MMM recent post

[boarder42]

Anyone else have a fundamental problem with the analysis he threw down. On the surface sure it's great everything is expensive. But mustachianism in part is about optimizing the luxurious items you choose to have in your life and his pricing and cost for items is fully based on retail prices. It would be like taking his grocery list and applying it to the regular prices for the goods he buys and saying he's an idiot for buying anything other than oatmeal at Aldi.

A much better version of the post would show you how to have the same things but with a more optimized view of them. I guess this is my fundamental issue with his message in general. He doesn't push optimization or evaluate optimizing properly. 

You can have way more for way less when you look at how to optimize what you want. Bc at the end of the day we all aren't living barebones.

To go down part of his list

Pool - my buddy figured out how to build that same pool for 8k himself with diy labor

Vacation home. If you must have it buy it at the right time and rent it out. Or better yet figure out how to live in your vacation home full time.

Boats - 15k a year in Chicago for use is hardly the most optinal way to do this.

Bigger house/yard etc. - Discounts if you bought it correctly at a reasonable interest rate and calculated what it would cost in years worked or other methods to see if you'd get value in your life. Houses appreciate in general and saying this yard is going to cost xyz is greatly overlooking other variables.

Rv.- Buy it in the winter off season. Use it to road trip sell before labor day weekend. Avoid taxes and a good quality class c rv is about 20-30k not 50

Then to his own shit he bought a building made it a business expense put his brewery in it etc.  That's a cool thing to do bc he optimized something he wanted but had 0 need for.

Very selective and poor analysis overall imo

[Mr. Green]

I felt like the meat of the article was more about thinking of the opportunity cost of something. Optimization is another, albeit related, topic.

[terran]

Most of your optimized solutions are some form of "find a way to buy it for less than most people do." That's fine and all (it's what you should do if you decide you want a thing), but you need to remember that the cost of consumption is not only what you paid for it divided by the number of uses you get out of it, its the greater of the amount you paid for it or the amount you could sell it for (net of transaction costs) divided by the number of uses you get out of it.

[Raymond Reddington]

I felt like the meat of the article was more about thinking of the opportunity cost of something. Optimization is another, albeit related, topic.

This. If using a free public pool would generate a similar benefit, there is also the opportunity cost to be considered of what those funds, invested elsewhere, might grow to become, and the amount of future happiness those dollars could have created.

[boarder42]

If MMM thought a pool was valuable to be in his backyard there would be 40000 words written about how to justify it's worth. And how to optimize it.

Just like the leaf and the MMM hq and the tiny house he built and his studio and and and. Shall I go on.

Agreed opportunity cost was the basis but if it was something he deemed valuable to his life it would have glossed over the opportunity  cost or as he always does been said it's a business expense.

Just in general his content is mostly dog shit at this point. If you eat his brand of it you can jump on board. But it's lost any real value.

[Telecaster]

This was one of those posts where I thought MMM was trying just a hair too hard.  Sure, once you include the opportunity cost, the pool costs $130K or whatever.   But what would you use the $130K for instead?  In fact in the footnotes he said almost the same thing:

However, if you are a Tesla fan like me and you want the company to make more profit to continue their mission, you may still opt for the extra options since you have nothing better to do with that money anyway.

I'm not a huge water person, but I can certainly see the appeal of going outside and splashing around whenever you want.  That has to be worth something, right?  You (typically) have to pay to use a public pool, and a backyard pool is way more convenient and private, so paying extra for something that is better doesn't seem crazy to me, as long as it is something you really want. 

[Raymond Reddington]

This was one of those posts where I thought MMM was trying just a hair too hard.  Sure, once you include the opportunity cost, the pool costs $130K or whatever.   But what would you use the $130K for instead?  In fact in the footnotes he said almost the same thing:

However, if you are a Tesla fan like me and you want the company to make more profit to continue their mission, you may still opt for the extra options since you have nothing better to do with that money anyway.

I'm not a huge water person, but I can certainly see the appeal of going outside and splashing around whenever you want.  That has to be worth something, right?  You (typically) have to pay to use a public pool, and a backyard pool is way more convenient and private, so paying extra for something that is better doesn't seem crazy to me, as long as it is something you really want.

