What do people spend money on?

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Livehard1234
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What do people spend money on?

Post by Livehard1234 » Sat May 23, 2020 9:00 pm

Have been very fortunate in life after growing up poor and with DW make a combined income of $1.1M (me: $900k, DW: $200k). This is likely to go up as I’ve been on a fast track in senior management at a top tech company.

I am 41 and DW is 36. We have $3.6M in investments ($1.2M retirement and $2.4M in taxable). We bought our dream home for $2.3M and have a 15 year 3.0% mortgage. Savings are about $600k per year. Income has tripled over the last 5 years.

Hitting a midlife crisis and know there is more to life than working and saving. Also know I don’t want to retire early and at this rate we’ll have much more saved then we need. I’m not a car or boat guy. We have two young kids (1 and 3), but I don’t want them to start life off with millions. We will pay for school and then they will be on their own to build their lives.

What would you do with the money? Should I just stay on this current path? I know this is a time of great uncertainty and maybe it’s best to just be conservative. Also when I look at big purchases I know they will make me excited for a couple of months and then just be more stuff.

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Sandtrap
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Re: What do people spend money on?

Post by Sandtrap » Sat May 23, 2020 9:03 pm

Is there an actionable financial question here?

Unsure.
j :happy
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Topic Author
Livehard1234
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Re: What do people spend money on?

Post by Livehard1234 » Sat May 23, 2020 9:08 pm

I guess not. Probably belongs on a mid-life crisis forum. Spent my whole life with a chip on my shoulder trying to “make it”. Now that I’m largely here, not really happier or sure what I can do financially to change that.

Thought maybe others who’ve been in a similar situation might have advice.

Normchad
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Re: What do people spend money on?

Post by Normchad » Sat May 23, 2020 9:14 pm

As a parent, sometimes you will have “magical moments”. Spend your money in such a way that you can increase your chances of having more of those magical moments.

For many, it’s experiences. Camping. Great vacations. Memorable shows.

I’d gladly trade my money for more of those moments.

DSInvestor
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Re: What do people spend money on?

Post by DSInvestor » Sat May 23, 2020 9:15 pm

Maybe you can use financial resources to help others. If you have any free time, maybe volunteer for causes that you're passionate about. Give back. You may find this to be really rewarding. For example, I live in Washington state and we have a great organization called Washington Trails Association (WTA) that do a lot of work on trails. Lots of people who are passionate about the outdoors volunteer for backpacking trips to do trail work.
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dmcmahon
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Re: What do people spend money on?

Post by dmcmahon » Sat May 23, 2020 9:16 pm

College for the kids. Paying off the house.Charities. A few “toys”.

sailaway
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Re: What do people spend money on?

Post by sailaway » Sat May 23, 2020 9:17 pm

We have been increasing charitable giving over the last few years.

We had also planned on spending more on vacations over the next couple of years. Mice and men...

We also plan to take a nice long sabbatical, that others might call early retirement.

As for happiness, my bike, my yoga mat, and our boat are the biggest tangible contributors to that. Obviously, only one of those takes a significant amount of money.

somekevinguy
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Re: What do people spend money on?

Post by somekevinguy » Sat May 23, 2020 9:18 pm

Do some reflecting and consider what has brought joy and value to your life. That may be material purchases (for me, a nice coffee maker, nice vacuum, good kitchen stuff, etc) or perhaps more in the realm of time and experiences. The latter is definitely where we have found the most value and joy- exploring new places, trying new foods, etc, all in the company of good friends and family- and then those shared memories continue to bring joy and value. Even with young kids, it can definitely be done.

FWIW, that’s where we tend to loosen up the purse strings- buying “time” and experiences. That being said, you and your family should consider what those things may be for you- like you recognized, you basically “made it” and “won the game” so take some time to come to thoughtful and purposeful decisions about what next.

ThankYouJack
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Re: What do people spend money on?

Post by ThankYouJack » Sat May 23, 2020 9:20 pm

Experiences - vacations...food....

Do you have any hobbies?

Grt2bOutdoors
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Re: What do people spend money on?

