What constitutes "a lot" of money?

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TomatoTomahto
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Re: What constitutes "a lot" of money?

Postby TomatoTomahto » Sat Apr 15, 2017 8:19 am

SQRT wrote:
RAchip wrote:
SQRT wrote:My portfolio can fluctuate by high 6 figures daily, but I don't worry about it.



Umm, your portfolio can fluctuate by $900,000 per day (high 6 figures)? So you have what, a $90 million portfolio?
.

My portfolio can fluctuate by more than 1% per day.

Yes. Even though we don't generally hold individual stocks, the large number of unvested shares of DW's employer awarded in bonuses that I count as in our portfolio can make our portfolio's value swing more than 1% in a day. If I didn't resist the temptation to own Amazon and Tesla, that would be even more dramatic.

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Re: What constitutes "a lot" of money?

Postby Longdog » Sat Apr 15, 2017 8:58 am

KlangFool wrote:
Longdog wrote:Do (or should) the daily dollar gyrations of your portfolio affect your view of how much money is "a lot." For example, if you had a million dollar 50/50 portfolio that on any given day could be up or down by, say, $5,000, would you view $5,000 as a dollar amount you'd be comfortable spending on an unexpected expense or a splurge? I think it's all about perspective and would like to hear how others might view this concept.

It does seem like the larger your portfolio the more secure you are and the less you need to be concerned about your spending... to a point.


Longdog,

There is another way to look at this. If your portfolio is big enough, you do not need to save in order to reach your retirement goal. You could live paycheck to paycheck. So, you do not really look at the daily movement of your portfolio.

This is the case for me. I spend all my annual savings on my children's college education. I "cash flow" my children's college education. I spend my current income and let the portfolio grow.

Do not eat your seed corn. Spend your current income. Do not withdraw from your portfolio.

KlangFool


KlangFool,

Good point. I think that is another, equally valid way of looking at it that probably yields similar answers. But one comment on this - when you say "spend your current income" - I think you mean earned income, which would imply that the answer might be different if you are in accumulation versus spend-down phase. I don't think you mean spend dividends or interest from your portfolio.

Overall this has been a great discussion and really interesting read from so many thoughtful folks!
Steve

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Re: What constitutes "a lot" of money?

Postby KlangFool » Sat Apr 15, 2017 9:15 am

Longdog wrote:
KlangFool wrote:
Longdog wrote:Do (or should) the daily dollar gyrations of your portfolio affect your view of how much money is "a lot." For example, if you had a million dollar 50/50 portfolio that on any given day could be up or down by, say, $5,000, would you view $5,000 as a dollar amount you'd be comfortable spending on an unexpected expense or a splurge? I think it's all about perspective and would like to hear how others might view this concept.

It does seem like the larger your portfolio the more secure you are and the less you need to be concerned about your spending... to a point.


Longdog,

There is another way to look at this. If your portfolio is big enough, you do not need to save in order to reach your retirement goal. You could live paycheck to paycheck. So, you do not really look at the daily movement of your portfolio.

This is the case for me. I spend all my annual savings on my children's college education. I "cash flow" my children's college education. I spend my current income and let the portfolio grow.

Do not eat your seed corn. Spend your current income. Do not withdraw from your portfolio.

KlangFool


KlangFool,

Good point. I think that is another, equally valid way of looking at it that probably yields similar answers. But one comment on this - when you say "spend your current income" - I think you mean earned income, which would imply that the answer might be different if you are in accumulation versus spend-down phase. I don't think you mean spend dividends or interest from your portfolio.

Overall this has been a great discussion and really interesting read from so many thoughtful folks!


Longdog,

Yes, I meant my earned income.

KlangFool

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TheTimeLord
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Re: What constitutes "a lot" of money?

Postby TheTimeLord » Sat Apr 15, 2017 10:00 am

SQRT wrote:
TheTimeLord wrote:. What is the point of accumulating wealth just to let it sit in a pile so you can oogle it? If they aren't going to use it, perhaps they should work more actively to give it away like Gates and Buffet.


