the funny thing about money

[brianmanahan]

i just realized today that the more money i get, the more i worry about it.

when i first starting working, i really wanted this piano, so i spent 5$k (half the money i had) on it. and it was sweet, and i didnt care that i spent 5$k on it because hey, i'll just make more money!

and now a few years later i have way more money, but i'm aghast at the amount i spent. i mean i love the piano, but it costed %50 of all my money. it just seems like it was dumb to spend that much then, and i am not sure i would even do it now.

its like that with everything else too - i always dreamed of having a nice house with a few acres and some woods, something that would cost say 150$k-200$k. and now that i have enough money to get a mortgage for such a house, i'm like "awwww heck no!" if i do get a house i cant see letting myself spend more than 75$k.

maybe i've just realized that time = money, and i dont want to blow my time?

on the other hand, i AM posting on ATOT... :hmm:

 

[Jeff7]

Were you unfamiliar with the teachings of Notorious B.I.G., concerning the positive correlation between money and problems?

 

[phucheneh]

A good thing for me is to evaluate whether the money you're spending is going into what could [roughly] be called a 'liquid asset.' I'm no accountant and don't know what specifics might go with that term, hence the qualifier.

But basically...are you totally stuck with what you bought? I would imagine a used piano bought in good condition, with proper upkeep, can be sold without any major loss.

Those of us that buy and sell guns generally try not to lose money, I would think. The more significant the purchase, the more I'm looking at the market for said weapon to see how easily I can convert it back to cash if I ever need.

Another example...I have a cheap guitar hot-rodded into a pretty damn decent guitar. But that money is GONE. Had I bought an American Strat and left it alone...it would probably hold a lot of value.

What I really wanna know, is where you live. A big house with property is under 200k? Around here, no matter where you go in the area (city or many suburbs), your best case for 200k is a nice house OR a house with some land. Not both. 75k is more like a gamble on a foreclosure in a not-so-great area.

 

[brianmanahan]

Were you unfamiliar with the teachings of Notorious B.I.G., concerning the positive correlation between money and problems?

yes, i only recently learned of prof. b.i.g's hypothesis

 

[Kaido]

It's like goldfish/koi theory: the larger of an aquarium/pond you put the fish in, the larger it grows. It's natural to do more stuff when you get more resources. A smarter way to live is to pick a target lifestyle (i.e. house, 2 cars, dog, etc.) and then live below your means. The trap is getting a bigger house, nicer cars, more toys, and constantly maxing out your budget or going into debt. Rainy days will come and you'll need money in a pinch at some point for medical bills, for when your car blows up, etc. so it's smarter to live within your means and have a buffer zone.

And that doesn't necessarily mean being frugal if you make enough money to live the way you want, and doesn't necessarily mean being rich either. I worked with a guy who bought a gorgeous BMW and brought in bagged lunches. He knew exactly what he wanted and made sacrifices (i.e. not eating out) to make his budget work for his goals. He wasn't rich, but he got an awesome car by making good decisions.

Also, neffing on ATOT isn't a bad thing. Time isn't just time, because there's time + effort (work) and time + pleasure (play). You need downtime or you'll burn out, and if all you do is work all the time, then earning all of that money becomes pointless because then you're just a workaholic. One key thing to remember is that all purchases are multi-faceted investments. They involve:

1. The initial purchase ($)
2. Maintenance ($)
3. Accessories & supplies ($)
4. Time/effort to set it up
5. Time/effort to maintenance it
6. Time/effort to use it

Let's take a simple example. If you buy a house, you will need a washing machine for your laundry. So let's say $500 for a washing machine. Then $100 down the road to fix the belt when it breaks. Then some accessories like a drip pan & water leak alarm and some ongoing supplies like detergent & fabric softener. Then you have to pick it up from the store and install it, or have a guy come in install it. Then you have to figure out how to use it, and you have to spend time using it on a regular basis. Then you have to maintain it and either spend the time fixing it yourself, or pay a guy to fix it (time/money either way).

