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Old 01-09-2013, 10:52 AM   #21
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I just woke up one day.

I grew up poor. Grocery shopping at the food pantry, only being allowed to take a shower once a week to conserve water kind of poor. Just before I turned 21 I finally got my first real full time dependable job. Having money was new to me and I felt like I should have "things" for the first time ever. By the time I was 22 I had bought a $1400 bed, $1200 chrome rims, $1000 computer, $1000 stereo each for both my home and car. Before I new it my credit cards totaled almost $8000. I decided I didn't want to end up 50 years old and have a five figure credit card bill like my parents. So at age 22 1/2 I paid off the entire $8000 in one year(2002) with an after tax income of only around $25K. After it was paid off I raised my 401K contribution to 33% and started a ROTH with a gross income of under $40K and learned to live on $1000/mo. I've lived on $12K/yr most years since 2003 and no more than $15K/yr. Never had any debt since then and don't even own a CC anymore.

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Old 01-09-2013, 01:51 PM   #22
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I've pretty much been a LBYM type of person even at a very young age. As for that attitude about money, I probably got that from my mom as she was more of the scrimp and save type of person whereas my dad was more of a spend it type. Also, coming from a large family it's fascinating to see what attitudes my siblings leaned towards (savers vs spenders).

Also, for me part of the strategy is holding of on purchasing things that I might consider as wasteful and use the money saved for something I really like. Um..sounds a bit like a budgeting mindset built-in

Have you ever seen a headstone with these words
"If only I had spent more time at work" ... from "Busy Man" sung by Billy Ray Cyrus
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Old 01-09-2013, 02:16 PM   #23
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Originally Posted by NW-Bound View Post
I have always been frugal and a saver. So, there's no LBYM wake-up moment story from me.

I am right now more interested to read stories of people "kicking it up a notch" in their retirement. Woo Hoo! Cheapskates are slowly realizing they cannot take it with them. And the economy needs stimulation. Spend, spend, spend...
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Old 01-09-2013, 02:59 PM   #24
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Wallowing in sin and sorrow, I was walking along a dusty road near Damascus. Suddenly I beheld a blindlingly brilliant light...

Since then I have reigned in splendor, by reining in my spending

The rest is history.

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Old 01-09-2013, 03:01 PM   #25
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I was pretty much a "live within your means" kind of gal... But had a car loan, a mortgage, and some credit card debt. I was never late on my payments, and I contributed 15% or more per year to retirement accounts... but wasn't getting ahead.

When I got married (later in life, late 30's) my husband had ZERO debt. Paid for (albeit crappier) house, older paid for car, no CC debt. But he had almost no retirement savings. So my net worth was greater, despite debt.

I am very competitive. It was unacceptable to me that my husband had less debt and that I was dragging down our finances. And I got lucky. My employer was acquired at about the time we got married and all of my stock options vested (at a historically high stock price). I cashed out and paid off all my debt except my mortgage.

That was my LBYM's inflection point. It was amazing to me how much easier it was to save/sock away when I didn't have debt to service. Our savings rate exploded that year.
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Old 01-09-2013, 03:23 PM   #26
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When I was about to leave for first year of college at McGill University, my father lost his job. At a very inopportune time, money was very tight. I worked throughout college (and between work and some scholarships, paid for college--thank goodness for low tuition at Canadian universities!), and learned to live a very frugal lifestyle. Having tons of fun at the same time drove home the point that money was not necessary to have a great life.
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Old 01-09-2013, 03:44 PM   #27
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The single biggest moment came during the economic recession that followed the 1987 sharemarket crash (which hit some countries much harder than the US).

Some moderately wealthy relatives lost everything and declared bankruptcy. My father was forced to shut down his small business to stop the losses that would have seen him suffer the same fate. Also, I spent the first years of my legal career enforcing mortgage security documents - it was really shocking watching people's homes being sold out from under them because they couldn't make the payments. I can still remember some of the people (and the houses) but, above all, it gave me an understanding of the consequences of not managing my finances prudently.

Reading The Millionaire Next Door in the mid or late 1990s helped a lot as well - more in the sense of confirming that I was following the right path than motivating me to change anything I was already doing.
Budgeting is a skill practised by people who are bad at politics.
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Old 01-09-2013, 05:07 PM   #28
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My moment of enlightenment was in my mid teens. I always liked to do things my own way, and the teen years were filled with the usual angst of disagreeing with my parents about my way vs their way. A couple years of this, and it dawned on me that if I had enough money to live on my own, nobody could tell me what to do. This was great motivation for getting a degree and LBMM! Motivation to FIRE is just more of the same.
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Old 01-09-2013, 05:55 PM   #29
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My grandmother told me in the 1970's that I shouldn't buy anything that I couldn't afford, or anything on credit, including a house. But I saved up a down payment and borrowed 60k to build a house. I told the builder (an older guy) what my grandmother said, and he said that he had built and lived in 19 different houses without having a mortgage. So I knew then that I needed to get debt free and LBYM
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Old 01-09-2013, 06:06 PM   #30
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I've always been a LBYM type and so is DW. So in some ways it's in our DNA. However, two significant factors played a significant factor in FIRE journey:

The first kept us pointed in the right direction at an early age - in 1985 I read read The Richest Man in Babylon for the first time. This book reinforced LBYM as well as reminding me to keep my skills up to date and approach work with a postive frame of mind (as much as possible).

