The Fine line between responsible and selfish/material

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The Fine line between responsible and selfish/material

Postby frugalhen » Sun Mar 17, 2013 8:25 am

More a philosophical question than anything else, but something I struggle with and imagine others do as well.

First, a little background. I am mid 40’s with a family. I came from a fairly wealthy upbringing where my parents did not save or look to the future (but were great in other ways) and therefore lost all of the high income they once had. It left a mark on me as needing to save for a rainy day and my own retirement/old age. Their final years were a strain financially, and emotionally. I don’t want to repeat that.

I have saved a relatively high income for years and delayed buying a house until my late 30’s and bought below what I can afford.

My challenge is balancing saving a responsible amount for a retirement I can enjoy at 60, versus enjoying life TODAY. I struggle spiritually with it as well (please do not take this thread in a direction that will be banned) because I find my ultimate question is this:

What is the balance between being responsible for oneself and saving/delaying gratification and being a miser and being overly materialistic? How do you balance these things mentally and emotionally, and of course, financially?
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Re: The Fine line between responsible and selfish/material

Postby livesoft » Sun Mar 17, 2013 8:36 am

It's an interesting question and I see some of myself in your post. For me, it was setting a certain dollar value for material net worth in my mind. Once that number was reached, it was like a switch going off. There is no doubt I became less of a miser at that point.

Perhaps at some point, you will really regret not buying something and that will change you. For example, I regret not buying some art work that I liked when I was younger. Years later, I had the same feeling about another painting, so I knew I would regret buying it. So I bought it and have enjoyed it every day since. Or maybe it will be a trip that your friends go on, but you chose not to go that you will regret.
It's all about short-term opportunistic rebalancing due to a short-term change in one's asset allocation, uh, I mean opportunistic rebalancing, uh I mean rebalancing, uh I mean market timing.
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Re: The Fine line between responsible and selfish/material

Postby investingdad » Sun Mar 17, 2013 8:45 am

I have considered this as well. I'm 39 and my wife is 40. Last year we broke through a major milestone with our net worth and it's had an effect on my thinking. Our incomes are also pretty good (not crazy, but not bad). Honestly, it all makes me a little nervous.

A large part of arriving where we are is because we don't have expensive tastes and we don't feel the need to spend what we earn. We've been investsing a large portion of our incomes since we were 22 so you can imagine what 18 years of that will add up to. We were brought up middle class though I suspect our families were always a little more secure than we were lead to believe.

My wife and I feel that we're responsible for ourselves when we retire and, eventually, reach very old age. Our goal is to travel after a semi-retirement in our 50s. We also want to fully fund our two kids' college educations (through bachelor's degrees, after that is up to them). Making that goal means living below our means, which we do. Part of what has made this a little easier is we don't have expensive hobbies or expensive tastes or feel the need to surround ourselves with 'stuff'. True, we do take a nice vacation every year and I don't skimp on my taste for expensive beer.

There are times when I feel like I don't deserve to be as fortunate as we are. But we haven't really done anything special to get here. We each went to college, got degrees that would be in demand (engineering / accounting), saved consistently 20% to 30% of our gross income and invested it, and controlled our spending. And here we are. Nothing special but yet we control a significant portfolio.

It does feel like being responsible is being selfish/material at times. I think the only real solution is to find a charity you're comfortable with and help support them.
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Re: The Fine line between responsible and selfish/material

Postby VictoriaF » Sun Mar 17, 2013 8:59 am

Spending and saving have much to do with the mental anchoring. When you avoid certain types of expenses or use lower-cost products and services, these prices (including $0) are the anchors for what is normal for you. When you are faced with new or higher expenses than your current anchors you tend to see them as frivolous, as going against your frugal grain.

But the anchors can be easily reset. For example, if a frugal anchor is to use vacation time for doing home improvement projects, a new anchor could be to go to Europe for two weeks. You may tell yourself that this would be once in a lifetime trip. But the trip will become a new anchor, and a "trip of the lifetime" can become a "lifetime of trips."

The decisions on whether to reset your anchors and what to reset them to are in your control.

Victoria
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Re: The Fine line between responsible and selfish/material

Postby Call_Me_Op » Sun Mar 17, 2013 9:17 am

Interesting question. Unlike you, I grew-up essentially in poverty and do not want to go back to living like that - so we are of the same mind-set, but how we got here is quite different.

I struggle with the same issue. I see people struggling [financially] all around me and although I donate to charity, on the one hand I feel I should be doing more, but on the other hand I am afraid to dig too deeply into my pocket for fear of risking a slide back into poverty.

As I have grown older, I realize what money buys - it buys you options. I grew-up 8 people in a 2 bedroom apartment with 1 bathroom. I never had my own room, and had to rush when on the toilet, having people yelling at me to hurry-up. That is just a sampling of a long-list of compromises that must be made if you are poor.
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Re: The Fine line between responsible and selfish/material

Postby frugalhen » Sun Mar 17, 2013 9:19 am

it constantly amazes me how fear acts as a motivator. I can't speak for others but it certainly motivates me. I agree giving is an antidote to greed.
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Re: The Fine line between responsible and selfish/material

Postby MnD » Sun Mar 17, 2013 9:31 am

I have some major goals (paid off house, two State U college educations fully funded, retirement mid-50's) that happen to require a lot of money.
I set our savings and frugality at just the level to reasonably meet those goals and no higher.
The objective of money is to meet our goals, not a contest to see how big a pile of unspent money we can build.

