19 ms·

Being frugal is for the rich

221 points by devy 9y ago

mcguire 9y ago
While it's kind of unrelated to the overall point of the article, it includes the statement, "According to the Federal Reserve, Millennials in their twenties carried an average debt of $22,135 last summer." The linked Federal Reserve article[1] doesn't seem to directly support that statement, but does say that ~55-60% of 18-29-year-old's used or are using loans to finance their own education, but that, "Among respondents who report that they currently owe student loan debt for their own education, the mean level of this debt is $30,156 and the median is $12,000." (Note: that doesn't include those who have already paid off their debt.)
aschearer 9y ago
The title here seems very inflammatory. The article questions whether some actions (e.g. painting your own home instead of hiring someone to do it) are truly frugal. It goes on to say that the philosophy of frugality is a handmaiden for wealthy. Maybe so, but why would we discourage good spending habits? For example, choosing to eat one or more meals out each day versus bulk cooking is an option available to most people. Likewise, choosing to spend $800 on rent with roommates versus $1,600 for a studio or one bedroom apartment. I'm not seeing how millenials or members of the middle class benefit by uncritically opting for more expensive options. My read on frugal culture is spend however much money you want on whatever you want, but do so eyes-wide-open. Break free from all the advertising, inertia, and "keeping up with the joneses". Frankly I think if more people adopted this style of thinking it would have serious ramifications for the rich and their businesses built on over consumption and debt.
- duxup 9y ago
  I think the title refers more to the idea that those folks selling this frugality made plenty of money already and that financial freedom is what helped them establish their lifestyle... not the frugality they sell.
  - aschearer 9y ago
    I agree the article was attempting to take down that family, but even on that count I wasn't convinced. So they have a home in Massachusetts? That hardly makes them "rich". Nor is being able to hire a painting company the exclusive province of the wealthy. Perhaps pursuing FIRE is something only available to the upper middle class. That's an interesting argument, but not one put forward in the article. Furthermore, I think it's bordering on class warfare to set the upper and lower middle classes against each other. It reeks of divide and conquer, and who benefits? The people pushing over expensive lifestyles funded with debt.
    - mcguire 9y ago
      Minor correction: They have a second house in Massachusetts, 1/2 a mile from MIT and 1 mile from Harvard, which they paid $460,000 for in 2012 (https://www.frugalwoods.com/2014/05/08/why-did-we-buy-our-house/ https://www.frugalwoods.com/2014/05/08/why-did-we-buy-our-ho...) and now rent (http://www.frugalwoods.com/2017/02/24/how-we-turned-our-city-home-into-a-rental-property/ http://www.frugalwoods.com/2017/02/24/how-we-turned-our-city...). (Whoa, their property manager is cheap.)
      - cko 9y ago
        Less than 3% of gross for a single unit? That is a rate you’d expect for a 200 unit apartment complex.
  - xboxnolifes 9y ago
    The audience that these types of blog posts are targeting aren't those of who are stuck making minimum wage, but instead those who are fairly well off but think they aren't because they keep spending yearly costs on $1000 phones, 5+ subscription services, large housing costs, eating out multiple times per week, etc.
    - duxup 9y ago
      I don't know who the target audience is. I'm not sure your issues you address are anymore a path to financal independence than anyone else offers. It's really easy to pick our personal boogeymen that no doubt play a part in things, and make them more of the issue than they really are.
- anigbrowl 9y ago
  You're missing the point. The 'frugal culture' is selling the idea that this is the road to economic self-sufficiency while omitting or glossing over other significant information, like having a very healthy income stream to begin with. If you're poor, being frugal is very unlikely to lift you out of poverty. That doesn't mean frugality is bad, but that marketing is as the key to financial stability is deceptive.
  - aschearer 9y ago
    Sure, but are people like the ones in this article or MMM seriously advocating that their philosophy will solve poverty? It's always struck me as middle or even upper middle class people revolting against over consumption and debt. Insofar as that's the case it seems like a positive development. And I don't see why we can't do two things at once, address inequality and poverty and reform out-of-control consumerism.
    - azernik 9y ago
      I've heard this frequently in right-wing circles; see e.g. the complaints about people on welfare having (shock!) smartphones.
      - AstralStorm 9y ago
        People in Sudan have too. An older smartphone can be had for very little nowadays. As can be a budget model.
      - ericd 9y ago
        Smartphones are an expensive luxury, not a necessity. I think the expectation is that people on the public dole should be trying to save as much as possible and try to get off of welfare.
        anigbrowl 9y ago
        A moderately capable smartphone can be had for $100 and up, especially if you're not aiming for the latest model. That makes it very competitive with laptops, and provides the owner with communications, mapping, and access to all kinds of services which will make it easier to get by and considerably easier to do things like job hunting. Dismissing it as an expensive luxury is absurd.
- qntty 9y ago
  I guess this is the real motive behind the article: But here’s the thing. Regardless of intent, these Millennials are telling an older generation of elite Americans — the very people whose policies and financial decisions kneecapped the economy — what they want to hear: that everything is more or less okay, and young people just need to be more thoughtful about their money. And that’s a shitty idea to perpetuate. Because whatever happens in the years ahead, penny-pinching will likely remain a lifestyle enhancement for bourgeois Millennials who possess enough money to enjoy the dividends of being thrifty. For most of us, there are no dividends: just thrift. It's not about the advice itself -- the advice all seems pretty reasonable -- it's about the place that advice has in the story we tell ourselves about young people. I myself practice many of these thrifty tips, but I cringe to think that the blog posts that people write about them will be used to justify continuing to build a world where they are more and more necessary.
  - malvosenior 9y ago
    I think there’s real value in spreading the message of thrift. The 20th century saw a massive build up of the consumerist lifestyle. It’s going to take a lot of work to back that out, so we might as well start now. I’ve personally seen people with high five figure student debt go on regular international trips. These people more or less live paycheck to paycheck and save specifically for travel (or use credit cards — if they can get them). Educating people as to why that might be a bad idea and creating a supportive culture of anti-consumerism seems like a good idea. Sure there are policy decisions at play too, but being “frugal” can hardly hurt.
    - qntty 9y ago
      No doubt. Again: the tips are great and many people would do well to listen to them. However, the larger question of the place that these tips have in the story that we tell ourselves about society is still an open question. There are multiple ways to place these tips in a larger context while still following them and regarding them as worthwhile. It's important to understand that there is a choice to be made here about the story we tell ourselves.
- notyourwork 9y ago
  People want what they can't have which I don't think will ever dissolve. Therefore, the idea that advertising has any bearing on this is flawed. Keeping up with the joneses is less about having the same thing and more about having the joneses quality of life. They aren't the same if you look at them. Having a fancy car for example is a status symbol, what is the status? The status is that this car has nicer features, butt warmers, more comfortable seating, better safety. Taking that status symbol a step further, I can deduce that if the joneses can afford that fancy car they also have other fancy things. Most reduce this logic down to the following: The more individual items I have that the joneses have the closer I'll be to their quality of life. I think this is a really interesting dynamic though because the more money I make I am not proportionally happier. In fact, my happiness stopped increasing with salary increases the moment I was able to afford bills and have leftover for savings. Since than my salary has grown many times over and I am still the same person I was fresh out of college getting by. My wife and I are still the same couple, we are no happier with the weather we have achieved over the years.
  - neogodless 9y ago
