Was frugality a mistake? The downsides of saving too much.

Questions on how we spend our money and our time - consumer goods and services, home and vehicle, leisure and recreational activities
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jackpullo997
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Was frugality a mistake? The downsides of saving too much.

Post by jackpullo997 » Sat Mar 15, 2014 9:00 am

If this theme has already been discussed in prior threads, please post links if you are able to find them.
If there are others like me, I would enjoy reading their reflections on this subject.

I have lived the frugal philosophy for my entire adult life.
You all know the drill. No McMansions, BMWs, Rolexes.
None of the cliche things that frugal people condescendingly sneer at while assuming anyone who does enjoy those things is broke, in-debt, and one step away from bankruptcy.
Most friends and coworkers never had a sense of my net worth.

Yes, in my younger days, I got a charge of seeing my bank balance grow exponentially.
I appreciate the spoils of my frugality (career flexibility, sleeping well at night, never worrying about money)
But, can one make the mistake of being too frugal?
In what ways has frugality limited your life, held you back, and prevented you from achieving your full potential?
Maybe you were too frugal to move to the big city, and instead stayed in the sticks where real estate was cheap (for a good reason)
Well, that sure limited your career options and marriage options (Your 2 biggest financial decisions, ironically)

At some point, I finally decided to start spending a little more.
For example, I drove used cars for decades while I built my nest egg.
Today, I drive a luxury car, and love it. I actually look forward to my daily commute.
Barring a catastrophe, I will never go back to driving cheap economy cars ever again.
In fact, I regret not driving a luxury car when I was much younger.
Even buying a used $20k car wouldn't have put much of a dent in my savings.

Did I sell myself short? Boring car. Basic apt. No stylish outfits. Boring affordable shoes. Large invisible Vanguard statement.
Women probably thought I was poor. Maybe they even thought I had serious money problems. Most other men they meet own expensive things if they earn decent money.
Sure, the frugal man avoids attracting a golddigger, but he also avoids attracting someone of equal education, success, and wealth.
Also, sometimes, a man just wants to enjoy a fling with a supermodel.
Instead, what if I had lived in a luxury condo, gotten a few sharp outfits, and driven a fun luxury car (while still saving plenty of money)
How many successful educated women underestimated me b/c I unwisely underrepresented my actual ambitions & net worth? (While other men wisely over-represented theirs....)

In hindsight, I believe you sometimes really should flaunt it, if you've got it.
Yes, the opposite of the frugal mindset.
A frugal person doesn't need artificial respect from material consumption. We're above that.
I understand the "under the radar" rationale, but there is a downside.
Otherwise, you will close doors that deserve to be open for you.
I'm not saying go into debt and be an idiot.
I am saying that you should spend a little more of your money and save less.
There's plenty of time left for frugality and hoarding.

Money never spent on your deathbed is effort wasted in acquiring and hoarding.
And you can't buy a Porsche when you're 70, and wondering how the heck to finally dispose of your fortune.
When you die, will your 7-figure nest egg will be squandered on Ferraris and 5-star hotels by people (or children) who didn't earn your money?

At middle age, I am still frugal, do not waste money, and still need to see the value in my purchases. Frugality never goes away.
However, I also spend more freely, and enjoy it. I am spending on things I would never have spent on 10 years ago.
It doesn't have to make sense. I want to. Or, I want it. Because I can. That's why.

Does anyone else here feel that frugality a mistake?
Have you encountered other downsides of saving too much?
Most likely that person will not still be posting on BH, but who knows.
Last edited by jackpullo997 on Sun Mar 16, 2014 10:43 am, edited 4 times in total.

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Re: Was frugality a mistake? The downsides of saving too mu

Post by letsgobobby » Sat Mar 15, 2014 9:04 am

rabbinic saying: A rich man should not live on bread and water alone, lest he think a poor man can survive on stones.

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Re: Was frugality a mistake? The downsides of saving too mu

Post by Ice-9 » Sat Mar 15, 2014 9:30 am

I'm 40 now. From about age 32 until about a year ago, I thought I was behind on retirement savings and saved like crazy. Last year, I was somewhat sad to have to significantly decrease my retirement savings for the year because of a few needed big expenditures for the house and (a happy reason) I had to save for my wedding. Of course, I sought out information to try to find out how much my decreased savings would affect my outlook, and as you might expect I discovered through this forum the retirement calculator Firecalc.

Firecalc gave me a pleasant surprise: Even without accounting for any social security at all, the calculator showed me that, for all 60-year cycles since 1871, my current portfolio with my decreased annual contributions would have lasted until age 100 if I were spending my current take-home pay each year. Of course, I realize there is the possibility that the next 60 years my portfolio could have worse performance than any of the 80+ cycles Firecalc reported from the past, but it still made me feel as though my efforts have been somewhat fruitful, and I no longer believe I am "behind" with regards to retirement savings.

I have decided to loosen up a bit on my frugality, but certainly not entirely. No plans on luxury cars or anything, but my wife and I recently invested in a couple upgrades to our kitchen. I'm thinking going forward I would be comfortable saving about 16% of my income, much lower than most of the past decade, and enjoying the now a bit more.

I don't regret the seven or so years of intense saving and frugal living at all, because being in this somewhat more secure position feels so good compared to the worry I felt at age 32. I also occasionally get a glimpse into some of my peers' situations who did not work as hard to "invest" in a frugal period of their lives, and I know they still have more to worry about regarding retirement. The relative financial peace I'm experiencing now feels great, but it came at a price of working especially hard at saving the last several years when many of my friends did not. I'm glad I paid that price, but plan to pay a good bit less of that price going forward.

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TimeRunner
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Re: Was frugality a mistake? The downsides of saving too mu

Post by TimeRunner » Sat Mar 15, 2014 9:38 am

Appearances are fooling. That young kid who looks like Mr Wall Street? You'll find him behind the front desk at that upscale hotel over there. Meanwhile the couple checking in who look like just plain folks....

