Ballin' on a budget

[bojangle]

Hello fellow Mustachians!

This is my first time posting. This community has been hugely helpful so far and I want input on something. Many MMM readers are champions of extreme frugality, but I have a different orientation. I like to live very large – nice houses, cars, vacations, etc - for very cheap.

A note: I’m in a bit of a unique situation. I’m 29, single and working in finance in SF earning ~$500k with a net worth of about $1.1M. I love my job and have no plans to ever retire. If anything, I love Mustachianism because of the career benefits - others have noted that you can take career risks, ask for promotions and raises, or start your own business. Living large MMM-style helps socialize with people who can help your career. I also love figuring out ways to game the consumerist system. So I spend on many of the things above – I have a big loft in the best part of the city, a luxury car, I took 3 international vacations last year, etc, but outside of taxes ($200k+ last year) I only spend about $45k a year.

I’m here to share some tips I’ve found and to solicit ideas from other Mustachians who have felt like they’ve lived large for cheap.

Some ideas:

Housing: I live in a 2 bedroom loft apartment right in the best part of the city. Cost: $26k/year
•   Live in a 2 bedroom luxury apartment, rent out the other room to a big spender to offset your rent (getting somebody who works a lot or travels frequently, like consultants or investment bankers, is a good way to get the whole thing to yourself)
•   Work with real estate developer friends to tap into inside knowledge on areas that are likely to appreciate; look for particular factors (like presence of homelessness) which may drive down housing costs but a city is likely to address in the near future
•   Doing minor real estate development: if you get a one bedroom with an extra living space, converting to a second bedroom is a good way to boost value by 20-30%. Likewise with developing unfinished basements, etc.
•   Point Digital is a company that will take an equity stake in your house – rather than a loan, they’ll own 20% of your place meaning a smaller downpayment and more diversification
•   I AirBnB frequently whenever I go out of town for more than a few days, offsetting several thousand dollars of mortgage every year. This is where the strategy of getting a great place in a central location pays off – you can charge premium rents and premiums on AirBnB, vs. a super cheap place in the middle of nowhere

Car: I buy nice cars – I have a Lexus GS at the moment, and had an Audi A6 before. Cost: $5k/year
•   Buy in private Craigslist transactions to distressed buyers. Look for people who don’t know much about cars but love having the newest. Also look for a ‘catalyst’: i.e., an event (people unloading quickly because they need cash) or something wrong with the car (small cosmetic defects; my A6 had been owned by a smoker, but baking soda easily removed the smell).
•   Expensive cars lose enormous value in the first 3-5 years, so I get them 4/5 years old and hold them ~3 years before selling. Negotiate hard on the purchase and then on the sale, and you can get your amoritized cost down to ~$2-3k per year. I’ve even made money on a car.
•   Getaround is Airbnb for cars – when I’m not using my car, I let people rent it on Getaround and make a few grand per year. Again, this only works because I’ve got a nice car in a central location.

Food and alcohol: I’ve eaten at many Michelin starred restaurants and I go out to top clubs frequently. Cost: $3k/year
•   The main thing to do here involves 1) eating or drinking at home and 2) to go out to nice restaurants and bars to socialize without spending anything.
•   For eating, meet friends at top restaurants but schedule late and say a senior colleague wanted to grab a quick working dinner before so you’re not very hungry – you can try appetizers or something inexpensive and socialize with your friends in a nice place
•   I can’t believe people aren’t talking about this, but Soylent is great – you can get full, balanced meals with no prep for $5/day
•   When going out, suggest your friends come over to pre-game first (and BYOB; you throw a party for cheap and then when you go out you nurse one drink
•   I also get lucky in that my firm pays for most meals – volunteering for travel assignments helps even more as everything is paid; inviting clients out to the world’s best restaurants and having them or your firm pay allows you to eat at the world’s best restaurants on somebody else’s dime

Travel: I love traveling, and have been to over 50 countries – I can rough it in hostels but also stay at 6-star resorts. Cost: $2k/year
•   Get points: Chase Sapphire Reserve, SPG/Marriot, Airline programs – find jobs that require travel, then pool all that travel on one airline network and one hotel network. I even convinced my firm to allow me to put all business expenses on my Reserve. You can offset a ton of cost doing all of this.
•   Pick cheaper locations when you travel – South America, Central America, Africa, Asia are all screaming with deals and you seem cooler than when you go to well trafficked places. Using Conde Nast Traveler for “undiscovered gems” and doing a quick COL check can make a big difference. Look also for countries that have recently suffered significant negative currency movements.
•   Use Skyscanner to look for deals and use vacation strategically to fly on odd days
•   Related to the above: if you AirBnB your place while you travel cheaply, you can actually offset the vast majority of your costs

Clothes: 
•   Here minimalism and sticking with classics and buying top-of-the-line helps. I have ~40 articles of clothing in my wardrobe. When I buy an item, I’ll buy from the best but 1) I’ll only buy at key times and 2) it’ll last far longer (i.e., buying a $500 pair of boots on sale Jan 2nd for $300, and then it lasts 15 years - $20/yr for the world’s best boot).
•   Look for Macy’s sales, or unique suppliers (like Suitsupply) where you can get nice clothes for significant deals

Goods / electronics
•   I have nice furniture, art, etc. – which I buy on OfferUp, which is a local-focused eBay. I put in super low bids on used goods and every once in awhile something sticks. I got a $1100 designer chair once for $199 bucks because of a broken leg which was easy to fix and a desperate owner looking to sell.
•   I have no qualms about trying to buy things off my more wasteful / spendy friends - year old iPads, flat screen TVs, etc.

I have other incidentals, but those are the main high-life categories. The net effect of all of this is that I live a ridiculous lifestyle for cheap, and get a lot of joy from the fact that I own the system rather than the system owning me.

Have you ever gotten some luxury items / experiences for cheap?

[GreenSheep]

You seem to be more into projecting a particular image than most people here are. Since that seems to be what you want, it's nice that you're able to do that without spending as much as one would expect, but I think for a lot of us that's not the goal. Within reason, I don't really care what people think of me. In fact, I sort of enjoy my "stealth wealth."

I think most of us would say that we're not so much into extreme frugality for frugality's sake as we are into making our money give us the best quality of life possible. Sometimes spending less actually makes you happier, by forcing you to learn a new skill, giving you more time away from work, etc. Sometimes it does make sense to buy the top of the line, most expensive option if it's going to last the longest and perform the best. In those cases, sure, it's nice when you can find it on sale.

I'm all for using airline miles, etc. but I'm not interested in taking advantage of my spendier friends. That's where I draw the line between "frugal" and "cheap." Even if you don't think they have, or even if they haven't yet, people will catch on to that kind of behavior, and for someone who seems to be very keen on what other people think... that's a difficult reputation to recover from. It's also exhausting to try to keep up with that sort of crowd. I would so much rather spend time with "real" people who aren't trying to project a certain image, really get to know them, and feel comfortable having honest conversations about meaningful things with them.

[bojangle]

GreenSheep, I hear you - you're right that this isn't super attractive to many MMM readers who are looking for a simpler lifestyle.

I think it's partially a personality thing (the INTJ bias, or what have you, in the MMM community). I believe in working hard, moving towards the 'noise' and throwing yourself headlong into life. I'm also quite extroverted, so that could drive that sort of outlook. My friends, though spendy, are great people working on things they love. My motivation is mainly about gaming the system, rather than removing myself from it.

