My friends a doctor, has to work lover 100 hours a week with high stress, gets treated like crap, and between him and his wife has over a half million in student loans. Sure he'll eventually make signifanctly more than me but my job is like taking nap compared to his. I think being a doctor, investment banker, true entrepreneur, etc is a lot tougher than a lot of people realize. If it was easy, everyone would do it.amateurnovice wrote:Honestly, along with the doctors who want help with their portfolios, this is why I don't come here often. It's hard for someone to watch people who clearly have it so easy and either lack the capacity to see how good they have it or choose to ignore it.toto238 wrote:I think we see more than one of these here on BH. Like the person that has pensions and SS covering 100% of their yearly expenses AND has a 7-figure portfolio to boot and is worried if they can retire.
When saving money becomes an irrational obsession
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Re: When saving money becomes an irrational obsession
Re: When saving money becomes an irrational obsession
That is funny! But depending on how much he saved, I don't think it was irrational. Let's say he saved $50 by doing that...is it irrational to walk around the corner for $50? If someone offered me $50 to walk around the corner and back I don't think it would be irrational to accept.Abe wrote:Talking about when saving money becomes an irrational obsession, I had an uncle who was extremely frugal. One time when he was on vacation, he saw an ad for an extremely low room rate. When he got to the hotel, he was told that the low rate only applied to people who called in and made a reservation. This was before cell phones. He said okay and then walked around the corner to the lobby and called the front desk from a pay phone and made a reservation. He then walked back to the front desk, and he got the lower rate.
Re: When saving money becomes an irrational obsession
I would definitely do that, for less than $50 too. I don't think being a millionaire would change that either.mptfan wrote:That is funny! But depending on how much he saved, I don't think it was irrational. Let's say he saved $50 by doing that...is it irrational to walk around the corner for $50? If someone offered me $50 to walk around the corner and back I don't think it would be irrational to accept.Abe wrote:Talking about when saving money becomes an irrational obsession, I had an uncle who was extremely frugal. One time when he was on vacation, he saw an ad for an extremely low room rate. When he got to the hotel, he was told that the low rate only applied to people who called in and made a reservation. This was before cell phones. He said okay and then walked around the corner to the lobby and called the front desk from a pay phone and made a reservation. He then walked back to the front desk, and he got the lower rate.
Chase the good life my whole life long, look back on my life and my life gone...where did I go wrong?
- TheTimeLord
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Re: When saving money becomes an irrational obsession
To be clear he works over 14.25 hours a day leaving less than 9.75 hours for eating, sleeping, commuting and anything personal. That is unsustainable.ThankYouJack wrote:My friends a doctor, has to work lover 100 hours a week with high stress, gets treated like crap, and between him and his wife has over a half million in student loans.
IMHO, Investing should be about living the life you want, not avoiding the life you fear. |
Run, You Clever Boy! [9085]
- backpacker
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Re: When saving money becomes an irrational obsession
We agree mostly I think. Humans being are not especially good at altruism. We tend to either splurge or hoard based mostly on our own interests. When we give money away, its often just because we want other to congratulate us or because we want to congratulate ourselves.Johno wrote:Yes it's more charitable, by definition, to give later than to spend on yourself now and not give. Whether charity or self interested commerce 'does more good for the world' I believe might be debated at least at the margin, but it's beyond the scope here. Anyway I don't think the obvious statement that giving is more charitable than not giving gets us very far in analyzing why super frugal people *really* act the way they do, including analyzing our own motives if we're possibly in that category ourselves. Again I think the more practical question is why, if charity is the goal, not just give the money now? And I doubt the reason is very often that the person has done a comprehensive analysis of the time value of money in investments v in charity to conclude it's better for others if they give later...they just feel happier sitting on a pile of money than not. That's fairly obvious in most cases, and like many such things not necessarily a problem as long as one remains in reasonable cognitive contact with one's own motives. Comparing the virtue of giving money to others v. not giving tends to suppose the reason for miserly tendencies is really charity, when that's actually a significant question as I see it, how often that's *really* the reason.backpacker wrote:Johno wrote:JonnyDVM wrote:Lots of "save for a lifetime and give to charity" on this thread. I think the grim reality is that often the huge ball of money that the over saver spent a lifetime building gets rapidly squandered by heirs.This is a nice point. It's hard to know whether giving now or giving in the future will, dollar for dollar, do more good for the world.Johno wrote: Which is that charitable work is also subject to the time value of money, and not necessarily at a lower implied rate than what you can achieve in your investments.
Even if the impulse to build a pile of money is suboptimal, irrationally hoarding money but giving to charity in the end still beats spending the money on "life upgrades" now... Even inefficient charitable giving beats the pants off present spending in terms of total good for the world.
From the inside, it's unclear whether there's any moral advantage to hoarding over splurging. My thought was that from the outside, hoarding is clearly better, assuming you give away your hoard once you're not around to enjoy it. Hoarding is not a better motive. But combined with an effective plan to give the hoard away, it has better consequences.
Re: When saving money becomes an irrational obsession
I had a great uncle who always wanted to got to the Hiltop Steakhouse, north of Boston. A local joint, better than Outback, but nowhere near in price to say Morton's. His wife always told him they couldn't afford it. This went on for decades. When his wife died he learned that they had a passbook savings account with over $49k in it (1980's). My parent's did take him there after the funeral.
Its important to understand where the line is between fear and prudence.
