UAW on EOC

[Jane]

I am reading the Millionaire Next Door (I know, I know, such a late comer) right now and loving it! It's weird to find a confirmation that the stuff I am doing now (LBYM and investing savings) is good for my financial future.

What really struck me is the section on EOC because I can see some people in my family who fit into this category (namely my brothers and one of my uncles).

Fortunately (I used to think I was unfortunate though ), I have never received any EOC from my parents/grandparents/uncle etc in term of schooling, car/house purchase, spending money etc. (It used to really irk me when I was a kid that my parents refused to give me even an allowance - gosh I had to work part time for my own spending money!! ).

There are some people in my family who receive financial assistance from family for all of the above and more. Now I can see the difference in attitude between me and them in terms of money. I don't spend as much (even when I was younger and a lot stupider about money). I saw my uncle (the one receiving EOC) in the weekend in one of those family gatherings, and he asked me why do I still drive my 10-year old Honda Civic. I was like, er, because it still runs?? He was like, c'mon you're an engineer, you probably earn big bucks, right? What is money if you can't enjoy it??

That really got me right there. I was going to say something like, you won't be that careless about money if it is your OWN money to spend! (But I bit my tongue because saying something like that towards older relatives in our family is enough warrant to have me roasted alive for years). This is the same uncle who bought a McMansion, a downtown condo and drive new SUVs with money from my grandparents (oh yeah, he thought my condo is so "cheesy" and have been bothering me to upgrade).

What is it to him what car I drive? What is it to him that I don't live in Mcmansion?

Okay, okay so I babble...okay, so my point is that, do you see any difference in money attitude between adults on EOC and non-EOC adults?

On a lighter note, I am happy to report that although I have a late start thinking/planning for my financial future (at 27), my TNW is close to what is expected for my income and age. One day, I want to be a PAW!

Jane

 

[cute fuzzy bunny]

TMA!

 

[John Galt]

In the not too distant future, we will all be completely
dependent on the government for what we need to
to sustain life. I will be dead. For the rest of you,
good luck!

John Galt

 

[Nords]

Try this one, Jane.

"My car reflects my values, not my net worth."

Then, just in case the point is too subtle, ER.

 

[unclemick]

Jane

The earliest $ are the best - time is your friend.

I read the Millionaire three years into ER and found a lot I liked. My only knit pick was that it kinda of implied that you needed to be self employed/small business, etc. Gee - I was a  salary grunt engineer all my work years, not mangement. I just saved and invested continuosly.

The EOC reminded me - An aunt(aka swedish maid in NYC) died and left my father something like a 10k mutual fund in the 1950's. He being Depression Era promptly sold those evil stocks and we ensconced to a house in town/with sidewalks. Being in the 7th grade, I wondered how a maid who made much less than my father could do so well. Handbook on Mutual Funds from the public library got me thinking even though I didn't invest until out of college. EOC via money is easy. EOC as in Educational outpatient care is much much tougher.  

 

[Nords]

"The Frugal Millionaire Next Door?"

He's pounded on that piano key for 30 years & more than three books, so it may be wearing out.

But I've been wondering if there's a book for us frugal savers who achieved ER without owning our own companies, having an entrepreneurial millionaire mindset, or being female.

Waddya think-- an invitation to Tom Stanley with the URL of this board?

 

[Skylark]

UAW EOC TNW PAW?

WTF?

I didn't read the book, can you help me out here?

 

[Whakamole]

I found Danko's web page... he has a very interesting table (from 1995) about the asset types that just-millionaires ($1-$2.5m) and multi-millionaires (>$20M) have.

The differences are fascinating, and I think point to the differences between those of us who aren't entrepreneurs, and those who were.

http://www.albany.edu/~danko/millionaire/netscape.html

The just-millionaires have much more invested in their personal residence and other real estate, retirement accounts, and cash.

The multi-millionaires had more of their assets in closely held and traded stock, and tax-exempt bonds.

Makes some sense.

 

[Jane]

Re: "The Frugal Millionaire Next Door?"

But I've been wondering if there's a book for us frugal savers who achieved ER without owning our own companies, having an entrepreneurial millionaire mindset, or being female.  

There is a financial advantage being female? I always think it is easier if you are male. Everything (from haircut to clothes) is cheaper for men.

