Struggling with "Live like a Resident" versus "Keeping up with the Joneses"

Questions on how we spend our money and our time - consumer goods and services, home and vehicle, leisure and recreational activities
Dyloot
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Re: Struggling with "Live like a Resident" versus "Keeping up with the Joneses"

Post by Dyloot » Sun Oct 09, 2016 10:10 am

njboater74 wrote:I understand what you're saying. Although I don't think your issue is really a 'keep up with the joneses' as much as it is a 'keep up appearances that are expected for you professsion'.

It's important for you to think pragmatically the way you are. You obviously don't like spending, and don't feel the need to own expensive purses and cars that have little utility value.

At the same time, you're an associate in a large law firm. The firm may expect you to dress and drive a certain way. I don't know the politics of the legal world, and whether this could legitimately jeopardize your chances for advancement. I work in sales, and it is expected that I show up in quality suits and a nice car. I've worked with people who didn't, and the whispering started.

I try and limit my luxury spending to just what will keep me from attracting the wrong sort of attention at work. It may sound superficial, but it's just the way it is. Sometimes you have to wear a uniform. Chalk it up to a business expense.
I agree with you 100%--and think it's just an important piece of how you are perceived in a professional setting.

Like it or not, your dress, your vehicle, your physical condition, your age, your mannerisms... these all craft how you are perceived in a professional setting. Is it fair? No! But perception is a powerful thing.

Just to add in--I work in IT, and I've seen the reverse of the high-end purchase come into play. Meaning, a guy drives his wife's Lexus to work (normally he drives a modest commuter car), and his (and my) boss jokes "I guess we pay him too much." It's all in fun, but I was left wondering if that was, in fact, my boss's perception.

Another guy--early 30s, single with no kids--buys expensive cars, and is generally considered to be young and unwise when it comes to finances.

We humans are a complex, intuitive bunch. We observe appearances and come up with judgments. And Bogleheads are not immune; they just may come up with a different conclusion when they see a co-worker who makes six figures driving a 12-year-old Toyota to work (he's smart, probably worth millions!). :D

If it were me, I'd probably pick the car and the clothing that crafted the perception I was looking for, and then buy them responsibly.

stoptothink
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Re: Struggling with "Live like a Resident" versus "Keeping up with the Joneses"

Post by stoptothink » Sun Oct 09, 2016 11:07 am

Dyloot wrote:
njboater74 wrote:I understand what you're saying. Although I don't think your issue is really a 'keep up with the joneses' as much as it is a 'keep up appearances that are expected for you professsion'.

It's important for you to think pragmatically the way you are. You obviously don't like spending, and don't feel the need to own expensive purses and cars that have little utility value.

At the same time, you're an associate in a large law firm. The firm may expect you to dress and drive a certain way. I don't know the politics of the legal world, and whether this could legitimately jeopardize your chances for advancement. I work in sales, and it is expected that I show up in quality suits and a nice car. I've worked with people who didn't, and the whispering started.

I try and limit my luxury spending to just what will keep me from attracting the wrong sort of attention at work. It may sound superficial, but it's just the way it is. Sometimes you have to wear a uniform. Chalk it up to a business expense.
I agree with you 100%--and think it's just an important piece of how you are perceived in a professional setting.

Like it or not, your dress, your vehicle, your physical condition, your age, your mannerisms... these all craft how you are perceived in a professional setting. Is it fair? No! But perception is a powerful thing.

Just to add in--I work in IT, and I've seen the reverse of the high-end purchase come into play. Meaning, a guy drives his wife's Lexus to work (normally he drives a modest commuter car), and his (and my) boss jokes "I guess we pay him too much." It's all in fun, but I was left wondering if that was, in fact, my boss's perception.

Another guy--early 30s, single with no kids--buys expensive cars, and is generally considered to be young and unwise when it comes to finances.

We humans are a complex, intuitive bunch. We observe appearances and come up with judgments. And Bogleheads are not immune; they just may come up with a different conclusion when they see a co-worker who makes six figures driving a 12-year-old Toyota to work (he's smart, probably worth millions!). :D

If it were me, I'd probably pick the car and the clothing that crafted the perception I was looking for, and then buy them responsibly.
I read these threads and posts about what you dress and wear influencing perceptions at work, and I truly have a difficult time believing they aren't merely a rationalization for people wanting what they want (luxury cars and fancy clothes). I'll add my anecdotes, with the realization that they are as worthless to the OP's individual situation as all the others. My grandfather was an extremely successful surgeon, for most of his career he drove either a beat-up Dodge pickup or 20+ year old motorhome (yes, a winnebago) to work and was known for wearing overalls under his lab coat (he grew up on a farm) - his wife (my stepgrandmother), always had a new Mercedes SL in the driveway though and wore Gucci/Prada/Versace. My wife is in enterprise sales for a tech company, she drives an 8yr old hyundai accent hatchback and wears jeans and a t-shirt to work at least 4 days a week. She actually rolled up to interview for the job, having zero sales experience, in a 20yr old gold crown victoria, and was offered the position within hours. Me, I'm a director in a megacorp and I walk to work and wear khakis and polos almost all the time (I do wear a suit when speaking in public, and my employer directly covers that cost). Clearly, in their environment and mine, it didn't matter one iota.

I have thankfully never been in and IMO never really seen a work environment where there was legit pressure and where it truly could effect someone's career (unless the individual otherwise carried themselves as a slob), but I can't generalize my experience over the entire business world. Really examine if it may be different in your environment and make a decision for yourself; anecdotes from strangers on the internet are worthless.

staythecourse
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Re: Struggling with "Live like a Resident" versus "Keeping up with the Joneses"

Post by staythecourse » Sun Oct 09, 2016 11:15 am

lernd wrote:
2. Demonstrations of wealth do not equal wealth. Those cars may be leased at ridiculous cost, colleagues may be mortgaged to the hilt and up to their eye balls in debt. What you think people own may actually be rented. You don't know the arguments they've had at home about bills, or the stress finances have placed on their family relationships. Be happy you and your spouse see eye to eye on financial matters and consider yourself fortunate that instead of adding debt, you are trying to pay it down (student loans). My wife and I love to collectively roll our eyes at conspicuous displays of wealth, it's a running inside joke between us. If anything, it helps to validate our choices - flip the script on those expensive watch wearers around you (who the heck needs an expensive watch - don't cell phones tell time?)
True, but the reality in many times is those folks just plain make more money then you and I. It is easier mentally and emotionally to validate it by thinking, "Boy that guy is just wasting his money instead of saving it", but in reality there are folks out there who save JUST as much as you and I do, but make an excess and spend the excess. The whole concept on this board that everyone who shows wealth is "house poor" is just not correct. Makes many folks feel better, but may not be completely true.

Either way who cares. Just watched a great documentary yesterday and one quote struck a chord and it went something like, "Comparisons is a great way to unravel happiness".

Good luck.
"The stock market [fluctuation], therefore, is noise. A giant distraction from the business of investing.” | -Jack Bogle

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Re: Struggling with "Live like a Resident" versus "Keeping up with the Joneses"

Post by dbr » Sun Oct 09, 2016 11:18 am

You are both employed in places that are a poor match to your personalities and values. It might be worthwhile in the long run to look around for alternatives.

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Re: Struggling with "Live like a Resident" versus "Keeping up with the Joneses"

Post by ImaBeginner » Sun Oct 09, 2016 12:39 pm

In my role at the hospital we hire a lot of people. It is a smaller city, basically without other options for work for those in the fields. When we hire a new person, and they buy a home before starting, I am always very happy because I know that they will not leave for the next 2+ years. Once they hit the 2 year mark they make partner, and they have a large financial incentive to stay for an additional 5 years minimum.
So for me seeing a new employee owning a house in town means that I have ~7 years without concerns that they will leave.

