When we say Top 1%, we mean Top 0.01%

[kevm14]

I agree - I think the secret is finding your true right balance of stuff vs saving. You may have missed the real point on saving money. MMM says invest in index stocks that pay dividends and in general, your financial freedom occurs when your interest payments are greater than your expenses. Once that happens, you can then save money from those payments and still afford to buy things. You just don't really need to work. Pretty cool, really.

I do agree also that saving up and living an extremely frugal life in the assumption of future time availability (i.e. you could die) needs to be included in all this. In an older school sense, you are balancing "living well" now or later. The spin is, MMM gives a very hearty challenge to most people's definition of "living well" and that is a good thing.

Another fact about your Camaro that hasn't come up for some reason is that you actually CAN afford one, the same way people afford everything: loans and credit. People who make less money than you drive nicer cars. You can have a Gen 5 tomorrow if you want one. I do agree with MMM on one thing: if you need a car payment, the car is probably too expensive (more of a rule of thumb, not an absolute cost comparison). If you don't have $20k right now, you probably shouldn't buy something that costs $20k. If you can't save $20k in a "reasonable" amount of time (because the car depreciates), then your debt to income ratio is probably not favorable to spend that kind of money on a depreciating asset. That runs highly counter to what regular people think but that's the whole point of MMM. Looking at my perspective comparing a $25-30k CTS-V that I almost bought to my half-price one that I still barely drive because I view $15k as a lot of money, I can say that paying more doesn't really equate to happiness. Between the two choices, I highly support the one I chose. And I could have probably found an even more optimal thing vs cost than what I bought.

One MMM commenter said they were toying with the idea of making a spreadsheet to calculate the work year extension required to buy stuff. How many years would you delay your retirement (i.e. financial freedom) by buying a Gen 5 Camaro? Perspectives can shift when things are put in a different light.

At the risk of rambling, I will say I don't think that decreasing my costs to a fraction of what they are now and not having to work would actually make me happy. I'd have all the time but nothing that I wanted to do would be affordable because the entire system was based on extremely low spending. Which is kind of your point. So the best you can do is absorb the MMM stuff and find your own balance. And I am going to look into that stock index thing.

[bill25]

I actually agree with every part of that. I again, also agree there are some good points on the site. The dividends thing is cool, and I need to look into that more. I also like the investment property thing too. I am not trying to discredit the site, there is a lot of good info, and, it is as warned, not a 100% solution. (Hating on cars: There was a quote like: every time you are about to start a car you should be thinking "I am an asshole")

I think that the thing I am disappointed about is the living within my means part. I just thought that I would be able to do more. Yes there are things I could and should do to make that more possible.

[kevm14]

I also like the investment property thing too.

That is why I am trying to hold onto my old house as long as I can, despite some very tempting Zestimates lately. I could sell the house and buy a used Gen 5 Camaro (or two) myself but then what would I have? I would have pissed away that cash and in a few short years, I'd have nothing. There is no car I like enough to do that for.

(Hating on cars: There was a quote like: every time you are about to start a car you should be thinking "I am an asshole")

You do learn a lot about someone when you read stuff like that. These guys act like giving up cars is like dropping cable. Everyone has a different threshold. For me, cable is useless. But not cars.

I think that the thing I am disappointed about is the living within my means part. I just thought that I would be able to do more. Yes there are things I could and should do to make that more possible.

I mean the main MMM tenet is get rid of all debt. If you have debt, pay that off before you do anything else. Don't chip away at student loan debt if you have any, for example. That said, MMM may not acknowledge that debt makes the world go round. This world is substantially more productive because of borrowing and lending (companies, countries, states, towns, and yes, sometimes people). But consider this: some guy sells all of his real estate assets, invests the money and with the dividend payments, can afford to rent a small condo for the rest of his life and not have to work again. I didn't do the math on this example, but stuff like this can be possible.

[kevm14]

Let me say one other thing on working: when you sometimes read that Americans love to work, I am not one of those people that goes "oh that is just total bullshit.". I don't think it is. If you play your cards right, you can have an extremely rewarding career that is not just collecting a pay check. The pay check keeps you going when you hit periods where you hate your job but if you hate your job 100% of the time, I think that is an issue that you can actually fix if you try. Part of this comes from my family background and culture so it is somewhat programmed.

I guess what I am saying is I wouldn't want to sit around all day with a mixed drink in my hand. That's not what I want to do with my time. I'd rather work because what I like to do with my time costs some money. I guess I fail MMM.

[kevm14]

I agree - I think the secret is finding your true right balance of stuff vs saving.

Expanding on this to hit a MMM point: get rid of stuff you don't really need or wouldn't care about if it was gone, to make room for stuff you really do care about. That is where cutting the cord comes in. Perfect example of something that costs a lot of money and people are often happier both for the reduced expense and increased time. But it can make some people very nervous.

