How do you determine your discretionary income?

[DeletedUser394]

Just last week I stopped myself from spending around $1,000 on premium gym memberships, brand new shoes, a $100 ed hardy cap, a $100 armani t-shit, etc

I realized that I could just get these things when I actually make a lot of money and have a large income. By buying things now that I don't really need, I'm simply delaying my goals and slowing down my progress.

As it stands now, I have more money than the average 17 year old, so why would I swindle this opportunity to get even further ahead!

So my question is for everyone, but more specifically for MJ, Russ, Runum, etc.

When you began, how did you determine what you would spend on things that you really didn't need? Or were you simply a miser until you sold your first company/RE deal?

I know the answer to this question is something along the lines of "everyone is different", but that's not what I'd like to know. I simply want to know how you went about spending discretionary income in the past, and how your perception of what discretionary income was as you progressed and made more money.

For the people (like me) who haven't yet achieved a massive amount of financial success, what kind of "pocket money" do you guys keep?

Ex: Spend $5-$10 out of every $100 you earn, or $200/month to spend on stupid things.

Thanks :smxB:

 

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[Rem]

I am not a millionaire so maybe you aren't looking for this answer but I have always been a saver. I don't buy anything unless I need it. I let me wife buy me the other stuff. LOL

It's more about self control. But if you need to, then budget it.

I am sure you will get some better answers.

 

[PaulRobert]

When you began, how did you determine what you would spend on things that you really didn't need? Or were you simply a miser until you sold your first company/RE deal?

For the people (like me) who haven't yet achieved a massive amount of financial success, what kind of "pocket money" do you guys keep?

I have determined my spending habits on NEED vs. WANT. My expenses on clothes, electronics, ect.. has gone down significantly. Almost all of my expenses consist of anything related to my product. It is good that you put a stop to the useless expenses such as memberships and other things. Since you are planning to go official and make a million by the end of this year, I suggest you buy a decent suit and a good pair of dress shoes. Thats it. Is the Armani shirt getting you closer to the Fastlane or is it just making you look as if your living in the Fastlane? Also, I always go quality or over quantity so I do not end up spending money on more than I need.

Invest that money to make you richer so you can reward yourself with something nice later on.

 

[mkzhang]

I am a cheap bum, I never spend much on clothes or food. In fact, when I am out on business and away from my parents (still lives at home lol), I eat bread everyday because I don't like spending money on food. If I can get full eating toilet paper I will eat that (I am cheap). As long as I can remember, every meal I've ever had with my friends I made them pay for me hehe...

But when it comes to spending money on my hobby, the only limit is the impact on my cashflow and whether or not I am putting myself at risk. I am perfectly okay with spending 100k on a car, that is no issue with me.

 

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[Rawr]

I have an answer from a Billionare for you:

It doesn’t matter where you live. It doesn’t matter how you live. It doesn’t matter what kind of car you drive. It doesn’t matter what kind of clothes you wear. It doesn’t matter. Your biggest enemies are your bills. The more you owe, the more you stress. The more you stress over bills, the more difficult it is to focus on your goals. More importantly, if you set your monthly income requirements too high, you eliminate a significant number of opportunities. The cheaper you can live, the greater your options. Remember that.

Success & Motivation – 2009 « blog maverick




You don't need ed hardy or armani shirts, especially for $100, and at 17, are you serious?


Bills paid, little money to hang out with friends, rest into investments/business.

I have heard a very good quote once:

"people dream of big things they want, but since they do not work to get those things, they fill up that space with plasma tv's and other crap, that very soon still leaves them feeling empty"

 

[DeletedUser394]

Is the Armani shirt getting you closer to the Fastlane or is it just making you look as if your living in the Fastlane?

Exactly, this is a problem I've battled for quite some time. I would buy ridiculous things that cost too much money (I bought 4 of the same Ipod Touchs once), because I had gone from being so poor, to actually having what seemed like "unlimited" funds.

I've put that behind me :smxF:

Gold post again lamboman.....it pains me that it won't let me give you more speed lol

 

[PaulRobert]

Exactly, this is a problem I've battled for quite some time. I would buy ridiculous things that cost too much money (I bought 4 of the same Ipod Touchs once), because I had gone from being so poor, to actually having what seemed like "unlimited" funds.

I've put that behind me :smxF:

Gold post again lamboman.....it pains me that it won't let me give you more speed lol

4 iPod touches!

I had a similar problem a couple years ago. Had a little extra cash in my pocket and spent it on crap that I didn't need. Gift cards, games, clothes all of that. I think a lot of people have to go through this phase and learn that money is not infinite and that one must learn money and time management. I am glad that both of us have learned this lesson early on than maybe 10 years later down the road.