    There are so many things you cannot tell by looking at how other people appear to be living their lives. Or whether the car is valued for utility, features or perceived status. First, you can't tell from looking at their car how well-suited their finances are to paying for it. They could have a 12.99% 72-month loan that doubles the actual cost (plus higher insurance premiums, premium fuel, etc). Or they bought it cash, self-insure, and have money invested that compounds over time and pays their insurance and gas bill for them. Second, you probably don't know how they are using it. If you're a master salesman with an excellent income, selling 7-figure deals to executives, you might actually get utility out of perceived status! But if you're a coder who walks a quarter mile from parking and works in the basement of the building, the brand name on that car is worth nothing. And most of those comfort features can probably be found in a Mazda for $20K less. Or a ten-year old luxury car. (Personally I love the hatchback which combines all those features with utility and fuel economy! No need to buy the luxury sport sedan.) Finally, wait, why do you think advertising isn't doing its job? People know what they can't have because of advertising. Then they want it.
- mcguire 9y ago
  Here's the question: if you were to "cut back on things like eating out at restaurants and taking public transportation to work," would you be able to save 71% of your income? How long would it take you, just in cutting back on lattes and painting your own home rather than hiring a contractor, to buy a 4 bedroom house on 66 acres in Vermont? I don't really like doing plumbing, but I've replaced quite a few faucets and toilets. Not because I wanted to be "frugal", but because I could not afford to pay someone to do it; if I didn't, it wasn't getting done. I didn't blog about it; I didn't tell everyone, "Hey, lookit me! I'm saving money!" because everyone else I knew was also doing their own plumbing because they were also broke. (Now, of course, I could pay someone. But that ship's sailed. Besides, it's really hard to find good contractors.) The McFrugals, according to the article, aren't talking to millenials or anyone else who needs to be frugal; they're talking to the wealthy, saying "all those people you think are whiney, spoiled kids, really are spoiled, whiney kids."
  - sokoloff 9y ago
    > Here's the question: if you were to "cut back on things like eating out at restaurants and taking public transportation to work," would you be able to save 71% of your income? No, because my taxation burden alone is well above 29%. I'm pretty sure they're calculating that they're saving 71% of their earned income, but they're almost surely not saving 71% of their earned income plus gross rent receipts.
    - mcguire 9y ago
      You are correct, it's post-tax. (https://www.frugalwoods.com/2015/01/09/well-hot-damn-frugality-works-our-2014-savings-rate-revealed/ https://www.frugalwoods.com/2015/01/09/well-hot-damn-frugali...) It also doesn't include 401(k)s and mortgage principal. Edit: Here's how they do it: https://www.frugalwoods.com/2014/04/10/how-we-save-65-annually/ https://www.frugalwoods.com/2014/04/10/how-we-save-65-annual...
jessaustin 9y ago
I realize that TFA is a critique of these silly people, but somehow reading the first two paragraphs seemed to be as much as I would ever need to know about them.
tvanantwerp 9y ago
So some people in a particular generational cohort write books and blogs about their financial independence, but this is bad because it trivializes the actual struggles of other people in their cohort who aren't financially independent? Oh, the horrors!
- mr_spothawk 9y ago
  they're also patently unaware of the class struggle their authorship persists! they should be deplatformed. /s
- notfromhere 9y ago
  they're usually bullshit because they fail to emphasize outside income and support.
peacetreefrog 9y ago
Here's the takeaway: the frugals/similar bloggers are bad because they, "are telling an older generation of elite Americans — the very people whose policies and financial decisions kneecapped the economy — what they want to hear: that everything is more or less okay, and young people just need to be more thoughtful about their money." While it's debatable whether everything is "more or less okay", and -- to some degree -- there are definite systemic issues preventing people from being where they want to be financially, I guarantee you that adopting this attitude ("it's not my fault I can't get ahead, the system is messed up") is going to make you worse off financially vs believing/focusing on what you can control and your own agency. For example, I do think there are some current millennials who sort of got unlucky with the student loan/college bubble and "were told" (or believed) that they could just borrow whatever they wanted to study whatever they wanted, and it'd all turn out OK. But I'm not sure people graduating high school now nec have that excuse. And if you are graduating high school and reading this, for gods sake, please take it upon yourself to think a bit about what you might like to do and take a long, hard look at what exactly borrowing the median 10's of k's of debt might get you before you do it.
- jogjayr 9y ago
  What I missed was the part where their blog says "Millennials only! Everyone else is absolved of blame!". To hear people tell it, large swaths of the American population has a retirement savings crisis, not just Millennials (who actually have time on their side to build wealth). Their advice is universally applicable, regardless of age or income.
- mr_spothawk 9y ago
  I've know a woman who's worked at University of Phoenix for a significant part of my adulthood. In that time, I've heard some terrible stories about who University of Phoenix targets for recruiting into their gov't borrowing scam. The folks who were targeted are largely unable to pay, and desperately wanted the airdrop of money they got from Financial Aid to attend.
joefourier 9y ago
American salaries are difficult to make sense of from a European perspective. The referenced average salary of $36,000/year for millennials with only a high-school diploma would be a normal entry-level salary for a software engineer in most of Western Europe, and a very good salary for experienced engineers in Eastern Europe. Tax burden is higher here as well, and while the cost of housing is exorbitant many parts of the US, so it is in cities like Dublin, London and Paris, but without the salary adjustments you see in San Francisco, New York, etc. This makes it difficult to understand why frugality is impossible for an American making triple the average salary of an average Czech or Croatian.
- tjpaudio 9y ago
  City-based salary adjustments are really something only educated professionals get, low-wage earners are screwed in big cities. I think also it will shock you how much every day items are compared to Europe. For one, public transportation is not available to most of America. So you have to have a car and car insurance, thats hundreds of dollars more per month right there. Cellphone service costs 3x as much as anywhere in Europe. And yes, the housing is absurd as a percentage of wages compare the the EU. Health insurance is really expensive as well; the employee's contribution to a company sponsored health plan is often as much as 20% of a minimum wage workers wage.
  - gowld 9y ago
    > City-based salary adjustments are really something only educated professionals get, That's not entirely true. In many cities, minimum wage is substantially higher ($12-$15/hr) than the Federal minimum ($7.25/hr) > in big cities > So you have to have a car and car insurance Not in big cities.
    - crooked-v 9y ago
      Very few of the big cities in the US have public transit that's even sufficient for most people to get to work, let alone to sustain the rest of a reasonable lifestyle. I'm saying this as someone who previously had a 1 hr 20 min commute via public transit just to go 16 miles, and that was with the relatively good public transit in the Portland metro area and me literally living a block away from main downtown transit hub.
neogodless 9y ago
Over the past few weeks, a long-running thread has been building on the Mr. Money Mustache forums at https://forum.mrmoneymustache.com/welcome-to-the-forum/what's-up-with-the-frugalwoods/ https://forum.mrmoneymustache.com/welcome-to-the-forum/what'... (Mr. Money Mustache isn't too different from the FrugalWoods. They never made quite so much money, but they did have good careers. Still, there's a similar message to be heard.) I get that the high income and extravagant Vermont estate are a turn off for median-and-below earners, but that doesn't mean you have to have their income to benefit from their frugality. After all, MMM and FW have the time to write about frugality because of their financial independence. But they are able to live the lives they want due to the choices they made with their money. It isn't hard to find counter-examples. How often do you hear of people that make $300k/year, yet fail to accumulate wealth and achieve financial independence? How often do they continue to be held to wage slavery to support their chosen lifestyle? Anyway, while you can't save money by not painting your kitchen, you can improve upon your self-sufficiency, and you can certainly become more mindful of your values and the choices you make with your money. It takes education (self or otherwise), and financial bloggers can serve as source of education. But you still have to learn how to filter and apply knowledge to your own situation. You can't pluck fruit from an orchard in your 600 sq. ft. apartment, but you can track your spending, and figure out where money is being spent on things that don't line up with your values and long-term goals. The important thing is to figure out what you can do to improve your situation. Complaining about people being more successful than you doesn't improve your situation. (I do get that income inequality is a whole other issue to address, but I think that muddies this specific message.) Remember that you can probably find ways to be more frugal and mindful, and know that doing so alone will not get you a 66-acre homestead at the age of 30, but it can improve your life and get you to your goals faster.
