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Old 11-13-2007, 11:11 PM   #21
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why is there an ad for $4m properties on this page?

I wouldn't live on an island if it cost 4 dollars...
being surrounded by all that ocean would keep
me constantly nervous... I don't even want to
live on the coast... that's the result of being
born and raised in the desert.
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Old 11-14-2007, 06:36 AM   #22
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Spender or saver? Now I'm a spender, because I've been a saver all my life.
But I still like to save while spending
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Old 11-14-2007, 07:37 AM   #23
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W2R, you and I are two of a kind!

I'm wondering two things.
(a) how much does a person's cultural background influence saving vs. spending?
(b) why is there an ad for $4m properties on this page?
(a) I'll bite. I would imagine that a lot of Americans (and a lot of those on this board) have a cultural/ethnic background like mine, and that it is really not all that unique. Despite the gorgeous German model depicted in my avatar, actually my ethnic background is Scottish-American and my paternal ancestors came over in a boat in the early 1730's. My maternal ancestors followed not too long afterwards. I have a big dose of American pioneer in my background, moving West, working hard and making do with what they had. Massive, massive doses of Puritan ethic have been passed down to me through the generations, and this has plagued me unmercifully and I try (often unsuccessfully) to put it in perspective. Some Calvinist background/attitudes as well.

(b) I found myself laughing at the ad! Being able to afford a property like that for ER is a nice fantasy, but realistically, even if I could afford it I doubt I would be interested. See (a), above.
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Old 11-14-2007, 10:50 AM   #24
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I'm a saver - no surprise. Most people here are bound to be. However, it is a never-ending struggle. Some months I am mystified to see how much we spent on things - something, somewhere - when I thought we were being very frugal. I think it must be like meditation; you practice it, but most people never perfect it. And the ones that get really close to it are probably pretty annoying. I always try to give thoughtful gifts for christmas and birthdays that aren't bought from a big chain store and just show off the appropriate price tag. I try not to keep gadgeting-up with ipods, cell phones, cable and other constant monthly bills that just become part of an accepted routine. But it does never end.

I'm sick of ads, sick of consumerism. Sick of the treadmill mentality that infects us in the US (and probably in other countries too to some extent). I wish I was better able to fight it on a larger scale than just on my own. Reading this forum regularly and seeing there are others out there that feel the same way is a big source of encouragement towards that.
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Old 11-14-2007, 10:58 AM   #25
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(a) I'll bite. I would imagine that a lot of Americans (and a lot of those on this board) have a cultural/ethnic background like mine, and that it is really not all that unique. Despite the gorgeous German model depicted in my avatar, actually my ethnic background is Scottish-American and my paternal ancestors came over in a boat in the early 1730's. My maternal ancestors followed not too long afterwards. I have a big dose of American pioneer in my background, moving West, working hard and making do with what they had. Massive, massive doses of Puritan ethic have been passed down to me through the generations, and this has plagued me unmercifully and I try (often unsuccessfully) to put it in perspective. Some Calvinist background/attitudes as well.

(b) I found myself laughing at the ad! Being able to afford a property like that for ER is a nice fantasy, but realistically, even if I could afford it I doubt I would be interested. See (a), above.
I grew up on and around small farms in Maine (father's family) and New York (mother's family); mother's parents immigrated from Germany.

The farm houses/barns/... in NY were built by grandfather and his children and other relatives. They sewed many of their own clothes, grew most of what they ate (animal and vegetable), hunted and gathered in the large woodlots, and brewed their own applejack.

Folks in Maine were similar; some relatives were fishermen.

