5 ms·

Nice! I just stop spending money unless I absolutely have to. A cup of coffee and a bit of candy at the gas station every other day (2+4 euro) * (365/2) * 10 y

by 6510 6y ago

Nice! I just stop spending money unless I absolutely have to. A cup of coffee and a bit of candy at the gas station every other day (2+4 euro) * (365/2) * 10 years. Thats ELEVEN THOUSAND euro I could probably be doing something more interesting with. At 7 euro/kg and 30 gr/liter 11k is 52380 liters of coffee or 314285 cups or 86 cups/day for 10 years. 2/3 was candy (we are not buying that) so we only have 28 cups left per day. At 2 cups per day (which is 4 times as much) it still is 140 years of coffee every 10 years. I pick 10 years because its short. If we take 50 years it is 55 000 euro. Now imagine throwing money around like that all day long. Think about that when you get a free coffee. I know it doesn't sound very convincing but most people manage to match their spending with their income. It really doesn't matter how much you earn. Real wealth is in not spending it. Also, if you hoard enough cash and enough discipline it eventually stops making sense to work. More time to enjoy life! (jay!) Also, that bag of candy is probably killing me. If I'm hungry I must have planned things poorly.

nacs 6y ago
Agreed, and that whole "oh just ignore purchases less than $10" is what causes people to go into debt without realizing it. Buying $8 daily coffees, lottery tickets, in-app purchases for crates of Candy Crush tokens, and subscribing to all kinds of useless subscription-delivery services (razors, shirts, Japanese candy, etc) adds adds up even if you're on Silicon Valley salaries.
- anitil 6y ago
  I think I phrased my comment poorly. I agree that a daily coffee is probably worth considering at ~$3x5x50 = $750 a year. (actually in my case I have multiple coffees throughout the day so if I were to purchase them it'd be more like $1500 or more). What I mean is the _occasional_ coffee is not worth bothering about. I think any recurring payment is worth recording, but where you set the level is pretty personal
- 6510 6y ago
  You are pretty much buying shots of endorphins. You get those anyway. You can get more of it for a short while but then sensitivity is dialed down and you have to buy candy crush crates forever. I really enjoy turning down the offers.
anitil 6y ago
While I agree that recurring costs should be accounted for, I'm trying to get a bit of balance in my approach. To put it in perspective, it's not out of the realm of possibility that I could switch jobs and make $11k extra this year. It's also not out of the realm of possibility that I have an injury that puts me out of work for the next 2 years. (Or, hypothetically, a global pandemic that reduces or increases my hours) I deal with that level of uncertainty by only tracking the broad strokes.
monksy 6y ago
I agree with the "I will teach you to be rich" (it's a book) approach a bit more than "i can't buy a $5e coffee daily". Their approach is more like a performance engineer. You look at the biggest costs first and reduce it down. I.e. Ask for a raise, refinance your place, find a cheaper place to rent, etc. When you get down to the coffee you would be faced with: is it cheaper to make good quality coffee, or am I paying for the experience? Personally I tend to view these re-occurring costs and I try to look at a way I can amortize them over a longer period of time. It's easier to justify the cost of a 200+$ espresso maker if I'm really that big of a fan and already have a defined habbit.
- PascLeRasc 6y ago
  I love the IWTYTBR philosophy too. My favorite part is the concept of "guilt-free spending". Once you get the "big wins" down like you talked about, you can set aside 15-20% of your monthly net income to be spent any way you like. This seems intuitive at face value, but the example Rami uses with buying a $150 pair of cashmere sweatpants brings it home. It was inside his $500/month or whatever "guilt-free spending" budget, so it doesn't matter if it was a good deal or not. You just have to want it. He says his friends all commented how it was a dumb purchase and he could have gotten regular sweatpants for $20 instead, but that's missing the point. I've taken the same approach, and this month some of my guilt-free spend went to a nice burr coffee grinder to replace my old blade one. But I'm not going to try to calculate the amortized joy per $ or long-term savings I'll get out of it, I just love brewing coffee, this makes it better, and I could afford it.
  - nitemice 6y ago
    I think there's a distinction to be made between "guilt-free" and "dumb/wasteful" spending. I can totally understand spending $150 on a pair of sweatpants if they "bring you joy" and are useful and will last you a decent amount of time. But just because you're willing and able to spend your money without guilt, doesn't mean any and every purchase is a good one. At the very least, spending a lot of money on a series of low quality items that you end up having to replace is a sustainability issue. And that doesn't preclude you from getting a good deal either. That doesn't mean you should spend days shopping around for a few dollars off every purchase, but "voting with your wallet" is always worth doing.
sequoia 6y ago
> More time to enjoy life! What if I enjoy life by buying a fancy coffee & drinking it on my walk to work? The downside of your formulation of "why buy coffee? you could be enjoying life instead!" is that this worldview encourages people to feel guilty about buying coffee. Extreme frugality has its place, but remember that "your life" that you have to enjoy isn't something that starts in 5 years or 10 years or once you save $x, it's what's happening right now, all the time. I might not be alive in 5 years, none of has that guarantee. So I enjoy my coffee. It sounds like you enjoy frugality for its own sake which is fantastic, and more power to you. But I think most personal financial planners would suggest that you have a goal you're working towards rather than "hoard cash." What's the point of that? "Thats ELEVEN THOUSAND euro I could probably be doing something more interesting with" figure out what that "something more interesting" is and it might make sense to forgo your daily coffee. Hoarding cash is not a goal. > If we take 50 years it is 55 000 euro. Yippee! I'm 85 years old (assuming I haven't died already) and I have an extra €55k. Am I allowed to drink coffee now?