The second situation occured in 1999 when DW and I added to our Steiff bear collection. Ultimately, that became the last Steiff bear we purchased and the scenario steered us to Your Money Or Your Life when it was offered as a class in Voluntary Simplicity at our church.
Dreamin' of Streamin'
FIRE'd at 52 on 7/8/11
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Old 01-09-2013, 06:54 PM   #31
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Like others, I grew up with LBYM, so my moment was more of a "confirmation" than "conversion."

I was fresh in the workforce. Engineer. Making good money for someone fresh out of school.

Went and bought a pair of shoes. Did what engineers do, and calculated the percentage of my yearly salary on those shoes.

It was 1/4% of my yearly salary.

Holy cr*p! A lousy pair of shoes cost me 1/4% of my yearly salary? I was reinvigorated right then and there to get ahead of the game and not allow knee jerk purchases to ever get me behind. If shoes cost that much, heaven only knows how much a pair of nice chrome rims would be. (Mentioned above, and something I had my eye on.)

Never got the rims. But resoled those beautiful shoes 2 times for $15.
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Old 01-09-2013, 09:47 PM   #32
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I have not always been a LBYM'er, but that was before my financial education, and at the time it took every last penny to even get by.

I do remember having to move back in with my parents/grandma in 2006 due to a roommate leaving, thus making my rent too expensive. Parents were kind enough not to charge me, and after a few months of working, and living rent free, I remember a specific time depositing a paycheck, the ATM spit out the receipt with my available balance in my checking account (my only asset at the time) $4000 some dollars!!!

I remember thinking to myself "Wow, this is the richest Ive ever been...I wonder what its like to have $10 grand!?"

Did some hard thinking, and realized that my newfound "riches" were 100% due to my lowered expenses. (Thanks mom and dad)

So I began to think of other ways to cut expenses even more, as I realized that my rent-free lifestyle wouldnt last forever, it was a huge opportunity. Eventually I took a job travelling the country, living in hotels and collecting per diem. Best part of that job...Not having to pay rent!

Looking back, Im not particularly proud of any of this, although it did teach me LBYM, and I guess Im just lucky to have parents who happily accepted and nurtured their poor boomerang kid.
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Old 01-10-2013, 01:21 AM   #33
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I grew up in a "sensible" family where carefully choosing what to spend on was just the norm. Parents were generous but always stresses the need to "buy quality" and never, ever to go into debt for consumables. Heck, they bought homes with cash!

Years later and in another country, when I started my first attending physician job, like all the other new faculty members, I was given an appointment to meet with the physicians' organization that managed our money. The first thing they impressed on me was the fact that I would never have a pension and that I needed to start saving for my retirement immediately. They did my first financial plan. I heard the message. I settled into a high income profession and a strong savings pattern. I bought a house within the year, with a mortgage of only $25k, which I paid off in 18 months (why would anyone not do so when interest rates were 10%!). I spent generously but never incurred any consumer debt. After doing an MBA, I began to track net worth annually and to take a more detailed interest in my investment portfolio.

In 2005 I received an inheritance. For the first time I was a millionaire. I realized that I now had choices. I did extensive research on investment of the inheritance as well as financial planning. I formulated the idea of FIRE with the support of this forum. I became acutely conscious of the opportunity cost of needless spending and high MERs. I became much more frugal and became a financial analytic junkie.

Fast forward 7 years and I have recently ER'd at age 55. Sincere thanks to everyone here who has contributed to helping me achieve my dream.

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Old 01-10-2013, 01:51 AM   #34
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I was raised with delayed gratifications and by LBYM parents, grandparents and other relatives.
All all of them having started with literally "0" after WW2 and 10-20 years later owning houses free and clear again. Loans were acceptable only for house purchase.

