Author Topic: High Income Mustachian Question  (Read 5204 times)

gaspony

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High Income Mustachian Question
« on: November 22, 2014, 04:37:13 PM »
I have a question to you all about high income earners that want to lead a Mustachian lifestyle.  Suppose you can make about $300 an hour at your job.  What would be more Mustachian, hiring someone to clean your home for $100 and then working an hour that day and spending the rest of the day with your family or exploring life or whatever pleases you and enriches your life, or doing the cleaning yourself which may take 5-6 hours and taking on the challenge and optimizing that activity to be more efficient even if it isn't your favorite thing to clean your home?
I think the Mustachian lifestyle makes a ton of sense for the person that make the average middle class income but it seems that productivity is a big part of the frugal lifestyle.  If you could work the average 2000 hours a year then the high income earner could bring in $600K before taxes in the example above and if that person could live on the $25K a year then he would only have to work 2 years to become FIRE.  I guess the ultimate question is what is the right thing to do?  Should you live on $25K a person no matter what or if you are a high income earner and are so efficient and productive that you make $300 an hour, are you being a better Mustachian by working and paying others a smaller wage to take care of some of the everyday tasks in your life?  I just want to see what you all think philosophically speaking in this situation. 


gaspony

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Re: High Income Mustachian Question
« Reply #2 on: November 22, 2014, 05:54:02 PM »
Thanks for the article. I missed that one. Sorry. 

Anonymous Coward

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Re: High Income Mustachian Question
« Reply #3 on: November 22, 2014, 06:09:31 PM »
MMM probably disagrees, and with big numbers and would let you get a housecleaner. here is his response to an email i sent in 2011 or 12

PS I drink boxed wine (bota box, black box) and the last 8 bottles i bought cost a combined $20 total.

from me email around 11 or12:

Thanks for writing this blog, it's given me a lot to think about the past 6 months or so I've been reading.

My wife is a (edited fancy money maker and I am also a fancy moneymaker). She is soon going to start work (edited) and I make 300+.and she will make 300+ too starting in 8 months.  this happened and came to fruition. Unfortunately with student loans our net worth is somewhere around negative 250K now very positive. We drive a ten and a twelve year old car the cars keep getting older and we just bought some bikes. We pay about 80-90k in post tax money per year towards student loans, we max out rotes, 403b x2 and 457 x1 so we're not total spenders (whew!) now that she's working we save a really even bigger number per year.

The real question I have is I've got us down to $6000 a month in spending including rent, but I can't get us lower without screaming from the wife. Her point is "I worked really hard so that I could enjoy the finer things in life" and to be honest I'm too lazy to convince her that you can be just as happy spending less, and let's be more honest I like wasting money too.

I want to give up the 40 working years as much as the next mustachian but when we are looking at 6-800 a year is it ok to not argue over 30-50K per year. Yes I do know about compounding interest.

His response:
Sounds like you'll be fine either way - you can just secretly run the numbers in the background as you progress and get the debt paid off.
A few tips on the psychological changes that might make you want to spend less over time:

http://www.mrmoneymustache.com/2011/04/25/having-the-talk-with-a-current-or-potential-mate/

http://www.mrmoneymustache.com/2012/03/22/selling-the-dream-how-to-make-your-spouse-love-frugality/

http://www.mrmoneymustache.com/2012/03/27/selling-the-dream-of-financial-independence-part-2/

With jobs like yours, some of the more hands-on aspects of Mustachianism might not be practical, since the tradeoff of time and money is different. At that level, it may indeed make sense to have a house cleaner or order in food if your hours are long.

But that doesn't mean you can't still make huge gains by not getting addicted to consumer crack like Mercedes SUVs and $300 bottles of wine.. the finer things in life are NOT things at all!

best of luck,
Pete (MMM)

iamadummy

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Re: High Income Mustachian Question
« Reply #4 on: November 22, 2014, 06:36:09 PM »
if you can afford it, no worries outsourcing it.

Ricky

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Re: High Income Mustachian Question
« Reply #5 on: November 22, 2014, 07:04:31 PM »
There's no question you could afford it but the problem is that the numbers for retirement don't change based on income. They changed based on spending. I'd assume that once not working you would cease outsourcing, but think about the psychological hit going from spending that much to spending much less.

