The Money Mustache Community
General Discussion => Welcome and General Discussion => Topic started by: TheAnonOne on May 21, 2015, 11:24:51 AM
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Pre-Note: This is generally aimed at household incomes in the 200k+ range but in varying degrees applies below that level as well.
I read this forum just about every day, so I catch the general drift of swaying opinions on topics. I am seeing some shift to being more extreme and negative to those who don't match their definition of "Mustachian"
There are posts about what car someone should have or how far is too- far of a commute, which are fine discussions. However, for some reason the end-all-be-all of answers is simply "Get a bike, and move" without re-guard to exactly what that means.
I see all of this advice thrown around with just pre-assumed benefits that may or may not even exist.
Does moving to a no car household benefit you for your FI date? Most would immediately say "YES" and they would be correct, however the returns are diminishing to an exponential degree with higher income households.
Those of you in these income ranges will know what I am talking about. Keeping two 5k(10k total) cars around might cost 1 month for early retirement. However for someone in the 60k range, that might be 6 months to a year! *My math is pretty lightly estimated, feel free to come up with exact figures if it bothers you*
Hell, I doubt buying a 50k sports car once every 6 years would change the date by that much.
Now this post was made in a light-hearted mood, so take it lightly. However, I can't be the only one who has run the numbers for people in this situation. (To which I think there are many of, mustachians tend to be high earners)
EDIT: I should have stated this before- this is not aimed at people who make tons and spend it all, but people who maintain a high savings rate and still splurge (so to speak).
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Not quite at the 200K income level mentioned, but we're feeling this in our house a lot these days. Our spending is clearly drifting towards our pre-MMM budget levels, and I'm not sure that is a bad thing. We have some savings locked in - life insurance, cell phones, and such, but in a lot of the "variable" categories like groceries and personal discretionary spending, we're finding we feel the reduced spending as more of a sacrifice than we thought we would. Maybe we're just not that badass, and that's OK.
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People also look at things differently anyway. Not having a car is a virtue for some, and is shameful for others. Some live in a place that's bikable, whereas others live in a place where that's not really practical or safe.
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We are a household like you describe, my wife and I both are well into six figure earners.
I think the great thing about MMM is that it shows you what is possible financially, but more important crystallizes that it's about happiness first. I used to think I would work "into my mid 50s" but now I plan on finishing my corporate life in the next 3-5 years (10 years early). i know I can optimize further, which is also thanks to this site (and others).
In terms of pure numbers, regardless of income it still comes back to savings rate.
Everyone finds their own balance.
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We are a household like you describe, my wife and I both are well into six figure earners.
I think the great thing about MMM is that it shows you what is possible financially, but more important crystallizes that it's about happiness first. I used to think I would work "into my mid 50s" but now I plan on finishing my corporate life in the next 3-5 years. i know I can optimize further, which is also thanks to this site (and others).
In terms of pure numbers, regardless of income it still comes back to savings rate.
Yes, the savings rate is the ultimate key. However, for someone with high income, spending thousands over what people here would ridicule you for, might only bump the rate by a few small %pts and even that, only for 1 year/month.
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Anon, the analysis in your post limits itself to the single variable of "time added to achievement of FIRE." Sure, my $200k+ household can plan to buy a new BMW every six years forever without delaying my retirement by that much, but the point is that possessing a perpetually-new BMW won't improve my family's happiness (and, in fact, would probably detract from it). The "get a bike, and move" sentiment has become a stand-in for "spend money on what maximizes your happiness, but not on anything else," so it shouldn't be taken too literally--depending on individual circumstances, the best way for someone to "get a bike, and move" may be to buy a car, and stay put.
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As your discretionary spending drifts upward, it affects your FI date both in terms of current savings and in terms of your future spending. You won't magically become more badass once your savings hits a certain level. So account for a new 50k sports car every few years into perpetuity.
More to the point, though, Mustachian and frugal ain't the same thing. Unnecessary spending is also unnecessary use of finite resources. I don't really have a plan for early retirement; my reasons for the lifestyle choices I make have more to do with boundless carelessness that results in the abuse of the planet in general and my community in particular. I honestly don't care if other people want to retire early or take extended work sabbaticals. I do care about being able to breathe clean air and drink clean water, and about what other people have to deal with as a result of my decisions.
If anything, this forum is far less extreme than it was a couple of years ago. The reason, I think, for the negative comments you may have seen of late is that there are more forumites here throwing out "less extreme" opinions regarding what types of expenditures and lifestyle choices are okay/Mustachian.
Regardless of income level - and unrelated to frugality - spending money on shit you don't need is not Mustachian.
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Anon, the analysis in your post limits itself to the single variable of "time added to achievement of FIRE." Sure, my $200k+ household can plan to buy a new BMW every six years forever without delaying my retirement by that much, but the point is that possessing a perpetually-new BMW won't improve my family's happiness (and, in fact, would probably detract from it). The "get a bike, and move" sentiment has become a stand-in for "spend money on what maximizes your happiness, but not on anything else," so it shouldn't be taken too literally--depending on individual circumstances, the best way for someone to "get a bike, and move" may be to buy a car, and stay put.
Yes, I am coming from a standpoint of simply 'time to FI', or 'total wealth gained'. You are absolutely correct on that. I find that I am a happy person regardless so there isn't much that my spending would change either way.
Off topic: I find that toys that give experiences, can offer real happiness and memories, while toys that are luxuries are pretty pointless. AKA, a fast 2 seater sports/ motorcycle car offers REAL FUN, while the bmw/lexus with fancier leather, doesn't do much. (For me at least)
Maybe this should be a whole topic in it's own right. I would like to discuss this.
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Regardless of income level - and unrelated to frugality - spending money on shit you don't need is not Mustachian.
Very true, to a degree. People don't need motorcycles, but for some, it is a massive part of enjoyment and true happiness for them.
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We are in the 200k plus club and while we aren't mustachian by many peoples levels we are pretty mustachian for our income level at a 55k a year spend level (33k of that is our 15 year mortgage, taxes and insurance in a HCOL area). We don't scrimp on everything, we have newer cars (paid for in cash and we both have a commute that requires them, we bought the house then my company decided to move it's HQ 45 minutes away with little notice, we could have lived closer to hubz job, but the housing cost would be double or more, he only has a 15-20 minute drive), we enjoy going out and having a good time, and we really enjoy our vacations (which is a decent chunk of the remaining 22k a year).
We've found that the things that make us happy are vastly different from our friends though. They enjoy going out to fancy dinners in DC, dropping 50-100 bucks a pop per night (and we have a couple friends that CANNOT afford to do this, but still do). It about damn near kills the hubs and I when we even go out to eat because we both know I can make the exact food for 5-10% of that, and have leftovers. We also REALLY don't like crowds, so the things we tend to do are free, hiking, walking, gardening etc.
We live in a townhouse so "Stuff" doesn't bring us happiness, it only brings us clutter. This is a new feeling for the hubz, he grew up in a family that tried to buy time together and happiness with things, in a recent conversation (argument) he said I never let him buy things he wants. I asked him what it is he wanted that I have said no to in the last 2 years. After actually thinking about it and laughing he said "Nothing, because there really isn't anything that I've wanted that was worth what they were charging for it, that was an argument that I used to use with my dad, now it just sounds ridiculous"
Over the years our mentality simply changed, we don't do everything in our power to reduce expenses, like reuse ziploc bags or bike 20 miles to work etc but we actually get a lot of enjoyment out of getting the best deals on things we will use, like buying a 3 month supply of said ziploc bags for 50c a box instead of 3 bucks. Overall, we don't sweat the small stuff, we get a lot of joy watching the other 75ish percent of our money make us money and just plug along until we hit the magic retirement number in a few years. It's a to each his own type of thing for us.
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Those of you in these income ranges will know what I am talking about. Keeping two 5k(10k total) cars around might cost 1 month for early retirement. However for someone in the 60k range, that might be 6 months to a year! *My math is pretty lightly estimated, feel free to come up with exact figures if it bothers you*
Hell, I doubt buying a 50k sports car once every 6 years would change the date by that much.
What kills the numbers for me isn't really the purchase price of the car, but what it does to my "FI number". Our car cost $6k to buy, which is about a month's worth of savings. So, in a way, you could say it cost me a month of extra working. But that wouldn't be exactly right. If I replace that car every 10 years, and add in gas, maintenance, and insurance expenses, and I want to maintain a conservative 3% WR, I need to add $99k to my stash - which is more than a year of saving. And those are very modest numbers (buying a well-used car and keeping it for 10 years). It is worth an extra year to us to have a car, but it isn't worth a second year to have another. YMMV, of course.
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Those of you in these income ranges will know what I am talking about. Keeping two 5k(10k total) cars around might cost 1 month for early retirement. However for someone in the 60k range, that might be 6 months to a year! *My math is pretty lightly estimated, feel free to come up with exact figures if it bothers you*
Hell, I doubt buying a 50k sports car once every 6 years would change the date by that much.
What kills the numbers for me isn't really the purchase price of the car, but what it does to my "FI number". Our car cost $6k to buy, which is about a month's worth of savings. So, in a way, you could say it cost me a month of extra working. But that wouldn't be exactly right. If I replace that car every 10 years, and add in gas, maintenance, and insurance expenses, and I want to maintain a conservative 3% WR, I need to add $99k to my stash - which is more than a year of saving. And those are very modest numbers (buying a well-used car and keeping it for 10 years). It is worth an extra year to us to have a car, but it isn't worth a second year to have another. YMMV, of course.
Indeed, I was being general. However if we want to really be specific. To add 100 grand to an already 1 million dollar pot is trivial. Infact, the thing will gain 100 grand BY ITSELF in about a year. So it really only requires you to help it along. It probably only costs you 4-6 months.
The math behind ADDING stuff to FI when you are so close is pretty fun actually. To afford a 60k sports car every 6 years, you need 250k but again, that money comes by itself VERY quickly at those numbers (assuming you have .75-1.5MM like most here at FI)
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Since the OP intended to keep this a light-hearted discussion, I'll do my best.