- gowld 9y ago
  beware of "frugal / FIRE bloggers" because they make their money blogging, and aren't financially independent (last time I checked, MMM was a working carpenter/contractor, while claiming he's "retired" because he "enjoys his work"), which is not an avenue open to their entire audience.
  - 9y ago
logfromblammo 9y ago
I would also make the economic argument that a rich person that is still frugal is actively exacerbating income inequality. If Warren Buffett is indeed still paying only $3 for breakfast every day, that's giving a big middle finger to the economy. Money is half of the circulatory system of the economy. When it pools too long in one spot, it clots, and then a thrombosed clot can cause damage somewhere else. He really needs to spend more on breakfast. As one of the richest individuals on the planet, even if he just wants a sausage muffin, it should really be made from only the highest quality agricultural goods, with a lot of personal services added. If he can't manage to swallow that level of ostentation, buying thousands more of the consumer-grade item than he could eat personally would also work. The only reason for poor people to permit rich people to continue existing is that concentrations of wealth allow for the development of novel classes of goods and services. There would be no luxury yachts if nobody could afford more than a fishing reefer. There would be no Acura if nobody could afford more than a Honda; no Lexus above Toyota; no Cadillac above GM. The luxury goods and services are the early adopters. Without them, some technologies would have died at inception, never to make it to consumer-grade products, because they were too big and expensive. Anyone can spend small. Everyone else needs the rich folk to spend big, whenever they can. If you don't buy the best, you are not doing your job as a rich person. If you aren't spending on someone's wage, you aren't really "creating jobs". If you can afford to have your cabinets painted instead of doing it yourself, hire someone for that and get back to being the QC/beta-tester for humanity's R&D. This crap where you "retire" and pretend to be rustic and homey isn't helping anyone. If you want to live like a poor person, that's easy; just get rid of all your money. Give it to someone more willing to spend it. Frugality stops once you can pay all your bills from your paycheck and still have some left. After that, it's called stinginess or miserliness.
- EnFinlay 9y ago
  I fundamentally and vehemently disagree with you.
  - xboxnolifes 9y ago
    second this
mnm1 9y ago
Whoa, I just realized I've been retired for four years now! Words used to mean something. If retired is a full time job and self employment, no one told me. It's not bad but it's way overrated and certainly not happiness. My mom is retired. She can literally do nothing all day every day. These people are not retired, they're lying. And referencing Warren Buffett's shit breakfast advise without considering the money needed to budget for the inevitable health disaster of eating a sugary breakfast at McDonald's every day is frankly ridiculous.
mr_spothawk 9y ago
I'm glad the wouldn't let something as Patently Right Wing as "being thrifty" to escape their journalistic gaze. it's super important to make sure that no stone goes unturned in the constant battle to find out who's keeping them down over there on "The Great Left". /s
- notfromhere 9y ago
  There's nothing wrong with being thifty, but there is a lot of wrong in using "you're not thrifty" to explain systemic income inequality
  - mr_spothawk 9y ago
    if any portion of success can be explained by patterns of behavior, then portions of "systemic" income inequality can as well. I'm emphatically NOT suggesting that poor people are only poor because they don't understand how to balance a checkbook, avoid predatory loans, and how to use the tax system to their advantage.
michaelbuckbee 9y ago
The word missing from this discussion is "structural" - there are deep structural changes to how the job market and economy now works that limit the economic prospects of millennials (as a group) in ways that can't readily be overcome with thriftiness and hard work. Here's an excerpt of the article that really clarified this for me: "Thirty years ago, she says, you could walk into any hotel in America and everyone in the building, from the cleaners to the security guards to the bartenders, was a direct hire, each worker on the same pay scale and enjoying the same benefits as everyone else. Today, they’re almost all indirect hires, employees of random, anonymous contracting companies: Laundry Inc., Rent-A-Guard Inc., Watery Margarita Inc. In 2015, the Government Accountability Office estimated that 40 percent of American workers were employed under some sort of “contingent” arrangement like this—from barbers to midwives to nuclear waste inspectors to symphony cellists. Since the downturn, the industry that has added the most jobs is not tech or retail or nursing. It is “temporary help services”—all the small, no-brand contractors who recruit workers and rent them out to bigger companies." from: http://highline.huffingtonpost.com/articles/en/poor-millennials/ http://highline.huffingtonpost.com/articles/en/poor-millenni...
- pitaj 9y ago
  The specific example you bring up seems to be a result of increased liability on the employer for employees. Hotels etc would rather contractors carry those liabilities, especially I imagine when it comes to possibly illegal immigrants.
  - knuththetruth 9y ago
    Sure, but that's not some kind of neutral, organic development. It's something the rich choose to do, in collusion with politicians, to increase their own wealth and power. Shifting all the "liability" onto workers, creating an economy where everyone but the wealthiest are fungible serfs, is a specific set of values and decisions advanced by these people because it benefits them.
    - iguy 9y ago
      It is _partly_ organic, or rather, technological. General Motors did everything in house (partly) for the same reason the hotel did: the computers needed to keep track of today's supply chain / subcontracting payments & management didn't exist. The efficient thing was to have one centralised payroll department cutting checks. But politics played a big role too. It deserves to be noted here that almost all the employees at this (1960s NYC, say) hotel were born Americans. While today a large proportion would not be, a factor which tips the balance of power towards their managers.
bluetomcat 9y ago
Living in Eastern Europe, I was able to witness the streamlined shift to a Western consumerist lifestyle in a mere 15 to 20 years. There was a saying in communist Bulgaria, "having money doesn't mean that there is anything you can spend it on". This encouraged people to save and have longer-term goals. Fast forward to today, everyday spending opportunities are beyond every corner, and people prove that they are successful in life with outward and vulgar consumerism which was probably a 70s thing in the West.
- ericd 9y ago
  It's still very much a thing here. Curbing that habit is one of the things these bloggers talk a lot about, since doing that helps you save much more.
nunez 9y ago
I was expecting the article to say how they've inherited a massive amount of money or how their parents paid for their education/first home/etc., which made them deciding to go frugal by achieving financial independence a hell of a lot easier. I didn't see any of that. Furthermore, the author doesn't fully explain how these two were "rich" before pursuing their journey to frugality aside from purchasing a home in Cambridge (which was a smart decision and is definitely possible with a dual-income tech salary in the area, assuming they didn't have debt to begin with). There are definitely people that are able to live extremely frugally with sizeable salaries and achieve large goals/financial independence in a considerably short amount of time. However, like building a beach body, the question is always "How much are you willing to sacrifice to get it?" For many (myself included), the answer is "not enough."
- mcguire 9y ago