This would be my view as well. I don't really understand money hoarders. Reminds me a bit of another thread. "Stealth Wealth". Money will be spent or given away for others to spend, now or later.


I think for a lot of people, I know I fall into this category, it is easy to get in an endless cycle of goal setting and you buy into the concept that it is tragic if your Net Worth falls in a given month so you fight and save to make sure you make that next goal or keep your balance from dropping. This is all fine and dandy during accumulation as long as it isn't to a ridiculous extreme, but I think it makes the transition to depending on your portfolio for income very difficult since for decades you have made it a focus to increase your savings not withdraw from them. This could be very bad in the early years of retirement when you waste your health and energy fearing you are over withdrawing. Of course the only thing worse would be being a total spend thrift the first 5 years and then getting hit with a Bear market right in the old kisser.
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wrongfunds
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Re: What constitutes "a lot" of money?

Postby wrongfunds » Sat Apr 15, 2017 10:47 am

It was cheaper than going to Seville myself.

But would it be *better* than going to Seville yourself? :-)

On the similar line, is attending your home team's football game in cold freezing weather*better* than watching it on a large screen and cuddled up on your own couch with all the food and the drinks right next to you? Logically, there is no contest but how many of you would give up the first experience if the opportunity popped up aka you won that as a prize?

Personally, if one is going to place to *see* it rather than *experience* it, it would be lot cheaper and better to do it via large screen HD TV and well made documentary. With the advent of better high tech multimedia technology, the day is just around the corner when the simulated experience would be coming close to being there.

michaeljc70
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Re: What constitutes "a lot" of money?

Postby michaeljc70 » Sat Apr 15, 2017 11:58 am

Money is almost always viewed in context. Being overcharged a $4 on a $5 item is a lot. A $3000 portfolio fluctuation on a $2 million portfolio is not. A daily fluctuation has zero impact on my spending.

The total balance of my portfolio does impact my spending.

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Re: What constitutes "a lot" of money?

Postby CppCoder » Sat Apr 15, 2017 12:47 pm

SQRT wrote:
TheTimeLord wrote:. What is the point of accumulating wealth just to let it sit in a pile so you can oogle it? If they aren't going to use it, perhaps they should work more actively to give it away like Gates and Buffet.


This would be my view as well. I don't really understand money hoarders. Reminds me a bit of another thread. "Stealth Wealth". Money will be spent or given away for others to spend, now or later.


To some, I might look like a money hoarder, but I don't view it that way. I make a certain amount of money each year, $X, and I (my family) have a certain amount of wants/needs per year, $Y. It just so happens that $X >> $Y, so I "hoard" the money. Should I just buy stuff I don't want so I'm not hoarding? The argument above is that no, I should give it away, but I have reasons for keeping it. First, I view it as self insuring against income catastrophe. Second, I view it as paying off years I won't have to work for someone else in the future. Third, I view it as paying off years my children won't have to work for someone else in the future (hopefully, to do something productive or love, not do nothing). I only "hoard" money because I have low cost hobbies. I never feel like I'm depriving myself to build the pile.

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TheTimeLord
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Re: What constitutes "a lot" of money?

Postby TheTimeLord » Sat Apr 15, 2017 1:49 pm

CppCoder wrote:
SQRT wrote:
TheTimeLord wrote:. What is the point of accumulating wealth just to let it sit in a pile so you can oogle it? If they aren't going to use it, perhaps they should work more actively to give it away like Gates and Buffet.


This would be my view as well. I don't really understand money hoarders. Reminds me a bit of another thread. "Stealth Wealth". Money will be spent or given away for others to spend, now or later.


