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Being frugal is for the rich

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Re: Being frugal is for the rich

#211

Post by state_less »

nck4222 wrote: post #189
state_less wrote: post #119

Earlier quoted context omitted.

Vote for candidates who will make healthcare a right and college affordable. While young people are bleeding out financially, rich people are getting a tax cut and they're running up the debt on the younger generation.

This is nitpicking a bit, but college is affordable, it's just very expensive. A side effect of the government guaranteeing student loans is that universities could charge basically whatever they want, knowing that students would still be able to pay it. It funded massive expansions, but instead of universities taking on the debt, students did.

What I had in mind was an education system where people generally felt more financially free and stable after they had completed their college education. In short, tuition wouldn't go up faster than the value the education provided and hopefully it'd go up a bit slower.

In my view, the product hasn't improved at the rate of tuition increases and I'd just follow where the money went to know where the problem lies.

https://www.nytimes.com/2015/04/05/opinion/sunday/the-real-r...

Re: Being frugal is for the rich

#212

Post by bhandziuk »

s73v3r_ wrote: post #196
bhandziuk wrote: post #184

Earlier quoted context omitted.

I don't understand the comment. Is Seattle not doable for <6k $/mo?

Most places in the US, housing near transit options is pretty expensive. Further out, where you get to housing being affordable, is nowhere near transit.

Yeah, that's fair but, from experience, the threshold in Seattle is much less than 6k

Re: Being frugal is for the rich

#213

Post by your-nanny »

Consultant32452 wrote: post #154
Frondo wrote: post #110

Earlier quoted context omitted.

No one's talking about hating the rich here but you. We can all care about societal inequality, and how it probably suggests that the levers of civilization need to be jiggered a bit, without hating anyone. I think housing in the PNW is way unaffordable but that doesn't mean I hate either the developers, the planners, or the numerous other social and geographical factors that have led to this situation. In short, ple…

Your primary complaint could have all the wind taken out of its sails if we just magically took all the money away from wealthy people and burned it. Because wealth inequality would go down. It wouldn't actually help anyone, but wealth inequality would go down. Affordable housing is a problem best addressed by the people who live in the areas that have a lack of affordable housing. It's not something that needs addre…

It might help, actually. Your assumption is that what the rich do with their mmonet doesn't actually hurt the poor; but it can. Itcab be used to purchase narratives and political influence in ways deeply harmful

Re: Being frugal is for the rich

#214

Post by rout39574 »

jacobush wrote: post #171
stretchwithme wrote: post #139

Earlier quoted context omitted.

Ignore manufactured goods and focus on labor intensive ones? No, I think it all matters. And the fact that technology is getting cheaper IS an improvement in our standard of living. People who can find anything within minutes and talk to anybody anytime ARE wealthier than those who have to spend large amounts of time to do the same things.

Potentially wealthier . If they find within minutes where their opiate supplier is, the new cat video and talk to anybody about what the Kardashians (sorry, Kardashians) were up to... are they really wealthier than when these sorts of things took longer?

So, let's say that their choice of media consumption indicates, or creates, their not-wealthier.

If they can tap into the entire universe of education and experience an Internet connection implies, and pick cat videos... what would you say is the critical link in their paupery?

I mean, horses to water and all that, and it's a matter of choice.

Re: Being frugal is for the rich

#215

Post by jnbiche »

nck4222 wrote: post #189
state_less wrote: post #119

Earlier quoted context omitted.

Vote for candidates who will make healthcare a right and college affordable. While young people are bleeding out financially, rich people are getting a tax cut and they're running up the debt on the younger generation.

This is nitpicking a bit, but college is affordable, it's just very expensive. A side effect of the government guaranteeing student loans is that universities could charge basically whatever they want, knowing that students would still be able to pay it. It funded massive expansions, but instead of universities taking on the debt, students did.

Sorry, if you have to take out 10- or 20-year loans to pay for even state colleges, college is NOT affordable. Unless you're working with a different definition of "affordable".

I agree with you that government-guaranteed loans have had the paradoxical effect of being one of the primary contributing factors to increased tuition costs.

Re: Being frugal is for the rich

#216

Post by myt6fore »

KingMob wrote: post #102
T2_t2 wrote: post #93

Earlier quoted context omitted.