I would be interested to know if there is anybody else who follows MMM principles but who likes to live it up without being a consumerist sucka!

[B L I S S]

That salary is impressive, what do you do in finance?

I'm with you mostly on the clothes part - I noticed when I started to buy nicer things I started to buy fewer things. Better in the long run and we all feel uplifted in nice clothes.

There's some pretty cool tips here. Hadn't heard of get around or offer up but it's worth a look.

Edit: - strange.. you mentioned making a couple grand per year on Getaround but they don't operate in Los Angeles, where you currently live. How dat work

[Gimesalot]

ENTP sometimes ENTJ checking in...

Honestly, a lot of this just sounds exhausting.

For housing you have to look for a central place that is undervalued but will be attractive to spendy pants that travel a lot.  Then you have to find a room mate.  Then you have to put the place on air bnb and rent it while you are gone.  Dude, I just rather rent a place that I can afford with out so much work.  If I want a car, I have to spend hours upon hours on craigslist looking for someone to off load the perfect car.  I can't just settle for one of the million plane jane sedans?  You have to play games to go out to eat or hang out at a club?

I rather save all that time so that I can hang out with friends and do other activities that bring me a lot more joy than having a luxury car.   

When I read your post, I get two impressions, which may be wrong:

1.  Your life is a check list: you check things off, but you don't seem to really "do" a lot of them.  You got to fancy restaurants to say you've been there, but you barely ate.  You went to 50 countries, but did you do anything or just check off the hottest clubs and best restaurants?

2.  Money is valuable to you but time, not so much: You'll spend a ton of time trying to make some money on your expensive housing or car, but you could just buy a cheaper car and save the time.

I also love to travel and eat at amazing restaurants.  These are things that I am willing to spend a lot of money on, well more than you listed in your post, but I actually DO, not just the bare minimum to check off a list, these things because they bring me satisfaction.

[golfreak12]

If I made $500K/yr I wouldn't worry about any of that stuff. I could retire in 5 yrs.

[bojangle]

ENTP sometimes ENTJ checking in...

Honestly, a lot of this just sounds exhausting.

For housing you have to look for a central place that is undervalued but will be attractive to spendy pants that travel a lot.  Then you have to find a room mate.  Then you have to put the place on air bnb and rent it while you are gone.  Dude, I just rather rent a place that I can afford with out so much work.  If I want a car, I have to spend hours upon hours on craigslist looking for someone to off load the perfect car.  I can't just settle for one of the million plane jane sedans?  You have to play games to go out to eat or hang out at a club?

I rather save all that time so that I can hang out with friends and do other activities that bring me a lot more joy than having a luxury car.   

When I read your post, I get two impressions, which may be wrong:

1.  Your life is a check list: you check things off, but you don't seem to really "do" a lot of them.  You got to fancy restaurants to say you've been there, but you barely ate.  You went to 50 countries, but did you do anything or just check off the hottest clubs and best restaurants?

2.  Money is valuable to you but time, not so much: You'll spend a ton of time trying to make some money on your expensive housing or car, but you could just buy a cheaper car and save the time.

I also love to travel and eat at amazing restaurants.  These are things that I am willing to spend a lot of money on, well more than you listed in your post, but I actually DO, not just the bare minimum to check off a list, these things because they bring me satisfaction.

Nice to meet another ENTJ/P! Looking back I can see how you got some of those impressions, but it really doesn't feel that way to me.

1. On the check list: I do have an achievement orientation - slow travel or epicurean delights aren't really my thing. On restaurants, I don't really like food - it's mainly just to hang out when people want to go somewhere nice. On travel, I have spent significant time overseas (between jobs) and I lived in Paris so spent weekends all over.

2. On the exhausting bit, I do get the feedback that I'm intense. : ) However, I think I do 1) spend extra time on things which increase wealth (a bit of legwork on real estate, for instance), but where the ROI is very high on those hours spent, and 2) I don't spend much time getting the deals on everything else. I might spend an extra 3-4 hours researching for a car, but buying the car takes just as much time. Being able to drive a car that can do 0-60 in <4.5 sec is worth a few extra hours I'd have been watching Netflix.

Living large serves a definite purpose - it's fun, girls absolutely love it, and I can socialize with people who I really admire and who could help my career. And with the MMM element, you can still have the option of freedom whenever you want.

[bojangle]

That salary is impressive, what do you do in finance?

I'm with you mostly on the clothes part - I noticed when I started to buy nicer things I started to buy fewer things. Better in the long run and we all feel uplifted in nice clothes.

There's some pretty cool tips here. Hadn't heard of get around or offer up but it's worth a look.

Edit: - strange.. you mentioned making a couple grand per year on Getaround but they don't operate in Los Angeles, where you currently live. How dat work

Bliss, I work for a hedge fund. And you outed me on the car subject - I tried to change a few details in case somebody might recognize me, but I actually live in San Francisco. : )

[Gimesalot]

Nice to meet another ENTJ/P! Looking back I can see how you got some of those impressions, but it really doesn't feel that way to me.

1. On the check list: I do have an achievement orientation - slow travel or epicurean delights aren't really my thing. On restaurants, I don't really like food - it's mainly just to hang out when people want to go somewhere nice. On travel, I have spent significant time overseas (between jobs) and I lived in Paris so spent weekends all over.

2. On the exhausting bit, I do get the feedback that I'm intense. : ) However, I think I do 1) spend extra time on things which increase wealth (a bit of legwork on real estate, for instance), but where the ROI is very high on those hours spent, and 2) I don't spend much time getting the deals on everything else. I might spend an extra 3-4 hours researching for a car, but buying the car takes just as much time. Being able to drive a car that can do 0-60 in <4.5 sec is worth a few extra hours I'd have been watching Netflix.

Living large serves a definite purpose - it's fun, girls some women absolutely love it, and I can socialize with people who I really admire and who could help my career. And with the MMM element, you can still have the option of freedom whenever you want.

fixed it for you

[bojangle]

Nice to meet another ENTJ/P! Looking back I can see how you got some of those impressions, but it really doesn't feel that way to me.

1. On the check list: I do have an achievement orientation - slow travel or epicurean delights aren't really my thing. On restaurants, I don't really like food - it's mainly just to hang out when people want to go somewhere nice. On travel, I have spent significant time overseas (between jobs) and I lived in Paris so spent weekends all over.

2. On the exhausting bit, I do get the feedback that I'm intense. : ) However, I think I do 1) spend extra time on things which increase wealth (a bit of legwork on real estate, for instance), but where the ROI is very high on those hours spent, and 2) I don't spend much time getting the deals on everything else. I might spend an extra 3-4 hours researching for a car, but buying the car takes just as much time. Being able to drive a car that can do 0-60 in <4.5 sec is worth a few extra hours I'd have been watching Netflix.

Living large serves a definite purpose - it's fun, girls some hot women absolutely love it, and I can socialize with people who I really admire and who could help my career. And with the MMM element, you can still have the option of freedom whenever you want.

fixed it for you

Thanks, made one more correction.

[thenextguy]

I loved this post even if not all applied to me. Lots of interesting things I hadn't heard about. Very interested in Point. Unfortunately it's not yet available in my area.