Sometimes it's OK to be the peacock but it's often more effective, rewarding, and wise to be the chameleon.
Last edited by TimeRunner on Sat Mar 15, 2014 10:27 am, edited 1 time in total.
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Re: Was frugality a mistake? The downsides of saving too mu

Post by nedsaid » Sat Mar 15, 2014 9:39 am

There is a difference between being frugal and just being cheap.

For example, I always buy the best tires that I can afford for my car. They are safer and they last longer. Spending to get quality and durability in the long run saves money. Buying a luxury car that you plan to keep for a while could be an excellent purchase.

One has to balance prudent saving with lifestyle. Few of us want to live like hermits. This life doesn't last very long and it is good to have fun along the way.

One key is to just not throw your money away on the stupid stuff. Make sure you get good use out of the things you buy.

Frugality is not a mistake. Just don't forget to have some fun and paying up for quality and durability is not a mistake.
A fool and his money are good for business.

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Re: Was frugality a mistake? The downsides of saving too mu

Post by Boglenaut » Sat Mar 15, 2014 9:43 am

I notice now I buy $16 per twelve pack of craft beer. I rarely did when I was younger.

Guess I'm feeling rich.

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Re: Was frugality a mistake? The downsides of saving too mu

Post by 3504PIR » Sat Mar 15, 2014 9:45 am

nedsaid wrote:There is a difference between being frugal and just being cheap.

For example, I always buy the best tires that I can afford for my car. They are safer and they last longer. Spending to get quality and durability in the long run saves money. Buying a luxury car that you plan to keep for a while could be an excellent purchase.

One has to balance prudent saving with lifestyle. Few of us want to live like hermits. This life doesn't last very long and it is good to have fun along the way.

One key is to just not throw your money away on the stupid stuff. Make sure you get good use out of the things you buy.

Frugality is not a mistake. Just don't forget to have some fun and paying up for quality and durability is not a mistake.
Very well said. I approach my own spending and saving with a sort of balance.

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ginmqi
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Re: Was frugality a mistake? The downsides of saving too mu

Post by ginmqi » Sat Mar 15, 2014 9:49 am

Instead, what if I had lived in a luxury condo, gotten a few sharp outfits, and driven a fun luxury car (while still saving plenty of money)
That simply shows someone who doesn't know how to budget, they confuse "frugal" with "bare neccessities living." If you truly have a financial plan setup where you KNOW you have a >90% of retiring the way you want AND still be able to live in a luxury condo, sharp outfits, and driven a fun luxury car then you should so by all means.

But the problem is that very very few % of people can afford that lifestyle AND still save enough to retire at their comfort level. That lifestyle also comes with other expenses....gifts for the girlfriend (who by their outer appearance people assume is successful and wealthy) expensive restaurants, going on nice vacations, etc. So to live that lifestyle you must account for ALL the cost of that lifestyle.

Also there are plenty of used luxury cars that are reliable and very comfy to drive (usually "fun" and "luxury" are not synonymous in a car). Since luxury cars are meant for very comfy ride and a non-existent handling feel vs a fun car that is all about driving the car.

Also someone who forgoes an opportunity to live in a town SOLELY because of low cost of living is also someone who does not understand the economic concept of opportunity cost. That is someone who is not frugal but unable to achieve their "full potential" anyways.

It seems you may have had a pathological frugality. Where extreme savings caused lost opportunities. Budgeting can easily fix that. You do not need to live in luxury apartments, drive luxury cars, or wear italian suits to open up opportunities in terms of career and also meeting people. Unless if you work at a place like wall-street investment bank...maybe.

I hear from my GF's family that they think I'm a penny pincher...and yet when my GF and I go out to ski/eat out at a nice restaurant/go shopping...they seem shocked when they ask how I can do these "expensive" things. And when I invite them to do these things they usually say they are broke and have no money. I just chuckle a bit inside. I wonder if they've figured out yet why I'm a "penny pincher." :wink:

I think there are only a few people have a problem of being pathologically frugal. The vast vast majority of people have a high consumption lifestyle that is way overboard. This is why BH was built...partially as a response to the changing investment/retirement industry and partially as a response to the high consumption lifestyle that is the American "dream" and the American culture.

But you know the irony is that we BH and sensible investors need this high consumption lifestyle of the AMericans to fuel all the publically traded companies in the US and in the World because essentially they will fund our vast retirement portfolio. By them spending money and growing these said companies. :wink: :wink:
Last edited by ginmqi on Sat Mar 15, 2014 9:54 am, edited 1 time in total.

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Re: Was frugality a mistake? The downsides of saving too mu

Post by jeffyscott » Sat Mar 15, 2014 9:50 am

Luckily I met my spouse of 30+ years while in college, where poverty was the norm.

We probably saved too much, but only real regret is that we did not put a little more into our home (pretty minor detail, just wish we had added a finished basement) when kids were little. But at least those same kids will likely benefit from our over-saving someday.

I am glad that we are comfortable enough with our asset level that my wife can quit her stressful job this year at the age of 50 and that we were frugal enough that she was able to stay home with them in their early years, she did not work full time until the youngest was school age.
Time is your friend; impulse is your enemy. - John C. Bogle

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Re: Was frugality a mistake? The downsides of saving too mu

Post by livesoft » Sat Mar 15, 2014 9:53 am

Tell me about the supermodel fling that happened when you were middle-aged please.
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Re: Was frugality a mistake? The downsides of saving too mu

Post by KlingKlang » Sat Mar 15, 2014 9:54 am

Very, very good question. I am 58 and almost to my second million with Vanguard. I drive a 10 year old Chevy Malibu and live in a 24 year old house that I paid cash for. I always wear sweaters to work because my shirts have been washed so many times that they are see-through. I am married, but she is a high school grad who works part time and brings home $150 a week. I only get three weeks vacation and give up two weeks of that to get some extra income.