- zhdc1 6y ago
  Yeah, but how fancy is the fancy coffee though? Are we talking Starbucks or a three day roast sourced from a micro lot in Kenya? If it fits your budget, go for it, but let's not confuse convenience with enjoyment or quality.
  - sequoia 6y ago
    I say this in order to share constructive feedback, because I know a lot of people on HN are not great at "tone" and sometimes appreciate an explanation why their comment might accidentally offend: This comment is very condescending and pointlessly critical. You suggest that I do not know how to enjoy coffee correctly, and am instead perhaps "confusing convenience with enjoyment." Rest assured that, I, along with basically everyone, can be trusted to know what they themselves enjoy or do not enjoy, without your advisement. To clarify, I am using "fancy" as a shorthand for "expensive," i.e. a $5-6 coffee rather than a $2 coffee.
- 6510 6y ago
  > What if I enjoy life by buying a fancy coffee & drinking it on my walk to work? haha, are you asking for my permission here? We are different people! Thank god! Imagine if our hard worked grand-design for life turned out exactly the same. Now that would be truly terrible. > this worldview encourages people to feel guilty about buying coffee. I don't feel guilty when I don't, I feel stupid when I do. > Extreme frugality has its place, but remember that "your life" that you have to enjoy isn't something that starts in 5 years or 10 years or once you save $x, it's what's happening right now, all the time. Right, dopamine is going to happen. Don't worry about it. I resist the cravings also because I don't want to become an instinct and emotion driven creature. > I might not be alive in 5 years, none of has that guarantee. So I enjoy my coffee. If you skip this one the next one will taste at least twice as good. Eventually you sit there clamping onto the cup with both hands and making conversation with it. The thing with bodies is that they always want something. There is no end to it! (haha) > It sounds like you enjoy frugality for its own sake which is fantastic, and more power to you. But I think most personal financial planners would suggest that you have a goal you're working towards rather than "hoard cash." Of course! They wouldn't have a job if they didn't! > What's the point of that? I'm not hoarding cash. There is no point in that for me! > "Thats ELEVEN THOUSAND euro I could probably be doing something more interesting with" figure out what that "something more interesting" is and it might make sense to forgo your daily coffee. I just want to be able to live without ever worrying about money. > Hoarding cash is not a goal. Money doesn't make you happy but a lack of it is just awful. Hoard enough until it stops making sense. > > If we take 50 years it is 55 000 euro. > Yippee! I'm 85 years old (assuming I haven't died already) and I have an extra €55k. Am I allowed to drink coffee now? haha, thanks for that. I can live comfortably on 1000 euro so the 55 k would allow me to reduce my earnings to 500 euro for 110 months spread out over the 50 years or 11 months every 60 months. If I brutally cut 5 more corners like this I could spend most of the 50 years reading HN poke peoples mind like this (and better) Thanks for just saying what you think.
sequoia 6y ago
> It really doesn't matter how much you earn. Real wealth is in not spending it. Have to add on that this is definitely not correct. Yes you must not simply inflate your spending to match your 100% of income if the latter increases, but while there's a limit to how much you can decrease outlays, income increase has no exact limit. Bob makes $60k, never buys coffee, brings lunch from home every day, stays focused on his personal finances, saves $5k/yr on lunch & coffee expenditures. Alice makes $60k, buys a $5 latte every single day, spends $12-15 per workday on lunch, focuses on job skills & networking, and negotiates a $10k raise upon switching jobs. Who comes out on top in this situation? My point is not that budgeting or frugality isn't useful, but that focusing on changing outlays and considering income fixed or even irrelevant, as you suggest, is not a useful or accurate way to look at things.
- woodpanel 6y ago
  I think you‘re making a good point. I would add though, that 6510‘s statement... > * it really doesn't matter how much you earn. Real wealth is in not spending it.* didn’t remind me of extreme frugalism (in which case I would side with your argument) but with my encounters in the workplace: No matter how much most people increase their income, they also increase their spending. And some manage to par their spending increases with with their income increases. Like many in tech, I‘ve made great income progress and during that I saw and continue to see colleagues struggling financially even though they‘re in the top income decile.
  - sequoia 6y ago
    To me, suggesting that I save money by not buying coffee for fifty years is extreme frugalism.
- 6510 6y ago
  12-15 is 1200-1500 cent. Lets say 1300. 10 cent coffee (12 euro/kg 30gr/liter) + 20-50 cent sandwich (5 cent slice or 15 cent bun, a 10 cent egg and/or 25 gr cheese 25 cent, 5 cent butter) is 30-60 cent. Lets say 40. 1300/40 = 32.5 while Alice only got a 17% raise. The extra 5k doesn't buy her anything. She will just favor the 15$ lunch which is 20% more expensive(!) Coffee was just an example of course. Bob wont be able to save this much on everything while some things will be even cheaper. There are other perks like growing your own food and making your own stuff. But the real kicker is perhaps that Alice could [naively] spend all of her savings on a big purchase, get fired and turn her life into hell on earth. If Bob does that he can be reasonably certain he will figure it out. His big purchase is also more likely something that can be converted back into cash.

