Frugality is worth as much as wealth

[haha]

Quote:

Originally Posted by donheff I guess I vote with youbet, wealth accumulation trumps frugality - at least for me.

And for me. Once you are retired, you can always get more frugal under pain of necessity. But you can't get more wealth, within given parameters of risk.

So wealth dominates frugality, since it confers flexibility. Even at the lowest level, wealth rules. There is a street dweller in this city with a $550 disability pension. He isn't stupid, and he uses his cash to buy all kinds of services, including watchdog services. He lives a completely different life from his colleagues because of his wealth.

At my modest level, not needing to resort to the frugal kinds of things mentioned in this thread are reason enough to like wealth. To me frugality as described here is like virtue as preached in church-I suppose there is a place for it, but I hope not in my life.

Ha

[RunningBum]

Quote:

Originally Posted by haha At my modest level, not needing to resort to the frugal kinds of things mentioned in this thread are reason enough to like wealth. To me frugality as described here is like virtue as preached in church-I suppose there is a place for it, but I hope not in my life. Ha

Frugality is whatever you make of it. IIRC, aren't you the one who lives in a 400 or 600 sq ft place? That's far too frugal for me. I'd go stir crazy. But it's none of my concern if you cope with it well.

[haha]

Quote:

Originally Posted by RunningBum Frugality is whatever you make of it. IIRC, aren't you the one who lives in a 400 or 600 sq ft place? That's far too frugal for me. I'd go stir crazy. But it's none of my concern if you cope with it well.

500. I would like more room for stuff, but not at $2+/sq.ft/mo. I do have a generous storeroom, shared bicycle room, and onsite laundry not included in my footage.

It is a one time adjustment, whereas penny pinching goes on and on. And compared to those who live aboard or in RVs, it's the Taj Mahal.

When I am home, I am either sleeping, cooking in my well designed kitchen, eating, reading or sittng at my computer-none of which need a lot of space.

The other thing is, I am not very big.

Ha

[Khan]

No clothes dryer
60F (50 at night) in winter
A/C 80 (90 when humidity is low)
Cook from scratch
Garden
Glean
Don't wear all new clothes every day
-change underwear
Don't shower every day
-sponge bath
If it's yellow let it mellow
Pets don't need gifts/toys/treats
-do get good food and regular vet care
Turn lights off when not used
High MPG car
Drive it 'til it drops
Live in blue-collar neighborhood
Thrift stores

Invest:
CFL
LED
Warm bedding
Warm indoor clothes
House upgrades(insulation, double-pane windows...)
Efficient appliances

[nun]

Quote:

Originally Posted by haha 500. I would like more room for stuff, but not at $2+/sq.ft/mo. I do have a generous storeroom, shared bicycle room, and onsite laundry not included in my footage. Ha

I want to build a 1200 sq.ft house with 2 bedrooms that is energy self-sufficient. I'm thinking about super insulation, windmills, solar cells and geo-thermal heat pumps.

[DallasGuy]

Being frugal was more important when I first started saving. The multiplier effect of a dollar saved when I was 25 was alot more important than the multiplier effect of a dollar saved at 50. I'm not as frugal as I was when I was younger.

Watching my investment portfolio lose or gain thousands in a day makes scrutinizing how much I spend on a small individual item seem ridiculous at times...the funny thing is that I catch myself doing it all the time. Old habits die hard.

[Keim]

I view it as two havles of the same coin.

[W2R]

Quote:

Originally Posted by Keim I view it as two havles of the same coin.

Me, too. The difference between the yearly income and yearly expenditures is more important than either by itself (whether in accumulation phase or in ER).

[template]

Techniques I employed in being frugal:

• develop and maintain a bias toward saving and away from spending
• marry a hard working, frugal spouse
• avoid debt at all costs except home mortgage
• buy modest house using a large down payment and a fixed mortgage.
• make a shopping list before going to a store, then stick to buying the items on your list once inside.
• buy everyday household items when on sale. Be aware of off season sales. I bought new winter jackets and vests for 75% off late in winter.
• be open to trying and buying generic products vs. name brand products. (Examples: Facial tissues, bathroom tissue, etc. For years I bought generic Cheerios-type cereal for $1.29/box instead of $3.29/box for the brand name Cheerios).
• purchase used items for hobbies rather than brand new items.
• avoid buying expensive designer and custom items for your hobbies.
• dress simply. My wife likes to buy some of her clothes at resale shops.
• use Linux (or even BSD Unix) software instead of Microsoft products. (saved me hundreds of dollars in both software and hardware)
• repair vs. replace. I have my boots resoled several times because the leather uppers last a lot longer than the soles.
• never, ever be too embarrassed to pick up coins you find on the ground.

[youbet]

Quote:

Originally Posted by Rambler For those of us not yet FIREd, expense adjustment is critical to wealth accumulation. The earlier we realize that and actually accumulate, the earlier we can FIRE...and use whatever we want then.:

Absolutely agree Rambler. OP opened the thread talking about wealth accumulation vs reduced expenses in RE, another subject, but I'm switched over now to what he actually meant (but didn't say).

[youbet]

Quote:

Originally Posted by haha The other thing is, I am not very big. Ha

You stand tall in my eyes Ha!

[Shawn]

I have a 1980 Toyota Corolla, still going strong. It gets very good gas mileage and the insurance is relatively low. I average less than $500/yr in non-routine maintenance (water pump, clutch, alternator, etc), which is much less than the depreciation on a newer car.

I shop at a store called the Grocery Outlet. It sells products that were recently discontinued, have bad packaging, were trial items from the manufacturer, are perishables about to expire, etc. I bought two containers of butter yesterday for 10 cents each (the identical product sells for $2.79 at the regular grocery store). Sure, they have an expiration date of December 10, but that doesn't mean everything suddenly goes bad at 12:01 am on the 11th.

