35 and Need Help With Building Wealth

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smectym
Posts: 222
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Re: 35 and Need Help With Building Wealth

Post by smectym » Wed Jun 13, 2018 12:08 am

Incorrectly attributed WanderingDoc’s “you cannot shrink your way to wealth” to OP—apologies

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M_to_the_G
Posts: 535
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Re: 35 and Need Help With Building Wealth

Post by M_to_the_G » Wed Jun 13, 2018 2:08 pm

WanderingDoc wrote:
Mon Jun 11, 2018 10:14 pm
I appreciate your civil input. I will maintain my stance: you cannot shrink your way to wealth. Period. It cannot be done. If you earn $3000 per month and spend all of it, and you decide to save $1000 per month. Well, you decreased your quality of life by 34%, which at the same time adding worry and shortcomings to you and your family. Instead of going without conveniences, good quality food, a nice heating/cooling of your house, etc. it is so much easier to learn how to earn an extra $1000 per month.

I have hung out on Dave Ramsey's live streams. Its chicken or the egg. You might thing a lot of unsuccessful people listen to Dave in that direction, I postulate that a significant proportion of people who listen to Dave Ramsey, follow his mind-limiting, overly frugal, scared of debt advice, and the best they make it to is low-middle/middle class. Open your mind. You cannot shrink your way to wealth.
bgf wrote:
Mon Jun 11, 2018 7:33 am
WanderingDoc wrote:
Sun Jun 10, 2018 6:48 pm
Are we going to continue with this Dave Ramsey limited thinking? Life is about enjoyment, and doing what you want. Not restricting things. I have already explained that is MUCH easier to earn X amount than it is to deprive yourself of X amount. There is a reason why 90%+ of those who listen to and follow Dave Ramsey are lower and lower-middle class. That should be your first clue. Debt isn't bad. Being cheap and depriving yourself and your family of quality of life is.

I achieved FI at age 32. I never saved or budgeted. Ever. I went to Starbucks as much as possible. I just focused on leveling up myself (human capital) and invested in real estate. It took 4 years from a $0 net worth to financial freedom. Didn't have to scrounge and live like a pauper. There are more important things to worry about than clipping coupons and telling your family they have to go without cable TV.
Cycle wrote:
Sun Jun 10, 2018 11:46 am
You have a lot of optional expenses, which we don't have and we achieved FI at 33. I'd recommend cutting out the non essentials. Prime, cable, car, etc. use the library, perhaps there is a 4-plex that cashflows as a rental (non-airbnb) near a library in vegas.
this is more of a humble brag than generally applicable advice. hate to break it to you. congrats on the FI at 32 (which is awesome, im jelly), but the fact that it is such an exceptional thing to say in itself destroys the general applicability of your point of view. it kind of pains me here to be taking the side of dave ramsey because i disagree with a lot of what he says, but he does have millions of listeners, and if i had to put your post up against his trite advice with respect to which would help the most people, it is going to be his.
For exceptional people, I would advise them to ignore everything and everyone and let their confidence and talent guide them. For unexceptional people, I would advise them to get a steady job, stay out of debt, and put 10% of their income into index funds. If you give the former advice to the latter group -- or vice versa -- I believe you do them an injustice. Not everybody is made out for great success, just as not everybody is made out for professional sports.

I also watch Dave Ramsey and his followers a little bit. I think your conclusion about the "Dave Ramsey way" -- or whatever they call it, "debt snowball" or something -- is off. Getting on a plan, cutting expenses, and seeing the results seem to be very inspiring and motivating to most people swimming in a sea of financial insecurity and poor decision-making. In many cases, quite the opposite of "adding worry and shortcomings." It's a workable path with a goal at the end, and that's what they need. And besides, Dave does advise people to increase their income. But for some people, earning "an extra $1000 per month" just isn't going to happen... not easily, anyway. It's not only about raw ability (which we all possess); personality and disposition play a role, as well, and those aren't easy things to change.
"It’s basically the plot of 'Charlie and the Chocolate Factory.' If you stick around, doing nothing, while everyone around you ****s up, you’re going to win big." - John Oliver

