Frugality is worth as much as wealth

TickTock said:
I am intrigued by your ideas and wish to subscribe to your newsletter...
:D
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He will be happy to oblige, but you must understand that he only does it as a hobby to entertain him between trips to hang out with Princess Caroline.

All proceeds will be donated to the Ray Kurzweil Institute of Eternal Life.

Ha
 
youbet said:
Know what ya mean Helen. DW and I enjoy first class world travel, McMansions, luxury cars, fancy electronics, pricey entertainment, giving generously, and leaving the lights on when we're away. But, we do it all frugally, but comfortably, and therefore need next to no income. We also enjoy seeing our portfolio double annually. ;)
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Didn't your mother tell you... mocking strangers is not nice.
Remember what the good book says about entertaining angels :angel:
 
Helena said:
Didn't your mother tell you... mocking strangers is not nice.
Remember what the good book says about entertaining angels :angel:
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Oh....... I'm sorrrrrry. :( Sometimes a little sarcasm just spills out!

DW and I, 19 months into RE, find ourselves to be more typical Americans than many of my comrades here on the Firecalc board. We have a very livable RE income, are enjoying RE a bunch and are grateful for what we have. But, we'd spend more if we could afford it. It seems like most things we enjoy, even outdoorsy things, cost money. And our FIRE portfolio all came the hard way, no inheritance, no big financial wins, no high paying jobs......just slow and steady over many years. So all this recent talk on the board (beyond this thread) where money comes easy and fun is cheap sometimes leaves me a little exasperated!

Helen, seriously, congratulations on enjoying retirement while spending modestly and even saving. We just can't do it........ Our withdrawal rate is conservative, and we're very disciplined about it, but if we had another $5k scheduled to spend in 2008, I'd be at travel web sites right now!

TickTock - I'd like to start a newsletter! I'd call it "Doing it the Hard Way!"
 
POGO - we have met the enemy and we is them.

Hide from yourself - max every available tax deferred offered - preferably in broad based low expense index funds(500Index for me) plus a few taxible mutual funds - ON AUTO DEDUCT - don't look, don't fiddle or do any 'managing'.

Party till you puke (tongue in cheek - but I did live thirty years in New Orleans) - the creative soul(read cheap bastard) will find a way to boogie.

Dollar cost average over a long period of time - time in the market not market timing and all that there.

heh heh heh - isn't hindsight just wonderfull? :angel: :cool:
 
;)I guess I made it to a comfortable FIRE through a variety of means including being "careful" about spending and staying out of debt. I would not say I have ever been frugal as defined by this board but I have seen some very tough times and still managed to get to FIRE.

I had a good job with a decent salary but I earned every penny of it. I lived below my means but was not frugal. I saved more each year and invested in many different places. I lost a bunch but I also made a bunch. I stepped up in housing and only lost once so far. Equity allows one to do that. I also moved some of this equity into "toys" which, don't make money but allow(ed) me to have fun despite some rough times in my life.

Being money wise is more the issue in my mind. Shop around for a good value; not just the lowest price. I still have many items I have purchased over the years because I bought the best I could afford at the time. Being cheap can actually cost you more in the long run when you have to replace an item over and over again. I usually keep cars 10 year or so and always pay cash for them. I shop every year on car and home insurance for the best value.

I pay more for satellite TV and other toys than the average Joe but I don't go out much so the monthly cost is acceptable to me. We do have a very nice RV we bought this year and while I know it is a hole in the road you throw money into, it is something we enjoy and I don't want to miss out on the things we enjoy because someday we won't be able to do them anymore.

We have a good income from our investments and we plan on spending a lot while we can do what we want to do. Soon enough we will be stuck around the house and not able to go and do things that make us happy. If we end up with a small portolio when we are 90 then who cares? I will most likely be dead before then anyway. We plan on living until we are 95 and our financial plan will allow it but we don't expect to ever see that age nor really want to with our various health issues.