Yes, I absolutely agree that with a high income the individual expendatures will have less of an impact on the dollar amount saved as someone who earns 1/4 as much. The real impact I see however is increasing annual spending overall. It's quite easy to go from spedning $30k to spending $60k, and while the added $30k might be a small fraction of a high-earner's total income, it doubles the necessary investments they will need to become FI.
In other words, regardless of how much you make, doubling your expenses doubles the amount you need to RE. (the converse is true too)
I see all of this advice thrown around with just pre-assumed benefits that may or may not even exist.
Does moving to a no car household benefit you for your FI date? Most would immediately say "YES" and they would be correct, however the returns are diminishing to an exponential degree with higher income households.
Those of you in these income ranges will know what I am talking about. Keeping two 5k(10k total) cars around might cost 1 month for early retirement. However for someone in the 60k range, that might be 6 months to a year! *My math is pretty lightly estimated, feel free to come up with exact figures if it bothers you*
Hell, I doubt buying a 50k sports car once every 6 years would change the date by that much.
Ok, I will come up with some more precise figures :-)
The major error that I see here is the assumption that the 'cost' of keeping a vehicle is only it's purchase price. In reality that's only a portion of the total cost - this is especially true of the $50k sports-car analogy. Besides the purchase price (and subsequent depreciation, which are connected) other big costs include fuel, maintenance, insurance, taxes and registration. If the vehicle is financed, we need to add that in too. CAA recently estimated that the median amount spent per car is $10,700. Other studies show amounts in a similar ballpark. If we consider two $5k cars, we are paying about $15k less than a comparable new car. Over five years that equates to a savings of ~$3k/year, so let's round down and say each car costs $7k/year to buy and own, or $14k together, or $140k in expenses over a 10 year time frame (you'd need to replace the cars at the 5 year mark, so $20k spent over 10 years, or $4k/year just for purchasing the cars).
In terms of opportunity cost, that's just under $0.25M invested annually and getting 7% returns.
For someone earning $200k and saving $125k after taxes and expenses, those cars add 2 years to that person's working life - not 'a month or two'.
Cars are expensive, any way you do it - that's why they routinely make up 20-35% of people's budgets.
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This is an interesting discussion and I appreciate that it has not (yet) dissolved into a bunch of punching. I love the tenants of mustachianism and adore the kick it has given me by showing us that it is possible to retire much earlier than we had expected. Our spending levels are not down to anywhere near what a lot of people here can do. Some of that is driven by where we live and some of it is driven by our choices.
That said, the more I think about what makes me happy, the more and more it comes down to TIME. I have most of the material possessions I want and know that I can pretty much have whatever I want if we just pull the trigger and spend the money on it. What is more and more limited and precious is my time. I want to spend my time with my family and in particular with my baby. That is more important to me than just about anything else out there. That means I make decisions like leaving work at 16:00 every day to pick her up from daycare (I doubt anyone would have a fit about that). It also means I pay cleaning ladies to clean our house every 2 weeks so I can spend my off time playing with my family (many people love to have a fit about that). Other people will make other choices and that is fine. To me the important thing is that I have thought about what I value and am trying to live my life accordingly.
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I've thought about this quite a bit. We could cut our budget from 60k/year to 40k/year with a few adjustments. I don't think our personal happiness would suffer and I would probably make the adjustments if it was just me. But my wife is comfortable with our current spending level. It's hard for me to complain when we are saving 120k/year. If we cut 20k in spending it would increase our savings rate from 66% to 78% and allow for FI in 4 years instead of 5, but this is not a huge sacrifice to me.
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Since the OP intended to keep this a light-hearted discussion, I'll do my best.
Yes, I absolutely agree that with a high income the individual expendatures will have less of an impact on the dollar amount saved as someone who earns 1/4 as much. The real impact I see however is increasing annual spending overall. It's quite easy to go from spedning $30k to spending $60k, and while the added $30k might be a small fraction of a high-earner's total income, it doubles the necessary investments they will need to become FI.
In other words, regardless of how much you make, doubling your expenses doubles the amount you need to RE. (the converse is true too)
I see all of this advice thrown around with just pre-assumed benefits that may or may not even exist.
Does moving to a no car household benefit you for your FI date? Most would immediately say "YES" and they would be correct, however the returns are diminishing to an exponential degree with higher income households.
Those of you in these income ranges will know what I am talking about. Keeping two 5k(10k total) cars around might cost 1 month for early retirement. However for someone in the 60k range, that might be 6 months to a year! *My math is pretty lightly estimated, feel free to come up with exact figures if it bothers you*
Hell, I doubt buying a 50k sports car once every 6 years would change the date by that much.
Ok, I will come up with some more precise figures :-)
The major error that I see here is the assumption that the 'cost' of keeping a vehicle is only it's purchase price. In reality that's only a portion of the total cost - this is especially true of the $50k sports-car analogy. Besides the purchase price (and subsequent depreciation, which are connected) other big costs include fuel, maintenance, insurance, taxes and registration. If the vehicle is financed, we need to add that in too. CAA recently estimated that the median amount spent per car is $10,700. Other studies show amounts in a similar ballpark. If we consider two $5k cars, we are paying about $15k less than a comparable new car. Over five years that equates to a savings of ~$3k/year, so let's round down and say each car costs $7k/year to buy and own, or $14k together, or $140k in expenses over a 10 year time frame (you'd need to replace the cars at the 5 year mark, so $20k spent over 10 years, or $4k/year just for purchasing the cars).
In terms of opportunity cost, that's just under $0.25M invested annually and getting 7% returns.
For someone earning $200k and saving $125k after taxes and expenses, those cars add 2 years to that person's working life - not 'a month or two'.
Cars are expensive, any way you do it - that's why they routinely make up 20-35% of people's budgets.
Thanks for keeping it upbeat!
I can agree with your numbers money wise but not time.
Assuming I have $0 today, getting to my 1MM FI number will take 10 years (assuming 100k saved)
What if I had 4MM and needed 5MM? <2 years. (assuming 10% gains for easy math)
A similar thing takes place for most of us on this forum. Each dollar added is quicker than the last.
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Those of you in these income ranges will know what I am talking about. Keeping two 5k(10k total) cars around might cost 1 month for early retirement. However for someone in the 60k range, that might be 6 months to a year! *My math is pretty lightly estimated, feel free to come up with exact figures if it bothers you*
Hell, I doubt buying a 50k sports car once every 6 years would change the date by that much.
What kills the numbers for me isn't really the purchase price of the car, but what it does to my "FI number". Our car cost $6k to buy, which is about a month's worth of savings. So, in a way, you could say it cost me a month of extra working. But that wouldn't be exactly right. If I replace that car every 10 years, and add in gas, maintenance, and insurance expenses, and I want to maintain a conservative 3% WR, I need to add $99k to my stash - which is more than a year of saving. And those are very modest numbers (buying a well-used car and keeping it for 10 years). It is worth an extra year to us to have a car, but it isn't worth a second year to have another. YMMV, of course.
Indeed, I was being general. However if we want to really be specific. To add 100 grand to an already 1 million dollar pot is trivial. Infact, the thing will gain 100 grand BY ITSELF in about a year. So it really only requires you to help it along. It probably only costs you 4-6 months.
The math behind ADDING stuff to FI when you are so close is pretty fun actually. To afford a 60k sports car every 6 years, you need 250k but again, that money comes by itself VERY quickly at those numbers (assuming you have .75-1.5MM like most here at FI)
But the problem here is that you are calculating how much money your investments can generate after you have a very large 'stache. Certainly, if you are FI and still working you can buy a fancy sports car once every five years, and it will only cost as much as it takes you to earn that amount, which isn't long with a $200k+ job.
However, when you are building your portfolio is when cars have the biggest impact. Too often I see someone finish their residency or be made partner and get a $200k salary, and suddenly they think that buying two gently used cars 'won't have a big impact' because their salary is so high. They are ignoring opportunity cost, and they are ignoring that a good chunk of the cost of a used car is not in the purchase price.
Assuming I have $0 today, getting to my 1MM FI number will take 10 years (assuming 100k saved)
What if I had 4MM and needed 5MM? <2 years. (assuming 10% gains for easy math)
Certainly. If you are at $4MM then purchasing a couple of used cars isn't going to add more than few days to your FI (if you aren't already). If you are at the $1MM mark then it might add a month. My point is, if you are starting at $0 then purchasing and owning two cars will cost you almost two years while saving $100k/year).
It all comes down to where you are in the wealth-accumulation curve.
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Between the original post and Mad Fientist's post, I'm realizing I need to loosen the reigns a bit. I get grouchy when my husband wants to buy a bagel sandwich for breakfast on the weekend. Is it worth the stress over a $4 sandwich? No. I enjoy our weekend morning walks with the dog, and I shouldn't mind my husband spending $4 on a sandwich that we could make at home for less than $1.
Thanks for the reminder, TheAnonOne
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As your discretionary spending drifts upward, it affects your FI date both in terms of current savings and in terms of your future spending. You won't magically become more badass once your savings hits a certain level. So account for a new 50k sports car every few years into perpetuity.
I guess this is where I draw my "mustachian" line.
We're over the level the OP talked about (HHI), and only expect more growth in the future. I DID buy a $35k sports car, but I bought it slightly used and paid $22k for it. What's further, is I went out and bought EXACTLY what I wanted, and have no plans to upgrade or replace it after 8 years of ownership.
That's how I define value and maximize things for myself. Buy high quality, buy exactly what I want, and buy as rarely as possible. Most people in this thread seem to assume that stuff begets a treadmill of upgrades and spending. In my case, I try NOT to do that, and simply get what I want the first time out and it only stings once. Even things which are the "upgrade poster children" like consumer electronics. I bought an iPad2 when it first came out, in 2011 or so. I bought the top of the line one at the time. Here it is 2-3 generations and 4 years later, and I have no plans or reason to upgrade. It works great, I bought plenty of capacity, why do I need a new one? I don't. No upgrade treadmill.
