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Just finished reading The Millionaire Next Door

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Originally posted by: faZZter

Agreed.......

Sure ya gotta save to a point for retirement and sauch, but if you don't enjoy life and do stuff now while you can (you may be paralyzed tomorrow!) you may never get to no matter how much money you saved!

One thing you can't buy back with money is time. You're only young and healthy for awhile...
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Not directing this at you, but why do people assume that if you are living below your means that you aren't enjoying life?
 
I probably know, or am professionally associated with, a dozen or more or such "quiet" millionaires. Not a single one of them is a tightwad or hoarder-quite the opposite. They generally have a clearer sense of what they need and want than most of us. Far too many of us are have been brainwashed by our consumerist society to always wanting to buy something to make us momentarily happy.

It's not a foolproof system, there is a certain amount of good luck involved, as well as steady habits. They generally made it through life without a divorce, extended unemployment or ner-do-well offspring. But it is certainly doable by the great majority of us without any real, MEANINGFUL crimpes in our lifestyles.
 
Originally posted by: Skoorb
WHAT IS THE POINT OF MAKING MONEY if all you're going to do is save it ? What kind of life is that ?! You only live once.
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You didn't get the book in the same way I did. When I read it and it put some things in perspective I immediately eliminated my CC debt, which I've kept off. I had a goal, which I've maintained since, of investing a decent portion of each pay check in to retirement and/or savings. The rest I do as anybody else. So, maybe I've got 10-15% less of my paycheck to spend, but unlike the average putz I'm not paying in gobs of money to credit card debt. I've also got flexibility to do things like buy a car with cash (not an expensive one yet!), or have mrsskoorb take off work for a long period with our baby without us wondering where the bill-payments will come from. I don't have the constant drain on finances like most debt-happy people, and when they're 45 and have a net worth of $45k mine will be in the hundreds. If I felt so compelled I could start skimming off the top at that point for extra disposable income.

It's really pretty basic: you can either have no debt or investments, or you can have debt, meaning that you pay money to others continually long-term, or you can have investments, meaning that your money makes itself out of thin-air.
It is not like you and me with a 9-5 job that can become a millionaire even if we saved every penny.
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Yes, it's exactly like that. Simple math and you can plug it into any finance calculator. It doesn't even take that much, if you start early enough. I don't work my ass off, I don't make a spectacular income, but I have more money than most people my age (correction: less debt), and I have better belongings. If things are balanced you can do a lot with a 9-5 income. A little spending-conservation goes a long way 🙂
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Bravo! I love the way you think about money. Isn't the average cc debt above 8k? That is pathetic.

Maybe some if it has to do with the way one is raised. Those who grow up in a cushy lifestyle think that it should continue, even if they aren't making as much money as their parents, or hadn't saved up as long, etc, so they live above their means. I see it all day long. The wife down the street wants a brand new SUV, but it costs 40k...they can't afford it, but they get it anyway.

The way I have grown up, we don't buy new cars, etc....so that way of thinking is instilled in me. Id rather put some of my money away, maybe in an IRA fund, and retire earlier. You don't need to buy that brand new 350z (insert other car too) to make yourself happy.
 
Everyone thinks these millionaire next door types waste their youth by working all the time instead of enjoying life. Newsflash: some people actually enjoy the work they do. For these people, they don't even really work for the money, though the money does come since they work so hard. My parents are "millionaires next door" in their 50s and still work to this day, and have said that they will work until at least 70. These types don't care about early retirement, for them working is more preferable. Bill Gates and Warren Buffett are the richest people in the world, yet they continue their day jobs. Buffett is like 70+ years old too.
So just because you hate your work and would want to retire ASAP, you can't say that about everyone.

moral of the story: Find a job you like. Spend within your means. Some luck helps too.
 
Live within your means, that is all. Spend as much as you like, just so long as what you spend is less than what you make.
 
Mandos - I'm 37, but, yes, I am doing well.

Hard work and luck. I have always saved and still live well. About a month ago I went to Vegas. Stayed at the Venetian because I wanted to see what it was like, we to go see Cirque du Soleil, ate at a few nice places. The difference is that I had money set aside to have fun and decided that my promotion deserved fun.

I spend money, just less than I make and after my savings goals.

Michael
 
Originally posted by: Thump553
I probably know, or am professionally associated with, a dozen or more or such "quiet" millionaires. Not a single one of them is a tightwad or hoarder-quite the opposite. They generally have a clearer sense of what they need and want than most of us. Far too many of us are have been brainwashed by our consumerist society to always wanting to buy something to make us momentarily happy.