[GreenSheep]

Nice to meet another ENTJ/P! Looking back I can see how you got some of those impressions, but it really doesn't feel that way to me.

1. On the check list: I do have an achievement orientation - slow travel or epicurean delights aren't really my thing. On restaurants, I don't really like food - it's mainly just to hang out when people want to go somewhere nice. On travel, I have spent significant time overseas (between jobs) and I lived in Paris so spent weekends all over.

2. On the exhausting bit, I do get the feedback that I'm intense. : ) However, I think I do 1) spend extra time on things which increase wealth (a bit of legwork on real estate, for instance), but where the ROI is very high on those hours spent, and 2) I don't spend much time getting the deals on everything else. I might spend an extra 3-4 hours researching for a car, but buying the car takes just as much time. Being able to drive a car that can do 0-60 in <4.5 sec is worth a few extra hours I'd have been watching Netflix.

Living large serves a definite purpose - it's fun, girls some hot women absolutely love it, and I can socialize with people who I really admire and who could help my career. And with the MMM element, you can still have the option of freedom whenever you want.

fixed it for you

Thanks, made one more correction.

Nice. So women who don't care about expensive things aren't hot? Women who make their own six-figure income and don't care what their potential mate makes can't be hot? Even if you're not looking to settle down... do you like hanging out with women who want you for your money but not for who you really are? Have fun with the bobbleheads who can't hold a conversation to save their life. Why not just use your money to go to Vegas and get your fill of hookers? What's the difference? I've known several very, very rich men who get all the girls they want but are miserable because they never make any meaningful connection. (This is what they say, not my assumption.)

[bojangle]

Nice to meet another ENTJ/P! Looking back I can see how you got some of those impressions, but it really doesn't feel that way to me.

1. On the check list: I do have an achievement orientation - slow travel or epicurean delights aren't really my thing. On restaurants, I don't really like food - it's mainly just to hang out when people want to go somewhere nice. On travel, I have spent significant time overseas (between jobs) and I lived in Paris so spent weekends all over.

2. On the exhausting bit, I do get the feedback that I'm intense. : ) However, I think I do 1) spend extra time on things which increase wealth (a bit of legwork on real estate, for instance), but where the ROI is very high on those hours spent, and 2) I don't spend much time getting the deals on everything else. I might spend an extra 3-4 hours researching for a car, but buying the car takes just as much time. Being able to drive a car that can do 0-60 in <4.5 sec is worth a few extra hours I'd have been watching Netflix.

Living large serves a definite purpose - it's fun, girls some hot women absolutely love it, and I can socialize with people who I really admire and who could help my career. And with the MMM element, you can still have the option of freedom whenever you want.

fixed it for you

Thanks, made one more correction.

Nice. So women who don't care about expensive things aren't hot? Women who make their own six-figure income and don't care what their potential mate makes can't be hot? Even if you're not looking to settle down... do you like hanging out with women who want you for your money but not for who you really are? Have fun with the bobbleheads who can't hold a conversation to save their life. Why not just use your money to go to Vegas and get your fill of hookers? What's the difference? I've known several very, very rich men who get all the girls they want but are miserable because they never make any meaningful connection. (This is what they say, not my assumption.)

First, it's almost universally acknowledged that most women tend to like men with more means or ambition. That applies especially for attractive women and to high-earning women. It's why I have trouble with MMM uber-frugality, because most women don't aspire to live like paupers (even MMM's own wife in that NYPost article had some snide comments). Second, it's a bit aggressive to assume that women liking men with means are all "gold diggers," essentially - they're free to like the drive or passion or other things that go along with the wealth. And third, if you had dated anybody hot, you'd know that not all attractive women are soulless bobbleheads.

But I think we're getting a bit off topic.

[GreenSheep]

First, it's almost universally acknowledged that most women tend to like men with more means or ambition. That applies especially for attractive women and to high-earning women. It's why I have trouble with MMM uber-frugality, because most women don't aspire to live like paupers (even MMM's own wife in that NYPost article had some snide comments). Second, it's a bit aggressive to assume that women liking men with means are all "gold diggers," essentially - they're free to like the drive or passion or other things that go along with the wealth. And third, if you had dated anybody hot, you'd know that not all attractive women are bobbleheads.

For the sake of keeping this on topic, I'll give you the last word. It would take too long to spell out my argument, and I don't think it would matter to you anyway. I hope that with time and maturity your views will change.

(Just so I don't offend any attractive women, I do want to clarify that I meant that women, attractive or not, who go after men ONLY for their money tend to have not much going for them other than their appearance. I did not mean that all attractive women are bobbleheads. I've known plenty of smart, attractive women and consider myself to be one as well.)

[TomTX]

Given your income, it's a nicely Mustachian lifestyle. Hopefully your surplus ~$250k/year is being well invested.


...and how do I get in on these $500k jobs?

[AJ41]

Ain't nothing wrong with balling on a budget. I actually like your post. I already do a couple things on the list like eat out at home, always pregaming at the crib, using your company to pay off the reserve, and using sky scanner.

Seems like your living good and the best part about it is you like what you do and you plan on continuing to do that and aren't worried about retiring anytime soon. That means you can have some fun with your money.


Congrats on making 500k at 29. Your definitely in the 1%. Im going to be joining you in a couple years.

[gliderpilot567]

"No plans to ever stop working".... cool, I thought that too when I was in my twenties. Check back in ten years and see if you still have the same priorities!

[undercover]

No offense, but I think focusing on any of these things at your income level is a complete waste of your time. You need to be creating your OWN game versus gaming some lackluster system that at this point is way beneath you.

Even if you saved/made an extra $25k a year with all of these hacks combined, there's no way that it's worth your sanity of dealing with people renting your car and renting/buying an expensive apartment to rent out rooms. Someone making under $100k? Sure. Airbnb is a great way to make extra money - but what the hell do you need extra money for at this point?

Definitely can't relate about the women thing. You definitely seem to fit into the "Wall Street Playboys" demographic. You know there are plenty of attractive, interesting women that could care less about tons of money? There's also plenty of attractive, charismatic men with $0 in their bank account that could pretty much sleep with anyone they wanted to.

[bojangle]

Given your income, it's a nicely Mustachian lifestyle. Hopefully your surplus ~$250k/year is being well invested.


...and how do I get in on these $500k jobs?

TomTX, I get to invest a lot of the money into my hedge fund, which has very high risk-adjusted rates of return. In fact, I worry a bit about diversification, but when you have access to these kind of vehicles it's hard to say no to the IRR (i.e., MMM looks for 4-5% in Vanguard funds, but good hedge funds or private equity funds can look at 10, 15, even 20% IRR yearly, though with obvious risk or liquidity drawbacks). Try comparing a 15% growth curve to a 4% and one of the key reasons to get into higher wealth brackets is the ability to tap into these sort of investment vehicles.

No offense, but I think focusing on any of these things at your income level is a complete waste of your time. You need to be creating your OWN game versus gaming some lackluster system that at this point is way beneath you.

Even if you saved/made an extra $25k a year with all of these hacks combined, there's no way that it's worth your sanity of dealing with people renting your car and renting/buying an expensive apartment to rent out rooms. Someone making under $100k? Sure. Airbnb is a great way to make extra money - but what the hell do you need extra money for at this point?