I expect your bosses like to see similar things to reassure them that they, as another poster stated "have you by the b***s"

Remember that you have the freedom to leave, which may not be true of other coworkers. That should help you hold off huge purchases. Small increases in lifestyle should be considered completely acceptable though, when you go from school to making >100k per year, you actually do deserve to go from eating ramen to eating spagetti with meatballs.

My salary increased 20x over the past few years, and I found it helpful to basically double my budget. Still save 18x the initial, minus taxes, which means I save a little over 10x the initial. It satisfies the me that I am saving so much, but I still get to enjoy a markedly better lifestyle. All it takes is choosing which areas of your life increasing your budget will have the most effect on happiness.
You do need to have presentable clothing though. The car is probably less important. Make sure you do enough lunches to network with higher up people, if that is a thing for your firm.

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Re: Struggling with "Live like a Resident" versus "Keeping up with the Joneses"

Post by njboater74 » Sun Oct 09, 2016 12:51 pm

Dyloot wrote: Just to add in--I work in IT, and I've seen the reverse of the high-end purchase come into play. Meaning, a guy drives his wife's Lexus to work (normally he drives a modest commuter car), and his (and my) boss jokes "I guess we pay him too much." It's all in fun, but I was left wondering if that was, in fact, my boss's perception.
That's funny. There's definitely different things that are expected based on your role, industry, location. Try showing up for work at a Silicon Valley tech company with a french cuff shirt, rolex, and high-end mercedes. A Prius is definitely more of a status symbol there. Just wait til the Tesla Model 3 comes out.
When the mob and the press and the whole world tell you to move, your job is to plant yourself like a tree beside the river of truth and tell the whole world - 'No, YOU move'--Captain America, Boglehead

staythecourse
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Re: Struggling with "Live like a Resident" versus "Keeping up with the Joneses"

Post by staythecourse » Sun Oct 09, 2016 1:22 pm

njboater74 wrote:
Dyloot wrote: Just to add in--I work in IT, and I've seen the reverse of the high-end purchase come into play. Meaning, a guy drives his wife's Lexus to work (normally he drives a modest commuter car), and his (and my) boss jokes "I guess we pay him too much." It's all in fun, but I was left wondering if that was, in fact, my boss's perception.
That's funny. There's definitely different things that are expected based on your role, industry, location. Try showing up for work at a Silicon Valley tech company with a french cuff shirt, rolex, and high-end mercedes. A Prius is definitely more of a status symbol there. Just wait til the Tesla Model 3 comes out.
Interesting. It looks like the issue is NOT about showing off wealth, but conformity. As I mentioned in the thread above this would fit into the situation of making expressive decisions. Those are one that are meant to show yourself to others how you want them to see you.

Funny as I have no interest in the expensive car or the prius. I want whatever I want and don't really care what others think. Guess I have and always will be a nonconformist.

Good luck.
"The stock market [fluctuation], therefore, is noise. A giant distraction from the business of investing.” | -Jack Bogle

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Re: Struggling with "Live like a Resident" versus "Keeping up with the Joneses"

Post by Afty » Sun Oct 09, 2016 1:28 pm

I'll throw in my 2 cents:

1) It's clear you have a financial plan and are executing on it. Good for you! Now own that plan, and be confident you are doing the right thing despite what others think. Don't let others sway you, and do what you need to do to get where you want to be.

2) It's not that bad to inflate your lifestyle a bit as long as you are hitting your financial goals. If you have a goal to save 20% of your income, then it's OK to spend once you've hit that. I would only caution you to spend on things that really will "move the needle," so to say -- i.e. if you don't care about clothes or fancy cars, don't spend on them just to satisfy others. Think about what would really improve your lives -- e.g. household help, travel, fancy meals, whatever you and your wife value -- and spend on those things.

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Re: Struggling with "Live like a Resident" versus "Keeping up with the Joneses"

Post by FrugalInvestor » Sun Oct 09, 2016 1:33 pm

WhyNotUs wrote:Asking someone what their net worth is often stops the queries.
Or simply "ask me again in a few years."
IGNORE the noise! | Our life is frittered away by detail... simplify, simplify. - Henry David Thoreau

Dyloot
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Re: Struggling with "Live like a Resident" versus "Keeping up with the Joneses"

Post by Dyloot » Sun Oct 09, 2016 1:52 pm

stoptothink wrote:
Dyloot wrote:
njboater74 wrote:I understand what you're saying. Although I don't think your issue is really a 'keep up with the joneses' as much as it is a 'keep up appearances that are expected for you professsion'.

It's important for you to think pragmatically the way you are. You obviously don't like spending, and don't feel the need to own expensive purses and cars that have little utility value.

At the same time, you're an associate in a large law firm. The firm may expect you to dress and drive a certain way. I don't know the politics of the legal world, and whether this could legitimately jeopardize your chances for advancement. I work in sales, and it is expected that I show up in quality suits and a nice car. I've worked with people who didn't, and the whispering started.

I try and limit my luxury spending to just what will keep me from attracting the wrong sort of attention at work. It may sound superficial, but it's just the way it is. Sometimes you have to wear a uniform. Chalk it up to a business expense.
I agree with you 100%--and think it's just an important piece of how you are perceived in a professional setting.

Like it or not, your dress, your vehicle, your physical condition, your age, your mannerisms... these all craft how you are perceived in a professional setting. Is it fair? No! But perception is a powerful thing.

Just to add in--I work in IT, and I've seen the reverse of the high-end purchase come into play. Meaning, a guy drives his wife's Lexus to work (normally he drives a modest commuter car), and his (and my) boss jokes "I guess we pay him too much." It's all in fun, but I was left wondering if that was, in fact, my boss's perception.

Another guy--early 30s, single with no kids--buys expensive cars, and is generally considered to be young and unwise when it comes to finances.

We humans are a complex, intuitive bunch. We observe appearances and come up with judgments. And Bogleheads are not immune; they just may come up with a different conclusion when they see a co-worker who makes six figures driving a 12-year-old Toyota to work (he's smart, probably worth millions!). :D

If it were me, I'd probably pick the car and the clothing that crafted the perception I was looking for, and then buy them responsibly.
I read these threads and posts about what you dress and wear influencing perceptions at work, and I truly have a difficult time believing they aren't merely a rationalization for people wanting what they want (luxury cars and fancy clothes). I'll add my anecdotes, with the realization that they are as worthless to the OP's individual situation as all the others. My grandfather was an extremely successful surgeon, for most of his career he drove either a beat-up Dodge pickup or 20+ year old motorhome (yes, a winnebago) to work and was known for wearing overalls under his lab coat (he grew up on a farm) - his wife (my stepgrandmother), always had a new Mercedes SL in the driveway though and wore Gucci/Prada/Versace. My wife is in enterprise sales for a tech company, she drives an 8yr old hyundai accent hatchback and wears jeans and a t-shirt to work at least 4 days a week. She actually rolled up to interview for the job, having zero sales experience, in a 20yr old gold crown victoria, and was offered the position within hours. Me, I'm a director in a megacorp and I walk to work and wear khakis and polos almost all the time (I do wear a suit when speaking in public, and my employer directly covers that cost). Clearly, in their environment and mine, it didn't matter one iota.

I have thankfully never been in and IMO never really seen a work environment where there was legit pressure and where it truly could effect someone's career (unless the individual otherwise carried themselves as a slob), but I can't generalize my experience over the entire business world. Really examine if it may be different in your environment and make a decision for yourself; anecdotes from strangers on the internet are worthless.
Why is it that you think anecdotes are worthless? I think they are quite valuable for people who come to forums like this to ask questions and hear from other's about their experiences and understandings of the world. I value your post and do not consider it worthless.