It's not a foolproof system, there is a certain amount of good luck involved, as well as steady habits. They generally made it through life without a divorce, extended unemployment or ner-do-well offspring. But it is certainly doable by the great majority of us without any real, MEANINGFUL crimpes in our lifestyles.
Click to expand...
I don't know how old you are, but by this post I'd guess you're a good bit older, and wiser than the rest of us. I think you nailed it with the second paragraph 🙂
 
Originally posted by: ExcelsiorBravo! I love the way you think about money. Isn't the average cc debt above 8k? That is pathetic.

Maybe some if it has to do with the way one is raised. Those who grow up in a cushy lifestyle think that it should continue, even if they aren't making as much money as their parents, or hadn't saved up as long, etc, so they live above their means. I see it all day long. The wife down the street wants a brand new SUV, but it costs 40k...they can't afford it, but they get it anyway.

The way I have grown up, we don't buy new cars, etc....so that way of thinking is instilled in me. Id rather put some of my money away, maybe in an IRA fund, and retire earlier. You don't need to buy that brand new 350z (insert other car too) to make yourself happy.
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Yeah average CC debt is around there, maybe higher now...I think one's parents are a huge influence on how they look at money. My older brother (not sure of younger yet since he's still finishing school) looks at money in the way that the majority of people do: spend as fast as you can make it. My parents I always considered big spenders, but they had big incomes - bigger than my brothers or I will likely ever have - so we grew accustomed to that. I did recall the occasional recommendation from my dad though, here and there, about the wisdom in saving early, and keeping that in mind - but more so honestly reading the millionaire next door - it did a 180 on me. Mrsskoorb originally bought the book for me and I had little intention of getting anything out of it when I started, but it was as if a light turned on for me and suddenly the choices I had to make were clear. I simply would never be happy again being hugely in debt, unless I had nothing to say about it (like an emergency medical problem). There is some luck involved in life, but as long as I've done what I can for the future, then I can sleep soundly. 🙂
 
Originally posted by: Skoorb
Originally posted by: Thump553
I probably know, or am professionally associated with, a dozen or more or such "quiet" millionaires. Not a single one of them is a tightwad or hoarder-quite the opposite. They generally have a clearer sense of what they need and want than most of us. Far too many of us are have been brainwashed by our consumerist society to always wanting to buy something to make us momentarily happy.

It's not a foolproof system, there is a certain amount of good luck involved, as well as steady habits. They generally made it through life without a divorce, extended unemployment or ner-do-well offspring. But it is certainly doable by the great majority of us without any real, MEANINGFUL crimpes in our lifestyles.
Click to expand...
I don't know how old you are, but by this post I'd guess you're a good bit older, and wiser than the rest of us. I think you nailed it with the second paragraph 🙂
Click to expand...
Well yeah, it's easier to become more wealthy (and just plain live life) if you plan properly and live at peace with life.
Living within your means is only part of it. The key is to avoid unnecessary expenses that do not benefit you. That way you can spend your money on things that do benefit you.
For example, if you live outside your means and paycheck to paycheck, that means you are borrowing money to live, i.e. credit card debt. That's expensive and does not benefit you. Being one missed paycheck from disaster, you're flirting with ending up with bad credit. Now your borrowing costs just went up even more, and that still doesn't benefit you.
But outside of poor financial planning, what's the #1 reason that otherwise healthy people have financial hardships and bad credit? You guessed it, divorce! Another expensive thing that results from poor planning that does not benefit you. Between child support and alimony, it pays to avoid it unless you're already rich and can afford it.
These are the real secrets to slowly building wealth.
 
I grew up cofortably middle class but my Dad set a great example. He refused to counter sign car loans, help with making the deposit on the first house, made sure we all had summer jobs after high school. Basically made sure that we didn't leverage off of himand start living beyond our means. My parents were always there if they were really needed, but all three kids (I'm the oldest) ended up with what they could really afford.

At the time I thought he was being an ahole. Today? I hope I do as well for my kids.

Michael
 
Originally posted by: Vic
Originally posted by: Skoorb
Originally posted by: Thump553
I probably know, or am professionally associated with, a dozen or more or such "quiet" millionaires. Not a single one of them is a tightwad or hoarder-quite the opposite. They generally have a clearer sense of what they need and want than most of us. Far too many of us are have been brainwashed by our consumerist society to always wanting to buy something to make us momentarily happy.