  A dual-income tech salary may well qualify as rich. The median household income in MA is about $75,000 (much higher than the national median). That's also about what the median software developer is paid. (https://www.payscale.com/research/US/Job=Software_Developer/Salary/13e3c9be/Boston-MA https://www.payscale.com/research/US/Job=Software_Developer/...)
  - nunez 9y ago
    That's fair. I agree that a dual-tech-income is a lot of money compared to the national average.
- markc 9y ago
  >which was a smart decision And a lucky one. I'm boggled that they found a 4 bedroom in Cambridge MA for $460k in 2012. I was very actively looking for real-estate in Cambridge that same year, and decent 3 bedroom condos started at $500k. I don't think I saw a single 4 bedroom single family home under $1M. Maybe it was a wreck that were able to fix up for not to much $$. Today their formula can't be replicated here. Any place in that area that can rent for $4400/mo. costs well over $1M so they had great luck AND great timing (interest rates were around 3% also) - on top of smarts and hard work I'm sure.
FussyZeus 9y ago
I get so tired of these narratives that paint anyone who isn't wealthy as just lazy, and I especially get tired of millennials like myself being derided as just not willing to give up enough in order to succeed. You know what, it's true. If you took a robot and gave it a ground floor job, that robot could work that job 7 days a week, 9 hour shifts, without missing a beat. It would never get sick, it would never need time off, it would just keep working. And it could eat really cheaply, just electricity really, but even if it needed food it could make and eat it's own meals, cutting spending down to pennies per. And it could do this for YEARS and have no problem at all doing so, and buy a million dollar house after doing it for a few decades. BUT, and say it with me: PEOPLE. AREN'T. ROBOTS. No people are, regardless of which generation they're from. We get sick. We get diseases. We have car accidents. We date. We sometimes have children unexpectedly. We occasionally even, yes, get drunk. We want to go out and party, because you know, we're social animals, and doing nothing but going to work, coming home, and cooking and eating alone is fucking SOUL CRUSHING, and was never ever expected from any other generation to not be. We're messy, emotional, unstable little things. We make bad decisions. We'll stress about our bills and then go do drugs with friends because it's the only way we can scrape ourselves together to go do it for another day. The fact that so many politicians and so many pundits just "don't want to deal" with the messy emotional side of being a working student, or just a low-achiever, DOES NOT MEAN THAT THE MESSY EMOTIONAL SIDE IS NOT RELEVANT. To deny any of these things, to deny they exist, to deny they are absolutely warranted, and to deny that they should be allowed because again we are all people, messy little people, is to deny what makes us human, and therefore is to de-humanize the working poor.
- peacetreefrog 9y ago
  The thing is, most humans are not doing those types of jobs for YEARS like robots. Humans can learn on the job and acquire skills and impress their boss and get raises and maybe become the boss and apply to other jobs or find something like better. That's why it's called "ground floor", because you can move up, and most people eventually do. The % of people making minimum wage at any given time is a snapshot, and it covers people at all stages of their lives. Are there some people working their ass off and not making it a la an Upton Sinclaire book? Sure. But that's not most people. In fact, most people (1) making minimum wage are between the ages of 16-24 and aren't going to be making that forever. And even among those who aren't, most are well above the poverty line. [1] https://www.heritage.org/jobs-and-labor/report/who-earns-the-minimum-wage-suburban-teenagers-not-single-parents https://www.heritage.org/jobs-and-labor/report/who-earns-the...
ars 9y ago
This article keeps trying to make fun of the concept, claiming it's not real. And yet, I know several people who have done exactly that (more quietly obviously). And several who tried and failed. The difference? It's debt. If you can avoid debt completely this really does work, but it takes a LOT of sacrifice on your part to get there. It's basically a real life form of min-maxing in games. Minimize all pleasure and ease at the start of life, and never get into debt. Then once you are past that part suddenly it's all easier.
DoreenMichele 9y ago
There have long been sort of similar advice gurus in this space. "How to survive without a salary" and "The Tightwad Gazette" come to mind. Some things they seem to have in common: 1. A married couple on the same page financially. 2. Both worked and saved before having kids. 3. Decided to move to the country to live more cheaply. 4. Developed a source of income that was portable such that moving to the country didn't leave them stuck with some underpaid local job. If you study history, part of the secret to the success of the parents of the Boomers is they were two income families during WW2 because of the men being off at war and the women taking factory jobs. Savings rates were as high as 50 percent due to basically war time rationing. So there wasn't anything to spend it on. With the guys off at war, babies were mostly not being conceived. So, if you can marry the right person, get on the same page financially, both work full time at something better than slave wages while not yet having any children and socking away the dough, you, too, can have this American dream. The reality is very few people can check all those boxes and if anything goes wrong at any point, the entire thing can be derailed. Please note, this sort of assumes that neither partner has serious health problems or any addictions or needs tons of therapy for some reason. It assumes nothing goes drastically wrong while you merrily work towards your dream, such as an unexpected pregnancy that could derail your plans even if you get an abortion. No matter how bad your situation, there are a few takeaways worth noting. Celibacy, paying down debt and making sure you jibe well with anyone close to you are all excellent choices that tend to benefit the bottom line. But, you know, much easier said than done.
thelibrarian 9y ago
The reason that the rich were so rich, Vimes reasoned, was because they managed to spend less money. Take boots, for example. He earned thirty-eight dollars a month plus allowances. A really good pair of leather boots cost fifty dollars. But an affordable pair of boots, which were sort of OK for a season or two and then leaked like hell when the cardboard gave out, cost about ten dollars. Those were the kind of boots Vimes always bought, and wore until the soles were so thin that he could tell where he was in Ankh-Morpork on a foggy night by the feel of the cobbles. But the thing was that good boots lasted for years and years. A man who could afford fifty dollars had a pair of boots that'd still be keeping his feet dry in ten years' time, while the poor man who could only afford cheap boots would have spent a hundred dollars on boots in the same time and would still have wet feet. This was the Captain Samuel Vimes 'Boots' theory of socioeconomic unfairness. — Terry Pratchett, Men at Arms
- concrete-faucet 9y ago
  > The reason that the rich were so rich, Vimes reasoned, was because they managed to spend less money. This really isn't as crazy as it may sound. When my spouse was working in BigLaw, we rarely paid anything for weekends out. A typical case was a "charity gala" at a downtown hotel. A law firm partners would buy the tickets for an entire table but would inevitably be working and couldn't go. Even if he could, he still needed 6 or 8 other people so his table didn't have empty seats, which would be very embarrassing. So the call would go around - who has time to attend a free party? Me, that's who. The bar would be stocked with top-shelf liquor only, food was provided and excellent. The catch? You have to know people to get invited. And you have to be able to show up in a perfectly-fitting tuxedo with only a few hours notice. So you buy one, and it needs to be pretty good because you're going to wear it 20-30 times a year. Amortized out, an Armani costs a fraction of a rental.
- peacetreefrog 9y ago
  I don't think this is true in a world where people can borrow money.
wemdyjreichert 9y ago
I started saving at about 6. My dad did the numbers to show me how much I could have by retirement. After inheriting a little from my grandparents and saving that too, and after saving as much of my income as possible, it paid off (literally).
- Dowwie 9y ago
  You make it sound as if this were an entirely deliberate practice of self control on your part. :) Were there safeguards that protected you from yourself?
RickJWag 9y ago
Count me in the 'skip the Starbucks and buy index funds' category. Over time, it will make you much richer than you'd otherwise be. It really works.
Double_a_92 9y ago
Why can't I start scrolling on that website? I have to pull it with the scrollbar past some initial barrier... WHY?
p3llin0r3 9y ago
If you look up the dudes nonprofit income it's like 300k. These people are either liars or incredibly nieve
Dowwie 9y ago
One's frugality is another's sustenance