A simple "Thank You" is enough sometimes. lol

 

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[mtnman]

This response can be all over the map. Always, ALWAYS, seek opinions and advice from those whom are more wealthy than you, have more experience/wisdom than you, or at least are in a place where you're headed.

That said, I'm not really qualified to answer this, as many are not.

If you speak to min. 7 figure net worth people, most will tell you a particular percentage is allocated for their lifestyle, and the rest is split between investments, active businesses, and so forth. Although personal plans differ massively.

Many variables... Dependants or family? Long haul versus explosive cash growth? Industry? And on and on.

 

[hatterasguy]

I hate spending money.

I only buy cloths when I have to, and usualy they are not crazy expensive.

What gets me is food and booz. I do enjoy eating out, and I love a good bottle. But no one is perfect. I'm getting a lot better with both.

 

[EastWind]

When it comes to cars I tell myself that it is stupid to spend more than 10% of your savings. NOTE, not net worth. Meaning, if you got $10k cash. Find you a reliable $1,000 honda. again, this is my opinion.

I believe that there are 3 major expenses that a man will face in his life outside of starting a business. Buying a house, buying a car, and paying for education.

On the house, I can't tell people what to do, but I believe in not over extending, getting something you will like and be comfortable in for 5-10yrs, in a very good neighbourhood.

Buying a car, no more than 10% of your savings.

On education, as little as possible too. Get scholarships, take as much classes as you can in community college, avoid loans if you. Find good cheap colleges in cheap towns. My reason being, your degree won't matter much if you decide to start your own business. On the other hand, if you want to work for people, then I guess it does matter where you go to school at.


Now on other things. SPARINGLY! One of the amazing things about women is that they know how to shop. Learn to shop like a woman, learn to find bargains. Learn to make what you have work for you. In terms of cloths, I can spend $50 on an outfit and look sharper than 95% of guys who will spend $300 on their outfits. Delay gratification, look at the total cost of owning a product. For example, if you buy a car, you have additional cost of insurance, registration, gas, maintenance, etc. Add those all up.

After the switch to HD signal in US. I didn't buy a TV. Everyone has been telling me to buy a HDTV, I refused. (1) I'm saving money. (2) I'm saving a lot of time by not watching TV (3) I'm saving money by not having to subscribe to cable! (4) I'm not tempted to buy blueray or more gadget. I still have my old TV, hooked up to my DVD player. If I want to watch a movie, I can use it. If someone comes to my place, we can sit and talk and not have to watch TV. If we can't find anything to talk about, then they gotta go.

On Food. I stopped eating out, I save a lot of money by doing my own grocery. I cook and have more variety. I eat healthy! My body is thanking me for eating well. I will also save money by not being sick in the future.

On Toys. I don't. Whenever I think of all the thousands of dollars I have spent on all sorts of toys and electronics, I shudder. How I wish I had that money. However, if I must. I buy an older one. I focus more on functionality, not the latest. I had a nice HTC phone with sprint, paying $110+ a month for unlimited data plan and voice. After my phone died, I realized that my contract was over and didn't want to renew. What did I do? I bought a nice used motorola Q for $60, I switched to a non contract phone and have 1200mins/1200text and 50mb data. I don't talk that much a month! All for $30. I'm saving $70 a month or around $850 a year!

When I wanted the internet. I asked for their slowest DSL. Instead of paying $40-$50 a month. I got a DSL plan for $10 a month!

Basically, I HOARD money, if I don't have to spend it. I won't. I make it a game to SPEND as less as I can. Some people are going to say that I'm not living right, but the truth is that I don't have it to spend it, and it will be stupid to. I use to have a girl around 10yrs ago, that will just say to me, "SPLURGE!" she steadily stayed broke with no money cuz she SPLURGED!

Spending before you have made it is just like putting your cart before your horse. You will get no where. As a matter of fact after reading that lambo thread and watching some videos. I told myself that I will love a lambo. So I thought of how much I would need to have made to buy one. Do you want to know how much? $5million. That's right, so when yall see a picture of my lambo. Know that I have made over $5million cash.

Make it first before you start spending it like you stole it.