It's not a foolproof system, there is a certain amount of good luck involved, as well as steady habits. They generally made it through life without a divorce, extended unemployment or ner-do-well offspring. But it is certainly doable by the great majority of us without any real, MEANINGFUL crimpes in our lifestyles.
Click to expand...
I don't know how old you are, but by this post I'd guess you're a good bit older, and wiser than the rest of us. I think you nailed it with the second paragraph 🙂
Click to expand...
Well yeah, it's easier to become more wealthy (and just plain live life) if you plan properly and live at peace with life.
Living within your means is only part of it. The key is to avoid unnecessary expenses that do not benefit you. That way you can spend your money on things that do benefit you.
For example, if you live outside your means and paycheck to paycheck, that means you are borrowing money to live, i.e. credit card debt. That's expensive and does not benefit you. Being one missed paycheck from disaster, you're flirting with ending up with bad credit. Now your borrowing costs just went up even more, and that still doesn't benefit you.
But outside of poor financial planning, what's the #1 reason that otherwise healthy people have financial hardships and bad credit? You guessed it, divorce! Another expensive thing that results from poor planning that does not benefit you. Between child support and alimony, it pays to avoid it unless you're already rich and can afford it.
These are the real secrets to slowly building wealth.
Click to expand...
yep, words to the wise. building wealth takes time.

Vic really helped me out and to that I am very grateful brother.

But I got thru my divorce quickly and somewhat painlessly. My next marriage will have a hard-fast bullet proof agreement on finances and will not touch my net worth or earnings or any growth. Just remember guys, when they want a divorce they will go after EVERYTHING

your 401k, your IRA, the house, the cars, any and all joint assets, the furniture you bought together (and she'll want full price paid), the portfiolio, the nest egg, the garden tools, the fertilizer, the price of the sealer on the deck, they keep records of this crap. I'm not kidding. everything

I was only out around 30K on my wife. I consider myself lucky by all means as there were no children involved. She actually made WAY more than me and still sucked my dry.

I'm getting some really good lawyers on my next wife.

(sure, I know...love is forever. Protect yourself.)
 
What is a 401k? Is it just a bank account that you get interest on?

Is there a canadian equivalent?

What kind of interest do you get and how often is it compounded?
 
hey, here's an idea, lets collect money and then not have any fun with it! and not even money that is worth more than it's face value, some rare coin or other. no, let's just collect zero's on our bank accounts and stare in wonderment!
 
Originally posted by: Stefan
What is a 401k? Is it just a bank account that you get interest on?

Is there a canadian equivalent?

What kind of interest do you get and how often is it compounded?
Click to expand...

I think the Canadian version of a 401k is called an RRSP.
 
Originally posted by: Tiqua
Originally posted by: faZZter

Agreed.......

Sure ya gotta save to a point for retirement and sauch, but if you don't enjoy life and do stuff now while you can (you may be paralyzed tomorrow!) you may never get to no matter how much money you saved!

One thing you can't buy back with money is time. You're only young and healthy for awhile...
Click to expand...

Not directing this at you, but why do people assume that if you are living below your means that you aren't enjoying life?
Click to expand...


True, I shouldn't assume that. I am more talking about those obsessed with saving every penny. I know some people that aren't even willing to pay for cable TV they are so cheap.....I know they could easily afford it.

I guess if you enjoy hoarding money you are enjoying life in your own way......just not my way.

I realize there is a happy medium.....
 
The problem is most Americans don't want to sacrifice their lifestyle. It's all about keeping up with the Jones?s and if you think differently then you?re sadly mistaken. I live in NJ and I see it everyday. New SUV's, sport cars, $500,000 homes, $10,000 credit card balances, etc? And the debt to boot! The more money people make the more they spend. My parents are exactly this way. My father makes close to $130,000 a year and has nothing to show for it. Nothing!

Most people (97% of Americans) can't compete with the rich elite so why should we even try? So what if Dr. Johnson has the $800,000 home? Why should I need to compete with him to find happiness? But as someone stated earlier people think that the new SUV they just purchased will find them happiness. It doesn't. What the added bills does though is add stress and it takes the mother out of the home because now the family needs that duel income to survive. So little Johnny comes home to an empty home and is likely to become dysfunctional.

All because people feel that to find happiness they need to keep up with the Jones?s.
 
Originally posted by: ElFenix
hey, here's an idea, lets collect money and then not have any fun with it! and not even money that is worth more than it's face value, some rare coin or other. no, let's just collect zero's on our bank accounts and stare in wonderment!
Click to expand...