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We are in the 200k plus club and while we aren't mustachian by many peoples levels we are pretty mustachian for our income level at a 55k a year spend level (33k of that is our 15 year mortgage, taxes and insurance in a HCOL area). We don't scrimp on everything, we have newer cars (paid for in cash and we both have a commute that requires them, we bought the house then my company decided to move it's HQ 45 minutes away with little notice, we could have lived closer to hubz job, but the housing cost would be double or more, he only has a 15-20 minute drive), we enjoy going out and having a good time, and we really enjoy our vacations (which is a decent chunk of the remaining 22k a year).
We've found that the things that make us happy are vastly different from our friends though. They enjoy going out to fancy dinners in DC, dropping 50-100 bucks a pop per night (and we have a couple friends that CANNOT afford to do this, but still do). It about damn near kills the hubs and I when we even go out to eat because we both know I can make the exact food for 5-10% of that, and have leftovers. We also REALLY don't like crowds, so the things we tend to do are free, hiking, walking, gardening etc.
We live in a townhouse so "Stuff" doesn't bring us happiness, it only brings us clutter. This is a new feeling for the hubz, he grew up in a family that tried to buy time together and happiness with things, in a recent conversation (argument) he said I never let him buy things he wants. I asked him what it is he wanted that I have said no to in the last 2 years. After actually thinking about it and laughing he said "Nothing, because there really isn't anything that I've wanted that was worth what they were charging for it, that was an argument that I used to use with my dad, now it just sounds ridiculous"
Over the years our mentality simply changed, we don't do everything in our power to reduce expenses, like reuse ziploc bags or bike 20 miles to work etc but we actually get a lot of enjoyment out of getting the best deals on things we will use, like buying a 3 month supply of said ziploc bags for 50c a box instead of 3 bucks. Overall, we don't sweat the small stuff, we get a lot of joy watching the other 75ish percent of our money make us money and just plug along until we hit the magic retirement number in a few years. It's a to each his own type of thing for us.
Can you post a rough budget for the 22k, I must be doing something seriously wrong as i cant get close to this?
Here's mine - feel safe posting as it has been declared a no facepunch thread
Monthly
Car Payment 563
Gas 200
Home Phone 15
Cell Phones (4) 100
Netflix/Spotify etc 20
Electric 200
Internet 39
Water 60
Life Insurance 52
Wine 175
Food 700
Restaurant 200
Doctor 50
Gym 70
Mortgage 1940
Misc 350
Clothes 200
Total Ongoing monthly 4934
Adhoc over the year
Car Insurance 2800
Umbrella 1022
Propane 750
Car Maintenance 1250
House Maintenance 5400 - moves up and down - sometimes I think this should be considered an addition to home value and maybe an asset if it improves sale price?
Vacation 15000
Gifts 2400
Total for Year 87830
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The math behind ADDING stuff to FI when you are so close is pretty fun actually.
Yes indeed! I expect this is a big reason why OMY-syndrome is so prevalent.
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I'm nowhere near this income range, so you can tell me where to go. :p I just wanted to explain my take on MMM. He stresses being frugal in order to RE, but I really think it is all about environmentalism. So, you only buy things that REALLY matter, and try to decrease your ecological footprint. If you keep that in mind, then I think you're okay buying just about any luxury you really, really desire (maybe not a gas guzzler though, according to MMM.)
Anyway, just my take. Carry on! :-)
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Didn't read all the replies, but from someone only a few months from FI, there are certainly times when I think about the microbrews and other junk I have bought that cost me "just a few months" and wish I hadn't!
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In reply to part of the OP's original point, we are in the same boat. Slashed a number of things, traded an expensive car for a practical one, and now look at all expenses with a different eye. Our savings rate is 56% (ignoring income/payroll taxes, it's 44% if those are added back in to the denominator), so while we could definitively increase that, it's still over $150k per year. Maybe it's just a rationalization on my part, but I've found myself no longer seriously pushing further optimization, but rather just trying to keep the expenses from reinflating, and instead I tell myself that I continue to learn and seek inspiration from the MMM forums not for immediate use, but for either the post-FIRE period, or as a fallback if we lose jobs or otherwise fall on hard times.
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I'm nowhere near this income range, so you can tell me where to go. :p I just wanted to explain my take on MMM. He stresses being frugal in order to RE, but I really think it is all about environmentalism. So, you only buy things that REALLY matter, and try to decrease your ecological footprint. If you keep that in mind, then I think you're okay buying just about any luxury you really, really desire (maybe not a gas guzzler though, according to MMM.)
Anyway, just my take. Carry on! :-)
I do notice a tendency to have environmentalism hiding under the veil of becoming rich. I am against this because it can have some misleading reasoning behind a decision.
For instance, MMM wouldn't recommend whole foods, or organic food for people in a hair on fire situation. However, an environmentalist would.
I may want a V8 sports car, (for happiness) but an environmentalist would take that away from me, even if it were free(it isn't).
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I think Frugal people are frugal, but you have to ask yourself at some point what the money is for. I'm a swing trader so the richer I get, the bigger line I swing. Its more fun, more exciting. At some point I could conceivably influence a small market. That's the shit right there!
I do think at some point I'll go from living on $25k to say $35. What will I spend it on? Trips and going out with friends. Real Estate maybe.
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http://www.mrmoneymustache.com/2013/04/25/why-should-i-be-frugal-when-im-so-rich/
MMM wrote a great post on this topic.
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We are in the 200k plus club and while we aren't mustachian by many peoples levels we are pretty mustachian for our income level at a 55k a year spend level (33k of that is our 15 year mortgage, taxes and insurance in a HCOL area). We don't scrimp on everything, we have newer cars (paid for in cash and we both have a commute that requires them, we bought the house then my company decided to move it's HQ 45 minutes away with little notice, we could have lived closer to hubz job, but the housing cost would be double or more, he only has a 15-20 minute drive), we enjoy going out and having a good time, and we really enjoy our vacations (which is a decent chunk of the remaining 22k a year).
We've found that the things that make us happy are vastly different from our friends though. They enjoy going out to fancy dinners in DC, dropping 50-100 bucks a pop per night (and we have a couple friends that CANNOT afford to do this, but still do). It about damn near kills the hubs and I when we even go out to eat because we both know I can make the exact food for 5-10% of that, and have leftovers. We also REALLY don't like crowds, so the things we tend to do are free, hiking, walking, gardening etc.
We live in a townhouse so "Stuff" doesn't bring us happiness, it only brings us clutter. This is a new feeling for the hubz, he grew up in a family that tried to buy time together and happiness with things, in a recent conversation (argument) he said I never let him buy things he wants. I asked him what it is he wanted that I have said no to in the last 2 years. After actually thinking about it and laughing he said "Nothing, because there really isn't anything that I've wanted that was worth what they were charging for it, that was an argument that I used to use with my dad, now it just sounds ridiculous"
Over the years our mentality simply changed, we don't do everything in our power to reduce expenses, like reuse ziploc bags or bike 20 miles to work etc but we actually get a lot of enjoyment out of getting the best deals on things we will use, like buying a 3 month supply of said ziploc bags for 50c a box instead of 3 bucks. Overall, we don't sweat the small stuff, we get a lot of joy watching the other 75ish percent of our money make us money and just plug along until we hit the magic retirement number in a few years. It's a to each his own type of thing for us.
Can you post a rough budget for the 22k, I must be doing something seriously wrong as i cant get close to this?
Here's mine - feel safe posting as it has been declared a no facepunch thread
Monthly
Car Payment 563
Gas 200
Home Phone 15
Cell Phones (4) 100
Netflix/Spotify etc 20
Electric 200
Internet 39
Water 60
Life Insurance 52
Wine 175
Food 700
Restaurant 200
Doctor 50
Gym 70
Mortgage 1940
Misc 350
Clothes 200
Total Ongoing monthly 4934
Adhoc over the year
Car Insurance 2800
Umbrella 1022
Propane 750
Car Maintenance 1250
House Maintenance 5400 - moves up and down - sometimes I think this should be considered an addition to home value and maybe an asset if it improves sale price?
Vacation 15000
Gifts 2400
Total for Year 87830
Your Food/Drink and vehicle costs are insane. $26,106 per year. And obviously $15,000 vacations don't fit into a $22K budget. Not sure how many people you're feeding, but if you could get your TOTAL Food/Drink/Restaurant bill under $500, and vacation to $2K, pay cash for an economical car with cheap insurance, you'd surely be saving over $25K per year right there.
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if you could get your TOTAL Food/Drink/Restaurant bill under $500
$500 for all food/drink/restaurant for 1 full year?
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Since the OP intended to keep this a light-hearted discussion, I'll do my best.
Yes, I absolutely agree that with a high income the individual expendatures will have less of an impact on the dollar amount saved as someone who earns 1/4 as much. The real impact I see however is increasing annual spending overall. It's quite easy to go from spedning $30k to spending $60k, and while the added $30k might be a small fraction of a high-earner's total income, it doubles the necessary investments they will need to become FI.
In other words, regardless of how much you make, doubling your expenses doubles the amount you need to RE. (the converse is true too)
I see all of this advice thrown around with just pre-assumed benefits that may or may not even exist.
Does moving to a no car household benefit you for your FI date? Most would immediately say "YES" and they would be correct, however the returns are diminishing to an exponential degree with higher income households.
Those of you in these income ranges will know what I am talking about. Keeping two 5k(10k total) cars around might cost 1 month for early retirement. However for someone in the 60k range, that might be 6 months to a year! *My math is pretty lightly estimated, feel free to come up with exact figures if it bothers you*
Hell, I doubt buying a 50k sports car once every 6 years would change the date by that much.
Ok, I will come up with some more precise figures :-)
The major error that I see here is the assumption that the 'cost' of keeping a vehicle is only it's purchase price. In reality that's only a portion of the total cost - this is especially true of the $50k sports-car analogy. Besides the purchase price (and subsequent depreciation, which are connected) other big costs include fuel, maintenance, insurance, taxes and registration. If the vehicle is financed, we need to add that in too. CAA recently estimated that the median amount spent per car is $10,700. Other studies show amounts in a similar ballpark. If we consider two $5k cars, we are paying about $15k less than a comparable new car. Over five years that equates to a savings of ~$3k/year, so let's round down and say each car costs $7k/year to buy and own, or $14k together, or $140k in expenses over a 10 year time frame (you'd need to replace the cars at the 5 year mark, so $20k spent over 10 years, or $4k/year just for purchasing the cars).