So time, money, and effort are not one-dimensional things. Things that you bring into your life like houses, pianos, cars, and laundry machines are not single-faceted either. They are multi-dimension and will require ongoing attention & resources from you to be useful. That's why I think it's important to define the lifestyle you want to live, work towards achieving that, and leave some buffer for hiccups in the plan. The smartest people are the ones who win the lottery, pay off their house & cars, and don't go nuts with their windfall - they never screw themselves out of the financial gain they received, and that applies to making more money at a job like you mentioned.

Life, man.

 

[Kaido]

A good thing for me is to evaluate whether the money you're spending is going into what could [roughly] be called a 'liquid asset.' I'm no accountant and don't know what specifics might go with that term, hence the qualifier.

But basically...are you totally stuck with what you bought? I would imagine a used piano bought in good condition, with proper upkeep, can be sold without any major loss.

Those of us that buy and sell guns generally try not to lose money, I would think. The more significant the purchase, the more I'm looking at the market for said weapon to see how easily I can convert it back to cash if I ever need.

Another example...I have a cheap guitar hot-rodded into a pretty dang decent guitar. But that money is GONE. Had I bought an American Strat and left it alone...it would probably hold a lot of value.

What I really wanna know, is where you live. A big house with property is under 200k? Around here, no matter where you go in the area (city or many suburbs), your best case for 200k is a nice house OR a house with some land. Not both. 75k is more like a gamble on a foreclosure in a not-so-great area.

iirc it was "Rich Dad, Poor Dad" that had the most clear explanation I'd ever seen:

http://www.amazon.com/Rich-Dad-Poor-.../dp/0762434279

1. Income = something that puts money into your pocket
2. Expenses = something that takes money out of your pocket
3. Assets = make you money
4. Liabilities = cost you money

The rules basically boiled down to:

1. Know the difference between an asset and a liability, and buy assets.
2. Rich people acquire assets. The poor and middle class acquire liabilities, but think they are assets.

He explained that everyone always said "my house is my biggest asset", when in reality, houses cost money and therefore are liabilities. Very simple. There's a nice Powerpoint explaining the patterns of poor, middle-class, and rich people here:

http://www.slideshare.net/lbprakash/Rich-Dad-Poor-Dad-1137449

The other thing I like was the explanation of what wealthy means: how many days you can survive into the future if your paycheck was cutoff today. If you require $2,500 a month to live (rent, typical food budget, bills, etc.), then if you have $5,000 in savings, you are 2-months rich. Dave Ramsey has some great material on the basics of personal finance that I think should be required reading for all high school kids:

http://www.amazon.com/The-Total-Mone...dp/1595555277/

And for more practical application, "I will teach you to be rich" is a pretty good starting point for applying finances to things like credit cards & cars:

http://www.amazon.com/Will-Teach-You...dp/0761147489/

If you want to be financially successful, then you need to define what that means to you. You can't be successful if you don't know what success means to you. "A million dollars" means nothing because you can blow that in a heartbeat, and if you don't have systems in place like goals, a savings plan, etc., then it's all pretty pointless. The first step to being successful is defining, in detail, what success means to you. Maybe that means owning a piano and having it fully paid off. Maybe that means owning a modest home. Maybe that means owning a vintage Ferrari. You have to define your target before you can achieve your target.

 

[Kaido]

yes, i only recently learned of prof. b.i.g's hypothesis

And he's right, too, if you don't make a detailed plan about what being financially successful means to you. Despite being tongue-in-cheek, that song is actually very applicable to our discussion here: sometimes people get financial windfalls, but don't have the training to deal with it, and end up with a bunch of problems because they're not prepared to handle it. Sort of like if you try to bench press 300 pounds without working up to it, it's pretty easy to choke to death when the bar falls on you. More money = more responsibility = more problems if used unwisely & without training.

A lot of is has to do with personal goals. I was really into art in high school, but I also wanted to have a family. As I moved into college, I discovered that the art field was a somewhat difficult field to make a good-paying career in and be able to provide well for a wife & kids, and that computers paid better. So while I'm not making doctor or dentist kind of money, I am able to support my family, which is one of my goals.