In my years in IT, I've learned that perception is often as important as reality, and sometimes even more important. An organization's major problems may be perceived as minor, leading to years of inefficiency and problems. Minor issues can be perceived as major problems, and end up being fixed very quickly because they made someone very uncomfortable despite posing a very mild risk or inconvenience to the business.

Perceptions, of course, are placed on individuals as well. I've managed teams in the past, and can tell you that one of my absolute best workers got minimum raises and zero promotions because of the way he dressed and presented himself. One of my biggest regrets is that I wasn't able to convince my director to pay him more before I took a position on a different team.

I'll close by saying that this is hardly some hard science. We all have perceptions. We do with them what we will. I'm absolutely not saying that if you drive an old car or dress in ordinary clothing that you won't be successful. Driving a luxury car and wearing expensive clothes isn't a ticket for success.

I'm just saying that it's valuable to consider your personal brand in professional settings. Can that include your car (especially if your car is visible in the staff lot or you drive colleagues and superiors to lunch), and your clothes? I think the answer is yes.

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Re: Struggling with "Live like a Resident" versus "Keeping up with the Joneses"

Post by staythecourse » Sun Oct 09, 2016 2:17 pm

Dyloot wrote:Why is it that you think anecdotes are worthless? I think they are quite valuable for people who come to forums like this to ask questions and hear from other's about their experiences and understandings of the world. I value your post and do not consider it worthless.

In my years in IT, I've learned that perception is often as important as reality, and sometimes even more important. An organization's major problems may be perceived as minor, leading to years of inefficiency and problems. Minor issues can be perceived as major problems, and end up being fixed very quickly because they made someone very uncomfortable despite posing a very mild risk or inconvenience to the business.

Perceptions, of course, are placed on individuals as well. I've managed teams in the past, and can tell you that one of my absolute best workers got minimum raises and zero promotions because of the way he dressed and presented himself. One of my biggest regrets is that I wasn't able to convince my director to pay him more before I took a position on a different team.

I'll close by saying that this is hardly some hard science. We all have perceptions. We do with them what we will. I'm absolutely not saying that if you drive an old car or dress in ordinary clothing that you won't be successful. Driving a luxury car and wearing expensive clothes isn't a ticket for success.

I'm just saying that it's valuable to consider your personal brand in professional settings. Can that include your car (especially if your car is visible in the staff lot or you drive colleagues and superiors to lunch), and your clothes? I think the answer is yes.
Kudos and agree 100%. Folks are delusional if they don't think presentation matters. It is either concious or subconcious, but it matters. Why do you think high price lawyers and FA dress up. It isn't just "becuase" it is becuase they are presenting an aura of success. It matters to their clients, becuase if it didn't they wouldn't keep doing it.

I will be saving this post to show my kids when they get old enough. Presentation, unfortanately, is AS important if not more important then knowing what you are doing. I don't agree with it, but you are not going to change how the world works.

Good luck.
"The stock market [fluctuation], therefore, is noise. A giant distraction from the business of investing.” | -Jack Bogle

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Re: Struggling with "Live like a Resident" versus "Keeping up with the Joneses"

Post by White Coat Investor » Sun Oct 09, 2016 2:25 pm

Philip_Marlowe wrote:I'm wondering how others resist lifestyle creep when everyone around them is spending.

I'm a junior associate at a large law firm and my DW is a teacher at a (ritzy) private school. We're both pretty naturally frugal and are driven to be even more so at the moment as we push to pay off my law school loans and build up a nest egg.

We have been doing really well at keeping costs down and not growing our spending to match our income but I've noticed that we are getting more and more peer pressure to spend.

My work especially (and my DW's to a lesser extent) is a hotbed of conspicuous consumption (the majority drive luxury cars, many of the women have purses that cost near what my wife's entire wardrobe costs, men wear expensive watches, etc) and as we've been in this world long enough now we're starting to get questions and comments on the fact that our spending is different. Coworkers will often make comments about how we're making good money so we should just do x or buy y. When it comes to cars especially we've both gotten a bunch of comments asking why we drive "beaters" (we both drive 10+ year-old cars in excellent condition with barely 100k miles).

We know we need to keep spending down but it's difficult sometimes not to let the comments and the visual differences in lifestyle get to us. How have others kept their eyes on the prize and resisted the urge to spend when surrounded by those who push spending?
When I used to get questions like that I answered them. I told them why I drove a beater etc. Now I'm the guy they're all worried will retire on them forcing them to hire. Now I not only earn more and have more than many/most/all of my partners, but I also spend more than many of them, or at least seem to. The whole point of "live like a resident" isn't to do it forever, it's to get back to broke ASAP, build a reasonable start to the nest egg ASAP, and then decide what you want out of your life and buy that as much as is possible. The goal isn't to live like a resident forever. It's temporary. But in that process you also get to learn to resist the siren call of the Joneses, so when you do spend you can do so in a way that will maximize your happiness. For example, in the last couple of years I've bought a boat (put 200 hours on it so far), quit working nights (routine to work them at least into your 50s in my field), bought our first brand new expensive car, cut back 25% on my hours, and literally took 9 vacations in the last 3 months. Guess whose lifestyle the new hires are trying to emulate by living like a resident for their first few years. Given the example, THIS is what they want. They want choices. They want financial freedom. And THAT, is why you're driving a beater. Because you want it too.
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Re: Struggling with "Live like a Resident" versus "Keeping up with the Joneses"

Post by bogle_rad » Sun Oct 09, 2016 3:15 pm

Philip_Marlowe wrote:
dodecahedron wrote:As far as clothes go, there are budget-friendly ways to present "the right image," if that is expected in your profession.
Atgard wrote:Yes, as an attorney at a big law firm, you will need a decent suit or two
A few people mentioned clothing in their responses, I've actually found this to be one area where it seems easier to find a balance between being frugal and fitting in. I've definitely gotten that image is important but a few budget pieces tailored seem to fit right in without costing much of anything. With clothing at least I've been able to find that sweet spot where I still feel like I am being frugal but not that I don't fit in. I've found that much harder to achieve with some of the other items (cars being a big example).
Leemiller wrote:My husband works in Biglaw, and I used to work in Biglaw, now I work for the federal government. We drive a late 90s car and have never had one comment about it. I find it somewhat bizarre that you get comments?
I'm definitely not driving clients around or anything and it's not like people are going out of their way to make comments but it has come up either as others have upgraded and discussed what they are getting or at events (SA lunches, closing dinners, recruiting dinners, etc) where a bunch of us are leaving and arriving at the same time.
Maybe this is too Machiavellian a response, but perhaps flatter the person with the more expensive car if they mention your less expensive one? People love flattery and will often forget about their opinion of your things if you re-focus the conversation onto their shiny objects (and you can add some flair that you're still trying to decide which shiny object you would like [whether it's true or not]). It does take some finesse to not make this turn obvious to the other person, but you may find it an interesting challenge and a fun play on psychology.

Nevertheless, as others have pointed out, hold firmly to your values. Because as the saying goes, "If you stand for nothing, you'll fall for anything."

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Re: Struggling with "Live like a Resident" versus "Keeping up with the Joneses"

Post by MandyT » Sun Oct 09, 2016 4:25 pm

stoptothink wrote:I'll add my anecdotes, with the realization that they are as worthless to the OP's individual situation as all the others.
If nothing else, anecdotes are helpful for giving a sample of some different organizational cultures and sets of expectations (filtered through the lens of the poster, of course). While perhaps not directly useful to the original poster, I think such anecdotes are instructive to those just entering the workplace.

I was very naive and oblivious to unstated social norms when I was younger. Society is very, very hard on women like that. Over the years, I've become more attuned to these kinds of things, and I'm fortunate to have spent most of my career as a mathematics faculty member at an engineering school, where I'm socially above average in my department and can function adequately with regard to campus politics. Actually, I'm pretty well-liked around campus, and I get cut some slack for an occasional faux pas because my brand is "I help students, and I know the right answer".