In terms of opportunity cost, that's just under $0.25M invested annually and getting 7% returns.
For someone earning $200k and saving $125k after taxes and expenses, those cars add 2 years to that person's working life - not 'a month or two'.
Cars are expensive, any way you do it - that's why they routinely make up 20-35% of people's budgets.
Thanks for keeping it upbeat!
I can agree with your numbers money wise but not time.
Assuming I have $0 today, getting to my 1MM FI number will take 10 years (assuming 100k saved)
What if I had 4MM and needed 5MM? <2 years. (assuming 10% gains for easy math)
A similar thing takes place for most of us on this forum. Each dollar added is quicker than the last.
I get where you're coming from, but you are comparing someone who saves 100k per year to someone who saves 500k per year. You're just tripling the "income" for no reason (200k-600k). I get that it's passive income, but come on...
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I get where you're coming from, but you are comparing someone who saves 100k per year to someone who saves 500k per year. You're just tripling the "income" for no reason (200k-600k). I get that it's passive income, but come on...
Simply to magnify the power.
If we want to use closer terms to a more average person. (Saving 100k a year, probably a bit above average)
Getting from 0 to 500k will take 5 years
500k to 1,000K (1MM) about 3
1MM to 1.5MM 2-2.5
1.5MM to 2MM <2
and so on... Very powerful, and definitely shows why OMY is so strong.
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This is purely academic for me since 200k is roughly exactly as much as I have ever earned in my entire life but I got something useful out of this mental exercise.
If I had $200k income I could retire in roughly 4.4 years.
If I increased my current spending by a factor of 50 percent, I would need to work 7.25 years to support this level of decadence indefinitely.
Is less than 3 years of your life worth decades of opulence or barring that amazing security? I can see a lot of argument that yes it is.
However I also note that if I kept my retirement budget the same, I would only have to work about another 0.6 years to live the life of Reilly during my five year career.
While the idea of having that kind of income is fantasy the trade offs are a very interesting mental exercise.
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We are in the 200k plus club and while we aren't mustachian by many peoples levels we are pretty mustachian for our income level at a 55k a year spend level (33k of that is our 15 year mortgage, taxes and insurance in a HCOL area). We don't scrimp on everything, we have newer cars (paid for in cash and we both have a commute that requires them, we bought the house then my company decided to move it's HQ 45 minutes away with little notice, we could have lived closer to hubz job, but the housing cost would be double or more, he only has a 15-20 minute drive), we enjoy going out and having a good time, and we really enjoy our vacations (which is a decent chunk of the remaining 22k a year).
We've found that the things that make us happy are vastly different from our friends though. They enjoy going out to fancy dinners in DC, dropping 50-100 bucks a pop per night (and we have a couple friends that CANNOT afford to do this, but still do). It about damn near kills the hubs and I when we even go out to eat because we both know I can make the exact food for 5-10% of that, and have leftovers. We also REALLY don't like crowds, so the things we tend to do are free, hiking, walking, gardening etc.
We live in a townhouse so "Stuff" doesn't bring us happiness, it only brings us clutter. This is a new feeling for the hubz, he grew up in a family that tried to buy time together and happiness with things, in a recent conversation (argument) he said I never let him buy things he wants. I asked him what it is he wanted that I have said no to in the last 2 years. After actually thinking about it and laughing he said "Nothing, because there really isn't anything that I've wanted that was worth what they were charging for it, that was an argument that I used to use with my dad, now it just sounds ridiculous"
Over the years our mentality simply changed, we don't do everything in our power to reduce expenses, like reuse ziploc bags or bike 20 miles to work etc but we actually get a lot of enjoyment out of getting the best deals on things we will use, like buying a 3 month supply of said ziploc bags for 50c a box instead of 3 bucks. Overall, we don't sweat the small stuff, we get a lot of joy watching the other 75ish percent of our money make us money and just plug along until we hit the magic retirement number in a few years. It's a to each his own type of thing for us.
Can you post a rough budget for the 22k, I must be doing something seriously wrong as i cant get close to this?
Here's mine - feel safe posting as it has been declared a no facepunch thread
Monthly
Car Payment 563
Gas 200
Home Phone 15
Cell Phones (4) 100
Netflix/Spotify etc 20
Electric 200
Internet 39
Water 60
Life Insurance 52
Wine 175
Food 700
Restaurant 200
Doctor 50
Gym 70
Mortgage 1940
Misc 350
Clothes 200
Total Ongoing monthly 4934
Adhoc over the year
Car Insurance 2800
Umbrella 1022
Propane 750
Car Maintenance 1250
House Maintenance 5400 - moves up and down - sometimes I think this should be considered an addition to home value and maybe an asset if it improves sale price?
Vacation 15000
Gifts 2400
Total for Year 87830
Your Food/Drink and vehicle costs are insane. $26,106 per year. And obviously $15,000 vacations don't fit into a $22K budget. Not sure how many people you're feeding, but if you could get your TOTAL Food/Drink/Restaurant bill under $500, and vacation to $2K, pay cash for an economical car with cheap insurance, you'd surely be saving over $25K per year right there.
Family of four - is 700 in groceries a month really that crazy for 4 adults?
Car insurance - 2 teen drivers - which also bumps up the Umbrella, not sure what I can do here with 4 drivers, 2 of the cars are 12 years old.
Travel - all family overseas - but agree this could be cut
I figure a lot of the auto expenses will go away when we retire, travel less likely to change. I'm aiming for 80K in FIRE. I'm open to suggestion on other cuts. We have made other cuts, eating out is likely closer to 100 a month which I think is acceptable, no cable, cell phones trimmed to 100 for 4 phones.
Still love to see your break down on the 22k
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This is purely academic for me since 200k is roughly exactly as much as I have ever earned in my entire life but I got something useful out of this mental exercise.
If I had $200k income I could retire in roughly 4.4 years.
If I increased my current spending by a factor of 50 percent, I would need to work 7.25 years to support this level of decadence indefinitely.
Is less than 3 years of your life worth decades of opulence or barring that amazing security? I can see a lot of argument that yes it is.
However I also note that if I kept my retirement budget the same, I would only have to work about another 0.6 years to live the life of Reilly during my five year career.
While the idea of having that kind of income is fantasy the trade offs are a very interesting mental exercise.
Which brings up a good point...$200k is a shitload of money for one person, but spread across two earners it's less, and add a child/children it continues to go down. Certainly $200k+ for my family of 3 doesn't make us poor, but I live very differently than I would if I had my current income for me alone.
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This is purely academic for me since 200k is roughly exactly as much as I have ever earned in my entire life but I got something useful out of this mental exercise.
If I had $200k income I could retire in roughly 4.4 years.
If I increased my current spending by a factor of 50 percent, I would need to work 7.25 years to support this level of decadence indefinitely.
Is less than 3 years of your life worth decades of opulence or barring that amazing security? I can see a lot of argument that yes it is.
However I also note that if I kept my retirement budget the same, I would only have to work about another 0.6 years to live the life of Reilly during my five year career.
While the idea of having that kind of income is fantasy the trade offs are a very interesting mental exercise.
Which brings up a good point...$200k is a shitload of money for one person, but spread across two earners it's less, and add a child/children it continues to go down. Certainly $200k+ for my family of 3 doesn't make us poor, but I live very differently than I would if I had my current income for me alone.
A good point, but to be fair a large number of people on this forum spend only $1000 to $1500 a month as single people. People who make less than I do support families and save enough to pursue ER. They are just more bad ass than me.
I am at point where ten years ago me would think current me is a bad ass though so maybe persisting will help?
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We live on a mustachian-esque budget (around $40k/year for family of 6) despite making around $200k in part as a risk measure. Single-earner family in a troubled market. There's no guaranty that the $200k salary will stick. If it doesn't stick, we won't have to downgrade our lifestyle by much, and if it does, then early retirement.
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I hope this is on-topic.
We live very frugally in comparison to my peers with similar incomes (though obviously nowhere near as frugally as others on this board). But I *would* like to spend more. I'd *like* to get massages and travel a lot more and once or twice a year go out to eat at those insanely expensive molecular gastronomy restaurants. I've done each of these things often enough to know I really would get pleasure out of doing more of them.
But for the most part, I *don't* do them right now because I can't bear to spend so much on them. When I retire, though, which might be two or three years from now, pfffffff... my plan is to really go a little nuts. I honestly expect my expenses to go up at least a third. Possibly 50%.
I know what I'm doing is not really rational. If I truly get pleasure out of these things (and believe me, I do), I should buy them *now,* and later. I can afford it. Yes, it would delay my retirement date some, but who cares. I guess I actually am too frugal for my own good, in some sense. Which makes me also wonder if I'm going to be able to bring myself to spend on all those things when I really have NO more excuse not to.
Nice problem to have, I know. Am I alone in this?
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I've said this in a previous thread before but it bears repeating. While you're not wrong that if you make enough money you don't really need to be frugal, you are missing the point. If you can afford to FIRE because you don't need to buy a yacht you're missing the point of mustachianism. There is a portion of conscious spending which is tied to all sorts of things like understanding what makes you happy, optimization, and conservation. While your savings rate is the lynchpin for FIRE it lacks the substance of why and how. High income doesn't destroy the need for frugality if the reason why you are frugal is beyond FIRE.
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Oh, I get it--and you are totally right. This is more a psychological point. Or maybe a dispositional one?
I remember several years ago refusing to buy some dishes at an Amish auction that I really wanted because they were, like, $1.50 and my price point that I had established before the auction began was like $1.00. I had set the price ex ante, that's what I had decided they were worth, and by god, I was going to stick to it. And I did.
But I'm thinking about those stupid dishes a decade later.
Just like for most people, it's hard to break the spendthrift pattern--for people like me (us?) it can be hard to break the frugality pattern... even when it doesn't serve a purpose. I justify it in some sense by thinking, "Well, I can't have it both ways--I'm either going to be dispositionally frugal or dispositionally profligate, and I'm glad it's the former." But I *do* wish sometimes I'm was better at letting it go, and spending some where I know it would bring me pleasure.