Definitely can't relate about the women thing. You definitely seem to fit into the "Wall Street Playboys" demographic. You know there are plenty of attractive, interesting women that could care less about tons of money? There's also plenty of attractive, charismatic men with $0 in their bank account that could pretty much sleep with anyone they wanted to.

It's a great point - any common sense would tell you to focus on the biggest levers to increase your wealth. Any further ideas on 'creating my own game'? Do you mean start my own business?

Historically, I followed MMM wisdom because I wasn't making $500k a year with $1M in the bank - in fact, I know a few people on my trajectory that haven't been disciplined that are making $500k and are seriously living hand to mouth. But whether I manage things to $45k or $55k doesn't move the needle like getting a better tax lawyer, for instance. I've started to reevaluate the most Moustachian things I do to figure out whether the time ROI makes sense, but on a cursory glance - it often does. If I ask myself whether I'd spend an hour to save $100-200 (which at my tax bracket means $200-300/hr in income), I almost always feel like it's worth it.

In general, on the wealth-building side, I think I'll stay for a few more years here (should be at ~$2M in 2 yrs) and then start a business.

On the expenses side, I'm thinking of kicking things up a notch. On the vacation home front, I befriended a few cool people with a ski house in Colorado that I now have an open invitation to (bring a bottle of wine or two). I started looking into more advanced areas like private jet travel - there are a few services like Victor that allow you to book empty legs of a jet, but cost is still a bit high at the moment.

As to your other point, I'm sure there are a few 6'+ guys who don't get laid and a few 5'1'' guys who date tall girls, but as a rule you can't say having height or money hurts.

First, it's almost universally acknowledged that most women tend to like men with more means or ambition. That applies especially for attractive women and to high-earning women. It's why I have trouble with MMM uber-frugality, because most women don't aspire to live like paupers (even MMM's own wife in that NYPost article had some snide comments). Second, it's a bit aggressive to assume that women liking men with means are all "gold diggers," essentially - they're free to like the drive or passion or other things that go along with the wealth. And third, if you had dated anybody hot, you'd know that not all attractive women are bobbleheads.

For the sake of keeping this on topic, I'll give you the last word. It would take too long to spell out my argument, and I don't think it would matter to you anyway. I hope that with time and maturity your views will change.

(Just so I don't offend any attractive women, I do want to clarify that I meant that women, attractive or not, who go after men ONLY for their money tend to have not much going for them other than their appearance. I did not mean that all attractive women are bobbleheads. I've known plenty of smart, attractive women and consider myself to be one as well.)

I think it was Augustine that said: "Give me wisdom, Lord - just not quite yet." : ) I know there are some non-money focused women out there. But there aren't many - MMM just self selects so it might feel like there are. Most beautiful or high-earning girls I know want a guy who's "ambitious" or "has a fun lifestyle." I know girls who make a lot and they all want men who make more (even if they're already in the 1%). I don't make the rules.

[Metric Mouse]

Nice. So women who don't care about expensive things aren't hot? Women who make their own six-figure income and don't care what their potential mate makes can't be hot? Even if you're not looking to settle down... do you like hanging out with women who want you for your money but not for who you really are? Have fun with the bobbleheads who can't hold a conversation to save their life. Why not just use your money to go to Vegas and get your fill of hookers? What's the difference? I've known several very, very rich men who get all the girls they want but are miserable because they never make any meaningful connection. (This is what they say, not my assumption.)

Wow.. this is pretty degrading to women...

[Mattzlaff]

I'm glad I get to read an entertaining post once in a while.

Seems to me you've come here to brag more than anything, but this isn't really the best forum to brag about how much you spend. You'll draw alittle bit of ire from some members.

You mention living with a mustachian policy but in another post you go off saying you'll buy a vacation home, you're filled with contradiction and there is way more to mustachianism and life than abusing your "friends" for their wealth or picking up a girl because of a lexus GS. Kicking up spending is kind of the opposite train of thought for a lot of people on this board.

Not sure if you came here for criticism but

1. even 500$ boots look ratty after a couple years no way with the way you put yourself out that you're wearing ratty boots out anywhere.
2. You spend an aweful lot of time trying to F people/businesses over when you could probably save the time and just cut your spending a little bit
3. You spend a lot on things your probably don't need (Ipads, flat screens, designer chairs). But you put yourself out there like you are trendy and hip so you have to spend to fit in.

You're 29, I'm a bit younger than you but I hope you're saving and investing a vast majority of your money.

But alas you're salary is better than mine by light years. You're doing fine!

[GoingConcern]

Obviously this post is one big humble brag if not out right bragging but I don't see anything wrong with it since there are varying degrees of mustachian lifestyles.

Keep up the good work.

[katscratch]

Obviously this post is one big humble brag if not out right bragging but I don't see anything wrong with it since there are varying degrees of mustachian lifestyles.

Keep up the good work.

Same. I actually think any choices that reduce consumerism and disposable crap are a good thing for anyone in our society. Good on you - you're still able to have the status-based lifestyle that you want while drawing inspiration from MMM to be a better steward of resources. I think it's not so much what you're spending on that doesn't resonate with a lot of readers as your overall worldview - I think the forums tend to attract participation from people closer to the other end of the minimalism<-->consumerpants spectrum.


It was fun to read your post, even though your views are very different from mine and your lifestyle is almost the direct opposite of what I have ever wanted in my life :)

[blahblahblah]

In attempt to add more good to this thread, it's not just Skyscanner you want, it's Skyscanner Inspire Map.  It's tough to find from the website (I still can't figure it out!) so I'll link it here https://www.skyscanner.net/inspire/map

You can find the cheapest time to go to a destination or the cheapest destinations at a certain time.  I like to then go to the airline Skyscanner directs me to and check the dates through direct booking to get any added perks that might come that way (priority seating, miles etc.)

[MaxP0wer]

So essentially, sell your soul to wall street and you can ball on a budget too.  All of this is possible because you're a hedge fund manager.  If you were a programmer or engineer making 100k in San Fran, none of this is possible.  You can travel, rent out rooms, buy cheap cars on CL, but you won't be ballin on the same level in a HCOL area.  Average condo cost is at least 1 mil, so you most likely put a huge chunk down if your annualy cost is "only" 26k even with airbnb income.   

Absolutely nothing wrong with the lifestyle, but definitely a brag thread more than anything.

[BallerOnABudget]

I thought this thread would be relevant to my interests. But then I read it.

[bojangle]

I want to make a general comment or two, and then get into some specific things people have mentioned.

This approach is more revolutionary than MMM. It's easy to see how to save money by denying yourself nearly everything - get rid of your car, move into your tiny house, wash your Ziploc bags, eat lentils. It's harder to see how to get everything you want without spending anything.

Uber-frugality can take the joy out of life - who here wants to live their life washing their lentil bags in their tiny house forever? What's the point of all this saving if you're not going to have any fun? But the bigger point is that it's also unnecessary - we all have a thing or two we really enjoy, and I'm suggesting you can have the coolest thing you want at MMM-levels of expenditure. My approach might seem outlandish when taken together, but I see so many threads talking about wanting to have a nice car or house or a dumb thing they want to splurge on. I say you should figure out what you want, and then figure out how to be clever about getting it rather than saying no.

And finally, I'm not here to brag. I'm here to get / share ideas on how to get stuff you want without spending much money. And I'm bit surprised by some of the negative attitudes by a few, considering how the wider MMM community talks about how normal folks would rather find reasons why something wouldn't work than to actually get smarter about spending.