In our case, it would be all about the ongoing headache of owning a pool specifically. All the maintenance and recurring charges. Plus, there is something to be said for the economy of scale achieved when a number of people use a pool vs. just us and our guests. If the riffraff in a public pool is too much, surely a membership somewhere that has a pool would be plenty adequate. Just my 2c.

His posts certainly won't be as hard hitting as they were early on - he's FI, so he's at the point where he's just trying new things all the time, and due to his success his wealth is actually growing to the point that he can increase his spending at next to no risk. While I certainly envy that, I also can understand why the content might seem a reach at times.

[sol]

However, if you are a Tesla fan like me and you want the company to make more profit to continue their mission, you may still opt for the extra options since you have nothing better to do with that money anyway.

At this point, I consider virtually every retail purchase I make to be a charitable contribution to that business.  Paying sticker price for anything is pretty dumb, unless you're trying to subsidize the seller for some reason.  Sometimes that makes sense, though, if it's a business you want to see continue to operate for whatever reason.

He doesn't push optimization or evaluate optimizing properly. 

Math is hard.  And the way you apply it is always somewhat subjective.  You are of course free to run your own analysis and make your own decisions.  I do!

Just in general his content is mostly dog shit at this point. If you eat his brand of it you can jump on board. But it's lost any real value.

I think the ideas still have huge value, but I agree that his writing (both frequency and quality) isn't what it used to be.  Can you blame him?  The blog became a job, and he's been pretty clear about not wanting one of those.

[Cranky]

I’d rather have a pool than a Tesla. Heck, I’d rather have a stand up paddle board than a Tesla (and I noticed today that standup paddle boards are about $400 at Sams Club, and I would never have noticed that before!)

But Colorado and NE Ohio have very short outdoor swimming pool seasons, and a pool is a lot of bother for the two months you’d use it. If I lived in Texas or Florida, I might add those numbers up differently.

[jjcamembert]

My wife and I were just discussing this post as well, and we concluded that we both feel like there can be a better balance between getting what you want out of life and maximizing for early retirement. There is also a huge difference in how you can live while still working and when you're FIRE. It's enormously simpler to live in your "bike bubble" when you're not expected to be somewhere for work. And the part about, "It’s the weekend and you are ready to celebrate. But first, what’s on your to-do list?" Well I just spent the week working so yeah I want to go on that road trip, when else am I going to?

Obviously (but sometimes people forget) everyone has their right to make informed decisions about their spending and where on the spectrum they want to be. I love skiing: If I was FIRE all I'd do is ski, maybe be a patrol (paid to ski? f-yeah!). It's expensive: equipment, passes, fuel, lodging. So I pay the price, but I maximize my money by buying used equipment, getting a season pass, and sharing rides and lodging. I believe it enhances my life more than saving that money and staying home.

[Syonyk]

Just in general his content is mostly dog shit at this point. If you eat his brand of it you can jump on board. But it's lost any real value.

I think the ideas still have huge value, but I agree that his writing (both frequency and quality) isn't what it used to be.  Can you blame him?  The blog became a job, and he's been pretty clear about not wanting one of those.

I imagine it's fairly hard to care about saving too many pennies with a... what, $400k/yr income from a blog about spending money efficiently?

I mostly don't read the front page anymore.  The older posts are good, but once you're clear of that quicksand, the recent stuff mostly feels like, "I suppose I probably shouldn't write about how I'm blowing all this money on stuff, but... um..."

He hit escape velocity and then kept going.  I'm more interested in the interviews and guest posts.

[Cranky]

Thinking about this more ... I know of no one who has spent $30k on an I ground pool, but I know quite a few people who have spent around $5k on an above ground pool and a deck to go around it, and have enjoyed them for years and years.

Still too much work for me, but not a terrible waste when you’ve got tweens/teens and would rather they hang out at your house.

The Moustache Family clearly lives in a fancier neighborhood than I do!

[Syonyk]

I know someone with a nice in ground pool, but he did basically all the work himself - borrowed a tractor to do the digging his tractor couldn't do, rented a jackhammer of some variety for the basalt at the bottom, did all the sanding and leveling, and used a kit for the upper metal framing.  I helped run the concrete chute when he was getting the upper part poured, but it was only a truck load of concrete for that.

Pretty sure he didn't spend $30k on it.

[tooqk4u22]

If MMM thought a pool was valuable to be in his backyard there would be 40000 words written about how to justify it's worth. And how to optimize it.

Just like the leaf and the MMM hq and the tiny house he built and his studio and and and. Shall I go on.

