Author Topic: Do you look at potential expenses in terms of time it would buy you?  (Read 3544 times)

Villanelle

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Since we moved to Europe, we are traveling a lot.  While our trips are organized with budget in mind (going places off-season, staying in cheap hotels or apartments, traveling based on airfare specials, etc.), as far as number of trips, we are sparing no expense.  It's important to us to take advantage of our time here, and after a brutal few years prior to this, we want some enjoyment and adventure.

But I can't help but think that the trip to Morocco, for example, probably could have bought us 2-3 months of retirement once if had compounded for a decade+.  And that makes me a little crazy.  I don't feel bad about the expenses, exactly, but when I look at it like that, I do feel a little conflicted. 

Anyone else do this? 

mlipps

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Re: Do you look at potential expenses in terms of time it would buy you?
« Reply #1 on: July 31, 2013, 09:16:57 AM »
To me, that's literally the entire point of Mustachianism. Every dollar you spend today is costing you time in the future. I don't do the precise math every time, but it's at the forefront of every major decision.

Albert

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Re: Do you look at potential expenses in terms of time it would buy you?
« Reply #2 on: July 31, 2013, 09:29:03 AM »
You would get to retirement faster by living in a van, never traveling for pleasure and never eating out. I wouldn't however advise it to anyone. There should be a balance of saving for future and living a nice life today. Don't be conflicted about enjoying life you have now. I assume you are not doing it on credit and have savings as well...

This coming from a guy who loves to travel and spends 3-5 weeks and ca 5k a year on it. I couldn't care less how many months of retirement it would buy me.

rubybeth

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Re: Do you look at potential expenses in terms of time it would buy you?
« Reply #3 on: July 31, 2013, 09:33:19 AM »
Eh, I love to travel, as well, and I just don't think you can look at it like this. Yes, the cost of a trip might have bought you more FI time, but I don't think you can put a price on memories like trips or other amazing experiences (note I said 'experiences' not 'things'). Also, there's no guarantee that you'll be able-bodied enough to do these kinds of trips in the future. You have to strike a balance between enjoying life now and making memories that you'll enjoy forever vs. being the absolute extreme of frugal.
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olivia

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Re: Do you look at potential expenses in terms of time it would buy you?
« Reply #4 on: July 31, 2013, 09:52:39 AM »
Eh, I love to travel, as well, and I just don't think you can look at it like this. Yes, the cost of a trip might have bought you more FI time, but I don't think you can put a price on memories like trips or other amazing experiences (note I said 'experiences' not 'things'). Also, there's no guarantee that you'll be able-bodied enough to do these kinds of trips in the future. You have to strike a balance between enjoying life now and making memories that you'll enjoy forever vs. being the absolute extreme of frugal.

Ditto this.   Travel is one thing I don't plan on changing at all.  I already am pretty frugal when I travel, so I don't have a ton of room for improvement in that category.  Comes from going over to Europe pretty regularly back in college when plane tickets were cheap, and I would backpack around and stay in hostels.  My tolerance for hostels is almost entirely gone, but I swill always stay in pensions vs. the Ritz-Carlton Madrid.
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daverobev

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Re: Do you look at potential expenses in terms of time it would buy you?
« Reply #5 on: July 31, 2013, 10:20:33 AM »
Question really is, are you on track to meet your goals? If you are - and the travelling isn't infringing on that - then spend away.

If you have a 15 year plan and the travelling is making it a 25 year plan then.. well...
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GuitarStv

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Re: Do you look at potential expenses in terms of time it would buy you?
« Reply #6 on: July 31, 2013, 10:25:33 AM »
Not really.  I often spend vast amounts of time doing things that are kinda fun that will only save me a little money . . . renovating my basement, fixing my own bike, cycling rather than driving, etc.

Time isn't money.  Money is freedom to choose what you want to spend your time on.

brand new stash

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Re: Do you look at potential expenses in terms of time it would buy you?
« Reply #7 on: July 31, 2013, 10:30:28 AM »
Yes, I think about every major expense in terms of how it delays retirement.  That doesn't mean that I don't spend.  I often find myself saying, "yes, this is worth it, even though it will delay retirement by 2 months" or the like.  But I think the key to mustachianism is understand that you are making that trade off.   But if you understand the trade off, you can pick whichever one you find more appealing.

arebelspy

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Re: Do you look at potential expenses in terms of time it would buy you?
« Reply #8 on: July 31, 2013, 10:37:15 AM »
No.

