Author Topic: Stoicism / Avoiding Lifestyle Creep  (Read 8821 times)

thedayisbrave

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Stoicism / Avoiding Lifestyle Creep
« on: February 24, 2015, 09:41:34 AM »
I ask this in the post FIRE community because it's something I've been struggling with lately.  I spend about $15K a year which is about a 2% WR for me but with about 1/3 of my NW in real estate (two rental properties).  But my spending is artificially low because I live in one of my rentals, drive a paid off gas efficient car, and keep an eye on my large expenses which are usually food/travel.  I expect it to double or triple once I settle down with someone and have kids.

I guess I just need encouragement from those who are on the other side that the sacrifices will be worth it.  I KNOW that they are, but it's tough when people (esp your parents) tell you to stop worrying about money (because, let's face it, what I have is more than enough and more than most people my age dream about) and buy the doubly expensive townhouse to live in by yourself because "it will make you happy."  I've done that already actually; and I learned that it's not where you live that makes you happy - I was happy living in my 1st condo because I was usually occupied by school/work and hanging with friends.  I live in student housing still (2nd rental) but I'm told that I'm "too old" for this and should be in a neighborhood of young professionals instead (I'm 24, btw.)  But doing this allows me to bank all my paychecks, as rent I collect covers about 90-100% of my living expenses (meaning I don't touch the stash).

The car is another thing.  Paid off Nissan Sentra, 45k miles, 32 average mpg.  She's been great so far.  But new career as a real estate agent means people look more favorably on something larger / grander.  I wouldn't do it just for those reasons, but also the fact that I live in the South and we are ill equipped to deal with snow -- waking up this morning to a surprise snow day was not fun.  It's a good thing I went grocery shopping yesterday or I'd be in a world of hurt, because the closest store is about 1 mile away.  I could walk if I needed to but it wouldn't be fun.  My original plan was to stick with the Sentra until 80k-90k miles when it'd likely need some expensive tune ups/tires and have enough cash saved up by then to spring for the SUV or nicer / roomier sedan.

I have a feeling I'm being a complainypants -- feel free to deliver the punches if you think so ;) I consider myself pretty disciplined but Mustachianism is a whole 'nother level of bad ass and the siren song of real life temptations often gets overwhelming sometimes.. :)

MLKnits

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Re: Stoicism / Avoiding Lifestyle Creep
« Reply #1 on: February 24, 2015, 09:51:56 AM »
The main thing I'd recommend is to try not to think of it as a "sacrifice." So many of the best things in the world are free that you're actually giving yourself a huge gift by refocusing on those long-term pleasures (like time with friends, time in nature, cooking or learning to cook*) instead of short-term, fast-fading "pleasures" like a slight gadget upgrade or some sushi you won't remember by tomorrow.

It's not a sacrifice at all, once it gets rolling: it's switching towards much greater, much more enduring joys and pleasures!

*Okay, I'm bad at this one, but I'm trying to focus on how happy all my friends who know how to cook are when they make things and how happy I am to eat all the amazing stuff they make!

former player

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Re: Stoicism / Avoiding Lifestyle Creep
« Reply #2 on: February 24, 2015, 11:51:32 AM »
It is difficult to deal with friends and family who have your best interests at heart but give bad advice.

For instance, you mention settling down with someone and having kids.  If you do that, you might very well regret buying a "doubly expensive townhouse" which would not be suitable as a family home.

About the car and appearances: I'd say that as long as you keep your existing car looking good (lots of cleaning and polishing can make almost any car look like a professional's vehicle) the fact that it is not something big and fashionable shouldn't matter at all.  (And a bigger and heavier car is actually worse to drive on snow/ice than a light one.)

Walking a mile in snow should not be hard, as long as you've got a decent pair of waterproof boots, a hat and gloves and some layers underneath your coat.