There isn't any particular "code" with respect to cars or dress--my style for both is clean and presentable but unadorned. The closest thing to peer pressure that I've experienced has to do with my continuing to rent instead of buying a house. A reply of "I ran the numbers, and it isn't a slam dunk either way" has usually been satisfactory.

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Re: Struggling with "Live like a Resident" versus "Keeping up with the Joneses"

Post by mouses » Sun Oct 09, 2016 5:08 pm

miamivice wrote: When we had kids, though, is where it is hard to not fall into the trap. It's hard to tell yourself that your kids can do with xyz because sooner or later they'll outgrow the age that they enjoy xyz and then you're driving their childhood of something.
Uh, back in the Good Old Days when I Was Growing Up, we somehow managed to have good times without even electronics. I think we were healthier too, since we were out and about not glued to a screen. Yes, kids need computers for school, but I think they are better off without most of that other stuff. They also learn good values if they are turned away from conspicuous consumption. Where is the mantra Just Because Everyone Else is Doing it, Doesn't Mean You Should Do it, do parents not say that any more?

While I'm at it, I think scheduling kids into 2-3 things after school every day is just crazy.

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Re: Struggling with "Live like a Resident" versus "Keeping up with the Joneses"

Post by HomerJ » Sun Oct 09, 2016 5:15 pm

Philip_Marlowe wrote:We know we need to keep spending down but it's difficult sometimes not to let the comments and the visual differences in lifestyle get to us. How have others kept their eyes on the prize and resisted the urge to spend when surrounded by those who push spending?
Tell them you are saving up for a yacht.

(or a vacation home or something like that. They won't understand "financial independence" or "early retirement".)

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Re: Struggling with "Live like a Resident" versus "Keeping up with the Joneses"

Post by njboater74 » Sun Oct 09, 2016 5:58 pm

staythecourse wrote: Interesting. It looks like the issue is NOT about showing off wealth, but conformity. As I mentioned in the thread above this would fit into the situation of making expressive decisions. Those are one that are meant to show yourself to others how you want them to see you.
I think it's a little bit of both, depending on the situation. Now that I think about it, if you showed up in a french cuff shirt in Silicon Valley, you'd be so out of place that it'd be perceived as ironic. In techie industries, there can be a certain non-conformist type of conformity.
When the mob and the press and the whole world tell you to move, your job is to plant yourself like a tree beside the river of truth and tell the whole world - 'No, YOU move'--Captain America, Boglehead

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Re: Struggling with "Live like a Resident" versus "Keeping up with the Joneses"

Post by perfin » Sun Oct 09, 2016 6:29 pm

I know where you're coming from.

I work at one of the "big" tech companies, where a lot of employees have done well. In our parking garage you'll find a lot of $100k+ cars. Some of their drivers are in my org & periodically ask why I'm still driving my POS I got in the 90s. Likewise, some of my peers will talk about various expenses I consider extravagant and ask why I'm just hoarding.

I usually just agree & make a joke at my own expense. "Yeah, I'm cheap skate." Or "Oh, I do go crazy, just my vices are pretty cheap: books & movies, and two buck chuck. Good wine is wasted on me." We usually just move on to another topic.

The way I look at it is different things make different people happy. Cars, expensive dinners, wine clubs & other things may genuinely make other people happy, but they don't make *me* happy. Why waste my money if it doesn't make me happy?

That said, when I crossed into seven figures income, I did start two "extravagant" items: 1) Periodically flying business class and 2) rebuilding our house.

Part of my (admittedly) flawed thinking on (1) is that when we need a new family car, we didn't go nuts and probably spent $30k left than what a lot of peers drive. We do a few trips each year to see out of state family and I estimated the delta between coach & biz would be ~$3k annually. So I asked myself "Would I rather have Car A and fly biz class for 10 years, or Car B and coach." Easy answer.

(And I know, the best move financially would have been Car A and coach, but it helped me decide to splurge on biz class.)

For (2) it's really a quality of life thing, more my family. It will change my timeline for retirement, but I decided it was worth it for a better home.

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Re: Struggling with "Live like a Resident" versus "Keeping up with the Joneses"

Post by lernd » Sun Oct 09, 2016 6:33 pm

staythecourse wrote:
lernd wrote:
2. Demonstrations of wealth do not equal wealth. Those cars may be leased at ridiculous cost, colleagues may be mortgaged to the hilt and up to their eye balls in debt. What you think people own may actually be rented. You don't know the arguments they've had at home about bills, or the stress finances have placed on their family relationships. Be happy you and your spouse see eye to eye on financial matters and consider yourself fortunate that instead of adding debt, you are trying to pay it down (student loans). My wife and I love to collectively roll our eyes at conspicuous displays of wealth, it's a running inside joke between us. If anything, it helps to validate our choices - flip the script on those expensive watch wearers around you (who the heck needs an expensive watch - don't cell phones tell time?)
True, but the reality in many times is those folks just plain make more money then you and I. It is easier mentally and emotionally to validate it by thinking, "Boy that guy is just wasting his money instead of saving it", but in reality there are folks out there who save JUST as much as you and I do, but make an excess and spend the excess. The whole concept on this board that everyone who shows wealth is "house poor" is just not correct. Makes many folks feel better, but may not be completely true.

Either way who cares. Just watched a great documentary yesterday and one quote struck a chord and it went something like, "Comparisons is a great way to unravel happiness".

Good luck.
Many times it is, many times it isn't. There are a lot more luxury cars on the road than people who make more than I do, probably a lot more luxury watches sold as well. The OP is a junior associate at a big law firm, if other junior associates are chiding the OP about cars, then they probably make the same amount as the OP. Sure, if a senior associate is chiding the OP, that's a different story, they make more (and may be trying to hint to the OP something important - as has been discussed here about appearances for clients). I certainly realize that there are plenty of people who can drive the Mercedes and still save plenty of money, but given nationwide debt problems (something like $15,000 of credit card debt per person in this country?) you have to admit, there are plenty of people living beyond their means as well.

The point I'm trying to make and help the OP with is to ignore the noise from others. If you like driving a 10 year old car and don't want to wear ostentatious jewelry, more power to you. It's hard not to compare oneself to others, but don't let others dictate to you how you should live or spend (or save) your money, and if having a chip on your shoulder helps keep you on path, then by all means go for it.

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Re: Struggling with "Live like a Resident" versus "Keeping up with the Joneses"

Post by daveydoo » Sun Oct 09, 2016 6:38 pm

lernd wrote:I know what you are talking about. When I finished my residency and took my first attending physician job, it was in a wealthy town. I parked my Civic in the physicians' lot and it was hard not to notice that is was one of the few non-luxury cars (though my favorite car in the lot was a 20+ year old Volvo wagon that reminded me of my childhood - driven by a 70 year old neurologist). That said, I never felt a strong urge to go out and buy Luxury Car X. My wife and I lived (and continue to live) our lives with the financial discipline that has given us much more freedom than perhaps many of the luxury car owners in that lot. Some things to keep in mind:

1. Work colleagues aren't necessarily your friends. They're often times more like frenemies - trying in a passive aggressive way to compete with you to make themselves feel better or you feel worse. Don't get caught up in the rat race. Real friends (and certainly they can be colleagues at work too) don't make fun of you for the things you have, or the things you "should have." People critiquing your car are doing so not to "help you" but to justify their own financial decision to buy a luxury vehicle instead.