Its important to understand where the line is between fear and prudence.
Re: When saving money becomes an irrational obsession
A friend of mine always refuels his car at cheapest gas station in town. I, OTOH, refuel at whichever top-tier gas station that is convenient for me. He may save a dollar or two each time, but I don't see how one can get rich that way and it does not make sense to (sometimes) drive across town in order to save a few dollar.
Re: When saving money becomes an irrational obsession
even in the 80's, $49k wouldn't have left anyone "set".sesq wrote:I had a great uncle who always wanted to got to the Hiltop Steakhouse, north of Boston. A local joint, better than Outback, but nowhere near in price to say Morton's. His wife always told him they couldn't afford it. This went on for decades. When his wife died he learned that they had a passbook savings account with over $49k in it (1980's). My parent's did take him there after the funeral.
Its important to understand where the line is between fear and prudence.
Leonard |
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Market Timing: Do you seriously think you can predict the future? What else do the voices tell you? |
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If employees weren't taking jobs with bad 401k's, bad 401k's wouldn't exist.
Re: When saving money becomes an irrational obsession
+1backpacker wrote:Money is like food. Most Americans overeat. Most Americans overspend. A small minority have anorexia, eating so little that it damages their health. A small minority have financial anorexia, spending so little that it seriously damages their relationships with other people and leaves them missing out on important life experiences.
A few odd ducks learn to actually like healthy food and exercise. Confronted with the choice between cheesy fries and a plate of cut vegetables, they would rather have the vegetables. And this even if cheesy fries are well within their caloric "budget". Years of eating vegetables has changed what tastes good to them. Vegetables really do taste better to them than cheesy fries.
To the average person, this looks like insanity or self-flagellation. You can't really like vegetables more than curly fries. You can't really like going for long evening runs. Life is short, so enjoy it! Stop depriving yourself. Eat curly fries. You might be hit by a bus tomorrow.
What the average person fails to understand is that tastes can be changed. They are, in the long run, a choice. Some people have chosen to like vegetables, so are not depriving themselves when they eat vegetables instead of less "enjoyable" options. The same goes for spending. The average person can't understand preferring a Toyota to a Mercedes when you can easily afford either one. But a few odd ducks have learned to actually like living modestly. After years of living with simple things, they see no point to the "life upgrades" average people fixate on.
Being wealthy is having more money than you know what to do with. Most people never get there because they always know what to do with more money. Wants always expand as fast as their means. For those who have learned to like simple things, being wealthy is much easier. Not being able to spend all your money isn't a problem. It means that you've arrived.
- dratkinson
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Re: When saving money becomes an irrational obsession
Your thinking is flawed, grasshopper. Why? It is only successful savers/investors who can teach successful saving/investing. And for a student to learn the investing wisdom of a 7-figure investor, then both must be willing and present. This is the central point in the book The Richest Man in Babylon.amateurnovice wrote:Honestly, along with the doctors who want help with their portfolios, this is why I don't come here often. It's hard for someone to watch people who clearly have it so easy and either lack the capacity to see how good they have it or choose to ignore it.toto238 wrote:I think we see more than one of these here on BH. Like the person that has pensions and SS covering 100% of their yearly expenses AND has a 7-figure portfolio to boot and is worried if they can retire.
It is harder to learn this method from scratch, than it is to learn it as a willing student. It is harder to create a teaching forum, than it is to withhold the information. Both demonstrate the forum founders' willingness to help others. Analogy: it's easier to use a light bulb, then it was to invest it and the associated electrical generation/distribution system.
I didn't find this concept until I was in my late 50s and effectively had no worthwhile investments before then. Wish I'd learned this concept much sooner. I looked for it, but financial publications (print and video) have a vested interest in withholding this information to protect their advertisers... their primary revenue stream. If it weren't for those 7-figure investors and their savings used to create this forum, and their coming here and sharing their wisdom, I'd still be clueless.
N.B. You have missed this forum's most important feature, it's reason for being. What? Everyone who requests help, gets their investments reviewed and improvements suggested.
As a novice investor, I know most of the 90% answers that are appropriate for new young investors. And I enjoy coming here and helping them. It's how I repay the help I was given.
This opportunity to learn and help others, this forum, exists only because those 7-figures investors wanted to create it and advise willing students. It is not "hard to watch". It is instead an impressive accomplishment, without which neither I, nor anyone else, could come here and learn or help.
The majority of other financial advice forums are hosted by/for financial advisors. Google "financial advisor forum". There they be dragons.
Grasshopper, after you've studied, after you've improved your own investments, and after you've learned enough to help others, you are invited to return and do so. Your thinking must change after you begin repaying the debt you owe to the forum's founders for creating this opportunity.
Full disclosure. I'm a 9-figure investor. In this I'm counting the dollar sign, comma, decimal points, and cents.
Last edited by dratkinson on Thu Jun 25, 2015 4:14 pm, edited 1 time in total.
d.r.a., not dr.a. | I'm a novice investor; you are forewarned.
Re: When saving money becomes an irrational obsession
Ok, this is the example of a person who loves gaming the system to save money. My husband is like that; he really, really enjoys the thrill of outsmarting, outwitting etc. to save a buck. Or half a buck. Or sometimes a quarter. It is sort of a competitive rush for him I think, almost divorced from the intrinsic value of the actual savings. Sometimes I remind him that if he really considers a saving opportunity holistically, it might not be worth the sum after factoring in the effort.Abe wrote:Talking about when saving money becomes an irrational obsession, I had an uncle who was extremely frugal. One time when he was on vacation, he saw an ad for an extremely low room rate. When he got to the hotel, he was told that the low rate only applied to people who called in and made a reservation. This was before cell phones. He said okay and then walked around the corner to the lobby and called the front desk from a pay phone and made a reservation. He then walked back to the front desk, and he got the lower rate.