Even though I have been with the company for 11 years and have two engineering degrees and an MBA, when they needed a new manager they hired someone much better looking than myself who has four sports cars and three boats. He tells great stories at meetings, who cares if he is a liberal arts BA who doesn’t understand the technology, he still gets paid three times what I do.

Yes, I think that I was too frugal.

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Re: Was frugality a mistake? The downsides of saving too mu

Post by ginmqi » Sat Mar 15, 2014 10:03 am

livesoft wrote:Tell me about the supermodel fling that happened when you were middle-aged please.
:D


KlingKlang wrote:Very, very good question. I am 58 and almost to my second million with Vanguard. I drive a 10 year old Chevy Malibu and live in a 24 year old house that I paid cash for. I always wear sweaters to work because my shirts have been washed so many times that they are see-through. I am married, but she is a high school grad who works part time and brings home $150 a week. I only get three weeks vacation and give up two weeks of that to get some extra income.

Even though I have been with the company for 11 years and have two engineering degrees and an MBA, when they needed a new manager they hired someone much better looking than myself who has four sports cars and three boats. He tells great stories at meetings, who cares if he is a liberal arts BA who doesn’t understand the technology, he still gets paid three times what I do.

Yes, I think that I was too frugal.
Umm. Sounds like you should've found a better company to work for. And sounds like some pathological frugality. See-through shirts and not replacing them? Dude.

Also I find it pretty interesting that a guy who has almost 2 million to his name is depressed...DEPRESSED!...that he did not spend more. I'm sure you're happy with a successfuly retirement portfolio but since this thread is talking about "regrets" and missed "opportunities"...remember hindsight is alwasy 20/20. If you lived the high consumption lifestyle you are not guaranteed to have 2 mil in your portfolio. But then again maybe you could've been a high level manager/executive and be making 7-figures and splashing waters in the sea next to your oceanfront property by your yacht with a harem of supermodels every weekend :wink:

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Re: Was frugality a mistake? The downsides of saving too mu

Post by scamper » Sat Mar 15, 2014 10:12 am

I felt the desire for a sports car a few years ago - scratched that itch with a manual transmission Mazda 3. Then I discovered $1.00 CNG and the Honda Civic that runs on it - now I'm saving tons of cash, chatting with other CNG users at the local refueling station, and telling the "my car runs on CNG" story everywhere.

My point? Living frugal does not have to be boring. As mentioned by others here, being frugal allows you to spend lavishly when desired.

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Re: Was frugality a mistake? The downsides of saving too mu

Post by doug91 » Sat Mar 15, 2014 10:24 am

It's funny that so much of the frugality regrets are centered around women, because at least when I lived in San Francisco and Chapel Hill, the most beautiful women were almost invariably having their flings with physically fit, poorly groomed, musically talented, and nigh-impoverished young men. When I think about what it would have taken to have a fling with a supermodel, I usually come back to learning to play the guitar and working out, but I haven't seen a reliable correlation between money and attractive partners. (Caveat: I have never lived in Manhattan.)

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Re: Was frugality a mistake? The downsides of saving too mu

Post by Kenkat » Sat Mar 15, 2014 10:25 am

It is a difficult question. Just a few random observations:

It is a lot easier to have too much money later in life and reward yourself with a few luxuries than it is to not have enough later in life and struggle to get by when it is too late to save.

Compound interest is your friend. The only way to take full advantage of it is to be frugal at some level when you are young. And the only way to do that is to have some form of delayed gratification. My dad bought a Cadillac when he was 70. Always wanted one but there were other priorities.

There is so much uncertainty that you are really forced to over-save. What will the stock market do over the next 20 years? If it doubles twice, I am going to be in great shape. If it's flat, I will probably need every penny I am saving. What is my health is poor? What if my parents leave me a nice inheritance? What if they need every penny they have to care for themselves well into their 90's? You just don't know. You can never replace the time lost when it comes to saving.

You can be too frugal. Worn out clothes are worn out. Get some new ones. You don't have to buy Armani suits and $300 dress shirts to look nice. Drive a decent car. Or buy a luxury car and keep it 10-12 years. Live in a decent place. Spend a little money. Go to the ballet or a broadway show or an amusement park every once in awhile. We are here for such a short time. Set some savings and investing goals and then, if you have money left over, enjoy it a little. Especially now that you have the money where you can afford to do that.

You can buy a Porsche at 70.

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Re: Was frugality a mistake? The downsides of saving too mu

Post by jridger2011 » Sat Mar 15, 2014 10:34 am

kenschmidt wrote:It is a difficult question. Just a few random observations:

It is a lot easier to have too much money later in life and reward yourself with a few luxuries than it is to not have enough later in life and struggle to get by when it is too late to save.

Compound interest is your friend. The only way to take full advantage of it is to be frugal at some level when you are young. And the only way to do that is to have some form of delayed gratification. My dad bought a Cadillac when he was 70. Always wanted one but there were other priorities.

There is so much uncertainty that you are really forced to over-save. What will the stock market do over the next 20 years? If it doubles twice, I am going to be in great shape. If it's flat, I will probably need every penny I am saving. What is my health is poor? What if my parents leave me a nice inheritance? What if they need every penny they have to care for themselves well into their 90's? You just don't know. You can never replace the time lost when it comes to saving.

You can be too frugal. Worn out clothes are worn out. Get some new ones. You don't have to buy Armani suits and $300 dress shirts to look nice. Drive a decent car. Or buy a luxury car and keep it 10-12 years. Live in a decent place. Spend a little money. Go to the ballet or a broadway show or an amusement park every once in awhile. We are here for such a short time. Set some savings and investing goals and then, if you have money left over, enjoy it a little. Especially now that you have the money where you can afford to do that.

You can buy a Porsche at 70.
This makes a ton of sense. Being cautious is sensible not knowing what the future holds for stock market, employment, health, and just changes in life. However, it is important to spend money on improving life as well. Why struggle with back and knee pain by wearing worn out or poorly made shoes? Go out for a nice meal you cannot prepare at home or will not go through the trouble of preparing (thinking of labor intense French food and fancy pastries).