WanderingDoc
Posts: 1100
Joined: Sat Aug 05, 2017 8:21 pm

Re: 35 and Need Help With Building Wealth

Post by WanderingDoc » Wed Jun 13, 2018 9:53 pm

I see your point. Let me ask you this. How easy do you think it is for the average family who earns $4K per month and spends $4.5K per month, to save $1000, ie. spending $1500 less than they normally do. You are asking them to spend 1/3 of what they normally do just to get by. Clipping coupons, and worrying about how much a latte costs is very limited thinking. In my opinion, energy is energy. You can focus it on shrinking or you can focus it on expanding. It takes the same amount of calories and brain power. Why not choose the latter?
M_to_the_G wrote:
Wed Jun 13, 2018 2:08 pm
WanderingDoc wrote:
Mon Jun 11, 2018 10:14 pm
I appreciate your civil input. I will maintain my stance: you cannot shrink your way to wealth. Period. It cannot be done. If you earn $3000 per month and spend all of it, and you decide to save $1000 per month. Well, you decreased your quality of life by 34%, which at the same time adding worry and shortcomings to you and your family. Instead of going without conveniences, good quality food, a nice heating/cooling of your house, etc. it is so much easier to learn how to earn an extra $1000 per month.

I have hung out on Dave Ramsey's live streams. Its chicken or the egg. You might thing a lot of unsuccessful people listen to Dave in that direction, I postulate that a significant proportion of people who listen to Dave Ramsey, follow his mind-limiting, overly frugal, scared of debt advice, and the best they make it to is low-middle/middle class. Open your mind. You cannot shrink your way to wealth.
bgf wrote:
Mon Jun 11, 2018 7:33 am
WanderingDoc wrote:
Sun Jun 10, 2018 6:48 pm
Are we going to continue with this Dave Ramsey limited thinking? Life is about enjoyment, and doing what you want. Not restricting things. I have already explained that is MUCH easier to earn X amount than it is to deprive yourself of X amount. There is a reason why 90%+ of those who listen to and follow Dave Ramsey are lower and lower-middle class. That should be your first clue. Debt isn't bad. Being cheap and depriving yourself and your family of quality of life is.

I achieved FI at age 32. I never saved or budgeted. Ever. I went to Starbucks as much as possible. I just focused on leveling up myself (human capital) and invested in real estate. It took 4 years from a $0 net worth to financial freedom. Didn't have to scrounge and live like a pauper. There are more important things to worry about than clipping coupons and telling your family they have to go without cable TV.
Cycle wrote:
Sun Jun 10, 2018 11:46 am
You have a lot of optional expenses, which we don't have and we achieved FI at 33. I'd recommend cutting out the non essentials. Prime, cable, car, etc. use the library, perhaps there is a 4-plex that cashflows as a rental (non-airbnb) near a library in vegas.
this is more of a humble brag than generally applicable advice. hate to break it to you. congrats on the FI at 32 (which is awesome, im jelly), but the fact that it is such an exceptional thing to say in itself destroys the general applicability of your point of view. it kind of pains me here to be taking the side of dave ramsey because i disagree with a lot of what he says, but he does have millions of listeners, and if i had to put your post up against his trite advice with respect to which would help the most people, it is going to be his.
For exceptional people, I would advise them to ignore everything and everyone and let their confidence and talent guide them. For unexceptional people, I would advise them to get a steady job, stay out of debt, and put 10% of their income into index funds. If you give the former advice to the latter group -- or vice versa -- I believe you do them an injustice. Not everybody is made out for great success, just as not everybody is made out for professional sports.

I also watch Dave Ramsey and his followers a little bit. I think your conclusion about the "Dave Ramsey way" -- or whatever they call it, "debt snowball" or something -- is off. Getting on a plan, cutting expenses, and seeing the results seem to be very inspiring and motivating to most people swimming in a sea of financial insecurity and poor decision-making. In many cases, quite the opposite of "adding worry and shortcomings." It's a workable path with a goal at the end, and that's what they need. And besides, Dave does advise people to increase their income. But for some people, earning "an extra $1000 per month" just isn't going to happen... not easily, anyway. It's not only about raw ability (which we all possess); personality and disposition play a role, as well, and those aren't easy things to change.
Don't wait to buy real estate. Buy real estate, and wait. | Rent where you live, buy where others pay your mortgage for you.