Frugal is good if you don't have much income or if you want to stretch what you have for a long time. I don't care to be frugal...just money wise.
 
SecondCor521 said:
You can join if you're a relative of a vet, so I qualify because my Dad was USAF. Failing that, you can pay $20 to join some organization -- NMFA, I think -- and then join PenFed.

They're a top notch organization. I've had a second mortgage and a credit card with them and been very happy.

2Cor521
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My dad was also USAF. What do they need to verify that??
 
REWahoo said:
FinanceDude, this tells you all there is to know about how to join PenFed CU...

https://www.penfed.org/howToJoin/overview.asp

(Full Disclosure: I posted this while wearing a playful smirk at the irony of providing a financial adviser with financial assistance. :))
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Shows you how much I invest in CD's.........well never.........plus, the fact I didn't serve has kept me from doing things such as this or joining the local VFW.......

Maybe it's a personal thing. Now ask me a question about UIT's or manged futures so I know I'm still an advisor..............;)
 
SecondCor521 said:
You can join if you're a relative of a vet, so I qualify because my Dad was USAF. Failing that, you can pay $20 to join some organization -- NMFA, I think -- and then join PenFed.

They're a top notch organization. I've had a second mortgage and a credit card with them and been very happy.

2Cor521
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I went to their site and it states active or retired from services and the eligibility steming from a family member's service is that a family member is also a current member of Pen Fed. My husband spent 4 years in USAF, but many years ago and not retired from that service. I don't believe we are eligible as per their site.
 
mexmeme said:
I went to their site and it states active or retired from services and the eligibility steming from a family member's service is that a family member is also a current member of Pen Fed. My husband spent 4 years in USAF, but many years ago and not retired from that service. I don't believe we are eligible as per their site.
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If you go to the link I provided earlier, it will show you can join the National Organization of Military Families (NMFA) for $20 and get PenFed membership that way. You don't have to maintain your NMFA membership beyond the first year to retain your PenFed membership. All CU's have a motto "Once a member, always a member".

(Which is also something an ex girlfriend once said to me...'cept she used a different term for "member"...)
 
For those of you buying PenFed CDs, do you purchase them as part of a tax-deferred account (IRA) or as part of your taxable account, and why?

I'm asking becasue I am in a high tax bracket right now so CD interest would be painful, but in a couple years that picture will change due to early retirement and I will be in a lower bracket. I have both taxable and tax-deferred accounts so I need to figure out how best to set up a CD ladder....
 
Edit: Whoops, I just read that your husband didn't retire from the USAF. I'm not sure if my father actually retired from the USAF or not. I think not because he was only in for 9 years. Hmmm, well I guess I'm a fraudster. Apparently they don't check, though, because I've been a member for several years now.

mexmeme said:
I went to their site and it states active or retired from services and the eligibility steming from a family member's service is that a family member is also a current member of Pen Fed. My husband spent 4 years in USAF, but many years ago and not retired from that service. I don't believe we are eligible as per their site.
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If you start at:

https://www.penfed.org/membershipApplication/eligibility/elig01.1.1.asp

and then click on the first / top left link in the box that includes USAF, and then answer "No" twice, you'll get to this screen:

https://www.penfed.org/membershipApplication/eligibility/elig04.1.1.asp

which says:

"You're eligible to join if you have a family member or housemate who is:

  • Eligible to join Pentagon Federal
  • Currently a member
Does this apply to you?"


So since my father was retired from the USAF, that makes him eligible to join, which in turn makes me eligible to join per the first bullet point quoted above. I would think you'd be able to follow the same path.

2Cor521
 
Linney said:
For those of you buying PenFed CDs, do you purchase them as part of a tax-deferred account (IRA) or as part of your taxable account, and why?
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My PenFed CDs are taxable. (About 80% of my monetary assets are taxable.)

Not sure how to answer "why?" I had money from other CDs coming due at the same time that PenFed held a promotion for high interest rate CDs.
 
I think the first thing to do is to precisely see exactly where you are currently spending money. You might see for example that you spend a lot of money on soda pop out of soda pop machines...
 