Savings comes out first and the game plan is to have as much fun as possible with the remainder.
It does not pain me to spend, even on items that are clearly just wants.
An inherently frugal/stingy person following my wife or I around for a few days would probably have a stroke. :mrgreen:

Life is short and their are no guarantees of a long retirement - or even tomorrow.
My test would be if you found out you had just a few months to live, would you regret the balance you made between enjoying life, being responsible and delaying some gratification?
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Re: The Fine line between responsible and selfish/material

Postby frugalhen » Sun Mar 17, 2013 9:34 am

MnD wrote:I have some major goals (paid off house, two State U college educations fully funded, retirement mid-50's) that happen to require a lot of money.
I set our savings and frugality at just the level to reasonably meet those goals and no higher.
The objective of money is to meet our goals, not a contest to see how big a pile of unspent money we can build.

Savings comes out first and the game plan is to have as much fun as possible with the remainder.
It does not pain me to spend, even on items that are clearly just wants.
An inherently frugal/stingy person following my wife or I around for a few days would probably have a stroke. :mrgreen:

Life is short and their are no guarantees of a long retirement - or even tomorrow.
My test would be if you found out you had just a few months to live, would you regret the balance you made between enjoying life, being responsible and delaying some gratification?



great post, thanks
"get out and live, you are dead an awfully long time" - Jimmy Demaret
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Re: The Fine line between responsible and selfish/material

Postby MOBY DICK » Sun Mar 17, 2013 9:37 am

Frugalhen,
Rejoice in your choice. Let others spend money they don't have as they will prop up your mutual funds! I see many around me with seemingly more but most are a paycheck or 2 away from the poor house and in today's job climate who needs that?

There are probably more that squirrel away for a rainy day here than at any where else but I've found our numbers to be small. Advertisers have staked their very existence in silencing frugalness. It is lonely at the top... but just keep in mind you'll be retiring much earlier than your peers if you want to! I struggle with this sometimes but it goes away quickly after "crunching the numbers".

Years ago while chatting with an old-timer about a classic car I wanted to acquire he said " it's just a hunk of iron". That phrase has served me quite well and has deterred me from senseless purchases. You truly cannot have your cake and eat it too.

Please do read "The Millionaire Next Door" if you haven't already. Although dated the principals contained therein still work.
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Re: The Fine line between responsible and selfish/material

Postby jeffyscott » Sun Mar 17, 2013 9:46 am

Like others, we just never developed really expensive tastes or habits. With our house paid off, excluding health care, taxes, and college tuition, and the occasional new car we've been spending about $30K per year. Now as we approach early retirement with seemingly more than we need, there are a couple things I might have spent more on had I known where we'd end up, but it was not known at the time, so...

But, OTOH, the excess can be passed on to our children and for at least some of them this could be very helpful, as it seems they may go through life on very low incomes. I recently developed a plan by which we can determine how much we can afford to give away, so that some of this may be passed on while we are alive.

The excess will also allow my wife to, at age 50, quit her teaching job that has become very stressful and burdensome to her, without the need to obtain other employment.
press on, regardless - John C. Bogle
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Re: The Fine line between responsible and selfish/material

Postby kitteh » Sun Mar 17, 2013 10:16 am

I think you've asked a hard question without someone knowing a lot about your life.

Are you sort of secure for retirement and thinking about buying a private jetliner?

Are you very secure for retirement and thinking about two months in Europe?

Are you not quite secure about retirement and wondering if you can make a one time purchase of $200 jeans?

It sounds like, if you truly believe your job is secure, that you could treat yourself to things that would bring you pleasure even though they would make an occasional noticeable dent in your budget. Just keep an eye on this long term.
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Re: The Fine line between responsible and selfish/material

Postby midareff » Sun Mar 17, 2013 10:31 am

Allen ... my parents who had been through the great depression were perhaps a little more frugal than they needed to be, so I learned very early on how to live well below your means. I remember clearly being in Key West with a g/f perhaps a dozen years ago and being the only 2 on an Island Tour bus. The driver starts telling his story how he retired a decade earlier from Vermont. I ask him if he retired 10 years ago why is he driving a bus? Ran out of money he says. A few years later a work friend retired and a year or so later there he is coming to work again one morning. I ask him what he's doing coming to work? He says he could see his money would not last so he better put in another year or so while they would still have him.

Many years ago I put together a long term projection spread sheet of saving and investment goals, year by year. I figured I could retire comfortably by the time I was 67 and decided I would not pickup any expensive toys or travel vacations until each year's goals were met or exceeded. Obviously my plan was conservative and I retired at 64 having met all goals a few years early. Along the way it became easier to meet those goal and once I did the extras went to international travel, hi-end cameras and audio video gear. By then I was a Boglehead but didn't know it yet although I was reading Bernstein, Swedroe, Ferri, Solin, Schutheis, Bogle and others seeing the same world through they do see it through slightly different colored glasses.

Fortunately, I got to see a lot of Asia and Africa, some Europe, many National Parks here, and got to do many nice things, once yearly plan goals were met. You can do both while you are still in heavy savings mode, just put together a long range plan of how to get to your goals. There are times in life career building, additional education, etc., is in the forefront, things get easier as you become more established. Planning is worth the effort. There is a hazy line between not enough and enough, there is no such thing as too much.
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Re: The Fine line between responsible and selfish/material

Postby HardKnocker » Sun Mar 17, 2013 11:33 am

VictoriaF wrote:Spending and saving have much to do with the mental anchoring. When you avoid certain types of expenses or use lower-cost products and services, these prices (including $0) are the anchors for what is normal for you. When you are faced with new or higher expenses than your current anchors you tend to see them as frivolous, as going against your frugal grain.

But the anchors can be easily reset. For example, if a frugal anchor is to use vacation time for doing home improvement projects, a new anchor could be to go to Europe for two weeks. You may tell yourself that this would be once in a lifetime trip. But the trip will become a new anchor, and a "trip of the lifetime" can become a "lifetime of trips."