Although the book keeps talking about small business owners who become millionaires in 1 generation, it also has few example about people who are employees. One example I remember is a college prof.

I believe it is still about how much you keep and how you invest, than how much you make. I personally don't think I want the stress and extra work in running your own company.

Okay let me see:
UAW = under accumulator of wealth
PAW = prodigius accumulator of wealth
TNW = total net worth
EOC = economic outpatient care

The book suggests this rule of thumb: age x realized income / 10 to calculate suggested net worth. If you are half or under the suggested net worth, you are UAW. If you are twice or more, you are PAW.

Another thing I want to point out is this formula probably shouldn't be used for people who just got out college. A 23 year old who just got out college earning 30K is supposed to have $69K TNW. Very rare this will happen. Most people I know have negative or 0 tnw out of college. I think this formula is more appropriate if you have been working for few years.

Uncle: that makes 2 of us grunt engineers on this board! I don't want to be a manager either.

Jane

 

[Whakamole]

Re: "The Frugal Millionaire Next Door?"

There is a financial advantage being female? I always think it is easier if you are male. Everything (from haircut to clothes) is cheaper for men.

Car insurance is cheaper for women, especially when you look at 20-somethings... I paid a LOT to insure my little car, even with a good driving record.

Life insurance too.

 

[Jane]

Re: "The Frugal Millionaire Next Door?"

Car insurance is cheaper for women, especially when you look at 20-somethings... I paid a LOT to insure my little car, even with a good driving record.

Life insurance too.

It's true but on average there is still a wage gap between men and women, and consumer goods/services aimed at women tend to be priced higher.

Jane

 

[MooreBonds]

This is the same uncle who bought a McMansion, a downtown condo and drive new SUVs with money from my grandparents (oh yeah, he thought my condo is so "cheesy" and have been bothering me to upgrade).

What is it to him what car I drive? What is it to him that I don't live in Mcmansion?

Okay, okay so I babble...okay, so my point is that, do you see any difference in money attitude between adults on EOC and non-EOC adults?

On a lighter note, I am happy to report that although I have a late start thinking/planning for my financial future (at 27), my TNW is close to what is expected for my income and age. One day, I want to be a PAW!

Jane

Hi Jane, good to see a fellow 27 year old who is intelligent enough to think ahead (by the way...are you looking for a like-minded PAW to enjoy those fun-filled ER years with? ).

I know exactly what you mean about the various family members that give you a hard time with your lack of current expenditures. It can be difficult to put ourselves in their shoes, but just remember that as much as we are disgusted with their financial hedonism, they take a similar view towards our financial modesty and foresight, and it gives them just as much horror to see us...SAVING ...something from our income/cash flow, as they are unable to comprehend NOT enjoying your money as much as possible (and to them, spending money is the only means of enjoyment, rather than realizing that money is not required for an enjoyable time). My brother and one of my sisters is the exact same as your uncle: they can't understand why I don't spend my money and imitate their live-it-up high, long-term-financially-impossible-to-maintain lifestyle.

However, I really don't think that the EOCs are truly influenced by how their family treats them - it is all ingrained in their core personalities.

I was engaged to a terribly deceitful, manipulative, compulsive lying woman who was a poster child of EOC - if it wasn't her mother paying her property taxes on her home, it was her uncle or one of her many friends (and, as I eventually found out, I soon rose to the top of the list of "people to hit up" ). I realized that even if her mother cut off her umbilical cord, she would simply find someone else to use to satisfy her needs. The sad thing was, she even owned her own entertainment company - but she seemed to only work as much as was necessary to earn barely enough to make ends meet. She didn't have a dime to her name, despite being 32(and she was barely break-even on her 5 year old mortgage since she overpaid for her modest house).

Thankfully, God opened my eyes to what my future would be like, and I saw her many lies for what they were and was able to call things off before it was too late. Of course, she took advantage of the situation to make headlines for herself (quite literally, I'm afraid)...a long story that I'll save for another day .

