It’s not hard.
God I'm such an IDIOT. Why had I never thought of that...
Seriously though, I love reading the comments section of HN, a subsection of a subsection in a high-growth, high-value industry talking about how easy/simple it is to make a ton of money and use that money to do things they want.
Where my Eastern European hackers at? Where my Indian code-factory guys? Anyone want to chime in on your experiences?
Suppose that wasn't the experience you were looking for?:)
We have a burner account providing a sample size of 1 here, guess I’ll shut it down.
As someone in a less financially prosperous section of world than the US, do you think that advice is particularly helpful to your countrymen? Is the problem that people are wasteful and unwilling to make obvious choices, or that those opportunities aren’t as widely available as HN’s commenters might make them out to be?
The rest of our social circle is decidedly middle income. We also live in a very high cost of living location that isn’t California or NYC.
Guess what guys, you can have a good life in all but a small handful of places while saving towards retirement and making median wages.
The problem of being relatively rich and living like a poor person is that it is a life of a poor person. Spending money provides access to experiences. Having gobs of money at fifties or sixties won't reset the clock and unlock what one missed in twenties, thirties and forties
For example, my very nice apartment in NYC costs me about $4500/mo. I get a 35-40 minutes commute to my office door to door. I have a co-worker who lives in PA. His one way commute is 2h-3h ( depending on a day ) one way but he pays only $1300 for his apartment and $1000/mo on the commute, making his cost $2300/mo. He says it is a great deal because he saving all that money and he is going to retire before me.
We also have a custodian. The custodian is paid much, much less than either of us. The custodian happens to live next to my co-worker. In fact, it was the custodian who told my co-worker about that place.
Because of how much an average American works, including my co-worker, life of my coworker pretty much matches the life of our custodian.
No, it's living below your means, saving and investing, because you value your time more than you value stuff. Your anecdotes are exactly that. The average person saving for FIRE is no miser.
Yes! One trades money for time. FIRE is the exact opposite - with FIRE one would pay for money with time.
Here's the thing though, it's easy to live a fun fulfilling life while 'living like a poor person'. You just need to figure out what you enjoy and how you maximise that enjoyment while minimising spending.
Your commuting example is an example of saving the wrong way, commuting time has been shown to have a massive impact on happiness. A better property example would be looking at extra features you don't need. My flat's a one bed, with most of it being one big room about 390 square feet in size. I could easily afford a bigger one with a lot more features but I've got what I need, so why waste the money?
Let's break down all the things that could be better.
- It has very limited storage (I could convert a bit of loft space if I really needed to)
The limited storage makes me consider whether I really need things when I buy them, reducing impulse spending and encouraging me to keep a semi-minimalist home, which I think is nicer.
- It only has one bedroom
I have a big comfy couch so friends can crash easily enough but I'm never folks first choice which is actually convenient. The lack of an office has sucked during covid but even if I had one I wouldn't want to WFH so hopefully it won't be an issue going forward.
- No Garden
I live in one of the greenest prettiest cities in the world and there dozens of parks and walks close by. If I want to sit in the sun it's a very short walk and it encourages me to get out and about.
- No Bathtub
I rarely took baths when I had one so not having one isn't a big deal. Actually now when I go on holiday and get one I'm really excited and enjoy them a lot more as a treat so overall I'm actually happier than when I had one.
- Expensive to heat
In non-covid times I spend most winter evenings out and about and a flat with cheaper heating generally costs a chunk more, so the extra expense is still less.
For some people those might be deal breakers and that's fair enough. Everyone is different. The point is to figure out what makes you happy and get it as cheap as possible not to be as cheap as possible regardless of happiness.
How many people in their mid-40's have you talked to? I know a lot who regret wasting their 20's and 30's grinding at academia and work. They feel like they fucked up and lost very many valuable years of their life to the grind.
For some - the grind didn't even pay off. They are still working and have a much lower NW than they expected.
This is more fitting to people who have spent their entire life up into their fities in jobs. Esp. so in US, where there's very little vacation. From what I've noticed, people who work non-stop since leaving college are pretty dull - they just didn't have time to have many varied experiences. Also, the job often becomes their identity and they have problem seeing that there are many other things to life. I've genuinely felt sorry for some managers that I've gotten to know better in my career - they're 20% of what they could be, if they didn't just work all the time.
This only happens if you equate life satisfaction with your car brand or the size of your house.
A depreciating 50k USD car and a large mortgage changes the math for the worse. One or two vacations a year or a hobby that takes up a relatively small percentage of your income is easily doable at median wages while saving 15% of pretax income.
I can eat on $4/day, probably less. That means giving up the pleasure of eating at Jean-George. Both feed me. One is just more enjoyable than the other.
Not going to the MET saves $20.
Not going to a bar saves $5 a beer, vs. getting a beer at a bodega.
Not going on a date saves hundreds.
And yes, after living that life for thirty years one would save a lot of money. It will be paired with his or hers mental health crisis in the fifties.
Yes, it does.
Let's take NYC as an example. At median rents for a one bedroom apartment, living in Queens instead of Manhattan saves approximately 1K USD a month, which equates to 60K USD over five years.
Going with an annual Metro card costs 1.5K USD, while a loan payment on a BWM 3 series costs approximately 7.4K USD. Over five years, the Metro card saves 29.5K USD. This is before you factor in parking, insurance, taxes, and fuel.
Together, living in a slightly cheaper, but still expensive area and using public transportation saves you 90K USD over five years.
You can eat a lot of overpriced food for 90K.
There are no one bedroom apartments in Queens that are $1K USD a month that exist where the apartments reachable by the public transportation from Union Sq for under 2.5 hours one way when everything is running ( so most often ~ 3 hours ) . So that's basically living in Poconos.
To get there for 1.5 hours one would have to buy a car and pay for insurance and find parking by the subway.
Dave Ramsey who peddles FIRE is a charlatan who makes money not of following his advice but of selling his advice to his followers.
The median rent for a one bedroom apartment in Queens is 1K USD - less - than a similar apartment in Manhattan
You can - save - 1K USD a month by living in Queens instead of Manhattan.
This is redundant.
How am I being a "parasitic landlord" by investing in the S&P500, which is mostly composed of companies generating value?