I believe it's a concept that helps most people that are just beginning their financial journey (and stumbled across MMM or YMOYL or something), but it stops being useful once spending is optimized.  Then you just enjoy life.

I have no idea how long it took me to earn the money for my recent vacation to Seattle, nor do I care.  It was worth it.  (And it was done in an optimized way, finding a cheap flight, staying with family instead of fancy hotel, etc., so I don't have to make that calculation - I know that it was worth it.)
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AJ

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Re: Do you look at potential expenses in terms of time it would buy you?
« Reply #9 on: July 31, 2013, 11:41:52 AM »
Yes, I think about every major expense in terms of how it delays retirement.  That doesn't mean that I don't spend.  I often find myself saying, "yes, this is worth it, even though it will delay retirement by 2 months" or the like.  But I think the key to mustachianism is understand that you are making that trade off.   But if you understand the trade off, you can pick whichever one you find more appealing.

This. I find the "you can't put a price on memories" and "travel is always worth it" stuff bullshit. We do travel (we're going to Iceland in a few months, so excited!) but it is a luxury we want and can afford. I wouldn't try to defend the choice by saying you need to spend money to be happy in the present. There are plenty of ways to make fond memories without traveling.

That doesn't mean you shouldn't do it, but it is important to know what you're trading for it. My trip to Iceland will delay my retirement about 2 weeks. That is obviously worth it to me. If it were 2 years it would not be worth it. There is only upside to knowing (whether explicitly or intuitively) what opportunity costs you're exchanging for any major purchase.

rubybeth

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Re: Do you look at potential expenses in terms of time it would buy you?
« Reply #10 on: July 31, 2013, 12:35:28 PM »
Yes, I think about every major expense in terms of how it delays retirement.  That doesn't mean that I don't spend.  I often find myself saying, "yes, this is worth it, even though it will delay retirement by 2 months" or the like.  But I think the key to mustachianism is understand that you are making that trade off.   But if you understand the trade off, you can pick whichever one you find more appealing.

This. I find the "you can't put a price on memories" and "travel is always worth it" stuff bullshit. We do travel (we're going to Iceland in a few months, so excited!) but it is a luxury we want and can afford. I wouldn't try to defend the choice by saying you need to spend money to be happy in the present. There are plenty of ways to make fond memories without traveling.

That doesn't mean you shouldn't do it, but it is important to know what you're trading for it. My trip to Iceland will delay my retirement about 2 weeks. That is obviously worth it to me. If it were 2 years it would not be worth it. There is only upside to knowing (whether explicitly or intuitively) what opportunity costs you're exchanging for any major purchase.

Since I'm the one who wrote "you can't put a price on memories," I feel compelled to respond to this statement that what I wrote "bullshit." Did you read the rest of my post? I did not say travel is always worth it. I was pretty much saying exactly what you wrote. Of course it's a trade off and I'm sure OP understands this, as s/he seemed to be asking if others think of these things in terms of trade offs. But some things are really a once in a lifetime opportunity (like the OP living in Europe and being able to travel, I imagine, much more cheaply to places than they were able to before or ever will have the opportunity to again if they live somewhere else post FI) and so the true "cost" is tougher to compute. If they tried to make a trip to Morocco in 10 years, it may be impossible  due to their current location, age, health, cost, etc.

Eh, I love to travel, as well, and I just don't think you can look at it like this. Yes, the cost of a trip might have bought you more FI time, but I don't think you can put a price on memories like trips or other amazing experiences (note I said 'experiences' not 'things'). Also, there's no guarantee that you'll be able-bodied enough to do these kinds of trips in the future. You have to strike a balance between enjoying life now and making memories that you'll enjoy forever vs. being the absolute extreme of frugal.
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StarswirlTheMustached

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Re: Do you look at potential expenses in terms of time it would buy you?
« Reply #11 on: July 31, 2013, 01:31:14 PM »
You would get to retirement faster by living in a van
down by the river, eating government cheese!