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Re: Was frugality a mistake? The downsides of saving too mu

Post by Leesbro63 » Sat Mar 15, 2014 10:42 am

I am 54. I've been a high earner for 30 years and always saved more than half my income. But lived well on the other (post tax) half. But not as well as I could have. I have zero regrets about not spending more....I'm convinced that more new cars, more travel and a bigger house would not have made me even 1% more happy. That being said, some of what the OP stated is becoming a concern. First, I worry that the money ultimately will get whizzed away by my (now 20something) kids or their spouses. Or worse...that leaving them too much will even harm them. My oldest is doing well and I think the money will be a plus for her, someday. My youngest is still a work in progress. I also sometimes resent the fact that there is a hidden tax to success beyond the Form 1040. College has to be paid for in somewhat phony "full sticker" dollars that many who didn't or couldn't save won't pay. And now health care is being subsidized for the middle class but those above that are paying more (not just through higher premiums but through higher deductibles and co-pays). Not a reason to quit aspiring to better yourself, but certainly a hidden tax that society puts on those who are willing to defer gratification.

I'm also concerned about the system itself. Delaying gratification and saving is a bet that the system will survive. I'm not a doomsdayer, but I do think that we are seeing economic experiments that we've never seen before. All you can do is diversify, live well below your means (I could do a 2% SWR if I had to), and hope for the best. But I do wonder more and more if the guy with the flashy Rolex and Bentley (and no appreciable savings) won't be snickering at the end. To some degree, delaying gratification and saving was just exchanging the fear of cat food in old age for the fear of an asset crash in old age.
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Re: Was frugality a mistake? The downsides of saving too mu

Post by VictoriaF » Sat Mar 15, 2014 10:44 am

jackpullo997 wrote:Did I sell myself short? Boring car. Basic apt. No stylish outfits. Boring affordable shoes. Large invisible Vanguard statement.
Women probably thought I was poor. Maybe they even thought I had serious money problems. Most other men they meet own expensive things if they earn decent money.
Sure, the frugal man avoids attracting a golddigger, but he also avoids attracting someone of equal education, success, and wealth.
Also, sometimes, a man just wants to enjoy a fling with a supermodel.
Your downfall with women is not due the invisibility of your Vanguard statement or a boring car, but your attitude towards women. From your previous posts:
jackpullo997 wrote:Don't support anyone but yourself. It's a fool's game. Women want to be treated as equals! Treat them as such.
jackpullo997 wrote:If you take time off, the wife can never steal those experiences from you, like she can your assets.
Victoria
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Re: Was frugality a mistake? The downsides of saving too mu

Post by ataloss » Sat Mar 15, 2014 10:46 am

so is this related to your thread about the guy who wants a Porsche? FWIW I have been frugal about objects but less so with experiences. Flew to Disneyworld with the kids and wife enough that they got tired of it. Cruises, trips. I buy expensive beer and consumables. Experiences that you defer may not be replaceable. It helps that Mrs is ok with frugality. When I have upgraded product quality I have found that the thrill doesn't last. Hedonic treadmill and all that.

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Re: Was frugality a mistake? The downsides of saving too mu

Post by pingo » Sat Mar 15, 2014 10:49 am

My question is: did living frugal/saving more when younger set you up to be able to let go and enjoy your income more later now? There must be a tipping point where you would have been less frugal and compromised your retirement. Where do you thing that point might have been?

I am continually driven to frugality as best as we can handle it. I don't know if I'll ever feel financially secure no matter how much I have for my retirement. I hope to barely qualify for the "2 comma club" if I make it to 65 and I expect to have plenty of complications the longer I live past 65.

There's still hope for many of you. Save yourselves and be free! :D

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Re: Was frugality a mistake? The downsides of saving too mu

Post by ginmqi » Sat Mar 15, 2014 10:51 am

VictoriaF wrote:
jackpullo997 wrote:Did I sell myself short? Boring car. Basic apt. No stylish outfits. Boring affordable shoes. Large invisible Vanguard statement.
Women probably thought I was poor. Maybe they even thought I had serious money problems. Most other men they meet own expensive things if they earn decent money.
Sure, the frugal man avoids attracting a golddigger, but he also avoids attracting someone of equal education, success, and wealth.
Also, sometimes, a man just wants to enjoy a fling with a supermodel.
Your downfall with women is not due the invisibility of your Vanguard statement or a boring car, but your attitude towards women. From your previous posts:
jackpullo997 wrote:Don't support anyone but yourself. It's a fool's game. Women want to be treated as equals! Treat them as such.
jackpullo997 wrote:If you take time off, the wife can never steal those experiences from you, like she can your assets.
Victoria
Wow, very telling indeed. There are plenty of attractive, successful women who do not care for a luxury car or luxury apartment. Of course if you're frugal to the point of not even caring for yourself (ie wearing super old shirts and not even replacing them, not going out at all, no extra spending at all) then of course no one would want you!

But quite the telling history indeed. And now we see it is his attitude towards women that is the problem....not his "large invisible Vanguard statement." :wink:

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Re: Was frugality a mistake? The downsides of saving too mu

Post by Leesbro63 » Sat Mar 15, 2014 10:51 am

ataloss wrote:so is this related to your thread about the guy who wants a Porsche? FWIW I have been frugal about objects but less so with experiences. Flew to Disneyworld with the kids and wife enough that they got tired of it. Cruises, trips. I buy expensive beer and consumables. Experiences that you defer may not be replaceable. It helps that Mrs is ok with frugality. When I have upgraded product quality I have found that the thrill doesn't last. Hedonic treadmill and all that.
I agree with most of this post except the part about updated product quality. There is a curve. And I've found that it pays to try to find the peak of the curve on product quality. Toyotas over Chrysler, but not necessarily Lexus...you can get 95% of the quality of a Lexus in a Toyota...but much more quality than in a Chrysler for not too much more money. For example.

