Living below your means is hard

[S.Y.]

Nothing wrong with spending money. I am not penny pinching and I am not extravagant. If I want something, I pay it.

I won't go as far as get my account to zero, or consistently spend more than I earn in the long run - unless for things that will increase my cashflow.

What is the point of having money if you can use it. Sure, don't go overboard, but enjoy the result of your hard work. Nothing wrong with that.

 

[Hong_Kong]

I agree with alot of your sentiment but that likely says more about some of our similarities than the analysis itself. It seems to be based on some very specific assumptions about personal preferences/values.

What would you say to someone that doesn't enjoy working? (let's define work as something that society views as valuable and is willing to pay you for it).

I agree. This is an interesting case study with some numbers.

 

[Hong_Kong]

Well, accomplish your goals and do what you want is what I would say.


Did you read the book? What do you think "slowlane" means? lmao

My goal is to start ventures and reinvest all the proceeds into financial assets. Businesses are a great way to build wealth, but my goal has to more with keeping wealth in my family for successive generations. ETFs are a very diverse time tested way of maintaining (not building) that wealth.
Lets say if you have a really bad health incident tomorrow, what happens with your business? My goal is to have enough capital saved up that running a business is irrelevant to my financial success.
If I have a fastlane business, but then I'm still living on a small percent and reinvesting almost all income that's even better.
The ultimate goal is to exit the business, and reinvest all of it into financial assets.
I'm not saying work a slowlane job and save as much as you can. I'm saying run a fastlane business, but save up as much as you can and reinvest it, that way you don't even need the business.

 

[Hong_Kong]

God I hate this type of shit.

How about sell your company for $25M? How about making $1.5M a year?

There, problem solved, and throw away these stupid charts.

Nothing wrong with trying to have a detailed plan, but ultimately people who live by charts and Excel spreadsheets are enslaved by money and have no plan to escape the defensive side of the rat-race.

Minimizing expenses doesn't create wealth, maximizing income and assets does.

Whats the downside of getting to that financial position sooner by limiting expenses? In that example you would have the savings from the 25M company plus the exit, increasing your overall net worth. I get that there is no floor to expenses so its better to increase income, but that doesn't mean spending more is increasing your financial strength in anyway.

 

[Hong_Kong]

Nothing wrong with prudent financial management.
Nothing wrong with spending less than you earn.
Nothing wrong with investing excess savings in better opportunities than a 1% savings account.

I agree with this.

The problem is, what you just said often translates into this: What's the downside of making my life suck more in order to increase a number on my computer monitor?

That makes sense. The way I think about is a like a game, how can I improve my life as much as possible while spending the least. For example I ski / golf, but I do it the most cost effective ways (buy seasons pass early, used clubs for now but still great clubs). I live a nice lifestyle, but I still live far far below what I could be living.

There is more utility in spending the money and living a life of experiential richness, than in the mental pyrrhic victories of investing $1125.75 into an index-fund because you deprived yourself of Starbucks and nice meals out for a year of your life, a youthful year you will NEVER get back.

This makes sense, its finding the right balance.

Read Die with Zero by Perkins. At some point, saving excess $$ becomes a stupid exercise.

My goal is to really push the needle on my NW as much as I can, then lock it all up in several trust funds (dynasty trust style). For me its about family, and family pride.

 

[Hong_Kong]

Growing net worth just for the sake of growing net worth is stupid.

I guess I don't see the same. Net worth is a point of family pride for me. I've always took inspiration from families that have build and maintained great wealth over generations and generations. I get than not everyone sees it the same way, but for me this is really what inspires me.

 

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[NeoDialectic]

I think you misread @Kak post.

Growing net worth just for the sake of growing net worth is stupid.

Money is a tool, use it. It helps amplify who you are. A useful human will become even more useful with more money. A useless human winning a lotto will piss it all away and go back to being useless.

I enjoy doing deals, creating business opportunities, solving problems, creating jobs for people, walking past buildings we built, seeing tenants that rent our apartments and even hearing them complain! I feel like what we do isn't just profitable, but useful too. People chose to buy an industrial space from us and now have a small business there, a few employees, some nice cars parked outside. I had something to do with that. I don't want that feeling to stop by "retiring" even if I have enough money not to work.

There is a sense of satisfaction from having a purpose. Grow your net worth to have options and opportunities but don't get sucked into the idea that "the higher the better" for the sake of seeing another zero on a bank account on your screen. It's only better if you make it better, if you use it the right way.

Retirement goal is dangerous that way, it presupposes that doing little is the way to go. But when are we happiest? There is no happiness in lethargy. Happiness comes from being stretched, doing more than you thought possible.

Everyone that I’ve ever met that held some idealistic view of traditional easy chair and golf retirement is miserable now that they have it.

Becoming useless isn’t good for a person.

If you meet someone that is living a "useless life" based on your descriptions and they claim they are happy/fulfilled relaxing with their family all day on the beach (or surfing or video gaming or whatever else).

How would you fit that contradiction into your ideology? Would you just conclude they are lying about what they do or about their happiness?

 

[rymf]

I bet if you made more money you would have bought a 3 series. So ask yourself why? Why wouldn't you buy a 1 if you were making 3x your current salary?

I see this mentality all the time. I don't understand it. I had a friend visit me in Vegas recently from out of town who is not currently working. We went to a bunch of tourist places and she bought a bunch of souvenirs. I just don't understand how someone can spend $35 on a t-shirt, $10 on a mug and $15 on a random knickknack when they aren't working. The excuse is "But I'm on vacation.". "I want something to remember this trip by."

I’m actually looking forward buying a 3 series haha

Thank you all for your meaningful thoughts, I’ve learned some things and I hope others have learned something too.

 

[starttoday123]

Yes, it’s tough and takes the discipline of looking at the truth of our spending habits regularly