Why do you LBYM? Why do you save and invest?

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MrNewEngland
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Re: Why do you LBYM? Why do you save and invest?

Post by MrNewEngland » Thu Sep 28, 2017 9:57 am

I'm an oddball that I am an extremely optimistic person that has an irrational fear of losing my job and being out on the streets. Despite having been gainfully employed for the past 15 years I have a feeling of impending doom all the time. The idea of financial independence is the most comforting thing that I can imagine. I'm still a long ways off because even though I follow the idea of LBYM I still don't live like a hermit. I go on trips and enjoy life... I just think I would enjoy everything (including work) if I was FI.

retire57
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Re: Why do you LBYM? Why do you save and invest?

Post by retire57 » Thu Sep 28, 2017 9:59 am

Watching our portfolio swell over the years means more to us than fancy houses, cars, or jewels.

DrGoogle2017
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Re: Why do you LBYM? Why do you save and invest?

Post by DrGoogle2017 » Thu Sep 28, 2017 10:01 am

KlangFool wrote:
Thu Sep 28, 2017 9:52 am
DrGoogle2017 wrote:
Thu Sep 28, 2017 9:43 am
I focus on big items, not small potatoes because it's stressful for me to pinch pennies. Stress can kill you. Why do you buy food at McDonalds? You may save a few bucks, but what about your health? What about long term consequences? Bad health costs money in the long run.
DrGoogle2017,

My question on this topic is why do you focus on saving at all? Big or small item is besides the point. Normal folks do not care about saving and investing at all.

KlangFool
I thought that was a rhetoric question. Why? Simple answer, because it costs money to live and you don't work forever, money has to come from somewhere.

soccerdad12
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Re: Why do you LBYM? Why do you save and invest?

Post by soccerdad12 » Thu Sep 28, 2017 10:06 am

For me it is 2 fold.

1: Fear. For some reason I always fear that I don't have enough and that it will run out. It is irrational as my net worth is in the very low 8 figures (entirely self-made). It isn't consuming, but always is in the back of my head. I don't think there will ever be a day when I think I have too much saved.

2: Don't need stuff. My wife and I have almost the same level of spending as we had 25 years ago even though income is way up. We do spend a little more, but still shop at TJ Max etc... Neither of us have a desire to spend for the sake of spending.

financeidiot
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Re: Why do you LBYM? Why do you save and invest?

Post by financeidiot » Thu Sep 28, 2017 10:12 am

lostdog wrote:
Thu Sep 28, 2017 8:19 am
We started LBYM when I experienced my first "bad boss". I was miserable every day because of this person. At the time I was with the company for a long time and making a lot of money. I knew the only way out was saving hard. I learned about FI and knew the only way to get back at your bad employer was to reach FI. I knew when investing in broad market index funds my bad boss would still be working hard to fatten my wallet after I left.
Same here.

I had a bad boss and was constantly stressed out about money and my job and an apartment with rent I couldn't afford. Got high blood pressure and gray hairs at 25 years old. Girlfriend at the time and I broke up over money with her in a similar situation. I quit that job and worked somewhere else, then my old employer tried to enforce a noncompete and get me fired at my new job, they failed. Then my new employer was sold and everyone at the company was laid off. Luckily I had already accepted a new job two days before.

I live below my means because life is miserable when you're worried about money, it's miserable when you work for bad people, and sure things don't exist. When you have the means to choose who you are, what you do, and who you are with, life is good.

KlangFool
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Re: Why do you LBYM? Why do you save and invest?

Post by KlangFool » Thu Sep 28, 2017 10:14 am

DrGoogle2017 wrote:
Thu Sep 28, 2017 10:01 am
KlangFool wrote:
Thu Sep 28, 2017 9:52 am
DrGoogle2017 wrote:
Thu Sep 28, 2017 9:43 am
I focus on big items, not small potatoes because it's stressful for me to pinch pennies. Stress can kill you. Why do you buy food at McDonalds? You may save a few bucks, but what about your health? What about long term consequences? Bad health costs money in the long run.
DrGoogle2017,

My question on this topic is why do you focus on saving at all? Big or small item is besides the point. Normal folks do not care about saving and investing at all.

KlangFool
I thought that was a rhetoric question. Why? Simple answer, because it costs money to live and you don't work forever, money has to come from somewhere.
DrGoogle2017,

You know and believe this. But, this is not normal. Most folks believe that they will be fully employed until retirement age. Then, social security will take care the rest. So, why do you believe the way that you are?