Actually, what's wrong with that? You could build a Tiny House into a van, and be happy as a clam... it's all about priorities. I'm probably a freak on this board, because travel isn't one of mine. I'm a homebody. I like to put down roots and not stray from them. When we got a dog, everyone was pointing out how much more difficult it would make travelling, and I could only say: "I know! Isn't it great?"

But the point is to satisfy values through friendship and ponies through carefully considered spending. If you stop to consider it and decide that travel satisfies your values, then travel! If not, don't. I'm not saying that's easy, but I do think you can put a price on it.

CanuckStache

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Re: Do you look at potential expenses in terms of time it would buy you?
« Reply #12 on: July 31, 2013, 01:40:08 PM »
I say travel all you want, but do it on the cheap where possible. Air bnb instead of hotels, cheap European airlines like Ryanair, self cater instead of eating out every night etc. I've been to about 80 countries and don't regret a moment. Save what you're comfortable with, but you only live once. Experiencing different cultures and parts of the world is something that's had a profound impact on how I live my life, so I strongly advocate it. Also depending on where you go, it could be cheaper than living certain places. I could spend a month in Indonesia, living very well, for less than what I pay in rent.

AJ

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Re: Do you look at potential expenses in terms of time it would buy you?
« Reply #13 on: July 31, 2013, 02:18:09 PM »
Did you read the rest of my post? I did not say travel is always worth it.

I wasn't responding to your post, I was responding to your statement that "you can't put a price on memories" - that is why I quoted only that part. It wasn't a jab on you specifically, but on the idea you espoused. That is why I quoted the line I disagreed with and not the whole paragraph. You are also not the only person that has offered the sentiment, and I was responding to the repeated refrain, not to you in particular.

However, as long as you bring it up, the dichotomy you present between "enjoying life now and making memories that you'll enjoy forever" and "being the absolute extreme of frugal" clearly implies a preference for the former. It also implies (perhaps unintentionally) that you can't have one if you have the other. That is, that you can't enjoy life and make fond memories if you are also being extremely frugal. I disagree with that sentiment as well. The real dichotomy is "making memories of traveling" and "one's other life goals" - which is much less compelling.

Sure, maybe the OP will be disabled or dead in 10 years. Or maybe they'll be active into their 90s. Maybe the one trip today could buy them 5 in their golden years because of compounding. If it were me, 2-3 months extra working for a trip like that might well be worth it. Maybe for the OP it isn't. It's silly to give travel a free pass and say you don't have to run a cost-benefit analysis on it because it is "special". That is what "you can't put a price on memories" implies - it says money is no object when it comes to "making memories". Perhaps that isn't what you meant?

Riceman

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Re: Do you look at potential expenses in terms of time it would buy you?
« Reply #14 on: August 01, 2013, 07:53:29 PM »
"You can't put a price on travel memories."

The problem I have with this kind of statement is that it universalizes individual preference.  It says that this one category deserves special preference, and so more money can be spent on it.  By everyone. 

Some people would rather reserve that special category for their truck, or their performance automobile.  Some people would rather reserve it for their house.  Others for clothes.  If everyone tells each other, "you can't put a price on this category," everyone's on the consumer treadmill.  And I think that is one of the common refrains that advertisers use to keep us on the treadmill.

I think it's better not to single out one category. That way, you ensure that each purchase gets the scrutiny it deserves.  You very well might have one category, such as "experiential entertainment," that you analyze and choose to spend a lot more on, but it's still a series of choices and tradeoffs that you continue to acknowledge.

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Re: Do you look at potential expenses in terms of time it would buy you?
« Reply #15 on: August 01, 2013, 08:13:20 PM »
I do think about how much time something costs in terms of both how much it would take for me to pay it off in earnings/hr and how much opportunity cost it'd cost me down the road. It isn't something I constantly think about, but it does pop up from time to time. I do have to remind myself that I want to live a balanced life and live a little while I'm trying to get to my bigger goals. As long as I'm on track with my goals, figure out that I truly want what I'm considering buying and have given it some deep thought, I'll go for it.
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