So essentially, sell your soul to wall street and you can ball on a budget too.  All of this is possible because you're a hedge fund manager.  If you were a programmer or engineer making 100k in San Fran, none of this is possible.  You can travel, rent out rooms, buy cheap cars on CL, but you won't be ballin on the same level in a HCOL area.  Average condo cost is at least 1 mil, so you most likely put a huge chunk down if your annualy cost is "only" 26k even with airbnb income.   

Absolutely nothing wrong with the lifestyle, but definitely a brag thread more than anything.

You're wrong about this. No matter your income level, you can get things so that the annual cost is very low. You can drive an Audi A6 for $3k/year, so why drive a Corolla for $1k/year if you love cars? Though it helps, you don't even need up-front capital. I finance my cars, because the interest rates are so low it's basically free money. For an apartment, just rent then - no down payment, can still sublet second room to high income person, etc.

I'm glad I get to read an entertaining post once in a while.

Seems to me you've come here to brag more than anything, but this isn't really the best forum to brag about how much you spend. You'll draw alittle bit of ire from some members.

You mention living with a mustachian policy but in another post you go off saying you'll buy a vacation home, you're filled with contradiction and there is way more to mustachianism and life than abusing your "friends" for their wealth or picking up a girl because of a lexus GS. Kicking up spending is kind of the opposite train of thought for a lot of people on this board.

Not sure if you came here for criticism but

1. even 500$ boots look ratty after a couple years no way with the way you put yourself out that you're wearing ratty boots out anywhere.
2. You spend an aweful lot of time trying to F people/businesses over when you could probably save the time and just cut your spending a little bit
3. You spend a lot on things your probably don't need (Ipads, flat screens, designer chairs). But you put yourself out there like you are trendy and hip so you have to spend to fit in.

You're 29, I'm a bit younger than you but I hope you're saving and investing a vast majority of your money.

But alas you're salary is better than mine by light years. You're doing fine!

Some interesting points in here. On the first point, you can definitely wear a good pair of boots for a decade+. I'm doing it right now - the key is buying quality and proper maintenance (regular resoling and proper leather care). On the second, I'm not screwing people over. When you transact, unless you're doing it by force the other person is agreeing to give you something in exchange for money - who here negotiates against themselves to pay more?

In attempt to add more good to this thread, it's not just Skyscanner you want, it's Skyscanner Inspire Map.  It's tough to find from the website (I still can't figure it out!) so I'll link it here https://www.skyscanner.net/inspire/map

You can find the cheapest time to go to a destination or the cheapest destinations at a certain time.  I like to then go to the airline Skyscanner directs me to and check the dates through direct booking to get any added perks that might come that way (priority seating, miles etc.)

This is awesome - both the tool and the suggestion to go book direct for added perks. I feel like travel is an area where I could optimize a lot more - any other tips welcome!

I thought this thread would be relevant to my interests. But then I read it.

Actually thought this was pretty funny. But how else are you balling on a budget, then?

[Guses]

.... but good hedge funds or private equity funds can look at 10, 15, even 20% IRR yearly, though with obvious risk or liquidity drawbacks).

LOL

I don't buy what you are selling.

[bojangle]

.... but good hedge funds or private equity funds can look at 10, 15, even 20% IRR yearly, though with obvious risk or liquidity drawbacks).

LOL

I don't buy what you are selling.

Pretty easy to look up.

For hedge funds: depending on the strategy, median 3-year annualized is around 8%, top quartile around 11%.
https://www.preqin.com/docs/samples/2016-Preqin-Global-Hedge-Fund-Report-Sample-Pages.pdf [P13]

For private equity: median was 14%, top quartile 23%
https://www.preqin.com/docs/reports/2016-Preqin-Global-Private-Equity-and-Venture-Capital-Report-Sample_Pages.pdf [P34]

I don't even want to tell you what top, top funds look like or your head would explode.

[NESailor]

You're wrong about this. No matter your income level, you can get things so that the annual cost is very low. You can drive an Audi A6 for $3k/year, so why drive a Corolla for $1k/year if you love cars? Though it helps, you don't even need up-front capital. I finance my cars, because the interest rates are so low it's basically free money. For an apartment, just rent then - no down payment, can still sublet second room to high income person, etc.

First of all - thanks for sharing.  You have a different perspective and different goals from most folks on here and that's OK.  I thought I wanted a life like yours when I was in college but that's not where I ended up.  No worries, I'm quite happy now even without an avenue to do the things you're describing.  2 acres, 2 kids, 2 cars, lots of toys and a very relaxed schedule - but nowhere near as wealthy as you are.  No worries, though, since I don't actually care about many of the things you mention.

Which brings me to the part I quoted.  Actually, the 2K difference between an A6 and a Corolla is quite significant for some of us poorer Mustachians.  Imagine a family with a household income of 100K pre-tax.  Not uncommon on here.  We're talking a 2% of gross income difference for exactly the same utility.   I like nice cars but I don't like them enough to give up that much in savings for a nicer one.  I don't feel deprived.  I get more joy out of other things and the thought of eventually FIRE-ing than I would out of driving around in a nicer vehicle.  The 2 kids figure into this as well.  My car is a pig sty :D.  It wouldn't feel right to do the things I do to my Civic to a premium car.

Anyway, I appreciate the freshness of your post and I'll check out skyscanner.  We still travel abroad even with the kids and gear so this one is relatable.

[BallerOnABudget]

I thought this thread would be relevant to my interests. But then I read it.

Actually thought this was pretty funny. But how else are you balling on a budget, then?

Ha, I guess I could actually contribute :) Hmm...for me personally, I like to have nice-ish clothing, so I buy things out of season, when they're on clearance, at outlets, etc. Clothing should never just be bought at full price off the rack. I also enjoy watching movies and shows (which kinda runs counter to the average lifestyle here), and I have a brother in law who is a huge tech geek, so when he upgrades, I swoop in and buy up his leftovers. My gear may be a few years older, but it's still nice. And when it comes to food, I can't do the ultra frugal rice and beans stuff. I like actual food. I love to smoke and grill meats. So my compromise to keep a reasonable budget is to plan deliberate meals. Be mindful of what can be re-used for the next day's lunch or re-purposed into another meal (leftover brisket makes great sandwiches, roasted turkey can become turkey soup, etc).

Your post did come off a bit braggy (hey look, I'm young and make three metric buttloads of money and live like a boss but still cut corners on my baller lifestyle to save money!) but there is still a good point in there about not always having to make extreme lifestyle sacrifice in the pursuit of FI.

[Guses]

.... but good hedge funds or private equity funds can look at 10, 15, even 20% IRR yearly, though with obvious risk or liquidity drawbacks).

LOL

I don't buy what you are selling.

Pretty easy to look up.

For hedge funds: depending on the strategy, median 3-year annualized is around 8%, top quartile around 11%.
https://www.preqin.com/docs/samples/2016-Preqin-Global-Hedge-Fund-Report-Sample-Pages.pdf [P13]

For private equity: median was 14%, top quartile 23%
https://www.preqin.com/docs/reports/2016-Preqin-Global-Private-Equity-and-Venture-Capital-Report-Sample_Pages.pdf [P34]

I don't even want to tell you what top, top funds look like or your head would explode.

Yeah, it's real easy, you just have to pick the fund that will outperform the others. It's always the same one right?