Post by Grt2bOutdoors » Sat May 23, 2020 9:23 pm

Livehard1234 wrote:
Sat May 23, 2020 9:08 pm
I guess not. Probably belongs on a mid-life crisis forum. Spent my whole life with a chip on my shoulder trying to “make it”. Now that I’m largely here, not really happier or sure what I can do financially to change that.

Thought maybe others who’ve been in a similar situation might have advice.
You want to "make it"? - Pay off your house - then you've made it! Get a dog or choice of pet - then you've reached the American Dream - paid off house, no debt, wife, 2 kids and the dog behind the white picket fence. Education fund for the two kids. Take a few vacations a year, keep your health and you've hit the jackpot. The job - eh, maybe it gives you satisfaction, maybe not. You could if you had extra time, donate some of it to a charitable cause - volunteer in some aspect where you can put your skills to good use, you may derive greater satisfaction in that.

Spending money is not going to make you happier, collecting things - so what? Spending quality time with your family - that ought to make you happier, being financially capable to do things with them that otherwise would not be feasible including deciding when/if to stop working.
"One should invest based on their need, ability and willingness to take risk - Larry Swedroe" Asking Portfolio Questions

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lthenderson
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Re: What do people spend money on?

Post by lthenderson » Sat May 23, 2020 10:00 pm

We are putting everything excess into a trust for future generations to use down the road. Instead of making one generation wealthy, we are trying to give several (or more) generations a nice supplemental income stream that they don't have to worry about. We are also increasing our charitable giving considerably.

DonIce
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Re: What do people spend money on?

Post by DonIce » Sat May 23, 2020 10:30 pm

Spend money to buy time. Are there any tasks you have to do that you don't enjoy doing? Cleaning the house? Keeping up the yard? Etc? Hire someone to do them for you.

HEDGEFUNDIE
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Re: What do people spend money on?

Post by HEDGEFUNDIE » Sat May 23, 2020 10:38 pm

People who say they don’t know what to spend their money on have never walked through the Bird Rock neighborhood of La Jolla / San Diego.

Also, I know that if my parents gave me millions of dollars when I was starting out, I would be in a much more personally and socially rewarding career than I am now. And probably spending much less time on Bogleheads.

iamblessed
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Re: What do people spend money on?

Post by iamblessed » Sat May 23, 2020 10:45 pm

I retired at 38. I have much less $$$ than you.

DonIce
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Re: What do people spend money on?

Post by DonIce » Sat May 23, 2020 10:51 pm

HEDGEFUNDIE wrote:
Sat May 23, 2020 10:38 pm
Also, I know that if my parents gave me millions of dollars when I was starting out, I would be in a much more personally and socially rewarding career than I am now. And probably spending much less time on Bogleheads.
You might be. But my guess is most people handed millions before entering the workforce would instead feel like they don't really need to work at all, and become lazy and useless.

HEDGEFUNDIE
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Re: What do people spend money on?

Post by HEDGEFUNDIE » Sat May 23, 2020 10:52 pm

DonIce wrote:
Sat May 23, 2020 10:51 pm
HEDGEFUNDIE wrote:
Sat May 23, 2020 10:38 pm
Also, I know that if my parents gave me millions of dollars when I was starting out, I would be in a much more personally and socially rewarding career than I am now. And probably spending much less time on Bogleheads.
You might be. But my guess is most people handed millions before entering the workforce would instead feel like they don't really need to work at all, and become lazy and useless.
I would suggest that those people would be lazy and useless regardless.

Gnirk
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Re: What do people spend money on?

Post by Gnirk » Sat May 23, 2020 11:06 pm

Our income was never anywhere near yours, but we had more than most people we knew. We are now retired, and continue to live below our means. My DH also grew up poor, so his focus on savings comes from that.

Over the years I've found that most of the time when I really (think) I want something, and then I buy it or receive it as a gift, it really doesn't bring me any satisfaction. I'm 75, and when I look back at things I've purchased, that which has brought me happiness isn't things-- it's travel to other countries and flying business class; treating my adult daughters to a nice vacation with me or to good live theater; or having lunch at a nice restaurant with my granddaughters. So that is what I spend my money on.

I (thought) I always wanted a nice diamond ring, and when my husband gave me one for my retirement, it was a fleeting moment of delight. I seldom wear it, because it just doesn't make me happy after all. It's just another thing.

