area and 200 sq. ft in a HCOL area
6) want to work until they are over 50
7) have two cars (see #2)
8) have their kids in preschool

1) Pass (?) - Drinking ( I assume you meant alcohol) during lunch is highly discouraged at my job. Do often have lunch or dinner with coworkers at restaurants, so sort of fail.
2) Fail. Bought it new, but plan to keep for a decade or more.
3) Fail, though most new clothes are bought 50% off. Wife works part-time retail gig. Do have some things from secondhand stores.
4) Fail. $300? Even with another zero on the end we'd still fail. Man, we suck at money.
5) Fail, unless there's an odd expansionary zone for moderate COL areas.
6) Probably Fail. I like my job. If I can scale back a little then I'll likely keep going after 50. Still many years down the road.
7) Pass. Woohoo! Found one!
8) Pass, but no kids so that's not really applicable.

I guess we're mostly a financial disaster. I never would have guessed by our net worth.

1) Pass, bring lunch to work.
2) Pass, don't own a car.
3) Fail
4) Fail, commodity inflation.
5) Fail
6) Fail, does HCOL mean HongKong or UES?
7) Pass
8) Pass, 0 car
9) Pass, employer paid so doesn't count.

Woohoo barely passed!

[LeRainDrop]

Here is the easiest way to spot financial disasters
They: don't know how to count from 1 to 9, so they count 5 twice.
1) eat lunch with coworkers and order drinks on top of that
2) drive a car that they paid more than $8,000 for
3) buy new clothes
4) have engagement rings/wedding bands that costs more than $300
5) had a wedding that was at a venue
5) have a house larger than 1,000 sq ft in a LCOL area and 200 sq. ft in a HCOL area
6) want to work until they are over 50
7) have two cars (see #2)
8) have their kids in preschool

Corrections shown above.

[Crusader]

I wonder two things:

1.  How many people on this forum think "not pursuing RE/MMM path" = "pending financial disaster". There are lots of people who can save 10-20% AND live a "flashy" life with a little leverage (car payment, maybe carry a small CC balance for a splurge occasionally) but who aren't $500 away from living in a van down by the river. I sometimes wonder if MMMers can tell the difference.

2.  How many people, here and IRL, take at face value statements said in jest. I say all the time things like "my wife took my daughter shopping this weekend; I never wanted to retire anyways" as a joke but it has zero actual bearing on my real financial situation. It's just empty talk. Or "got no money till Friday again!" But that really means "because I don't want to transfer any out of savings."  It really can't be that everyone you know is a walking financial disaster, I think people downplay stuff all the time, or they say they "can't imagine retiring" because they don't want to think about retirement not being a million dollar beach house, not because they'd be eating cat food in week two.

Great points. 

If I talked about some of the things I purchased, I think some people here would have a heart attack, haha.

I am kind of in the same boat, but with 50%-25% savings rate. I think this is the greatest post of how to look into the grey area of MMM and being a overspender.

[Crusader]

I find that many economists assume everyone tries to optimize economically. There is actually a lot more emotion and sentiment involved.  Thinking like an engineer isn't best for every situation, but engineers have to actually think and plan out how things will work. Motivational speeches, vision, and goals can be helpful with people, but they don't work on equipment and electronics. The fundamental laws of physics and chemistry apply. Engineers win by working through those details and making things happen. Meanwhile they are criticized for being too literal and detail oriented.

As a business person who supports engineers, I find too often engineers get caught down in the weeds on stuff that doesn't really matter, and on many occasions can fail to see the forest.  I also see engineers who ask very specific questions, get very specific answers to them, and fail to solve the problem because a broader question would have given them the answer they were looking for.  Many times I've written the email that said "you asked me for X, the answer is Y, but what I think you were after is Z and the answer to that is A, B, and C."

In a lot of things requiring deep thought of philosophy, finance, politics, and general discussion, I generally find myself having to discuss things is as many as four viewpoints. Kind of basically being devils advocate, but it also helps provoke thought in people I am discussing with and myself. Even if I do not agree with the conclusions of the viewpoints I at try to follow it by some logical consistency defining that viewpoint.

[Simpli-Fi]

I find that many economists assume everyone tries to optimize economically. There is actually a lot more emotion and sentiment involved.  Thinking like an engineer isn't best for every situation, but engineers have to actually think and plan out how things will work. Motivational speeches, vision, and goals can be helpful with people, but they don't work on equipment and electronics. The fundamental laws of physics and chemistry apply. Engineers win by working through those details and making things happen. Meanwhile they are criticized for being too literal and detail oriented.

As a business person who supports engineers, I find too often engineers get caught down in the weeds on stuff that doesn't really matter, and on many occasions can fail to see the forest.  I also see engineers who ask very specific questions, get very specific answers to them, and fail to solve the problem because a broader question would have given them the answer they were looking for.  Many times I've written the email that said "you asked me for X, the answer is Y, but what I think you were after is Z and the answer to that is A, B, and C."

In a lot of things requiring deep thought of philosophy, finance, politics, and general discussion, I generally find myself having to discuss things is as many as four viewpoints. Kind of basically being devils advocate, but it also helps provoke thought in people I am discussing with and myself. Even if I do not agree with the conclusions of the viewpoints I at try to follow it by some logical consistency defining that viewpoint.

Funny because I'm an engineer who is supported by business persons who think the details of having leaves on trees is irrelevant to the sustainability of the forest.  I love when I ask questions and these clever business minds respond with an answer to a question I didn't ask; really helps me do my job because I'm a moron fumbling around looking for the right question to ask.