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To add 100 grand to an already 1 million dollar pot is trivial. Infact, the thing will gain 100 grand BY ITSELF in about a year. So it really only requires you to help it along. It probably only costs you 4-6 months.
6 additional months of work to me would be super painful, given my current mindset. I'd totally not spend that money if that meant working 6 additional months. I guess it depends how far you are from the RE goal...
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Regardless of income level - and unrelated to frugality - spending money on shit you don't need is not Mustachian.
Very true, to a degree. People don't need motorcycles, but for some, it is a massive part of enjoyment and true happiness for them.
Unnecessary isn't quite the right word because our actual "needs" (minimal food, water, shelter) are so minimal. To me, Mustachianism is about being conscientious in your spending to maximize the value you derive from your spending and your efficiency, while minimizing wastefulness and impact on the environment. Depending on your values, a motorcycle might be a reasonable purchase. I remember ERE Jakob spent a very high percentage of his spending on martial arts, but he was mindful in that spending and derived great satisfaction from it.
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I think the rich get a lot of things for free, so some of that inflated lifestyle comes from just plain benefits of the job or the neighbors or whatever. I was thinking recently that the correct aphorism is really, "To whom much is given, much is given."
I also think that when you're dealing with larger pots of money, it's easier to take actions that lead to huge savings. Refinance the house, get a 15-year mortgage, don't buy the $800K house your bank qualified you to buy; buy the $300K house instead. Against decisions that affect such big swings in your financial outlook, Starbucks doesn't seem so bad.
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My buying decisions have never had anything to do with income. My choices are based on value and efficiency. I'm not going to be any more "loose" on spending decisions just because income goes up. It helps to start with realizing that having/owning few possessions in life makes for a more fulfilling and content life. I can't stand clutter or unnecessary items laying around. I get rid of something the minute it becomes useless.
So, I'm not even sure where these high income people can let loose and splurge considering most individuals can easily live on under $15k (much less in some cases) and still be perfectly happy. More vacations? More eating out? More stuff? I just don't get it?
Fancy dinners at overpriced restaurants? I've never understood this. Admittedly, I splurge on eating out but that's really the ONLY thing I splurge on. But I do this at Chipotle's and Five Guys, not at "The Admiral". If I'm going to outsource food, there is going to be as little markup as possible as I don't see the value in paying for "fine dining". I guess my palette just isn't sophisticated, and I'm OK with that :)
Sure, you could play a game with yourself and "pretend" you could only save based off a frugal person living on $50k and match their savings rates on their income, but you're just pretending and why do that?
As your discretionary spending drifts upward, it affects your FI date both in terms of current savings and in terms of your future spending. You won't magically become more badass once your savings hits a certain level. So account for a new 50k sports car every few years into perpetuity.
I guess this is where I draw my "mustachian" line.
We're over the level the OP talked about (HHI), and only expect more growth in the future. I DID buy a $35k sports car, but I bought it slightly used and paid $22k for it. What's further, is I went out and bought EXACTLY what I wanted, and have no plans to upgrade or replace it after 8 years of ownership.
That's how I define value and maximize things for myself. Buy high quality, buy exactly what I want, and buy as rarely as possible. Most people in this thread seem to assume that stuff begets a treadmill of upgrades and spending. In my case, I try NOT to do that, and simply get what I want the first time out and it only stings once. Even things which are the "upgrade poster children" like consumer electronics. I bought an iPad2 when it first came out, in 2011 or so. I bought the top of the line one at the time. Here it is 2-3 generations and 4 years later, and I have no plans or reason to upgrade. It works great, I bought plenty of capacity, why do I need a new one? I don't. No upgrade treadmill.
I agree with this. I try to own as little as possible - but what I do own, I "buy it for life". You generally get what you pay for and I'm always happier with the better quality than I am with skimping just to save a few dollars. These one-off purchases improve my life in a meaningful way and the impact on spending is negligible.
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I hope this is on-topic.
We live very frugally in comparison to my peers with similar incomes (though obviously nowhere near as frugally as others on this board). But I *would* like to spend more. I'd *like* to get massages and travel a lot more and once or twice a year go out to eat at those insanely expensive molecular gastronomy restaurants. I've done each of these things often enough to know I really would get pleasure out of doing more of them.
But for the most part, I *don't* do them right now because I can't bear to spend so much on them. When I retire, though, which might be two or three years from now, pfffffff... my plan is to really go a little nuts. I honestly expect my expenses to go up at least a third. Possibly 50%.
I know what I'm doing is not really rational. If I truly get pleasure out of these things (and believe me, I do), I should buy them *now,* and later. I can afford it. Yes, it would delay my retirement date some, but who cares. I guess I actually am too frugal for my own good, in some sense. Which makes me also wonder if I'm going to be able to bring myself to spend on all those things when I really have NO more excuse not to.
Nice problem to have, I know. Am I alone in this?
How long have you been focused on saving and investing (I'm guessing not long)? I bet by the time you actually pull the trigger, you'll forget all about fancy food and massages and will have comfortably settled into your happier lifestyle of getting by with less.
I only think depriving yourself is worth it to some extent. It takes a shift in thinking to turn deprivation into satisfaction, but I think it's totally possible. Instead of something making you feel deprived, you can feel better and relaxed about not wanting/having said thing.
I used to feel like I would save now so that I could have enough money to do whatever I wanted in passive income. This is no longer the case. In fact, that was my primary motivator. I was being frugal so that I could retire with tons of money that I'd never know what to do with. I realize things that I thought I would want I really would not want. This is a blessing and a curse. With infinite wants, you set out to make infinite money. With limited wants, you're motivation to make more money tapers as you get closer to the amount you think you will need.
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Don't ever forget the grandkids therum. Each dollar invested today should yield $1,000 in 60 years. Are you buying 50k sports cars and robbing your grandkids of 50,000,000? (Perhaps 8 million inflation adjusted). What about MMM did he rob his grandkids of 50,000,000 (adjusted) by spending 400k on a house instead of 100k? Would his grandkids not enjoy that $2,000,000 a year income?
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Fancy food has always been on my mind...
As my income continued to stay above the 200k mark and my stash increasing approaching technical FI number, I am now more willing to consider the possibility of dropping 10 big ones for a family dinner at a 3 star restaurant - still just considering... one day I tell you...one day
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Fancy food has always been on my mind...
As my income continued to stay above the 200k mark and my stash increasing approaching technical FI number, I am now more willing to consider the possibility of dropping 10 big ones for a family dinner at a 3 star restaurant - still just considering... one day I tell you...one day
Here's one. Now you just need nine more....
(http://s16.postimg.org/op93lbilx/screenshot_16.png)
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Fancy food has always been on my mind...
As my income continued to stay above the 200k mark and my stash increasing approaching technical FI number, I am now more willing to consider the possibility of dropping 10 big ones for a family dinner at a 3 star restaurant - still just considering... one day I tell you...one day
$10 to feed the whole family? What?
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I'm nowhere near this income range, so you can tell me where to go. :p I just wanted to explain my take on MMM. He stresses being frugal in order to RE, but I really think it is all about environmentalism. So, you only buy things that REALLY matter, and try to decrease your ecological footprint. If you keep that in mind, then I think you're okay buying just about any luxury you really, really desire (maybe not a gas guzzler though, according to MMM.)
Anyway, just my take. Carry on! :-)
I do notice a tendency to have environmentalism hiding under the veil of becoming rich. I am against this because it can have some misleading reasoning behind a decision.
Another aspect of Mustachianism is maintaining a "gratitude attitude." Instead of seeing what we don't have and what's wanting, we can think about the opportunities and blessings that are the default North American lifestyle. You could get more/take more, sure, but do you need it or even really want it? It's a good thing to question.
One thing I really enjoy about frugality and minimalist and environmentalism is how it inspires me to decline politely when NEW!!!1! becomes available. I almost always have some thing that is already enough or the right thing, I just forgot about it because it was under eight other possessions in the garage or the closet.
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No, 1000.
Fancy food has always been on my mind...
As my income continued to stay above the 200k mark and my stash increasing approaching technical FI number, I am now more willing to consider the possibility of dropping 10 big ones for a family dinner at a 3 star restaurant - still just considering... one day I tell you...one day
$10 to feed the whole family? What?
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I also sometimes wonder where the line lies in terms of being frugal and enjoying. Especially if you already have a cushion built up. I will hit FI by the end of 2017. That's 2.5 years to go. By then I will be 33 years old. I often stop myself from buying something or having certain experiences becaues I want to save the money. But then I think to myself....ok...if I spend 10k this year on the holidays that I want to take...then I have to work roughly 6 more weeks to reach my FI date. And that is holding all else equal...I might get raises by then that would by far make up for it...or market returns might be better than expected...etc. And even if not...working another 6 weeks at the age of 33 is hardly such a terrible thing. So then I think I should just go ahead and book some plane tickets and enjoy life rather than socking it all away to hit my FI date on time....and if the past is any indication of the future...then by the time I hit FI I might change my mind and not want to FIRE anymore or do something totally different or who knows. And even after I FIRE, I will probably still do something income producing, I can't really see myself just gardening or whatever.
But of course I did not hold this view when I just graduated 6 years ago and my networth was zero. At that point I saved every penny I could. And I guess that is why I am 3 years from FI now. But I do sometimes think that if you already have a large money cushion, then it might be ok to "let loose" a bit and do some things I enjoy even if it will set back my FI date by a few weeks or months.
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But I do sometimes think that if you already have a large money cushion, then it might be ok to "let loose" a bit and do some things I enjoy even if it will set back my FI date by a few weeks or months.
This is my understanding of the MMM message:
1. Learn to enjoy life with less stuff and less spending.
2. Save money to reach FU money, then FI, then RE (if you want it).
3. Side note: MMM claims to also care about protecting the environment and therefore some of his decisions are based on that.
I think that where the majority of these discussions "go wrong" is when people think of the philosophy as "scrimp and save now, retire early and get to (finally) have fun."