I get the OP's general point. A $ saved in reduced spending is a $ less that needs to be generated for income to cover needs.

And of course, that idea works before or after retirement. Before retirement, it helps one to build wealth.

It is the way that most of us working stiffs have a chance of retiring.
 
I lurk a lot but rarely post...

IMHO, Frugality as I define it will not help you accumulate wealth quickly. It will eventually but is a long and slow process. More income and spending smartly does.

Compare this...

The wife and I are 35ish. She works for a megacorp and I consult independently.
1. Drive a Porsche Cayenne..
2. Live in a mil dollor condo in Chicago...
3. One kid and one on the way. The kids are expensive as we decided that they will always be in nanny care and go to private schools.
4. Use a destination club membership to take 3-4 weeks of vacation every year during peak season. Try and fly First class whenever we can.
5. Use our boat 34 ft boat 20+ times in Lake Michigan during the summer.

to this...

1. Had 50 bucks to my name at 25. Upgraded my IT skills to be more billable. Burned a lot of midnight oil. Spent 13 months living in hotels and flying home every Friday to have the right kind of experience.
2. Made it a point to save 1/3 or gross salary before taxes. No exceptions. Anythig over it is play money.
3. Made it a point that one of us will always consult. Bigger income without worrying about benefits. The kicker. Can salt away 40%+ in Sep 401K.
4. The Mil Next door. Buy your home smartly. Bought two condos and merged them into a larger unit. Cost of purchase. 580K. Bought two more rental units in the same building before the boom.
5. Spending - Always eyed quality stuff to buy but bought it when price was right. Slickdeals and fatwallet.com save a lot of money. To give an idea, Frugal means buying a $15 shirt at Walmart. Spending smartly means buying a $100 shirt at $15 at Josbank.com and stocking up just in case.
6. Drove a Camry for 10 years before letting it go. Got the Cayenne for 15% less. Naturally, bought it a year old.
7. Travel - Fly 100,000 base miles every year with a bulk of them to nowhere. Reason. Top Tier perk is Anytime Anywhere mileage tickets with unlimited First Class. A risky bet but bought a High Country Club: membership very early in the game. The vacations are so inexpensive that it's a joke. The boat is a yearly lease. I write some of it off as a business expense. 25% of it is used for keeping clients happy and renting to friends.

Target Retirement date: Dec 31 2017.

As they say, as long as you keep the eye on the ball and move in the right direction, the point is WHEN and not IF.
 
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Bourne ,
What do you consider inexpensive for travel ? I really think $9,000 a year plus an inital outlay of $70,000 is a joke .Invested that $70,000 could bring between $3,500 and $7,000 so added with the annual dues that's $ 16,000 a year and one of the places is Orlando home to the really great vacation deals .You are jokeing right ?
 
Moemg,

I was not joking. Beauty is in the eye of the beholder.

The wife and I bought into HCC at the Affiliate level when it was 30K. Including discounts and promotions, it costed us 25K plus 4.8K per year in dues. That may sound steep but here is my rationale...

25K membership is a lost opportunity of $1.25K (5%). Add that to 4.8K and you approximately get 6K. Now, that may sound steep to some but 21-25 days is approx $250 - $275 a night. More in ballpark of an average condo rental or a Westin/Hilton. Just that these provide more space than a high end hotel and are a cut above condo rentals.

Now this is what I call a joke...:)

Exclusive Resorts - Luxury Destination Club & Private Vacation Homes
 
template said:
Techniques I employed in being frugal:
  • use Linux (or even BSD Unix) software instead of Microsoft products. (saved me hundreds of dollars in both software and hardware)
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How does Linux "save in hardware" ? Can Linux run well on older /slower computers where Windows might craw ?

We have a bunch of working but older computers around the house - they are very slow with Windows XP - wondering if putting Linux on them might make them good "web access terminals" around house.

Where can I get Linux - free ? Thanks
 
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