RetiredAt63

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Re: Stoicism / Avoiding Lifestyle Creep
« Reply #3 on: February 24, 2015, 12:04:02 PM »
Apart from the fact that Car & Driver likes my car (Mazda3) better than your car, [ ;-) ] I don't see what is wrong with the Sentra.  If you keep it sparkling clean inside and out, and well running, you appear professional.  The only way I could see you wanting something flashier is if 1.  you drive clients a lot instead of meeting them, and need extra interior space and comfort (here agents meet clients at properties, I have never been driven someplace by an agent) or 2. you are selling really high end properties.

mxt0133

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Re: Stoicism / Avoiding Lifestyle Creep
« Reply #4 on: February 24, 2015, 12:41:13 PM »
My original plan was to stick with the Sentra until 80k-90k miles when it'd likely need some expensive tune ups/tires and have enough cash saved up by then to spring for the SUV or nicer / roomier sedan.

Lifestyle creep ALERT!!!  Are you currently uncomfortable or unable to drive properly with your current car?  Do you feel unsafe in it?

Why don't you rent a nicer sedan or SUV for a day and see what you like about it?  And then really ask yourself if it really makes that much of a difference and if the depreciation and extra maintenance and insurance costs are worth it.

I recently had this experience where I got a loaner for a day when I brought our car in for maintenance.  The loaner was nice, new, had parking camera and sensors, blind spot detection.  Lots of bells and whistles.  I was admiring all this while I was stuck in the same traffic as everyone else.  The BMWs, Teslas, and old beaters were stuck on the same road restricted to the same speed limits.  That's when the novelty wore off for me and started day dreaming of my bike and how I would be zooming past traffic with the wind in my face.  Was the care nice and shiny, HELL YEAH, was it worth the 15k depreciation in the next 4-6 years, NO.

Gone Fishing

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Re: Stoicism / Avoiding Lifestyle Creep
« Reply #5 on: February 26, 2015, 02:55:34 PM »
First step should be to stock the pantry.  Nothing wrong with keeping an extra week or two of non-perishable food inventory. 

Second step- quit thinking cars are only good for 80-90k.  A reasonably maintained car should be able to make it to 200k without too much trouble.  As a realtor, you will be putting on LOTS of miles.  Do it as efficiently as possible.  Front wheel drive cars perform nearly the same as a 4WD in the snow with the exception of climbing steep hills. Slow way down, give yourself LOTS following distance, and start braking way before you need to, you will be fine.  If you get stuck somewhere, flag down the closest couple guys, bat your eyes at them a little, and ask for a push!  Plan ahead so you can get home before all the other idiots, but once things calm down you should be good to go.  If things are really too bad to be out, you will be able to tell by the time you get to the end of your street. 

Third Step-Your situation is unique. Unlike most of us ER types that have been slogging away in the corporate world for 10-20 years and are dying to get out, you are just getting started, probably semi-self employed, and can probably work as much or as little as you want (within reason).  Sounds like you have a pretty good setup. I would allow yourself some creep, just make sure you are spending it on things that actually enrich your life, vs things others think you should buy.  You mention you are at 2%, why not just aim to stay there?  When your stache goes up $100k, your spending can go up $2k, and so on.  When you get married and have kids you can bump up to a 4% withdrawal, sell a little RE on the side and be set!     


JLR

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Re: Stoicism / Avoiding Lifestyle Creep
« Reply #6 on: February 26, 2015, 03:53:07 PM »
Trust me, the sacrifices WILL be worth it!
I'm now sitting here at 32 wishing I had known at 24 what I now know. :) Stick with it. Find what motivates you to help you stay on track. Have some special treats, but make sure they are really the things that mean a lot to you. Don't worry about what others think is important. It is your life.

Argyle

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Re: Stoicism / Avoiding Lifestyle Creep
« Reply #7 on: February 26, 2015, 04:25:57 PM »
My mother had a Sentra in the snowy wasteland of the upper midwest for many years.  A Sentra is perfectly good on snow.  If you get a feeling that it's not, or that you need a fancier car for business, or those other feelings you're having — those are restlessness, not real feelings.