Life is supposed to be fun now and later. It's just what defines fun. MMM's biggest contribution is probably the simple math and telling people that it is actually possible to retire early (I'm pretty good at math and I never had considered it). After that, I think his strongest point is living with less. The idea is that simplicity is relaxing, fun, enjoyable. However, it is a VERY touchy subject, because we start talking about whether people really know what they want and what makes them happy. "I'm happy driving this car. No, you're not. Yes, I am, trust me."
My conclusion is that simplicity (and buying less stuff) is a good idea and increased happiness by increased spending is largely an illusion. However, exactly where the line is between too little (depriving yourself of aids to increased happiness) and too much (justifying higher spending) is murky at best.
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We are in the 200k plus club and while we aren't mustachian by many peoples levels we are pretty mustachian for our income level at a 55k a year spend level (33k of that is our 15 year mortgage, taxes and insurance in a HCOL area). We don't scrimp on everything, we have newer cars (paid for in cash and we both have a commute that requires them, we bought the house then my company decided to move it's HQ 45 minutes away with little notice, we could have lived closer to hubz job, but the housing cost would be double or more, he only has a 15-20 minute drive), we enjoy going out and having a good time, and we really enjoy our vacations (which is a decent chunk of the remaining 22k a year).
We've found that the things that make us happy are vastly different from our friends though. They enjoy going out to fancy dinners in DC, dropping 50-100 bucks a pop per night (and we have a couple friends that CANNOT afford to do this, but still do). It about damn near kills the hubs and I when we even go out to eat because we both know I can make the exact food for 5-10% of that, and have leftovers. We also REALLY don't like crowds, so the things we tend to do are free, hiking, walking, gardening etc.
We live in a townhouse so "Stuff" doesn't bring us happiness, it only brings us clutter. This is a new feeling for the hubz, he grew up in a family that tried to buy time together and happiness with things, in a recent conversation (argument) he said I never let him buy things he wants. I asked him what it is he wanted that I have said no to in the last 2 years. After actually thinking about it and laughing he said "Nothing, because there really isn't anything that I've wanted that was worth what they were charging for it, that was an argument that I used to use with my dad, now it just sounds ridiculous"
Over the years our mentality simply changed, we don't do everything in our power to reduce expenses, like reuse ziploc bags or bike 20 miles to work etc but we actually get a lot of enjoyment out of getting the best deals on things we will use, like buying a 3 month supply of said ziploc bags for 50c a box instead of 3 bucks. Overall, we don't sweat the small stuff, we get a lot of joy watching the other 75ish percent of our money make us money and just plug along until we hit the magic retirement number in a few years. It's a to each his own type of thing for us.
Can you post a rough budget for the 22k, I must be doing something seriously wrong as i cant get close to this?
Here's mine - feel safe posting as it has been declared a no facepunch thread
Monthly
Car Payment 563 0
Gas 200 100
Home Phone 15 0
Cell Phones (4) 100 (2) 60
Netflix/Spotify etc 20 8
Electric 200 40
Internet 39 60
Water 60 0
Life Insurance 52 0
Wine 175 0
Food 700 275
Restaurant 200 75
Doctor 50 50
Gym 70 0
Mortgage 1940 (rent) 960
Misc 350 250
Clothes 200 10
Entertainment 200
Public Transportation 400
Total Ongoing monthly 4934 ~2600
Adhoc over the year
Car Insurance 2800 900
Umbrella 1022 0
Propane 750 (natural gas)400
Car Maintenance 1250 1250
House Maintenance 5400 - moves up and down - sometimes I think this should be considered an addition to home value and maybe an asset if it improves sale price? 0
Vacation 15000 2000
Gifts 2400 800
Total for Year 87830 about 36000
I'll post mine because I decidedly make less than you spend in a year ;). We're not as frugal as MMM is. We do some stuff, and we can do other stuff better, but we try to enjoy life as well. Do stuff that interests us. Spend money on what we think is worth spending money on. That sort of thing. Mustachianism is all about putting your money where you enjoy it most and cutting out the crap. If 80k spending is what makes you the happiest, then 80k is what you should spend. The difference between your spending and mine comes down to essentially two things. First is that we rent where you have a mortgage. Second is that you spend more on vacations than we do. You also have kids where we don't, though that has a minor effect compared to the other two.
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I do notice a tendency to have environmentalism hiding under the veil of becoming rich. I am against this because it can have some misleading reasoning behind a decision.
For instance, MMM wouldn't recommend whole foods, or organic food for people in a hair on fire situation. However, an environmentalist would.
I may want a V8 sports car, (for happiness) but an environmentalist would take that away from me, even if it were free(it isn't).
MMM has actually said his blog is actually an environmentalism blog disguised as a personal finance blog. I'll see if I can dig up the quote.
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But I do sometimes think that if you already have a large money cushion, then it might be ok to "let loose" a bit and do some things I enjoy even if it will set back my FI date by a few weeks or months.
This is my understanding of the MMM message:
1. Learn to enjoy life with less stuff and less spending.
2. Save money to reach FU money, then FI, then RE (if you want it).
3. Side note: MMM claims to also care about protecting the environment and therefore some of his decisions are based on that.
The key part is "enjoy life with less stuff and less spending". Everyone has to decide what that means to them. For MMM, that's biking and hiking. He's fortunate that the things he likes to do are cheap/free. The heart wants what hte heart wants, if I were to retire on Monday with plans to bike and hike for the rest of my days I'd be bored out of my skull by Wednesday. I simply don't LIKE biking and hiking that much. He does. Cool for him.
Things I like are more expensive, but not necessarily expensive. I like driving and working on my sports car. That's not THAT expensive, but it's more expensive than biking and hiking. Ditto playing golf. I also like BBQ and home repair, that's not very expensive. Someone else may like racing yachts and showing horses, those are very expensive holidays, and if that's your passion and what you want to do, you need to plan that in to your spending.
And that's where MMM falls apart a little bit, anything that isn't devoted to retiring early to bike and hike deserves a "face punch" and is "wasteful and idiotic." I gotta tell you, after an hour or two, I'd rather be at work than riding a bike or hiking. It's just not that great for me. So I need to plan my spending and life to support the hobbies I DO like, and being told those hobbies are wasteful and stupid and I should just hike and bike is not productive and off-putting.
What IS valuable in his message is to identify what DOES make you happy and approach your spending with an eye towards does that make you happy. If I want to play golf and drive my sports car, does buying a new $300 cell phone every 6 months help me towards my goal? No. Does buying a new golf driver or set of tires for the car? Possibly.
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I do notice a tendency to have environmentalism hiding under the veil of becoming rich. I am against this because it can have some misleading reasoning behind a decision.
For instance, MMM wouldn't recommend whole foods, or organic food for people in a hair on fire situation. However, an environmentalist would.
I may want a V8 sports car, (for happiness) but an environmentalist would take that away from me, even if it were free(it isn't).
MMM has actually said his blog is actually an environmentalism blog disguised as a personal finance blog. I'll see if I can dig up the quote.
Pretty sure that quote is simply that his frugality has that as a side effect. Generally, the less money you transfer, the less product would move and the less damage you do to the world.
However, I don't think he sat down and said "Let's make an environmental blog and find a way to get people to join in, people like money, lets see if I can get them to bla bla bla ect ect"
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I've been doing some soul searching about My Purpose lately. Egads. When I created an admittedly vague mission statement, it looked something like, "My vision is that my choices reflect my highest self." That, mostly, is what brings me happiness; looking at a life that's been intentionally chosen, and then enjoying the choices I made. Of course I make compromises to that, while a life of broccoli and bean sprouts is probably "my highest self" ... I really like cheese. Within liking cheese, I try to make the best choice I can, but it is still, I admit, about my preference, not evolved existence.
Although getting to FI and remaining FI are very important to me, I try to take a bigger picture view when making purchases, especially big purchases. Would the choice to buy a Corvette represent the best person I believe I'm capable of being?
For me the answer is no. While that's convenient in terms of how my FI status is impacted, it's really a choice that transcends my financial goals, it's about other values I hold, and the belief that the happiness brought to me by a Corvette would not be offset by what I'd lose in terms of being comfortable with myself. A little cheese I can handle. YMMV!!! I am not advocating buying a Corvette or not buying one, regardless of your income level, I'm just advocating looking at your own values beyond money before making the decision.
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No, 1000.
Fancy food has always been on my mind...
As my income continued to stay above the 200k mark and my stash increasing approaching technical FI number, I am now more willing to consider the possibility of dropping 10 big ones for a family dinner at a 3 star restaurant - still just considering... one day I tell you...one day
$10 to feed the whole family? What?
The *s he is referring to are Michelin stars. For those who missed it...
http://en.wikipedia.org/wiki/List_of_Michelin_starred_restaurants
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I do notice a tendency to have environmentalism hiding under the veil of becoming rich. I am against this because it can have some misleading reasoning behind a decision.
For instance, MMM wouldn't recommend whole foods, or organic food for people in a hair on fire situation. However, an environmentalist would.
I may want a V8 sports car, (for happiness) but an environmentalist would take that away from me, even if it were free(it isn't).
MMM has actually said his blog is actually an environmentalism blog disguised as a personal finance blog. I'll see if I can dig up the quote.
Pretty sure that quote is simply that his frugality has that as a side effect. Generally, the less money you transfer, the less product would move and the less damage you do to the world.
However, I don't think he sat down and said "Let's make an environmental blog and find a way to get people to join in, people like money, lets see if I can get them to bla bla bla ect ect"
I agree that I don't think he ever set out to disguise an environmental blog as a PF blog, but from his standpoint, that's what his blog is.
From the comments of Why should I be Frugal, When.... (http://www.mrmoneymustache.com/2013/04/25/why-should-i-be-frugal-when-im-so-rich/)
You probably already know that environmentalism is really the main point of this blog. Sure it’s about living the best life possible and having loads of money, but neither of those things is possible without an understanding of the planet that MADE you.
He has stated this elsewhere as well, this is first reference I could find.
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Don't ever forget the grandkids therum. Each dollar invested today should yield $1,000 in 60 years. Are you buying 50k sports cars and robbing your grandkids of 50,000,000? (Perhaps 8 million inflation adjusted). What about MMM did he rob his grandkids of 50,000,000 (adjusted) by spending 400k on a house instead of 100k? Would his grandkids not enjoy that $2,000,000 a year income?
