The Millionaire Next Door

[pb4uski]

Spending money is not a sin as long as you can afford it. Nor is not spending money. Personal choices. LBYM is a means to an end, rather than an end in its own right. Driving a BMW doesn't necessarily mean you can't afford it.

+1 We're more loose with the checkbook than ever before, but we can afford it (I think )

 

[Walt34]

I read the book a few years after it came out and it made sense to me. My parents grew up in the 1930's Depression and knew what "being poor" was. Neither had to stand in a breadline but at times were only a day or so away from it.

One lesson that stands out is that they had a Montgomery Ward credit card and they (I suspect mostly my father) got carried away with it and ran up some debt that took several years to pay off, which is "forever" to a teenager. Had a big celebration when the cc was paid off and I resolved to never put myself in that position.

Even now as someone else noted it is hard for me to force myself to put stuff on a rewards cc as it goes against the grain. But as most here do we pay it off in full every month.

 

[Galt21]

Overall, I regard TMND as a classic, and have read it probably three times since it was originally published. That said, I found the formula for anticipated net worth a bit simplistic. As a business owner, my annual income tended to fluctuate, thus altering my net worth calculations to determine whether I fit the UAW, AAW or PAW category. I quickly came up with my own definition, based more on my own preferred saving and investment targets. However, reading this book (and others) helped me at a time when I was focused on building my nest egg. LBYM worked out for me, thankfully. I never anticipated having health problems, but it happened. If people can take one message from the book, I think it would definitely be to try to LBYM.

 

[Options]

Spending money is not a sin as long as you can afford it. Nor is not spending money. Personal choices. LBYM is a means to an end, rather than an end in its own right. Driving a BMW doesn't necessarily mean you can't afford it.

+1000
I've been frugal for so long it's a way of life. I've been saying no to myself for so long it's a habit to turn directly toward whatever difficult thing must be done and do it at the exact time when it must be done whether I feel like it or not. As a consequence, in retirement I say yes to myself all the time. Owning stuff isn't a big deal, it's just that I can. It's surprising how much pent up spending has occurred. I've bought, do own, and thoroughly enjoy some very beautiful (and expensive) "stuff". After a move in a couple years, my expenses will even double. It wasn't a "sacrifice" to be frugal in prior years, as it was viewed as buying security and freedom (which is exactly what it bought). I've probably saved way more than I need for retirement and I don't even care.

"I'd rather do stuff than own stuff." No, no, and more no. I do stuff only when I feel like it, not because I think in retirement it's "bucket list travel/experience" time. In fact, I'm weighing cancelling a trip in January because I don't feel like going through the trouble. I traveled in and out of the country in 2016 and have [-]extensive [/-]possibly too many travel plans in 2017. Some of us just don't measure ourselves by how much we "do".

 

[Onward]

Had we been "Mustachian", we would really be rollin' in it.

I assume this refers to Mr. Money Mustache? Can you explain?

 

[Teacher Terry]

When I was younger I preferred things to experiences but now it is just the opposite. Fortunately , my DH and I both feel the same way. We took 3 trips in 14 months. We also like to eat out, go to movies, concerts, festivals, etc.

 

[jollystomper]

To the OP, in my view that is a great book, one of the key ones that made a difference in how I looked at personal finance - which enabled me to reach FI and be able to RE at a moment's notice.

 

[ExFlyBoy5]

Spending money is not a sin as long as you can afford it. Nor is not spending money. Personal choices. LBYM is a means to an end, rather than an end in its own right. Driving a BMW doesn't necessarily mean you can't afford it.

Exactly this. As a matter of fact, the author of TMND lived pretty close to me in a very affluent country club community and was killed by a drunk driver and was driving a Corvette at the time.

Does this mean he wasn't frugal or smart with his money? Of course not.

 

[mickeyd]

I remember reading MND years ago and saying to myself, "hey, that's me!"

 

[Danmar]

When I was younger I preferred things to experiences but now it is just the opposite. Fortunately , my DH and I both feel the same way. We took 3 trips in 14 months. We also like to eat out, go to movies, concerts, festivals, etc.

Yes, I can certainly understand this transition. As we age the "stuff" does tend to pile up. However, I wonder if the distinction is that important? A lot of nice experiences require stuff. Ie that feeling of driving a sporty convertible down a windy country road? That comfortable "homey" feeling cocooning in your nice home. That soft feeling of cashmere next to your skin. The wonderful emotional feeling while appreciating art you own. Not saying you always have to have "stuff" but maybe sometimes?

Agree that memories are priceless at least until you can't remember them. In my case I am investing significantly in memories but not mine, rather my daughter's by taking her( and her husband) with us on wonderful trips. A little bit of immortality for me, I hope.

 

[kcowan]

I give my kids the equivalent of a world cruise every year. I don't have a BMW anymore because we are only home for 5 months and I think it would be a shame to leave it in the garage. But we do LBYM even so. One day we will start eating into the principal but we are a long way from that right now.