Based on your OP, you're starting to experience some of the stress that goes along with finances. You didn't have clear financial goals in the past, so the money disappeared, and now you're second-guessing your purchase because you're not sure if it was a good decision because you never setup clear financial goals. But now the limited money supply is influencing your initial thoughts & decisions on purchasing a house. Instead, I'd recommend spending some time thinking about what you want out of life. If you want a $200k home, that's fine - set a goal, make a plan, and work towards achieving it! Right now, you're letting your indecision on your financial plan (i.e. lack of a financial plan) drive your decision-making, instead of YOU driving your decisions. Take control, man!

And don't feel limited to doing what others do. One thing I've heard criticism on is leasing cars - how it's a waste of money, blah blah blah. However, I work hourly and having a reliable car is extremely important to my paycheck, so leasing a car made a lot of sense to me both in terms of reliability and financially because it gave me a lower monthly payment that fit my budget. It's worked out very well for me in the past, despite not being the "norm". That's what I mean about setting personal goals - figure out what you want, figure out a way to make it happen, and get to work - instead of letting the reality of the situation drive your decisions, you make the decisions and then go after what you want instead of coasting and then dealing with buyer's remorse.

 

[Svnla]

OP, since you worry too much about money, just sent them to me. I will worry about them for you, free of charge. Hehehehe.

 

[Imaginer]

Kaido said it very well. Management and understanding of resource flow and stagnation can apply not just personally with finances, but in almost anything. You do not even need to be a business major to understand basic flow, use, and held up resources (though the formal education would put you in proper lingo amongst other things).

My dad always said "Hope for the best, expect the worst." People that are exhausting their resources to their limit with no fallback or buffer, are asking for it should the worst comes about. The OP's situation of "too much money" will inevitably condition the OP to being used to exerting that immediate power always, but no plan in place thus building a dangerously bad habit.

In another thread (one dealing with education and success), I mentioned success is a flag. What triggers that flag, is what you want to accomplish, thus determining a success (can be just a short term success goal, or can be a milestone success goal). I also mentioned that sometimes education (or a formal, costly one) may not be ideal with some people in raising that success flag.

Kaido's three posts just summed it nicely.

 

[Jumpem]

What I really wanna know, is where you live. A big house with property is under 200k? Around here, no matter where you go in the area (city or many suburbs), your best case for 200k is a nice house OR a house with some land. Not both. 75k is more like a gamble on a foreclosure in a not-so-great area.

Upstate, NY. My house was $150k. It's small, but in a very good neighborhood with excellent schools. My sisters small older house was $60k. My cousin bought an 80 acre farm with an old farmhouse and a newer modular house for $250k. It even has great views of across the lake if you drive up to the top field.

 

[olds]

 

[Murloc]

I just can't spend money.
Sometimes I wish I was more careless.

 

[brianmanahan]

protip: in english, funny can sometimes mean weird or odd

lern2dictionary4alternatemeaning

 

[gorcorps]

protip: in english, funny can sometimes mean weird or odd

lern2dictionary4alternatemeaning

No it doesn't, you're just not funny

Anyway, the term you're searching for in the op is "being responsible"

 

[brianmanahan]

No it doesn't, you're just not funny

umm, wasnt trying to be. you and olds have obviously never heard of the alternate uses of the word "funny".

Anyway, the term you're searching for in the op is "being responsible"

yes, perhaps it is. though i think i might be pushing it, as i have been considering not going on vacation this year because it could cost 1$k or so.

 

[Tweak155]

I just can't spend money.
Sometimes I wish I was more careless.

This sounds like me.

 

[Corporate Thug]

mo money mo problems son.

 

[Jumpem]

mo money mo problems son.

More money, less problems. As you make more, keep your standard of living relatively the same, and just save more.

 

[TXHokie]

My perspective changed when I went to my boss funeral couple years ago. Dude was only 48 and dropped one weekend from heart attack. Since then it's about quality of life for me. While I plan not to go stupid and go broke, I'll also will spend whatever to allow me to make life more enjoyable while I can. I'm only here for some definite amount of time and I won't be able to take it with me.