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Re: Was frugality a mistake? The downsides of saving too mu

Post by jeffyscott » Sat Mar 15, 2014 11:10 am

kenschmidt wrote:There is so much uncertainty that you are really forced to over-save. What will the stock market do over the next 20 years? If it doubles twice, I am going to be in great shape. If it's flat, I will probably need every penny I am saving. What is my health is poor? What if my parents leave me a nice inheritance? What if they need every penny they have to care for themselves well into their 90's? You just don't know. You can never replace the time lost when it comes to saving.
A couple more to add to the list...What if you lose your job at 50 and never work again? What if 2008 had resulted in depression 2.0?
Time is your friend; impulse is your enemy. - John C. Bogle

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Re: Was frugality a mistake? The downsides of saving too mu

Post by dad2000 » Sat Mar 15, 2014 11:11 am

With effort, one can be frugal, yet enjoy many of life's luxuries.

I've owned some luxurious sports cars. Instead of focusing in on one model, I took advantage of some leases with artificially high residual value and low rates.
Been to Superbowl, NBA finals, top-name fights.
In season, I've stayed in beachfront condos in Hawaii, penthouse suites in South Beach, 4-5* Carribbean resorts, while paying Best Western rates.
I can't say there was a supermodel :( Does an exotic dancer count?
Most of this was done when my salary was very ordinary, and I never carried credit card debt.

I'm now middle aged, but don't crave that stuff anymore. I'm content to raise my family and blend in.

I recently went back and calculated my savings to net worth ratio (net worth / medicare earnings) as Jim Dahle did in his recent (and excellent) book. It's at 78%, which I think is pretty darn good.

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Re: Was frugality a mistake? The downsides of saving too mu

Post by Leesbro63 » Sat Mar 15, 2014 11:22 am

dad2000 wrote:With effort, one can be frugal, yet enjoy many of life's luxuries.

I've owned some luxurious sports cars. Instead of focusing in on one model, I took advantage of some leases with artificially high residual value and low rates.
Been to Superbowl, NBA finals, top-name fights.
In season, I've stayed in beachfront condos in Hawaii, penthouse suites in South Beach, 4-5* Carribbean resorts, while paying Best Western rates.
I can't say there was a supermodel :( Does an exotic dancer count?
Most of this was done when my salary was very ordinary, and I never carried credit card debt.

I'm now middle aged, but don't crave that stuff anymore. I'm content to raise my family and blend in.

I recently went back and calculated my savings to net worth ratio (net worth / medicare earnings) as Jim Dahle did in his recent (and excellent) book. It's at 78%, which I think is pretty darn good.
Two good points here: 1. As we age, many of us crave "toys" less. (Although other stuff like health care can offset any savings). 2. Rent toys for temporary periods; don't buy them and get stuck owning them beyond the serotonin-surge period.

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Re: Was frugality a mistake? The downsides of saving too mu

Post by investomajic » Sat Mar 15, 2014 11:22 am

Saving without a goal or a solid understanding of exactly why you are saving money will lead to these sorts of thoughts, IMO. When I start having these types of thoughts, it is usually a sign I need to revisit my plan and solidify my understanding of what the money will be used for.

More important, IMO - and something that is usually lacking in these conversations - is the concept of time. Most people phrase these types of thoughts along the lines of "What if I retire at 65 and realize I have saved too much - what a waste!". But what if those years of extra savings allow you to retire even earlier? This is the most important point to me because according to my plan I can never save too much as more savings means less years working.

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Re: Was frugality a mistake? The downsides of saving too mu

Post by killjoy2012 » Sat Mar 15, 2014 11:25 am

Like many things in life, moderation is key. Being frugal can be a very good thing, not only for you, but your family & loved ones. But frugalness taken to the extreme of foregoing life experiences & ruining relationships for only the sake of saving money - not wise.
investomajic wrote: Most people phrase these types of thoughts along the lines of "What if I retire at 65 and realize I have saved too much - what a waste!". But what if those years of extra savings allow you to retire even earlier?
While I agree with the general concept, I think you need to watch that again, you don't play this to the extreme. There are things I'd love to do in my 20's, 30's & 40's that become impossible or much less appealing in your 50's & 60+'s. Personally, I would rather spend the $ to experience those things when I am younger & able, rather than forgo the entire experience and have (1.5 * X) in my bank account at age 65. This, of course, is under the assumption that the expense is both affordable & reasonable.
Last edited by killjoy2012 on Sat Mar 15, 2014 11:34 am, edited 1 time in total.

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Re: Was frugality a mistake? The downsides of saving too mu

Post by steve r » Sat Mar 15, 2014 11:33 am

Leesbro63 wrote:
ataloss wrote:so is this related to your thread about the guy who wants a Porsche? FWIW I have been frugal about objects but less so with experiences. Flew to Disneyworld with the kids and wife enough that they got tired of it. Cruises, trips. I buy expensive beer and consumables. Experiences that you defer may not be replaceable. It helps that Mrs is ok with frugality. When I have upgraded product quality I have found that the thrill doesn't last. Hedonic treadmill and all that.
I agree with most of this post except the part about updated product quality. There is a curve. And I've found that it pays to try to find the peak of the curve on product quality. Toyotas over Chrysler, but not necessarily Lexus...you can get 95% of the quality of a Lexus in a Toyota...but much more quality than in a Chrysler for not too much more money. For example.
And clearly a Lexus over a Mercedes. Maybe five years ago Consumer Reports found a ten year old Lexus more reliable than a one year old Mercedes. Not sure if this is still the case. Last year I bought my first Lexus, and like the OP, love it. That said, if I bought it as a younger man things would be different for me financially.

The one expense I did have with no regrets is family vacations ... always budget friendly ... the difference between staying on a budget friendly Costa Rica resort and not top of the line ... staying at the low end All Star Resort at Disney and not the one that cost twice as much ... these are adventure and experiences of a life time.