The decisions on whether to reset your anchors and what to reset them to are in your control.

Victoria


Victoria,

That is very profound.
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Re: The Fine line between responsible and selfish/material

Postby jeffyscott » Sun Mar 17, 2013 11:35 am

midareff wrote:Many years ago I put together a long term projection spread sheet of saving and investment goals, year by year.


That reminded me, I did not do anything so detailed but I did a rough estimate that had indicated that if we maxed out on tax deferred savings, that would be enough so that we could retire in our 50s and continue to spend about the same amount. So our criteria was simply that we maxed out the 457, 403b, and Roth IRAs and anything beyond that could be spent, if we so desired. This was conservative as we were making mortgage payments and would be paying college tuition while working but not while retired, this was offset somewhat by the potential health care cost issue.
press on, regardless - John C. Bogle
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Re: The Fine line between responsible and selfish/material

Postby Epsilon Delta » Sun Mar 17, 2013 12:50 pm

frugalhen wrote:My challenge is balancing saving a responsible amount for a retirement I can enjoy at 60, versus enjoying life TODAY.

This implies that spending more money is a necessary part of enjoying life more. An alternative to this mindset of "deny myself today to save for tomorrow" you can have "there's nothing I can spend money on that will make me happier, so I won't spend it."
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Re: The Fine line between responsible and selfish/material

Postby saelen » Sun Mar 17, 2013 1:21 pm

This topic really hits home for me and is something I struggle with. This forum is full of extremely intelligent and frugal people but very few discussions on spending some money on something you enjoy. For me I have dreamed of owning a boat and have been financially able to afford one through good luck and hard work since my early 20s. Five+ years later and countless trips to boat shows and boat realtors I still do not own one. I worry about spending money I could use for retirement, the massive depreciation and maintenance costs and other issues as well. At this point I am saving greater than 75% of my income and it is starting to feel silly.

Bogleheads: how do you balance saving and spending money and hobbies and interests? Would love to hear how you guys balance the two.
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Re: The Fine line between responsible and selfish/material

Postby countofmc » Sun Mar 17, 2013 1:30 pm

Great topic and OP!

It has been mentioned before, but I believe that some people are truly hardwired to be savers, and others spenders. Unfortunately i think I'm the latter, so being frugal is not natural but rather a constant fight/ struggle.

I find that if I get too drastic with my cutting/ frugalness, I end up exploding and buying something I regret.

And then there's the whole balance issue you discuss in your OP. I don't want to wake up at age 50 (I'm 30 now) with a solid nest egg but without any "fun" experiences to remember.

The solution I have arrived at (quite recently) is this: I set annual financial goals. I establish a goal that would take some work/frugalness to reach, but also something that is not ridiculous based on our incomes. My goal this year is to max out 1 person's 401k, beef up our E-fund to X amount, and pay off X amount of student loans. X is a fixed number I already have determined. If we hit this goal, then any money "leftover" is spending money we can do whatever we want with. If we don't want to spend it, then we have that option of saving it, and then next year this process starts over. This solution is working well for me so far.
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Re: The Fine line between responsible and selfish/material

Postby wingnutty » Sun Mar 17, 2013 1:55 pm

Gosh I think this topic is one that most every boglehead contemplates. For many of us, we think about this topic a lot. My wife and I earn decent incomes given our location and we try to save 20-25% of our incomes, but that is VERY hard to do with 2 kids in daycare...not to mention a set of twins in the ICU as I type this. Historically, I think we probably saved more than enough, but looking into the future, I am very glad we have been focused on saving because one never knows what life will throw at you. Like it or not, most of us are still one big event away from forever altering our financial goals.

I think for us, the stress of saving vs spending will continue until our kids are out of college. I'd like to provide as much as possible towards my children's educations, however, I am now fully aware that our incomes will never allow us to assist as much as I would like in that dept.; this is a struggle that will challenge me for the next 20 years.

At this point in my life, I feel my saving has not hurt my quality of life, but rather improved it because, as said before, it has now provided us with increased options and security.
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Re: The Fine line between responsible and selfish/material

Postby jeffyscott » Sun Mar 17, 2013 1:58 pm

saelen wrote:For me I have dreamed of owning a boat and have been financially able to afford one through good luck and hard work since my early 20s. Five+ years later and countless trips to boat shows and boat realtors I still do not own one... At this point I am saving greater than 75% of my income and it is starting to feel silly.


Sure does sound silly, why don't you just buy the boat? The day you buy it will be the second happiest day of your life and you can then wait for the happiest day, the day you sell it :wink: .

Not something I ever wanted, but if I did and had been saving 75% on my income, I would buy the thing and save a lower percentage for one year or whatever.
press on, regardless - John C. Bogle
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Re: The Fine line between responsible and selfish/material

Postby momar » Sun Mar 17, 2013 2:21 pm

Epsilon Delta wrote:
frugalhen wrote:My challenge is balancing saving a responsible amount for a retirement I can enjoy at 60, versus enjoying life TODAY.

This implies that spending more money is a necessary part of enjoying life more. An alternative to this mindset of "deny myself today to save for tomorrow" you can have "there's nothing I can spend money on that will make me happier, so I won't spend it."

This is what I was going to post.

Whenever I see someone post something like this, it sounds like they don't actually know what they want to spend money on but they see everyone else doing it and all the advertising showing how happy spending money makes people.

Until you figure out what really makes you happy and whether it requires spending money, any money you spend trying to buy happiness is going to go down the drain. And you'll end up thinking "well, just a little bit more and I'll be happy like everyone else". It's a bottomless hole and most people find themselves deeper every day.