If you believe what you are saying, you would probably double down and borrow as much cash as you could to get those returns. Heck, with 20% IRR, you can almost borrow on a credit card and make it worth it. You will be a billionaire in no time. You essentially double your money every 4 years.

 

[MaxP0wer]

So essentially, sell your soul to wall street and you can ball on a budget too.  All of this is possible because you're a hedge fund manager.  If you were a programmer or engineer making 100k in San Fran, none of this is possible.  You can travel, rent out rooms, buy cheap cars on CL, but you won't be ballin on the same level in a HCOL area.  Average condo cost is at least 1 mil, so you most likely put a huge chunk down if your annualy cost is "only" 26k even with airbnb income.   

Absolutely nothing wrong with the lifestyle, but definitely a brag thread more than anything.

You're wrong about this. No matter your income level, you can get things so that the annual cost is very low. You can drive an Audi A6 for $3k/year, so why drive a Corolla for $1k/year if you love cars? Though it helps, you don't even need up-front capital. I finance my cars, because the interest rates are so low it's basically free money. For an apartment, just rent then - no down payment, can still sublet second room to high income person, etc.

Of course, you can finance anything long enough to make payments low enough.  All this stuff is easy to spout when you have over a mil in the bank and make 500k/year.  99% of this forum is not in that category.  I love cars, I love nice houses, I love nice things, but even I know the reality of the numbers.  And your market gains are only attainable to the wealthy.  Your average person cannot invest 10k into a hedge fund to get your 15-20% returns.

[bojangle]

You're wrong about this. No matter your income level, you can get things so that the annual cost is very low. You can drive an Audi A6 for $3k/year, so why drive a Corolla for $1k/year if you love cars? Though it helps, you don't even need up-front capital. I finance my cars, because the interest rates are so low it's basically free money. For an apartment, just rent then - no down payment, can still sublet second room to high income person, etc.

First of all - thanks for sharing.  You have a different perspective and different goals from most folks on here and that's OK.  I thought I wanted a life like yours when I was in college but that's not where I ended up.  No worries, I'm quite happy now even without an avenue to do the things you're describing.  2 acres, 2 kids, 2 cars, lots of toys and a very relaxed schedule - but nowhere near as wealthy as you are.  No worries, though, since I don't actually care about many of the things you mention.

Which brings me to the part I quoted.  Actually, the 2K difference between an A6 and a Corolla is quite significant for some of us poorer Mustachians.  Imagine a family with a household income of 100K pre-tax.  Not uncommon on here.  We're talking a 2% of gross income difference for exactly the same utility.   I like nice cars but I don't like them enough to give up that much in savings for a nicer one.  I don't feel deprived.  I get more joy out of other things and the thought of eventually FIRE-ing than I would out of driving around in a nicer vehicle.  The 2 kids figure into this as well.  My car is a pig sty :D.  It wouldn't feel right to do the things I do to my Civic to a premium car.

Anyway, I appreciate the freshness of your post and I'll check out skyscanner.  We still travel abroad even with the kids and gear so this one is relatable.

It's a fair point -I get that there's a range of appetite or drive to 'trade up.' If you really don't prefer driving a nice car over a Civic, then more power to you. But I was using that to illustrate a point - I actually drove that A6 almost for free, selling it for what I bought it for. I drove it for the cost of insurance and gas.  But beyond that, you may not want to go for an A6, but rather a nice mid-range car. If it's really important to you, open your eyes to possibilities.

.... but good hedge funds or private equity funds can look at 10, 15, even 20% IRR yearly, though with obvious risk or liquidity drawbacks).

LOL

I don't buy what you are selling.

Pretty easy to look up.

For hedge funds: depending on the strategy, median 3-year annualized is around 8%, top quartile around 11%.
https://www.preqin.com/docs/samples/2016-Preqin-Global-Hedge-Fund-Report-Sample-Pages.pdf [P13]

For private equity: median was 14%, top quartile 23%
https://www.preqin.com/docs/reports/2016-Preqin-Global-Private-Equity-and-Venture-Capital-Report-Sample_Pages.pdf [P34]

I don't even want to tell you what top, top funds look like or your head would explode.

Yeah, it's real easy, you just have to pick the fund that will outperform the others. It's always the same one right?

If you believe what you are saying, you would probably double down and borrow as much cash as you could to get those returns. Heck, with 20% IRR, you can almost borrow on a credit card and make it worth it. You will be a billionaire in no time. You essentially double your money every 4 years.

.

Not sure where all the negativity is coming from, Guses. You doubted my numbers and I showed you the facts. And as to the 'same one,' point, there is some persistence of returns - good people are likely to continue outperforming. And FWIW, I have borrowed to invest, but usually you're capped at some point (the firm doesn't need you to go talk to banks to bring in more money, it can do that itself).

 

I thought this thread would be relevant to my interests. But then I read it.

Actually thought this was pretty funny. But how else are you balling on a budget, then?

Ha, I guess I could actually contribute :) Hmm...for me personally, I like to have nice-ish clothing, so I buy things out of season, when they're on clearance, at outlets, etc. Clothing should never just be bought at full price off the rack. I also enjoy watching movies and shows (which kinda runs counter to the average lifestyle here), and I have a brother in law who is a huge tech geek, so when he upgrades, I swoop in and buy up his leftovers. My gear may be a few years older, but it's still nice. And when it comes to food, I can't do the ultra frugal rice and beans stuff. I like actual food. I love to smoke and grill meats. So my compromise to keep a reasonable budget is to plan deliberate meals. Be mindful of what can be re-used for the next day's lunch or re-purposed into another meal (leftover brisket makes great sandwiches, roasted turkey can become turkey soup, etc).

Your post did come off a bit braggy (hey look, I'm young and make three metric buttloads of money and live like a boss but still cut corners on my baller lifestyle to save money!) but there is still a good point in there about not always having to make extreme lifestyle sacrifice in the pursuit of FI.

Two great tips here: talking to a tech geek friend about picking up older equipment - they're usually cycling through, always playing with newer stuff. And I'm guilty of not cooking as much as I should - I rely on Soylent and meals out (paid for by work), but makes it a bit boring on weekends.

[bojangle]

So essentially, sell your soul to wall street and you can ball on a budget too.  All of this is possible because you're a hedge fund manager.  If you were a programmer or engineer making 100k in San Fran, none of this is possible.  You can travel, rent out rooms, buy cheap cars on CL, but you won't be ballin on the same level in a HCOL area.  Average condo cost is at least 1 mil, so you most likely put a huge chunk down if your annualy cost is "only" 26k even with airbnb income.   

Absolutely nothing wrong with the lifestyle, but definitely a brag thread more than anything.

You're wrong about this. No matter your income level, you can get things so that the annual cost is very low. You can drive an Audi A6 for $3k/year, so why drive a Corolla for $1k/year if you love cars? Though it helps, you don't even need up-front capital. I finance my cars, because the interest rates are so low it's basically free money. For an apartment, just rent then - no down payment, can still sublet second room to high income person, etc.

Of course, you can finance anything long enough to make payments low enough.  All this stuff is easy to spout when you have over a mil in the bank and make 500k/year.  99% of this forum is not in that category.  I love cars, I love nice houses, I love nice things, but even I know the reality of the numbers.  And your market gains are only attainable to the wealthy.  Your average person cannot invest 10k into a hedge fund to get your 15-20% returns.