2. Demonstrations of wealth do not equal wealth. Those cars may be leased at ridiculous cost, colleagues may be mortgaged to the hilt and up to their eye balls in debt. What you think people own may actually be rented. You don't know the arguments they've had at home about bills, or the stress finances have placed on their family relationships. Be happy you and your spouse see eye to eye on financial matters and consider yourself fortunate that instead of adding debt, you are trying to pay it down (student loans). My wife and I love to collectively roll our eyes at conspicuous displays of wealth, it's a running inside joke between us. If anything, it helps to validate our choices - flip the script on those expensive watch wearers around you (who the heck needs an expensive watch - don't cell phones tell time?)

3. Do not discount the benefit of financial independence on happiness in life. Stress associated with financial instability is real. Freedom is inversely related to debt.

4. Studies demonstrate that happiness is more about experiences than things. An expensive watch will probably make you less happy than a vacation of a lifetime. Money spent on things that make you happy is well spent. Money spent on trying to show off is pretty much wasted. Hey, if a fancy watch or car floats your boat (another expensive item!), more power to you. But it sounds like you aren't interested in that stuff.
All of this. Well said.
"I mean, it's one banana, Michael...what could it cost? Ten dollars?"

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Re: Struggling with "Live like a Resident" versus "Keeping up with the Joneses"

Post by gator15 » Sun Oct 09, 2016 7:26 pm

I agree with everyone when they say purchase what makes you happy. If you want an expensive car and you can afford it, go for it. Just make sure you are meeting your savings goals. I've finally reached a point in my life were I know what makes me happy. It took a while to get to that point. For a long time I thought I wanted fast cars and have purchased my fair share over the years. The reality is the car caused more anxiety than happiness. I was scared to park it for fear of door dings. I didn't want to drive it to work because I was a leader in my organization and didn't think it was a good look as I tried to mentor those who worked for me. I understand when people say you shouldn't worry about what other people think, but I don't think that is relevant in all professions. Whatever you get, ensure you are happy with your purchase. Don't worry about the Joneses. Do what's best for you. I've made some extravagant purchases over the years and it was never because I felt like I was trying to match someone else's lifestyle. I would argue I am Jones considering all my friends live cheaper than I do. The difference is I've met my savings goals over the last 15 years and have given myself a lot of financial flexibility. Meet your savings goals and do whatever you like with your money if it makes you happy.

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Re: Struggling with "Live like a Resident" versus "Keeping up with the Joneses"

Post by mavi » Sun Oct 09, 2016 8:19 pm

Depending on your firm and the city, it may be important for a law firm associate to not have an obviously cheap car.

But just because your car is a "luxury car" doesn't mean that it has to be expensive. I bought an Acura when I got out of law school, because my old car had died. Even though it was a luxury car, I bought it for less than the cost of a Honda Fit, because as it had a decent amount a mileage on it. 7 years later, I still drive it, and the only mechanical issue I have ever had is that I had to replace was the washer motors. For every firm event I went to with this car, I never had even close to the nicest vehicle, but my car was "nice enough" so as to not stand out.

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Re: Struggling with "Live like a Resident" versus "Keeping up with the Joneses"

Post by carguyny » Mon Oct 10, 2016 11:41 am

dbr wrote:You are both employed in places that are a poor match to your personalities and values. It might be worthwhile in the long run to look around for alternatives.
+1 - at my firm what people wear/drive has zero relevance.

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Re: Struggling with "Live like a Resident" versus "Keeping up with the Joneses"

Post by lomarica01 » Mon Oct 10, 2016 12:04 pm

my advice when you do need to buy something make sure it is a top quality item but not necessarily the most expensive or flashy. People "in the know" will recognize this type of wise purchase.

Also ignore others spending habits and just focus on paying off your debt and future house as fast as you can and work on your plan to retire years earlier than you peers. That should keep you motivated. As Dave Ramsey says A paid off mortgage has taken the place of a BMW as the status symbol of choice. Your peers in 10 years or so will be shocked when they find out your house is all paid for.

good luck

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Re: Struggling with "Live like a Resident" versus "Keeping up with the Joneses"

Post by EddyB » Mon Oct 10, 2016 12:11 pm

dbr wrote:You are both employed in places that are a poor match to your personalities and values. It might be worthwhile in the long run to look around for alternatives.
This may be a stretch. I wouldn't base too much on how the OP's fellow junior associates act or expect him to act, if that's where the "pressure" originates. When I was a junior associate, I think there was some pressure like this. Some new associates came from modest backgrounds and had no context in which to place their new spending power. Others had no student debts and really had quite a lot of disposable income for (generally) single, childless twenty-somethings. The same has seemed true, mostly, of the (many years!) of associates who came after me. Eventually, though, nearly all of those people develop more mature views of money and consumption, find their comfort level and accepted others'. That said, there is some geographic aspect to all of it, too, in that a lot of big law jobs are in places that may generally place higher emphasis on consumption, and in that sense the typical experience for associates in those positions is skewed, vs. the typical experience for new doctors, for example.

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Re: Struggling with "Live like a Resident" versus "Keeping up with the Joneses"

Post by mwm158 » Mon Oct 10, 2016 12:25 pm

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Re: Struggling with "Live like a Resident" versus "Keeping up with the Joneses"

Post by alfaspider » Mon Oct 10, 2016 12:35 pm

EddyB wrote:
dbr wrote:You are both employed in places that are a poor match to your personalities and values. It might be worthwhile in the long run to look around for alternatives.
This may be a stretch. I wouldn't base too much on how the OP's fellow junior associates act or expect him to act, if that's where the "pressure" originates. When I was a junior associate, I think there was some pressure like this. Some new associates came from modest backgrounds and had no context in which to place their new spending power. Others had no student debts and really had quite a lot of disposable income for (generally) single, childless twenty-somethings. The same has seemed true, mostly, of the (many years!) of associates who came after me. Eventually, though, nearly all of those people develop more mature views of money and consumption, find their comfort level and accepted others'. That said, there is some geographic aspect to all of it, too, in that a lot of big law jobs are in places that may generally place higher emphasis on consumption, and in that sense the typical experience for associates in those positions is skewed, vs. the typical experience for new doctors, for example.
I think cultures can vary quite a bit between firms (and probably practice groups within). One of the partners I worked with at a large NY-based firm used to brag about showing up to a client meeting in a 15 year old Honda Civic with tape over one of the windows. For reference, profits per partner at the firm were well over $1 million. By contrast, my spouse worked at a large firm where people were constantly talking about their luxury cars and designer clothes. That firm was no more profitable than the one I worked for.

In any event, it's important to keep in mind that junior associates have terrible job security. I would be a 6th year associate if I were still at my firm. Of the roughly 25 people who were in my first-year class, guess how many are still there? THREE. To be fair, many of them are still in big firms or other highly remunerative positions, but it's worth considering that even if you manage to impress them with consumption or spend to feel more included, that inclusion is likely to be fleeting. The partners, who make many multiples of what you do, aren't going to be impressed with anything you could spend your comparatively puny salary on.

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Re: Struggling with "Live like a Resident" versus "Keeping up with the Joneses"

Post by NotWhoYouThink » Mon Oct 10, 2016 12:44 pm

HomerJ wrote:
Philip_Marlowe wrote:We know we need to keep spending down but it's difficult sometimes not to let the comments and the visual differences in lifestyle get to us. How have others kept their eyes on the prize and resisted the urge to spend when surrounded by those who push spending?
Tell them you are saving up for a yacht.

(or a vacation home or something like that. They won't understand "financial independence" or "early retirement".)
I like this advice. It let's everyone know you have some ambition and drive and want to advance, but doesn't cause you to spend money you'd rather not spend. Keep some brochures up in your office about expensive things you're saving for. You may need to upgrade your vehicle a bit, but a late model used Lexus bought off lease from someone who spends too much on cars would probably do the trick.