Now I'm grouchy about the bagel sandwich again! :)
If your spending aligns with your values, then I think you'll be happy.
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Don't ever forget the grandkids therum. Each dollar invested today should yield $1,000 in 60 years. Are you buying 50k sports cars and robbing your grandkids of 50,000,000? (Perhaps 8 million inflation adjusted). What about MMM did he rob his grandkids of 50,000,000 (adjusted) by spending 400k on a house instead of 100k? Would his grandkids not enjoy that $2,000,000 a year income?
I'm not here to make my grandkids' lives better, to a point. As I see it, my responsibility is to give their parents (my kids) a good education and guidance that allows them to build a good life for their kids. Yes, there might be some money left over when I go to the great cocktail party in the sky, but my purpose here is not to save as much money as possible so my kid's kid can do lines of blow of a stripper's ass instead of going to college 'cuz gramps set me up for life. I will delay my own gratification to fund my kids' college educations. I will not delay my own gratification to hoard cash for my theoretical future descendants.
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Pretty sure that quote is simply that his frugality has that as a side effect. Generally, the less money you transfer, the less product would move and the less damage you do to the world.
However, I don't think he sat down and said "Let's make an environmental blog and find a way to get people to join in, people like money, lets see if I can get them to bla bla bla ect ect"
MMM has explicity stated that it's the other way around: the blog's purpose is environmental, and frugality is a means to that end (with lots of other beneficial side effects, like enabling us to achieve financial independence and retire early!).
The most salient quote, I think, is this one:
"The real reason this blog exists, is simply to save the entire human race from destroying itself through overconsumption."
- from "Weekend edition: Why are you Writing this Blog, Anyway?" (http://www.mrmoneymustache.com/2013/02/16/weekend-edition-why-are-you-writing-this-blog-anyway/)
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Sure, my $200k+ household can plan to buy a new BMW every six years forever without delaying my retirement by that much, but the point is that possessing a perpetually-new BMW won't improve my family's happiness (and, in fact, would probably detract from it).
I want to use your post as an example, even though I don't doubt that you know what would and would not affect your happiness.
It's just my own read of forum posts, but I feel there is an implicit assumption that often underlies advice and comments--i.e., that spending more will makes an individual less happy. But the hedonic adjustment argument states that people are generally no less happy spending less. So spending more shouldn't detract from happiness at all, as long as it's not significantly affecting other areas of life. Saving, say, 65-70% of a $200k or $300k income sounds great to me. As the OP says, why bother sacrificing luxuries if you aren't going to improve your happiness or significantly change your FI date?
My specific reasoning for thinking that buying a new BMW every six years would make me less happy (rather than simply neutral) is that the minor benefits like pampering my tushy with a cushy leather seat, etc. (to which I would quickly hedonically adapt anyway) would be outweighed by the psychological costs of constantly worrying about having it parked on the public streets, etc., becoming a bigger magnet for speeding tickets, etc. So, even totally removing financial considerations, I think me and my family would be happier with our old hatchback and fleet of bicycles than with a perpetually-new BMW.
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My specific reasoning for thinking that buying a new BMW every six years would make me less happy (rather than simply neutral) is that the minor benefits like pampering my tushy with a cushy leather seat, etc. (to which I would quickly hedonically adapt anyway) would be outweighed by the psychological costs of constantly worrying about having it parked on the public streets, etc., becoming a bigger magnet for speeding tickets, etc. So, even totally removing financial considerations, I think me and my family would be happier with our old hatchback and fleet of bicycles than with a perpetually-new BMW.
Depends, generally I think luxury items are indeed what you explained. However, for those who value the fun and thrill of say, a 2 seater sports car or motorcycle. Things like that can give genuinely good experiences.
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Depends, generally I think luxury items are indeed what you explained. However, for those who value the fun and thrill of say, a 2 seater sports car or motorcycle. Things like that can give genuinely good experiences.
Yep, and that's why, like I said in my first response in this thread, you should evaluate the purchase from the perspective of whether it makes sense in light of the happiness you will derive from it, etc., and not solely from the perspective of how much time it will add to attainment of FIRE. If it is the case for a particular individual that a new BMW is not going to add value to their life, then it's a stupid purchase whether it delays their FIRE by five years or by two weeks.
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Depends, generally I think luxury items are indeed what you explained. However, for those who value the fun and thrill of say, a 2 seater sports car or motorcycle. Things like that can give genuinely good experiences.
Yep, and that's why, like I said in my first response in this thread, you should evaluate the purchase from the perspective of whether it makes sense in light of the happiness you will derive from it, etc.,
This sentiment has been expressed a few times in this thread, and I'm a bit confused by that fact. Perhaps it's time to revisit this post (http://www.mrmoneymustache.com/2012/09/18/is-it-convenient-would-i-enjoy-it-wrong-question/).
A salient excerpt from the post (which is in my list of top 5 all-time MMM articles):
But the bottom line is, virtually everything we buy is actually a form of false happiness, a slippery slope that ends at the catheter and the bedpan, and the earlier on the slope that you catch yourself, the richer and happier you will be.
Mental Exercise: The next time you really want to buy some sort of treat for yourself, whether it’s a latte or a Mercedes, try the trick of not buying it instead. Mockingly offer yourself a catheter and a bedpan as a substitute.
Then over the coming months, make a note of your feelings of desire for that item you skipped. How do you feel about not owning it? Are you happy? What are you doing with the time and money that would have been spent in acquiring that item? How do you feel about the accomplishment of voluntarily controlling your urge to buy something? Do you feel more in control of your life in general? Repeat the experiment with more items over time, and note the change in your feelings
Once you master this basic mental framework, you are truly ready to breeze through the tactical aspect of getting rich. Now that you know that virtually no purchases, regardless of their convenience or enjoyability, will actually make you happier, you can instead make the decision based on whether or not you can afford it.
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http://en.wikipedia.org/wiki/Slippery_slope
Because that is one of the posts that I most disagreed with. Maybe virtually everything that most people buy would not result in happiness for MMM. Certainly as a culture, Americans buy WAAAAAAY more crap than they need and could use some re-aligning of their values with their spending. But some stuff does make me happy. And some of that stuff does cost money. I am much more careful now about weighing the money spending vs the happiness gained, and whether there are cheaper or free options that will make me as happy, but there are times when spending money makes me happy. I go out to lunch with a girlfriend and spend money on that even though I am capable of cooking at home. That doesn't mean I'm suddenly going to degenerate into a person who buys BMW's and requires updated iPhones whenever they are released and needs a catheter and a bedpan. It doesn't even mean I'm going to stop cooking and start getting takeout or going out to eat every night. It just means that sometimes, I like to pay someone else to make a meal and feed me yummy food while I catch up with a friend. And I am fine with that. And I think it's fine that MMM doesn't like to eat out, but I get a little annoyed that he or anyone thinks they can judge me because I find happiness in something they don't.
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MMM does eat out, and I don't think you'd find anyone who would facepunch you for having lunch with your friend. He writes about meeting friends at fancy restaurants, enjoying the indian restaurant, etc. The MMM message would be to have a complete and full appreciation of how awesome your life is because you can occasionally hire a team of dozens of people to prepare your lunch, wipe the table, refill your glass, etc.
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Can you post a rough budget for the 22k, I must be doing something seriously wrong as i cant get close to this?
Here's mine - feel safe posting as it has been declared a no facepunch thread
Monthly
Car Payment 563 - don't buy a car you can't afford. Making payments on a car is a sign you can't afford it.
Gas 200
Home Phone 15
Cell Phones (4) 100 - unnecessary, you have a home phone
Netflix/Spotify etc 20
Electric 200
Internet 39
Water 60
Life Insurance 52
Wine 175 - ridiculously high, sober up
Food 700
Restaurant 200 - total waste
Doctor 50
Gym 70 - either one time cost of a couple hundred dollars to buy some barbells and weight used, or jog/bike for free outside.
Mortgage 1940
Misc 350
Clothes 200 - Even 50$ a month on clothing is pretty extravagant, but 200?
Total Ongoing monthly 4934
Adhoc over the year
Car Insurance 2800
Umbrella 1022
Propane 750
Car Maintenance 1250
House Maintenance 5400 - moves up and down - sometimes I think this should be considered an addition to home value and maybe an asset if it improves sale price?
Vacation 15000
Gifts 2400
Total for Year 87830
Just skimming over your numbers casually it is very easy to drop the monthly expense down to 3676 without any real hardship or impact in quality of life.
The yearly vacation cost is out of control. Do you need to stay in palaces and mansions out of the country while slaves wait on you? You are also spending a crazy amount on gifts.
You could knock 30 grand off your yearly expenses without even being frugal.
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MMM does eat out, and I don't think you'd find anyone who would facepunch you for having lunch with your friend. He writes about meeting friends at fancy restaurants, enjoying the indian restaurant, etc. The MMM message would be to have a complete and full appreciation of how awesome your life is because you can occasionally hire a team of dozens of people to prepare your lunch, wipe the table, refill your glass, etc.
Which is pretty much the message that I take from most of his stuff, too. I was just responding to the previous poster, who quoted one of MMM's posts that I personally find to be rather condescending and off-putting.
Depends, generally I think luxury items are indeed what you explained. However, for those who value the fun and thrill of say, a 2 seater sports car or motorcycle. Things like that can give genuinely good experiences.
Yep, and that's why, like I said in my first response in this thread, you should evaluate the purchase from the perspective of whether it makes sense in light of the happiness you will derive from it, etc.,
This sentiment has been expressed a few times in this thread, and I'm a bit confused by that fact. Perhaps it's time to revisit this post (http://www.mrmoneymustache.com/2012/09/18/is-it-convenient-would-i-enjoy-it-wrong-question/).
A salient excerpt from the post (which is in my list of top 5 all-time MMM articles):
But the bottom line is, virtually everything we buy is actually a form of false happiness, a slippery slope that ends at the catheter and the bedpan, and the earlier on the slope that you catch yourself, the richer and happier you will be.