KlangFool

flyingaway
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Re: Why do you LBYM? Why do you save and invest?

Post by flyingaway » Thu Sep 28, 2017 10:19 am

lostdog wrote:
Thu Sep 28, 2017 8:19 am
We started LBYM when I experienced my first "bad boss". I was miserable every day because of this person. At the time I was with the company for a long time and making a lot of money. I knew the only way out was saving hard. I learned about FI and knew the only way to get back at your bad employer was to reach FI. I knew when investing in broad market index funds my bad boss would still be working hard to fatten my wallet after I left.
If you LBYN and finally reached FI and left your bad boss. Who did win, your boss or you?

mak1277
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Re: Why do you LBYM? Why do you save and invest?

Post by mak1277 » Thu Sep 28, 2017 10:19 am

I've always pretty much lived the same lifestyle and done what I wanted to do.

When I first started my career, I lived paycheck to paycheck and didn't save in my 401k....because I couldn't save AND live my life the way I wanted.

Now that I make (a lot) more money, I can still live pretty much the same lifestyle but also save. I live below my means mainly because of my income, not because I'm smart or noble.

Then, when I realized I could retire (very) early, I had a real reason for living below my means.

KlangFool
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Re: Why do you LBYM? Why do you save and invest?

Post by KlangFool » Thu Sep 28, 2017 10:21 am

flyingaway wrote:
Thu Sep 28, 2017 10:19 am
lostdog wrote:
Thu Sep 28, 2017 8:19 am
We started LBYM when I experienced my first "bad boss". I was miserable every day because of this person. At the time I was with the company for a long time and making a lot of money. I knew the only way out was saving hard. I learned about FI and knew the only way to get back at your bad employer was to reach FI. I knew when investing in broad market index funds my bad boss would still be working hard to fatten my wallet after I left.
If you LBYN and finally reached FI and left your bad boss. Who did win, your boss or you?
Success is the best revenge.

KlangFool

lostdog
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Re: Why do you LBYM? Why do you save and invest?

Post by lostdog » Thu Sep 28, 2017 10:22 am

financeidiot wrote:
Thu Sep 28, 2017 10:12 am
lostdog wrote:
Thu Sep 28, 2017 8:19 am
We started LBYM when I experienced my first "bad boss". I was miserable every day because of this person. At the time I was with the company for a long time and making a lot of money. I knew the only way out was saving hard. I learned about FI and knew the only way to get back at your bad employer was to reach FI. I knew when investing in broad market index funds my bad boss would still be working hard to fatten my wallet after I left.
Same here.

I had a bad boss and was constantly stressed out about money and my job and an apartment with rent I couldn't afford. Got high blood pressure and gray hairs at 25 years old. Girlfriend at the time and I broke up over money with her in a similar situation. I quit that job and worked somewhere else, then my old employer tried to enforce a noncompete and get me fired at my new job, they failed. Then my new employer was sold and everyone at the company was laid off. Luckily I had already accepted a new job two days before.

I live below my means because life is miserable when you're worried about money, it's miserable when you work for bad people, and sure things don't exist. When you have the means to choose who you are, what you do, and who you are with, life is good.
If things get really bad at work because of your boss, human resources is never on your side. FI seems to be the only sure way to be free from a bad employer. Sometimes the grass isn't always greener on the other side when looking for a new employer. It's even more bitter sweet knowing their working hard to fatten your wallet when you walk away.
"Our life is frittered away by detail. Simplify, simplify." -Thoreau

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DaftInvestor
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Re: Why do you LBYM? Why do you save and invest?

Post by DaftInvestor » Thu Sep 28, 2017 10:23 am

I grew up in a household where we struggled financially. No money for new clothes; food was whatever we could find cheapest for the week; etc.
I work in an industry where lay-offs are common.

Put the two together and I have always saved in case I end up in a less fortunate situation myself - never wanted to feed the kids hot-dogs and canned-corn out of necessity. I then started to apply to my savings habits to retirement and college savings plans.

Chuck
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Re: Why do you LBYM? Why do you save and invest?

Post by Chuck » Thu Sep 28, 2017 10:37 am

I've found that I enjoy my job more the more I don't need it.

jimishooch
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Re: Why do you LBYM? Why do you save and invest?

Post by jimishooch » Thu Sep 28, 2017 10:46 am

The great recession was the wake up call...

Texanbybirth
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Re: Why do you LBYM? Why do you save and invest?

