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How I live on $7,000 per year

earlyretirementextreme.com

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Re: How I live on $7,000 per year

#21

Post by rorrr »

erejacob wrote: post #11
munin wrote: post #6

Earlier quoted context omitted.

he implies that he owns his own home. maybe he inherited it? he's also in his mid-30's. it's possible to have bought a property on a 15yr mortgage, paid it off on a modest salary, have some money saved up, and then just chill out. if you don't have kids, this works. if you don't have any medical problems that cause your insurance carrier to illegally drop you (what are you going to do, sue them?), this also works. my…

I like living in the US. We bought our home in cash. Our home is currently an RV---bear with me here. The cost of it was $16k. We pay a combined $6000/year in rent (half of which is my half). You need $200k in investments to support such a cash flow (which I have). So the total cost or asset base or our current living situation is about $216,000 (not counting repairs which I can mostly do myself). We're seriously thi…

Living in an RV is like living in a tiny tiny shitty studio, plus you have to pump your own shit and piss regularly.

Yeah, I can live in a tent and hunt for food. Zero dollars per year.

Sorry, but fuck that. None of these stories are inspiring.

Re: How I live on $7,000 per year

#22

Post by erejacob »

nirvana wrote: post #10

I've been living on $13,754 per year for the past 4 years. (Average as of last month.) There are two of us, so, double that and you have the average cost over that period. While we've been doing it, we've been traveling full time, spent the last year in europe living in AirBNB pads, and doing our startup. We buy a MacBook Pro each year and an iPad or iPhone each year as needed, with the old one going to the other per…

It's been my experience too that the majority don't give a second thought to what money represents. To most people money is something that comes out of a slit in the wall when they insert their plastic card. Some realize that this only keeps working as long as they maintain their job and don't get fired, but some don't consider that possibility either. Money really is life. Most people are born without things to sell, so they can really only procure money by renting out their mind or labor for others to use. One can always make more money but nobody can make more life. Hence, it's somewhat of an optimization problem: How much life to give up to procure enough money in order to make money with money instead of selling one's labor or thoughts.

PS: I'm jealous of your liveaboard experience. That's what I originally wanted to do but wifey wasn't prepared for the possibility of having our home sinking for whatever reason and to be honest neither was I (I hadn't taken up sailing at that time so I was clueless). Thus we settled on the RV.

Re: How I live on $7,000 per year

#23

Post by awongh »

ahsanhilal wrote: post #15

Basic economics tells you that this is not a good growth strategy to adopt especially if you have a consumption-based economy, and not savings-based one (aka China, India). In short population is going to increase over time, resources are going to decrease over time, in order to keep GDP per capita in line with an increasing population, you cannot just decrease your spending (or tighten your belt). You have to grow b…

I would say that the OP understands that a growth economy is not the end-all be-all of human progress, and in the end may not be ideal.

Maybe it's not about imposing a way of life on other people, but realizing that the underlying philosophy of a growth economy is flawed- it's inherently true that limitless growth is impossible, so in some sense we are all just waiting until we either slide over the top of that curve naturally, or people realize that there are other dimensions to the problem than just the x and y plot of that graph.

Re: How I live on $7,000 per year

#24

Post by erejacob »

diiq wrote: post #20

I've been living on $6000 a year for the past five years. Next year, I intend to spend 10 months in New Zealand on It's very doable. I rent a very nice room in a pleasant suburb. I eat well, if repetitively. I have enough pocket money to go out somewhere nice with friends now and again. I don't make much more than I spend --- product, in part, of a BFA --- and sure, an extra few thousand would improve my lifestyle co…

Exactly!

It isn't hard to do. It's only "hard to imagine" for those who aren't doing it. It's like being a runner and having a hard time convincing couch potatoes that running isn't primarily dominated by sweating, side stitches, gasping for air, and near heart attacks.

Re: How I live on $7,000 per year

#25

Post by rorrr »

Sorry, but this story is garbage.

Rent/mortgage, retirement completely ignored.

Plus he has the shittiest $82 health insurance plan he could find, and he doesn't calculate the costs of what will happen if he gets sick.