To some, I might look like a money hoarder, but I don't view it that way. I make a certain amount of money each year, $X, and I (my family) have a certain amount of wants/needs per year, $Y. It just so happens that $X >> $Y, so I "hoard" the money. Should I just buy stuff I don't want so I'm not hoarding? The argument above is that no, I should give it away, but I have reasons for keeping it. First, I view it as self insuring against income catastrophe. Second, I view it as paying off years I won't have to work for someone else in the future. Third, I view it as paying off years my children won't have to work for someone else in the future (hopefully, to do something productive or love, not do nothing). I only "hoard" money because I have low cost hobbies. I never feel like I'm depriving myself to build the pile.


We were talking about financially independent people with 8 figure portfolio and holes in their socks, not people accumulating towards retirement.
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SQRT
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Re: What constitutes "a lot" of money?

Postby SQRT » Sat Apr 15, 2017 5:29 pm

TheTimeLord wrote:
CppCoder wrote:
SQRT wrote:
TheTimeLord wrote:. What is the point of accumulating wealth just to let it sit in a pile so you can oogle it? If they aren't going to use it, perhaps they should work more actively to give it away like Gates and Buffet.


This would be my view as well. I don't really understand money hoarders. Reminds me a bit of another thread. "Stealth Wealth". Money will be spent or given away for others to spend, now or later.


To some, I might look like a money hoarder, but I don't view it that way. I make a certain amount of money each year, $X, and I (my family) have a certain amount of wants/needs per year, $Y. It just so happens that $X >> $Y, so I "hoard" the money. Should I just buy stuff I don't want so I'm not hoarding? The argument above is that no, I should give it away, but I have reasons for keeping it. First, I view it as self insuring against income catastrophe. Second, I view it as paying off years I won't have to work for someone else in the future. Third, I view it as paying off years my children won't have to work for someone else in the future (hopefully, to do something productive or love, not do nothing). I only "hoard" money because I have low cost hobbies. I never feel like I'm depriving myself to build the pile.


We were talking about financially independent people with 8 figure portfolio and holes in their socks, not people accumulating towards retirement.

Yes, it's very different once retired. Once you are already FI, retired, to continue saving. For what? I can understand late life health care perhaps, but otherwise to keep saving as you get near the end just seems like hoarding to me.
Last edited by SQRT on Sat Apr 15, 2017 5:33 pm, edited 2 times in total.

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Re: What constitutes "a lot" of money?

Postby SQRT » Sat Apr 15, 2017 5:31 pm

TheTimeLord wrote:
SQRT wrote:
TheTimeLord wrote:. What is the point of accumulating wealth just to let it sit in a pile so you can oogle it? If they aren't going to use it, perhaps they should work more actively to give it away like Gates and Buffet.


This would be my view as well. I don't really understand money hoarders. Reminds me a bit of another thread. "Stealth Wealth". Money will be spent or given away for others to spend, now or later.


I think for a lot of people, I know I fall into this category, it is easy to get in an endless cycle of goal setting and you buy into the concept that it is tragic if your Net Worth falls in a given month so you fight and save to make sure you make that next goal or keep your balance from dropping. This is all fine and dandy during accumulation as long as it isn't to a ridiculous extreme, but I think it makes the transition to depending on your portfolio for income very difficult since for decades you have made it a focus to increase your savings not withdraw from them. This could be very bad in the early years of retirement when you waste your health and energy fearing you are over withdrawing. Of course the only thing worse would be being a total spend thrift the first 5 years and then getting hit with a Bear market right in the old kisser.

Yes, agree. My in laws were like this. Died in early 90's with 5 times the net worth he had when he retired. Very good for us,of course.

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Re: What constitutes "a lot" of money?

Postby lthenderson » Sat Apr 15, 2017 5:56 pm

Like so many questions here on Bogleheads, "a lot" of money is a matter of perspective.

I didn't bat an eyelash when I bought my fixer upper home for $173k. Didn't break into a sweat when I paid $30k for my last vehicle. However when I paid nearly $10 for a quart of milk while on vacation in Hawaii, it did make me blink, twice.

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Re: What constitutes "a lot" of money?

Postby anoop » Sat Apr 15, 2017 5:57 pm

*3!4!/5! wrote:If my portfolio goes up or down $10,000 (1% of $1M) in a day, then that amount of money is basically nothing. It's just background noise (even if I peek every day).