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M_to_the_G
Posts: 535
Joined: Mon Jan 21, 2013 9:57 am

Re: 35 and Need Help With Building Wealth

Post by M_to_the_G » Thu Jun 14, 2018 2:57 am

WanderingDoc wrote:
Wed Jun 13, 2018 9:53 pm
I see your point. Let me ask you this. How easy do you think it is for the average family who earns $4K per month and spends $4.5K per month, to save $1000, ie. spending $1500 less than they normally do. You are asking them to spend 1/3 of what they normally do just to get by. Clipping coupons, and worrying about how much a latte costs is very limited thinking. In my opinion, energy is energy. You can focus it on shrinking or you can focus it on expanding. It takes the same amount of calories and brain power. Why not choose the latter?
M_to_the_G wrote:
Wed Jun 13, 2018 2:08 pm
WanderingDoc wrote:
Mon Jun 11, 2018 10:14 pm
I appreciate your civil input. I will maintain my stance: you cannot shrink your way to wealth. Period. It cannot be done. If you earn $3000 per month and spend all of it, and you decide to save $1000 per month. Well, you decreased your quality of life by 34%, which at the same time adding worry and shortcomings to you and your family. Instead of going without conveniences, good quality food, a nice heating/cooling of your house, etc. it is so much easier to learn how to earn an extra $1000 per month.

I have hung out on Dave Ramsey's live streams. Its chicken or the egg. You might thing a lot of unsuccessful people listen to Dave in that direction, I postulate that a significant proportion of people who listen to Dave Ramsey, follow his mind-limiting, overly frugal, scared of debt advice, and the best they make it to is low-middle/middle class. Open your mind. You cannot shrink your way to wealth.
bgf wrote:
Mon Jun 11, 2018 7:33 am
WanderingDoc wrote:
Sun Jun 10, 2018 6:48 pm
Are we going to continue with this Dave Ramsey limited thinking? Life is about enjoyment, and doing what you want. Not restricting things. I have already explained that is MUCH easier to earn X amount than it is to deprive yourself of X amount. There is a reason why 90%+ of those who listen to and follow Dave Ramsey are lower and lower-middle class. That should be your first clue. Debt isn't bad. Being cheap and depriving yourself and your family of quality of life is.

I achieved FI at age 32. I never saved or budgeted. Ever. I went to Starbucks as much as possible. I just focused on leveling up myself (human capital) and invested in real estate. It took 4 years from a $0 net worth to financial freedom. Didn't have to scrounge and live like a pauper. There are more important things to worry about than clipping coupons and telling your family they have to go without cable TV.

this is more of a humble brag than generally applicable advice. hate to break it to you. congrats on the FI at 32 (which is awesome, im jelly), but the fact that it is such an exceptional thing to say in itself destroys the general applicability of your point of view. it kind of pains me here to be taking the side of dave ramsey because i disagree with a lot of what he says, but he does have millions of listeners, and if i had to put your post up against his trite advice with respect to which would help the most people, it is going to be his.
For exceptional people, I would advise them to ignore everything and everyone and let their confidence and talent guide them. For unexceptional people, I would advise them to get a steady job, stay out of debt, and put 10% of their income into index funds. If you give the former advice to the latter group -- or vice versa -- I believe you do them an injustice. Not everybody is made out for great success, just as not everybody is made out for professional sports.