On average people after 65 spend $2,920 per year on medical out of pocket expenses (Source: http://www.newretirement.com/Planning101/Rising_Medical_Cost...)

Then his food comes from his garden, which means he has to work on that, and he conveniently didn't calculate the opportunity costs, tools, irrigation, chemicals, seeds, etc.

What about transportation costs, electric/gas, phone, internet, household supplies, upgrade of your old computer, clothing, shoes.

Then if you want to have a car (and it sucks to live pretty much everywhere in the US without a car), what about car insurance, maintenance, new car every X years?

Yeah, it's fucking easy to live on $7K per year when you own a house with a garden, don't pay property taxes, use 1995 computer, and have no safety net in case of a serious sickness.

Re: How I live on $7,000 per year

#26

Post by twfarland »

rymedia wrote: post #2

Interesting perspective. Definitely not for everyone living that frugally though. 1 Charlie Sheen weekend in Vegas would blow the years budget :P

Agreed. The author is lucky to have a taste for the quiet life. My wife and I would bite each other's heads off if we stayed in a van eating salad and I'm sure my grandparents would have too. I'm happy to pay for a bit of light hedonism.

Re: How I live on $7,000 per year

#27

Post by potatolicious »

erejacob wrote: post #13
dhume wrote: post #8

Earlier quoted context omitted.

Nor does he seem aware of inflation (see his "grandparents" paragraph at the end). The site below suggets $7k in 1950 would be about the same as $65k today, and I would hope people aren't amazed at the notion of being able to live on $65k per year. http://www.dollartimes.com/calculators/inflation.htm

I am aware of inflation. I did not intentionally imply anything about CPI. I was referring to the old generations attitude of "make it do or do without" compared to the current attitude of "just charge it on the card".

Both are straw men that represent the extremity of a population.

There's a bit of rose-tinted glasses going on here, isn't there? I don't particular buy into this notion that the previous generation was oh so virtuous, while this one is just daft as a brick.

Re: How I live on $7,000 per year

#28

Post by scarmig »

Depends on your goals in life. $7,000 is definitely doable. But I don't want to live in an RV. Indeed, I want to live in a walkable neighborhood with groceries, low crime, and easily accessible entertainment.

The site probably isn't a convincing case for a general audience. Which is a real pity, because a lifestyle of $10,000 to $12,000 a year is very doable, even for a single person, even in the Bay Area, even with regular outings and entertainment, and even with flushable toilets.

Re: How I live on $7,000 per year

#29

Post by nirvana »

ahsanhilal wrote: post #15

Basic economics tells you that this is not a good growth strategy to adopt especially if you have a consumption-based economy, and not savings-based one (aka China, India). In short population is going to increase over time, resources are going to decrease over time, in order to keep GDP per capita in line with an increasing population, you cannot just decrease your spending (or tighten your belt). You have to grow b…

I'm sorry, that's not "basic economics". That's neo-keynesian economics. (They call themselves keynesians, but they aren't following what keynes said.)

The word "capitalism" comes from the word Capital. You accumulate capitals so that you can invest it in productive assets.

You could blow your money on a consumptive lifestyle, as you advocate.

Or you could save that money, and use it to start a business. Notice, your business has value, and if you do well, you will have turned the money you saved into a lot more money. You will employ people, and you will make products that make your customer's lives better... generally by lowering the costs for doing things, for them, making them richer.

This increases productivity.

Your argument is only looking at one side of the coin and kind ignoring most of economics.... but it is the perspective put forth by politicians who want to spend spend spend. They want to spend because spending gets them power. But it damages the economy (government spending.)

Henry Hazlitt wrote a good book "Economics in one Lesson". It's really a really good primer on economics.

Re: How I live on $7,000 per year

#30

Post by nirvana »

scarmig wrote: post #28

Depends on your goals in life. $7,000 is definitely doable. But I don't want to live in an RV. Indeed, I want to live in a walkable neighborhood with groceries, low crime, and easily accessible entertainment. The site probably isn't a convincing case for a general audience. Which is a real pity, because a lifestyle of $10,000 to $12,000 a year is very doable, even for a single person, even in the Bay Area, even with…

Do you want to start a startup? Or do you want to live your life in the burbs?
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