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Being frugal is for the rich

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Re: Being frugal is for the rich

#21

Post by mikeash »

joefourier wrote: post #11

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…

American salaries are listed as pre-tax figures. Lower end jobs often don’t include health insurance at all, and those that do will usually require the employee to pay for a substantial portion of it.

Re: Being frugal is for the rich

#22

Post by duxup »

xboxnolifes wrote: post #12
duxup wrote: post #5

Earlier quoted context omitted.

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.

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.

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.

Re: Being frugal is for the rich

#23

Post by gowld »

anigbrowl wrote: post #6
aschearer wrote: post #3

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 peo…

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.

If you're near poor, being frugal will prevent you from falling into poverty. There are many people who have good jobs, earning $50k-$100k per year, saving nothing (or negative!), and then losing those jobs, and then collapsing into the downward spiral of poverty and homelessness.

Re: Being frugal is for the rich

#24

Post by jogjayr »

anigbrowl wrote: post #6
aschearer wrote: post #3

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 peo…

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.

But the "frugal culture" doesn't call out low-income people or blame them for being poor. Most of the FIRE community and advice is targeted to middle- and upper-middle-class people - office professionals, small businesspeople, skilled tradespeople. If you're poor it's assumed that you're already a black-belt at economizing - most FIRE advice at those income levels focuses on side hustles and ways to increase income.

Re: Being frugal is for the rich

#25

Post by duxup »

jogjayr wrote: post #17
duxup wrote: post #5

Earlier quoted context omitted.

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.

But tons of folks working high-paying jobs don't manage to establish a lifestyle like the Frugalwoods. There's a reason phrases like "keeping up with the Joneses" exist. It's how you end up with "out-of-touch" articles about how a $250k annual income is barely middle-class in NYC or the Bay Area. Can't we focus on the message instead of the messenger? Or stop assuming that the message is for Millennials alone?

I think there is a legit reason to include the messenger and the message if you think the messenger's advantages are what make the suggestions in the message possible....

Re: Being frugal is for the rich

#26

Post by gowld »

tjpaudio wrote: post #19
joefourier wrote: post #11

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…

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 anywher…

> 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.

Re: Being frugal is for the rich

#27

Post by malvosenior »

qntty wrote: post #20
malvosenior wrote: post #14

Earlier quoted context omitted.

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 —…

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 a…

I don’t think there’s a way to place them in the larger context that makes them less useful though. It’s tough out there, try to be frugal, seems like great advice. I like that it’s not political as well. Once you move the discussion to policy, people get territorial.

The “American dream” of the 20th century was never sustainable. We’re just now realizing that en masse. Being frugal is just a natural realignment of culture and reality.

Re: Being frugal is for the rich

#28

Post by jogjayr »

peacetreefrog wrote: post #9

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 degr…

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.

Re: Being frugal is for the rich

#29

Post by gowld »

neogodless wrote: post #13

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'... (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…

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.

Re: Being frugal is for the rich

#30

Post by logfromblammo »

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.

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