Post by Texanbybirth » Thu Sep 28, 2017 10:52 am

Chuck wrote:
Thu Sep 28, 2017 10:37 am
I've found that I enjoy my job more the more I don't need it.
That's a great line.

I save to provide for my family in the event of my sudden demise, to eventually quit working (retire?), to provide my future self with spending power from my current self as opposed to spending my future self's money today.

DrGoogle2017
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Re: Why do you LBYM? Why do you save and invest?

Post by DrGoogle2017 » Thu Sep 28, 2017 11:01 am

KlangFool wrote:
Thu Sep 28, 2017 10:14 am
DrGoogle2017 wrote:
Thu Sep 28, 2017 10:01 am
KlangFool wrote:
Thu Sep 28, 2017 9:52 am
DrGoogle2017 wrote:
Thu Sep 28, 2017 9:43 am
I focus on big items, not small potatoes because it's stressful for me to pinch pennies. Stress can kill you. Why do you buy food at McDonalds? You may save a few bucks, but what about your health? What about long term consequences? Bad health costs money in the long run.
DrGoogle2017,

My question on this topic is why do you focus on saving at all? Big or small item is besides the point. Normal folks do not care about saving and investing at all.

KlangFool
I thought that was a rhetoric question. Why? Simple answer, because it costs money to live and you don't work forever, money has to come from somewhere.
DrGoogle2017,

You know and believe this. But, this is not normal. Most folks believe that they will be fully employed until retirement age. Then, social security will take care the rest. So, why do you believe the way that you are?

KlangFool
I don't know if most folks believe that way. Didn't the Great Recession teach them something? I warn the younger generation, aka my kids, that they should save money, not every dime, but some money because they can't count on their jobs forever. Why do I believe that way? Every Recession for whatever reason, maybe working for small companies, I was unemployed. That's how I learned, yes the hard way.

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Abe
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Re: Why do you LBYM? Why do you save and invest?

Post by Abe » Thu Sep 28, 2017 11:07 am

I like the 10 chicken nuggets for $1.49 at Burger King.

But, speaking of saving money, I was at Walmart the other day and needed some deodorant. I had a choice of Mennen Speed Stick Regular: a 1.8 oz size for .98c or a 2 pack (3oz each) for a total of 6 oz that cost $3.76. Being a frugal person, I got out my pocket calculator and computed the cost per oz. Turns out the two value pack was higher than the single pack. That doesn't seem right does it. You would think the Value two pack would be cheaper. Got to watch those folks. They'll trick you if you're not careful. :happy
Slow and steady wins the race.

randomguy
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Re: Why do you LBYM? Why do you save and invest?

Post by randomguy » Thu Sep 28, 2017 11:11 am

KlangFool wrote:
Thu Sep 28, 2017 8:32 am
Folks,

I started this topic because in my case, this is normal.

1) The average gross saving rate in my country is 30+%.

2) Looking for the bargain is part of the culture.

3) My family is multi-generations business family. Investing is part of the regular dining table discussion.

This is part of my community/culture. It extends beyond my family. This is the norm. So, I wonder how a person in a culture that this is not normally done come to this path.

KlangFool
And given all that, what is everyone doing with their wealth ? Is everyone retiring at 50 or are the amassing huge fortunes?

randomguy
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Re: Why do you LBYM? Why do you save and invest?

Post by randomguy » Thu Sep 28, 2017 11:15 am

simmias wrote:
Thu Sep 28, 2017 7:06 am
nisiprius wrote:
Thu Sep 28, 2017 6:57 am
It takes twenty seconds to stop, bend over, pick up the penny, straighten up, and put it in your pocket.
Whenever anyone asks the average age of the bogleheads user, I'm going to reference this post. :D

I find it hard to believe it takes anyone 20s to pick up a penny. They can either do it in 10s or not at all:)

But lets run the math .01/20s = 3 cents/min or 1.80 hour. Wouldn't you be better off working an hour at 8 bucks/hr instead of picking up that penny? Something about being pennywise and pound foolish:) Not to mention it is really rude. Think of how exciting a 5 year old will be to see the penny and how much joy are you are removing from the world by your greed:)

chevca
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Re: Why do you LBYM? Why do you save and invest?

Post by chevca » Thu Sep 28, 2017 11:18 am

I LBYM now because I used to not do so. I/we (ex) used to be in fairly big debt, then divorced, got debt paid off, lived paycheck to paycheck.... and it stressed me out beyond belief!! Never want that again!