Forget about the market gains - I actually agree with you here. I probably wouldn't have access to most of these things if I didn't actually work for a fund.

But you're missing the point - it has very little to do with the amount of income and wealth. You may not be able to wheel and deal across categories or for stuff that's quite as nice, but you can pick one or two and still get something awesome.

Take the car for example. A new Audi A6 MSRP is $47k. I bought a version that was 5 years old with a few dings and an interior that smelled heavily of smoke from a private buyer who was desperate to get a new car - for $16k. I got rid of the smoke smell, drove it for 2 years and sold for $16k to another private buyer. You may not want to outlay $16k - then pick a cheaper car that fits your budget! Don't want to do this for a car, do this for a road bike, a vacation, etc. Point is that this approach works any time you don't want the uber-frugal option, you want something fun but don't want to pay much extra. Scale up or down as you want.

[Guses]

Not sure where all the negativity is coming from, Guses. You doubted my numbers and I showed you the facts. And as to the 'same one,' point, there is some persistence of returns - good people are likely to continue outperforming. And FWIW, I have borrowed to invest, but usually you're capped at some point (the firm doesn't need you to go talk to banks to bring in more money, it can do that itself).

What you showed me is a report aggregating performance from the top performing funds over a given time period (i.e., cherry picked with the bad performing and dying funds removed).

I am not disagreeing that SOME funds can return 20% SOME years. Claiming consistent 15-20% return is laughable (LOL).


https://blogs.cfainstitute.org/investor/2016/02/24/hedge-funds-what-are-they-good-for/

or the book quoted in the blogpost for more.

[Khaetra]

but there is still a good point in there about not always having to make extreme lifestyle sacrifice in the pursuit of FI.

I agree with this point.  I have always been frugal (not cheap) and that enabled me to FI/RE, but I wouldn't go as far as eating rice and beans every meal or giving up everything I enjoy just to get there.  I do make menus and shop around what's on sale, stock up when the price is right and eat pretty darn well.  I also like to travel, but I don't fly (medically can't) so I road trip, which enables me to fill the cooler and save a bunch by not eating out.  I like to read a lot, so my library card comes in handy.  I also watch TV and pay for satellite and also for Sirius, very un-MMM but I budget for it by not spending money on other things, like eating out (I was a chef, I can cook), buying coffees out, etc.  It's a balance and one I am happy with.

[south of 61]

Posting to get in early, this thread may end up just like the Beatles, and I don't wanna miss out ;)

[Turnbull]

(i.e., MMM looks for 4-5% in Vanguard funds, but good hedge funds or private equity funds can look at 10, 15, even 20% IRR yearly, though with obvious risk or liquidity drawbacks).

We're all being trolled but I guess I'll bite. Where does MMM say he "looks for 4-5% in Vanguard funds?"

[aceyou]

Hi Bojangle, welcome to the forum and congrats on doing such a great job at such a young age. 

Even though I live far more like some of your critics on here, I don't see any problem with your lifestyle.  Your savings rate has gotta be ridiculously low, and you are conscientiously spending your money on things that you value.  Now, the things that you value are different than what the majority of us value (myself included), but that's not really the point is it.  You think about how you spend your money and align it to YOUR values. 

It's important for us all to consider that we are kind of splitting hairs at this point, because in the grand scheme of things, spending 25k/year is really qualitatively the same thing as 100k from the point of view of 90% of the worlds population.  I mean, a billion are living off a dollar/day.  For them, 25k and 100k are both exactly the same...they're just unimaginably enormous sums of money. 

A Mustachian spending 25k looks way more spendy to those billion people than you do to us Mustachians.

That said, I would encourage you to at least screen out super anti-mustachian's when dating, even if they are fun/hot/etc.    Not because you can't afford them, but because their values may not jive with yours long term.  So just like you won't settle for a "normal" corolla when a sweet audi is out there, it might be worth your time to find a hot girl who shares your values.  Don't seek out a frugal/non-materialistic (but still beautiful:) girl because of finances, do it because as you grow together over the years, and as you watch her as a mother teaching your son/daughter life lessons, you'll say "damn that woman's amazing...and she's smoking hot to boot!!!". 

[bacchi]

.... but good hedge funds or private equity funds can look at 10, 15, even 20% IRR yearly, though with obvious risk or liquidity drawbacks).

LOL

I don't buy what you are selling.

Pretty easy to look up.

For hedge funds: depending on the strategy, median 3-year annualized is around 8%, top quartile around 11%.
https://www.preqin.com/docs/samples/2016-Preqin-Global-Hedge-Fund-Report-Sample-Pages.pdf [P13]

For private equity: median was 14%, top quartile 23%
https://www.preqin.com/docs/reports/2016-Preqin-Global-Private-Equity-and-Venture-Capital-Report-Sample_Pages.pdf [P34]

I don't even want to tell you what top, top funds look like or your head would explode.

Eh. The S&P returned 9.5% over 3 years annualized (with dividends reinvestd). It returned 20% last year (with dividends reinvested). I can't tell if those hedge returns are before or after performance fees, either.

Not impressed.

[bojangle]

Hi Bojangle, welcome to the forum and congrats on doing such a great job at such a young age. 

Even though I live far more like some of your critics on here, I don't see any problem with your lifestyle.  Your savings rate has gotta be ridiculously low, and you are conscientiously spending your money on things that you value.  Now, the things that you value are different than what the majority of us value (myself included), but that's not really the point is it.  You think about how you spend your money and align it to YOUR values. 

It's important for us all to consider that we are kind of splitting hairs at this point, because in the grand scheme of things, spending 25k/year is really qualitatively the same thing as 100k from the point of view of 90% of the worlds population.  I mean, a billion are living off a dollar/day.  For them, 25k and 100k are both exactly the same...they're just unimaginably enormous sums of money. 

A Mustachian spending 25k looks way more spendy to those billion people than you do to us Mustachians.

That said, I would encourage you to at least screen out super anti-mustachian's when dating, even if they are fun/hot/etc.    Not because you can't afford them, but because their values may not jive with yours long term.  So just like you won't settle for a "normal" corolla when a sweet audi is out there, it might be worth your time to find a hot girl who shares your values.  Don't seek out a frugal/non-materialistic (but still beautiful:) girl because of finances, do it because as you grow together over the years, and as you watch her as a mother teaching your son/daughter life lessons, you'll say "damn that woman's amazing...and she's smoking hot to boot!!!".

Love this take. And great advice on the dating - I do think shared values in long term relationships are huge, and particularly around money. Disagreements about money are the #1 cause of divorce in this country. I also think my approach allows more leeway with a lot of women, most of whom may be varying degrees of sensible about frugality but usually not fanatical. All the better when you can do it without endangering FI. But your bigger point stands - make sure you're both clear on what you want out of life.

(i.e., MMM looks for 4-5% in Vanguard funds, but good hedge funds or private equity funds can look at 10, 15, even 20% IRR yearly, though with obvious risk or liquidity drawbacks).

We're all being trolled but I guess I'll bite. Where does MMM say he "looks for 4-5% in Vanguard funds?"