Now my DH, on the other hand, loves cars and for his entire life has bought one or two new cars every few years. At one time he had seven cars and these are newer cars, not collectors cars. He loves cars, they make him happy. I shake my head, and think what a waste of money! He spends money on cars, and golf.

The only "thing" I've ever really wanted and will never have is a nice, smaller house with an uninterrupted view of Puget Sound. Sadly, my DH has no interest in that.

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celia
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Re: What do people spend money on?

Post by celia » Sat May 23, 2020 11:49 pm

Gnirk wrote:
Sat May 23, 2020 11:06 pm
The only "thing" I've ever really wanted and will never have is a nice, smaller house with an uninterrupted view of Puget Sound. Sadly, my DH has no interest in that.
Ahhh... It looks like your goal, then, is to outlive him. :D

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SevenBridgesRoad
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Re: What do people spend money on?

Post by SevenBridgesRoad » Sun May 24, 2020 12:31 am

Livehard1234 wrote:
Sat May 23, 2020 9:00 pm
Have been very fortunate in life after growing up poor and with DW make a combined income of $1.1M (me: $900k, DW: $200k). This is likely to go up as I’ve been on a fast track in senior management at a top tech company.

I am 41 and DW is 36. We have $3.6M in investments ($1.2M retirement and $2.4M in taxable). We bought our dream home for $2.3M and have a 15 year 3.0% mortgage. Savings are about $600k per year. Income has tripled over the last 5 years.

Hitting a midlife crisis and know there is more to life than working and saving. Also know I don’t want to retire early and at this rate we’ll have much more saved then we need. I’m not a car or boat guy. We have two young kids (1 and 3), but I don’t want them to start life off with millions. We will pay for school and then they will be on their own to build their lives.

What would you do with the money? Should I just stay on this current path? I know this is a time of great uncertainty and maybe it’s best to just be conservative. Also when I look at big purchases I know they will make me excited for a couple of months and then just be more stuff.
Likely a troll thread. But if not...Good grief. Grow up. Just give your money away if you are so rich and can't handle it.
Retired 2018 age 61 / VPW / VTINX mirrored / No mortgage. No debt / Good enough | "Not using an alarm is one of the great glories of my life." Robert Greene

EnjoyIt
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Re: What do people spend money on?

Post by EnjoyIt » Sun May 24, 2020 12:55 am

Didn't you say this:
Livehard1234 wrote:
Tue Nov 13, 2018 9:51 am
Don’t work in something you hate, but also don’t get caught in the trap of seeking “fulfillment” at work. It’s a suckers game, and in the end work will always be work and it isn’t what will make you happy. Find external hobbies to achieve “fulfillment”. Work is what ensures you can afford them.
We became more or less financially independent in our 40s. We now work less and therefor make less, but we have more time for each other, our kids, our extended family, and our friends. Life is about experiences and not about money although money sure does make it easier to have experiences. Now that you have the money, you have realized that it alone does not fulfill you. It is time to start looking elsewhere.

IMO
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Re: What do people spend money on?

Post by IMO » Sun May 24, 2020 2:08 am

Sandtrap wrote:
Sat May 23, 2020 9:03 pm
Is there an actionable financial question here?

Unsure.
j :happy
The post just sounds sort like a humble brag honestly. Presuming it's even valid.

OP, you'll figure it out.

barberakb
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Re: What do people spend money on?

Post by barberakb » Sun May 24, 2020 2:59 am

Spend some of it on pictures and experiences.

Take more vacations. The memories will be worth it. Travel, camping, etc...

RevFran
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Re: What do people spend money on?

Post by RevFran » Sun May 24, 2020 5:05 am

Find 2 small nonprofits and get really Involved as a major donor. If you care about x (education for incarcerated people, food banks, saving whales etc) and see that you are able to practically transform a small np that works on your issue — what could be more rewarding?

InvestingGeek
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Re: What do people spend money on?

Post by InvestingGeek » Sun May 24, 2020 6:46 am

Congratulations, you "made it".