Re: When saving money becomes an irrational obsession
I have been saving money all my life because I like feeling safe financially. However, I have made the choice to retire this year, age 50, to begin spending my money saved. I just don't want to be the richest guy in the cemetery.
"The two most important days in someone's life are the day that they are born and the day they discover why." -John Maxwell
Re: When saving money becomes an irrational obsession
I drive a 1994 Buick. Automobiles are merely a way to get there and back.sambb wrote:to each his own.. it doesn't make sense to me to have millions of dollars in investments, but drive an old camry or a fit. But it makes sense to some.. can't figure that out
Re: When saving money becomes an irrational obsession
I started a real job at 32 (grad school etc) with a 1 year old and no money. DW did not start work until our son was 4. So when our son was about 3, thinking about future hit us coupled with potential job uncertainity. So a change in attitude made us save and be frugal. Now we don't have any regrets. Financial freedom ( food, roof + some fun) is nice have in life (savings) as we graduated from being a serf to a reasonable state of independence. However, we are cognizant there is always uncertainity ahead as we have experiences of both "have not" and "have" states. Now being a Boglehead lurker I wonder how a 50:50 portfolio trajectory will be in the next 30 years, i.e. what state will we be, in terms of sequence of return, CAGR, and std dev.
Having freedom, food and roof is being 90% lucky in life and so is index investing. So, don't let the remaining 10% bother you.
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Re: When saving money becomes an irrational obsession
Yes, especially when you're often woken up in the middle of the night to respond to critical situations. It's a 1 year fellowship, you can see the hospital from his apartment (5 minute walk), he's the fastest eater I've ever seen and a lot of the other fellows moved without their family (because they would hardly see them anyway).TheTimeLord wrote:To be clear he works over 14.25 hours a day leaving less than 9.75 hours for eating, sleeping, commuting and anything personal. That is unsustainable.ThankYouJack wrote:My friends a doctor, has to work lover 100 hours a week with high stress, gets treated like crap, and between him and his wife has over a half million in student loans.
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Re: When saving money becomes an irrational obsession
This was me at one point and kind of still continues to be me. What my wife and I setup is a "fun" account. We put a certain percentage of our income into this account and then we can use it for whatever we want. It's really freeing for me because I've mentally written off the money and can enjoy spending it rather than worrying about how much I'm spending.baw703916 wrote: Here's a challenge for everyone: what advice would you give to a young person if you knew their tendency was to oversave, rather than spend?
I wish I had started doing it years ago.
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Re: When saving money becomes an irrational obsession
It is the habit that counts. If he goes to the cheapest gas stations, he may go to the cheapest grocery stores, drive cheapest cars, and so on. Then money gets saved and accumulated from all sources in no time.wander wrote:A friend of mine always refuels his car at cheapest gas station in town. I, OTOH, refuel at whichever top-tier gas station that is convenient for me. He may save a dollar or two each time, but I don't see how one can get rich that way and it does not make sense to (sometimes) drive across town in order to save a few dollar.
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Re: When saving money becomes an irrational obsession
I used to drive very expensive cars before I have a million. I now drive a 15 year old Nissan car with more than a million in my portfolio. As someone just said, I no longer see the need for driving a new, more expensive car.sambb wrote:to each his own.. it doesn't make sense to me to have millions of dollars in investments, but drive an old camry or a fit. But it makes sense to some.. can't figure that out
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Re: When saving money becomes an irrational obsession
But if the habit is without good reason, that's where things could turn into an irrational obsession.flyingaway wrote:It is the habit that counts. If he goes to the cheapest gas stations, he may go to the cheapest grocery stores, drive cheapest cars, and so on. Then money gets saved and accumulated from all sources in no time.wander wrote:A friend of mine always refuels his car at cheapest gas station in town. I, OTOH, refuel at whichever top-tier gas station that is convenient for me. He may save a dollar or two each time, but I don't see how one can get rich that way and it does not make sense to (sometimes) drive across town in order to save a few dollar.
If he's driving across town, the it's probably cheaper for him to buy locally. Say the person drives an extra 10 miles each way to save 5 cents a gallon and fills up 10 gallons. So he saved 50 cents on gasoline. But driving is expensive. Lets say it costs it 30 cents per mile to drive (when you factor in gas, maintenance, repairs and depreciation). So he's essential spending $6.00 to save $0.50. Plus one could also factor in their time and environmental reasons if those are important to them.
Re: When saving money becomes an irrational obsession
The uncle has the right idea. No need to throw away $50.BW1985 wrote:I would definitely do that, for less than $50 too. I don't think being a millionaire would change that either.mptfan wrote:That is funny! But depending on how much he saved, I don't think it was irrational. Let's say he saved $50 by doing that...is it irrational to walk around the corner for $50? If someone offered me $50 to walk around the corner and back I don't think it would be irrational to accept.Abe wrote:Talking about when saving money becomes an irrational obsession, I had an uncle who was extremely frugal. One time when he was on vacation, he saw an ad for an extremely low room rate. When he got to the hotel, he was told that the low rate only applied to people who called in and made a reservation. This was before cell phones. He said okay and then walked around the corner to the lobby and called the front desk from a pay phone and made a reservation. He then walked back to the front desk, and he got the lower rate.