Now I think I'm being trolled. You're kidding, right?

http://www.mrmoneymustache.com/affiliates/
http://www.mrmoneymustache.com/2016/02/29/what-to-do-about-this-scary-stock-market/
http://www.mrmoneymustache.com/betterment-vs-vanguard/
http://www.mrmoneymustache.com/2012/05/29/how-much-do-i-need-for-retirement/

.... but good hedge funds or private equity funds can look at 10, 15, even 20% IRR yearly, though with obvious risk or liquidity drawbacks).

LOL

I don't buy what you are selling.

Pretty easy to look up.

For hedge funds: depending on the strategy, median 3-year annualized is around 8%, top quartile around 11%.
https://www.preqin.com/docs/samples/2016-Preqin-Global-Hedge-Fund-Report-Sample-Pages.pdf [P13]

For private equity: median was 14%, top quartile 23%
https://www.preqin.com/docs/reports/2016-Preqin-Global-Private-Equity-and-Venture-Capital-Report-Sample_Pages.pdf [P34]

I don't even want to tell you what top, top funds look like or your head would explode.

Eh. The S&P returned 9.5% over 3 years annualized (with dividends reinvestd). It returned 20% last year (with dividends reinvested). I can't tell if those hedge returns are before or after performance fees, either.

Not impressed.

I'd love to put this market returns topic to bed, since it's not central to my point and not helpful to the vast majority of Mustachians who don't have access to these anyway. Suffice it to say that there are many places to get higher risk-adjusted returns than normal equities. S&P has had a great run lately - hedge funds and private equity offer a very different risk profile (and measurably better growth, especially at top firms). Unless you believe that the world's top money mangers are complete morons, there's not another good explanation for why there are trillions of dollars of value in these places.

but there is still a good point in there about not always having to make extreme lifestyle sacrifice in the pursuit of FI.

I agree with this point.  I have always been frugal (not cheap) and that enabled me to FI/RE, but I wouldn't go as far as eating rice and beans every meal or giving up everything I enjoy just to get there.  I do make menus and shop around what's on sale, stock up when the price is right and eat pretty darn well.  I also like to travel, but I don't fly (medically can't) so I road trip, which enables me to fill the cooler and save a bunch by not eating out.  I like to read a lot, so my library card comes in handy.  I also watch TV and pay for satellite and also for Sirius, very un-MMM but I budget for it by not spending money on other things, like eating out (I was a chef, I can cook), buying coffees out, etc.  It's a balance and one I am happy with.

All about finding a balance between saving for FI and living the life you want!

I know a lot of MMM readers have library cards, but I find library selections to be very lacking. Has anyone had experience with other book alternatives? Oyster used to be a Netflix for books but it shut down, and Amazon's borrowing program isn't particularly great.

[bacchi]

We're all being trolled but I guess I'll bite. Where does MMM say he "looks for 4-5% in Vanguard funds?"

Now I think I'm being trolled. You're kidding, right?

Sure you're not confusing the Trinity SWR with fund returns?

[bojangle]

OP Congrats on living a low cost lifestyle on such a high income and savings. While, as others have said, it wouldn't be my lifestyle choice at all iif you're enjoying it and living so far below your means then kudos to you.

My only question us about dating/women. I live down in VERY materialistic Orange County - land of the fabulous, wealthy and beautiful - and most of my women friends who only date high earning/high asset men don't date them because they are high earning/high asset, they date them because they are high spenders...and expect them to spend very high...on them. They wouldn't date a mustashian guy regardless of his income unless he spent laviously on dates and gifts (really they are that shallow and self absorbed). So how long before a woman you're dating gets wind of the fact that you're wining and dining her at home for little money but spending zero on her while out? I can't imagine that kind of woman wouldn't stick around very long once she realized you rarely open the wallet. Of course that might be exactly what you want ;-)

Good question - I'll tell you a few things I do, but I'm interested in hearing what other people have to say

- I frame myself as a mostly down-to-earth guy, which despite my spending I am and people believe, because it's all relative, and relative to folks like this I'm not actually that big a spender
- I rarely go on big dinner dates and I rarely buy gifts, I do drinks for a few dates first, proceeding as quickly as possible (obv) to home where I can bring out my $20/bottle wine (always with a great story on the wine). Sometimes I'll take them out for cheap burgers and beers - sometimes girls who've been on nonstop dates at the trendiest cocktail bars like this
- My game is pretty good, so I don't have to (and hate) relying on buying gifts or expensive experiences
- I do have limits - some girls probably won't date me because I wouldn't "put out" financially, but then I'm less interested in girls who expect that (and from outside appearances, I'm a pretty serious spender, so only a minority of girls fall into this category).

[Turnbull]

(i.e., MMM looks for 4-5% in Vanguard funds, but good hedge funds or private equity funds can look at 10, 15, even 20% IRR yearly, though with obvious risk or liquidity drawbacks).

We're all being trolled but I guess I'll bite. Where does MMM say he "looks for 4-5% in Vanguard funds?"

Now I think I'm being trolled. You're kidding, right?

http://www.mrmoneymustache.com/affiliates/
http://www.mrmoneymustache.com/2016/02/29/what-to-do-about-this-scary-stock-market/
http://www.mrmoneymustache.com/betterment-vs-vanguard/
http://www.mrmoneymustache.com/2012/05/29/how-much-do-i-need-for-retirement/

Surely a ballin', $500k earning, hedge fund managing, hot women dating, luxury car driving, globetrotting, system gaming stud like you knows the difference in total return of an investment and the safe withdrawal rate of said investment.

[bojangle]

(i.e., MMM looks for 4-5% in Vanguard funds, but good hedge funds or private equity funds can look at 10, 15, even 20% IRR yearly, though with obvious risk or liquidity drawbacks).

We're all being trolled but I guess I'll bite. Where does MMM say he "looks for 4-5% in Vanguard funds?"

Now I think I'm being trolled. You're kidding, right?

http://www.mrmoneymustache.com/affiliates/
http://www.mrmoneymustache.com/2016/02/29/what-to-do-about-this-scary-stock-market/
http://www.mrmoneymustache.com/betterment-vs-vanguard/
http://www.mrmoneymustache.com/2012/05/29/how-much-do-i-need-for-retirement/

Surely a ballin', $500k earning, hedge fund managing, hot women dating, luxury car driving, globetrotting, system gaming stud like you knows the difference in total return of an investment and the safe withdrawal rate of said investment.

I made a mistake - I should've said MMM's looking for a minimum of 4-5% from his Vanguard funds. I do get the difference between return and SWR.

But the good news is that it doesn't take a ballin', $500k earning, hedge fund managing stud to look on Google for the mountain of proof that other asset classes have better risk-adjusted rates of return than public equities, and that the IRR's I claimed are not only real but not that crazy.

[Turnbull]

I'm done here. The rest of you can keep rising to the bait.

[bojangle]

I'm done here. The rest of you can keep rising to the bait.

Just as well, dude. I think people'd be more interested in constructive ways to get nice stuff for cheap than somebody constantly needling on a moot point.

[bacchi]

Link to blog in 5..4..3..

[nemesis]

This concept of balling is interesting.  I've made over $100k per year for the last 20 years or so, and I don't live in an expensive part of the country.  I've never thought about "balling".  My philosophy is to live life well, spend wisely, and bank the rest. Have quality friends, relationships, and enjoy the little things in life.  I would never rent out my vehicles or my home, my sanctuary and privacy is very important to me.

To each their own.  I guess if it makes you happy that's all that matters.