3 ms·

I'm not sure exactly what the article is trying to accomplish but it does feel in about the right ballpark for the levels. I don't think I'll ever get to the va

by eppp 7y ago

I'm not sure exactly what the article is trying to accomplish but it does feel in about the right ballpark for the levels. I don't think I'll ever get to the vacation one but simply paying last debt off really took a lot of weight off. Sure borrowing at low interest makes math sense but having a paid off house just feels good.

esotericn 7y ago
I'm not so sure, personally. The six levels: Level 1. Paycheck-to-paycheck: You are conscious of every dollar you spend. This includes people with crippling debt. Level 2. Grocery freedom: How much specific grocery items cost don’t impact your finances. Level 3. Restaurant freedom: You eat what you want at restaurants regardless of the cost. Level 4. Travel freedom: You travel when you want, how you want, and stay where you want. Level 5. House freedom: You can afford your dream home. Level 6. Philanthropic freedom: You can give away money that has a profound impact on others. I personally would say 4, 5, and 6 are in the wrong order entirely. I give away money that has a profound impact on others (so I'm at #6). But I can't afford my 'dream home' (#5) (I'm within an order of magnitude, I suppose). And #4 doesn't even interest me (I actively don't _want_ to have a private jet or whatever). I can take a holiday pretty much whenever I want, if that's what it's getting at? I think very few people actually travel "how they want". I think this is based on a very narrow, 'hollywood star' style of lifestyle. You don't need to be stupidly rich to give 10% of your income or to take a sabbatical from work.
- eightysixfour 7y ago
  > And #4 doesn't even interest me (I actively don't _want_ to have a private jet or whatever). I don't believe his intent was "private jet" it was "you can pick first class without concern and you don't have to look at the hotel/rental home prices."
  - esotericn 7y ago
    That doesn't change my point. House freedom is way below that. There's an inbuilt assumption that you desire extravagance, which inevitably places philanthropy last. My point is that it's a choice.
- Kirby64 7y ago
  I think you're overthinking this. The article examples maybe aren't descriptive enough. #4 would mean I don't price shop Airbnb, hotels, and plane tickets so much. Or maybe I just take first class everywhere. Either way, you're talking spending amounts in the $10k+ range. #5 means you can buy whatever size house you want within limits. That's more a $1M+ decision (although, amortized out long term) #6 means Bill Gates level philanthropy. Not saying whatever donations you're giving away aren't meaningful, but I doubt you're getting wings in hospitals named after you.
  - hirako2000 7y ago
    That's why we don't call small donations acts as philanthropy. It surprises me how philanthropic individuals are sold as benefactors who are a solution to solving problems linked to lack of resources, for those in needs around the world. I think it rather servers themselves instead, an effective PR routine that comes with decent guilt therapy. It's one of those things like "expat" sounding all so good compared to those job stealing "immigrants". Maybe we should all give a portion of our monetary power to those in needs, displacing what we would normally give to Unilever-like producers. It would skip the inefficient intermediary.. I digress.. The scale ain't right, but the idea is spot on.
  - esotericn 7y ago
    No, they're dependent on preferences in what you want. Your preferences differ from mine here. Either that, or you're assuming that the reasonable benchmark for comparison is close to the absolute most expensive example within a specific sector, which doesn't really match how I spend money. Thinking about it more, I'd probably say I even hit #4 before #3. Why? a) I don't really care that much about eating out, so despite being able to theoretically afford "Super Fancy Meals" I still think about it because I could just give someone else that money instead. b) First class flights and fancy hotels I find ridiculous, they don't factor into my purchasing decisions. I far prefer a cabin in the woods or going hiking or something like that to some constructed notion of luxury. I'd sooner give $10k to charity before I take a first class flight - in fact I'm on track to do that this year, and hope to increase it. If you don't count anything below $millions as being philanthropic then of course you've defined level 6 as being the top, that doesn't make sense to me.
- jetpackjoe 7y ago
  I think the labels are not very helpful, but tying each level to 0.01% of an individuals net worth is. For example, I still don't flinch at paying 1 or 2 dollars more for items at the grocery store, but I do for paying 10-20 dollars more for items at a restaurant. "Travel" can mean grey hounds and motels, or first-class flights and luxury hotels. Philanthropy can be donating $100,000 or giving a buck to a guy on the street. The key take away from the article, at least for me, is how much you flinch at extra costs, and that being about 0.01% of what you have in the bank.
  - esotericn 7y ago
    I agree with the concept of the levels, I disagree with the ordering - particularly the final one, because philanthropy is something that almost everyone can practice, it's an individual choice. The idea that you must first have your entire life laid out with a massive house and first class flights and stuff before you start helping others is deeply wrong IMO.
    - svachalek 7y ago
      I think it boils down to the definition of "philanthropy", to a lot of people (self included) that's something billionaires do, the rest of us can try "charity". Kind of like the old saw about only the poor are "crazy", with enough money you become "eccentric".
3dprintscanner 7y ago
It's taking the approach that the best way of gaining wealth is to convert earned income into unearned (passive) income over time. That once the basic necessities are covered the bulk of your nontrivial expenditure should really be investments and that your elective consumption should be pegged to some nominally small percentage of your overall wealth. I think this has to come from a place of having something to fall back on at a certain level of wealth, you can take the risk on those investments if the downside wouldn't be any worse than losing your current 'level' of wealth.
hirako2000 7y ago
It tries to tell the bottom 99% how very wealthy people think, and how people think in between and perhaps whats important to do to getting there, and stay there. What I see with most people around me,who stand at a low level: - spend most if not all or even more than what they can afford. - far more obsessed with getting more money than adapting their expenses. Of course they have no clue how to make more money, so they don't end up financially happy at all. I think it's a great article as it put things rather simply.