Leonard |
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Market Timing: Do you seriously think you can predict the future? What else do the voices tell you? |
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If employees weren't taking jobs with bad 401k's, bad 401k's wouldn't exist.
Re: When saving money becomes an irrational obsession
Then why do you drive a luxury car instead of econ box that would probably half your gas cost which probably dominates your car cost?john94549 wrote:I drive a 1994 Buick. Automobiles are merely a way to get there and back.sambb wrote:to each his own.. it doesn't make sense to me to have millions of dollars in investments, but drive an old camry or a fit. But it makes sense to some.. can't figure that out
Re: When saving money becomes an irrational obsession
Are you calling a Buick a luxury car?randomguy wrote:Then why do you drive a luxury car instead of econ box that would probably half your gas cost which probably dominates your car cost?john94549 wrote:I drive a 1994 Buick. Automobiles are merely a way to get there and back.sambb wrote:to each his own.. it doesn't make sense to me to have millions of dollars in investments, but drive an old camry or a fit. But it makes sense to some.. can't figure that out
Leonard |
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Market Timing: Do you seriously think you can predict the future? What else do the voices tell you? |
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If employees weren't taking jobs with bad 401k's, bad 401k's wouldn't exist.
Re: When saving money becomes an irrational obsession
There is a reason why buicks and Olds became old people cars. They are what people aspired to and bought when they retired. Granted it was always the entry level luxury level for the people that wanted to let people now they were successful but not rich like those caddy owners:) The old goal was you start up with a chevy, upgrade to a buick, and aspire to the Caddy. Now a days it is a bit more waterdowned with all the luxury brands putting out lower end models where the goal is to move you up the brand chain rather than switch brand. Buick was a tweener brands (things like SAAB and Volvo) that straddle the line but the point remains that some choose to pay more to buy these cars than buying the mass market chevy. And of course there are mass brand cars that probably should be considered luxury ones (i.e. toyota land cruiser starts at 80k, they chevys retailing for north of 50k,..)leonard wrote:Are you calling a Buick a luxury car?randomguy wrote:Then why do you drive a luxury car instead of econ box that would probably half your gas cost which probably dominates your car cost?john94549 wrote:I drive a 1994 Buick. Automobiles are merely a way to get there and back.sambb wrote:to each his own.. it doesn't make sense to me to have millions of dollars in investments, but drive an old camry or a fit. But it makes sense to some.. can't figure that out
Re: When saving money becomes an irrational obsession
Perhaps there's some confusion. A 2015 Buick Regal costs between $30-40k depending on the options you get and could definitely be considered a luxury vehicle.leonard wrote:Are you calling a Buick a luxury car?randomguy wrote:Then why do you drive a luxury car instead of econ box that would probably half your gas cost which probably dominates your car cost?john94549 wrote:I drive a 1994 Buick. Automobiles are merely a way to get there and back.sambb wrote:to each his own.. it doesn't make sense to me to have millions of dollars in investments, but drive an old camry or a fit. But it makes sense to some.. can't figure that out
A 1994 Buick Regal costs between $1000-$2000 depending on its options. It is not a luxury vehicle. Though in 1994 it may have been. According to KBB, if the car is in mint condition, with less than 1,000 miles on it, it could sell for as much as $3,000.
Re: When saving money becomes an irrational obsession
A 1994 Buick Regal (my "ride") is most assuredly not a luxury motor vehicle these days. Moreover, given that I drive it (at most) 30 miles/week (to the store and back), I'm not sucking up a lot of petrol. Last I checked, 120 miles/mo, divided by 20 miles/gallon, equals 6 gallons of gasoline per month X $3.50 = $21.00.
Funny story. My battery failed (as it does from time-to-time) and I called AAA. Battery was still under warranty. Fellow from AAA said I should really run the car more often, so it would not run down. "How much, said I?" About a half-hour a day, said he. I did the math, and a half-hour of driving the car per day would suck up another 30 gallons/mo, or more than $100, roughly the cost of replacing the AAA battery. I'll go for the warranty.
Funny story. My battery failed (as it does from time-to-time) and I called AAA. Battery was still under warranty. Fellow from AAA said I should really run the car more often, so it would not run down. "How much, said I?" About a half-hour a day, said he. I did the math, and a half-hour of driving the car per day would suck up another 30 gallons/mo, or more than $100, roughly the cost of replacing the AAA battery. I'll go for the warranty.
Re: When saving money becomes an irrational obsession
expensive <> luxury
Leonard |
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Market Timing: Do you seriously think you can predict the future? What else do the voices tell you? |
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If employees weren't taking jobs with bad 401k's, bad 401k's wouldn't exist.
- dratkinson
- Posts: 6108
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Re: When saving money becomes an irrational obsession
Neighbor's little-used second car often had low battery/wouldn't start. They'd recharge it with their battery charger: remove charger from storage, open hood, plug it in, wait 1-2 hours for sufficient charge to start car, reverse steps to re-store battery charger. This took time and was inconvenient when it delayed plans.john94549 wrote:A 1994 Buick Regal (my "ride") is most assuredly not a luxury motor vehicle these days. Moreover, given that I drive it (at most) 30 miles/week (to the store and back), I'm not sucking up a lot of petrol. Last I checked, 120 miles/mo, divided by 20 miles/gallon, equals 6 gallons of gasoline per month X $3.50 = $21.00.
