You're not taxed on work you do for yourself (, yet).
How I live on $7,000 per year
41–50 of 222 posts
Re: How I live on $7,000 per year
#42Earlier quoted context omitted.
I believe he does account for rent/mortgage, by doing an RV. And his idea is that he has handled retirement--he's living in retirement now. The catch is that he had six figures saved up beforehand (he lives off the investment income), which doubles as a rainy day fund in case of serious illness.
Then you have to calculate the amortization costs for the next RV (when this one dies), RV insurance, gas (which RVs needs a lot of), maintenance, sewage pumping costs, water costs. I wouldn't call living in an RV a retirement most people envision.
Not arguing that it's a choice I'd make, just pointing out that he does include rent.
It'd be interesting to see his breakdown of the other expenses you mention, though.
Re: How I live on $7,000 per year
#43I'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…
Thanks. This pretty much aligns with my philosophy. If your budget is readily available, could you post it?
I've been seeing a lot of "we live on $XX,XXX" online. That's nice, but what really inspired me was when people just posted their budgets, which since you already have one, would probably take less time than articulating the philosophy.
I personally don't set a budget (I've tried it but I spend just as much with as without a budget), but for those who do, please post as it makes your claims more believable.
Re: How I live on $7,000 per year
#44Earlier quoted context omitted.
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…
Ok let's all save money and try to be entrepreneurs, is that what you are advocating? Lets see, in your economy we are going to have a lot of producers, but who is going to consume these products if people are saving. Now if you say China does it, then I would answer back that China does it because it has the US and Europe as huge consumption bases for its produced goods. You are trying to give me an economics lesson…
I'm intrigued by your comment that you have an advanced degree in economics. I don't, but it seems obvious to me that you're missing something (I'm happy to be corrected here!): the problem isn't the lack of consumers so much as a lack of incentive to produce.
If everyone becomes an entrepreneur, compelled to be stingy and just do productive things for the fun of it, then they're still being productive, and the world is still getting useful stuff. But, it seems your concern is that if everyone just does the work they'd like to do then there will be a misallocation of labor: certain things that need to get done won't get done.[1]
Is this really true? Are there well-organized economies that are stagnating while people are engaged in their own independently productive pursuits? Is Japan's economy stagnating because they consume too little or because they are working too little?
[1] An immediate counter-argument here is that people are likely to be more productive when they love their work.
Re: How I live on $7,000 per year
#45Sorry, 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…
It disappoints me, but I have to agree with you (at least in part, I wouldn't call his story garbage).
I say it's disappointing because his blog really inspired me to make some changes and I agree with the overall thrust of what he's saying.
But the problem I have is figuring out how he accumulated his wealth. Of course, being a former physicist you'd think spelling that out in a simple spreadsheet would be a trivial problem for him. I haven't seen that though.
From what I have put together I think he got very lucky in the stock market, which quite honestly takes a bit of the wind out of his sails. Based on what he was earning, saving and investing, it seems that only outsized rates of return could explain his nest egg.
Nonetheless, his overarching theme is spot on.
Re: How I live on $7,000 per year
#46Earlier quoted context omitted.
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…
Ok let's all save money and try to be entrepreneurs, is that what you are advocating? Lets see, in your economy we are going to have a lot of producers, but who is going to consume these products if people are saving. Now if you say China does it, then I would answer back that China does it because it has the US and Europe as huge consumption bases for its produced goods. You are trying to give me an economics lesson…
The reason you are being down voted, just so you know, is because you're being flippant and dismissive.
Re: How I live on $7,000 per year
#47Earlier quoted context omitted.
What rorrr said, but not in quite such an inflammatory tone. I think it's great that you've found a lifestyle you enjoy that also allows you to get by with very little money. What I take issue with is your judgmental tone in the article - as if there's something wrong with everyone else for not wanting to live in an RV. This country faces a dire economic crisis, and there is no doubt that the income of the middle cla…
especially when your lifestyle was enabled (albeit, in this specific instance), apparently, by public spending (grad school, postdoc, and subsidized higher education in his country of origin) you're effectively a net neutral on the system, however, when you factor in all that society has invested in you, you're very much a net negative.
> ...you're very much a net negative.
Not he spends his life inspiring and educating people about how to control their finances, and make money serve them instead of the other way around. That would be a very valuable social contribution.
And yes his lifestyle is extreme, but people don't have to follow him that far to get benefit from what he says.
Re: How I live on $7,000 per year
#48The article comes from the same reason I'm running the A Buck A Plate blog http://abuckaplate.blogspot.com - doing it because so many think living well for cheap can't be done.
Thanks! A lot of folks are saying they live on the cheap. It's nice to see a commenter who actually is showing others how. Keep up the good work.
Re: How I live on $7,000 per year
#49Earlier quoted context omitted.
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…
Ok let's all save money and try to be entrepreneurs, is that what you are advocating? Lets see, in your economy we are going to have a lot of producers, but who is going to consume these products if people are saving. Now if you say China does it, then I would answer back that China does it because it has the US and Europe as huge consumption bases for its produced goods. You are trying to give me an economics lesson…
> Next time you want to argue regarding economics, please argue with actual theoretical knowledge rather than some flimsy theoretical base that you have created in your own mind.
I can't imagine a better base for economics knowledge than Henry Hazlitt's "Economics in One Lesson."
> I know every economics model there is in and out.
Then you should be familiar with Austrian economics.
Though that is probably not covered in an "advanced degree in economics!"
Re: How I live on $7,000 per year
#50The title of the article is slightly misleading in that it's $7,000 per person, so it's actually $14K in this case. I know that's a little nit-picky, but things like rent would eat a good chunk of that $7k. Living on $14k is certainly possible, and the usual suspects can be cut to save some cash: * Drop cable TV * Same for cell phone - keep one pre-pay for emergency and use Skype for business/personal * Stick to one…
That's a good point and one of the frustrating things I find about an otherwise awesome blog. Living with a significant other is cheaper than living by yourself because I really doubt you're going to want to live in really close quarter with someone your not sleeping with.