Now it's probably time to start figuring out what you really want out of life besides money. This forum or any forum can't help with that, only you can. Try some meditation or quiet reflection to find out for yourself.

eigenperson
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Re: What do people spend money on?

Post by eigenperson » Sun May 24, 2020 6:48 am

Livehard1234 wrote:
Sat May 23, 2020 9:00 pm
Have been very fortunate in life after growing up poor and with DW make a combined income of $1.1M (me: $900k, DW: $200k). This is likely to go up as I’ve been on a fast track in senior management at a top tech company.

I am 41 and DW is 36. We have $3.6M in investments ($1.2M retirement and $2.4M in taxable). We bought our dream home for $2.3M and have a 15 year 3.0% mortgage. Savings are about $600k per year. Income has tripled over the last 5 years.

Hitting a midlife crisis and know there is more to life than working and saving. Also know I don’t want to retire early and at this rate we’ll have much more saved then we need. I’m not a car or boat guy. We have two young kids (1 and 3), but I don’t want them to start life off with millions. We will pay for school and then they will be on their own to build their lives.

What would you do with the money? Should I just stay on this current path? I know this is a time of great uncertainty and maybe it’s best to just be conservative. Also when I look at big purchases I know they will make me excited for a couple of months and then just be more stuff.
You said "know there is more to life than working and saving." This is a platitude. For you, personally, what is there to life other than working and saving? Be specific. You don't have to post the answers, because that can be very private, but make a list for yourself.

Also, it's OK if you don't actually know (because many people have no clue what's important to them).

You've done a good job eliminating some things from the list -- car, boat, early retirement. Fine. Now it's time to find the items that are on the list. When you make the list, don't start from the perspective of "how to spend money," because a lot of people value things that don't cost money.

remomnyc
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Re: What do people spend money on?

Post by remomnyc » Sun May 24, 2020 7:17 am

My husband has amazing memories from vacations he took with his parents. When the he and his brother married, those vacations included their families. Traveling around the world with three families can burn through a lot of money quickly. We invite members of my extended family, who otherwise wouldn't be able to afford vacations, to travel with us. You could host a family reunion and invite everyone.

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Sandtrap
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Re: What do people spend money on?

Post by Sandtrap » Sun May 24, 2020 7:40 am

For the Original Poster (OP)
Livehard1234 wrote:
Sat May 23, 2020 9:00 pm
1
What would you do with the money? (3.6 million dollars plus)
2
Should I just stay on this current path?
3
I know this is a time of great uncertainty and maybe it’s best to just be conservative. Also when I look at big purchases I know they will make me excited for a couple of months and then just be more stuff?
1. 2. 3.
Financially, continue the proven path and disciplined habits toward success that has earned you rewards up to now.
4.
*You are not as wealthy nor as secure as things might seem. From other points of view, only mild mid-life achievements.

Thoughts and considerations to ponder:
1
Is the core inner sense or source of dissatisfaction the same or similar as when you did not have wealth?
If so, no amount of wealth or spending will change that.
2
You have had experience with the temporary satisfaction of material things and learned something. True?
Build on that.
3
Material success and attainment of "earned" wealth is cyclical, goes through transitions of life and self concurrently with the journey that includes work, business, etc. IE: strive >> adjust/reset >> strive >> adjust/reset >> etc. Has this happened?
4
Inner Peace = material/financial success, family security, income security + things that grow and strengthen the "Self".
So, how to achieve that balance in the latter?

Actionable suggestions:
(do by yourself for yourself, not conceptual "thinking"/"academic", but physically "doing".)

IE: Non physical (not more muscles or fitness), non material (not in the next $5000 watch): take a meditation class regularly (weekly, etc) IE: zen meditation, etc; sign up for an Aikido class or Tai Chi or . . . . where the focus is not fighting/physical/combative/etc, other solo and/or non social, non group activities that focus inwardly.

Why?

It's common for ambitious, driven, focused, and fiancially achieved persons to not put time or effort into inner development.
It's common for those that have "earned wealth" to forego; "day's off", "time off", "sick leave", "weekend BBQ's", or the security and comfort of a structured 40 hour 5 day work week with guaranteed vacation time.
It's common for those achieving high material success to have been motivated for others, not for self.