Funny story. My battery failed (as it does from time-to-time) and I called AAA. Battery was still under warranty. Fellow from AAA said I should really run the car more often, so it would not run down. "How much, said I?" About a half-hour a day, said he. I did the math, and a half-hour of driving the car per day would suck up another 30 gallons/mo, or more than $100, roughly the cost of replacing the AAA battery. I'll go for the warranty.
We solved their problem by placing their battery charger (in "maintenance"/trickle charge mode) on a garage wall shelf above second vehicle's driver-side door. Rigged a battery charger/cigarette lighter adapter plug to hang on a garage wall hook adjacent to driver-side door open window. Car had a "hot" (ON when ignition switch OFF) cigarette lighter. While sitting in driver's seat, easy to reach both battery charger's cigarette lighter plug hanging on wall hook (through car's open window) and cigarette lighter socket. Problem solved. Unplug/hang cigarette lighter plug on hook before driving away. Retrieve/reinsert plug into cigarette lighter socket upon return before getting out of car.
Battery Tender makes a 3/4 amp charger (~$40, advertised not to harm battery, so permanent attachment okay). I use one to keep my backup generator battery topped off. I'm assuming the cigarette lighter in your old Buick is wired hot. Will need to buy a cigarette lighter plug adapter.
Consuming 6 gallon/month with a 16.5 gallon tank (internet), means you only fill up every ~2 months. That, plus low insurance and vehicle registration. Don't you just love it! A new vehicle couldn't provide better grocery-getter service. More expensive, yes. Better, no.
Happy 1990 Montero owner. Ditto!
d.r.a., not dr.a. | I'm a novice investor; you are forewarned.
Re: When saving money becomes an irrational obsession
For years I have used the "Automatic Battery Float Charger", frequently on sale for $4.99 from Harborfreight, on my 2nd vehicle that I don't drive often. Works beautifully and keeps the battery fully charged at all times.dratkinson wrote: Neighbor's little-used second car often had low battery/wouldn't start. They'd recharge it with their battery charger: remove charger from storage, open hood, plug it in, wait 1-2 hours for sufficient charge to start car, reverse steps to re-store battery charger. This took time and was inconvenient when it delayed plans.
We solved their problem by placing their battery charger (in "maintenance"/trickle charge mode) on a garage wall shelf above second vehicle's driver-side door. Rigged a battery charger/cigarette lighter adapter plug to hang on a garage wall hook adjacent to driver-side door open window. Car had a "hot" (ON when ignition switch OFF) cigarette lighter. While sitting in driver's seat, easy to reach both battery charger's cigarette lighter plug hanging on wall hook (through car's open window) and cigarette lighter socket. Problem solved. Unplug/hang cigarette lighter plug on hook before driving away. Retrieve/reinsert plug into cigarette lighter socket upon return before getting out of car.
Battery Tender makes a 3/4 amp charger (~$40, advertised not to harm battery, so permanent attachment okay). I use one to keep my backup generator battery topped off. I'm assuming the cigarette lighter in your old Buick is wired hot. Will need to buy a cigarette lighter plug adapter.
http://www.harborfreight.com/automatic- ... 42292.html
"If you can enjoy Saturdays and Sundays without looking at stock prices, give it a try on weekdays." Warren E. Buffett.
Re: When saving money becomes an irrational obsession
How is that being irrational? Sounds perfectly logical to me; not spending money that does not need to be spent; obtaining the same product for less money; doing something relatively minor to save money.Abe wrote:Talking about when saving money becomes an irrational obsession, I had an uncle who was extremely frugal. One time when he was on vacation, he saw an ad for an extremely low room rate. When he got to the hotel, he was told that the low rate only applied to people who called in and made a reservation. This was before cell phones. He said okay and then walked around the corner to the lobby and called the front desk from a pay phone and made a reservation. He then walked back to the front desk, and he got the lower rate.
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Re: When saving money becomes an irrational obsession
Good idea but you still don't spend it. In fact it can go into a brokerage account and buy stock and grow into an amount you still don't spend. I am waiting to buy something "really good" with my account. Just not sure what that is and I sure hope I don't die first.Maynard F. Speer wrote:I'd probably say: don't forget, your biggest investment, especially in youth, is yourself .. Education, sport, travel, art, relationships .. these can all be assets in the truest sense, and probably should be balanced alongside financial assetsbaw703916 wrote:Here's a challenge for everyone: what advice would you give to a young person if you knew their tendency was to oversave, rather than spend?
Psychologically I find it difficult to take money out of investments .. For someone like me, it may make sense to have a bank account that's somewhat off-the-grid - so figures aren't included in your concept of personal wealth .. Perhaps like a small business maintains petty cash - this could be money that sits there until you need it, and that you don't let yourself invest or include in any spreadsheets
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Re: When saving money becomes an irrational obsession
I'm hoping this will be me, I'm currently 33 and feel like I'm one of those irrationally over-saving/investing. Again I know many won't agree but I absolutely don't want to be the richest guy in the cemetery. The biggest problem for me is coming from an immigrant family so a lot of this is baked into me. The problem is my parents made minimum wage in their 30s when we moved to the US. I've been making 6 figures since mid 20s. Their choices were based on their income, mine are not based on mine. I see my grand parents in retirement perfectly happy on little to no money. You don't need a 100k annual income to be happy at retirement, you probably don't even need half that. Anyway, again many have different feelings on this but I hope to make up for my over-frugality by forcing myself (I hope) to retire early.obgyn65 wrote:I have been saving money all my life because I like feeling safe financially. However, I have made the choice to retire this year, age 50, to begin spending my money saved. I just don't want to be the richest guy in the cemetery.