Late 30's I finally decided to educate myself on saving and investing... even though folks older and wiser than I had told me to all along. Now, I can't believe I ever lived like I used to.

I don't get into pinching pennies, nor worrying about the dollar menu at McD's. If one is worried about pennies or a couple bucks, why are they eating out anyway? :wink: I still spend and have some fun. But, I now make sure to pay myself first and make sure some it left over at the end of the month. I won't ever be super rich and I'm fine with that. But, I will be comfortable and have some savings... that feels good.

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Abe
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Re: Why do you LBYM? Why do you save and invest?

Post by Abe » Thu Sep 28, 2017 11:22 am

randomguy wrote:
Thu Sep 28, 2017 11:15 am
simmias wrote:
Thu Sep 28, 2017 7:06 am
nisiprius wrote:
Thu Sep 28, 2017 6:57 am
It takes twenty seconds to stop, bend over, pick up the penny, straighten up, and put it in your pocket.
Whenever anyone asks the average age of the bogleheads user, I'm going to reference this post. :D

I find it hard to believe it takes anyone 20s to pick up a penny. They can either do it in 10s or not at all:)

But lets run the math .01/20s = 3 cents/min or 1.80 hour. Wouldn't you be better off working an hour at 8 bucks/hr instead of picking up that penny? Something about being pennywise and pound foolish:) Not to mention it is really rude. Think of how exciting a 5 year old will be to see the penny and how much joy are you are removing from the world by your greed:)
This is the way I look at it. You have to bend over 100 times to make a dollar. Having said that, I have to admit I still pick up pennies. Can't tell you why. It's like a little voice in my head saying, "you better pick that penny up". :wink:
Last edited by Abe on Thu Sep 28, 2017 11:49 am, edited 1 time in total.
Slow and steady wins the race.

DarthSage
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Re: Why do you LBYM? Why do you save and invest?

Post by DarthSage » Thu Sep 28, 2017 11:25 am

Why? Two main reasons:

(1) Fear. I grew up poor. It changes who you are. Not poverty itself, but that constant insecure feeling that you could lose your meager possessions at any time.

(2) I like the challenge of it. As an electrical engineer, I love math problems, and I consider spending as little as possible to be a math problem. It becomes a game.

Fortunately, my kids see the game aspects, not the fear, so they seem to be growing up with a more healthy relationship with money than I have.

Also, it's important to remind my self that not all spending is bad. Quality education and family experiences are priceless.

rkhusky
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Re: Why do you LBYM? Why do you save and invest?

Post by rkhusky » Thu Sep 28, 2017 11:28 am

I grew up in a family of limited means, but not necessarily LBYM. I never felt insecure. I learned to live frugally in college. I know I could go back to eating Rice-A-Roni or Mac n Cheese for three meals straight if I had to. I am content to live relatively frugally now, but saving allows me to now live without many financial concerns. And I know that I can buy things if I really want them.

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Procopius
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Re: Why do you LBYM? Why do you save and invest?

Post by Procopius » Thu Sep 28, 2017 11:29 am

I am the target audience for “If You Can.” My generation has no pension plans, subsidized higher education, or job security, even as we pay ever more for necessities like housing, education, childcare, and healthcare. As a result, we have to save much more for retirement than the earlier generations, who are fast pulling up the ladder behind them. The financial future for most millennials is grim.

The Wizard
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Re: Why do you LBYM? Why do you save and invest?

Post by The Wizard » Thu Sep 28, 2017 11:31 am

I was always LBYM to a degree. Back in my 20s, expenses were high relative to income, with buying a house and all, so I think 5% of salary plus employer match was all I could put away.

In subsequent decades, I increased my savings rate 1% or so with some pay raises. I still had decent funds leftover for reasonable travel and recreation; I wasn't saving so much as to make life arduous.

In my mid fifties, after my last kid finished college, I was finally able to max both my 403(b) and Roth IRA, which I did for several more years before retiring.

Point is, you need to keep an eye on the goal. Starting around age 50, I would ponder where I stood as regards retirement income a few years hence.
Initial estimates weren't so great, so continue upping the savings rate. Eventually I got there. :)

Nowadays, one thing I focus on is where to find $1 oysters every week...
https://boston.eater.com/maps/dollar-oysters-boston
Attempted new signature...

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JoMoney
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Re: Why do you LBYM? Why do you save and invest?