Money can buy happiness, but just because you are spending it on something doesn't mean it will.
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Re: The Fine line between responsible and selfish/material

Postby Hilda » Sun Mar 17, 2013 2:27 pm

FrugalHen,

I think constantly about the questions you raised. I'm a latecomer in life to this forum and since I joined in January, I will freely admit that Bogleheadism has become my new interest. I have a tendency to embrace new enthusiasms in my life with great passion and I would be embarrassed to tell you how many times a day I check this site for new and interesting threads that might teach me more. I guess you could say I'm in sponge phase --soaking it up like crazy and eager to learn.

But...I am a little uneasy. Because its about money. Not some new humanitarian interest, or an avenue to express my compassion towards animals or whatever. Suddenly my head is full of calculations (if I save this much or that much, I'll have this amount or that amount by such and such a date). And then I'm also constantly reviewing in my head all the financial sins my husband and I have committed over the years--we have been capital S-Stupid etc etc. So (unlike you) I'm beset with a sense of urgency about making up for lost time and attempting to rectify our mistakes.

It's not all bad-- several years ago when one of my passions caused me to incur substantial credit card debt, i had a moment of head-against-a-brick-wall clarity (Life Lesson Alert: if any young Bogleheads on this forum think they might pursue dog breeding/dog showing as a hobby and potential moneymaker, please let me disabuse you of any notion that there is any money to be had from such pursuits...JPMorgan Chase Visa loved me enough to front me $35,000 to support my dog venture. It seemed like free money at the time). In that moment of clarity, I got religion about the evils of credit card debt, and I made a decision. It took me 3 and 1/2 years, but the day I wrote my last check to pay it off was a truly happy day, and I've been a credit card teetotaler ever since.

What worries me is that this new interest will consume my attention in a way that might not be good. The trick is balance,as you said. Without veering into banned topic territory (you did use the word "spiritual")' I will say that I do have a commitment to keeping my priorities straight and one of those is a spiritual one. I tell myself that as long as I have that one in order, I should be okay. And toward that end, I will continue doing something that I've been doing for many, many years now....I give 10% of my income to the chur...um, to "charity". Somehow I feel like it is the right thing to do. Among the many things that I love about what I read about Jack Bogle is that he is a man of integrity (how rare is that in the financial world?!) and that he donates a significant portion of his money to charity. So it seems that Jack Bogle is a good man. I find that beautifully compelling and it makes me feel good about being here because he himself says those same things about the group that named themselves after him.

Although I used to think so, money itself is not a bad thing. It's the excessive love of it that is a problem. When I was in my twenties, I used to sneer at people who cared about/were seriously interested in money. Those people were just crass materialists whereas I was the better sort who cared about a life of the mind. My head was in the poetic and musical clouds. Well, it turns out that having enough money is a really good thing. And planning to have enough is even better. I haven't been truly destitute since my graduate school days, but there is no question that I'd be much further along on the wealth continuum if I had planned better and sooner.

C'est la vie and no time like the present.
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Re: The Fine line between responsible and selfish/material

Postby wingnutty » Sun Mar 17, 2013 2:30 pm

momar wrote:
Epsilon Delta wrote:
frugalhen wrote:My challenge is balancing saving a responsible amount for a retirement I can enjoy at 60, versus enjoying life TODAY.

This implies that spending more money is a necessary part of enjoying life more. An alternative to this mindset of "deny myself today to save for tomorrow" you can have "there's nothing I can spend money on that will make me happier, so I won't spend it."

This is what I was going to post.

Whenever I see someone post something like this, it sounds like they don't actually know what they want to spend money on but they see everyone else doing it and all the advertising showing how happy spending money makes people.

Until you figure out what really makes you happy and whether it requires spending money, any money you spend trying to buy happiness is going to go down the drain. And you'll end up thinking "well, just a little bit more and I'll be happy like everyone else". It's a bottomless hole and most people find themselves deeper every day.

Money can buy happiness, but just because you are spending it on something doesn't mean it will.


I hear what you are saying and there is certainly truth in your words, but for me, it is the little expenses that add up, not necessarily the big ticket items. For example, going to dinner with friends, going on weekend getaways, putting expenses into things I like to do (fishing, gardening, hunting...), ...those are all things that enhance quality of life, but also end up eroding the ability to save; this is especially true for those of us at the mid to lower income scales who still save a lot. In the end, you have to balance and you can't do all the things you want to do if you expect to be able to still save, even if those things independently don't cost a lot of money. Life is about picking and choosing and sometimes the present vs future rewards aren't inherently clear.

Note: please don't take this post to mean that I don't stop and smell the roses, because I really think that I do, but I don't always stop to smell every rose in the big rose garden, sometimes I just stop for a wiff and then move on.
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Re: The Fine line between responsible and selfish/material

Postby umfundi » Sun Mar 17, 2013 3:23 pm

What ever you choose, you'll grow into it over time.

If you save 15% of your income over a working career, it will replace about 1/3 of your income when you retire.

So, if you save about 1/3 of your income you will be living on 2/3 and will be able to replace that 2/3 when you retire. SS and a pension (if you have one) are gravy.

With rules of thumb like this you can figure out what you need to do for where you want to be. For most people, I think saving 25% will adequately do it. If you get much over 30%, that might be "overdoing" it.

A problem with being too frugal is that it will become your nature, and you will not achieve or enjoy delayed gratification. If you save money now by never eating out, do you think you will suddenly enjoy eating out when you retire?

I think it is a good idea to contemplate how to achieve a lifestyle that you can continue without major changes (up or down) when you retire. It's about balance. You could live in a trailer now and a mansion when you retire. Or, you could live in a mansion now and a trailer when you retire. I think most people would prefer a middle road between those extremes.

