4 ms·

Some sensible advice here, but also ignoring all debt is not a good idea. I used to have a similarly black-and-white view, but now I realise that debt is simply

Some sensible advice here, but also ignoring all debt is not a good idea. I used to have a similarly black-and-white view, but now I realise that debt is simply another trade-off to be considered. Remember, your life is precious. Don't live your 20s and 30s as an ascetic just so you can retire to a golf course in your 50s. I spend a lot now (but not beyond my means) because these are some of the best years of my life, and I know that there's a very significant probability (not guaranteed, but large) that my earning potential will continue to increase for the next 10 years at least (I'm 28). I have made an informed, calculated decision to evolve my spending like this. My utility function is simply that $100 is worth more to me now that it will be when I'm 35. Ergo, borrowing (limited) money can be a net utility positive.

chrisBob 12y ago
I like the earning potential argument, and I also consider the useful life of the products I purchase: A canoe bought now has a long lifespan, and provides several years of enjoyment that will be lost if I wait to purchase the same thing. This argument does not work quite as well for something that depreciates, or deteriorates quickly, but paying more for immediate use of something isn't always crazy.
tomp 12y ago
> I spend a lot now (but not beyond my means) because these are some of the best years of my life, I agree with the second part of the statement, but not with the first one. In my life, there is almost nothing that could be further improved by spending more (or a lot of) money on. Currently, my biggest expenses are rent (allows me to live in London and have a very good job) and food (I buy the best, mainly because I believe that bad food will tax my body in ways that will only become apparent in several decades - but I eat home-cooked food as often as possible, so it's quite cheap). Other than that, I spend very little. I enjoy reading (books are cheap, so is internet), good conversation (again quite cheap, no need to spend 100s in bars), nature (parks are free), dance and sports (climbing, running, bodyweight training, skiing and surfing - the last two are a bit more expensive, but you don't need to buy your equipment if you're not doing it that often). If I lived in a smaller town, I would probably have a used car to travel in the countryside. I'm probably really lucky, but I really don't see the appeal of most of the more expensive stuff/experiences.
- NickPollard 12y ago
  I agree with most of what you say; different people have different tastes though. Like you I spend most of my money on rent (I also live in London) and food - in the case of rent, probably 50% of that is paying for location. I moved recently to be closer to work, and now I walk to work in 25 minutes rather than spending 45 minutes+ on the tube. This costs me several hundred a month, and it's worth every penny. It gets me back 30-60 minutes a day of time, I get extra exercise, and I get to enjoy being outside in the sun. It has literally made a significant difference to my happiness. Outside food and rent, the other main expenditure for me is travel - I have friends around the world, and enjoy exploring new places, so I spend a few thousand a year at least on travel. I could certainly cut back some of that by staying at cheaper locations, but that's a trade-off I'm willing to make. I think the difference between myself and a lot of consumers these days is that I spend primarily on experiences, not posessions.
- michaelt 12y ago
  I really don't see the appeal of most of the more expensive stuff/experiences. I live near London. If I decide to travel into central London to meet some friends from school, I can easily spend £15 on a national rail return train ticket, £4 on tube travel, drink three pints of beer at £3 a pint, and buy some bar food for say £8. Then you you've spent £36. Needless to say, if I want to keep to the same budget I lived on as a student, I would not be meeting my friends in London very often!
falcolas 12y ago
I can't agree with this enough. If you're not taking 3-5% of your monthly income and just blowing it on something fun (it doesn't have to be material things, trips, fancy dinners, and financially helping friends have the same effect here), you're missing out on life. It's a conscious decision which may not maximize your earnings across your entire life, but I've found that it significantly increases your enjoyment of your entire life.
ryandrake 12y ago
10 years is not a long-term view. Try 50 years. Your ability to make $100 now is must more guaranteed than your ability to make $100 when you're in your 70s. A lot can happen between now and then. You could suffer a debilitating illness or become disabled. Your currently bankable skills may no longer be in demand. If you're 28, chances are you have about 10, maybe 20 years left of barely increasing eating potential, followed by a pretty steep drop-off. I, for one, don't want to be in my 70s thinking, boy, if I only saved a little when I was younger, I wouldn't be eating dog food right now and choosing between my arthritis medication and rent.

chrisBob 12y ago

I like the earning potential argument, and I also consider the useful life of the products I purchase: A canoe bought now has a long lifespan, and provides several years of enjoyment that will be lost if I wait to purchase the same thing. This argument does not work quite as well for something that depreciates, or deteriorates quickly, but paying more for immediate use of something isn't always crazy.

tomp 12y ago

> I spend a lot now (but not beyond my means) because these are some of the best years of my life, I agree with the second part of the statement, but not with the first one. In my life, there is almost nothing that could be further improved by spending more (or a lot of) money on. Currently, my biggest expenses are rent (allows me to live in London and have a very good job) and food (I buy the best, mainly because I believe that bad food will tax my body in ways that will only become apparent in several decades - but I eat home-cooked food as often as possible, so it's quite cheap). Other than that, I spend very little. I enjoy reading (books are cheap, so is internet), good conversation (again quite cheap, no need to spend 100s in bars), nature (parks are free), dance and sports (climbing, running, bodyweight training, skiing and surfing - the last two are a bit more expensive, but you don't need to buy your equipment if you're not doing it that often). If I lived in a smaller town, I would probably have a used car to travel in the countryside. I'm probably really lucky, but I really don't see the appeal of most of the more expensive stuff/experiences.

NickPollard 12y ago
I agree with most of what you say; different people have different tastes though. Like you I spend most of my money on rent (I also live in London) and food - in the case of rent, probably 50% of that is paying for location. I moved recently to be closer to work, and now I walk to work in 25 minutes rather than spending 45 minutes+ on the tube. This costs me several hundred a month, and it's worth every penny. It gets me back 30-60 minutes a day of time, I get extra exercise, and I get to enjoy being outside in the sun. It has literally made a significant difference to my happiness. Outside food and rent, the other main expenditure for me is travel - I have friends around the world, and enjoy exploring new places, so I spend a few thousand a year at least on travel. I could certainly cut back some of that by staying at cheaper locations, but that's a trade-off I'm willing to make. I think the difference between myself and a lot of consumers these days is that I spend primarily on experiences, not posessions.
michaelt 12y ago
I really don't see the appeal of most of the more expensive stuff/experiences. I live near London. If I decide to travel into central London to meet some friends from school, I can easily spend £15 on a national rail return train ticket, £4 on tube travel, drink three pints of beer at £3 a pint, and buy some bar food for say £8. Then you you've spent £36. Needless to say, if I want to keep to the same budget I lived on as a student, I would not be meeting my friends in London very often!

falcolas 12y ago

I can't agree with this enough. If you're not taking 3-5% of your monthly income and just blowing it on something fun (it doesn't have to be material things, trips, fancy dinners, and financially helping friends have the same effect here), you're missing out on life. It's a conscious decision which may not maximize your earnings across your entire life, but I've found that it significantly increases your enjoyment of your entire life.

ryandrake 12y ago

10 years is not a long-term view. Try 50 years. Your ability to make $100 now is must more guaranteed than your ability to make $100 when you're in your 70s. A lot can happen between now and then. You could suffer a debilitating illness or become disabled. Your currently bankable skills may no longer be in demand. If you're 28, chances are you have about 10, maybe 20 years left of barely increasing eating potential, followed by a pretty steep drop-off. I, for one, don't want to be in my 70s thinking, boy, if I only saved a little when I was younger, I wouldn't be eating dog food right now and choosing between my arthritis medication and rent.