Post by JoMoney » Thu Sep 28, 2017 11:32 am

KlangFool wrote:
Wed Sep 27, 2017 10:32 pm
...So, it turns out that we are not normal. We look for bargains and we found them. But, others don't do that...
Economics purported "rational agent" is not the norm.

http://www.nybooks.com/articles/2015/10 ... -fools-us/
(a good article on Robert Shiller's book: Phishing for Phools )
"To achieve satisfactory investment results is easier than most people realize; to achieve superior results is harder than it looks." - Benjamin Graham

marcopolo
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Re: Why do you LBYM? Why do you save and invest?

Post by marcopolo » Thu Sep 28, 2017 12:07 pm

Grew up in a LBYM family, so I saw example of it growing up. But, in my youth, I made a lot of youthful mistakes (but had a LOT of fun). After I had a family of my own, I settled back into lessons i learned when i was younger.

I think most people don't know or don't care about the impacts their behavior today will have on their lifestyles in the future. To give one example: My employer 401K matches dollar-for-dollar up to 10% of income. If you set it up properly (and have enough income), you can get up to $27K in matching contributions this year. Yet, most years our plan fails the "discrimination test" and we get a portion of our contributions returned to us because many people do not take advantage of the free money. And this is in a setting where everyone makes well above the US median income.
Once in a while you get shown the light, in the strangest of places if you look at it right.

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Re: Why do you LBYM? Why do you save and invest?

Post by ThrustVectoring » Thu Sep 28, 2017 12:41 pm

I have very modest needs and I'm compensated generously. I don't really control my spending and have a roughly 33% savings rate. Might as well make my long-term plans work out well for me.

tsewell10
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Re: Why do you LBYM? Why do you save and invest?

Post by tsewell10 » Thu Sep 28, 2017 12:46 pm

We live below our means for a variety of reasons. We have a goal to be financially independent at a relatively young age for the freedom it provides [OT comment removed by moderator prudent] . I also like the feeling of knowing we are working toward a common goal together. Like many other people LBYM was instilled in me by my parents although investing was not. Seeing that they are financially free now simply from LBYM and rarely investing (they are the type to invest or not invest for 4 straight years depending on who is president) gives me a lot of motivation to see what I can do by saving AND investing.

KlangFool has asked several people what makes them different than the average person who doesn't invest.

For one, my wife and I have very little desire to impress others. You will almost never catch me wearing anything but gym shorts and a tshirt away from work. I'm not sure this is a common trait and is likely learned or hereditary because my parents are the same way.

Secondly, I have always loved math and learning. I think both of these things lead me to be more interested in what is probably a boring topic for most people. The idea of rebalancing, playing with different retirement calculators, or writing a budget are all fun, relaxing thoughts to me.

Third, we both "trust the math" and history of the stock market. I have a lot of friends who spend everything they have because "I could lose it all in the stock market so why chance it?". Ideas like these are enough to scare away most people who didn't really want to save to begin with. Delayed gratification just isn't a term in most people's vocabulary.

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Re: Why do you LBYM? Why do you save and invest?

Post by climber2020 » Thu Sep 28, 2017 12:52 pm

KlangFool wrote:
Wed Sep 27, 2017 10:32 pm
What makes you different from others?
I think a characteristic that is common here but is not common in the general public is the ability to delay gratification and consider one's life in the distant future. I know many people who can't think past next Tuesday.

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Re: Why do you LBYM? Why do you save and invest?

Post by peterinjapan » Thu Sep 28, 2017 12:55 pm

My personal life philosophy is, find a job you're good at and enjoy, and work so much that you don't know your own salary, and certainly don't have time enough to spend it all. That has worked out well, I have money to pay down my mortgages and invest, and I'm focused on my company so it's enjoyable for me, though of course I want to retire by the age of 58 or so.

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Re: Why do you LBYM? Why do you save and invest?

Post by WhiteMaxima » Thu Sep 28, 2017 12:56 pm

I would go to Costco to buy a $4.99 roast chicken and add gas. Beat that McDonald $4 20 pieces chicken nugget.

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Re: Why do you LBYM? Why do you save and invest?

Post by wrongfunds » Thu Sep 28, 2017 1:01 pm

Abe wrote:
Thu Sep 28, 2017 11:07 am
I like the 10 chicken nuggets for $1.49 at Burger King.