221 points by devy 9y ago

While it's kind of unrelated to the overall point of the article, it includes the statement, "According to the Federal Reserve, Millennials in their twenties carried an average debt of $22,135 last summer." The linked Federal Reserve article[1] doesn't seem to directly support that statement, but does say that ~55-60% of 18-29-year-old's used or are using loans to finance their own education, but that, "Among respondents who report that they currently owe student loan debt for their own education, the mean level of this debt is $30,156 and the median is $12,000." (Note: that doesn't include those who have already paid off their debt.)

aschearer 9y ago

The title here seems very inflammatory. The article questions whether some actions (e.g. painting your own home instead of hiring someone to do it) are truly frugal. It goes on to say that the philosophy of frugality is a handmaiden for wealthy. Maybe so, but why would we discourage good spending habits? For example, choosing to eat one or more meals out each day versus bulk cooking is an option available to most people. Likewise, choosing to spend $800 on rent with roommates versus $1,600 for a studio or one bedroom apartment. I'm not seeing how millenials or members of the middle class benefit by uncritically opting for more expensive options. My read on frugal culture is spend however much money you want on whatever you want, but do so eyes-wide-open. Break free from all the advertising, inertia, and "keeping up with the joneses". Frankly I think if more people adopted this style of thinking it would have serious ramifications for the rich and their businesses built on over consumption and debt.

duxup 9y ago
I think the title refers more to the idea that those folks selling this frugality made plenty of money already and that financial freedom is what helped them establish their lifestyle... not the frugality they sell.
- aschearer 9y ago
  I agree the article was attempting to take down that family, but even on that count I wasn't convinced. So they have a home in Massachusetts? That hardly makes them "rich". Nor is being able to hire a painting company the exclusive province of the wealthy. Perhaps pursuing FIRE is something only available to the upper middle class. That's an interesting argument, but not one put forward in the article. Furthermore, I think it's bordering on class warfare to set the upper and lower middle classes against each other. It reeks of divide and conquer, and who benefits? The people pushing over expensive lifestyles funded with debt.
  - mcguire 9y ago
    Minor correction: They have a second house in Massachusetts, 1/2 a mile from MIT and 1 mile from Harvard, which they paid $460,000 for in 2012 (https://www.frugalwoods.com/2014/05/08/why-did-we-buy-our-house/ https://www.frugalwoods.com/2014/05/08/why-did-we-buy-our-ho...) and now rent (http://www.frugalwoods.com/2017/02/24/how-we-turned-our-city-home-into-a-rental-property/ http://www.frugalwoods.com/2017/02/24/how-we-turned-our-city...). (Whoa, their property manager is cheap.)
    - cko 9y ago
      Less than 3% of gross for a single unit? That is a rate you’d expect for a 200 unit apartment complex.
- xboxnolifes 9y ago
  The audience that these types of blog posts are targeting aren't those of who are stuck making minimum wage, but instead those who are fairly well off but think they aren't because they keep spending yearly costs on $1000 phones, 5+ subscription services, large housing costs, eating out multiple times per week, etc.
  - duxup 9y ago
    I don't know who the target audience is. I'm not sure your issues you address are anymore a path to financal independence than anyone else offers. It's really easy to pick our personal boogeymen that no doubt play a part in things, and make them more of the issue than they really are.
anigbrowl 9y ago
You're missing the point. The 'frugal culture' is selling the idea that this is the road to economic self-sufficiency while omitting or glossing over other significant information, like having a very healthy income stream to begin with. If you're poor, being frugal is very unlikely to lift you out of poverty. That doesn't mean frugality is bad, but that marketing is as the key to financial stability is deceptive.
- aschearer 9y ago
  Sure, but are people like the ones in this article or MMM seriously advocating that their philosophy will solve poverty? It's always struck me as middle or even upper middle class people revolting against over consumption and debt. Insofar as that's the case it seems like a positive development. And I don't see why we can't do two things at once, address inequality and poverty and reform out-of-control consumerism.
  - azernik 9y ago
    I've heard this frequently in right-wing circles; see e.g. the complaints about people on welfare having (shock!) smartphones.
    - AstralStorm 9y ago
      People in Sudan have too. An older smartphone can be had for very little nowadays. As can be a budget model.
    - ericd 9y ago
      Smartphones are an expensive luxury, not a necessity. I think the expectation is that people on the public dole should be trying to save as much as possible and try to get off of welfare.
      - anigbrowl 9y ago
        A moderately capable smartphone can be had for $100 and up, especially if you're not aiming for the latest model. That makes it very competitive with laptops, and provides the owner with communications, mapping, and access to all kinds of services which will make it easier to get by and considerably easier to do things like job hunting. Dismissing it as an expensive luxury is absurd.
qntty 9y ago
I guess this is the real motive behind the article: But here’s the thing. Regardless of intent, these Millennials are telling an older generation of elite Americans — the very people whose policies and financial decisions kneecapped the economy — what they want to hear: that everything is more or less okay, and young people just need to be more thoughtful about their money. And that’s a shitty idea to perpetuate. Because whatever happens in the years ahead, penny-pinching will likely remain a lifestyle enhancement for bourgeois Millennials who possess enough money to enjoy the dividends of being thrifty. For most of us, there are no dividends: just thrift. It's not about the advice itself -- the advice all seems pretty reasonable -- it's about the place that advice has in the story we tell ourselves about young people. I myself practice many of these thrifty tips, but I cringe to think that the blog posts that people write about them will be used to justify continuing to build a world where they are more and more necessary.
- malvosenior 9y ago
  I think there’s real value in spreading the message of thrift. The 20th century saw a massive build up of the consumerist lifestyle. It’s going to take a lot of work to back that out, so we might as well start now. I’ve personally seen people with high five figure student debt go on regular international trips. These people more or less live paycheck to paycheck and save specifically for travel (or use credit cards — if they can get them). Educating people as to why that might be a bad idea and creating a supportive culture of anti-consumerism seems like a good idea. Sure there are policy decisions at play too, but being “frugal” can hardly hurt.
  - qntty 9y ago
    No doubt. Again: the tips are great and many people would do well to listen to them. However, the larger question of the place that these tips have in the story that we tell ourselves about society is still an open question. There are multiple ways to place these tips in a larger context while still following them and regarding them as worthwhile. It's important to understand that there is a choice to be made here about the story we tell ourselves.
notyourwork 9y ago
People want what they can't have which I don't think will ever dissolve. Therefore, the idea that advertising has any bearing on this is flawed. Keeping up with the joneses is less about having the same thing and more about having the joneses quality of life. They aren't the same if you look at them. Having a fancy car for example is a status symbol, what is the status? The status is that this car has nicer features, butt warmers, more comfortable seating, better safety. Taking that status symbol a step further, I can deduce that if the joneses can afford that fancy car they also have other fancy things. Most reduce this logic down to the following: The more individual items I have that the joneses have the closer I'll be to their quality of life. I think this is a really interesting dynamic though because the more money I make I am not proportionally happier. In fact, my happiness stopped increasing with salary increases the moment I was able to afford bills and have leftover for savings. Since than my salary has grown many times over and I am still the same person I was fresh out of college getting by. My wife and I are still the same couple, we are no happier with the weather we have achieved over the years.
- neogodless 9y ago
  There are so many things you cannot tell by looking at how other people appear to be living their lives. Or whether the car is valued for utility, features or perceived status. First, you can't tell from looking at their car how well-suited their finances are to paying for it. They could have a 12.99% 72-month loan that doubles the actual cost (plus higher insurance premiums, premium fuel, etc). Or they bought it cash, self-insure, and have money invested that compounds over time and pays their insurance and gas bill for them. Second, you probably don't know how they are using it. If you're a master salesman with an excellent income, selling 7-figure deals to executives, you might actually get utility out of perceived status! But if you're a coder who walks a quarter mile from parking and works in the basement of the building, the brand name on that car is worth nothing. And most of those comfort features can probably be found in a Mazda for $20K less. Or a ten-year old luxury car. (Personally I love the hatchback which combines all those features with utility and fuel economy! No need to buy the luxury sport sedan.) Finally, wait, why do you think advertising isn't doing its job? People know what they can't have because of advertising. Then they want it.
mcguire 9y ago
Here's the question: if you were to "cut back on things like eating out at restaurants and taking public transportation to work," would you be able to save 71% of your income? How long would it take you, just in cutting back on lattes and painting your own home rather than hiring a contractor, to buy a 4 bedroom house on 66 acres in Vermont? I don't really like doing plumbing, but I've replaced quite a few faucets and toilets. Not because I wanted to be "frugal", but because I could not afford to pay someone to do it; if I didn't, it wasn't getting done. I didn't blog about it; I didn't tell everyone, "Hey, lookit me! I'm saving money!" because everyone else I knew was also doing their own plumbing because they were also broke. (Now, of course, I could pay someone. But that ship's sailed. Besides, it's really hard to find good contractors.) The McFrugals, according to the article, aren't talking to millenials or anyone else who needs to be frugal; they're talking to the wealthy, saying "all those people you think are whiney, spoiled kids, really are spoiled, whiney kids."
- sokoloff 9y ago
  > Here's the question: if you were to "cut back on things like eating out at restaurants and taking public transportation to work," would you be able to save 71% of your income? No, because my taxation burden alone is well above 29%. I'm pretty sure they're calculating that they're saving 71% of their earned income, but they're almost surely not saving 71% of their earned income plus gross rent receipts.
  - mcguire 9y ago
    You are correct, it's post-tax. (https://www.frugalwoods.com/2015/01/09/well-hot-damn-frugality-works-our-2014-savings-rate-revealed/ https://www.frugalwoods.com/2015/01/09/well-hot-damn-frugali...) It also doesn't include 401(k)s and mortgage principal. Edit: Here's how they do it: https://www.frugalwoods.com/2014/04/10/how-we-save-65-annually/ https://www.frugalwoods.com/2014/04/10/how-we-save-65-annual...