Thus, eventually, the question when finally sitting back for a moment after achieving wealth; "what now?"

Lot's of ways of looking at these things and doing things. Everyone is different.
These are ponderings for the OP:.

j :happy
Wiki Bogleheads Wiki: Everything You Need to Know

OnTrack2020
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Re: What do people spend money on?

Post by OnTrack2020 » Sun May 24, 2020 8:09 am

If it were me and we were saving that amount of money per year, and looking backwards to your age especially with 2 small children, I would absolutely, absolutely focus on their education from pre-school on up through college--make sure they are getting the best education available.

And I would also take some fantastic vacations. This doesn't necessarily have to be done by spending a lot of money; I would just put more thought into where to travel.

I would lend support to local charities that you like that are struggling.

And I would pay off the house by age 50.

SQRT
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Re: What do people spend money on?

Post by SQRT » Sun May 24, 2020 8:27 am

I spent money on the usual things. Fabulous vacations, multiple homes, charitable giving, family giving, art, really nice everything. These have certainly been fun. No regrets. Currently almost 70, totally retired almost 14 years. Every body is different. I wish I had the choices you currently have at your age. By the time I was in your position, I was in my mid 50’s so a more traditional retirement made more sense.

Only you can figure out what makes you happy.

Mr. Rumples
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Re: What do people spend money on?

Post by Mr. Rumples » Sun May 24, 2020 8:35 am

I don't need much, my family is doing well, but many are having a tough time. You can think now about setting up an endowed scholarship or you can find youth groups that are formal organizations and you can give a cash grant. So many kids struggle.

MarkerFM
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Re: What do people spend money on?

Post by MarkerFM » Sun May 24, 2020 12:48 pm

Been there, done that. Looking at my peers in similar financial situations, everyone has a different set of preferences for spending money you don't really need to live on. Some prioritize cars, houses, travel, philanthropy, art, etc.

We gave our kids the gift of education and are currently gifting money into trusts for them annually. Almost no matter what happens, they will inherit the benefits of a relatively large amount of money, to be passed down until it runs out. We currently give lots to charities (in increasing amounts, and 10% of our estate will be given to a small list of favorites).

We don't spend much on clothes or cars, moderately high amounts on travel, and relatively more on real estate and furnishings. A bit on art and toys, but nothing extravagant. Our biggest "spending" was stopping work for money when I was 45. Time instead went to leadership in non-profit organizations.

You will have to find what gives you and your family joy and spend on that. Don't be caught up in what you "should" do.

hicabob
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Re: What do people spend money on?

Post by hicabob » Sun May 24, 2020 12:57 pm

Livehard1234 wrote:
Sat May 23, 2020 9:00 pm
Have been very fortunate in life after growing up poor and with DW make a combined income of $1.1M (me: $900k, DW: $200k). This is likely to go up as I’ve been on a fast track in senior management at a top tech company.

I am 41 and DW is 36. We have $3.6M in investments ($1.2M retirement and $2.4M in taxable). We bought our dream home for $2.3M and have a 15 year 3.0% mortgage. Savings are about $600k per year. Income has tripled over the last 5 years.

Hitting a midlife crisis and know there is more to life than working and saving. Also know I don’t want to retire early and at this rate we’ll have much more saved then we need. I’m not a car or boat guy. We have two young kids (1 and 3), but I don’t want them to start life off with millions. We will pay for school and then they will be on their own to build their lives.

What would you do with the money? Should I just stay on this current path? I know this is a time of great uncertainty and maybe it’s best to just be conservative. Also when I look at big purchases I know they will make me excited for a couple of months and then just be more stuff.
Buying large boats and airplanes are an efficient way to deplete an excessive pile of $$$. Try a flying lesson at the local airport and see if it rings your bell.

jory1804
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Re: What do people spend money on?

Post by jory1804 » Sun May 24, 2020 12:58 pm

As someone with roughly 4x your NW and income, here is my take.