Agreed opportunity cost was the basis but if it was something he deemed valuable to his life it would have glossed over the opportunity  cost or as he always does been said it's a business expense.

Just in general his content is mostly dog shit at this point. If you eat his brand of it you can jump on board. But it's lost any real value.

+1.   Next project on the list Solar Water Heater, which means I absolutely need to install a pool in my backyard to verify that it works adequately, but I won't add the $30K into my spending bc its research and therefore business related. 

[cats]

I felt like the meat of the article was more about thinking of the opportunity cost of something. Optimization is another, albeit related, topic.

Yes, I also felt this post is more about opportunity cost.  If you optimize the pool (or whatever) cost and get it down to $8k instead of $30k, fine, you have a lower opportunity cost, but you still need to think about that number and whether or not it is worth it to you.  Some people will probably decide they would rather work 5 extra years and have that infamous daily latte, others will decide said latte is not worth even an extra minute of work time and seeing the opportunity cost will immediately galvanize them to cut it.  Everything you do or spend money on has an opportunity cost, and it's not feasible for anyone to cut the opportunity cost of their life to zero.  The point is to be conscious of the opportunity cost and truly factor it in when making spending decisions.

When MMM says things like oh, he's buying a Tesla because he wants to support the company and has "nothing better to do with the money", that doesn't mean he's calculated the opportunity cost, it means (I hope) he's calculated it and decided that it's still the best use of that money for him.

That said, this is not a new or revolutionary concept.  It's pretty well laid out in Your Money or Your Life, and MMM himself has covered it in other ways in other posts (as have plenty of other FIRE or PF bloggers).  While I wouldn't go so far as to
characterize MMM content as "dogshit", I think most long-time forum participants have (hopefully) "mastered" all the information on the blog and the forums are now the more useful part of the MMM package.

[sol]

When MMM says things like oh, he's buying a Tesla because he wants to support the company and has "nothing better to do with the money", that doesn't mean he's calculated the opportunity cost, it means (I hope) he's calculated it and decided that it's still the best use of that money for him.

If MMM buys a tesla and says he had nothing better to spend his money on, I'm done here.  That money can literally save lives. 

It could send an underprivileged kid to college, or  pay for job training for disabled people, or support a post doc working to cure aids or cancer or Alzheimer's.  It could buy immunizations for kids in Africa, or spay/neuter every shelter animal in town, or provide safe haven to every victim of domestic abuse.  Hell, if he worries about the environment he'd be better off using it to conserve rain forest acreage than on buying a second (fancier, luxurious motorized throne room) EV.

The only reason to buy a Tesla, for him or for anyone else in the whole world, is because they value a fancy luxury car more than any of those other things.  It's a supremely selfish decision, made by thousands of Americans every day in ways big and small, because we are inured to the suffering the rest of the world endures in order to support our wanton and destructive consumption.

I don't pretend immunity, either.  I drive a (much cheaper than a tesla) 2012 Nissan leaf EV and I love it, in part because I wanted to support the early development of EVs,  and in part because I covet fun cars.  I have made the same decision, on a smaller scale, but I don't use my enormous digital platform to sell people on the ideal of my moral virtue, either.  I'm at least cognizant of my choices, and the opportunity costs of those choices, and I recognize and accept the suffering I have caused with my choices.  I would rightfully accept the community's derision if I publicly said "there's nothing better for me to spend my money on" because that's ridiculous.  Hopefully MMM knows that too, and avoid that particular pitfall.

[patchyfacialhair]

When MMM says things like oh, he's buying a Tesla because he wants to support the company and has "nothing better to do with the money", that doesn't mean he's calculated the opportunity cost, it means (I hope) he's calculated it and decided that it's still the best use of that money for him.

If MMM buys a tesla and says he had nothing better to spend his money on, I'm done here.  That money can literally save lives. 

It could send an underprivileged kid to college, or  pay for job training for disabled people, or support a post doc working to cure aids or cancer or Alzheimer's.  It could buy immunizations for kids in Africa, or spay/neuter every shelter animal in town, or provide safe haven to every victim of domestic abuse.  Hell, if he worries about the environment he'd be better off using it to conserve rain forest acreage than on buying a second (fancier, luxurious motorized throne room) EV.