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Re: When saving money becomes an irrational obsession
What do you mean by forcing yourself to retire? Do you enjoy your job, but would make yourself retire just because you have the financial means to do so? If you were retired now, would you get bored after 6 months and would you want to work at least part-time?ChosenGSR wrote:
I'm hoping this will be me, I'm currently 33 and feel like I'm one of those irrationally over-saving/investing. Again I know many won't agree but I absolutely don't want to be the richest guy in the cemetery. The biggest problem for me is coming from an immigrant family so a lot of this is baked into me. The problem is my parents made minimum wage in their 30s when we moved to the US. I've been making 6 figures since mid 20s. Their choices were based on their income, mine are not based on mine. I see my grand parents in retirement perfectly happy on little to no money. You don't need a 100k annual income to be happy at retirement, you probably don't even need half that. Anyway, again many have different feelings on this but I hope to make up for my over-frugality by forcing myself (I hope) to retire early.
I'm in a similar situation where money was a concern growing up, so having financial freedom will be a great thing. But the time I have now is an even better thing -- so I plan on maximizing my vacation time, increasing spending, possibly switching to part-time work.
- Yesterdaysnews
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Re: When saving money becomes an irrational obsession
I have found over the years (although I am not yet 40) that many material things we are socially conditioned to value in life are pretty overrated.
I bought the big house and nice car when I first started making good money and honestly feel it is pretty overrated. I feel no strong desire to do it again and don't really see the point. I like the feeling of being able to afford such things if I want, but find when it comes time to pull the trigger I don't really have the desire.
I bought the big house and nice car when I first started making good money and honestly feel it is pretty overrated. I feel no strong desire to do it again and don't really see the point. I like the feeling of being able to afford such things if I want, but find when it comes time to pull the trigger I don't really have the desire.
Re: When saving money becomes an irrational obsession
Ya think? We went "whole hog" back in 1978, buying an acre with a new house, 2600 square feet. Wow, an acre! Now into our fourth year of drought, everything not already dead is preparing for same. The only survivors are the natives which existed long before California was a State*. They learned how to survive a mega-drought; sadly, our acre did not.Yesterdaysnews wrote: honestly feel it is pretty overrated.
Ironically enough, the gent who bought my (deceased) Mom's house back in early 2014 can't seem to sell it, as the area is experiencing "water issues". As, they are getting monsoons just about every third day. He put in a major French drain as part of his renovation, but to no avail.
*Don't ask me their names, but some seem to relish, and even flower, with the drought.
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Re: When saving money becomes an irrational obsession
Pretty much mean exactly as stated, if I get to a point when I feel I can financially call it quits, at the very least quits from full time work I should do so. I would not be bored, I could enjoy years of hard labor by traveling more, spending time with kids, etc. Work to live vs. live to work.ThankYouJack wrote: What do you mean by forcing yourself to retire? Do you enjoy your job, but would make yourself retire just because you have the financial means to do so? If you were retired now, would you get bored after 6 months and would you want to work at least part-time?
Re: When saving money becomes an irrational obsession
I think we may all have a little bit of that in us, but most healthy people will realize when it becomes an irrational problem. I have a cousin who is a hoarder. I haven't been to her house in 20 years even though she lives less than a mile a way. My sister did go to see her house last year and it was that of a hoarder. She knows she has a problem, but is stuck and obvious needs professional help.
I do not care about a new car and buying material possessions gives me no pleasure at all, but I have always been like that. When the time comes for retirement, I will like to go on one or two vacations a year and just enjoy my freedom. If it ever becomes irrational and I start having a fear about spending money to live on, I hope I still have enough sense to get professional help.
Even though I am 51, watching my Mother lose everything (the house we grew up in, her car, etc) after my Dad passed, still stays with me. Having a nice amount in my 401K and a paid off house does feel like a warm blanket and does give me a sense of security more than buying things.
I do not care about a new car and buying material possessions gives me no pleasure at all, but I have always been like that. When the time comes for retirement, I will like to go on one or two vacations a year and just enjoy my freedom. If it ever becomes irrational and I start having a fear about spending money to live on, I hope I still have enough sense to get professional help.
Even though I am 51, watching my Mother lose everything (the house we grew up in, her car, etc) after my Dad passed, still stays with me. Having a nice amount in my 401K and a paid off house does feel like a warm blanket and does give me a sense of security more than buying things.
Choose Simplicity ~ Stay the Course!! ~ Press on Regardless!!!
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Re: When saving money becomes an irrational obsession
I keep more than the recommended 6-12 months of reserves in cash. Is that irrational? To some, perhaps, but over the last 10 years (this is not recency bias) I've seen plenty of talented qualified colleagues get the axe while upper management rewards themselves with higher compensation for all of their "hard work". Accordingly, the equities markets have rewarded them with a negative real return over the same time span - see investors aren't blind to the obvious. My extra reserves is my "swan portfolio", for those who don't know what a swan is (plagerizing from fellow poster "CFS") - sleep well at night and it is completely rational.