And, by the way, spending money does not bring happiness. But, I believe, financial security helps a whole lot.

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Re: The Fine line between responsible and selfish/material

Postby DAK » Sun Mar 17, 2013 5:39 pm

This is probably something a lot of bogleheads struggle with.

I save about 75% of my take home pay. I dont need to save that much. I have some notion to do this at least until Im 40-41 years old then Ill enjoy life more, I hope.
Some of it has to do with 2 kids age 3 and under and we couldnt travel anyway right now. I also want enough money to work less if I so choose, as my kids get older. The more I save now the more compounding benefits us as well.
If I died right now I would have regrets. Nose to grindstone until 2015. :?:
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Re: The Fine line between responsible and selfish/material

Postby lwfitzge » Sun Mar 17, 2013 5:47 pm

I think there is also a fine line between frugal and cheap. The former can splurge periodically to enjoy special moments in life where the latter can't and is ridden w anxiety and angst over the thought of any unnecessary expense.
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Re: The Fine line between responsible and selfish/material

Postby Mudpuppy » Sun Mar 17, 2013 5:47 pm

frugalhen wrote:What is the balance between being responsible for oneself and saving/delaying gratification and being a miser and being overly materialistic? How do you balance these things mentally and emotionally, and of course, financially?

Figure out what brings you pleasure or joy in life. Then set aside some money to spend on pursuing those activities. If it's in your budget that this is your "enjoy life" money and you know you can still save for the future even with spending that "enjoy life" money, I think a lot of the conflict (which is likely rooted in guilt or fear that spending the money would derail your retirement savings) would disappear.
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Re: The Fine line between responsible and selfish/material

Postby Abe » Sun Mar 17, 2013 5:57 pm

Happiness is not external: it's internal.
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Re: The Fine line between responsible and selfish/material

Postby avalpert » Sun Mar 17, 2013 5:57 pm

Epsilon Delta wrote:
frugalhen wrote:My challenge is balancing saving a responsible amount for a retirement I can enjoy at 60, versus enjoying life TODAY.

This implies that spending more money is a necessary part of enjoying life more. An alternative to this mindset of "deny myself today to save for tomorrow" you can have "there's nothing I can spend money on that will make me happier, so I won't spend it."


So you recommend denial?
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Re: The Fine line between responsible and selfish/material

Postby DWD » Sun Mar 17, 2013 6:07 pm

saelen wrote:This topic really hits home for me and is something I struggle with. This forum is full of extremely intelligent and frugal people but very few discussions on spending some money on something you enjoy. For me I have dreamed of owning a boat and have been financially able to afford one through good luck and hard work since my early 20s. Five+ years later and countless trips to boat shows and boat realtors I still do not own one. I worry about spending money I could use for retirement, the massive depreciation and maintenance costs and other issues as well. At this point I am saving greater than 75% of my income and it is starting to feel silly.

Bogleheads: how do you balance saving and spending money and hobbies and interests? Would love to hear how you guys balance the two.


I believe it was an uncle who made a comment that stuck with me was "you don't have to own something to enjoy it." Maybe you could rent a boat first and see how much you really enjoy it. Or if friends with a boat owner, offer to buy the gas, etc. for the outing and enjoy the time together.
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Re: The Fine line between responsible and selfish/material

Postby frugalhen » Sun Mar 17, 2013 6:18 pm

All the money won’t help if you have a terrible disease or are in a lousy marriage. Money cannot buy health (to a degree) and you have to make good life choices. There are certainly a lot of poor people who are happy and rich people who are miserable.

Some of the clichés are apropos, you really can’t take it with you and life is short.

My situation calls some of these into question as we have a small home paid off (we need a bigger home) and about $1.5 in investments with no debt. Mid 40’s and a combined income of $225k. In 2 years my spouse wants to go part time and spend more time with our child. Our income will be about $130k at worst, $150k at best. We need a larger house, which would cost us about $150 of our cash.

We want to dine out a little and enjoy ourselves and cruise or vacation twice a year. A golf membership for me would mean a lot because I love the game and have played little the last 20 years. All this costs money and I worry about the balance.

The last 20 years flew by and I worked my tail off to be in a decent position financially. I have seen others not so lucky.

I think charity is the weapon against greed.

I don’t need to keep up with the Jones’ and wear designer clothes. I don’t care my car is 8 years old and can probably go another 3 when I buy used again. I can live in a townhouse and avoid the mcmansion others in my generation seem to like. But where is the balance?

If I max out tax deferred plans from here on out and no other investments, can I enjoy these other luxuries? Will I enjoy them or worry like crazy while doing them?

Bogleheads are a disciplined bunch and I am grateful to their life experience and certainly their financial acumen. Somehow I think deep down some feel as tough if they deny themselves all the time and save, save, save, death will never come. Death comes to all and all the money in the world will not help.

I find what I like the most about Bogleheads is they are a responsible bunch. My parents were wonderful people and I was blessed they gave us good ideals, a kindness to others and believed in the value of faith and education. Financially though they were not responsible and worried about keeping up with the Jones’ a bit. My task is to learn from this, not be greedy, give to those in need where I can help and enjoy what is a fleeting life on this earth.
"get out and live, you are dead an awfully long time" - Jimmy Demaret
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Re: The Fine line between responsible and selfish/material

Postby investingdad » Sun Mar 17, 2013 6:25 pm

frugalhen wrote:All the money won’t help if you have a terrible disease or are in a lousy marriage. Money cannot buy health (to a degree) and you have to make good life choices. There are certainly a lot of poor people who are happy and rich people who are miserable.

Some of the clichés are apropos, you really can’t take it with you and life is short.