The only reason to buy a Tesla, for him or for anyone else in the whole world, is because they value a fancy luxury car more than any of those other things.  It's a supremely selfish decision, made by thousands of Americans every day in ways big and small, because we are inured to the suffering the rest of the world endures in order to support our wanton and destructive consumption.

I don't pretend immunity, either.  I drive a (much cheaper than a tesla) 2012 Nissan leaf EV and I love it, in part because I wanted to support the early development of EVs,  and in part because I covet fun cars.  I have made the same decision, on a smaller scale, but I don't use my enormous digital platform to sell people on the ideal of my moral virtue, either.  I'm at least cognizant of my choices, and the opportunity costs of those choices, and I recognize and accept the suffering I have caused with my choices.  I would rightfully accept the community's derision if I publicly said "there's nothing better for me to spend my money on" because that's ridiculous.  Hopefully MMM knows that too, and avoid that particular pitfall.

So when I read your post this morning, I 100% agreed. Didn't respond, because I didn't have anything to say.

But I got to thinking: didn't our lord and savior give 100k to charities in 2017? And if we assume he keeps giving a similar percentage...is there a point where a frivolous Tesla purchase is excused by tons of donations to worthwhile charities? Isn't that him saying that he values luxury cars and charity somewhat equally?

Making up numbers: if a person makes a million a year take home, donates half of it, and lives off half...we could certainly look at it like "dude/dudette lives on half mil a year, what a spendypants" but in this made up example, the person gives away an objectively huge amount of money. That's a good thing that should be encouraged.

My personal opinion: If MMM gets a Tesla, good for him. I'll let him talk to whatever deity he worships, if at all, to reconcile that if he feels he needs to. I think that his platform (and this associated forum) has done enough good to outweigh a Tesla purchase, for now.

[sol]

I think that his platform (and this associated forum) has done enough good to outweigh a Tesla purchase, for now.

Maybe?  I don't claim to be any sort of authority on this matter.  I also gave away approximately 25% of my gross salary last year, but then again I don't make $400k/yr from a popular blog.

I think that $100k of charitable donations can do a lot of good in the world, and I think that's true whether you've just given away another million or never given a penny.  I suspect that the mental gymnastics we each undertake to internally justify our immoral personal spending on luxury goods is just post-rationalization.  It's how we deal with our own flaws and personal failings. 

I can tell myself that someone else would have wasted the money on hookers and blow, and so I am virtuous for spending it on a tesla because I support their business model, and not because I covet their cars for reasons of personal greed.  I can tell myself that I should buy myself that fancy $600 smoothie blender because I have routinely give 10x that amount to people who don't have enough to eat.  I can even make the case that the good I have done in the world far outweighs a few personal indulgences here and there.  And at some point in my life, I have done all of the above.

But it's just excuses.  There are still American children going hungry each night, while I talk myself into throwing away life altering sums of money on frivolities.  There is always someone you can help with your good fortune, and the difference you make in their lives would vastly outweigh whatever marginal improvements in your own incredibly luxurious standard of living could be had for the same sum.  And I think this gets more true, not less, as you get richer and richer.

[englishteacheralex]

Actually, I LOVED the latest post.

That type of calculation is my favorite thing to read in any personal finance blog. It's my favorite thing in Amy Dacyzyn's stuff, too. It's the kind of mental math I do with personal finance decision-making all the time.

Here's a fun direction for this thread:

Mental Math Tricks for Optimization:

1. "Should I sell it?" How much could you get for it? Would you use that money to buy it again? If not, sell! If yes, keep!

2. Cost Per Serving Add up the cost of every ingredient and figure out how many portions you got out of the recipe. Divide the costs by the portions and that's your cost per serving. For bonus points, compare to a comparable pre-made meal from the grocery store or a restaurant.


3. Cost per use The MMM trick where you have to not only add up the sticker price of something, but then also the maintenance. Then take the opportunity cost of the original sticker price MINUS the price of renting or going without the thing, times whatever you could have made investing that money in whatever. Divide that number by the number of times you used the thing.

4. Hourly Wage Take the amount you would have paid for a service and divide it by how long it took you to do the thing yourself. That's your hourly wage for DIY. Make sure you recognize the fact that you shouldn't compare that hourly wage to the money you make when doing your compensated employment. You should compare it to what you would have made for the time doing whatever you would have done instead of DIYing the thing.

