Post: #26

The question you need to ask, is what's their end game? I take issue with this, because I am the person you talk about. I drive a corolla that is pushing 20 years, routinely shop at dollar stores, and get the half off food about to expire. I look at incoming and outgoing money as seperate discreet things. Completely unrelated to each other. Most people don't. I'll buy all the cheap meat I can because if I freeze it, it's good for months, and it will eventually get eaten. Its a slightly higher up front cost, but the long term effect of this is that all my food costs 30-50% less. Buy food when it's cheap, eat what you have on hand, and what's in your freezer/pantry is your buffer because food isn't always cheap. Restock at opportune times. It isn't about money. It's about not being wasteful. Full on agree with cheap vs frugal.

Cheap in my opinion, is very short sighted, affects other people (not tipping etc) and often time in the long run, is not financially prudent.

Frugal on the other hand takes into account all factors (time, effort, MONEY, social stigma (again not tipping) ) and based on all of these things, picking the lowest total cost. It just happens that money is a weighted factor, because money can easily be changed to anything else. (Money converts to a car a hell of a lot easier than vice versa)

Same thing with work. I'm of the opinion that if I work 4 hours a week or 120, the week is shot. Now that I'm working, I'm pushing a healthy 6 figures. I'm spending like 10-15% of my pretax income on living expenses.

I don't mind living like a student. I just bought a 2k camera lens on a whim, my friend bought an 18k harley. Why? Because we enjoy these little hobbies. Money is freedom.

My end game is to stop working for good, and am on track to do it in the next couple years (early 30s). Then I can stop working a job I can barely tolerate, continue living a modest lifestyle, and basically do whatever the fuck I want. Do you honestly think your friends want to bank 90% of their salary working until they're 65 so they can be the richest guy in the grave yard?

While Mr. Money Moustache is kind of a little *too* far out there, I agree with a lot of what he says. The difference between a 20 yr car, and a new one, is $25k, which if you invested it, means you could retire years earlier. What does a new car get you over an old one? A little imagined status. Most people are way to inwardly focused to give two shits about your new car beyond a passing comment of a facebook like.

Post: #27

Once you have a decent amount of money, you hit a plateau and realize in order to live a drastically better lifestyle, you'd have to spend drastically more money. If your income increases that dramatically, and you foresee some longevity in that higher income, great. Go for it. It doesn't happen very often.

You'll find many, many financially healthy people that say, "I could afford a more expensive place. I could afford a more expensive car." But so what? What does a more expensive place or car get you?

Money always comes down to one thing: Freedom. If you're a diehard gearhead like el mech then it makes sense to drop serious cash on cars. But there's a difference between passion vs. ego. I can go out and enjoy a $700 per person sushi meal, a few times a month if I want. Some people would do that to impress, others like myself would do it because we are genuinely passionate about the food and understand that we're getting what we pay for.

The way I handle my finances is to keep a $10K minimum cash balance at all times. Whatever have over 10K at the beginning of the month gets invested. The more I invest the more I get back in dividends and appreciation. The less I spend, the more I invest. It's really a simple thought process.

When you see that investing increases your income, suddenly all those toys and splurges seem fucking pointless.

Post: #28

Ha. I have a neighbour woman who is 87 years old and she is sitting on a serious amount of dough. No husband, no children, and she lived greedy all her life.
For what? She obviously has already one foot in her grave.

However I'm going the middle way here. I spend money on things, but only important things. Like quality ingredients, I always cook my own meals. I also put money on quality clothes. I have blown a lot of money on traveling, but I don't regret a single cent. That's a part of me.

BUT here where I live people lives way above their means.
New houses popping up everywhere. People take loans, 2-300K in Euro and build themselves a nice a house and a nice car. 2-300k may not be so much, BUT these people are usually bluecollar people with a yearly income around 30-40k.

The interest on bank loans is so unreal low here (0,4-1 %) so the loaning has gotten out of control. If there would be a banking crisis and the interest would rise to 10-25% like it did twenty years ago, people would be royally fucked.

This fucking country is built on huge bankloans.


This puts me in a unique situation since I don't have debts and I'm living below my own means. If I don't have money I don't but anything. I don't crawl to the bank.