by 6510 6y ago

nacs 6y ago

Agreed, and that whole "oh just ignore purchases less than $10" is what causes people to go into debt without realizing it. Buying $8 daily coffees, lottery tickets, in-app purchases for crates of Candy Crush tokens, and subscribing to all kinds of useless subscription-delivery services (razors, shirts, Japanese candy, etc) adds adds up even if you're on Silicon Valley salaries.

anitil 6y ago
I think I phrased my comment poorly. I agree that a daily coffee is probably worth considering at ~$3x5x50 = $750 a year. (actually in my case I have multiple coffees throughout the day so if I were to purchase them it'd be more like $1500 or more). What I mean is the _occasional_ coffee is not worth bothering about. I think any recurring payment is worth recording, but where you set the level is pretty personal
6510 6y ago
You are pretty much buying shots of endorphins. You get those anyway. You can get more of it for a short while but then sensitivity is dialed down and you have to buy candy crush crates forever. I really enjoy turning down the offers.

anitil 6y ago

While I agree that recurring costs should be accounted for, I'm trying to get a bit of balance in my approach. To put it in perspective, it's not out of the realm of possibility that I could switch jobs and make $11k extra this year. It's also not out of the realm of possibility that I have an injury that puts me out of work for the next 2 years. (Or, hypothetically, a global pandemic that reduces or increases my hours) I deal with that level of uncertainty by only tracking the broad strokes.

monksy 6y ago

I agree with the "I will teach you to be rich" (it's a book) approach a bit more than "i can't buy a $5e coffee daily". Their approach is more like a performance engineer. You look at the biggest costs first and reduce it down. I.e. Ask for a raise, refinance your place, find a cheaper place to rent, etc. When you get down to the coffee you would be faced with: is it cheaper to make good quality coffee, or am I paying for the experience? Personally I tend to view these re-occurring costs and I try to look at a way I can amortize them over a longer period of time. It's easier to justify the cost of a 200+$ espresso maker if I'm really that big of a fan and already have a defined habbit.