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Re: Struggling with "Live like a Resident" versus "Keeping up with the Joneses"

Post by englishgirl » Mon Oct 10, 2016 1:33 pm

I've been a BigLaw employee for 15+ years, and I've seen people come and go. Most of the junior associates who buy fancy Mercedes or Porsches and conspicuously consume are either living beyond their means, or their parents paid their way through law school so they don't have student loans to pay but they're still not saving aggressively for retirement. There are and have been those who drive old beaters, wear obviously cheap clothing and bring their own lunch every day - those are the "odd" ones who end up leaving to hang their own shingles because they can't quite fathom why the overhead is so high when they only have 1/4 of a secretary (forgetting the army of IT, accounting, HR, marketing and other personnel that make their lives easier). So, that's the two extremes.

But what about the middle? There are plenty of associates who dress reasonably, have nice normal cars like Honda Accords, and who don't stand out in either direction. Acuras and Infinitis are also popular in our garage. They seem to strike a happy balance of not spending crazily so they can still save money, and yet not penny pinching.
Sarah

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Re: Struggling with "Live like a Resident" versus "Keeping up with the Joneses"

Post by Dickerson » Mon Oct 10, 2016 1:54 pm

The syndicated newspaper column “Office Cat by Junius” (Edgar Allan Moss of Marion, IN) published the saying in January 1929:
“How many people do you know who are spending money they have not yet earned for things they don’t need to impress people they don’t like?”

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Re: Struggling with "Live like a Resident" versus "Keeping up with the Joneses"

Post by aude » Mon Oct 10, 2016 4:59 pm

Lots of good discussion here so far. I feel compelled to answer because I'm a partner at a large national law firm and have about 15-20 years in the profession. I am a nice person and try to mentor people like you. Part of that is giving them advice on avoiding mistakes like spending too much -- but only if they ask.

If I were you, just starting out, I would more or less ignore any feeling that you have to spend to fit in.

Here's what you need to do:

--Show up where and when you are needed.
--Be eager to learn and make sure we know you care.
--Don't put on airs.
--Don't pretend you know more than you do (law school is not med school -- it's largely irrelevant for the real world)
--Work hard.

Once you have a few decent suits (please get them tailored for ~!$40 each) and make sure your shoes are polished, etc., you are OK. Well, please also remember to brush your teeth, avoid chewing gum while speaking to a client, don't tell clients how you were up until 3:00 a.m. working, and don't address them with "Yo" or "Hey" or via social media. Seriously, behave like a professional if you want to charge $XXX per hour.

On cars: A great many of us partners who hire, train and evaluate people like you do not know or care what you drive. If you are like the one guy who bought a used yellow Lotus Esprit a few years back, then inevitably someone notices and thinks your priorities are out of order. I privately shake my head and wonder what you are thinking, and wonder whether you are a car guy (or girl) who likes to work on cars like I do.

Seriously, though, in the unlikely event that you were required to drive me or a client somewhere, I would mostly care about whether your car was clean and presentable. If it's dirty, smells like a locker room, has french fries on the seat, and says "CHECK AIRBAGS," then I don't care if it's a brand new Mercedes, you're insulting the client by making him ride in it. If it's 20 years old, clean, and presentable, then it's OK if even if it's a modest vehicle.

Which one tells the client that you care about doing things well? Hint: I drive a 20-year old Mercedes that I work on myself, because I like to. The non-car people say things like "nice car!" and the car people ask how car people questions. Nobody says to me, "Why don't you buy something newer?" Instead they say, "Wow, you take nice care of this," and I say, "Thanks, I love to spin a wrench now and then..."

Keep your eye on the ball: How do I learn enough that when the next recession hits I am not toast? The rest will take care of itself.

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Re: Struggling with "Live like a Resident" versus "Keeping up with the Joneses"

Post by gasman » Mon Oct 10, 2016 5:53 pm

I have noted that many people place a huge value on how others spend their money. Those who spend as they do affirm their choices. Those that spend differently is an implied criticism. Big house and fancy cars vs. small house practical cars. Public school vs. Private school. Clothes, Jewelry, etc., This is true in the workplace and life outside work.

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Re: Struggling with "Live like a Resident" versus "Keeping up with the Joneses"

Post by lemonPepper » Mon Oct 10, 2016 7:11 pm

several great responses. I used to be super frugal and spend way lower than my coworkers. Eventually I brought my appearances in line with what was expected for my profession so that nobody would think of me as weird. The reality is most people think you are "smart and intelligent" if you spend/behave like them. Likability is very important in professional success.

I tried but never got good at buying good clothes & accessories at discounted prices. I have some friends who know how to dress well and always buy in sales. I tag along with them when they go to shop. We have one 4 year old car and another beater car. We use the better car if we are going to business meetings etc.

It's much easier to do what you want when you are super successful. But to get there you have to look the part.

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Re: Struggling with "Live like a Resident" versus "Keeping up with the Joneses"

Post by Hunky-dory » Mon Oct 10, 2016 7:33 pm

Philip_Marlowe wrote:I'm wondering how others resist lifestyle creep when everyone around them is spending...How have others kept their eyes on the prize and resisted the urge to spend when surrounded by those who push spending?
I am a senior associate at a large firm, set to find out about promotion in the next couple of months. I was frugal until I had a kid three years ago, at which point monthly recurring expenses associated with childcare became my largest expense and my wife insisted on not living underneath train tracks and not driving a 10 year old car that had doors that didn't work. I am glad I was frugal when I was a younger attorney because I managed to pay off my debt and save seven figures, which I think is the biggest reason I am pretty relaxed about my promotion (the process is opaque at every firm, and even if you are confident you never really know as there is always an internal political process outside of your hands). My 2 cents to the OP and other junior associates out there: (1) unless you are at least mid-level associate, you really don't know if you are any good at being an attorney, (2) even if you are very good and know that with a degree of confidence, you probably don't know if you really want to be an attorney at a large firm for the rest of your life and (3) even if you are good and know you want to do it, you might not get the breaks you need to become a partner and sustain a practice over a long period of time. As a result, the odds are fairly high that the money you are making as a junior associate is more than you will ever make again, or at least on par. Do you really want to spend this money on keeping up with people who will come and go with regularity during your time at a large firm? Good luck, OP. It sounds like your head is in the right place and obviously you came to the right forum for support in being frugal.
:sharebeer

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Re: Struggling with "Live like a Resident" versus "Keeping up with the Joneses"

Post by miamivice » Tue Oct 11, 2016 9:05 am

mouses wrote:
miamivice wrote: When we had kids, though, is where it is hard to not fall into the trap. It's hard to tell yourself that your kids can do with xyz because sooner or later they'll outgrow the age that they enjoy xyz and then you're driving their childhood of something.
Uh, back in the Good Old Days when I Was Growing Up, we somehow managed to have good times without even electronics. I think we were healthier too, since we were out and about not glued to a screen. Yes, kids need computers for school, but I think they are better off without most of that other stuff. They also learn good values if they are turned away from conspicuous consumption. Where is the mantra Just Because Everyone Else is Doing it, Doesn't Mean You Should Do it, do parents not say that any more?

While I'm at it, I think scheduling kids into 2-3 things after school every day is just crazy.
I'm not talking computers, electronics, or 2-3 things.

I'm talking music class as an "add on" that is offered for preschool while my child is 2-3. She enjoys it now, and it's fun. Yes, I'd like to enroll her in music class, and know that in a few years she might not enjoy it as much. I don't want her to miss out on fun things to do as a child.

I'm talking taking my kids to age appropriate children's symphony events. They cost money to. My wife and I know we can always do the symphony another year, so we can delay it for ourselves, but if our kids enjoy music this year, it's hard not to buy the tickets for the children's symphony that they will enjoy.