My situation calls some of these into question as we have a small home paid off (we need a bigger home) and about $1.5 in investments with no debt. Mid 40’s and a combined income of $225k. In 2 years my spouse wants to go part time and spend more time with our child. Our income will be about $130k at worst, $150k at best. We need a larger house, which would cost us about $150 of our cash.

We want to dine out a little and enjoy ourselves and cruise or vacation twice a year. A golf membership for me would mean a lot because I love the game and have played little the last 20 years. All this costs money and I worry about the balance.

The last 20 years flew by and I worked my tail off to be in a decent position financially. I have seen others not so lucky.

I think charity is the weapon against greed.

I don’t need to keep up with the Jones’ and wear designer clothes. I don’t care my car is 8 years old and can probably go another 3 when I buy used again. I can live in a townhouse and avoid the mcmansion others in my generation seem to like. But where is the balance?

If I max out tax deferred plans from here on out and no other investments, can I enjoy these other luxuries? Will I enjoy them or worry like crazy while doing them?

Bogleheads are a disciplined bunch and I am grateful to their life experience and certainly their financial acumen. Somehow I think deep down some feel as tough if they deny themselves all the time and save, save, save, death will never come. Death comes to all and all the money in the world will not help.

I find what I like the most about Bogleheads is they are a responsible bunch. My parents were wonderful people and I was blessed they gave us good ideals, a kindness to others and believed in the value of faith and education. Financially though they were not responsible and worried about keeping up with the Jones’ a bit. My task is to learn from this, not be greedy, give to those in need where I can help and enjoy what is a fleeting life on this earth.


I'm just a few years younger than you and we have a large enough home and a mortgage (two kids and my wife wants to keep working). But, jeez, it's like you're typing out (almost) my own story.
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Re: The Fine line between responsible and selfish/material

Postby jsl11 » Sun Mar 17, 2013 6:41 pm

I believe the best method is to set a goal, and then devise a plan to reach your goal. Once that is done, any money you have that is not required to follow your plan is available for spending on anything you wish, without guilt. Set your goal, plan, implement, and enjoy.

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Re: The Fine line between responsible and selfish/material

Postby BrandonBogle » Sun Mar 17, 2013 6:46 pm

MnD wrote:Life is short and their are no guarantees of a long retirement - or even tomorrow.
My test would be if you found out you had just a few months to live, would you regret the balance you made between enjoying life, being responsible and delaying some gratification?


I just had to repost the above from earlier in the thread as it strikes a cord with me.

My childhood was much like this:
Call_Me_Op wrote:Interesting question. Unlike you, I grew-up essentially in poverty and do not want to go back to living like that - so we are of the same mind-set, but how we got here is quite different.


Reading this thread, I know that over the past two years I've become less miserly, but I would still answer the above with "Yes, I would regret not living life more if I were to learn I have months to live". Time for some deep thinking here.
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Re: The Fine line between responsible and selfish/material

Postby jeffyscott » Sun Mar 17, 2013 7:57 pm

frugalhen wrote:We want to dine out a little and enjoy ourselves and cruise or vacation twice a year. A golf membership for me would mean a lot because I love the game and have played little the last 20 years. All this costs money and I worry about the balance.
...
can I enjoy these other luxuries? Will I enjoy them or worry like crazy while doing them?


Well, if you don't enjoy them, then maybe they are really not that important to you compared to more certainty of your financial security.

But how much is this really going to amount to, spending an extra $10K per year? For, the next 10 years, 20 years? I'd come up with a balanced plan, using a spreadsheet or something...were it me, I'd want to ensure having enough to meet retirement goals, even if there are poor returns. But in the end the if issue is the impact of spending an extra $100-200K over your remaining working years, I would doubt that would be a significant problem given your financial situation (I'm assuming the $1.5 meant $1.5 million).
press on, regardless - John C. Bogle
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Re: The Fine line between responsible and selfish/material

Postby steadyeddy » Sun Mar 17, 2013 9:09 pm

I resonate with your feelings, but believe balance between prudence and hedonism is a moving target. Money gives you options and you can use it to achieve different goals at different times. There is no harm is going out to eat a little more this year, and there is no harm in scaling back your dining in the future if you find the pleasure is not worth the price. Likewise, you can modulate your golf consumption to suit your fancy.

Very few decisions in life are all or nothing, no turning back affairs.
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Re: The Fine line between responsible and selfish/material

Postby Normchad » Sun Mar 17, 2013 9:30 pm

We are not frugal by nature. The way I make it work is to save 20% of gross income from every paycheck. I don't care what happens to the rest.

If we want a bigger house, we buy it. If we want to live in a hovel and buy shoes like Imelda Marcos, we'd do it. I don't ever sweat spending the money as long as we are saving the 20%. Nice vacations, sure thing.

Funny thing is that along the way, I've largely lost my appetite for material possessions.

I did set networth goals back in 1992 covering the next 20 years. By saving 20%, we are far ar ahead of those original goals. So we don't worry about not having enough later.
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Re: The Fine line between responsible and selfish/material

Postby Curlyq » Sun Mar 17, 2013 9:31 pm

I've had to live a very frugal lifestyle for most of my adult life, mostly due to not getting serious about a career until I was 30 and working in lesser paid industries (hospitality and teaching). I also chose to live where I wanted to live and found work there, rather than following a job, which can limit income to some extent.

For my 50th birthday, I was diagnosed with malignant melanoma. It was successfully removed, but now my body knows how to grow cancer and I'm at a higher risk for the return of this cancer and other really scary cancers.