But, speaking of saving money, I was at Walmart the other day and needed some deodorant. I had a choice of Mennen Speed Stick Regular: a 1.8 oz size for .98c or a 2 pack (3oz each) for a total of 6 oz that cost $3.76. Being a frugal person, I got out my pocket calculator and computed the cost per oz. Turns out the two value pack was higher than the single pack. That doesn't seem right does it. You would think the Value two pack would be cheaper. Got to watch those folks. They'll trick you if you're not careful. :happy
Being of the type of the person who would be able to do this calculation in my own head means I could never understand how it is even possible to NOT LBYM! Now, savings and investing, that is little bit different than LBYM. LBYM does NOT imply savings and investing. For that, my wife forced me to enroll in to 401K.

rosylenm
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Re: Why do you LBYM? Why do you save and invest?

Post by rosylenm » Thu Sep 28, 2017 1:07 pm

I let myself get burned out at work in 2014. My blood pressure was way too high, stressed out all the time, making doctors appointments on court holidays because I couldn’t take time off. It was all bad. The only option I could see was to quit. I had a small chunk of change in savings and a contracting gig lined up (less than 20 hours/week) so I quit. I spent the following twenty months living on a little more than half my normal income until the contracting gig turned into a regular full-time position. From that point, my eyes were opened to how little money I needed to live well. I can’t remember what I was reading, but it mentioned Mr. Money Mustache and how he was able to stop working a regular job by the time he was 30. I spent a couple of months reading every single one of his blog posts, which led me to JL Collins for another month or two which led me to Bogleheads.

It’s too late for me to retire by 30, but I have a plan for and am making progress toward FI thanks to all of the above.

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Re: Why do you LBYM? Why do you save and invest?

Post by jadd806 » Thu Sep 28, 2017 1:14 pm

I learned the power of saving from my grandfather. I learned what not to do from watching the financial trainwreck that is my own father. My grandfather and I joke about how "the money gene" must have skipped a generation.

I LBYM because the alternative is too stressful. To me, money is the ultimate tool of freedom and security.

I am thankful that I discovered Mr. Money Mustache and the Bogleheads at 18 years old. At 24 now, I am in a very good financial situation thanks to implementing the invaluable knowledge that I have gained from these forums.

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TD2626
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Re: Why do you LBYM? Why do you save and invest?

Post by TD2626 » Thu Sep 28, 2017 1:17 pm

FIREchief wrote:
Thu Sep 28, 2017 12:30 am
KlangFool wrote:
Wed Sep 27, 2017 10:32 pm
My question to the member of the forum is this. What makes you different from others?
There are three groups of people:
a) don't understand math
b) understand math but don't want to be bothered with it
c) understand math and use it to their powerful advantage

What makes some/all of us different is that we fall into category "c." 8-)
Option C:
It's often said of compound interest that it's the 8th wonder of the world.

Those who choose option A often pay compound interest in the form of debt payments.

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Re: Why do you LBYM? Why do you save and invest?

Post by The Wizard » Thu Sep 28, 2017 1:29 pm

TD2626 wrote:
Thu Sep 28, 2017 1:17 pm
FIREchief wrote:
Thu Sep 28, 2017 12:30 am
KlangFool wrote:
Wed Sep 27, 2017 10:32 pm
My question to the member of the forum is this. What makes you different from others?
There are three groups of people:
a) don't understand math
b) understand math but don't want to be bothered with it
c) understand math and use it to their powerful advantage

What makes some/all of us different is that we fall into category "c." 8-)
Option C:
It's often said of compound interest that it's the 8th wonder of the world.

Those who choose option A often pay compound interest in the form of debt payments.
If not for Option a, we would not have much of an underclass.
Think about that for a moment...
Attempted new signature...

fantasytensai
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Re: Why do you LBYM? Why do you save and invest?

Post by fantasytensai » Thu Sep 28, 2017 2:17 pm

Because I hate my profession, but I invested years of my life into getting a degree and license for the earning potential, so I cannot (or should I say, choose not to) turn back.

So the compromise I made myself is to shorten the amount of my exposure to the profession. I will work 10 years with extreme savings, and then have enough to do what I want to do, which is to raise a few animals on a 2 acre farmland.

deltaneutral83
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Re: Why do you LBYM? Why do you save and invest?