I'm talking buying fingerpaint at the store because they are the age that fingerpaint is fun. In a few years they'll outgrow it, so we buy the fingerpaint today, even though a similar purchase we might delay for my wife or myself knowing that we could always delay the xyz purchase for the future and there is no harm.

While each of these things aren't expensive, they do add up. But it tears at the heartstrings to forgoe the children's symphony tickets, the music lessons that she loves so much, or the fingerpaint that makes my 2 year old smile. As parents, we want our kids to do fun things. As money-wise spenders, we want to minimize wasteful spending. It's harder accomplishing the latter as parents than before we had kids.

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Re: Struggling with "Live like a Resident" versus "Keeping up with the Joneses"

Post by protagonist » Tue Oct 11, 2016 10:42 am

If you are the type of individual that is vulnerable to peer pressure and wants to avoid it, one suggestion is to live in a community where peer pressure towards ostentatious displays is not a strong factor. Just as, if you want to quit drinking, you avoid hanging around bars.

Degree (and type) of peer pressure varies tremendously from community to community.

Where I live (MCOL college town), if anything, there is peer pressure AGAINST the ostentatious show of wealth. You can't really tell who has money because the richest people in town would be embarrassed driving around town in Porsches or carrying designer bags.

I'm also skeptical of the assertion that one has to flaunt wealth in order to get ahead in certain professions. But if that is truly the case, a knock-off Movado watch or Hermes bag can be found on eBay for probably less than $50, function just as well as an original, and nobody but an expert will know the difference (laughing).

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Re: Struggling with "Live like a Resident" versus "Keeping up with the Joneses"

Post by lemonPepper » Tue Oct 11, 2016 4:08 pm

protagonist wrote: I'm also skeptical of the assertion that one has to flaunt wealth in order to get ahead in certain professions. But if that is truly the case, a knock-off Movado watch or Hermes bag can be found on eBay for probably less than $50, function just as well as an original, and nobody but an expert will know the difference (laughing).
I think flaunting wealth is different than begin acceptable. You are not trying to outdo anybody but just enough to fit in.

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Re: Struggling with "Live like a Resident" versus "Keeping up with the Joneses"

Post by DVMResident » Tue Oct 11, 2016 5:48 pm

englishgirl wrote:But what about the middle? There are plenty of associates who dress reasonably, have nice normal cars like Honda Accords, and who don't stand out in either direction. Acuras and Infinitis are also popular in our garage. They seem to strike a happy balance of not spending crazily so they can still save money, and yet not penny pinching.
^ +1 This seems like the sweet spot the OP is trying to balance. Don't stick out either direction.

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Re: Struggling with "Live like a Resident" versus "Keeping up with the Joneses"

Post by DaftInvestor » Tue Oct 11, 2016 6:06 pm

I pulled up at a restaurant to have lunch with some old colleagues for dinner from an old company I used to work for. One of them saw me getting out of my Toyota and said "gee - with your title of xxxx over at company-yyyy I thought you'd be driving a Mercedes or something."
I just said "I'm going for financial independence and high net-worth versus financial status with no financial independence and lower net=worth."
I got a puzzled look at first and then a smile and then he asked me how my kids were doing.

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Re: Struggling with "Live like a Resident" versus "Keeping up with the Joneses"

Post by Barefoot » Tue Oct 11, 2016 7:22 pm

I have a go to line that I've used over the years when asked why I don't buy myself a new car/go out to lunch/whatever. You can afford it right?

I always say "I can afford anything I want, I can't afford everything I want"

Works every time.

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Re: Struggling with "Live like a Resident" versus "Keeping up with the Joneses"

Post by Slacker » Tue Oct 11, 2016 8:38 pm

Philip_Marlowe wrote:I'm wondering how others resist lifestyle creep when everyone around them is spending.

I'm a junior associate at a large law firm and my DW is a teacher at a (ritzy) private school. We're both pretty naturally frugal and are driven to be even more so at the moment as we push to pay off my law school loans and build up a nest egg.
Probably not something that you can do, but I work from home and conduct all my legal work without ever seeing anyone other than via Webex with a web cam on my desk.

Before I began working from home I always used the mass transit system. In DC, with their traffic, no one thinks any less of you for using the WMATA system to get to work and they certainly have no idea what I drive due to the use of trains or buses.

My wife also works from home with me, so we get to really dodge the bullet on putting on a "show". Furthermore, we moved to a low-cost of living area with low income taxes in a neighborhood where the median home value is under $175K. I really like how low key it all is and am glad we aren't still in DC.

If I do need to meet with someone, I am flying to them and need only one nice suit, one pair of nice shoes, a couple nice shirts, a couple nice ties and with fewer people wearing watches, I don't even have a Casio or Timex - just my phone.

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Re: Struggling with "Live like a Resident" versus "Keeping up with the Joneses"

Post by Swimmer » Thu Oct 13, 2016 6:45 pm

lernd wrote:I know what you are talking about. When I finished my residency and took my first attending physician job, it was in a wealthy town. I parked my Civic in the physicians' lot and it was hard not to notice that is was one of the few non-luxury cars (though my favorite car in the lot was a 20+ year old Volvo wagon that reminded me of my childhood - driven by a 70 year old neurologist). That said, I never felt a strong urge to go out and buy Luxury Car X. My wife and I lived (and continue to live) our lives with the financial discipline that has given us much more freedom than perhaps many of the luxury car owners in that lot. Some things to keep in mind:

1. Work colleagues aren't necessarily your friends. They're often times more like frenemies - trying in a passive aggressive way to compete with you to make themselves feel better or you feel worse. Don't get caught up in the rat race. Real friends (and certainly they can be colleagues at work too) don't make fun of you for the things you have, or the things you "should have." People critiquing your car are doing so not to "help you" but to justify their own financial decision to buy a luxury vehicle instead.

2. Demonstrations of wealth do not equal wealth. Those cars may be leased at ridiculous cost, colleagues may be mortgaged to the hilt and up to their eye balls in debt. What you think people own may actually be rented. You don't know the arguments they've had at home about bills, or the stress finances have placed on their family relationships. Be happy you and your spouse see eye to eye on financial matters and consider yourself fortunate that instead of adding debt, you are trying to pay it down (student loans). My wife and I love to collectively roll our eyes at conspicuous displays of wealth, it's a running inside joke between us. If anything, it helps to validate our choices - flip the script on those expensive watch wearers around you (who the heck needs an expensive watch - don't cell phones tell time?)

3. Do not discount the benefit of financial independence on happiness in life. Stress associated with financial instability is real. Freedom is inversely related to debt.

4. Studies demonstrate that happiness is more about experiences than things. An expensive watch will probably make you less happy than a vacation of a lifetime. Money spent on things that make you happy is well spent. Money spent on trying to show off is pretty much wasted. Hey, if a fancy watch or car floats your boat (another expensive item!), more power to you. But it sounds like you aren't interested in that stuff.

Well said. Congratulations to you and your wife.

Mike83
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Re: Struggling with "Live like a Resident" versus "Keeping up with the Joneses"

Post by Mike83 » Thu Oct 13, 2016 10:05 pm

Throughout my career I had seen, close up, three individuals with net worth of $100MM, $1 Billion and $5 billion, at different companies Two had ten year old cars, two had VERY modest homes and the third had a modest home considering their wealth, none had fancy accessories nor expensive clothes, two ate in the company cafeteria with regular company employees. Two of them shopped at K-mart. All were nice people without affect. They were 100% invested in building their business, and 0% interested in puffing themselves. I feel lucky to have observed them and seen that this is possible, and think of them when I see celebrities and wannabees strutting their stuff.

protagonist
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Re: Struggling with "Live like a Resident" versus "Keeping up with the Joneses"

Post by protagonist » Mon Oct 17, 2016 10:33 am

lernd wrote: When I finished my residency and took my first attending physician job, it was in a wealthy town. I parked my Civic in the physicians' lot and it was hard not to notice that is was one of the few non-luxury cars (though my favorite car in the lot was a 20+ year old Volvo wagon that reminded me of my childhood - driven by a 70 year old neurologist).
I am a retired physician, and wherever I worked, it seemed the most common doctor cars were Hondas or Toyotas- Civics, Accords, Camrys and Corollas were very common....there were a few scattered luxury cars and the occasional beater, but not many of either. Nobody ever commented about my car, which was typically a Honda, sometimes new and sometimes 10 or more years old.