jessaustin 9y ago

I realize that TFA is a critique of these silly people, but somehow reading the first two paragraphs seemed to be as much as I would ever need to know about them.

tvanantwerp 9y ago

So some people in a particular generational cohort write books and blogs about their financial independence, but this is bad because it trivializes the actual struggles of other people in their cohort who aren't financially independent? Oh, the horrors!

mr_spothawk 9y ago
they're also patently unaware of the class struggle their authorship persists! they should be deplatformed. /s
notfromhere 9y ago
they're usually bullshit because they fail to emphasize outside income and support.

peacetreefrog 9y ago

Here's the takeaway: the frugals/similar bloggers are bad because they, "are telling an older generation of elite Americans — the very people whose policies and financial decisions kneecapped the economy — what they want to hear: that everything is more or less okay, and young people just need to be more thoughtful about their money." While it's debatable whether everything is "more or less okay", and -- to some degree -- there are definite systemic issues preventing people from being where they want to be financially, I guarantee you that adopting this attitude ("it's not my fault I can't get ahead, the system is messed up") is going to make you worse off financially vs believing/focusing on what you can control and your own agency. For example, I do think there are some current millennials who sort of got unlucky with the student loan/college bubble and "were told" (or believed) that they could just borrow whatever they wanted to study whatever they wanted, and it'd all turn out OK. But I'm not sure people graduating high school now nec have that excuse. And if you are graduating high school and reading this, for gods sake, please take it upon yourself to think a bit about what you might like to do and take a long, hard look at what exactly borrowing the median 10's of k's of debt might get you before you do it.

jogjayr 9y ago
What I missed was the part where their blog says "Millennials only! Everyone else is absolved of blame!". To hear people tell it, large swaths of the American population has a retirement savings crisis, not just Millennials (who actually have time on their side to build wealth). Their advice is universally applicable, regardless of age or income.
mr_spothawk 9y ago
I've know a woman who's worked at University of Phoenix for a significant part of my adulthood. In that time, I've heard some terrible stories about who University of Phoenix targets for recruiting into their gov't borrowing scam. The folks who were targeted are largely unable to pay, and desperately wanted the airdrop of money they got from Financial Aid to attend.

joefourier 9y ago

American salaries are difficult to make sense of from a European perspective. The referenced average salary of $36,000/year for millennials with only a high-school diploma would be a normal entry-level salary for a software engineer in most of Western Europe, and a very good salary for experienced engineers in Eastern Europe. Tax burden is higher here as well, and while the cost of housing is exorbitant many parts of the US, so it is in cities like Dublin, London and Paris, but without the salary adjustments you see in San Francisco, New York, etc. This makes it difficult to understand why frugality is impossible for an American making triple the average salary of an average Czech or Croatian.

tjpaudio 9y ago
City-based salary adjustments are really something only educated professionals get, low-wage earners are screwed in big cities. I think also it will shock you how much every day items are compared to Europe. For one, public transportation is not available to most of America. So you have to have a car and car insurance, thats hundreds of dollars more per month right there. Cellphone service costs 3x as much as anywhere in Europe. And yes, the housing is absurd as a percentage of wages compare the the EU. Health insurance is really expensive as well; the employee's contribution to a company sponsored health plan is often as much as 20% of a minimum wage workers wage.
- gowld 9y ago
  > City-based salary adjustments are really something only educated professionals get, That's not entirely true. In many cities, minimum wage is substantially higher ($12-$15/hr) than the Federal minimum ($7.25/hr) > in big cities > So you have to have a car and car insurance Not in big cities.
  - crooked-v 9y ago
    Very few of the big cities in the US have public transit that's even sufficient for most people to get to work, let alone to sustain the rest of a reasonable lifestyle. I'm saying this as someone who previously had a 1 hr 20 min commute via public transit just to go 16 miles, and that was with the relatively good public transit in the Portland metro area and me literally living a block away from main downtown transit hub.

neogodless 9y ago

Over the past few weeks, a long-running thread has been building on the Mr. Money Mustache forums at https://forum.mrmoneymustache.com/welcome-to-the-forum/what's-up-with-the-frugalwoods/ https://forum.mrmoneymustache.com/welcome-to-the-forum/what'... (Mr. Money Mustache isn't too different from the FrugalWoods. They never made quite so much money, but they did have good careers. Still, there's a similar message to be heard.) I get that the high income and extravagant Vermont estate are a turn off for median-and-below earners, but that doesn't mean you have to have their income to benefit from their frugality. After all, MMM and FW have the time to write about frugality because of their financial independence. But they are able to live the lives they want due to the choices they made with their money. It isn't hard to find counter-examples. How often do you hear of people that make $300k/year, yet fail to accumulate wealth and achieve financial independence? How often do they continue to be held to wage slavery to support their chosen lifestyle? Anyway, while you can't save money by not painting your kitchen, you can improve upon your self-sufficiency, and you can certainly become more mindful of your values and the choices you make with your money. It takes education (self or otherwise), and financial bloggers can serve as source of education. But you still have to learn how to filter and apply knowledge to your own situation. You can't pluck fruit from an orchard in your 600 sq. ft. apartment, but you can track your spending, and figure out where money is being spent on things that don't line up with your values and long-term goals. The important thing is to figure out what you can do to improve your situation. Complaining about people being more successful than you doesn't improve your situation. (I do get that income inequality is a whole other issue to address, but I think that muddies this specific message.) Remember that you can probably find ways to be more frugal and mindful, and know that doing so alone will not get you a 66-acre homestead at the age of 30, but it can improve your life and get you to your goals faster.