I definitely have loosened up my spending, but in areas of travel and fun with friends and family, rather than buying things. I am also downsizing to a smaller home. The stuff in my big place is just stuff and I don't really care about it or the house as I used to. If I didn't love my current job/friends/location so much, I would sell everything and move into an RV and travel.
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Re: The Fine line between responsible and selfish/material

Postby reason-logic » Sun Mar 17, 2013 9:34 pm

I have met many wealth but unhappy individuals in my life. Many of these people are so afraid of either losing what they have, or so concerned about having more than everyone else, that they never enjoy what they have earned. A lot of these people lived a spartan lifestyle, died, and their children blew through their life savings in a few decades.

When investing, we try to diversify to reduce risk. In life, you should also diversify. Adopt an approach that balances prudent consumption while realizing while there is always an opportunity to earn more money, you only have so much time.
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Re: The Fine line between responsible and selfish/material

Postby scouter » Sun Mar 17, 2013 10:08 pm

I found that we naturally loosened up our spending as we gotten closer and closer to "our number". There were years where we had to tighten up to stay on track, and other years where we could splurge a little. But what we've always told our kids is: "The best thing money can buy is not stuff. It's not even experiences, like great trips. It's the freedom to spend your time doing what you really want to do, and to be able to give when you want to help." (of course, "doing what you really want to do" may involve a Ferrari and world travel, so never mind...)
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Re: The Fine line between responsible and selfish/material

Postby AustenNut » Sun Mar 17, 2013 10:45 pm

This is a very interesting question. Part of it, I feel, really depends on a family's income. Take two families, for example. Family A has an income of $60,000. If 20% goes toward taxes and 30% towards savings, they are left with $30,000 to cover all their other expenses. Family B has an income of $200,000. If 30% goes toward taxes and 30% toward savings then they are left with $80,000 to cover all their other expenses. That amount can make a big difference in how frugal one's life is. Even though their savings rates are the same, Family A has to "deny" itself far more, even though their savings rates are the same. And then Family A asks itself why is it so hard to deny themselves when Family B seems to have no problem doing so, at least on a Boglehead forum where savings rates are discussed (but not necessarily in relation to one's income range).

That being said, I have recently started working part-time in an accounting office. I have been very surprised to see the amounts being reported for charitable contributions by many of the clients. Though I've only seen a limited sample, I have yet to see any of these very high income individuals donate more than 1% of their incomes to charitable contributions.

As a couple, my husband and I are still seeking that balance. Like others have mentioned, hanging around these forums make people (at least me) want to ratchet up our savings rate. Yet when we look at the sacrifices that would need to be made, discussions regarding quality of life arise. Looking forward to the continuation of this discussion.
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Re: The Fine line between responsible and selfish/material

Postby umfundi » Sun Mar 17, 2013 11:06 pm

AustenNut wrote:As a couple, my husband and I are still seeking that balance. Like others have mentioned, hanging around these forums make people (at least me) want to ratchet up our savings rate. Yet when we look at the sacrifices that would need to be made, discussions regarding quality of life arise. Looking forward to the continuation of this discussion.

Austen,

If you have not yet read "The Millionaire Next Door" you may find it inspiring and instructive.

Addall.com/used brings up (for example)
http://www.abebooks.com/servlet/BookDet ... a&para_l=0

There are many copies for $1 plus shipping.

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Re: The Fine line between responsible and selfish/material

Postby wshang » Sun Mar 17, 2013 11:15 pm

Later this month I am giving a talk about the hormonal basis of hunger and experienced a eureka moment when reading this thread.

For those who have overeaten in the past, their stomach has hypertrophied, (grown larger) and has more cells producing Ghrelin when ever they eat. Not only does it take more food to stretch the side of the stomach to the same degree, the hunger hormone Ghrelin remains elevated. Studies have shown that even a year after they have lost weight, they still feel hungry. If one doesn't become overweight, this shift in the setpoint doesn't occur. Personally, I've never felt deprived in terms of satiety.

I think the same analogy holds in spending. It doesn't feel like denial to me (a nonglutton). Most material goods don't have any hold on my happiness and over the years, my wife and I are happy with a low setpoint burn rate. Now, having reached our number, I am overjoyed that we have 'bought' our freedom. Its either the future or the present YOU - no selfishness involved.
“. . . extraordinary wealth can be made by knowing the future" - Harry Dent
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Re: The Fine line between responsible and selfish/material

Postby jollystomper » Mon Mar 18, 2013 7:45 am

frugalhen wrote:What is the balance between being responsible for oneself and saving/delaying gratification and being a miser and being overly materialistic? How do you balance these things mentally and emotionally, and of course, financially?


Very good question!

This is what DW and I believe. From a financial perspective, we never wanted to be a financial burden on anyone else. So we earned, saved, and invested with the goal of not being dependent on others (including the government, in not assuming that SS would be there when we reached that age).

In terms of being materialistic, we focused on what we wanted, not what others have. We saved to get what we wanted as much as possible, and learned to limit credit.

Whenever we received an unexpected financial gift we followed our own 20/80 rule: have fun with 20% of the after tax amount, and save/invest the other 80%.

While overall we are careful to spend, there is nothing wrong with "splurging" in certain areas and we build that into our budget. We each set aside a portion of money every month for our "personal mad money" account. This is money we can each spend on whatever we want, no questions asked. We can spend it all that month, or let it build to buy something bigger. It has been use for everything from fine jewelry (DW) to computers (me) to even assisting a friend to pay an unexpected bill.

And finally, we donate generously to charities, more than 10% of our pre-tax income.

If one has earned the money through hard work and skills, I don't see how they can ever be called "selfish", if the market for their skills is such that they are able to earn a good living. But I have always believed in the saying "It's not what you earn, it is what you do with what you earn, that makes the difference". We feel by seeking first to not be a burden on others is responsible, and enables us to do other things to avoid being selfish and material.
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Re: The Fine line between responsible and selfish/material

Postby HardKnocker » Mon Mar 18, 2013 7:48 am

"I make myself rich by making my wants few."