The key is balance. Moreover, one never knows if they have the right balance ... in someways it is unknowable in real time.
Maximize Diversification - Minimize Costs - Avoid Lotteries

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Re: Was frugality a mistake? The downsides of saving too mu

Post by Kenkat » Sat Mar 15, 2014 11:56 am

jeffyscott wrote:
kenschmidt wrote:There is so much uncertainty that you are really forced to over-save. What will the stock market do over the next 20 years? If it doubles twice, I am going to be in great shape. If it's flat, I will probably need every penny I am saving. What is my health is poor? What if my parents leave me a nice inheritance? What if they need every penny they have to care for themselves well into their 90's? You just don't know. You can never replace the time lost when it comes to saving.
A couple more to add to the list...What if you lose your job at 50 and never work again? What if 2008 had resulted in depression 2.0?
I worry about those two also!

When I was young, I never really understood when my parents - who were born in the depression and raised through WWII and Korea - said "sometimes, you should be damn glad you have a job". I always thought "why? - I can just get another one". Now that I am 50 and experienced 2008-2009, I think I get it. Maybe I will say it to my kids someday. :D

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Re: Was frugality a mistake? The downsides of saving too mu

Post by Artsdoctor » Sat Mar 15, 2014 12:13 pm

You will not be able to enjoy the Porsche when you're 70. It's too close to the ground and it will kill your back every time you get in and out of it. :)

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Re: Was frugality a mistake? The downsides of saving too mu

Post by jackpullo997 » Sat Mar 15, 2014 12:40 pm

KlingKlang wrote:Very, very good question. I am 58 and almost to my second million with Vanguard. I drive a 10 year old Chevy Malibu and live in a 24 year old house that I paid cash for. I always wear sweaters to work because my shirts have been washed so many times that they are see-through. I am married, but she is a high school grad who works part time and brings home $150 a week. I only get three weeks vacation and give up two weeks of that to get some extra income.

Even though I have been with the company for 11 years and have two engineering degrees and an MBA, when they needed a new manager they hired someone much better looking than myself who has four sports cars and three boats. He tells great stories at meetings, who cares if he is a liberal arts BA who doesn’t understand the technology, he still gets paid three times what I do.

Yes, I think that I was too frugal.
I agree. Thank you for posting your story.
This is a good example of frugality costing you more than you save.

Do you come in to work with ratty old shoes? Ill fitting clothing?
It seems that frugality has cost you a major promotion (and probably lots of work place respect)

Also, if you have $2mm banked, why does your wife bother to work a $3600 job?
Is it just for her entertainment?

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Re: Was frugality a mistake? The downsides of saving too mu

Post by jackpullo997 » Sat Mar 15, 2014 12:43 pm

doug91 wrote:I haven't seen a reliable correlation between money and attractive partners. (Caveat: I have never lived in Manhattan.)
You are ignoring the age variable.
Those broke bad boys hit the wall by 30 or so.
There are very few attractive women married to broke men.

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Re: Was frugality a mistake? The downsides of saving too mu

Post by Levett » Sat Mar 15, 2014 12:44 pm

Be frugal or flaunt?

What an odd way of framing the proposition.

Lev

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Re: Was frugality a mistake? The downsides of saving too mu

Post by jackpullo997 » Sat Mar 15, 2014 12:47 pm

Leesbro63 wrote: I have zero regrets about not spending more....I'm convinced that more new cars, more travel and a bigger house would not have made me even 1% more happy.
Key statement. And it's important to point out that frugal people get as excited by saving as spenders get from buying a new pair of shoes.
So, in my younger days, spending on a luxury car would have not made me happy, but I think it would have been the more optimal decision.
At this age, those superficial things DO make me happy, so I guess it's better late than never, and it's time to move into fancier digs and start shopping for a $50k car.

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Re: Was frugality a mistake? The downsides of saving too mu

Post by ginmqi » Sat Mar 15, 2014 12:48 pm

Artsdoctor wrote:You will not be able to enjoy the Porsche when you're 70. It's too close to the ground and it will kill your back every time you get in and out of it. :)
I don't see why one has to wait until 70 to buy a "Porsche." There are are "Toyotas" more expensive than a "Porsche." It's more than just the name of the auto, but the specific model and year. With a BH mindset and decent income, one can probably afford a used 911 in their early 60s with good planning. Remember used 911s can be had for probably as ow as 35k-40k..and there are tons of trucks and SUVs more expensive than that roaming the roads today.

On the other hand if you want a Porsche Carrera GT, Porsche 959, or a Toyota 2000 GT then about 99.9% of us, even with BH mind sets and average to above average US median household income, will NEVER be able to afford those cars in our lifetime.

There are quite a few retirees today driving around in 50-70k Corvettes, so a used 911 that is in that exact same price range is not so surprising. But of course the associated costs will be higher in terms of insurance and maintenance.

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Re: Was frugality a mistake? The downsides of saving too mu

Post by ginmqi » Sat Mar 15, 2014 12:51 pm

jackpullo997 wrote:
Leesbro63 wrote: I have zero regrets about not spending more....I'm convinced that more new cars, more travel and a bigger house would not have made me even 1% more happy.
Key statement. And it's important to point out that frugal people get as excited by saving as spenders get from buying a new pair of shoes.
So, in my younger days, spending on a luxury car would have not made me happy, but I think it would have been the more optimal decision.
At this age, those superficial things DO make me happy, so I guess it's better late than never, and it's time to move into fancier digs and start shopping for a $50k car.
Yes, if you are retired....the whole point is to splurge! Go on vacations and drive a nice car. The years are counting down. Seems like you need to loosen up and finally enjoy life. Congrats on having a comfortable retirement :sharebeer

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Re: Was frugality a mistake? The downsides of saving too mu