Frugality was simply what was.
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Old 11-14-2007, 11:47 AM   #26
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Maybe I'm in the oddball category here since most seem to be savers, but I find it hard to resist spending sometimes. Love gadgets, tools, and computers, and have a tendency to pick up expensive hobbies where I _must_ have the perfect whizzmajig to do it just right... Fortunately, I don't spend a lot on housing or cars, and try to balance periods of excess with frugality.
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Old 11-14-2007, 05:14 PM   #27
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I used to think the cultural background made a lot of difference, and I still think it has influence, but there are other influencers out there as well (tv ads, the jones's down the street etc). My brother and sisters and I were all brought up the same way. My father retired about 5 years ago, with an ending salary of 24k, but he waited until 67 to do it and they live just fine with what they have and are very happy. They live on their social security and a couple of very small pensions (+ or - $200/mo total). However, they have somewhere around 500k in savings, that they never touch unless they need to buy a new car. My parents have a decent standard of living, but not extravagent. They drive a new Corolla (older Corolla was totaled in an accident last year but no injuries), and also have a 12 year-old Nissan truck in excellent condition. They had paid off their mortgage some 15 or 20 years earlier, and have been debt free for that long. They always taught us to save what money we needed to buy things including cars (except for a home).

As for me, I had my mortgage paid off by the time I was 35 on a modest salary. Then and there I vowed never to have a mortgage or any other debt again, even if I up-sized, up-scaled, luxurized, etc. After my salary finally super-sized (low-sixers), DW and I found a piece of land for our dream home. She wanted to build right away, mortgage and all. I refused. We took it slow...a year to decide what we wanted, a year to design, and nearly two years to build, and was completed a couple years ago. But we did it without debt, and it sure feels good.

Now, DW is very happy that we did it that way, because we are on an international assignment now with mega-corp (1 year assignment has lasted 8 1/2 as of this writing), and we are saving like crazy for FIRE. Because we have been here so long and because my work schedule is so hard, she now can't wait to get home to her dream home, and she knows that there is no way that I can get a j*b making what I do now (now high sixers, sometimes low sevens) near our dream home. We are both happy that we could retire now if it came to that, but our DD has a year and a half to graduate HS, and with that time left we can further build our nest egg so that our standard of living stays as high as it is now even without a paycheck.

My brother on the other hand was in debt 55k when he married and that number has climbed rather than fallen. Everything he buys is on credit. My sister is the same way, and had to declare bankruptcy earlier this year. My other sister keep saying she is going to pay off her debt, but keeps up-sizing, upscaling, and luxurizing, even though they can't afford it. They all essentially live month to month...no savings.

Back to us, we do enjoy some luxuries sometimes, but not nearly the in the same amounts as my contemporaries at mega-corp or in my network of acquaintances. But, we also know that we won't always have this kind of income. By the time I pull the plug, we will be able to have spend (after tax) somewhere on the order of 90-100k per year, inflation adjusted, for the rest of our lives....at a withdrawl rate of +/-3%. But the way we figure it, this will be more than enough for our needs.

The moral of the story: your background can have influence over your spending and saving patterns, but it doesn't always.

Rambler
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Old 11-14-2007, 05:25 PM   #28
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My background is Scotch-Irish and the stereotype holds true in my family. Drinkers, yes. And my dad was/is as tight as (the ole Irish saying goes) a nun's knickers. When I was in high school I got an allowance of $10/month to buy any school lunches and my clothing, which I couldn't afford to buy obviously so ended up sewing myself. I had two pairs of shoes, sandals and sneakers (California). This was not a poor family, just struggling middle class. Parents had no money for college. My sister and I paid for it ourselves. My brothers never went to college.

In my marriage I was the frugal one, paying extra on the mortgage, making sure bills paid on time, complaining about ex-husband's credit card usage, and always trying to get him to save more. Useless struggle, that one turned out to be. I guess I learned something from Dad. Today I bought a waterproof outdoors jacket Northface brand for $200. Just about killed me!

Now dear ole Dad has saved plenty of money to pay for his own nursing home if and when he needs it. Still, last Thanksgiving he tried to get me to commit to moving there to nurse him when he becomes decrepit. Ah, I don't think so.
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Old 11-14-2007, 05:50 PM   #29
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My family was not cheap just careful with money .We were middle class but my parents stressed education and we all ( 2 sisters 1 brother ) went to college with our parents help . My parents gave us a great life even on my Dad's salary as a state policeman .Christmas at our house was a magical time with my Mother baking cookies and my Dad assembling toys . They were the best !
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Old 11-14-2007, 05:53 PM   #30
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My father retired about 5 years ago, with an ending salary of 24k, but he waited until 67 to do it and they live just fine with what they have and are very happy. They live on their social security and a couple of very small pensions (+ or - $200/mo total). However, they have somewhere around 500k in savings, that they never touch unless they need to buy a new car.
Do they spend the dividends/interest? If not, why not ($500,000 will buy more new cars than they could possibly need)?
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Old 11-14-2007, 07:49 PM   #31
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I am spending the same now as I did when my income was lower. I just continue to let my income rise, but don't increase my spending.