Or something like that.

A key strategy to increase your wealth is not to increase your spending as your income increases. Maintain your current consumption and invest your increased earnings. Most people do the opposite and as a result do not amass wealth.

If wealth building is your goal and not consumption, then you must make choices.

I've heard 75% of NFL players are broke 3 years after retiring from the game. They spend it.
“Gold gets dug out of the ground, then we melt it down, dig another hole, bury it again and pay people to stand around guarding it. It has no utility.”--Warren Buffett
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Re: The Fine line between responsible and selfish/material

Postby investingdad » Mon Mar 18, 2013 8:18 am

Yes. A large part of our mindset is to not be a burden on anyone else and to reduce as much as possible (or eliminate entirely) the need to rely on any form of government assistance (social security, etc). We have always assumed that SS will not be available to us when we retire and have tried to plan accordingly.
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Re: The Fine line between responsible and selfish/material

Postby guitarguy » Mon Mar 18, 2013 8:22 am

For us it's all about balance. On a monthly basis we make sure we save for retirement, pay extra on debt, set aside a few bucks for vacations and home improvements, and even (yes...oh the shock!!) a few bucks a month to go out for dinner with friends. We try to do what makes us happy and not spend too long fretting about the little things. If we like the name brand peanut butter better...we're going to spend the extra dollar and just buy it. :)

When it comes down to material things or "enjoying life"...we just do it responsibly. We go on vacation every year for our anniversary. Do we go on big extravagant vacations? Nope. Can't afford to (yet). Weekend getaways, staying with out of state friends, etc...much more our speed. We have a great time for relatively low cost.

Want to buy something big/expensive? Save up slowly for it and wait until you can afford it. If you still want it at that point, buy it. For us, it's a new patio in our backyard. The money spent won't buy happiness, but after we get that patio and we have a better place to entertain friends and have lots of laughs and good times...well you get the point.

Life is to short to deny yourself everything you want until you're middle aged. Just be responsible and have balance. It doesn't make sense to stray too far in either direction. Just how we percieve things.
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Re: The Fine line between responsible and selfish/material

Postby VictoriaF » Mon Mar 18, 2013 8:26 am

I think there is a peculiar analogy between (1) the sequence of market returns in retirement and (2) the order of saving and spending.

It's well known that for retirees with identical asset amounts and allocations, disbursement strategies, and 30-year performance--the endgame strongly depends on the sequence of returns. If one retiree faces bull markets in the beginning and bear markets at the end, he makes out (dies) as a bandit. If another retiree encounters bear markets first and bull markets later, she ends up destitute.

Likewise, those who save first and spend later do much better than those who spend first and save later. When you work and face uncertainties--you save. When you quit and already have all your saving responsibilities performed, and the uncertainties are somewhat limited--you spend. And so there is need for both, some prudent life-stage appropriate balance between saving and spending--and cognizance of the inflection point when cautious saving can be turned around into indulgent spending.

Victoria
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Re: The Fine line between responsible and selfish/material

Postby 1210sda » Mon Mar 18, 2013 8:43 am

Epsilon Delta wrote: "there's nothing I can spend money on that will make me happier, so I won't spend it."


Excellent !

What I try to balance is the happiness that I get from the "stuff" vs. the guilt I feel from having spent too much.

When the happiness is greater, I get the "stuff"; When the guilt is greater, I don't.

When they are equal, there is harmony.

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Re: The Fine line between responsible and selfish/material

Postby Hikes_With_Dogs » Wed Mar 20, 2013 12:06 pm

Hi Boggles.

I'm new here, and looking forward to learning a lot.

That said, this topic is definitely at the crux of any thrifty saver. Each one of us has our own balance that we have to find that gives us that warm fuzzy feeling of saving enough, and yet allows us to live in our day-to-day lives.

I'll share a bit about myself since nobody here knows me yet.

My miserliness comes from my father, who made a healthy income and saved and saved and saved for retirement. But he died young, and never got to enjoy it. All that money, and he's in the ground. He could have had another vacation, or enjoyed a new pair of shoes, or a finer lunch. But he didn't. And he never will.

Life is short & precious. I don't believe in denying myself anything. That said - my wants are few and far between.

My mantra is pretty simple: Save the % I need to so I obtain my retirement goals, and spend the rest if I want. But also ever present in my mind is that money literally doesn't buy happiness. Experiences make you happy, so I am often more willing to spend money on that then on 'stuff.'

I am lucky and I make plenty of money to achieve both goals (saving & spending) without struggling. So, in general, I am a cheap and thrifty person. But on occasion I'll buy $100 pair of shoes, or spend $5 on a latte I don't need, or upgrade myself to a nicer hotel room. Not often, but enough that I still feel like I'm enjoying some of the things people should enjoy in life.

And while I'm sipping my latte, I'm watching my retirement funds grow, hoping my family and I will live long enough to spend it.
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Re: The Fine line between responsible and selfish/material

Postby Jay69 » Wed Mar 20, 2013 2:47 pm

frugalhen wrote:What is the balance between being responsible for oneself and saving/delaying gratification and being a miser and being overly materialistic? How do you balance these things mentally and emotionally, and of course, financially?


I'm about the same age as you. I found that after I took the Boglehead oath 2 or so years ago I maybe hanging on to tight to the wallet now. I never had to hard of a time spending cash when I was in my 20's, now when I open the wallet moths fly out. Having teenage kids may have something to do with it, not much time for hobbies, not that its a bad thing. I'm trying to find a balance myself :sharebeer
"Out of clutter, find simplicity” Albert Einstein
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