But if I had to spend $10 on lunch, well that's a lot.


Is that being pennywise and pound foolish? Just kidding. :D

I think what you're saying is that you have different standards for the cost of doing business/investing vs the cost of a consumable.

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Re: What constitutes "a lot" of money?

Postby *3!4!/5! » Sat Apr 15, 2017 7:12 pm

anoop wrote:
*3!4!/5! wrote:If my portfolio goes up or down $10,000 (1% of $1M) in a day, then that amount of money is basically nothing. It's just background noise (even if I peek every day).

But if I had to spend $10 on lunch, well that's a lot.


Is that being pennywise and pound foolish? Just kidding. :D

I think what you're saying is that you have different standards for the cost of doing business/investing vs the cost of a consumable.


No, that totally misrepresents what I was saying. Read my followup comment.

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Re: What constitutes "a lot" of money?

Postby Lynette » Sat Apr 15, 2017 7:22 pm

wrongfunds wrote:
It was cheaper than going to Seville myself.

But would it be *better* than going to Seville yourself? :-)


:D I've been to Seville twice on tours to Spain. I would like to spend more time there and I may in the future. My objective now is to learn Spanish and I did not think that I would learn on this course is value for money though I am tempted. Fifty years ago, I was briefly a Latin teacher and I've taken and am taking classes at a community college in Spanish. I'm great at grammar compared to some of the kids who don't know what a verb or noun is. But I wasn't great at "hearing" the language or speaking. This is why I got Spanish TV and listened to soaps in the evening when I was tired. The content was not very stimulating but I can understand most of what is being said without subtitles. I need to find a course and country that is more to what I think my requirements are.

I'll be willing to spend the money (after a very deep breath) if I feel it really teaches me what I think I need.

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Re: What constitutes "a lot" of money?

Postby anoop » Sat Apr 15, 2017 8:30 pm

*3!4!/5! wrote:
anoop wrote:
*3!4!/5! wrote:If my portfolio goes up or down $10,000 (1% of $1M) in a day, then that amount of money is basically nothing. It's just background noise (even if I peek every day).

But if I had to spend $10 on lunch, well that's a lot.


Is that being pennywise and pound foolish? Just kidding. :D

I think what you're saying is that you have different standards for the cost of doing business/investing vs the cost of a consumable.


No, that totally misrepresents what I was saying. Read my followup comment.


Thanks. That was a great post.

JimD7
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Re: What constitutes "a lot" of money?

Postby JimD7 » Sun Apr 16, 2017 12:56 am

Big news this week for me, I was able to revive a can opener with a spritz of WD-40. $10 saved!

And my net worth almost never goes down , only up, but I'm very risk averse and miss many glorious opportunities because of that.

Stuff like Trump at 5-1

Can't have everything.

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Re: What constitutes "a lot" of money?

Postby Mr.BB » Thu Apr 20, 2017 10:48 am

TheTimeLord wrote:
Mr.BB wrote:It is definitely more about the cost of an item instead of portfolio size. I work with people who are the top 1%
I know they would have no problem spending 5 million on something that would help their business or be for personal use like a home.
Yet I have gone workout with them and they have on an old t-shirt and holes in their socks. I think people look at smaller price items (discretionary spending)as how they judge what costs a lot of money vs. big ticket items.


I think they need therapy. If you pulling down over $400,000/year (sounds like a lot more) and have a 8 digit portfolio and still have holes in your socks that is a sign you have lost perspective. Wearing an old t-shirt a sign of nostalgia, ignorance of new materials or a loss of perspective. What is the point of accumulating wealth just to let it sit in a pile so you can oogle it? If they aren't going to use it, perhaps they should work more actively to give it away like Gates and Buffet.