That's dead wrong. Let me tell you the story of one next door millionaire I know. He and his wife raised four children, and have lived in the same, comfortable ranch home since the 1950s (he built much of it himself). He retired from a mid-level corporate job in the 1970s at age 56 (his company had a superb pension system not available today) and is now in his mid-80s. Until age 70 or so, when declining physical ability set in, he avidly pursued his hobbys of flying and skiing-both of which are very expensive. Neither he nor his wife have ever had any sort of hobby collection. Both have been very generous, in both time and money, to family and public service.

Their basic rationale is to spend money on what makes you happy, not to spend money to be happy. Don't be afraid to question "conventional wisdom" for it frequently is not wisdom at all.
 
Originally posted by: skace
The idea is that if you save the money early enough on. You should get to a point where you can live wealthily. Which includes spending your money at that point.

The point isn't to simply save your money until you die...
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who is to say you make it that far though? heck anyone of us could die in the next few hours...seems like alot of people give up what they could have in the here and now for that which they hope to have in the future and who knows if the future will ever come?
 
Originally posted by: bozack
Originally posted by: skace
The idea is that if you save the money early enough on. You should get to a point where you can live wealthily. Which includes spending your money at that point.

The point isn't to simply save your money until you die...
Click to expand...

who is to say you make it that far though? heck anyone of us could die in the next few hours...seems like alot of people give up what they could have in the here and now for that which they hope to have in the future and who knows if the future will ever come?
Click to expand...
If you are older than, say, 18, you should just kill yourself now and make your life a self-fulfilling prophecy...
 
Originally posted by: SagaLore

So your point is - blow all your money early, spend your entire life paying off debt, and just barely make it to 65 before you go bankrupt and retire off of Social Security income?
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Not at all Saga, but rather just be somewhat responsable with money but also indulge yourself from time to time...personally from the threads I have read here (haven't read the book yet) it seems that it promotes being uber frugal until retirement and then you will be so used to saving that any small indulgence will seem like something awesome, while this is a nice idea the fact is that one seriously limits themselves, especially if they like nicer things...I feel that people should indulge from time to time as that is why we work, to support and also reward ourselves.

There are those though who have no control and spend on everything the second they want it, these are the ones who should learn some self discipline.
 
Originally posted by: Mwilding
If you are older than, say, 18, you should just kill yourself now and make your life a self-fulfilling prophecy...
Click to expand...

did my point just fly over your head or what? all I was getting at was that while it is nice to plan for the future, people should not deny themselves the occasional indulgence especially if it will make them happy as who knows what the future will bring.
Don't get me wrong, I believe the book has some good ideas, but if everyone followed it to the letter than you would have some people who feel like they are missing out, myself especially as I do like the occasional nice thing which also happens to be expensive. It all depends on how you manage your money, personally I have invested money, I have money which I save and I have money that I aquire from ebay that I use for personal non essential purchases...
 
Originally posted by: Skoorb
WHAT IS THE POINT OF MAKING MONEY if all you're going to do is save it ? What kind of life is that ?! You only live once.
Click to expand...
You didn't get the book in the same way I did. When I read it and it put some things in perspective I immediately eliminated my CC debt, which I've kept off. I had a goal, which I've maintained since, of investing a decent portion of each pay check in to retirement and/or savings. The rest I do as anybody else. So, maybe I've got 10-15% less of my paycheck to spend, but unlike the average putz I'm not paying in gobs of money to credit card debt. I've also got flexibility to do things like buy a car with cash (not an expensive one yet!), or have mrsskoorb take off work for a long period with our baby without us wondering where the bill-payments will come from. I don't have the constant drain on finances like most debt-happy people, and when they're 45 and have a net worth of $45k mine will be in the hundreds. If I felt so compelled I could start skimming off the top at that point for extra disposable income.

It's really pretty basic: you can either have no debt or investments, or you can have debt, meaning that you pay money to others continually long-term, or you can have investments, meaning that your money makes itself out of thin-air.
It is not like you and me with a 9-5 job that can become a millionaire even if we saved every penny.
Click to expand...
Yes, it's exactly like that. Simple math and you can plug it into any finance calculator. It doesn't even take that much, if you start early enough. I don't work my ass off, I don't make a spectacular income, but I have more money than most people my age (correction: less debt), and I have better belongings. If things are balanced you can do a lot with a 9-5 income. A little spending-conservation goes a long way 🙂
Click to expand...


I agree with everything you have said.
 
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