Post by Artsdoctor » Sat Mar 15, 2014 1:02 pm

VictoriaF wrote:
jackpullo997 wrote:Did I sell myself short? Boring car. Basic apt. No stylish outfits. Boring affordable shoes. Large invisible Vanguard statement.
Women probably thought I was poor. Maybe they even thought I had serious money problems. Most other men they meet own expensive things if they earn decent money.
Sure, the frugal man avoids attracting a golddigger, but he also avoids attracting someone of equal education, success, and wealth.
Also, sometimes, a man just wants to enjoy a fling with a supermodel.
Your downfall with women is not due the invisibility of your Vanguard statement or a boring car, but your attitude towards women. From your previous posts:
jackpullo997 wrote:Don't support anyone but yourself. It's a fool's game. Women want to be treated as equals! Treat them as such.
jackpullo997 wrote:If you take time off, the wife can never steal those experiences from you, like she can your assets.
Victoria
Victoria always raises good points and it rarely pays to ignore her. This is not about a Vanguard account balance and frugality. It is about choices that have been made and a world view that's been chosen. Many of my friends are extraordinarily wealthy and many friends are barely scraping by. The least advantaged group often have an enviable flare and enjoy life to its fullest; they'd also give you the shirt off their backs. I have no friends who have boring apartments and no one I know wears boring shoes. And certainly not a single friend believes his/her spouse will steal assets.

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Re: Was frugality a mistake? The downsides of saving too mu

Post by HueyLD » Sat Mar 15, 2014 1:06 pm

Artsdoctor wrote:This is not about a Vanguard account balance and frugality. It is about choices that have been made and a world view that's been chosen. Many of my friends are extraordinarily wealthy and many friends are barely scraping by. The least advantaged group often have an enviable flare and enjoy life to its fullest; they'd also give you the shirt off their backs. I have no friends who have boring apartments and no one I know wears boring shoes. And certainly not a single friend believes his/her spouse will steal assets.
Congrats on choosing your friends well.

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Re: Was frugality a mistake? The downsides of saving too mu

Post by freddie » Sat Mar 15, 2014 1:24 pm

You can also date the 20 year old super model when your 70. Just need to be in the 3 comma club:)

The need to oversave is based on your risk assumptions. My desired retirement might be at 100k/yr but it isn't like I am eating Alpo is if I end up at 60k. For me planning a case where I am guaranteed 60k but are likely to end up at 100k makes a lot more sense than one where I am guaranteed 100k but am more likely to have 175k. The opportunity cost of the second case it too high. YMMV.
kenschmidt wrote:It is a difficult question. Just a few random observations:

It is a lot easier to have too much money later in life and reward yourself with a few luxuries than it is to not have enough later in life and struggle to get by when it is too late to save.

Compound interest is your friend. The only way to take full advantage of it is to be frugal at some level when you are young. And the only way to do that is to have some form of delayed gratification. My dad bought a Cadillac when he was 70. Always wanted one but there were other priorities.

There is so much uncertainty that you are really forced to over-save. What will the stock market do over the next 20 years? If it doubles twice, I am going to be in great shape. If it's flat, I will probably need every penny I am saving. What is my health is poor? What if my parents leave me a nice inheritance? What if they need every penny they have to care for themselves well into their 90's? You just don't know. You can never replace the time lost when it comes to saving.

You can be too frugal. Worn out clothes are worn out. Get some new ones. You don't have to buy Armani suits and $300 dress shirts to look nice. Drive a decent car. Or buy a luxury car and keep it 10-12 years. Live in a decent place. Spend a little money. Go to the ballet or a broadway show or an amusement park every once in awhile. We are here for such a short time. Set some savings and investing goals and then, if you have money left over, enjoy it a little. Especially now that you have the money where you can afford to do that.

You can buy a Porsche at 70.

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Re: Was frugality a mistake? The downsides of saving too mu

Post by bottlecap » Sat Mar 15, 2014 1:26 pm

To the extent I have been frugal, I have no regrets so far. Sure has helped in hard times. I like to buy nice things on the cheap, but rarely see the point in so called "luxury" or new things when old things work just fine.

If you have regrets and continue to look down on folks to spend too much or save too much, you might have an issue with money, not frugality. I just don't think about it much and have about as much fun as everyone else, despite never having spent enough to attract supermodels (seriously?).

JT

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Re: Was frugality a mistake? The downsides of saving too mu

Post by nisiprius » Sat Mar 15, 2014 1:34 pm

I think this quotation from Charles Kingsley is profound:
We act as though comfort and luxury were the chief requirements of life, when all that we need to make us really happy is something to be enthusiastic about.
Annual income twenty pounds, annual expenditure nineteen nineteen and six, result happiness; Annual income twenty pounds, annual expenditure twenty pounds ought and six, result misery.

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Re: Was frugality a mistake? The downsides of saving too mu

Post by Leesbro63 » Sat Mar 15, 2014 1:41 pm

jackpullo997 wrote:
doug91 wrote:I haven't seen a reliable correlation between money and attractive partners. (Caveat: I have never lived in Manhattan.)
You are ignoring the age variable.
Those broke bad boys hit the wall by 30 or so.
There are very few attractive women married to broke men.
Yeah. They're divorced, perhaps with kids and often struggling. Because what the "bad boy" had to offer quickly faded.

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Re: Was frugality a mistake? The downsides of saving too mu

Post by White Coat Investor » Sat Mar 15, 2014 1:43 pm

Spend your money on what you value most. We save now to spend later. I drive a cheap car because I don't value cars much. But I just spent the week renting a million dollar house in Vegas, taking the kids to a cirque show, going to a college basketball game, eating fancy dinners, rock climbing etc.

Figure out what you want and spend your money accordingly. If you regret not spending more, you're not spending enough. Despite my relative frugality, I actually find it very easy to spend money on stuff I actually care about.
1) Invest you must 2) Time is your friend 3) Impulse is your enemy | 4) Basic arithmetic works 5) Stick to simplicity 6) Stay the course

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Re: Was frugality a mistake? The downsides of saving too mu

Post by amitb00 » Sat Mar 15, 2014 2:03 pm

Anything done in extreme is bad. Too much saving to the extent of depriving yourself is bad just like too much spending. Have a balance in life and learn to enjoy it as well.
If you have money with you, you get choices to do fun things. They give you pleasure and help you build experiences and memories.
Ultimately real pleasure will stop coming from worldly and materialistic things and one may look into spending time and/or money for social causes dear to them. Provided he is not worried about next pay check.