 

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[rxcknrxll]

if it's an asset and you can buy it, buy it. If it's stupid stuff like clothes or cars, buy or create an asset to pay for it first, then buy it. Forget your net worth or whether it's "reasonable" for you to buy something. Sorry; buying something ultra-cool is never reasonable. the level of extravagance shouldn't be an issue. i personally could give a rats' a$$ about high end clothes, but I have no issue with other equally stupid expenditures. We're all idiots...jsut in different ways. if you want it, create the income stream and then get it. Life is short. Fastlane isn't about building massive wealth imo; it's about living well...now. How much is a lambo payment? About $2000 a month. It's not hard to create a site or a product or acquire a rental property with that type of cashflow. Just go do it and live your life. Don't buy a rolex though; they all suck. I have no experience with exotic cars though. Maybe they're worth the money

 

[PaulRobert]

Don't buy a rolex though; they all suck. I have no experience with exotic cars though. Maybe they're worth the money

A nice DateJust isn't that bad. And I know Lamborghinis are worth every single penny of the price. :banana:

 

[EastWind]

if it's an asset and you can buy it, buy it. If it's stupid stuff like clothes or cars, buy or create an asset to pay for it first, then buy it. Forget your net worth or whether it's "reasonable" for you to buy something. Sorry; buying something ultra-cool is never reasonable. the level of extravagance shouldn't be an issue. i personally could give a rats' a$$ about high end clothes, but I have no issue with other equally stupid expenditures. We're all idiots...jsut in different ways. if you want it, create the income stream and then get it. Life is short. Fastlane isn't about building massive wealth imo; it's about living well...now. How much is a lambo payment? About $2000 a month. It's not hard to create a site or a product or acquire a rental property with that type of cashflow. Just go do it and live your life. Don't buy a rolex though; they all suck. I have no experience with exotic cars though. Maybe they're worth the money

fastlane is't about building massive wealth? are you serious? you better start over from the basics and understand what this site is about. fastlane is all about acquiring massive wealth FAST! cuz via your logic, you are telling me that someone who makes $6000 a month after tax, should be comfortable driving a lambo cuz it's only $2000 a month. Are you serious? Please. You don't have any business driving a lambo if you don't have $1mil CASH saved up somewhere. now, that's my RIGHTFUL opinion. a lot of people like to fool themselves with net worth (counting their over valued house equity, and very optimistic business value based on future instead of current incomes). I only count one thing in life, LIQUID assets. LIQUID net worth. if you can't cash it out in 2 weeks. it doesn't count. so when I spend, I look at only one thing, my liquid networth. You may not agree with me, but it's working really great for me. I will make millions while on this forum, and that will happen because when my business is up and running, I'm going to be running super lean, massive profit, less expense. I'm going to live and die for my positive cash flow, and it will all happen from me practicing the same in my personal life and not over extending.

 

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[rxcknrxll]

A nice DateJust isn't that bad. And I know Lamborghinis are worth every single penny of the price. :banana:

lol. cool man i ditched rolex when they just kept breaking. My experience with a lot of high end stuff is that it's also high maintenance. I don't dig that. To each his own!

btw, if I were to get another, a datejust would be the one. Good call man

 

[rxcknrxll]

fastlane is't about building massive wealth? are you serious? you better start over from the basics and understand what this site is about. fastlane is all about acquiring massive wealth FAST! cuz via your logic, you are telling me that someone who makes $6000 a month after tax, should be comfortable driving a lambo cuz it's only $2000 a month. Are you serious? Please. You don't have any business driving a lambo if you don't have $1mil CASH saved up somewhere. now, that's my RIGHTFUL opinion. a lot of people like to fool themselves with net worth (counting their over valued house equity, and very optimistic business value based on future instead of current incomes). I only count one thing in life, LIQUID assets. LIQUID net worth. if you can't cash it out in 2 weeks. it doesn't count. so when I spend, I look at only one thing, my liquid networth. You may not agree with me, but it's working really great for me. I will make millions while on this forum, and that will happen because when my business is up and running, I'm going to be running super lean, massive profit, less expense. I'm going to live and die for my positive cash flow, and it will all happen from me practicing the same in my personal life and not over extending.

you're right...it's your rightful opinion It seems to me you've taken my comment and jumped to some wild assumptions as to my beliefs about things, but it's all good. It sounds as if you're on your way to making bazillions. Rock on.

 

[LondonLife]

I was a probably viewed as a miser until I sold my company given my net worth.

I withdrew £100 a week cash to cover daily expenses, food, drink, beer etc. I only purchased stuff when I needed it, but when I did, I purchased high quality above anything else. If I wanted a £15 pizza and I'd already spent my £100, I didn't buy it, simple. Only thing I ever spent alot on were assets to build my business and my buy/reburb my apartment. I was driving a car worth £3500, wearing a £200 watch and owned only highstreet clothes. I have never been one to spend what I don't have, and I didn't have much. Everytime I made a significant chunk I didn't spend it, I re-invested the whole thing.

Now I'm not saying this is neccesarily the best way to live. I have quite an obbessesive personality, and realistically know I could have spent more and lived a more balanced life. I had business partners driving ferraris and spending £100,000+ on a wedding, and they are still successful. Spending doesn't neccesarily kill your fastlane plan. It just wasn't for me at the time...

 

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