At the age of 18 working for a bank it really hit me: so many customers with "high" salaries and so deep in ****.
This made me really appreciate where I came from.
When I received some money to pay for my university education I made it my goal to stretch it as much as possible.
It worked. The money became part of the equity of the house we purchased 4 years later.
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Old 01-10-2013, 01:55 AM   #35
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Like some posters here, I have always been LBYM. It is in my DNA. Always had delayed gratification. Never had a single debt, even paid my home cash. I cannot stand the idea of even owing $100 to someone. I guess I am frugal, and still, as mentioned in another thread a few days ago, I have no problem giving cash to homeless patients who come to the free clinic or even paying for their meds. No problem either paying out $5,000-10,000 a year for mission projects abroad.
Very conservative with investments. Not ER'd yet, 48 years old. Please do not take anything I write or imply as legal, financial or medical advice directed to you. Contact your own financial advisor, healthcare provider, or attorney for financial, medical and legal advice.
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Old 01-10-2013, 05:58 AM   #36
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I have always had a job, even at age 14. As a young lad I had a preference for Jack Pucells, Weejuns and button down shirts. Mom said OK here, I will give you $2 toward your $5 shirt(1964), $5 toward the $10 sneakers, $10 toward your $20 loafers. I said fine I will pay the difference, I learned fairly quickly that I needed to LBYM.
For me experiences are not good or bad, just different
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Old 01-10-2013, 08:58 AM   #37
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When I was 11 or 12, I really wanted a CD player. They were still fairly new back then (my parents didn't even have one), and Mom & Dad thought I was fine with my cassette player. But since I really wanted one, they offered to lend me the money to buy one. I found one on sale that I liked, a Phillips for 250 DM (down from 350 DM).
I enjoyed it very much (and I still have it to this day), but it soon dawned on my how long I would have to pay for that loan. My allowance at the time was a few bucks a month (I really don't remember how much it was).

Back then, it felt like ages until I managed to get rid of this debt, though probably it was not more than a few months (I sometimes got small gifts from my grandparents, and a little more for my birthday, and Christmas). I was always hoping my parents would forgive my debt, but fortunately I was too proud to ask them for it. I remember vividly how bad it felt to be indebted to someone else. It was the best money lesson I ever got, and I'm quite sure my parents have no idea about that, since I never complained.

I have never again borrowed even one cent, except to purchase real estate.
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Old 01-10-2013, 09:07 AM   #38
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Originally Posted by panhead View Post
I'm also one of those who has always been very frugal and LBYM. When I was a very young and getting an allowance for things like taking the garbage out, yard work, etc. I would save almost all of the money. My sister would spend every cent she got. She would eventually come to me to lend her money.
I was EXACTLY like Panheads sister. I spent every penny of my allowance. My sister saved over half of hers and at Christmas actually bought gifts for Mom, Dad and me. I was so embarrassed ! From that day forward I started saving and I never stopped. I remember my first real paycheck of $96. I spent $20 on two jackets and deposited the remainder in the bank. Over the years I learned to spend more, and actually lived AT my means for about 18 months. When I did my annual expense review it freaked me out that I spent every dollar I made one year and I went into super-spendthift mode. I like this MUCH better.
"For the time being no discipline brings joy, but seems grievous and painful; but afterwards it yields a peaceable fruit of righteousness to those who have been trained by it." ~
Hebrews 12:11

ER'd in June 2015 at age 52. Initial WR 3%. 50/40/10 (Equity/Bond/Short Term) AA.
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Old 01-10-2013, 09:41 AM   #39
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We were "house rich but cash poor" growing up. We lived in a very posh suburb of Chicago in a lovely big home with beautiful gardens. Parents paid cash for it in the early 1950s. But my dad fell ill when I was in grade school and lingered some years but never got well: he couldn't keep a job. Mom went back to teaching and raised 5 kids with help from her parents. We had no discretionary money to speak of, and when I had an operation at 14 I realized we also had no health insurance--I felt so guilty about it. I was so pleased to get my first job at 16 to have spending money for the first time, and I quickly learned how far it went. I'm sure these early experiences contributed to my frugality today.
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Old 01-10-2013, 09:51 AM   #40
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Originally Posted by haha View Post

Since then I have reigned in splendor, by reining in my spending


Thank you for using rein and reign correctly. There misuse makes me crazy.

Maybe we were poor - didn't know it though. The money you had was the money you could spend - it just didn't occur to me that you could borrow money for stuff. Driving back and forth from NM to Oregon I thought it would be really neat if I could sleep in my own house every night, never being more than 600 miles from a home. Started buying the junk houses I could afford, but they were all in one area. Only way to pay for them was by renting them out. Junk houses require lots of care and feeding and the interest rate on the property loans was huge, so there was never a problem with spare cash laying around - always a worthy place to put it. No spare cash, no temptation.

My sister, OTOH, works and spends. She can be counted on to try the latest snack, food product, cleaning device, shoes, etc... She has a savings account but carries a big credit card balance - the concept of interest just seems to not be of importance to her. I do wonder why we are so different but figure her lifestyle has it's own positive features.

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