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Re: Was frugality a mistake? The downsides of saving too mu

Post by TomatoTomahto » Sat Mar 15, 2014 3:00 pm

VictoriaF wrote:
jackpullo997 wrote:Did I sell myself short? Boring car. Basic apt. No stylish outfits. Boring affordable shoes. Large invisible Vanguard statement.
Women probably thought I was poor. Maybe they even thought I had serious money problems. Most other men they meet own expensive things if they earn decent money.
Sure, the frugal man avoids attracting a golddigger, but he also avoids attracting someone of equal education, success, and wealth.
Also, sometimes, a man just wants to enjoy a fling with a supermodel.
Your downfall with women is not due the invisibility of your Vanguard statement or a boring car, but your attitude towards women. From your previous posts:
jackpullo997 wrote:Don't support anyone but yourself. It's a fool's game. Women want to be treated as equals! Treat them as such.
jackpullo997 wrote:If you take time off, the wife can never steal those experiences from you, like she can your assets.
Victoria
My experience was with a normal model ( perhaps a supermodel in her own mind). She made a living at it, but wasn't jetting around the world. I did not have much money, but I was relatively well educated, had a good sense of humor, paid attention to the people I spent time with, was confident, was optimistic in my outlook, and generous with my smiles and good wishes. Since I was in my early twenties and fit, I looked better than I do in my sixties.

We were not together for very long when one afternoon, I said to myself as we were getting involved: "this should be a peak experience; she is beautiful, she is incredibly skilled at what we're doing right now, but honestly, I'm bored."

Attractive partners come to people who are attractive, internally and/or externally. Even if you could get a woman by flaunting wealth, is she the woman you'd want? A potential partner might well be looking for someone who can signal that they're not destitute, but that's far from flaunting money.

One of my proudest moments was a few weeks ago when my 18 yo son told me that some friends were making fun of him for saying that being intimate with someone you have feelings for feels better and is more intense than just hooking up. Thatsa my boy!
Okay, I get it; I won't be political or controversial. The Earth is flat.

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Re: Was frugality a mistake? The downsides of saving too mu

Post by jackpullo997 » Sat Mar 15, 2014 3:21 pm

TomatoTomahto wrote:A potential partner might well be looking for someone who can signal that they're not destitute, but that's far from flaunting money.
I think this is the ironic ugly underbelly of saving and investing.
If you've driving a 10 year old car, you will be passed over for someone with much less money (b/c you apparently have none)
In a consumer society, those who do not consume may indeed be viewed as destitute.
After all, even people on welfare drive brand new SUVs.
In the past, I might not have been viewed as totally destitute, but certainly hopelessly average and mediocre.

I think the moral is that you need to have a few things that reflect your wealth.
This is hardest for people who find little gratification in material items.

Lucky thing for me is that I am finally getting more interested in "nice things" and material gratification as I get older,
and therefore, am finally finding more things to spend money on.

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Re: Was frugality a mistake? The downsides of saving too mu

Post by TomatoTomahto » Sat Mar 15, 2014 3:26 pm

jackpullo997 wrote:
TomatoTomahto wrote:A potential partner might well be looking for someone who can signal that they're not destitute, but that's far from flaunting money.
I think this is the ironic ugly underbelly of saving and investing.
If you've driving a 10 year old car, you will be passed over for someone with much less money (b/c you apparently have none)
In a consumer society, those who do not consume may indeed be viewed as destitute.
After all, even people on welfare drive brand new SUVs.

I think the moral is that you need to have a few things that reflect your wealth.
This is hardest for people who find little gratification in material items.
Good thing for me is that I am getting more and more materialistic and superficial as I get older,
and therefore, am finally finding more things to spend all this money on.
I think you should give the potential partner the benefit of the doubt. More than likely, they can make a more nuanced determination based on something more than make/model of car. And if they can't, who wanted them anyway? :sharebeer
Okay, I get it; I won't be political or controversial. The Earth is flat.

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Re: Was frugality a mistake? The downsides of saving too mu

Post by cfs » Sat Mar 15, 2014 3:41 pm

Good conversation.

I was a Sailor once . . . and young.

During the last four or five military deployments I stayed on the ship helping the executive officer, command duty officer, and duty section leaders, while the rest of the crew was on liberty having fun and expending like a bunch of drunken Sailors. By doing this I saved a ton of money, but saving was only part of the equation.

Now at the end of the road, for me having fun is going to a restaurant and eating what I want without checking the cost of the meal, plus I am in a position to do part time volunteer work.

Money is no longer an issue. In other words, in my case frugality was not a mistake, and if I had to do it all over I would not change a thing.

Thanks for reading.
~ Member of the Active Retired Force since 2014 ~

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Re: Was frugality a mistake? The downsides of saving too mu

Post by pjstack » Sat Mar 15, 2014 3:43 pm

The comic strip "Pearls Before Swine" has a comment on this situation:
http://www.gocomics.com/pearlsbeforeswine#.UyS5rYePKLg
Enjoy!
pjstack

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Re: Was frugality a mistake? The downsides of saving too mu

Post by IMD801 » Sat Mar 15, 2014 3:46 pm

From the perspective of hedonic adaptation, I question the assumption that consuming more expensive things and showing them off is equal to enjoying life more. Paying for experiences might be an exception to that, however. But I can't see myself at 80 years old looking back and savoring the memory of owning a Land Rover, expensive sunglasses, and a $10,000 watch. To each his own. I'll be happy with my "F U" money and the freedom to pursue hobbies or volunteer work at age 45 instead of being a slave to materialism.

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