He doesn't need therapy actually if you look at some very wealthy people like Warren Buffett depending how the market did the day before he spends only like a buck eighty $2.50 or $3.30 for breakfast at McDonald's everyday. Here's a guy who can have a perfectly made breakfast for him anytime anywhere anyplace and even limits how much he spend at McDonald's based o
n the stock market;is just his thing. You can't judge other people's habits by what you think they should do or how they should spend their money, just because it's important to you.

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Re: What constitutes "a lot" of money?

Postby Mr.BB » Thu Apr 20, 2017 11:07 am

TheTimeLord wrote:
DaftInvestor wrote:
TheTimeLord wrote:
Mr.BB wrote:It is definitely more about the cost of an item instead of portfolio size. I work with people who are the top 1%
I know they would have no problem spending 5 million on something that would help their business or be for personal use like a home.
Yet I have gone workout with them and they have on an old t-shirt and holes in their socks. I think people look at smaller price items (discretionary spending)as how they judge what costs a lot of money vs. big ticket items.


I think they need therapy. If you pulling down over $400,000/year (sounds like a lot more) and have a 8 digit portfolio and still have holes in your socks that is a sign you have lost perspective. Wearing an old t-shirt a sign of nostalgia, ignorance of new materials or a loss of perspective. What is the point of accumulating wealth just to let it sit in a pile so you can oogle it? If they aren't going to use it, perhaps they should work more actively to give it away like Gates and Buffet.


I think for some its just the way they are or a pride in acting like the rest of us. I know a CEO with a multi-million dollar car collection (about a dozen very high end cars). He once drove me into the city with his Aston Martin and we had to drive around for an extra 30 minutes finding the cheapest parking garage (I think we saved $5 that day with him stating that perhaps we should have taken public-transit into the city since parking was so high).


It is delusional to think they are like the rest of us. Wealth accumulation is naturally isolating, if you want to fit in buy an Accord. If you aren't homeless and have holes in your workout socks I think you silly whether you are a 1% or make $40K.If you have an 8 figure portfolio you are no more like me than I am like a guy living paycheck to paycheck trying to save $500/month. In either case you just don't have the perspective to understand the issues of the others persons situation. I am very fortunate and blessed and one of the things I am becoming aware of is how difficult it is going to be to find friends capable of affording the same activities and travel we will be able to in retirement and I am not by any meaning rich (at least not in a first world sense). Again wealth accumulation is isolating. (probably why many of the people here gravitate to this forum).


I don't think it's about taking pride thinking they're acting like the rest of us, somethings are just not important to them. Wealth is relative thing is I think we all can agree on, $10,000 to you may not be that much but somebody making minimum wage it is a huge amount of money. These people have more money than probably three-quarters of the people on this board combined, but if something is not important to them they're not going to spend the money on it.

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TheTimeLord
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Re: What constitutes "a lot" of money?

Postby TheTimeLord » Thu Apr 20, 2017 11:26 am

Mr.BB wrote:
TheTimeLord wrote:
Mr.BB wrote:It is definitely more about the cost of an item instead of portfolio size. I work with people who are the top 1%
I know they would have no problem spending 5 million on something that would help their business or be for personal use like a home.
Yet I have gone workout with them and they have on an old t-shirt and holes in their socks. I think people look at smaller price items (discretionary spending)as how they judge what costs a lot of money vs. big ticket items.


I think they need therapy. If you pulling down over $400,000/year (sounds like a lot more) and have a 8 digit portfolio and still have holes in your socks that is a sign you have lost perspective. Wearing an old t-shirt a sign of nostalgia, ignorance of new materials or a loss of perspective. What is the point of accumulating wealth just to let it sit in a pile so you can oogle it? If they aren't going to use it, perhaps they should work more actively to give it away like Gates and Buffet.


He doesn't need therapy actually if you look at some very wealthy people like Warren Buffett depending how the market did the day before he spends only like a buck eighty $2.50 or $3.30 for breakfast at McDonald's everyday. Here's a guy who can have a perfectly made breakfast for him anytime anywhere anyplace and even limits how much he spend at McDonald's based on the stock market;is just his thing. You can't judge other people's habits by what you think they should do or how they should spend their money, just because it's important to you.