Some things you could do if you wanted:

- Private school for the kids, if it's better than the public options.
- Weekend home. This probably only makes sense if it's substantially different from your weekday home (e.g. weekday home is an apartment in the city, weekend home is a real house in the suburbs). If your main home is already your dream home as you say, I'd probably scratch this.
- Gift your close relatives. My wife and I made a one-time gift to our sublings; we were happy to do it and they've put the money to good use.
- Get more domestic help to take chores off your plate. Cleaning, etc.
- Spend some money on hobbies you already have, though picking up a new expensive hobby "just because you can" probably isn't worthwhile. If you're not already into wine, no need to start collecting it.

Also, some things I would definitely recommend doing:

- Get an umbrella liability policy. The last thing you need is to get sued for your entire NW.
- Spend money on healthy food. Pay up for the branzino at lunch rather than the burger, if that's what it takes to get you eating healthier. More generally, all the money in the world is worth nothing without your health.
- Continue to save. Personally I wouldn't look to spend very extravagantly until you're sure you have enough to last the rest of your lives. I haven't been there, but I can imagine there are few worse feelings than losing the game after you've already won it.

rbaldini
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Re: What do people spend money on?

Post by rbaldini » Sun May 24, 2020 1:01 pm

Are you asking us to suggest hobbies for you?

austin757
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Re: What do people spend money on?

Post by austin757 » Sun May 24, 2020 1:05 pm

One of the worst humble brags I’ve seen on here in a while. At least try to throw in a question in there.

TheNightsToCome
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Re: What do people spend money on?

Post by TheNightsToCome » Sun May 24, 2020 1:18 pm

There have been a couple of similar posts on the forum. They are only nominally about money. The real question is, "How can I be happy?"

I know my answer, my wife's answer, and my father's answer, but the OP will have to determine his answer, and I doubt the internet will be much help.

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JonnyDVM
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Re: What do people spend money on?

Post by JonnyDVM » Sun May 24, 2020 1:26 pm

barberakb wrote:
Sun May 24, 2020 2:59 am
Spend some of it on pictures and experiences.

Take more vacations. The memories will be worth it. Travel, camping, etc...
Would also recommend some exotic travel. When such a thing is allowed again anyway. Also try out some better quality wine. You’re drinking swill.
I’d trade it all for a little more | -C Montgomery Burns

22twain
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Re: What do people spend money on?

Post by 22twain » Sun May 24, 2020 1:57 pm

rbaldini wrote:
Sun May 24, 2020 1:01 pm
Are you asking us to suggest hobbies for you?
If that's what you're looking for, or are willing to consider that route, enter "hobbies" in the search box at the top right of this page. The first several hits are previous threads here where people discuss their hobbies.
Help save endangered words! When you write "princiPLE", make sure you don't really mean "princiPAL"!

Topic Author
Livehard1234
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Re: What do people spend money on?

Post by Livehard1234 » Sun May 24, 2020 2:22 pm

Thanks for all the replies. It was a very poorly constructed post, but what I was looking for is what people in a similar situations have chosen to do with their money and how/if it has helped them find more contentment.

Being in lockdown with two small children and a stressful job is clearly wearing on me. While I have focused on family and health (quit alcohol, lost 30 pounds), this life stage (two small children) leaves little room for anything outside of work and childcare. Even vacations tend to be more stressful than our day-to-day. I know this will change. I guess now that I am in a position to not be stressed about money (as was the source of daily fights between my parents), I want to take the next step and use it to put me in a better position to have a fulfilling life.

Some suggestions that resonated with me:
(1) Focus first on ensuring you have more money saved then you will ever need. Nothing worse than finding a way to lose a game you've won.
(2) Education for kids. With no need for trade-offs, make sure they have every opportunity possible to lead a productive life. As someone who went to terrible public schools with barbed wire and gang fights, I worry about a potential loss of grit and perspective. However, I do think that comes more from parenting than schools.
(3) Focus on family and personal experiences, be that exotic vacations, vacation home in the mountains, or other experiential hobbies. This is what you'll find more value from than stuff.
(4) Find charities that resonate with you and give meaningful donations AND time. You're in a position to make real impact to something bigger than yourself.
(5) Focus on your health. You can buy time and afford quality food and this is one thing that you will never regret.
(6) Money can be a constraint, but it isn't a solve for happiness. Once you determine what creates fulfillment in your life you are in a position to invest fully in it, but you're the only person who can figure out what that is.