I'd recommend to never start the habit and then you'll never have to quit it, much like anything else.

But it also depends if you could truly give up all of the luxurious spending in a heartbeat.

homehandymum

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Re: High Income Mustachian Question
« Reply #6 on: November 22, 2014, 07:23:22 PM »
We're all outsourcing something.  (clothing manufacture, house heating, food production, water harvesting...)

For me it comes down to the Your Money or Your Life graph of the 'cross-over point'
http://www.thesimpledollar.com/your-money-or-your-life-the-crossover-point/
i.e. the point at which your passive income reaches the same level as your normal expenses.  That's the point at which you are FI.

So the considerations are: What will increase the pot of money faster? vs. What will decrease the normal expenses?

And a corollary consideration is, is this a 'normal expense' that I will keep paying for beyond the point of FI, and if it is *not*, am I actually going to be able to deal with that transition.  You might have to budget for a cleaner for some time into your retirement, rather than just going cold turkey with it, and that will impact on your FI numbers.

As someone who is not FI, and who still plans on getting a cleaner in twice a month once our next baby is born, I say go for it :)  There are only so many hours in the day, and only you can really decide if spending on a cleaner is in line with your true values (the measure, in my mind, of whether it is a good use of funds).

ClaycordJCA

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Re: High Income Mustachian Question
« Reply #7 on: November 22, 2014, 08:25:26 PM »
Another vote for outsourcing. If you have kids or will have kids, your time with them is worth much more than the money you pay for a house cleaner. 

chucklesmcgee

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Re: High Income Mustachian Question
« Reply #8 on: November 22, 2014, 10:39:10 PM »
Another vote for outsourcing. I pay $100/hr for a thorough 2 hour cleaning once a week. Not only is it that I value my time more than $50/hr, it's that:

1. The housekeeper does it faster than I could, so it's saving more than 2 hours.
2. It's cleaned far better than I ever could.
3. I don't have to take to time or money to buy or keep mops, buckets, brooms and vacuum cleaners and most other cleaning materials.
4. Since I know someone else will be cleaning, it gives me the freedom not to almost nothing on a day-to-day basis. Might as well get my money's worth right?
4. Not only is it saving me more than 2 hours, it's saving me from UNENJOYABLE time. Cleaning for me is not merely 2 hours of not doing what I'd prefer to be doing, it's hours of miserable Sisyphean drudgery where I use toxic chemicals and elbow grease in a futile attempt to get the piss off of everything.

Is it a luxury? Sure. But, in the way I can go about allocating dollars for luxuries (as we basically all do), one that provides an enormous amount of value? Definitely.

Calvawt

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Re: High Income Mustachian Question
« Reply #9 on: November 23, 2014, 12:24:38 AM »
As others have said, it comes down to prioritizing.  When your income is higher, you have more leeway on some of your choices.  You can still get to FI much faster than most outsourcing some housecleaning.   I would rather spend the time with my family.

LadyMustache

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Re: High Income Mustachian Question
« Reply #10 on: November 23, 2014, 07:37:48 AM »

We are high earners, but do everything ourselves while our neighbors outsource - lawn-mowing, gutter-cleaning, window-cleaning, ironing, house-cleaning, car-cleaning, tree-felling, household repairs...you name it, we do it! We have kids and I sometimes (OK, quite often) wish that we had help from outside. Yes, we can afford it, and yes, it would make our lives a lot easier, but we have been brought up to believe that money is precious and we should clean take care of things by ourselves.

But...having said all that, I actually admire people who can get help in when they need it (if they can afford it, of course) and are able to prioritize their own time and happiness over financial gain. I guess I, personally, just would feel guilty paying somebody to do jobs that I can technically do, and also it means that DH has to keep working for longer in a job he hates, I feel that we shouldn't fritter the money away, no matter what it takes. I'm not saying this is a healthy attitude! It's just different people have a different perspective and different priorities. Do whatever works for you :)

Plenty of people have said to me that I should get help in, that it's crazy what we try to do, but it's a mindset for us. We don't expect to have this kind of income for much longer, so anything we can save is important.