Funny thing I keep hearing is that people believe that I have taken a 500k bankloan so I could finance my travels

What they don't know is that the year I spent entirely abroad was my cheapest year ever to this date. People have no idea of how cheap it is to travel when you are coming from a expensive country.

Post: #29

Money is a tool. That's all it is. People should use it to achieve what they really want in life, but also understand that they can't have their cake and eat it too. I think there are going to be a lot of people who chase status and a fleeting good time who are going to be royally screwed in a few years. These people are going to be forced to keep working even when they don't want to and are barely able to. You read about these people who should be retired who end up working as greeters at Walmart or something like that and it's horrendous. They can barely stand up at the end of the day. There is a massive day of reckoning coming, and the last financial crisis was only the opening salvo. Likewise, there are also going to be a great number of people who will have spent their entire lives playing the game and doing what they thought was the right thing who will see the rug pulled out from under them when the SHTF and TPTB turn around, shrug their shoulders and say, "You fucked up. You trusted us."

For me, money is about freedom. I quit my job a few months ago and if things go according to plan (I have a Plan B, C, D, etc. also), I'll never have to "work" again. I earn money still (though most of what I make is passive), but I don't consider it work because it's on my terms and I'm able to turn people away if I so choose. The change in stress levels and happiness in the past few months has been incredible. It's one of the best decisions I ever made.

Yet I'm not throwing money around just yet because I am still concerned about the day of reckoning I see coming. Not only do I want to make sure that all of these other knuckleheads don't drag me down with them, I want to be in a kind of anti-fragile position where I can take advantage of the next financial crisis when it occurs.

Besides, most of the things that bring me real happiness have nothing at all to do with money. I think a lot of people have been conditioned to believe that they can't enjoy life without spending money. Walking your dog doesn't cost you anything. Why not find happiness in those kinds of things?

(09-20-2014 03:51 PM)samsamsam Wrote:  I have quoted this a few times.

Play now, work later. Work now, play later. Whatever you do last, you do longest.

Yes, there is a middle ground. I am not all work, but I am looking forward to punching the eject button.

That's a great quote. Is it yours or does it come from somewhere else?

Post: #30

This topic is interesting for me, as i've just received my first major monthly paycheck (a LOT) and hardly know what to do with it. I am intelligent, which means I know how to limit my spending, but at the same time I don't have the "brains" of a businessman, which means I also have zero idea of how to invest it. Which results in me (us) just sitting on the cash.

In the beginning, you never know how long your situation will last. We live frugal just in case some apocalyptic shit happens 3 months down the road. But, for those that have stable jobs, yeah I'm not sure what's going through their minds...
.

Post: #31

I´am not working for 2,5 years now and it´s the best time of my life though I live very frugal. I like it a lot. Good thing is that I am fit. As Greg Plitt put it this way: If you are fit the whole world is a great playground for you. I have already done so many different sports and it´s maybe one of the most satisfying feelings one can get without spending much money.

Post: #32

When I was in my 20s, I definitely thought about brand names, buying that lifestyle, impressing women with my material goods. Ironically, my paychecks were smaller, investments non-existent and I was scraping by. In my 30s, I am far from enlightened however my mindset has changed. These days I am making more money but have less of a desire for material things. I haven't updated my wardrobe in a few years, still drive my (paid off and in good condition) BMW. I am not trying to be sanctimonious here, I just stopped caring about brand names and acquiring stuff.

I have spent generously on education. I am finishing a long dormant Masters Degree, got my Real Estate license (not planning on becoming an agent), and getting fitness training. My focus has shifted to buying up real estate to fix up and rent out, putting money in the 401K, and doing side hustles that are risky but may make me serious money if I succeed. Interestingly, this shift hasn't effected my relationships that much: my parents still love me as they had in the past, my close friends are ride or die types who could care less about how much money I make, and the women in my rotation are either down with their one night a week where we eat take out and bang or I drop them.

There is a sense of a quiet confidence that I have these days. I'm busier than ever, have a few dollars in my bank account yet have maintained the relationships that I want.

Post: #33

I know this old man here in DR (he is 67) and he says he is worth almost 10 million dollars. If you see this man, you would never think he is worth all that money. He drives a really old car, rents a very cheap place and fucks prostitutes all day. If I am going to work all my life to live like that, then I don't want to have 10 million dollars. What is the point of having lots of money if you are not going to spend it?