Thanks again. Very helpful advice from those who aren't wallowing in mid life crisis.

mathwhiz
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Re: What do people spend money on?

Post by mathwhiz » Sun May 24, 2020 2:51 pm

Let's say you had a net worth of $20M and didn't have to work, how would your life be different? That's what I would think about a lot. What net worth do you need to fufill your life goals and something to retire to. And then execute a plan to reach that number and retire.

visualguy
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Re: What do people spend money on?

Post by visualguy » Sun May 24, 2020 3:05 pm

mathwhiz wrote:
Sun May 24, 2020 2:51 pm
Let's say you had a net worth of $20M and didn't have to work, how would your life be different? That's what I would think about a lot. What net worth do you need to fufill your life goals and something to retire to. And then execute a plan to reach that number and retire.
He said that he doesn't want to retire early, though...

Ultimately, fulfillment comes from doing things, but what those things are varies significantly from person to person, so there really isn't a universal answer to OP's question.

Quaestner
Posts: 236
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Re: What do people spend money on?

Post by Quaestner » Sun May 24, 2020 3:11 pm

Keep making money - you're good at it! Then, spend it to help others. Try to make sure you are spending it in a way that does the most good. Consider reading William MacAskill's book "Doing Good Better: How Effective Altruism Can Help You Make a Difference".

EnjoyIt
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Re: What do people spend money on?

Post by EnjoyIt » Sun May 24, 2020 3:37 pm

jory1804 wrote:
Sun May 24, 2020 12:58 pm
As someone with roughly 4x your NW and income, here is my take.

Some things you could do if you wanted:

- Private school for the kids, if it's better than the public options.
- Weekend home. This probably only makes sense if it's substantially different from your weekday home (e.g. weekday home is an apartment in the city, weekend home is a real house in the suburbs). If your main home is already your dream home as you say, I'd probably scratch this.
- Gift your close relatives. My wife and I made a one-time gift to our sublings; we were happy to do it and they've put the money to good use.
- Get more domestic help to take chores off your plate. Cleaning, etc.
- Spend some money on hobbies you already have, though picking up a new expensive hobby "just because you can" probably isn't worthwhile. If you're not already into wine, no need to start collecting it.

Also, some things I would definitely recommend doing:

- Get an umbrella liability policy. The last thing you need is to get sued for your entire NW.
- Spend money on healthy food. Pay up for the branzino at lunch rather than the burger, if that's what it takes to get you eating healthier. More generally, all the money in the world is worth nothing without your health.
- Continue to save. Personally I wouldn't look to spend very extravagantly until you're sure you have enough to last the rest of your lives. I haven't been there, but I can imagine there are few worse feelings than losing the game after you've already won it.
Can I add to the above?

One thing we have done as our wealth grew is increase spending slowly. If currently you spend $150k a year don’t just jump to $250k overnight. Let it rise as your wealth rises. You will enjoy a slow and steady lifestyle creep far more than one huge splurge.

Since you are currently saving $600k a year, then you can comfortably increase your spending by $600k x 4% = $24k. So how about next year you spend $15k-$25k more for the next 2-3 years. Repeat this process every few years this way your wealth keeps up with your spending.

One thing we have enjoyed doing is getting the people we care about together. Prior to covid, we would host people often and set up trips with friends and family. I believe a great way to enjoy your money is by helping the people you care about enjoy it also.

manatee2005
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Re: What do people spend money on?

Post by manatee2005 » Sun May 24, 2020 3:42 pm

mathwhiz wrote:
Sun May 24, 2020 2:51 pm
Let's say you had a net worth of $20M and didn't have to work, how would your life be different? That's what I would think about a lot. What net worth do you need to fufill your life goals and something to retire to. And then execute a plan to reach that number and retire.
Private plane. No more TSA and cattle class!

manatee2005
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Re: What do people spend money on?

Post by manatee2005 » Sun May 24, 2020 3:43 pm

rbaldini wrote:
Sun May 24, 2020 1:01 pm
Are you asking us to suggest hobbies for you?
He can start trading forex futures and he won't have a problem with extra money anymore :D :D :D

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goodenyou
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Re: What do people spend money on?