;-)

[NESailor]

CPA here.  Later bloomer as far as super mustachianism is concerned so targeting a FIRE age of around 41 - 42.  A lot of my colleagues and fellow CPAs are total spendypants but they're not really in disaster territory.  Sure, they may blow 90K on a very "normal" life but they still save tens of thousands/ year in their 401(k) and will most likely end up millionaires regardless.  Just at 65 instead of 45...but to each their own.

[ditheca]

Here is the easiest way to spot financial disasters
They:
1) eat lunch with coworkers and order drinks on top of that
2) drive a car that they paid more than $8,000 for
3) buy new clothes
4) have engagement rings/wedding bands that costs more than $300
5) had a wedding that was at a venue
5) have a house larger than 1,000 sq ft in a LCOL area and 200 sq. ft in a HCOL area
6) want to work until they are over 50
7) have two cars (see #2)
8) have their kids in preschool

I've done 1, 2, 3, 4, 5, 5b, 7, and 8.  I'm obviously a financial disaster...  or maybe these are terrible criteria.  Or do I get a pass because I'll be retired long before 50?

It's easier to spot a mustachian:

1) No consumer debt
2) Live on half your income
3) Ride a bike
4) Life plan doesn't include needing to work forever

Not a perfect list though... We should be more inclusive!

1) No [new] consumer debt
2) Live on [reasonable fraction of] your income
3) Ride a bike [and/or drive an economical car]
4) Life plan doesn't include needing to work forever

Edit: Full disclosure: I'm a business major.

[trashmanz]

Math is a science
People are emotional
Spending for some is closer to a science while spending for others is closer to emotional

That doesn't seem to jive with why most MMM folks are engineers and scientists.

[talltexan]

I'm going to take a contrarian position: Business Majors have high earning power, meaning they focus on growing their income more than on making the kinds of lifestyle modifications that will help them save for retirement.

In addition, their earning power will make it harder for them to pull the plug eventually because continuing to work will make them so much money.

[Laura33]

Yeah, I'm gonna go with selection bias.  If you're looking at dropping $100K or more for a top MBA program, you are likely doing it because you are interested in the high salaries that are dangled on the other side.  And for most people at 18 or 22 or 25, that is because of all of the cool shit that kind of salary can buy you.  Someone who is inherently frugal is more likely to figure the optimal ROI on the degree and conclude that something like engineering makes more sense, given the likelihood of said MBA hitting it big at a hedge fund or as CEO somewhere anyway.

And I, too, am apparently a total financial disaster, except for #1.  I'm even 51 and -- gasp! -- choose to continue working.  Oh, the horror.  Pretty please will you let me back in the club if I can prove that I am FI and save half my income from said unnecessary job? :-P

[Chris22]

Yeah, I'm gonna go with selection bias.  If you're looking at dropping $100K or more for a top MBA program, you are likely doing it because you are interested in the high salaries that are dangled on the other side.  And for most people at 18 or 22 or 25, that is because of all of the cool shit that kind of salary can buy you.  Someone who is inherently frugal is more likely to figure the optimal ROI on the degree and conclude that something like engineering makes more sense, given the likelihood of said MBA hitting it big at a hedge fund or as CEO somewhere anyway.

You don't have to "hit it big" to be successful as a business person.  With my accounting degree and my state-school part-time MBA, I've managed to get to a comfortable six-figure income about 10 years after entering the work force.  Probably pretty analogous to most engineers. 

[Laura33]

Yeah, I'm gonna go with selection bias.  If you're looking at dropping $100K or more for a top MBA program, you are likely doing it because you are interested in the high salaries that are dangled on the other side.  And for most people at 18 or 22 or 25, that is because of all of the cool shit that kind of salary can buy you.  Someone who is inherently frugal is more likely to figure the optimal ROI on the degree and conclude that something like engineering makes more sense, given the likelihood of said MBA hitting it big at a hedge fund or as CEO somewhere anyway.

You don't have to "hit it big" to be successful as a business person.  With my accounting degree and my state-school part-time MBA, I've managed to get to a comfortable six-figure income about 10 years after entering the work force.  Probably pretty analogous to most engineers.

Oh, ITA.  But you are also not the poster child for the question -- in fact, you are the "business" analogue of my example (comparing the ROI and figuring out that accounting undergrad + part-time MBA = excellent low-risk path to more-than-sufficient income).

IOW, it's not that following the business/finance track necessarily means you're big-hat-no-cattle.  It's just that if you are naturally drawn to the gigantic Stetsons, a fancy MBA followed by a hedge fund job looks like a pretty good way to get there -- people who are interested in money tend to follow it.  So I wouldn't be surprised if the finance world had a higher population of those types than some other areas.

I'd say the same about my profession, btw -- yes, there are people like me who did it pragmatically (scholarship undergrad + state school JD, loans paid off in under 2 years, six figures in @5-6), but there are a lot more who are just chasing the money so they can live it up.  Of course, these are also the ones who tend to burn out and so who, ironically, need MMM the most.  :-)

[A Definite Beta Guy]

My business friends are not financial wrecks compared to my other friends. They are just more spendy-pants than the typical mustachian.

I probably should throw myself in there as well.

[Tyson]

In some defense of the spendipants (of which I used to be a member), if it's drilled into that you'll never retire till 65 no matter what, then what the hell, why NOT spend a bit and enjoy some nicer things now? 

Of course, once I realized that the initial premise was wrong, and you could retire much faster, well then all the "treats" and "rewards" for working hard or whatever, simply lost their appeal.

[SeaEhm]

Comments and advice like the person pursuing business should be an engineer is probably why so many people want to leave their jobs so badly, haha.

Let the ducks swim and the gazelles frolic. 

Maybe society needs to spend more time on finding what makes meaning in their life and how to balance it with everything thrown at them.