I don't really spend a lot of money but whenever I see something that I like I would pay for it. I recently bought a watch for 250 dollars and a sun glasses for 250 dollars. My friends said they wouldn't pay all that money for it, I value those things and I know they will last me few years, so I don't see any problems in buying it. I don't mind buying travel tickets to memorable places, buying quality clothes whenever I need them, eating good food (even though I eat good and cheap on everyday basis).

I just don't spend money on stuff that I don't need. I won't buy the latest iphone for example, I won't buy a new laptop because the one I bought second hand 4 years ago, still doing the job. I don't spend 100 dollars buying alcohol in one night, I don't buy a car because I don't need one even though I could afford it. But don't get me wrong, If I had 500k dollars saved, my life would be a bit different. I would probably buy myself a car for 40k dollars and travel a bit more often.

Some of these people are being frugal because they say you never know what the future could bring. But really, what is the worse that could happen? If you have 200k saved, I think you could solve most of everyday life problems, enjoy the rest of the money.

Post: #34

(09-20-2014 01:15 PM)OGNorCal707 Wrote:  One thing I am noticing a lot lately is people who have money and could be living a nice lifestyle, but still live like they are poor. I think being frugal with your money is never a bad idea, but on the flip side I am also a believer that one should "treat themselves, not cheat themselves."

If you have money, but still shop at the discount grocery outlet where you get shitty food on the verge of expiring, you drive an old beater car that's a P.O.S., never go on vacation or travel, or wear old unstylish clothes, I think you are missing out a lot on life.

I have two friends that have done well for themselves over the past year, but if you ask them to go out and eat a nice restaurant they will scoff. One of my buddies, bought an old beater 95' Ford F-150 with almost 200,000 miles, while I was trying to convince him to drop a bunch more, (he has the money), and get a 2006-2010 with under 100,000. Well, he claims he doesn't need anything fancy, and bought the old beater for $3,000. A month later the beater blew the head gasket and my buddy had to drop $5,000 to get a new engine, since then he has dropped at least another couple grand on it. Overall, the amount he dumped into that old truck is how much he could've bought a newer used one for.

My other buddy, has a bunch of cash stacked, but lives like he is on welfare, the guy shops at the dollar store, his idea of eating out is hitting the taco truck, his apartment is sparse (barely any furniture, no art, a tv that looks like it's from the 90's). Meanwhile he could easily afford to give himself nice things that would vastly improve his lifestyle.

The point of this post, is having money is one thing, but knowing how to spend it and enjoy it is another. I'm about 1/4 of the way through The Millionaire Fastlane, and enjoyed the 4 Hour Work Week, these books have kind of opened up my eyes on lifestyle and having money. What's the point of slaving away money to save away for when you're an old man, if you're not enjoying it now?

I do want differentiate between enjoying one's money and blowing on frivelous things. I dropped $3500 on an omega watch a few years ago when I was doing real well, now looking back, I kind of think it may have been a waste because there is other stuff I would prefer to do with that money. But, what I didn't do was drop $10,000 on the equivilent model of a Rolex. I kept my spending within my means of what I could afford, without breaking the bank. If you only have $20,000 and you spend $10,000 on a Rolex, that is idiotic, but if you have $200,000 and spend $10,000 on a Rolex, it's still a large expense, but within your budget.

Another thing is I see people I know that are making way more money than I do, my earnings are modest compared to their's, but at the end of the year we are making about the same when it comes to our time spent. A friend may make twice what I make, but if he works 50 hours a week, and I only work 20 hours, it kind of evens out, especially in the quality of lifestyle I can lead.

So I guess the idea is find a balance, between being frugal and living cheaply, with enjoying the money you do save, and live a full and rich lifestyle. If I never traveled around the world, I'd easily be $50,000 richer than I am now, but then again I wouldn't have seen and done all the cool shit I've done, I guess it's all relative.

Warren Buffet still lives in a modest house in the midwest and lives a frugal life. He lives substantially before his means. Some people don't have the desire to live a baller lifestyle even with tremendous wealth.

Post: #35

(09-21-2014 03:24 AM)Feisbook Control Wrote:  

(09-20-2014 03:51 PM)samsamsam Wrote:  I have quoted this a few times.