What are you saving up for?  Are you going to FIRE?  It's good to keep the prize in mind, not just a vague feeling of "I should save/why am I denying myself?/I should save/Why am I denying myself?"  The gimmes start to happen if you don't keep in mind what you really want, above and beyond the distracting and soon-to-wear-off newness of a pricy new car.

thedayisbrave

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Re: Stoicism / Avoiding Lifestyle Creep
« Reply #8 on: February 26, 2015, 08:06:26 PM »
Thank you everyone! I guess what set me off with the car thing is I had an ice scare last week.  I am fine and I didn't hit anything but it was just scary enough to make me re-think my vehicle safety etc.

Argyle, you bring up a good point.  Last fall when I was digging really deep in the MMM thing I was all gung-ho and hard core about my spending, mostly enabled by focusing on my goal.  I still have the same goal, but since I've switched jobs, I realize now that since my job molds itself around the lifestyle I want, I don't know that I will ever want to completely stop what I do.

cashstasherat23

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Re: Stoicism / Avoiding Lifestyle Creep
« Reply #9 on: February 26, 2015, 08:57:18 PM »
Wow! First of all, congrats on everything you have accomplished so far. I am just about to turn 24 myself, but nowhere near as FI as you.

Second (facepunch time!), how much snow do you ever really get in the south? I live up in North Jersey, where we get snow 1 or 2 times a week in a really bad winter, like this one, and I make it just fine with my little 2001 Infiniti I30. It's going on 150K miles now and still trucking along, even in the heavy snowstorms. I can't imagine that you would ever get enough snow in the South to justify a gas guzzling SUV!

happy

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Re: Stoicism / Avoiding Lifestyle Creep
« Reply #10 on: February 27, 2015, 05:55:34 AM »
Thedayisbrave, 2%WR at 24, you're a legend! You got there by being a motivated and independent thinker and by being different to everyone else. Celebrate that and don't be shamed into spending like everyone else.

Quote
Third Step-Your situation is unique. Unlike most of us ER types that have been slogging away in the corporate world for 10-20 years and are dying to get out, you are just getting started, probably semi-self employed, and can probably work as much or as little as you want (within reason).  Sounds like you have a pretty good setup. I would allow yourself some creep, just make sure you are spending it on things that actually enrich your life, vs things others think you should buy.  You mention you are at 2%, why not just aim to stay there?  When your stache goes up $100k, your spending can go up $2k, and so on.  When you get married and have kids you can bump up to a 4% withdrawal, sell a little RE on the side and be set!     

I think this idea from So Close is a great idea.

Presentation is big in sales jobs, but go for the least you can get away with. You are young so people are not going to expect you to have such a lavish car. Clean and well cared for is more important  If you are meeting folks at houses you could try getting there first and leaving after them so they don't see which is your car.

2Birds1Stone

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Re: Stoicism / Avoiding Lifestyle Creep
« Reply #11 on: February 27, 2015, 06:29:31 AM »
3/4 of a mil by age 24 is incredible!!

I have had my 2004 Sentra for over 4 years. I live in NY. We have had some of the snowiest and coldest winters in history the past few years. I have not once had a problem driving in the white stuff, FWD cars are amazing in the snow. I fly by these giant RWD pickups and All wheel drive trucks without problem. Knowing how to drive in the winter is key, good tires also make an immense difference.

Keep doing what you're doing, you obviously have a system that work.

thedayisbrave

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Re: Stoicism / Avoiding Lifestyle Creep
« Reply #12 on: February 27, 2015, 08:48:08 AM »
OK, you guys have convinced me, I am sticking with the Sentra.  The SUV I was considering was the Nissan Rogue which gets about the same mpg as the Sentra (26 city, 33 highway) which was why it was so tempting.  I do take really good care of my car and she still shines like she's brand new (turned 5 this year) so she definitely has a lot left in her.