An Egg McMuffin vs a Bacon, Egg & Cheese Biscuit is different than having holes in you socks. Buffet loves junk food.
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Re: What constitutes "a lot" of money?

Postby Grt2bOutdoors » Thu Apr 20, 2017 11:45 am

TheTimeLord wrote:
Mr.BB wrote:
TheTimeLord wrote:
Mr.BB wrote:It is definitely more about the cost of an item instead of portfolio size. I work with people who are the top 1%
I know they would have no problem spending 5 million on something that would help their business or be for personal use like a home.
Yet I have gone workout with them and they have on an old t-shirt and holes in their socks. I think people look at smaller price items (discretionary spending)as how they judge what costs a lot of money vs. big ticket items.


I think they need therapy. If you pulling down over $400,000/year (sounds like a lot more) and have a 8 digit portfolio and still have holes in your socks that is a sign you have lost perspective. Wearing an old t-shirt a sign of nostalgia, ignorance of new materials or a loss of perspective. What is the point of accumulating wealth just to let it sit in a pile so you can oogle it? If they aren't going to use it, perhaps they should work more actively to give it away like Gates and Buffet.


He doesn't need therapy actually if you look at some very wealthy people like Warren Buffett depending how the market did the day before he spends only like a buck eighty $2.50 or $3.30 for breakfast at McDonald's everyday. Here's a guy who can have a perfectly made breakfast for him anytime anywhere anyplace and even limits how much he spend at McDonald's based on the stock market;is just his thing. You can't judge other people's habits by what you think they should do or how they should spend their money, just because it's important to you.


An Egg McMuffin vs a Bacon, Egg & Cheese Biscuit is different than having holes in you socks. Buffet loves junk food.


I think he's making it up. Secretly, he's at home eating tofu, green beans, broccoli and drinking almond milk. :P
"One should invest based on their need, ability and willingness to take risk - Larry Swedroe" Asking Portfolio Questions

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TheTimeLord
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Re: What constitutes "a lot" of money?

Postby TheTimeLord » Thu Apr 20, 2017 11:49 am

Grt2bOutdoors wrote:
TheTimeLord wrote:
Mr.BB wrote:
TheTimeLord wrote:
Mr.BB wrote:It is definitely more about the cost of an item instead of portfolio size. I work with people who are the top 1%
I know they would have no problem spending 5 million on something that would help their business or be for personal use like a home.
Yet I have gone workout with them and they have on an old t-shirt and holes in their socks. I think people look at smaller price items (discretionary spending)as how they judge what costs a lot of money vs. big ticket items.


I think they need therapy. If you pulling down over $400,000/year (sounds like a lot more) and have a 8 digit portfolio and still have holes in your socks that is a sign you have lost perspective. Wearing an old t-shirt a sign of nostalgia, ignorance of new materials or a loss of perspective. What is the point of accumulating wealth just to let it sit in a pile so you can oogle it? If they aren't going to use it, perhaps they should work more actively to give it away like Gates and Buffet.


He doesn't need therapy actually if you look at some very wealthy people like Warren Buffett depending how the market did the day before he spends only like a buck eighty $2.50 or $3.30 for breakfast at McDonald's everyday. Here's a guy who can have a perfectly made breakfast for him anytime anywhere anyplace and even limits how much he spend at McDonald's based on the stock market;is just his thing. You can't judge other people's habits by what you think they should do or how they should spend their money, just because it's important to you.


An Egg McMuffin vs a Bacon, Egg & Cheese Biscuit is different than having holes in you socks. Buffet loves junk food.


I think he's making it up. Secretly, he's at home eating tofu, green beans, broccoli and drinking almond milk. :P

I would not be shocked if Buffet had a bit of showman in him and his mystic.
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10YearPlan
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Re: What constitutes "a lot" of money?