Play now, work later. Work now, play later. Whatever you do last, you do longest.

Yes, there is a middle ground. I am not all work, but I am looking forward to punching the eject button.

That's a great quote. Is it yours or does it come from somewhere else?

I read it somewhere once and it stuck in my head. Wish I could say it was mine!

Post: #36

(09-21-2014 08:21 AM)pitt Wrote:  I know this old man here in DR (he is 67) and he says he is worth almost 10 million dollars. If you see this man, you would never think he is worth all that money. He drives a really old car, rents a very cheap place and fucks prostitutes all day. If I am going to work all my life to live like that, then I don't want to have 10 million dollars. What is the point of having lots of money if you are not going to spend it?

I don't really spend a lot of money but whenever I see something that I like I would pay for it. I recently bought a watch for 250 dollars and a sun glasses for 250 dollars. My friends said they wouldn't pay all that money for it, I value those things and I know they will last me few years, so I don't see any problems in buying it. I don't mind buying travel tickets to memorable places, buying quality clothes whenever I need them, eating good food (even though I eat good and cheap on everyday basis).

I just don't spend money on stuff that I don't need. I won't buy the latest iphone for example, I won't buy a new laptop because the one I bought second hand 4 years ago, still doing the job. I don't spend 100 dollars buying alcohol in one night, I don't buy a car because I don't need one even though I could afford it. But don't get me wrong, If I had 500k dollars saved, my life would be a bit different. I would probably buy myself a car for 40k dollars and travel a bit more often.

Some of these people are being frugal because they say you never know what the future could bring. But really, what is the worse that could happen? If you have 200k saved, I think you could solve most of everyday life problems, enjoy the rest of the money.

I agree but that is 10M old man is an extreme, same thing with the old lady example on an earlier post. I think when you hit a number for LIQUID ASSETS and have a steady cash flow, then sure things change and it would make sense to. The numbers are different for everyone

Maybe I missed the point, but to me my thought was about how to get to that point where I can enjoy things I appreciate and yet know I am set up for the long term.

Also, being frugal doesn't mean buying cheap items. To me it is buying things of value, lasting value. In the shoe thread people discussed whether or not to buy cheap work shoes. But they wear out quicker, some are not made to be re-soled, good shoes can last you decades. So you think about your costs of shoes over a long period of time.

I'd be curious what liquid number everyone would need to feel like you could live your life you wanted. And a monthly inc stream. For me $1M liquid assets plus 5K a month off passive or easy work (low hours, no stress) would be significant for me.

Post: #37

Quote:What is the point of having lots of money if you are not going to spend it?

Because you can use money without spending it.

Post: #38

(09-21-2014 08:32 AM)Dantes Wrote:  Warren Buffet still lives in a modest house in the midwest and lives a frugal life. He lives substantially before his means. Some people don't have the desire to live a baller lifestyle even with tremendous wealth.

Damn you got in there before me. I was going to mention Buffett. With all these pro athletes and celebrities on 'MTV Cribs' with their huge mansions and 10 cars, its so heroic for me to see a guy who has more money than all of them put together live in a simple home he bought in 1958 for $31,000.

The big distinction I've made is between spending and investing.

I used to be very frugal until my perspective changed after hanging around with some entrepreneurs.

I noticed this about them: Hoarding money is for people that don’t believe they’re able to make more of it.

I think a lot of people are overly frugal because they know that if their boss has a change of mind, if the government makes cut-backs, they will be in a desperate financial situation.

I think if you are confident in your ability to come up with ideas and generate money from them then you become freer with your money.

Post: #39

Well I'm glad my thread started an interesting discussion, and I've appreciated everyone's replies. One thing though, I think people are misinterpreting what I'm saying to an extent, and as far as I'm concerned an important distinction within this discussion has arisen, being frugal vs. being cheap.

I am buy no means an advocate for frivolous spending and blowing cash, especially when one's amount of liquid assets are low, but this wasn't directed towards the young guy trying to make it on a low wage salary, it's about people who have a good amount of money saved, who barely spend it.

It's also important to not the distinction between being frugal, which in my mind is a very smart thing to do, and entails being smart with how you spend your money and what you spend it on, compared to being cheap which is about not spending anything and usually purchasing whatever is the lowest price regardless of quality.