I think it is not so much a commentary on the pressures to conform of the profession , but rather on the pressures to conform of the community where you live or work, and that is (at least to a large extent when dealing with relatively affluent and educated people with good employment prospects) a matter of personal choice. This extends beyond just material conformity to politics, religion and just about everything else.

IMHO, given the luxury of choice, one should choose a community where one feels most comfortable being one's self, whatever that is for you.

mcraepat9
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Re: Struggling with "Live like a Resident" versus "Keeping up with the Joneses"

Post by mcraepat9 » Mon Oct 17, 2016 10:48 am

Barefoot wrote:I have a go to line that I've used over the years when asked why I don't buy myself a new car/go out to lunch/whatever. You can afford it right?

I always say "I can afford anything I want, I can't afford everything I want"

Works every time.
I agree with this.

I am a Biglaw associate who owns no tangible item worth more than $200. I couldn't be happier and it allows me not to worry about my colleagues who have big things (that would add no joy to my life) and are basically forced to work in Biglaw to pay for them. I can leave at a moment's notice and not be concerned about money.

When people ask me about it, I tell them I spend money on (i) experiences and (ii) things that make my life easier. A $50,000 car does neither.
Amateur investors are not cool-headed logicians.

afan
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Re: Struggling with "Live like a Resident" versus "Keeping up with the Joneses"

Post by afan » Tue Oct 18, 2016 3:32 pm

I have to wear a suit to work to avoid people thinking I don't belong here. It does not have to be an expensive suit- so it isn't. But for those who need expensive suits: Thrift shops and ebay have them at a tiny fraction of the cost new. Like 5-10% of retail on ebay, and much less than that at thrift shops. Alterations of course add to that, depending on how carefully you shop for something that needs minimal work and how particular you are.

Other than the suit, I have no expectations of displays of wealth. I have no idea what kind of car others at my place drive. The parking lots my immediate colleagues use have people of a wide range of incomes. So I have no way of knowing whether that old Prius belongs to someone senior to me or a low paid worker. No one seems to care.

Being cheap, I know lots of people who, to me, seem to spend money like water. A number of them are friends. I feel no need to emulate them, but I don't lecture them on their spending either. Free country, you know.

I can easily believe there are workplaces where the employees are expected to project an air of affluence. I can believe that consumption of the obvious badges of wealth could be part of the expectation. I have never walked in to a Morgan Stanley or Goldman office. I assume if I were to visit, I would see lots of mahogany and workers dressed up to say "see how rich we are." There are people who are impressed by this and if you are in sales, you need to make the correct impression on your customers.

I have no idea whether Big Law firms expect the same show. If they do, then I assume associates have to conform if they want to move up.

I never heard of school teachers being expected to do this, no matter how wealthy the parents...
We don't know how to beat the market on a risk-adjusted basis, and we don't know anyone that does know either | --Swedroe | We assume that markets are efficient, that prices are right | --Fama

Hug401k
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Re: Struggling with "Live like a Resident" versus "Keeping up with the Joneses"

Post by Hug401k » Tue Oct 18, 2016 7:02 pm

Christine_NM wrote: I found that if you have a few witty answers when co-workers ask these things it does not become a serious issue to them or to you. A little humor saves a lot of money.
This. A friend asked me when I was going to replace my 2007 Honda Pilot. I told him "When I earn antique plates." If I were you I would add, "I'm saving for a Tesla to celebrate when my loans are paid off " (or insert some other over the top car). Sometimes, I simply give them a piece of the truth." I'd rather drive that car for the rest of my life than step into a dealership." (I'm female so most women just nod in agreement). Occasionally, I'll pull out the smart kid line "I hate to invest money into a depreciating asset."

That being said, my husband is in sales so he does have to walk the walk a bit. When his 12 year old car got unacceptable (i.e. someone backed into the hood), he carefully picked a mid level luxury car, used, and as old as would be "acceptable" and by leveraging models that rarely change bodies, like an Infiniti.

ThankYouJack
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Re: Struggling with "Live like a Resident" versus "Keeping up with the Joneses"

Post by ThankYouJack » Tue Oct 18, 2016 7:17 pm

Philip_Marlowe wrote:
We know we need to keep spending down but it's difficult sometimes not to let the comments and the visual differences in lifestyle get to us. How have others kept their eyes on the prize and resisted the urge to spend when surrounded by those who push spending?
Why do you need to keep spending down and what is your prize? I assume early retirement, Mr. Money Mustache style? Assuming you have a healthy relationship with money (not overly obsessed with saving) why not just tell people?

Something like:
"I don't buy an expensive car because it won't bring any additional joy to my life. I also hope to retire early because there are things that I enjoy more than work."


It's good to be different when you realize the herd is heading in the wrong direction.

chicagoan23
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Re: Struggling with "Live like a Resident" versus "Keeping up with the Joneses"

Post by chicagoan23 » Tue Oct 18, 2016 9:28 pm

I am a 16-year lawyer who has represented lawyers that have encountered financial problems and who helps counsel partners of mine (500+ lawyer firm) who find themselves in tricky financial situations. I've seen lawyers making $500k+ who can't afford their estimated tax payments and find themselves in six figure debt to the IRS very quickly. I've dealt with lawyers making $800k but who can't come up with $20k to make their mandatory retirement plan contributions. I can name a half-dozen lawyers with seven figure incomes but who are paying off a divorce and who have kids in college so they are living paycheck to paycheck. My clients have included lawyers who have committed tax fraud because they were trying to shield income in order to get financial aid to their kids, despite making in the mid-six figures. It is amazing to me how terrible some of these people are at managing their income. I would say that some of these high-income lawyers are among the most financially illiterate people I have ever encountered.

Please don't take advice on what you can "afford" given your salary from other lawyers, or from anyone for that matter. They would be the last people I would listen to. If you don't start down the road of lifestyle creep, you will never fall into that trap.

You have also indicated that you don't need your car for client purposes (almost no lawyers that I know do) so put the car idea out of your head. I know many lawyers who have gotten overextended after the $600 or $700 a month car payment and then have had to give it up--such a waste of money. Don't even bother thinking of the luxury cars, etc. until you have seven figures saved up. You'll be thankful that you waited.

helloeveryone
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Re: Struggling with "Live like a Resident" versus "Keeping up with the Joneses"

Post by helloeveryone » Wed Oct 19, 2016 2:54 pm

If what you are doing is making you and your wife happy and you are achieving your financial goals then don't worry about everyone else. I tell my colleagues and friends that I'm cheap and can't stand paying full price for things. I also tell them that my goal is to be able to retire when I'm 59 & 1/2. When they ask why I tell them it's because I'm cheap and I don't want to be penalized 10% for withdrawing from my 401k earlier than that.
Having said that, I succumbed because growing up my lifelong dream was to own an BMW M3. I traded in a 2012 Accord for a pre-owned 2012 BMW528i and it's made me happy. (being older and wiser it made no sense to have an M series) I love the car but it makes me a little sad financially when I see that my insurance six month premium is ~$175 more than the accord, I have to pay 20cents more per gallon because it requires the 89 octane fuel, my repairs are more however it allowed me to achieve my childhood dream of owning a BMW.

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