I appreciate the congrats on the size of my stash, though full disclosure I did not earn most of it - it came from a family tragedy.  Though I was smart enough not to blow it all on male strippers and blow so I think I'll pat myself on the back for that one ;)

Exflyboy

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Re: Stoicism / Avoiding Lifestyle Creep
« Reply #13 on: March 03, 2015, 11:53:13 PM »
OK, you guys have convinced me, I am sticking with the Sentra.  The SUV I was considering was the Nissan Rogue which gets about the same mpg as the Sentra (26 city, 33 highway) which was why it was so tempting.  I do take really good care of my car and she still shines like she's brand new (turned 5 this year) so she definitely has a lot left in her.

I appreciate the congrats on the size of my stash, though full disclosure I did not earn most of it - it came from a family tragedy.  Though I was smart enough not to blow it all on male strippers and blow so I think I'll pat myself on the back for that one ;)

Hahahah.. Nice one

Right, your thinking correctly. At 24 you have 60 years or so to live...You have $500k liquid and $750k NW... Not enough to retire on at a normal rate of spend.

The awesome thing is your stash will grow (i assume the $500k is invested in stock ETF's or a good portion of it)? 50 to 10 years from now you'll be looking at $2M NW.. then allow your lifestyle to creep and/or retire.

The point is, with such a great start and a great attitude you will be set for life.

Good for you!


2Birds1Stone

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Re: Stoicism / Avoiding Lifestyle Creep
« Reply #14 on: March 04, 2015, 06:13:22 AM »
OK, you guys have convinced me, I am sticking with the Sentra.  The SUV I was considering was the Nissan Rogue which gets about the same mpg as the Sentra (26 city, 33 highway) which was why it was so tempting.  I do take really good care of my car and she still shines like she's brand new (turned 5 this year) so she definitely has a lot left in her.

I appreciate the congrats on the size of my stash, though full disclosure I did not earn most of it - it came from a family tragedy.  Though I was smart enough not to blow it all on male strippers and blow so I think I'll pat myself on the back for that one ;)

I agree with Exflyboy, you are in a great position to take what cards life have dealt you and really be able to live life on your own terms. Heck, with that stash you could keep that invested and work a job seasonally for play/travel money without adding another penny to the long term stash.

Retire-Canada

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Re: Stoicism / Avoiding Lifestyle Creep
« Reply #15 on: March 04, 2015, 09:52:27 AM »
  I expect it to double or triple once I settle down with someone and have kids.

If your COL doubles with a partner and a kid that would make sense, but you'd have to have a herd of kids to triple your COL.

I would also only hook up with a partner that brought some $$ to the table AND was as frugal as you. If you do that there should be no undue financial pressure on you.

-- Vik

thedayisbrave

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Re: Stoicism / Avoiding Lifestyle Creep
« Reply #16 on: March 08, 2015, 07:46:59 AM »
  I expect it to double or triple once I settle down with someone and have kids.

If your COL doubles with a partner and a kid that would make sense, but you'd have to have a herd of kids to triple your COL.

I would also only hook up with a partner that brought some $$ to the table AND was as frugal as you. If you do that there should be no undue financial pressure on you.

-- Vik

All valid points, Vik.  Thank you!

Doulos

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Re: Stoicism / Avoiding Lifestyle Creep
« Reply #17 on: March 11, 2015, 03:25:38 PM »
To be encouraging....
My wife and I live off of $30k a year including rent.  We rent.  Still 2 people @15k each.
- Admittedly, we decided to send my wife to school again, so our current expenses are $10k higher. (~$40k this year).
- If you pulled rent out of that $30k, we are living off ~20k.

So it definitely is possible to keep that $15k a person you are looking at.

Ideally, my wife and I would like to increase to a less Mustacheian budget of more like $42k a year.
- Since we rent instead of own a house, our numbers are different.  This is basically $30k per year + a $10k rent budget.
- If you run that math it is roughly the same as cost as a $150k house.

So in summary... You can do it!

Doulos

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Re: Stoicism / Avoiding Lifestyle Creep
« Reply #18 on: March 11, 2015, 03:34:14 PM »
By the way.  We do go out for sushi, Renascence festivals, trips to Vegas, party rocking.
It is still possible on a budget.
It is just a matter of setting aside a reasonable "entertainment" fund as part of your budget.

 

Wow, a phone plan for fifteen bucks!