Since I am single, this works pretty well. I don't feel especially deprived, because I have every bit as much to spend as I did last year (and the year before, and the year before, and so on). I am frugal but I also buy some things for fun.
This is DW and I as well. We LBOM, but don't consider that we deprive ourselves.

Now, on the one hand it's 'easy' for two DINKs with good jobs to preach LBYM, right? OTOH, most folks with our incomes (and higher!) don't save much; expenses tend to increase with income for most humans.

It almost comes down to: do you want to look rich or be rich? It's not impossible to do both, but it takes one heck of a lot of money!

F'r instance, we live in a nice house. But it's less than we could afford - even by traditional measurements, rather than the ones the banks were using until the sub-prime crunch hit - what's the tradtional rule of thumb, 2.5 x annual gross income? We're below it.

We drive what I consider to be nice cars - both bought new (not at the same time!!!), loans paid off, and we intend to keep them for many more years before buying new ones. And I know that buying vehicles new is not the most economical way, but I judge it worth the extra cost to know exactly what the vehicle's history is.

We spend money on things that we judge to give us good value, but we don't go and get a big-screen TV and a vacation home and a boat and a blah blah blah. I'm not knocking any of those items as such, but for us they wouldn't provide good value for money spent.

Quote:
Originally Posted by Want2retire
I will be getting a cash award sometime soon. I have no idea how much it will be, but the last one was $1200. I am not thinking of "what treat will I buy for myself". Instead am thinking of how great it will be to be able to contribute the max to my Roth in January instead of later. So, I guess I'm a saver!
That's us, too. When we get a dollar in our hands, the first thought is, "Save it", not "Oooh, now we can afford [insert thing here]".
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Old 11-14-2007, 11:18 PM   #32
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Do they spend the dividends/interest? If not, why not ($500,000 will buy more new cars than they could possibly need)?
They don't spend the divies or interest. Dad is a wonderful man but a bit tight with his money. He is (rightfully) worried about Mom having enough if he passes first, as the SS$ will decline significantly. So in the meantime, they just let it grow.

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Old 11-15-2007, 05:39 AM   #33
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Rambler: That sounds so familiar even down to the approximate cash # and funny but the actual age. Sure your not my kid writing under another name? I think my kids would say the same about me. It has always been a worry in me that DW or myself would cost the kids financially in our later years. NO ONE, at least that I know of, wants to be a financial burden to their children. In the meantime, to attempt to avoid that, you just save, save and save.
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Old 11-15-2007, 05:46 AM   #34
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RW: No, Dad wasn't in 'Nam...but I agree. He is very independent, does not want to be a burden in any way, shape or form. He is still saving...from his meager SS income. Save save save...his favorite saying is "use it up, wear it out, make it do, or do with out...that's a LBYMer!

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Old 11-15-2007, 10:08 AM   #35
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Hmmm - wrapping up 14 yrs of ER - after Katrina and three deaths in the household, ages 89 down to 51, - I watch the mortality tables more than the investment tables.

IRS single life I think is 84.6(memory?).

Still bumping up to 5%variable of portfolio seems outrageously extravagent at times.

heh heh heh - save a little here and there and then when it's appropriate spend like a drunkern sailor! Er or something.
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Old 11-16-2007, 03:12 AM   #36
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I guess my choices have changed as I aged...

before I was 30 I spent every penny I earned, but was cash and carry: NO Debt

30-40 I spent like a drunken sailor...justified by if I'm going to live I may as well live well: aquired 80K debt

40+ pay off debt and SAVE SAVE SAVE...plan FIRE

Seems like there should be some balanced approach in my future
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Old 11-16-2007, 09:22 PM   #37
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8 years retired. Our spending has dropped each year until recently.