gowld 9y ago
beware of "frugal / FIRE bloggers" because they make their money blogging, and aren't financially independent (last time I checked, MMM was a working carpenter/contractor, while claiming he's "retired" because he "enjoys his work"), which is not an avenue open to their entire audience.
- 9y ago

logfromblammo 9y ago

I would also make the economic argument that a rich person that is still frugal is actively exacerbating income inequality. If Warren Buffett is indeed still paying only $3 for breakfast every day, that's giving a big middle finger to the economy. Money is half of the circulatory system of the economy. When it pools too long in one spot, it clots, and then a thrombosed clot can cause damage somewhere else. He really needs to spend more on breakfast. As one of the richest individuals on the planet, even if he just wants a sausage muffin, it should really be made from only the highest quality agricultural goods, with a lot of personal services added. If he can't manage to swallow that level of ostentation, buying thousands more of the consumer-grade item than he could eat personally would also work. The only reason for poor people to permit rich people to continue existing is that concentrations of wealth allow for the development of novel classes of goods and services. There would be no luxury yachts if nobody could afford more than a fishing reefer. There would be no Acura if nobody could afford more than a Honda; no Lexus above Toyota; no Cadillac above GM. The luxury goods and services are the early adopters. Without them, some technologies would have died at inception, never to make it to consumer-grade products, because they were too big and expensive. Anyone can spend small. Everyone else needs the rich folk to spend big, whenever they can. If you don't buy the best, you are not doing your job as a rich person. If you aren't spending on someone's wage, you aren't really "creating jobs". If you can afford to have your cabinets painted instead of doing it yourself, hire someone for that and get back to being the QC/beta-tester for humanity's R&D. This crap where you "retire" and pretend to be rustic and homey isn't helping anyone. If you want to live like a poor person, that's easy; just get rid of all your money. Give it to someone more willing to spend it. Frugality stops once you can pay all your bills from your paycheck and still have some left. After that, it's called stinginess or miserliness.

EnFinlay 9y ago
I fundamentally and vehemently disagree with you.
- xboxnolifes 9y ago
  second this

mnm1 9y ago

Whoa, I just realized I've been retired for four years now! Words used to mean something. If retired is a full time job and self employment, no one told me. It's not bad but it's way overrated and certainly not happiness. My mom is retired. She can literally do nothing all day every day. These people are not retired, they're lying. And referencing Warren Buffett's shit breakfast advise without considering the money needed to budget for the inevitable health disaster of eating a sugary breakfast at McDonald's every day is frankly ridiculous.

mr_spothawk 9y ago

I'm glad the wouldn't let something as Patently Right Wing as "being thrifty" to escape their journalistic gaze. it's super important to make sure that no stone goes unturned in the constant battle to find out who's keeping them down over there on "The Great Left". /s

notfromhere 9y ago
There's nothing wrong with being thifty, but there is a lot of wrong in using "you're not thrifty" to explain systemic income inequality
- mr_spothawk 9y ago
  if any portion of success can be explained by patterns of behavior, then portions of "systemic" income inequality can as well. I'm emphatically NOT suggesting that poor people are only poor because they don't understand how to balance a checkbook, avoid predatory loans, and how to use the tax system to their advantage.

michaelbuckbee 9y ago

The word missing from this discussion is "structural" - there are deep structural changes to how the job market and economy now works that limit the economic prospects of millennials (as a group) in ways that can't readily be overcome with thriftiness and hard work. Here's an excerpt of the article that really clarified this for me: "Thirty years ago, she says, you could walk into any hotel in America and everyone in the building, from the cleaners to the security guards to the bartenders, was a direct hire, each worker on the same pay scale and enjoying the same benefits as everyone else. Today, they’re almost all indirect hires, employees of random, anonymous contracting companies: Laundry Inc., Rent-A-Guard Inc., Watery Margarita Inc. In 2015, the Government Accountability Office estimated that 40 percent of American workers were employed under some sort of “contingent” arrangement like this—from barbers to midwives to nuclear waste inspectors to symphony cellists. Since the downturn, the industry that has added the most jobs is not tech or retail or nursing. It is “temporary help services”—all the small, no-brand contractors who recruit workers and rent them out to bigger companies." from: http://highline.huffingtonpost.com/articles/en/poor-millennials/ http://highline.huffingtonpost.com/articles/en/poor-millenni...

pitaj 9y ago
The specific example you bring up seems to be a result of increased liability on the employer for employees. Hotels etc would rather contractors carry those liabilities, especially I imagine when it comes to possibly illegal immigrants.
- knuththetruth 9y ago
  Sure, but that's not some kind of neutral, organic development. It's something the rich choose to do, in collusion with politicians, to increase their own wealth and power. Shifting all the "liability" onto workers, creating an economy where everyone but the wealthiest are fungible serfs, is a specific set of values and decisions advanced by these people because it benefits them.
  - iguy 9y ago
    It is _partly_ organic, or rather, technological. General Motors did everything in house (partly) for the same reason the hotel did: the computers needed to keep track of today's supply chain / subcontracting payments & management didn't exist. The efficient thing was to have one centralised payroll department cutting checks. But politics played a big role too. It deserves to be noted here that almost all the employees at this (1960s NYC, say) hotel were born Americans. While today a large proportion would not be, a factor which tips the balance of power towards their managers.

bluetomcat 9y ago

Living in Eastern Europe, I was able to witness the streamlined shift to a Western consumerist lifestyle in a mere 15 to 20 years. There was a saying in communist Bulgaria, "having money doesn't mean that there is anything you can spend it on". This encouraged people to save and have longer-term goals. Fast forward to today, everyday spending opportunities are beyond every corner, and people prove that they are successful in life with outward and vulgar consumerism which was probably a 70s thing in the West.

ericd 9y ago
It's still very much a thing here. Curbing that habit is one of the things these bloggers talk a lot about, since doing that helps you save much more.

nunez 9y ago

I was expecting the article to say how they've inherited a massive amount of money or how their parents paid for their education/first home/etc., which made them deciding to go frugal by achieving financial independence a hell of a lot easier. I didn't see any of that. Furthermore, the author doesn't fully explain how these two were "rich" before pursuing their journey to frugality aside from purchasing a home in Cambridge (which was a smart decision and is definitely possible with a dual-income tech salary in the area, assuming they didn't have debt to begin with). There are definitely people that are able to live extremely frugally with sizeable salaries and achieve large goals/financial independence in a considerably short amount of time. However, like building a beach body, the question is always "How much are you willing to sacrifice to get it?" For many (myself included), the answer is "not enough."

mcguire 9y ago
A dual-income tech salary may well qualify as rich. The median household income in MA is about $75,000 (much higher than the national median). That's also about what the median software developer is paid. (https://www.payscale.com/research/US/Job=Software_Developer/Salary/13e3c9be/Boston-MA https://www.payscale.com/research/US/Job=Software_Developer/...)
- nunez 9y ago
  That's fair. I agree that a dual-tech-income is a lot of money compared to the national average.
markc 9y ago
>which was a smart decision And a lucky one. I'm boggled that they found a 4 bedroom in Cambridge MA for $460k in 2012. I was very actively looking for real-estate in Cambridge that same year, and decent 3 bedroom condos started at $500k. I don't think I saw a single 4 bedroom single family home under $1M. Maybe it was a wreck that were able to fix up for not to much $$. Today their formula can't be replicated here. Any place in that area that can rent for $4400/mo. costs well over $1M so they had great luck AND great timing (interest rates were around 3% also) - on top of smarts and hard work I'm sure.