Except they also had less. This is the ... I'm not sure of the right word, paradox? duality? ... anyway, the problem/benefit of globalisation, that it leads to cheaper stuff. We all have more today, even on less money. Thought experiment: ask yourself when it was better to be poor: 1950, or 2018. In 1950 you could... go to the library? In 2018, even the very poor likely have a mobile phone, the internet, a games cons…

The plummeting costs of technology over time make it a poor barometer for measuring wealth. Instead of mobile phones and TVs, look at bigger items like health care, housing, and education, all of which have gotten more expensive (in the case of education, astoundingly so) even as inflation-adjusted wages have decreased.

Perhaps wealth can be described as a measure of being able to adapt to new market demands. Acquiring new skills or refactoring existing ones takes effort, money, time. Those considered poor are devoid of that, bogged down...

Re: Being frugal is for the rich

#217

Post by jogjayr »

mcguire wrote: post #175
jogjayr wrote: post #24

Earlier quoted context omitted.

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.

Out of curiosity, how long do you think it would take your average "office professionals, small businesspeople, skilled tradespeople" to frugal their way into a 4-bedroom house on 66 acres, free and clear? ( https://www.frugalwoods.com/2016/04/06/that-time-we-bought-a... )

I don't have much familiarity with the blog itself but another post says that the property cost $389k[1].

They claim they could've paid cash for it but chose to get a mortgage - so they don't own it "free and clear". Unless they've ended up paying off the mortgage early. Assuming a 25% down payment that's a $310k mortgage. You'd need annual household income of around $80k to qualify for a mortgage that size, which also seems within the reach of a dual-earning household of white-collar/skilled trades professionals.

A household earning $80k annually could save up the $90k down payment for that property in about 3-4 years, assuming a 40% savings rate. I'll admit it's aggressive and ambitious by most people's standards, but not actually impossible.

Now I don't think it's actually a good idea to buy property worth nearly $400k if your annual household income is $80k but it's not an entirely outlandish idea.

I assume the Frugalwoods had annual income well in excess of $80k before they "retired". Their savings rate is also correspondingly huge - 71% according to the article. A brief skim of some other posts suggests they're going to be renting out their current house + putting the new property to revenue-generating uses. They clearly know how balance sheets work and the numbers make sense for their situation.

Pulling back a bit I think we should acknowledge that the Frugalwoods are people who have optimized the heck out of the very good hand that they were dealt. We should be applauding that rather than trying to pick at their story and point out why it doesn't work for everyone. I might not have Michael Phelps' swimming genes but following his workout routine would probably improve my health, even if I never become an Olympian.

It's obvious that having a higher income makes it easier to frugal your way into early financial independence. The vast majority of high-income households don't take that path even though there's not much stopping them.

1. https://www.frugalwoods.com/2016/04/22/the-finances-of-our-c...

Re: Being frugal is for the rich

#218

Post by scythe »

rout39574 wrote: post #214
jacobush wrote: post #171

Earlier quoted context omitted.

Potentially wealthier . If they find within minutes where their opiate supplier is, the new cat video and talk to anybody about what the Kardashians (sorry, Kardashians) were up to... are they really wealthier than when these sorts of things took longer?

So, let's say that their choice of media consumption indicates, or creates, their not-wealthier. If they can tap into the entire universe of education and experience an Internet connection implies, and pick cat videos... what would you say is the critical link in their paupery? I mean, horses to water and all that, and it's a matter of choice.

The Internet contains information, not education. Even the free academies are not as good as community college.

>I mean, horses to water and all that, and it's a matter of choice.

No, it's not. Claims like "education" should be based on reliable expectations of effects, not "possibilities" that ignore actual human behavior. The Internet has not actually made people more educated, with few exceptions.

Food and shelter are more important than Internet access. Having a house and a steady income in the 1970s is wealthier than sharing an apartment with roommates and working irregularly in the 2010s; we know this because people prefer it, which is the only actual measure of economic anything.

Re: Being frugal is for the rich

#219

Post by thelibrarian »

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

Re: Being frugal is for the rich

#220

Post by ericmcer »

lghh wrote: post #149
T2_t2 wrote: post #93

Earlier quoted context omitted.

Except they also had less. This is the ... I'm not sure of the right word, paradox? duality? ... anyway, the problem/benefit of globalisation, that it leads to cheaper stuff. We all have more today, even on less money. Thought experiment: ask yourself when it was better to be poor: 1950, or 2018. In 1950 you could... go to the library? In 2018, even the very poor likely have a mobile phone, the internet, a games cons…

> even the very poor likely have a mobile phone, the internet, a games console, This isn't true for a lot of impoverished areas. Most of the students my wife works with at her elementary school do not have any of these.

Anyone on welfare can receive a cell phone with a data plan in this country. Part of the whole Obama phone thing.
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