Post by goodenyou » Sun May 24, 2020 4:47 pm

Keep saving. You may want to quit your stressful job. You could get sick too. Living in $2M+ house with some luxury cars, kids that are used to luxury, and paying for people to give you more time is very expensive. You'll want to spend on the kids big time. They are young now and they get very expensive as they age. Pay off the house.
"Ignorance more frequently begets confidence than does knowledge" | Do you know how to make a rain dance work? Dance until it rains.

barberakb
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Re: What do people spend money on?

Post by barberakb » Sun May 24, 2020 5:00 pm

Livehard1234 wrote:
Sun May 24, 2020 2:22 pm
Thanks for all the replies. It was a very poorly constructed post, but what I was looking for is what people in a similar situations have chosen to do with their money and how/if it has helped them find more contentment.

Being in lockdown with two small children and a stressful job is clearly wearing on me. While I have focused on family and health (quit alcohol, lost 30 pounds), this life stage (two small children) leaves little room for anything outside of work and childcare. Even vacations tend to be more stressful than our day-to-day. I know this will change. I guess now that I am in a position to not be stressed about money (as was the source of daily fights between my parents), I want to take the next step and use it to put me in a better position to have a fulfilling life.

Some suggestions that resonated with me:
(1) Focus first on ensuring you have more money saved then you will ever need. Nothing worse than finding a way to lose a game you've won.
(2) Education for kids. With no need for trade-offs, make sure they have every opportunity possible to lead a productive life. As someone who went to terrible public schools with barbed wire and gang fights, I worry about a potential loss of grit and perspective. However, I do think that comes more from parenting than schools.
(3) Focus on family and personal experiences, be that exotic vacations, vacation home in the mountains, or other experiential hobbies. This is what you'll find more value from than stuff.
(4) Find charities that resonate with you and give meaningful donations AND time. You're in a position to make real impact to something bigger than yourself.
(5) Focus on your health. You can buy time and afford quality food and this is one thing that you will never regret.
(6) Money can be a constraint, but it isn't a solve for happiness. Once you determine what creates fulfillment in your life you are in a position to invest fully in it, but you're the only person who can figure out what that is.

Thanks again. Very helpful advice from those who aren't wallowing in mid life crisis.
I wouldn't worry about it man. There are alot of negative nancies around that just look for something bad to say. And haters... While I have never
made or had anywhere the $ that you have, and I am cheap or thrifty. The experiences that I remember most and my kids do as well are basically ones my wife was adamant about that cost us $ like a cruise or trip and I have to admit it was well worth the splurge.

FrankTheViking
Posts: 76
Joined: Wed Jan 08, 2020 3:44 pm

Re: What do people spend money on?

Post by FrankTheViking » Sun May 24, 2020 5:03 pm

Casinos. Not the gambling, unless that's your thing, but the buffet. In a hypothetical world in which I did not care about saving money I would be a very fat man....not much else would change. :sharebeer
No EF. 80% Total U.S. / 20% Total International. 100% equity. Is there a gun to your head? Is there a tiger in the room? No? What's the problem?

BuyandHold37
Posts: 73
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Re: What do people spend money on?

Post by BuyandHold37 » Mon May 25, 2020 6:13 am

Experiences...travel.

Things like this: https://www.nationalgeographic.com/expe ... -jet-tour/

toocold
Posts: 45
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Re: What do people spend money on?

Post by toocold » Mon May 25, 2020 8:37 am

I was in a similar situation as you. Keep in mind that as you get older and you take on more responsibilities at work, the stress level will increase. I would avoid thinking that your comp will forever go up. For me, I burnt out on my corporate job in my mid 40s and left formal work late 40s.

In preparation for this, I invested wisely, including real estate, to mimic my normal expenses. I kept my expenses reasonable at 60k without a mortgage. So when it was time to leave work, I was very comfortable with my figures.

I don't know your expenses but I presume about ~200k. I'd advise you to keep them in check during your wealth accumulation phase.

Now, with that said, we've always had a budget to go traveling. It's quite difficult with young kids and I suspect even more so with work requirements. I would also put money in their college fund -- If you are interested, it's about 80k per year with room and board at some of the more selective schools, and I suspect it will go higher.

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