I think a lot has to do with a person's choice of entertainment/recreation. My recreation is essentially free (running, bicycling, hiking, etc). There is some initial equipment expense, but good equipment can last a lifetime.

I usually shower at work.

My electric bill averages $10-15/month. I have no clue why some people have such high bills. Turn it off when it's not in use. Simple.

My house can get down to 45-50 at night, but an electric blanket works magic and is incredibly cost efficient.

I usually buy clothes at Wal Mart or Target.

I usually eat at home, but when I go to restaurants by myself, I love fast food. There are many good deals. On Tuesday where I live, one can get 4 pieces of chicken (2 thighs, 2 legs) at Popeye's for $1.98. Last time they even threw in two biscuits for free.

Local fruit/vegetable stands are also cost effective.

I pay cash for my day-to-day expenses. This helps constrain excessive frivolous purchases.

It works for me.

[Rambler]

Quote:

Originally Posted by nun I want to build a 1200 sq.ft house with 2 bedrooms that is energy self-sufficient. I'm thinking about super insulation, windmills, solar cells and geo-thermal heat pumps.

Nun, I have a solar electric system. I love it...it is fantastic to watch your electric meter spin backwards on sunny days. I'm hoping to get a Skystream windmill sometime in the future as a supplement. Just be sure to plan well. If you don't, you could end up having too much electricity, and giving it away to the power company (that is what we are doing now as we are posted overseas and the house stays empty 75% of the time). You my know these systems are not cheap. If your state has generous rebates, the payback can be much quicker. Likewise, rising electric rates make the payback quicker, in theory. But if you are looking for something to boost frugality, make sure you look into efficiency first! You will save much more by investing in efficient electrical appliances than you will by investing in renewable energy, so do that first, then invest in solar when you know just how much you will need.

R

[nun]

Quote:

Originally Posted by Rambler You my know these systems are not cheap. If your state has generous rebates, the payback can be much quicker. R

I'm going to plan them into my new house form the beginning and look for as many tax incentives/rebates as I can. Any utility system is a big part of a house cost. If we start building energy neutral buildings and ammortarizing the cost of the systems I don't think people will see them as expensive.

[Rambler]

Planning it from the beginning is how we did it...and glad we did. It allowed us to create a back-up system with its own subpanel, powered by battery storage. that is not impossible if done later, but it is harder. By the way, we are electric neutral, but the stove still requires propane.

I also agree that if they were built standard with all new homes, no one would think twice about the cost, AND, the cost would go down based on the increased volumes.

R

[growing_older]

Making a budget from gross income didn't work so well for me. It did attract my attention to the tax outlay, and I did get motivated to try to reduce that, but didn't see much improvement. My "budget trick" is to make my budget on net - after savings have been deducted. My 401k comes out before I see the paycheck. My autopay to other savings comes out before I divy up the rest. Because my budget is based on my spendable income I'm more aware of the cost of each item, and think I have a better idea what my expenses will be come eventual FIRE.

[Eyerishgold]

Quote:

Originally Posted by template never, ever be too embarrassed to pick up coins you find on the ground.

Never am!

[Sweetlip]

The big expenses in life, IMHO, are interest payments (mortgage, car, boat loan interest), depreciation, and the cost of raising and educating kids.

Whilst you can make savings on day to day living expenses such as food, the savings on those things will pale into insignificance compared with interest, depreciation and the cost of kids.

So, for many years, I have been taking the long view approach to buying and keeping cars for as many years as they are safe to drive, saving to pay cash for my cars and boat, and teaching my adult kids, who would like cash hand-outs from time to time, the concept that I learnt in the book, "The Millionaire Next Door", to not make my kids into "economic outpatients". That is, once they have all grown up and have established their independent lives, they are truly on their own financially.

Whilst the cost of a gallon of fuel irritates, that is the small cost in running a car each year - the big cost is depreciation.

My wife and I are thrifty on many of our daily living costs but in truth, the savings made on those are inconsequential to our standard of living - which is very good.

By getting the big expenses of interest, depreciation and raising kids in control, and living within my means and saving the surplus, I am now very comfortable in retirement several years ahead of my original life's expectations as to when I would retire.

As an afterthought, I have also minimised transactional costs pretty well by living in the same house for 25 years and not trading in the old wife at any time over the past 32 years. (After all, she was the best that I could get with the car that I had!)

[Rustic23]

Sweetlip... nice post.

[Walt34]

I guess we're middle-of-the-road. We eat out at restaurants about 2-3 times a month, lunch at the expensive-but-really-nice one. Bought a nice house and two new vehicles after cashing out from an expensive metro area, but they replaced vehicles that were 14 and 18 years old. Barring accident or theft I expect them to last 15-20 years with meticulous maintenance.

Most meals are made from scratch - I made beef stew in an 8-quart crock pot yesterday, we'll eat off that for a week along with some veggies, the rest in the freezer. When I was working I brown-bagged lunch about 90% of the time.

We've decided that if we had it to do over again we'd buy a smaller house, but we're here, this is no time to sell, and moving is a royal PITA. And a two-car garage is nice, never had that before! And I can see in just five years that the vehicles will last a lot longer being garaged. Both still look like they were delivered yesterday so maybe that's a "break-even". Time will tell.

I'm the one who would like to get in the car and "just head west" (we're on the east coast) but wife is more frugal and it's not worth the fight, so some day trips and a small fishing boat suffice for me. Both sides of the family say we're both much more relaxed than we were five years ago. We're not actively saving, but we're not withdrawing from the deferred comp. accounts yet either so that continues to compound. After a certain point saving becomes, well, pointless. I want my will to read "Being of sound mind and body I spent all my money while I was alive!"