PascLeRasc 6y ago
I love the IWTYTBR philosophy too. My favorite part is the concept of "guilt-free spending". Once you get the "big wins" down like you talked about, you can set aside 15-20% of your monthly net income to be spent any way you like. This seems intuitive at face value, but the example Rami uses with buying a $150 pair of cashmere sweatpants brings it home. It was inside his $500/month or whatever "guilt-free spending" budget, so it doesn't matter if it was a good deal or not. You just have to want it. He says his friends all commented how it was a dumb purchase and he could have gotten regular sweatpants for $20 instead, but that's missing the point. I've taken the same approach, and this month some of my guilt-free spend went to a nice burr coffee grinder to replace my old blade one. But I'm not going to try to calculate the amortized joy per $ or long-term savings I'll get out of it, I just love brewing coffee, this makes it better, and I could afford it.
- nitemice 6y ago
  I think there's a distinction to be made between "guilt-free" and "dumb/wasteful" spending. I can totally understand spending $150 on a pair of sweatpants if they "bring you joy" and are useful and will last you a decent amount of time. But just because you're willing and able to spend your money without guilt, doesn't mean any and every purchase is a good one. At the very least, spending a lot of money on a series of low quality items that you end up having to replace is a sustainability issue. And that doesn't preclude you from getting a good deal either. That doesn't mean you should spend days shopping around for a few dollars off every purchase, but "voting with your wallet" is always worth doing.

sequoia 6y ago

> More time to enjoy life! What if I enjoy life by buying a fancy coffee & drinking it on my walk to work? The downside of your formulation of "why buy coffee? you could be enjoying life instead!" is that this worldview encourages people to feel guilty about buying coffee. Extreme frugality has its place, but remember that "your life" that you have to enjoy isn't something that starts in 5 years or 10 years or once you save $x, it's what's happening right now, all the time. I might not be alive in 5 years, none of has that guarantee. So I enjoy my coffee. It sounds like you enjoy frugality for its own sake which is fantastic, and more power to you. But I think most personal financial planners would suggest that you have a goal you're working towards rather than "hoard cash." What's the point of that? "Thats ELEVEN THOUSAND euro I could probably be doing something more interesting with" figure out what that "something more interesting" is and it might make sense to forgo your daily coffee. Hoarding cash is not a goal. > If we take 50 years it is 55 000 euro. Yippee! I'm 85 years old (assuming I haven't died already) and I have an extra €55k. Am I allowed to drink coffee now?