Postby 10YearPlan » Thu Apr 20, 2017 11:57 am

My definition of a lot has evolved over the years but mostly in relation to my income not my portfolio and it's definitely not always rational.

But I guess, if I had to say what causes me to pause before I just buy something, that number is pretty firmly fixed at around $300. If over $300, I have to talk myself into it, do some research, etc. So, I guess for me, $300 is a lot of money. ;)

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Re: What constitutes "a lot" of money?

Postby Admiral » Thu Apr 20, 2017 12:40 pm

nisiprius wrote:I have what we now call a STEM background, I think in percentages. I'm risk-averse and yet I think I really do accept the risk that I do take. That means, for example, that whether I like it or not, the stock market as a whole normally fluctuates daily, with something like a 1% standard deviation. I just have to accept the idea that if I have $250,000 in the stock market, I'm going to be "gaining" and "losing" several thousand dollars almost every day. It's just the way it is.

Now, as to peoples' attitudes toward what expenses they fuss about, there's nothing to say there but it's personal. Everybody's personal pattern looks crazy to everybody else. As to whether to pick pennies off the sidewalk or not, that's up to you. I don't think there's anything terrible about picking pennies off the sidewalk but buying a new car just because you want one and can afford one. I don't think there's anything terrible about letting the pennies lie but only buying used cars.

Right now, I am personally faced with a laser printer I love that has a ding in one of the fuser rollers; having a local office place replace the fuser assembly is going to cost about $250; a new one at Staples costs $199.99; and in theory I could buy a new fuser assembly from an Amazon partner that says it's an OEM unit for $100, and install it myself. I'm opting for having the local office place replace the fuser. Shrug. That's just my personal choice.

The most irrational thing to do is to fool ones' self that one is rational.


There's another way to look at this, which is way I look at it: Often, I'd rather fix something myself (or even pay someone to fix it, if I can't, and even if it costs more than buying new) rather than throwing it in a landfill. I don't like waste. We have enough of it already.

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Will do good
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Re: What constitutes "a lot" of money?

Postby Will do good » Thu Apr 20, 2017 12:59 pm

10 millions+

Jimmie
Posts: 144
Joined: Tue Mar 07, 2017 7:05 pm

Re: What constitutes "a lot" of money?

Postby Jimmie » Thu Apr 20, 2017 2:01 pm

After reading this thread for a while, isn't it really about "value"?

The purchase of a million dollar home, to many people on this forum, is nothing. The idea of paying $9 for a beer at the ballpark or airport makes us all sick because we can purchase 12 of those same beers to drink at home for $1 apiece.

So I have set my own rule: If something is higher in price than I perceive its value to be, it is "a lot" of money.

Mr.BB
Posts: 120
Joined: Sun May 08, 2016 10:10 am

Re: What constitutes "a lot" of money?

Postby Mr.BB » Thu Apr 20, 2017 5:26 pm

TheTimeLord wrote:
Grt2bOutdoors wrote:
TheTimeLord wrote:
Mr.BB wrote:
TheTimeLord wrote:
I think they need therapy. If you pulling down over $400,000/year (sounds like a lot more) and have a 8 digit portfolio and still have holes in your socks that is a sign you have lost perspective. Wearing an old t-shirt a sign of nostalgia, ignorance of new materials or a loss of perspective. What is the point of accumulating wealth just to let it sit in a pile so you can oogle it? If they aren't going to use it, perhaps they should work more actively to give it away like Gates and Buffet.


He doesn't need therapy actually if you look at some very wealthy people like Warren Buffett depending how the market did the day before he spends only like a buck eighty $2.50 or $3.30 for breakfast at McDonald's everyday. Here's a guy who can have a perfectly made breakfast for him anytime anywhere anyplace and even limits how much he spend at McDonald's based on the stock market;is just his thing. You can't judge other people's habits by what you think they should do or how they should spend their money, just because it's important to you.


An Egg McMuffin vs a Bacon, Egg & Cheese Biscuit is different than having holes in you socks. Buffet loves junk food.