I have two phones and a reasonable cell phone plan (under $100/mo for two phones that I own and didn't pay $500, $400 or even $300 for). Internet only. Netflix and Amazon Prime (I caved on the latter - we will see how it goes in terms of actual value). Annual trash permit instead of curbside pickup. Bring my lunch to work usually 4 days a week. No car payment. I won't go through all of it now (need to look up some things anyway) but I wouldn't, for example, run the A/C less or not at all, to save $30 to $100/month (at most a 3 month period here). I could scrap my Caprice and sell the CTS-V to get a relia-pod. Not interested.

Add up how far ahead I am in theoretical terms than someone who has all that stuff. It is probably approaching $1000/mo.

Lately what I am actually spending money on is my house. Fortunately I think I bought well and there is almost nothing reasonable that I could do to this house that wouldn't come out the other end with more equity. So even on that spending, I am not really wasting money. That's the promise of real estate: you enjoy all of the quality of life benefits from home ownership and the improvements you make, and when you sell, long term, you should get your money back and then some. This can easily be ruined by bad decisions, bad economic conditions or just sheer bad luck but on the whole I think it works.

[bill25]

I guess what I am saying is I wouldn't want to sit around all day with a mixed drink in my hand. That's not what I want to do with my time.

I can tell you if I won the lottery tomorrow, I would quit my job, but would be the busiest unemployed or employed person you ever met. I would just do things I wanted to do. I would learn more about programming. I would learn more about cars. I would work on both. I would likely try to start a company doing something that combined the two. I would work more seriously on guitar playing. I am not saying I want to just sit back and do nothing.

Unfortunately I don't get to really do much of any of this at work. That is probably on me. It is a tough problem. Do coding at work, and accept that I will be capped at less than I want to make because it will limit other things I can do, or try to make enough at work to do what I want when I am not there (My current plan). In the present, I am not succeeding at either. So the way it feels is like work is about 50 hours a week where I am in limbo, not doing what I really want to, just to "get by". That is kind of depressing. I think this thread just turned into a therapy session...

[Adam]

Kevin, I agree with your analysis.

[Adam]

Kevin, I agree with your analysis.

Except the part about spending $15k on a car. Not sure I could do that.

[Fast_Ed]

I actually agree with every part of that. I again, also agree there are some good points on the site. The dividends thing is cool, and I need to look into that more. I also like the investment property thing too. I am not trying to discredit the site, there is a lot of good info, and, it is as warned, not a 100% solution. (Hating on cars: There was a quote like: every time you are about to start a car you should be thinking "I am an asshole")

I think that the thing I am disappointed about is the living within my means part. I just thought that I would be able to do more. Yes there are things I could and should do to make that more possible.

On the 'I am an asshole whenever I start a car' thing.. MMM kinda went back on that in the 'man who gets his cars for free' article IIRC. He hits on the fact that your hobbies can save you money. and honestly, you could use a similar approach to the free car guy to get to your Camaro.

His site focuses heavily on saving money to get to retirement sooner.. But as an employee with a minimum retirement age, ,this date is a bit more fixed than it is for others. You could certainly focus your savings on acquiring the Camaro sooner.. meanwhile the cost to purchase said camaro becomes lower and you learn more about fixing cars. This moves the date sooner, because you can buy a cheaper, less desireable camaro with some more age on it and fix it up. So you're going in the right direction.

I think that one of the things that keeps people not in the 1% poor is trying to have everything... If you must have the best of everything in each category.. best food, newest phone, coolest car, etc, you're spreading your budget too thin. Saving money with used phones, slightly lower protein diet, exercise or books as entertainment vice "going out to dinner," etc frees up money to spend on cars or whatever you do value. Not saying you do that, but I definitely see it in others.

[kevm14]

I think that one of the things that keeps people not in the 1% poor is trying to have everything...

People in the lower 1% can easily live pay check to pay check trying to have everything. The lower 1% is not FU money. That was the original topic of the thread.

If you must have the best of everything in each category.. best food, newest phone, coolest car, etc, you're spreading your budget too thin. Saving money with used phones, slightly lower protein diet, exercise or books as entertainment vice "going out to dinner," etc frees up money to spend on cars or whatever you do value. Not saying you do that, but I definitely see it in others.

That's exactly it. You have to prioritize what you really care about (if you are lucky, that won't cost much money - and MMM spends a lot of time trying to convince people that what you care about shouldn't cost much money). Either way, you have to make sacrifices: live without some material thing that costs money to save up for something else, or give up more time to work OT, another job or perform more DIY activities in place of paying a professional. Everything costs (money or time).