"One should invest based on their need, ability and willingness to take risk - Larry Swedroe" Asking Portfolio Questions
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Re: When saving money becomes an irrational obsession
I was discussing this with a friend last week.Grt2bOutdoors wrote:My extra reserves is my "swan portfolio", for those who don't know what a swan is (plagerizing from fellow poster "CFS") - sleep well at night and it is completely rational.
I'm a firm believer that sleeping well at night is essential to quality of life. If having your cake lets you sleep better than eating it, then despite the conflict with some strains of conventional wisdom, life is of higher quality if you forgo eating the cake. Some people can wolf down the cake and sleep like babies. Others can't. Both are potentially enjoying life equally.
Don't do something. Just stand there!
- jabberwockOG
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Re: When saving money becomes an irrational obsession
People who over save seem to me that they don't actually understand money and how to use it. Over 35 years I worked hard to save enough to always increase my level of freedom to do what I want to do and live how and where I want to live. Living frugally or lavishly does not matter as long as you can live how you want to live. To me the point of having wealth (cash + investments + no debt) directly equates to building and creating freedom and personal choice. Folks with no money and serious debt have limited freedom and choice. I am far from wealthy because I could spend way more money than I have very easily. But I feel very lucky because my desires and "needs" for material possessions, home, cars, and lifestyle are in pretty close alignment with the assets I have built.
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Re: When saving money becomes an irrational obsession
I agree with you. My point isn't to negate their success or invalidate their own financial dilemmas. I consider myself quite frugal and financially responsible compared to most people I know, the problem I am describing is from a different angle than you're describing. I agree it doesn't hurt for a second set of eyes to help someone out, I just see it so often rather than looking at an old post of conforming their own issues to it. Their jobs may be tough, but sometimes they come across as if they aren't going to someday have it so easy.ThankYouJack wrote:My friends a doctor, has to work lover 100 hours a week with high stress, gets treated like crap, and between him and his wife has over a half million in student loans. Sure he'll eventually make signifanctly more than me but my job is like taking nap compared to his. I think being a doctor, investment banker, true entrepreneur, etc is a lot tougher than a lot of people realize. If it was easy, everyone would do it.amateurnovice wrote:Honestly, along with the doctors who want help with their portfolios, this is why I don't come here often. It's hard for someone to watch people who clearly have it so easy and either lack the capacity to see how good they have it or choose to ignore it.toto238 wrote:I think we see more than one of these here on BH. Like the person that has pensions and SS covering 100% of their yearly expenses AND has a 7-figure portfolio to boot and is worried if they can retire.
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Re: When saving money becomes an irrational obsession
Oh ok, so more like choosing to retire than "forcing" yourself to retire. Sounds like a great plan to meChosenGSR wrote:Pretty much mean exactly as stated, if I get to a point when I feel I can financially call it quits, at the very least quits from full time work I should do so. I would not be bored, I could enjoy years of hard labor by traveling more, spending time with kids, etc. Work to live vs. live to work.ThankYouJack wrote: What do you mean by forcing yourself to retire? Do you enjoy your job, but would make yourself retire just because you have the financial means to do so? If you were retired now, would you get bored after 6 months and would you want to work at least part-time?
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Re: When saving money becomes an irrational obsession
Absolutely, just mean that for many of us it's been all about "hauling a$$" for so long that it's hard to take the foot off the pedal.ThankYouJack wrote:Oh ok, so more like choosing to retire than "forcing" yourself to retire. Sounds like a great plan to meChosenGSR wrote:Pretty much mean exactly as stated, if I get to a point when I feel I can financially call it quits, at the very least quits from full time work I should do so. I would not be bored, I could enjoy years of hard labor by traveling more, spending time with kids, etc. Work to live vs. live to work.ThankYouJack wrote: What do you mean by forcing yourself to retire? Do you enjoy your job, but would make yourself retire just because you have the financial means to do so? If you were retired now, would you get bored after 6 months and would you want to work at least part-time?
Re: When saving money becomes an irrational obsession
Saving is hardly irrational. When you get to a certain age, you worry. An example from today. The contractor doing a major bathroom re-model (all budgeted) noticed our guest bathroom toilet was draining slowly. Given the drought here in Northern California, I could only imagine tree roots invading our lateral. In a drought, trees love sewer laterals. They will aim for any source of water, and invite friends.
Turns out, we had a minor blockage (thank you, Roto-Rooter), all cleared less than $200. Funny part was, we got the "senior citizen" 10% discount. Why "senior citizens" with seven-figure portfolios automatically get discounts is beyond me. For your chuckle of the day, Round Table Pizza now has "senior" discounts. Where does it end? From everything I've read, it's the Millenials who actually need the discounts; living in the basement, etc. We seniors seem to be quite OK.
Turns out, we had a minor blockage (thank you, Roto-Rooter), all cleared less than $200. Funny part was, we got the "senior citizen" 10% discount. Why "senior citizens" with seven-figure portfolios automatically get discounts is beyond me. For your chuckle of the day, Round Table Pizza now has "senior" discounts. Where does it end? From everything I've read, it's the Millenials who actually need the discounts; living in the basement, etc. We seniors seem to be quite OK.