I think he's making it up. Secretly, he's at home eating tofu, green beans, broccoli and drinking almond milk. :P

I would not be shocked if Buffet had a bit of showman in him and his mystic.


LoL..Grt

SGM
Posts: 2165
Joined: Wed Mar 23, 2011 4:46 am

Re: What constitutes "a lot" of money?

Postby SGM » Fri Apr 21, 2017 8:41 am

I have already won the game, but I still believe that a penny saved is a penny earned. So I look for bargains. If I don't then DW does. I spend freely if it will free up a lot of time from noxious activities. I paid NY prices for a New England paint job to help out a painter in need. I tip more than I once did. We give more to charities but are annoyed by follow up calls and silly mailings. I would prefer to buy 4 or 6 season tickets to a theater, symphony or opera and give the tickets away to others who might not be able to afford the tickets rather than make a tax deductible contribution because I don't want the phone calls.

I don't give a damn if I have a hole in my socks and I don't want to attract attention by having an expensive vehicle. I don't give a damn about portfolio fluctuations except it seems to keep going up and reaching new milestones. I probably paid more for a plumbing job than I needed to if I shopped around, but I like the company owner and I can tell he needs new hearing aids. Still I waited for the price of forever stamps to come down before buying more. I didn't go to Costco to get them cheaper yet because it was inconvenient.

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JaneyLH
Posts: 234
Joined: Wed Oct 16, 2013 7:16 pm

Re: What constitutes "a lot" of money?

Postby JaneyLH » Fri Apr 21, 2017 1:05 pm

market timer wrote:I tend to ignore my portfolio's fluctuations and think about spending in terms of additional work-hours. One of my splurges is buying business class tickets instead of economy for long haul flights for myself and my family. I'll usually calculate how many extra days I'd have to work to pay for the cost difference. An expense is too much if it's not worth the effort.

A couple of years ago I used frequent flyer miles for two business class tickets to Europe. My husband is 6'4" and his knees suffer terribly in economy seats. (Only place he had ever ridden on a plane. I used to fly business class for work so I understood how nice it is.) He is still mad at me for "wasting" all those Frequent flyer miles although I know he loved the comfort in those wonderful lie flat seats! Next month we are flying to the U.K. economy, but I paid for the upgrade to economy plus and got seats with no row in front of us. We'll see how that goes...

Our portfolio is 3.1M with no debt. I manage our finances so I don't think he fully understands that this isn't such a big splurge for us. He is always making comments about how other people who fly business class or buy new cars every few years have "a lot of money". Oh yes, we have no children to leave it to if we don't spend it.

Stormbringer
Posts: 231
Joined: Sun Jun 14, 2015 7:07 am

Re: What constitutes "a lot" of money?

Postby Stormbringer » Fri Apr 21, 2017 3:37 pm

JaneyLH wrote:He is always making comments about how other people who fly business class or buy new cars every few years have "a lot of money".

I find that people who appear to have "a lot of money" usually do not.

Dottie57
Posts: 1188
Joined: Thu May 19, 2016 5:43 pm

Re: What constitutes "a lot" of money?

Postby Dottie57 » Fri Apr 21, 2017 3:54 pm

Da5id wrote:
*3!4!/5! wrote:If my portfolio goes up or down $10,000 (1% of $1M) in a day, then that amount of money is basically nothing. It's just background noise (even if I peek every day).

But if I had to spend $10 on lunch, well that's a lot.


I agree. "A lot" is relative to what it is being purchased. Using the fact that your portfolio swings X dollars a day to calibrate your sense of "a lot" is only useful if you want to rationalize spending on things you know you shouldn't buy.

e.g. I consider any amount of money spent on a book I'll read once "a lot", I have a lending library for that (and don't need more clutter). Books I read a number of times or want to refer to spontaneously or be able to loan to other folks I tend to buy. But I consider spending $10K or more on a vacation perfectly reasonable.



Books are friends to me. I either keep, resell or give away to friends who pass them on down after they are through.


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