Peter

 

[Whakamole]

I know exactly what you mean about the various family members that give you a hard time with your lack of current expenditures. It can be difficult to put ourselves in their shoes, but just remember that as much as we are disgusted with their financial hedonism, they take a similar view towards our financial modesty and foresight, and it gives them just as much horror to see us...SAVING ...something from our income/cash flow, as they are unable to comprehend NOT enjoying your money as much as possible (and to them, spending money is the only means of enjoyment, rather than realizing that money is not required for an enjoyable time). My brother and one of my sisters is the exact same as your uncle: they can't understand why I don't spend my money and imitate their live-it-up high, long-term-financially-impossible-to-maintain lifestyle.

Shall I summarize?

"You could die tomorrow!"

"You only live once."

Those are two of the common responses to heavy savings that I hear. Frankly neither makes sense to me. Yes, I could die tomorrow, but it's more likely that I'll live until a ripe old age. And correct, I do only live once - which is why I want to retire early and ENJOY the one life I have rather than spend it in a cubicle.

 

[MooreBonds]

"You could die tomorrow!"

"You only live once."

Those are two of the common responses to heavy savings that I hear.  Frankly neither makes sense to me.  

I almost welcome these comments, as all I have to say in reply is "Yes, I could die tomorrow - and if I were to die tomorrow, I would be the happiest person in the world. Passing on with a pile of cash and investments would not make me resentful. Why? Because spending money doesn't make me happy - happy experiences make me happy (and yes, saving money actually DOES make me happy). So it doesn't matter how much - or how little - I have when I die, because I will have lived my life EXACTLY how I wanted, planned, and enjoyed living it."

(of course, seeing my net worth grow also makes me happy, but I can't say that lest I be accused of being a grouchy, old, mean miser )

For those on track for ER - keep the faith. For those enjoying ER - set aside a day to enjoy for those of us struggling to reach that worthwhile goal.

 

[John Galt]

Leaving my children a bunch of money is not too
important to me. If I did, it would be nice, although
dying broke would be okay I guess. Anyway, my spouse and I both lean toward the "live for today"
approach. Trouble is predicting how long you have and
how much money you need, and where it will come from.
I think about this daily. My spouse, never! In that sense,
it may be a match made in heaven.

John Galt

 

[SDY888]

...why do I still drive my 10-year old Honda Civic. I was like, er, because it still runs?? He was like, c'mon you're an engineer, you probably earn big bucks, right? What is money if you can't enjoy it??

Jane, I have had similar conversations and comments, mostly with colleagues (particularly seem to involve cars). I keep any responses neutral, inoffensive and polite but based upon my terms. i.e. I will say, ''Yes, would prefer to drive a new convertible BMW, but I am content at the moment to have a good percentage of my daughter's education funded.'' (My daughter is 6 months old!).

Uncle, Jane, I am with you in the grunt engineer club!

Simon888

 

[SDY888]

The book suggests this rule of thumb: age x realized income / 10 to calculate suggested net worth. If you are half or under the suggested net worth, you are UAW. If you are twice or more, you are PAW.

I haven't read TMND, but is there an acronym if a person is beyond PAW (Aside from WAB)? Three times, five times, what acronym then??

 

[unclemick]

It's called an ER with a Dryer Sheet Flag out front - on a nice flagpole of course. ER with DSF. Or ERWDSF.

 

[Whakamole]

It's called an ER with a Dryer Sheet Flag out front - on a nice flagpole of course. ER with DSF. Or ERWDSF.

Seriously, it only goes to PAW, at least in TMND. Once you've reached that, you're in the bigtime (assuming you are still working, otherwise the results are skewed.)

I'm only at 60% of the suggested net worth.

 

[unclemick]

Heh, heh, heh - I cheated - the MND came out well after I retired - so my retirement income made PAW easy.
Those guys in the book didn't make my "HERO" list - the fools kept working.

 

[Jane]

Those guys in the book didn't make my "HERO" list - the fools kept working.

Apparently these guys ENJOYED their work

Peter76: apparently being a spouse to EOC kids is not such a bad deal : Should talk to one of my aunties' husband. My aunt also receiving money from my grandparents and as a result, she can buy house, "investment" condo, new cars, take vacations and all her kids go to private school. Also she and her husband are running their own company (supposedly) although they apparently haven't made a decent money in the past 7 years (when they started the company).

She told me my regular 40-hour week is "hard work". : She rarely works that much. Not bad eh?

Note: this post should not be taken seriously.

I don't care if I die tomorrow (I will be dead, I won't care about anything!), but barely able to afford living is what scares me.

Jane