FussyZeus 9y ago

I get so tired of these narratives that paint anyone who isn't wealthy as just lazy, and I especially get tired of millennials like myself being derided as just not willing to give up enough in order to succeed. You know what, it's true. If you took a robot and gave it a ground floor job, that robot could work that job 7 days a week, 9 hour shifts, without missing a beat. It would never get sick, it would never need time off, it would just keep working. And it could eat really cheaply, just electricity really, but even if it needed food it could make and eat it's own meals, cutting spending down to pennies per. And it could do this for YEARS and have no problem at all doing so, and buy a million dollar house after doing it for a few decades. BUT, and say it with me: PEOPLE. AREN'T. ROBOTS. No people are, regardless of which generation they're from. We get sick. We get diseases. We have car accidents. We date. We sometimes have children unexpectedly. We occasionally even, yes, get drunk. We want to go out and party, because you know, we're social animals, and doing nothing but going to work, coming home, and cooking and eating alone is fucking SOUL CRUSHING, and was never ever expected from any other generation to not be. We're messy, emotional, unstable little things. We make bad decisions. We'll stress about our bills and then go do drugs with friends because it's the only way we can scrape ourselves together to go do it for another day. The fact that so many politicians and so many pundits just "don't want to deal" with the messy emotional side of being a working student, or just a low-achiever, DOES NOT MEAN THAT THE MESSY EMOTIONAL SIDE IS NOT RELEVANT. To deny any of these things, to deny they exist, to deny they are absolutely warranted, and to deny that they should be allowed because again we are all people, messy little people, is to deny what makes us human, and therefore is to de-humanize the working poor.

peacetreefrog 9y ago
The thing is, most humans are not doing those types of jobs for YEARS like robots. Humans can learn on the job and acquire skills and impress their boss and get raises and maybe become the boss and apply to other jobs or find something like better. That's why it's called "ground floor", because you can move up, and most people eventually do. The % of people making minimum wage at any given time is a snapshot, and it covers people at all stages of their lives. Are there some people working their ass off and not making it a la an Upton Sinclaire book? Sure. But that's not most people. In fact, most people (1) making minimum wage are between the ages of 16-24 and aren't going to be making that forever. And even among those who aren't, most are well above the poverty line. [1] https://www.heritage.org/jobs-and-labor/report/who-earns-the-minimum-wage-suburban-teenagers-not-single-parents https://www.heritage.org/jobs-and-labor/report/who-earns-the...

ars 9y ago

This article keeps trying to make fun of the concept, claiming it's not real. And yet, I know several people who have done exactly that (more quietly obviously). And several who tried and failed. The difference? It's debt. If you can avoid debt completely this really does work, but it takes a LOT of sacrifice on your part to get there. It's basically a real life form of min-maxing in games. Minimize all pleasure and ease at the start of life, and never get into debt. Then once you are past that part suddenly it's all easier.

DoreenMichele 9y ago

There have long been sort of similar advice gurus in this space. "How to survive without a salary" and "The Tightwad Gazette" come to mind. Some things they seem to have in common: 1. A married couple on the same page financially. 2. Both worked and saved before having kids. 3. Decided to move to the country to live more cheaply. 4. Developed a source of income that was portable such that moving to the country didn't leave them stuck with some underpaid local job. If you study history, part of the secret to the success of the parents of the Boomers is they were two income families during WW2 because of the men being off at war and the women taking factory jobs. Savings rates were as high as 50 percent due to basically war time rationing. So there wasn't anything to spend it on. With the guys off at war, babies were mostly not being conceived. So, if you can marry the right person, get on the same page financially, both work full time at something better than slave wages while not yet having any children and socking away the dough, you, too, can have this American dream. The reality is very few people can check all those boxes and if anything goes wrong at any point, the entire thing can be derailed. Please note, this sort of assumes that neither partner has serious health problems or any addictions or needs tons of therapy for some reason. It assumes nothing goes drastically wrong while you merrily work towards your dream, such as an unexpected pregnancy that could derail your plans even if you get an abortion. No matter how bad your situation, there are a few takeaways worth noting. Celibacy, paying down debt and making sure you jibe well with anyone close to you are all excellent choices that tend to benefit the bottom line. But, you know, much easier said than done.

thelibrarian 9y ago

The reason that the rich were so rich, Vimes reasoned, was because they managed to spend less money. Take boots, for example. He earned thirty-eight dollars a month plus allowances. A really good pair of leather boots cost fifty dollars. But an affordable pair of boots, which were sort of OK for a season or two and then leaked like hell when the cardboard gave out, cost about ten dollars. Those were the kind of boots Vimes always bought, and wore until the soles were so thin that he could tell where he was in Ankh-Morpork on a foggy night by the feel of the cobbles. But the thing was that good boots lasted for years and years. A man who could afford fifty dollars had a pair of boots that'd still be keeping his feet dry in ten years' time, while the poor man who could only afford cheap boots would have spent a hundred dollars on boots in the same time and would still have wet feet. This was the Captain Samuel Vimes 'Boots' theory of socioeconomic unfairness. — Terry Pratchett, Men at Arms

concrete-faucet 9y ago
> The reason that the rich were so rich, Vimes reasoned, was because they managed to spend less money. This really isn't as crazy as it may sound. When my spouse was working in BigLaw, we rarely paid anything for weekends out. A typical case was a "charity gala" at a downtown hotel. A law firm partners would buy the tickets for an entire table but would inevitably be working and couldn't go. Even if he could, he still needed 6 or 8 other people so his table didn't have empty seats, which would be very embarrassing. So the call would go around - who has time to attend a free party? Me, that's who. The bar would be stocked with top-shelf liquor only, food was provided and excellent. The catch? You have to know people to get invited. And you have to be able to show up in a perfectly-fitting tuxedo with only a few hours notice. So you buy one, and it needs to be pretty good because you're going to wear it 20-30 times a year. Amortized out, an Armani costs a fraction of a rental.
peacetreefrog 9y ago
I don't think this is true in a world where people can borrow money.

wemdyjreichert 9y ago

I started saving at about 6. My dad did the numbers to show me how much I could have by retirement. After inheriting a little from my grandparents and saving that too, and after saving as much of my income as possible, it paid off (literally).

Dowwie 9y ago
You make it sound as if this were an entirely deliberate practice of self control on your part. :) Were there safeguards that protected you from yourself?

RickJWag 9y ago

Count me in the 'skip the Starbucks and buy index funds' category. Over time, it will make you much richer than you'd otherwise be. It really works.

Double_a_92 9y ago

Why can't I start scrolling on that website? I have to pull it with the scrollbar past some initial barrier... WHY?

p3llin0r3 9y ago

If you look up the dudes nonprofit income it's like 300k. These people are either liars or incredibly nieve

Dowwie 9y ago

One's frugality is another's sustenance