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Re: When saving money becomes an irrational obsession
This is my exact dilemma. I'm in the "can have anything but not everything" and have many good years left for working if desired.Ybsybs wrote:I'm struggling with this. My family's net worth has reached a point where all the calculations show we won't be able to spend it all at our current rate. Logically, it makes sense to raise our standard of living a bit. But so much time avoiding lifestyle creep makes it challenging to change. We don't have enough to just go from frugal to money-is-no-object. I think there's skill involved in learning to spend a bit more without spending *a lot* more and destroying the carefully built financial security.
I keep going back and forth between doubling down on work to achieve "having everything and anything I want" (which takes a More than a few years) and increasing my lifestyle and exiting now but living at my current standard of life. It's become more a question of figuring out what to do with the rest of the years vs money.
Though I must admit there is a part of me that wants the rolls Royce and the jet vs the Chevy and the fishing boat.
You can do anything you want in life. The rub is that there are consequences.
Re: When saving money becomes an irrational obsession
I would really splurge and get an HR-V! The EX-L of course, but can you imagine the dealer is asking over $28,000?!? MSRP plus $2k dealer markup!zaboomafoozarg wrote:The Fit is pretty sweet though. If I had millions of dollars I would probably trade in my old one for a new one.sambb wrote:to each his own.. it doesn't make sense to me to have millions of dollars in investments, but drive an old camry or a fit. But it makes sense to some.. can't figure that out
If you have the money, splurge on whatever makes you happy!
http://www.zillow.com/blog/joan-rivers- ... et-169719/Joan RiversWho knew the late Joan Rivers had such a fixation on Marie Antoinette?
Her Manhattan penthouse, which is listed for $28 million, is how Marie Antoinette would have lived “if she had money,” Rivers joked in the 2010 documentary “Joan Rivers: A Piece of Work.”
- White Coat Investor
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Re: When saving money becomes an irrational obsession
I agree. That's a great post. And no surprise it is written by someone with the name backpacker. Backpacking is actually the perfect hobby for a stoic. Due to weight and space issues, you don't take anything you're not sure you'll need. Luxuries are things like a cup so you don't have to drink out of your bowl, a small salt shaker or perhaps a full length pad instead of a 3/4 length one. You start cutting unnecessary straps and buckles off your pack to save weight etc.jane1 wrote:+1backpacker wrote:Money is like food. Most Americans overeat. Most Americans overspend. A small minority have anorexia, eating so little that it damages their health. A small minority have financial anorexia, spending so little that it seriously damages their relationships with other people and leaves them missing out on important life experiences.
A few odd ducks learn to actually like healthy food and exercise. Confronted with the choice between cheesy fries and a plate of cut vegetables, they would rather have the vegetables. And this even if cheesy fries are well within their caloric "budget". Years of eating vegetables has changed what tastes good to them. Vegetables really do taste better to them than cheesy fries.
To the average person, this looks like insanity or self-flagellation. You can't really like vegetables more than curly fries. You can't really like going for long evening runs. Life is short, so enjoy it! Stop depriving yourself. Eat curly fries. You might be hit by a bus tomorrow.
What the average person fails to understand is that tastes can be changed. They are, in the long run, a choice. Some people have chosen to like vegetables, so are not depriving themselves when they eat vegetables instead of less "enjoyable" options. The same goes for spending. The average person can't understand preferring a Toyota to a Mercedes when you can easily afford either one. But a few odd ducks have learned to actually like living modestly. After years of living with simple things, they see no point to the "life upgrades" average people fixate on.
Being wealthy is having more money than you know what to do with. Most people never get there because they always know what to do with more money. Wants always expand as fast as their means. For those who have learned to like simple things, being wealthy is much easier. Not being able to spend all your money isn't a problem. It means that you've arrived.
1) Invest you must 2) Time is your friend 3) Impulse is your enemy |
4) Basic arithmetic works 5) Stick to simplicity 6) Stay the course
Re: When saving money becomes an irrational obsession
flyingaway wrote:It is the habit that counts. If he goes to the cheapest gas stations, he may go to the cheapest grocery stores, drive cheapest cars, and so on. Then money gets saved and accumulated from all sources in no time.wander wrote:A friend of mine always refuels his car at cheapest gas station in town. I, OTOH, refuel at whichever top-tier gas station that is convenient for me. He may save a dollar or two each time, but I don't see how one can get rich that way and it does not make sense to (sometimes) drive across town in order to save a few dollar.
Or he could spend all that extra time looking for the cheapest stuff, and instead miss out on something else. I expect to have more money than I have time in this world. So time is more valuable to me. To each his own.
Re: When saving money becomes an irrational obsession
I wish this quote was about me.toto238 wrote:I think we see more than one of these here on BH. Like the person that has pensions and SS covering 100% of their yearly expenses AND has a 7-figure portfolio to boot and is worried if they can retire.
Re: When saving money becomes an irrational obsession
For every irrational saver, there must be a hundred people who couldn't save money at gunpoint here in the United States.
"Optimum est pati quod emendare non possis." |
-Seneca
Re: When saving money becomes an irrational obsession
Although it's not the only phone in my house, I still have one.Pajamas wrote:That hits a little too close to home. I kept the rotary dialing until they stopped charging for it and forced me to switch because they no longer supported it. I think that was more than fifteen years ago, however, and certainly more than ten.kjvmike wrote:This reminds me of the wealthy old relative in the family. He had a rotary dial phone until around 2009 because there was a small surcharge for pulse dialing.
Fortunately my phone had a switch that would cause it to make either rotary or pulse dialing sounds, so I didn't have to buy a new one.
Slow and steady wins the race.