If anyone has seen, I'm all about being frugal, shit my last thread I posted on here was even about things I've done to save money: /thread-39065.html But, one thing I am about is enjoying my life and often enjoying your life can largely come down to your lifestyle.

That said, what is a good lifestyle will vary from person to person, one guy may be happy with a 92' Toyota Corolla, clothes he bought from Walmart, a 500 sq. ft. studio apartment, etc. While that would be living hell for another guy.

One thing I am an advocate for is quality. I look at money spent on quality items as an investment, all the while being frugal with my spending. I haven't bought any new clothes in like two years, but last time I bought clothes I dropped about $1500 total on clothes from Hugo Boss, Diesel, Lacoste, and Kenneth Cole.

Some might try to say that I'm "name dropping, being a label whore, or chasing status", but what I would tell them is these are nice clothes that I will keep clean, and in good condition and have to wear for years to come. I'd also tell them that I bought all these clothes during the after Thanksgiving sale, when the clothes were all basically 30-75% off their usual retail price.

Anyhow being frugal definitely pays, but being cheap doesn't in my opinion. Often when you are cheap, you buy cheap things whether it's clothes, car, electronics, etc., and you often pay more in the long run, because your stuff is poor quality and breaks, so you have to buy more stuff or pay to repair it which can be a never ending cycle.

Also, how one man lives and the lifestyle he leads, may not necessarily be what excites another man. Some guys on here probably travel the world sleeping in hostels and eating street food, and that works for them, that makes them happy... Meanwhile another guy thinks that's no way to live and prefers a pimped out apartment, nice car, fancy dinners eating out, nice watch, etc. You can't really knock either guy, because they are unique, they are trying to enjoy their lives, and are doing what makes them happy.

Post: #40

Quote:One thing I am an advocate for is quality. I look at money spent on quality items as an investment, all the while being frugal with my spending. I haven't bought any new clothes in like two years, but last time I bought clothes I dropped about $1500 total on clothes from Hugo Boss, Diesel, Lacoste, and Kenneth Cole.

Some might try to say that I'm "name dropping, being a label whore, or chasing status", but what I would tell them is these are nice clothes that I will keep clean, and in good condition and have to wear for years to come. I'd also tell them that I bought all these clothes during the after Thanksgiving sale, when the clothes were all basically 30-75% off their usual retail price.

Good point. But the so called quality of name brand clothing has mostly gone the way of the dinosaur in the non top tier. Now it is all made in 3rd or 2nd world countries same as the Walmart stuff.

For example I bought a Hugo Boss suit, yearly Nordstrom sale 60% off on a 1k suit. Good deal.

But I notice they make them in Bulgaria(for me a 2nd world country not much difference in workmanship than Ukraine) now and on the style forum some astute members are complaining about them falling apart.

Ordered some Puma clothing from PUMA directly and such awful quality that the shirts should be sold at 99 cent store.

Point is we are becoming a global world where the so called differences in quality are less than it was 20-30 years ago.

Even with electronics you have the generic cheap brands that are basically selling the same model as the name brand without the brand. I hear it is often the same with supermarket brands of food.

I had an insignia Blue Ray player(Best Buy brand) that was REALLY a LG model. This type of stuff is going to become more common, its the global trend.

Today anyone who doesn't RESEARCH what they are buying is doing themselves a disservice!

Post: #41

To me it's about the freedom. Initial goal is financial independence and work a job that I like. Work on what I want to work on.

Warren Buffet is just very good at investing. A lot like some guys are very good at Starcraft. He's still a very regular dude. Personally I live below my means and scale up accordingly. I will move up when I have the financial resources. The goal is to maximize lifetime happiness, and all debt will do is cripple you.

I have discovered the key to happiness is new goals and constant growth. The hedonistic approach you eventually reach an end. Building an empire the way to go IMO. Constant growth towards goals is what I discovered. Take the approach

Happiness comes in different forms though. It's not usually what you think.

I was without my health. Health always > wealth. You can always make more money, but your health is a one time thing.

Money is a means to an end. Better you do something you enjoy than not. I have plenty of rich friends and broke friends and the idiots are often the happiest.