zhdc1 6y ago
Yeah, but how fancy is the fancy coffee though? Are we talking Starbucks or a three day roast sourced from a micro lot in Kenya? If it fits your budget, go for it, but let's not confuse convenience with enjoyment or quality.
- sequoia 6y ago
  I say this in order to share constructive feedback, because I know a lot of people on HN are not great at "tone" and sometimes appreciate an explanation why their comment might accidentally offend: This comment is very condescending and pointlessly critical. You suggest that I do not know how to enjoy coffee correctly, and am instead perhaps "confusing convenience with enjoyment." Rest assured that, I, along with basically everyone, can be trusted to know what they themselves enjoy or do not enjoy, without your advisement. To clarify, I am using "fancy" as a shorthand for "expensive," i.e. a $5-6 coffee rather than a $2 coffee.
6510 6y ago
> What if I enjoy life by buying a fancy coffee & drinking it on my walk to work? haha, are you asking for my permission here? We are different people! Thank god! Imagine if our hard worked grand-design for life turned out exactly the same. Now that would be truly terrible. > this worldview encourages people to feel guilty about buying coffee. I don't feel guilty when I don't, I feel stupid when I do. > Extreme frugality has its place, but remember that "your life" that you have to enjoy isn't something that starts in 5 years or 10 years or once you save $x, it's what's happening right now, all the time. Right, dopamine is going to happen. Don't worry about it. I resist the cravings also because I don't want to become an instinct and emotion driven creature. > I might not be alive in 5 years, none of has that guarantee. So I enjoy my coffee. If you skip this one the next one will taste at least twice as good. Eventually you sit there clamping onto the cup with both hands and making conversation with it. The thing with bodies is that they always want something. There is no end to it! (haha) > It sounds like you enjoy frugality for its own sake which is fantastic, and more power to you. But I think most personal financial planners would suggest that you have a goal you're working towards rather than "hoard cash." Of course! They wouldn't have a job if they didn't! > What's the point of that? I'm not hoarding cash. There is no point in that for me! > "Thats ELEVEN THOUSAND euro I could probably be doing something more interesting with" figure out what that "something more interesting" is and it might make sense to forgo your daily coffee. I just want to be able to live without ever worrying about money. > Hoarding cash is not a goal. Money doesn't make you happy but a lack of it is just awful. Hoard enough until it stops making sense. > > If we take 50 years it is 55 000 euro. > Yippee! I'm 85 years old (assuming I haven't died already) and I have an extra €55k. Am I allowed to drink coffee now? haha, thanks for that. I can live comfortably on 1000 euro so the 55 k would allow me to reduce my earnings to 500 euro for 110 months spread out over the 50 years or 11 months every 60 months. If I brutally cut 5 more corners like this I could spend most of the 50 years reading HN poke peoples mind like this (and better) Thanks for just saying what you think.

sequoia 6y ago

> It really doesn't matter how much you earn. Real wealth is in not spending it. Have to add on that this is definitely not correct. Yes you must not simply inflate your spending to match your 100% of income if the latter increases, but while there's a limit to how much you can decrease outlays, income increase has no exact limit. Bob makes $60k, never buys coffee, brings lunch from home every day, stays focused on his personal finances, saves $5k/yr on lunch & coffee expenditures. Alice makes $60k, buys a $5 latte every single day, spends $12-15 per workday on lunch, focuses on job skills & networking, and negotiates a $10k raise upon switching jobs. Who comes out on top in this situation? My point is not that budgeting or frugality isn't useful, but that focusing on changing outlays and considering income fixed or even irrelevant, as you suggest, is not a useful or accurate way to look at things.

woodpanel 6y ago
I think you‘re making a good point. I would add though, that 6510‘s statement... > * it really doesn't matter how much you earn. Real wealth is in not spending it.* didn’t remind me of extreme frugalism (in which case I would side with your argument) but with my encounters in the workplace: No matter how much most people increase their income, they also increase their spending. And some manage to par their spending increases with with their income increases. Like many in tech, I‘ve made great income progress and during that I saw and continue to see colleagues struggling financially even though they‘re in the top income decile.
- sequoia 6y ago
  To me, suggesting that I save money by not buying coffee for fifty years is extreme frugalism.
6510 6y ago
12-15 is 1200-1500 cent. Lets say 1300. 10 cent coffee (12 euro/kg 30gr/liter) + 20-50 cent sandwich (5 cent slice or 15 cent bun, a 10 cent egg and/or 25 gr cheese 25 cent, 5 cent butter) is 30-60 cent. Lets say 40. 1300/40 = 32.5 while Alice only got a 17% raise. The extra 5k doesn't buy her anything. She will just favor the 15$ lunch which is 20% more expensive(!) Coffee was just an example of course. Bob wont be able to save this much on everything while some things will be even cheaper. There are other perks like growing your own food and making your own stuff. But the real kicker is perhaps that Alice could [naively] spend all of her savings on a big purchase, get fired and turn her life into hell on earth. If Bob does that he can be reasonably certain he will figure it out. His big purchase is also more likely something that can be converted back into cash.