The first two years after retirement was our highest spending. We took a lot of expensive group trips, going to all those places we'd really wanted to go, but didn't have time/energy for while working. But we had also deliberately set aside a generous one time "travel budget" for just that purpose.

The next two years our spending dropped drastically. We'd had enough of the group trips and starting organizing/doing our own thing. Travel costs came way down.

The next year we got a small RV. Travel costs came down even more.

Traveling with an RV was so much fun, we decided to ditch the house! Our monthly expenses came down even more. [Not counting the cost of the big fulltime RV - that blows all accounting out of the water].

The first fulltime RV year was the lowest monthly expenses since retiring! 6 years later!

Since then, we have kind of let our spending "creep up". Partly due to covering some parents medical expenses. But also, after spending well under 3% of portfolio for several years, it just seemed silly so we've just decided "anything goes" until we cross that 3% number we're not even going to worry about it!

So I guess that means we've converted to full spend mentality?

Audrey

P.S. Oh, before retiring I was a big time saver.
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Old 11-16-2007, 11:41 PM   #38
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My parents were children of the Depression and they squeezed every penny into copper foil. They both were the first and only kids in their families to go to college. They valued education and thrift but were not cheap. We kids never lacked for the essentials but we did not have what many of our friends had. We are now successful in our own right but not extravagant. I chose to retire early but the others like what they do and don't want to quit just yet.

Spender or Saver?
Both. I have saved but also spent carefully on special items I really wanted. Never paid full price for most things and enjoy the hunt for the best quality item at the lowest price. After my divorce I never carried CC balance and my only loans were my houses and an occasional car.

We are in a transitional period right now; converting some assets into others and exchanging one toy for others. We are downsizing and looking forward to more quality time together. Our income is mostly "spending" as it comes from liquidation of some part of our portfolio. The only saving we do now is by not spending on something.
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Old 11-17-2007, 11:41 AM   #39
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I'm trying to visualize life with an after tax burn rate of $10k-$15k per month. Must be like living in the drivers seat of an F16 with full afterburners on, covering a lot of territory but never seeing a thing.

Lets see..... there would be a mortgage on the McMansion, property taxes and insurance. Then car payments on a bimmer or two or a couple of SUV's and cars for the kids and all the gas and service bills.

Everyone in the house would have a cell phone with txt messaging. There would be highspeed wireless and cable TV with all the sports packages for the 65" HD flat screen and separate feeds for the kids rooms. Need to throw in a few IPods and IPhones for good measure along with some laptops.

Outside I guess there would be the pool and the pool man and the lawn service to keep the place looking nice.

Maybe go out to eat 3-4 times a week (wouldn't want to mess up that nice $75K kitchen with all the fancy stainless steel appliances). Maybe make a few three day trips each month to the beach or skiing in Aspen. Oh yes, got to have the latest skis and the accouterments to go along with them.

Don't forget the membership to the golf club and gym and the latest carbon fiber golf gear.

Hummmmm must be missing something from the list but can't think what it would be right now. Maybe throw in a few jet skis and snowmobiles.

My big question is; How do these people find time to enjoy all the stuff they're paying for? Just writing checks for all this stuff would keep me busy and worrying what will happen when it all comes to an end. Looks like they're running down the street carrying a leaking keg of gun powder.
Hey- You talking about me??!!

Seriously- you are right about this- I live in rich Mclean Virginia- this stuff is all around me.....people buying bmw's and benz for their kids when they get their driver's license. health club and country club memberships. Owning every toy you could imagine..... its a tough life here
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Old 11-17-2007, 06:07 PM   #40
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Seriously- you are right about this- I live in rich Mclean Virginia- this stuff is all around me.....people buying bmw's and benz for their kids when they get their driver's license. health club and country club memberships. Owning every toy you could imagine..... its a tough life here
It is very similar where I live - including many of the folks I work with - and I know they earn about the same or less than me. Having read the article of Credit Scores by State and seeing Texas bottom of the list I realize it not so much about how many poor folks live here but probably as much about the constant struggle to keep up with the Jones's.
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