Post: #42

This is a big reason why these people are rich. They don't throw money away on shit they don't need.

Post: #43

(09-21-2014 02:08 PM)puckerman Wrote:  This is a big reason why these people are rich. They don't throw money away on shit they don't need.

Don't take it personal, I actually like your posts, but did you read what the OP said?

Post: #44

Quote:time I bought clothes I dropped about $1500 total on clothes from Hugo Boss, Diesel, Lacoste, and Kenneth Cole.

You are getting swindled. $1500 bucks for clothing? I don't think I've spent $1500 for clothing in my entire life. You can have a suit tailor made in China for under $50 bucks. Probably $10 in India... if you think quality is a brand name then I've got a story for you.

I have a fake CK shirt that is 14 years old... so much for brand name quality.
Brands actually don't mean a goddamn thing except where you are purchasing the stuff from. You can walk down Changsho lu in Guangzhou and pick up Brand Name LOGOs by the 1000's for 5 bucks. Put them on a plain white t-shirt and no one knows the difference, if you can find me 1 in a million people who can identify the difference from 3 meters I'd be amazed. The difference between REAL quality clothes, is maybe an extra stitch, and honestly who cares? If you can get a pair of pants for 5 bucks and they come apart a year later, just go buy another pair.

Clothes are probably the worst thing to drop mega bucks on because most clothes are initially sold from the factory for under a dollar. Anything that says made in CHINA, guarantee was a dollar or two, no matter what the price tag in the West indicates. If you go down to Xiaobei, across the street from Pizza 2 Pizza, there's a major clothing and shoe market, where you can find Air Jordans, Nike and pretty much any name brand for 5 dollars. Being frugal helps you locate these and markets just like them so when you return to the West you realize that people here are just ignorant of the true cost of goods. If you hit up Wuhan or Xiangyang right behind the major shopping centers are huge areas of 'fake' brand name clothing that can be had for 5 rmb and less.

I have about 5 'generic' smartphones in China that I picked up, each for around 20 bucks and under. I come back to Canada and go to pick one up here and the cheapest one I can find at the local mall is $400 (with a plan). I finally found one at Canada computers for $100 but still its no better than any of the generic brands from China.

BTW VP if you are reading this, that is a picture of the town that HR broad was going to put you in. Those little houses are less than $600 a month.

You can have the millionaire lifestyle, trophy wife and lots of friends as long as you do your homework. There are plenty of places on Earth where your dollar goes a lot farther. I may earn less money than you but I get more bang for my buck simply cause I make sure to look for the true cost of items. Now if you are talking buying an airplane or getting quality medical care, well yeah then we're talking major bucks but for consumer goods and quality of life, you are doing yourself a major disservice staying in America.

Post: #45

If you gots dough you should enjoy it.

But this demographic of well off people living frugally is by far the minority. It's still a far better group to be in than the vast majority: people living well beyond their means, carrying debt month to month.

I would sooner smoke crack on the regular than pay 17% on credit card interest which many do.

Post: #46

^^ I am sure you think your cheap suits and clothing look good, but I bet you money they don't. What the heck is a fake CK shirt. Real CK is garbage as is.
I am knocking you but $1500 on clothes is not a lot. Granted in Canada we get ripped off, but I can go across the border and load up on clothes.
As Jimurkr mentioned brands like Boss have sacrificed quality for profits.

Post: #47

Quote:I am sure you think your cheap suits and clothing look good, but I bet you money they don't. What the heck is a fake CK shirt. Real CK is garbage as is.

And this is exactly what I'm talking about... there is no fake or real, its all in your mind. Expensive clothes don't make the man, and looking good has nothing to do with the quality/price of clothes you wear but man if you want to go on paying that, be my guest. All of our clothes come from the same place on Earth. Take the logo or tag off your expensive suit and will it still look attractive? Would you pay the same price for the same suit that didn't have an embroider name on the front? Not only can most people not tell the difference, the people that do, you probably don't want to associate with anyway.

Expensive clothing is like expensive lipstick on a pig... doesn't change much.

American marketing companies have been preying on people like you for a long time, how do you think China is so rich in the first place?

Post: #48

I never said clothes make the man, the man makes the clothes.

All of my clothes don't come from China.