by eppp 7y ago

esotericn 7y ago

I'm not so sure, personally. The six levels: Level 1. Paycheck-to-paycheck: You are conscious of every dollar you spend. This includes people with crippling debt. Level 2. Grocery freedom: How much specific grocery items cost don’t impact your finances. Level 3. Restaurant freedom: You eat what you want at restaurants regardless of the cost. Level 4. Travel freedom: You travel when you want, how you want, and stay where you want. Level 5. House freedom: You can afford your dream home. Level 6. Philanthropic freedom: You can give away money that has a profound impact on others. I personally would say 4, 5, and 6 are in the wrong order entirely. I give away money that has a profound impact on others (so I'm at #6). But I can't afford my 'dream home' (#5) (I'm within an order of magnitude, I suppose). And #4 doesn't even interest me (I actively don't _want_ to have a private jet or whatever). I can take a holiday pretty much whenever I want, if that's what it's getting at? I think very few people actually travel "how they want". I think this is based on a very narrow, 'hollywood star' style of lifestyle. You don't need to be stupidly rich to give 10% of your income or to take a sabbatical from work.

eightysixfour 7y ago
> And #4 doesn't even interest me (I actively don't _want_ to have a private jet or whatever). I don't believe his intent was "private jet" it was "you can pick first class without concern and you don't have to look at the hotel/rental home prices."
- esotericn 7y ago
  That doesn't change my point. House freedom is way below that. There's an inbuilt assumption that you desire extravagance, which inevitably places philanthropy last. My point is that it's a choice.
Kirby64 7y ago
I think you're overthinking this. The article examples maybe aren't descriptive enough. #4 would mean I don't price shop Airbnb, hotels, and plane tickets so much. Or maybe I just take first class everywhere. Either way, you're talking spending amounts in the $10k+ range. #5 means you can buy whatever size house you want within limits. That's more a $1M+ decision (although, amortized out long term) #6 means Bill Gates level philanthropy. Not saying whatever donations you're giving away aren't meaningful, but I doubt you're getting wings in hospitals named after you.
- hirako2000 7y ago
  That's why we don't call small donations acts as philanthropy. It surprises me how philanthropic individuals are sold as benefactors who are a solution to solving problems linked to lack of resources, for those in needs around the world. I think it rather servers themselves instead, an effective PR routine that comes with decent guilt therapy. It's one of those things like "expat" sounding all so good compared to those job stealing "immigrants". Maybe we should all give a portion of our monetary power to those in needs, displacing what we would normally give to Unilever-like producers. It would skip the inefficient intermediary.. I digress.. The scale ain't right, but the idea is spot on.
- esotericn 7y ago
  No, they're dependent on preferences in what you want. Your preferences differ from mine here. Either that, or you're assuming that the reasonable benchmark for comparison is close to the absolute most expensive example within a specific sector, which doesn't really match how I spend money. Thinking about it more, I'd probably say I even hit #4 before #3. Why? a) I don't really care that much about eating out, so despite being able to theoretically afford "Super Fancy Meals" I still think about it because I could just give someone else that money instead. b) First class flights and fancy hotels I find ridiculous, they don't factor into my purchasing decisions. I far prefer a cabin in the woods or going hiking or something like that to some constructed notion of luxury. I'd sooner give $10k to charity before I take a first class flight - in fact I'm on track to do that this year, and hope to increase it. If you don't count anything below $millions as being philanthropic then of course you've defined level 6 as being the top, that doesn't make sense to me.
jetpackjoe 7y ago
I think the labels are not very helpful, but tying each level to 0.01% of an individuals net worth is. For example, I still don't flinch at paying 1 or 2 dollars more for items at the grocery store, but I do for paying 10-20 dollars more for items at a restaurant. "Travel" can mean grey hounds and motels, or first-class flights and luxury hotels. Philanthropy can be donating $100,000 or giving a buck to a guy on the street. The key take away from the article, at least for me, is how much you flinch at extra costs, and that being about 0.01% of what you have in the bank.
- esotericn 7y ago
  I agree with the concept of the levels, I disagree with the ordering - particularly the final one, because philanthropy is something that almost everyone can practice, it's an individual choice. The idea that you must first have your entire life laid out with a massive house and first class flights and stuff before you start helping others is deeply wrong IMO.
  - svachalek 7y ago
    I think it boils down to the definition of "philanthropy", to a lot of people (self included) that's something billionaires do, the rest of us can try "charity". Kind of like the old saw about only the poor are "crazy", with enough money you become "eccentric".

3dprintscanner 7y ago

It's taking the approach that the best way of gaining wealth is to convert earned income into unearned (passive) income over time. That once the basic necessities are covered the bulk of your nontrivial expenditure should really be investments and that your elective consumption should be pegged to some nominally small percentage of your overall wealth. I think this has to come from a place of having something to fall back on at a certain level of wealth, you can take the risk on those investments if the downside wouldn't be any worse than losing your current 'level' of wealth.

hirako2000 7y ago

It tries to tell the bottom 99% how very wealthy people think, and how people think in between and perhaps whats important to do to getting there, and stay there. What I see with most people around me,who stand at a low level: - spend most if not all or even more than what they can afford. - far more obsessed with getting more money than adapting their expenses. Of course they have no clue how to make more money, so they don't end up financially happy at all. I think it's a great article as it put things rather simply.