I also watch Dave Ramsey and his followers a little bit. I think your conclusion about the "Dave Ramsey way" -- or whatever they call it, "debt snowball" or something -- is off. Getting on a plan, cutting expenses, and seeing the results seem to be very inspiring and motivating to most people swimming in a sea of financial insecurity and poor decision-making. In many cases, quite the opposite of "adding worry and shortcomings." It's a workable path with a goal at the end, and that's what they need. And besides, Dave does advise people to increase their income. But for some people, earning "an extra $1000 per month" just isn't going to happen... not easily, anyway. It's not only about raw ability (which we all possess); personality and disposition play a role, as well, and those aren't easy things to change.
It is indeed not easy, but cutting expenses is entirely within a family's control, i.e. there is nothing stopping them from simply living on less. But making more money, for most people, involves external factors and usually means changing jobs. There is competition involved, a question of education levels attained, etc. I understand and agree with your general premise for people of ambition, talent, and confidence, but for most people, making money by "hustling" isn't a viable option, as most people aren't engaged in any form of entrepreneurship. Rather they have jobs, i.e. they work for someone else and get paid a set wage or salary. Making more would thus require a serious justification -- if it were even possible at their current job -- or changing jobs.

I agree with you completely that one can't really make any headway by following the popular (and flawed) advice to use more coupons or to cut out the daily latte. One of my favorite financial quotes is from Katherine Porter -- "You can't latte your way to bankruptcy. The bladder won't allow it." But the average person of average talent can indeed make headway by cutting costs in major areas: housing, transportation, etc. Moving to a cheaper house or apartment and driving a less expensive car can mean thousands of dollars in savings every month. And even though cutting out the daily latte won't change anyone's life, cutting out all of the figurative "lattes" can add up and change someone's life, i.e. cutting not only the daily latte, but also the frivolous extras, the premium phone plan, etc. All those things could also add up to hundreds or thousands of dollars a month. Again, for the average person of average intellect and ambition, this is probably a more viable option than making more money.
"It’s basically the plot of 'Charlie and the Chocolate Factory.' If you stick around, doing nothing, while everyone around you ****s up, you’re going to win big." - John Oliver

fujiters
Posts: 114
Joined: Tue Mar 06, 2018 2:17 pm

Re: 35 and Need Help With Building Wealth

Post by fujiters » Thu Jun 14, 2018 3:10 am

WanderingDoc wrote:
Wed Jun 13, 2018 9:53 pm
I see your point. Let me ask you this. How easy do you think it is for the average family who earns $4K per month and spends $4.5K per month, to save $1000, ie. spending $1500 less than they normally do. You are asking them to spend 1/3 of what they normally do just to get by. Clipping coupons, and worrying about how much a latte costs is very limited thinking. In my opinion, energy is energy. You can focus it on shrinking or you can focus it on expanding. It takes the same amount of calories and brain power. Why not choose the latter?
Similar to how Dieting is more effective for weight loss, I think for many people living substantially above the poverty line, decreasing expenses is more effective for gaining wealth. Anyone can look into their expenses with an eye to cutting waste. Not everyone can command a higher salary than they currently have. Cutting expenses also decreases the amount you need in retirement, in addition to increasing the amount of money available for investing.
“The purpose of the margin of safety is to render the forecast unnecessary.” -Benjamin Graham

spammagnet
Posts: 919
Joined: Wed Apr 27, 2016 9:42 pm

Re: 35 and Need Help With Building Wealth

Post by spammagnet » Fri Jun 15, 2018 2:07 am

kingdf wrote:
Sat Jun 09, 2018 10:46 pm
... I like movies, tv, etc. I've considered cutting some of those expenses, but I've come to terms with certain luxuries I'm probably not going to cut. My daughter loves Netflix, I buy enough stuff on Amazon that the monthly expense pays for itself in shipping costs.
When we scaled back on cable we had a short term withdrawal but it didn't take long to adapt our viewing habits to what was available. We already had Netflix and Amazon, which wasn't going to change. Our Netflix subscription is the cheapest available. Amazon is justified by the combination of TV content, shipping and now, possibly, discounts at Whole Foods. Our cable internet is cheaper with a basic cable TV subscription than without. We have a TiVo with a lifetime subscription (one-time $500 fee) which aggregates all of the sources together and works well. We have more available than we can possibly watch and eliminated a lot of the filler junk.

Consider cutting back to some degree. Have an active plan to replace that content with something else you kept. After an adjustment period, you may be surprised to find yourself satisfied with what you have. Pocket the difference.

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