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An amount of money diversely invested in the stock market can generate about 4% in return even with volitility (see Trinity Study). By buying a $4,000 couch, yo

An amount of money diversely invested in the stock market can generate about 4% in return even with volitility (see Trinity Study). By buying a $4,000 couch, you are spending $3,500 more today than the Ikea alternative. $3,500 invested could be drawn down at $140 per year without invading principle. A new Ikea couch only costs $100/year. You're actually spending more (with opportunity costs) on the buy-it-once couch. This is why I don't buy nice furniture. (Also, I move too much, and it's easier to sell and re-buy Ikea than paying to move heavy, well-built furniture).

pc86 11y ago
If you reduce everything to how much money you could have otherwise pulled out of the stock market you are going to have a miserable life.
- gutnor 11y ago
  He will not live rich, but he will die rich.
  - Jtsummers 11y ago
    Or retire early/rich. This is why I encourage my younger coworkers (well, all of them really) to try and put as much into an IRA and their 401k as they can afford (ideally maxing it, once that's done every pay raise goes entirely to you and the gov't (as taxes)). When you're in your twenties you usually have a far higher tolerance for discomfort (so if you want to travel you're more willing to do the hostel stays and such) and have fewer external obligations. By the time you're in your 30s you're making enough money (as a professional engineer/scientist type in my field) that those contributions are a small (but still significant) part of your income, and if you need to reduce it to cover family expenses you still have a lot of money banked and earning towards your retirement.
    - gutnor 11y ago
      The most likely outcome is retiring early, but that really only applies to young people making significantly better than average salaries in order to do it quick, before having kids. If you have spent 40+ years saving every penny, you don't start spending when you retire, saving money has become part of your identity, not a mean to an end.
- knughit 11y ago
  That completely misses the point about allocating resources efficiently over a lifetime.
  - pc86 11y ago
    And looking at a couch arguably an order of magnitude nicer than anything at Ikea and saying "oh I'm losing $140/mo in potential revenue at retirement!" completely misses several points.
mcguire 11y ago
There's ano old story about someone who got a barrel of apples. At every point, they ate the apples that were starting to go bad first. They spent months eating slightly rotten apples.
- knughit 11y ago
  Old story? That's my fridge and pantry, every week.

pc86 11y ago

If you reduce everything to how much money you could have otherwise pulled out of the stock market you are going to have a miserable life.

gutnor 11y ago
He will not live rich, but he will die rich.
- Jtsummers 11y ago
  Or retire early/rich. This is why I encourage my younger coworkers (well, all of them really) to try and put as much into an IRA and their 401k as they can afford (ideally maxing it, once that's done every pay raise goes entirely to you and the gov't (as taxes)). When you're in your twenties you usually have a far higher tolerance for discomfort (so if you want to travel you're more willing to do the hostel stays and such) and have fewer external obligations. By the time you're in your 30s you're making enough money (as a professional engineer/scientist type in my field) that those contributions are a small (but still significant) part of your income, and if you need to reduce it to cover family expenses you still have a lot of money banked and earning towards your retirement.
  - gutnor 11y ago
    The most likely outcome is retiring early, but that really only applies to young people making significantly better than average salaries in order to do it quick, before having kids. If you have spent 40+ years saving every penny, you don't start spending when you retire, saving money has become part of your identity, not a mean to an end.
knughit 11y ago
That completely misses the point about allocating resources efficiently over a lifetime.
- pc86 11y ago
  And looking at a couch arguably an order of magnitude nicer than anything at Ikea and saying "oh I'm losing $140/mo in potential revenue at retirement!" completely misses several points.

mcguire 11y ago

There's ano old story about someone who got a barrel of apples. At every point, they ate the apples that were starting to go bad first. They spent months eating slightly rotten apples.

knughit 11y ago
Old story? That's my fridge and pantry, every week.