Be advised: this thread is not for serious in-depth discussion of weighty topics (we have a link for that), this thread is not for anything Culture War related. This thread is for Fun. You got jokes? Share 'em. You got silly questions? Ask 'em.
- 169
- 3
Jump in the discussion.
No email address required.
Notes -
Those very rich people who are extremely thrifty are not maximizing their money, because their cognition is better spent on their work than on a hundred dollars here or there. But I think what’s going on is psychological: those small moments of spendthriftiness increase the perceived valuation of money, thus increasing their motivation to work harder (even though they already have enough money for multiple lifetimes of satisfying any whim). They go into work after picking the cheapest gas station, then when they see the dollar signs on their monitor it is imbued with salient meaning that is otherwise lost through habit.
I don't think thriftiness is what you are looking for. It's more of a good sense of the return on marginal dollar spent along with knowing what is the return that you want.
I know a "extremely thrifty" 8 figure net worth individual whose behaviors and spending I can comment on. He has excellent clarity of mind on how much anything, any random good or service ough to cost, and won't pay a dime extra simply on the principle of not wasting money. This reads externally as thrifty, but I think as a comment below me mentions, is exactly one of the traits of many successful businessmen, knowing what is worth what and not wasting money even if one could afford it. That trickles down into his business and is one of the main reasons his business is cash positive and profitable in an insanely saturated and high variance field.
I think it is an immature culture that assigns more weight to the mean/deviation of money people spend on things as opposed to how much value is obtained.
On us mortals who don't have 8 figure net worths. I'm speaking about upwardly mobile young professionals.
I have friends with a fraction of my income who have better cars, clothes, gadgets and go out drinking and partying and to fancy restaurants every week. They live paycheck to paycheck and in debt. Whilst I cook most of my meals at home, wear thrifted clothes, still live with my parents, (to save rent and because they are aging) and take a vacation maybe only once a year.
I can tell you the price of any randomly chosen item from the store and how much I would/would not pay for it. They can't. In fact they are not even bad with money in that they spend it recklessly, they literally don't have a model of it good enough to predict how much something ought to cost and if that's worth paying or not, its grim really. And then they complain about being "poor".
I have friends like this too. I was talking to a friend of mine recently. Her and her husband make about 50% more than I do combined. They've never had a budget, they have no idea what the other one makes, what gets saved, anything. They have no investments to speak of, just an anemic 401k and a savings account. My wife has a friend very similar, with a 3 income, multi generational household that might be bringing in 80-100% more than we do, which similarly has no savings. Nothing. Nada. Truck breaks down and out comes the credit card to pay for the fix.
I've budgeted, saved and invested my entire life. I've never had a bonkers salary, just a relatively regular middle class income (for my area), that's admittedly rather high cost of living. I have a single income household with my wife staying home and raising our kid. I turned 40 last year, and my net worth hit 7 figures, partially thanks to diligence and 20 years of saving, partially due to getting very lucky on several things. Although the effects of that luck probably accounted for only 20% of that accumulated net worth.
But frankly, it seems that my wife and I are the only people we know who live like this. We don't know anyone else with so much as a written budget, much less aggressive thriftiness and savings. It seems most people just thoughtlessly live hand to mouth, money comes, money goes, who even really knows where.
More options
Context Copy link
More options
Context Copy link
More options
Context Copy link