(This one really helped me mentally get through a horrible 8 hour flight with a 1.5 year old on my lap. The cost of a plane ticket was $1000. So I made about $125/hour by having her on my lap. Worth it!!!)

Any other calculations that help you optimize/stay motivated towards frugality?

[englishteacheralex]

Actually, I'm gonna start my own thread with this because I really want to hear other people's optimization mental math!

[jlcnuke]

My wife and I were just discussing this post as well, and we concluded that we both feel like there can be a better balance between getting what you want out of life and maximizing for early retirement. There is also a huge difference in how you can live while still working and when you're FIRE. It's enormously simpler to live in your "bike bubble" when you're not expected to be somewhere for work. And the part about, "It’s the weekend and you are ready to celebrate. But first, what’s on your to-do list?" Well I just spent the week working so yeah I want to go on that road trip, when else am I going to?

Obviously (but sometimes people forget) everyone has their right to make informed decisions about their spending and where on the spectrum they want to be. I love skiing: If I was FIRE all I'd do is ski, maybe be a patrol (paid to ski? f-yeah!). It's expensive: equipment, passes, fuel, lodging. So I pay the price, but I maximize my money by buying used equipment, getting a season pass, and sharing rides and lodging. I believe it enhances my life more than saving that money and staying home.

Balance is key, imo. Early on, one of the things I liked about MMM was that it was "personal" and "flexible". It was about what gives "you" the most "value", in your opinion, for your money when spending.  That meant person A could look at a particular expense and say "nope, not worth it to me" and person B could look at the same expense and say "definitely worth it!"

We all value things differently, and that's okay. Saving all of our money isn't the goal. Retiring isn't the only (or maybe even primary) goal for everyone. Avoiding throwing away money on things we don't personally value, on the other hand, is a goal we should all share. Spending money on things just because that's what people spend money on isn't how we should think.

Those basics, imo, seem to have been somewhat overshadowed by "examples" that may or may not be the same for everyone. Many don't value a Tesla and thus it would be a terrible choice to buy one. Others, like MMM, value it enough that it's worth the cost to them. That's fine. You're allowed to value things differently. The "cost" (even the opportunity cost) is only a variable in deciding if something is "worth it", and personal opinions/values are massive variables that can change the equation to make something worth it or not worth it depending on the person.

[Ecky]

I still greatly value MMM's analysis, and appreciate the angle he comes at things from.

The catch? He's now in a different socioeconomic class and his specific spending decisions overlap close to 0% with mine. Maybe one day I'll be able to read his blog and appreciate the details of comparing buying a Tesla vs an in-ground pool. For now I'm just going to apply his method to my own life.

[sol]

Maybe one day I'll be able to read his blog and appreciate the details of comparing buying a Tesla vs an in-ground pool.

+1 internet points for Ecky.  That was subtle, but oh so clear.

[mm1970]

Actually, I LOVED the latest post.

That type of calculation is my favorite thing to read in any personal finance blog. It's my favorite thing in Amy Dacyzyn's stuff, too. It's the kind of mental math I do with personal finance decision-making all the time.

Here's a fun direction for this thread:

Mental Math Tricks for Optimization:

1. "Should I sell it?" How much could you get for it? Would you use that money to buy it again? If not, sell! If yes, keep!

2. Cost Per Serving Add up the cost of every ingredient and figure out how many portions you got out of the recipe. Divide the costs by the portions and that's your cost per serving. For bonus points, compare to a comparable pre-made meal from the grocery store or a restaurant.


3. Cost per use The MMM trick where you have to not only add up the sticker price of something, but then also the maintenance. Then take the opportunity cost of the original sticker price MINUS the price of renting or going without the thing, times whatever you could have made investing that money in whatever. Divide that number by the number of times you used the thing.

4. Hourly Wage Take the amount you would have paid for a service and divide it by how long it took you to do the thing yourself. That's your hourly wage for DIY. Make sure you recognize the fact that you shouldn't compare that hourly wage to the money you make when doing your compensated employment. You should compare it to what you would have made for the time doing whatever you would have done instead of DIYing the thing.

(This one really helped me mentally get through a horrible 8 hour flight with a 1.5 year old on my lap. The cost of a plane ticket was $1000. So I made about $125/hour by having her on my lap. Worth it!!!)

Any other calculations that help you optimize/stay motivated towards frugality?

+1.  I enjoyed the post.  I think this way a LOT.