Mental Exercise: The next time you really want to buy some sort of treat for yourself, whether it’s a latte or a Mercedes, try the trick of not buying it instead. Mockingly offer yourself a catheter and a bedpan as a substitute.
Then over the coming months, make a note of your feelings of desire for that item you skipped. How do you feel about not owning it? Are you happy? What are you doing with the time and money that would have been spent in acquiring that item? How do you feel about the accomplishment of voluntarily controlling your urge to buy something? Do you feel more in control of your life in general? Repeat the experiment with more items over time, and note the change in your feelings
Once you master this basic mental framework, you are truly ready to breeze through the tactical aspect of getting rich. Now that you know that virtually no purchases, regardless of their convenience or enjoyability, will actually make you happier, you can instead make the decision based on whether or not you can afford it.
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I get a little annoyed that he or anyone thinks they can judge me because I find happiness in something they don't.
Not to use another slippery slope argument, but um...there are lots of things people find happiness in that are generally considered unethical, immoral, and in many cases illegal.
In the case of dining out, though, I think it's safe to say few would actually claim that it makes you a bad person or that it is the first step on the road to a catheter. BBub hit the nail on the head regarding a MMM response to dining out.
More broadly speaking, I get it. Buying stuff, eating at restaurants, etc: sometimes it makes me happy. Briefly. And usually in inverse proportion to the amount of money I spend, because every dollar spent now takes me farther away from the goal of spending unlimited time with whomever I want doing whatever catches our fancy. And anyway, it's usually not the stuff that makes me happy. It's the time or mental energy or emotional investment expended on or with those things - like conversation with my kids where I don't have to think about food prep (restaurant dining) or problem-solving to improve the quality of my homebrewed ales or using the new fancy stick blender I just bought to make a batch of soap that will help my daughter's eczema.
In the end, I'm not judging you for going out to a restaurant with a friend. I am judging the asshole driving solo in a Suburban to get to work a whopping six miles from his house. And I could give a damn how much happiness he finds in it.
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I'll be honest about this. With regard to the Holier Than Thou channel:
It's personal. If someone does something that, from my research, damages MY earthship (which is of course everyone else's earthship as well), I'm going to be judgmental about it. I might even - gasp - be verbally judgmental about it to their face. That's totally self centered, but it's an attitude that happens to serve every living thing on the planet - you included - as well as serving me.
Of course there are exceptions and everyone needs a little slack here and there, but when people stick their heads in the sand and trash the planet while make a religion out of exceptions and slack in the name of personal freedom to do anything they want, that's crap.
I now return you to your regularly scheduled destruction.
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Late to this thread! Being high income didn't destroy our frugality. It might have increased it since it was so much fun to save and build wealth. What did was reaching FI suddenly because of vested stock options. Once we got that money invested the daily swings in net worth are more than we spend in a month, more than I'd get as a raise in a year. When I saw that it weakened my frugality muscle a lot.
I don't feel like being so careful anymore but we'll go back to it soon I hope.
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It depends on the word "need" in the original question. If by "need" the question considers the purely financial aspect, then absolutely, high income means lowering spending becomes less of a priority, as, for example, not cutting the cable bill is not going to put a high earner in a financially compromised position, whereas spending 2k a year on cable when earning 30k is a major drag on FI.
If by "need" the question considers a high earners impact on the environment, then while lowering spending might not be a priority, but lowering consumption should still be a priority. Even if the cost of, say for example, heating a home at less than 70deg and air conditioning at higher than 72deg (or whatever your ideal temperature limits are), is not going to break the bank, it certainly is wasteful from a greenhouse gas point of view.
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MMM has explicity stated that it's the other way around: the blog's purpose is environmental, and frugality is a means to that end (with lots of other beneficial side effects, like enabling us to achieve financial independence and retire early!).
The most salient quote, I think, is this one:
"The real reason this blog exists, is simply to save the entire human race from destroying itself through overconsumption."
- from "Weekend edition: Why are you Writing this Blog, Anyway?" (http://www.mrmoneymustache.com/2013/02/16/weekend-edition-why-are-you-writing-this-blog-anyway/)
Personally, this is why his blog resonates so strongly with me: It's the combination of environmentalism, minimalism, frugality and FIRE. There are tons of blogs, forums, etc out there that cover one but he obviously feels strongly that they go together. Sometimes I feel like some of us are reading different blogs. :-/
EarlyRetirement.org (which I found right before MMM) has many participants that are high income/high spenders. Some have post-retirement budgets that I can't even fathom.
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Well, I've been reading the board for a long time but this is my first actual post. This thread is fascinating and I think highlights very clearly why the MMM message and the forum, at times, is very compelling.
I'm likely in the extreme camp of MMM readers, as follows. Very significant income - scaling up for 20 years to a 7 figure level, with assets created from savings from that income and subsequent investments. So, I just wanted to contribute briefly with a perspective from this vantage point, which is limited by definition but may be instructive to someone reading this thread.
I suppose in colloquial terms, my main suggestion to you would be: "rich people" admire and learn from MMM too, and apply the lessons their own way. High income doesn't weaken the power of the message or make it less relevant. Take it from me.
I have learned a tremendous amount from reading MMM philosophy over the last couple of years and also, frequently, from the forum. He is an exceptionally clear-thinking and logical person. You do not need to agree with everything at all to still derive a lot of benefit from the messages and recommendations. I do consider him a "philosopher" of sorts, with a very coherent set of messages and world view. It is impressive, not to mention enjoyable, and you take from it what works and is valuable to you.
In my case, I already knew well before finding this community and the specific MMM ideas, that money did not equal happiness. Money was a means to an end - freedom. But what is "freedom" and how do you best articulate it?
Some of the arguments on this blog help crystallize the logic behind freedom very clearly and uniquely. For example, frugality for it's own sake ("it's the right thing to do") and the sake of the planet can be part of that.
I find myself adding the MMM perspective to many of the things I do and think about doing, and when I provide counsel to others. I did it somewhat instinctively before, but now I do it consciously and more constructively, and that is a good thing.
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Wine 175 - ridiculously high, sober up
No need to be that drastic, but bear in mind that "expensive wine is for suckers": http://www.vox.com/2015/5/20/8625785/expensive-wine-taste-cheap
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Depends, generally I think luxury items are indeed what you explained. However, for those who value the fun and thrill of say, a 2 seater sports car or motorcycle. Things like that can give genuinely good experiences.
Yep, and that's why, like I said in my first response in this thread, you should evaluate the purchase from the perspective of whether it makes sense in light of the happiness you will derive from it, etc.,
This sentiment has been expressed a few times in this thread, and I'm a bit confused by that fact. Perhaps it's time to revisit this post (http://www.mrmoneymustache.com/2012/09/18/is-it-convenient-would-i-enjoy-it-wrong-question/).
A salient excerpt from the post (which is in my list of top 5 all-time MMM articles):
But the bottom line is, virtually everything we buy is actually a form of false happiness, a slippery slope that ends at the catheter and the bedpan, and the earlier on the slope that you catch yourself, the richer and happier you will be.
Mental Exercise: The next time you really want to buy some sort of treat for yourself, whether it’s a latte or a Mercedes, try the trick of not buying it instead. Mockingly offer yourself a catheter and a bedpan as a substitute.
Then over the coming months, make a note of your feelings of desire for that item you skipped. How do you feel about not owning it? Are you happy? What are you doing with the time and money that would have been spent in acquiring that item? How do you feel about the accomplishment of voluntarily controlling your urge to buy something? Do you feel more in control of your life in general? Repeat the experiment with more items over time, and note the change in your feelings
Once you master this basic mental framework, you are truly ready to breeze through the tactical aspect of getting rich. Now that you know that virtually no purchases, regardless of their convenience or enjoyability, will actually make you happier, you can instead make the decision based on whether or not you can afford it.
Yeah, that's a giant load of bullshit. Even MMM has his bike and his silly inflatable kayak that he likes. Those were both purchases and they both presumably made him happy.
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And he uses them, which is what brings the happiness. If they sat in his garage, would they bring happiness? No. They would be a burden, not a source of joy.
The trick is always to separate out our true wants from the wants that society is trying to talk us into. Then we need to prioritize the things we truly value, since some will be more valuable than others (value =/= money cost here). And that is where our money goes.
More general example - cars - some people on the forums are true car people, they love cars, they love the fiddling with them, they love driving them. So some of their money will go to cars. What I need in a car is totally different, so I will decide how much to spend on a car based on my needs (my walk score = 0) and wants, not theirs. Some people will decide that they don't need a car at all, or want one, and that determines where their money goes (in this case, not to cars).
TL:DR - MMM is about spending our money to reflect our true values, needs and wants. This means we have to figure those out first. It is not about slavishly following someone else's spending patterns.
Yeah, that's a giant load of bullshit. Even MMM has his bike and his silly inflatable kayak that he likes. Those were both purchases and they both presumably made him happy.
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Don't ever forget the grandkids therum. Each dollar invested today should yield $1,000 in 60 years. Are you buying 50k sports cars and robbing your grandkids of 50,000,000? (Perhaps 8 million inflation adjusted). What about MMM did he rob his grandkids of 50,000,000 (adjusted) by spending 400k on a house instead of 100k? Would his grandkids not enjoy that $2,000,000 a year income?
Not everyone believes in inheritance.
Now, you might be robbing a charity of your choice of that money. But perhaps the grandkids should make their own.
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I think the key ethos of mustacianism is that money and things are not ends in and of themselves.
That fact should spur one to carefully consider what core values/principles they ascribe to and how to best leverage the means they have available to achieve specific goals set out in line with the core values. The specific values, goals, income levels, savings rates, etc are all subjective to each individual but mustacianism, to me, clearly demands that we each make these choices explicit and deliberate- unlike the VAST majority of our consumerist society.
Personally, we could be much more frugal and FIRE sooner,but we splurge on many entertainment/travel/adventure/hobby opportunities that we are blessed to be able to afford while still operating within a very aggressive savings program that will provide total FI in a few years. In other words, I believe that frugality is merely a means to and end, but if frugality IS a core value to which one ascribes I can see where some of my behaviors would be, in another's world view, quite non-Mustachian!