Post by deltaneutral83 » Thu Sep 28, 2017 2:27 pm

For me, I'm competitive, and money is a game. The same rush of dopamine that most millennials get when they get "likes" on social media I get from buying something below market value. Bigger the item/savings, bigger the rush for me. The mentality hammered home a long time ago by my dad has stuck. I despise small monthly payments on extraneous things (NFLX, Pandora, iTUNES, etc etc) as well as subscriptions online. This website has given me more knowledge than any paid financial publication within about the first two weeks of reading (although I spent the first two weeks reading non stop). Being competitive is usually a disaster in investing, but understanding the drip drip drip of passive investing by reading all the books has sealed the deal for me on indexing. Boglehead's "favorite" money man Dave Ramsey calls it the tortoise vs the hare. I also get that rush of dopamine whenever my orders for VTI and VEU fill in my taxable because I quickly compute using the rule of 72 to determine what it will be worth in 32 years (9% CAGR used = 8 year doubling iteration, although past performance......) . I drive a used car, but not like some on here past 10 years, and the real estate situation is modest. Vice might be travel, but credit card games reduce that cost to nearly 0. I don't really look around too much at other people and try to convince them to change there ways because 30 years of bad habits isn't going to be broken from the outside. I honestly respect those that have been through the ringer because of the knowledge they did without growing up and then come to the other side rather than the folks who had financial boot camp from day one like myself who were given the tools to build what you want to build.

delamer
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Re: Why do you LBYM? Why do you save and invest?

Post by delamer » Thu Sep 28, 2017 2:53 pm

All four of my grandparents were immigrants to the USA. My grandmothers both were widowed in their 60's with very few financial resources except minimal Social Security benefits. They both relied on their children to support them, and both lived to their early 90's.

That is why I've lived below my means, and saved and invested. I wouldn't go so far as to say that I feared becoming a bag lady, but I knew the future was uncertain and money is a form of security. It helped that my parents were frugal. Slowly but surely they became middle-class, so I had seen that it was possible to start with nothing and build a comfortable life.

dn160
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Re: Why do you LBYM? Why do you save and invest?

Post by dn160 » Thu Sep 28, 2017 3:01 pm

fantasytensai wrote:
Thu Sep 28, 2017 2:17 pm
Because I hate my profession, but I invested years of my life into getting a degree and license for the earning potential, so I cannot (or should I say, choose not to) turn back.
This speaks to me on so many levels.

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Abe
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Re: Why do you LBYM? Why do you save and invest?

Post by Abe » Thu Sep 28, 2017 3:05 pm

KlangFool wrote:
Wed Sep 27, 2017 10:32 pm
My question to the member of the forum is this. What makes you different from others? What makes you believe that you could be LBYM, save and invest to make a difference in your life? I believe this will be a very interesting topic to discuss.

Thanks in advance.
KlangFool
I remember early on thinking that if I had a million dollars I could put it in a savings account, which at the time were paying around 5%, and I would have $50k a year to spend and never have to touch my principal. I don't know why I thought that because I didn't think it was likely I would ever have that much money, nevertheless that was my thought process at the time. I don't know if that line of thinking would be any different from others or not. I do know there are people who never get past living paycheck to paycheck, and in many cases it's because of circumstances beyond their control. Some people don't even get to the paycheck stage; they live for the most part on public assistance. I feel very fortunate and lucky to some degree to be where I am today financially. Things could very well have gone the other way. Most of us on this forum are lucky just to be living in the USA where there are so many opportunities.
Slow and steady wins the race.

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Earl Lemongrab
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Re: Why do you LBYM? Why do you save and invest?

Post by Earl Lemongrab » Thu Sep 28, 2017 4:29 pm

I have the three components for the most successful results. I am by nature frugal, that is I dislike spending money, have since I was a kid. I also have simple needs and wants. Thirdly, I have had a good-paying job as an engineer for decades. So it's easy for me to live well below.

And yeah, I do those kind of analyses as mentioned in the OP (other than I am unlikely to ever be at McDonald's as that's way overpriced for what you get). You should see me grocery shopping. I have told that to people when comes to the, "you spend more with credit cards you can't help it!!!" I look at and think in one way or another about every purchase.

It is important to have an accurate comparison. Are the nuggets on the dollar menu identical to the regular ones? If they're smaller, then the comparison is not so easy. I don't know. Like I said I don't go to fast food places much. Besides the cost, I've been trying to eat a more healthy diet. The last time was a White Castle run back some time ago.
This week's fortune cookie: "You will do well to expand your horizons." Ow. Passive-aggressive and vaguely ominous.

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praxis
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Re: Why do you LBYM? Why do you save and invest?

Post by praxis » Thu Sep 28, 2017 4:44 pm

Daryl wrote:
Thu Sep 28, 2017 5:50 am
One simple word: Contentment.