 

[LegendKiller]

iirc it was "Rich Dad, Poor Dad" that had the most clear explanation I'd ever seen:

http://www.amazon.com/Rich-Dad-Poor-.../dp/0762434279

1. Income = something that puts money into your pocket
2. Expenses = something that takes money out of your pocket
3. Assets = make you money
4. Liabilities = cost you money

The rules basically boiled down to:

1. Know the difference between an asset and a liability, and buy assets.
2. Rich people acquire assets. The poor and middle class acquire liabilities, but think they are assets.

He explained that everyone always said "my house is my biggest asset", when in reality, houses cost money and therefore are liabilities. Very simple. There's a nice Powerpoint explaining the patterns of poor, middle-class, and rich people here:

http://www.slideshare.net/lbprakash/Rich-Dad-Poor-Dad-1137449

The other thing I like was the explanation of what wealthy means: how many days you can survive into the future if your paycheck was cutoff today. If you require $2,500 a month to live (rent, typical food budget, bills, etc.), then if you have $5,000 in savings, you are 2-months rich. Dave Ramsey has some great material on the basics of personal finance that I think should be required reading for all high school kids:

http://www.amazon.com/The-Total-Mone...dp/1595555277/

And for more practical application, "I will teach you to be rich" is a pretty good starting point for applying finances to things like credit cards & cars:

http://www.amazon.com/Will-Teach-You...dp/0761147489/

If you want to be financially successful, then you need to define what that means to you. You can't be successful if you don't know what success means to you. "A million dollars" means nothing because you can blow that in a heartbeat, and if you don't have systems in place like goals, a savings plan, etc., then it's all pretty pointless. The first step to being successful is defining, in detail, what success means to you. Maybe that means owning a piano and having it fully paid off. Maybe that means owning a modest home. Maybe that means owning a vintage Ferrari. You have to define your target before you can achieve your target.

Saying that assets don't cost money is silly. Everything "costs" money, even stocks "cost" money if you buy them low, sell them high, and then pay cap gains tax (liability), pay brokerage fees, load fees...etc. Holding gold costs money, even gold bars, since you need to keep them safe (is a safe a liability of owning gold?). A house is an asset that you need to pay upkeep on. The dictionary definition of asset is "a useful or valuable thing, person, or quality." A house is useful and has value. Hell, even holding physical cash costs you money through inflation. I guess that's a liability too.

Houses are assets, not liabilities. Explaining it any other way is moronic and something I'd expect from the liar/huckster Kiyosaki.

Dave Ramsay is another toolbag of financial nonsense, his whole schtick against education lately was moronic. He has also made many misstatements and given poor financial advice, all to sell books.

Finance doesn't require financial hucksters to make sense, it requires basic critical thought. If people just broke it down to in > out, the world would be far better.

 

[EliteRetard]

*snip* If people just broke it down to in > out, the world would be far better.

I dunno, most people seem obsessed with in > out and it doesn't help the world at all.

 

[Engineer]

i just realized today that the more money i get, the more i worry about it.

I find myself in the same situation FWIW.

Edit: Either that or the guy that retired by 30 has inspired the living hell out of me!

 

[LegendKiller]

I dunno, most people seem obsessed with in > out and it doesn't help the world at all.

I wasn't responding to whether the pursuit of in>out makes the world better, I was saying that you don't need financial hucksters to make sense of it.

What would make the world happier? There's a lot of stuff and it has less to do with individual pursuit of money than it does with a multitude of other things. I would say the #1 way to help the world is to let everybody believe in their own religion without fear of persecution or jihad.

 

[biostud]

Just make an assessment on what will bring you most happiness for your money. While I could afford a larger apartment an live on my own, I have a relatively small two room apartment where I rent one of the rooms out. Why? Because I want more money for traveling and buy stuff that I want, while saving money for the future.

 

[gorcorps]

yes, perhaps it is. though i think i might be pushing it, as i have been considering not going on vacation this year because it could cost 1$k or so.

Eh, it all depends on if you feel that 1k could be better spent. I had the same problem where I was spending like crazy because I all of a sudden had money, but then pretty quickly realized that's not sustainable. We need a budget, and then we'll be able to better know what's worth our money or not.