I'm content with my current lifestyle. I have the time/energy to volunteer in my community and the resources to pursue some incredible hobbies. If I wasn't content, I'd probably spend some more! I've been very lucky in life in that I have a career that has provided more than enough to maintain this lifestyle.
+1

fantasytensai
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Re: Why do you LBYM? Why do you save and invest?

Post by fantasytensai » Thu Sep 28, 2017 4:56 pm

dn160 wrote:
Thu Sep 28, 2017 3:01 pm
fantasytensai wrote:
Thu Sep 28, 2017 2:17 pm
Because I hate my profession, but I invested years of my life into getting a degree and license for the earning potential, so I cannot (or should I say, choose not to) turn back.
This speaks to me on so many levels.
If you can, try not to take your work home with you. Cliche I know, but that is really so important.

BogleWogle
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Re: Why do you LBYM? Why do you save and invest?

Post by BogleWogle » Thu Sep 28, 2017 5:07 pm

Dottie57 wrote:
Thu Sep 28, 2017 7:06 am
My grandfather died in 1987 at age 90. He worked as a janitor and a ham packing factory. Yet He left 250k in Cd's.

I learned from grandpa and also inherited his saving gene.
Similar story here... maybe LBYM is genetic :happy

KlangFool
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Re: Why do you LBYM? Why do you save and invest?

Post by KlangFool » Thu Sep 28, 2017 5:16 pm

fantasytensai wrote:
Thu Sep 28, 2017 4:56 pm
dn160 wrote:
Thu Sep 28, 2017 3:01 pm
fantasytensai wrote:
Thu Sep 28, 2017 2:17 pm
Because I hate my profession, but I invested years of my life into getting a degree and license for the earning potential, so I cannot (or should I say, choose not to) turn back.
This speaks to me on so many levels.
If you can, try not to take your work home with you. Cliche I know, but that is really so important.
fantasytensai,

I work from home. I guess I am doomed. :confused :shock: :oops: :sharebeer

KlangFool

Pacman
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Re: Why do you LBYM? Why do you save and invest?

Post by Pacman » Thu Sep 28, 2017 5:36 pm

Klangfool,

I LBYM because I don't want others who have less means to feel bad about themselves. I've always felt that buying expensive things that are unnecessary (i.e. flashy cars) is almost like rubbing it in the face of others who don't have the means to afford those.

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PhysicianOnFIRE
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Re: Why do you LBYM? Why do you save and invest?

Post by PhysicianOnFIRE » Thu Sep 28, 2017 5:51 pm

I'm ordering from the McD's dollar menu and using the McD's app to score a free medium fry or milkshake!

For years, I lived below my means because I wanted to become wealthy. Now that I'm reasonably wealthy, I live below my means because I want to be free. I've earned financial independence and too much lifestyle inflation would take that away.

I drop from full time to working a 0.6 FTE position starting next week at age 41. In a couple years, I may give up regular work entirely.

:beer
-PoF

furikake
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Re: Why do you LBYM? Why do you save and invest?

Post by furikake » Thu Sep 28, 2017 6:10 pm

My parents never taught me about credit, so growing up, I always thought people had what they had because they had money to pay for it all. Then in college, the credit card companies came to get us to sign up, I signed up, I read the terms and conditions, and interest was 29.99% if I didn't pay in full, so I always paid in full every month. I thought credit card was for convenience, not for people to borrow money from. I never understood why some of my friends thought it was a good idea to pay 1/3 more for things they bought by accruing interest. So there was no way to not LBYM because I didn't know I could borrow and not pay until later.

That I met dh, who said he wanted to us to retire early. So since out of college, I had one goal which was to get us to RE. He was the one who introduced me to Vanguard, that was 20+ years ago. So here we are today. I guess you can say, things just happened. :D

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Re: Why do you LBYM? Why do you save and invest?

Post by qwertyjazz » Thu Sep 28, 2017 6:16 pm

KF
Great question. For most of my life, I did not care about money. Having a family and a bad experience at work changed that. I never really valued much things that I could be cheaply and never had the money to buy things that would have made a difference (millions of dollars level) or donated (fund a few people at a charity for a few years). So I ignored money. I figured there are only 24 hours in a day and becoming successful was more important than a few percent to be gained in personal finance. This has changed a few years ago with the family and work experience mentioned. I think there are two groups in the self selected Boglehead world: those who developed LBYM as a child and those who had some rude awakening.If I never had that experience, I still might not care about money. My bad boss was probably a good thing in that way.
QJ
G.E. Box "All models are wrong, but some are useful."

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