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The real use of money is to buy freedom

paraschopra.com

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Re: The real use of money is to buy freedom

#61

Post by alexeisadeski3 »

dobbsbob wrote: post #20
joosters wrote: post #18

Earlier quoted context omitted.

The good thing about being rich is that you could be poor whenever you want. What? Name some rich people who are now voluntarily poor! I'd happily bet that 99.9999% of multi-millionaires never choose to be poor in their lifetime. But I'm sure lots of them feel amazing about thinking how they could help people.

I believe that was sarcasm however warren buffet is a good example. He's giving all his money away and leaving his kids squat because he doesn't want to create a legacy of trust fund descendants but they certainly won't be poor.

>He's giving all his money away and leaving his kids squat

LOL!

Re: The real use of money is to buy freedom

#62

Post by base698 »

vanderZwan wrote: post #24
paraschopra wrote: post #13

Earlier quoted context omitted.

One of the projects I want to do is to map living expenses, inflation and life expectancy to know exactly how much money is "enough". My problem is that we forget that we tomorrow should be more valuable to us than today and by the time we get this realization, we might have lost many years (of adulthood).

Based on the following research, I guess $75K? http://www.npr.org/blogs/money/2010/09/07/129703291/new-stud...

For me personally I know it's way more than $75k but less than $200k. I have expensive hobbies and like to to travel without blowing my savings.

Re: The real use of money is to buy freedom

#63

Post by sokoloff »

gchokov wrote: post #25
monsterix wrote: post #22

Earlier quoted context omitted.

> One of the projects I want to do is to map living expenses, inflation and life expectancy to know exactly how much money is "enough". There you go: http://www.nileshtrivedi.com/2012/07/10/how-much-is-enough.h...

Or, just create a blank web page with black font saying "it's never going to be enough, give this thought up". Reminds me of another saying that software development time is never enough, except when you have hard borders and deadlines with the right priorities and vision - it will take exactly that time. Getting more money loosens the borders - you buy better houses, better cars, have bigger family, make bigger inve…

That's true to a point for everyone: that having more money from a low starting point primarily increases lifestyle. But as you add more and more money, I think that most people reach a turning point where "enough really is enough" and their worries about money truly diminish, but that lifestyle stops increasing.

As I've grown in my own career, for sure my lifestyle increased. I literally subsisted on Ramen and $2 frozen pizzas in my first startup. Then as I achieved more income, I added a convertible, then a 401-k, then a new SUV (worst decision to that point), then a first house, then maxing out 401-k, then an airplane, then a classic Mustang, then a city apartment because my house was too far away and I got tired of the constant commute, then moved to a house in the city, then had 2 wonderful kids, then added 529s (college savings plans), then a bigger airplane, then...

All of those things, except the 401k and 529s, also came with additional expenses in time and money. (Technically, those 2 did as well, but in an immaterial way compared to orchestrating the maintenance on a house, classic car or airplane.)

However, I can also see that increases in income from here won't go towards (current) lifestyle inflation, as we have "enough" now. That could be because I'm older and wiser now, rather than a natural knee in the lifestyle vs income curve, but I'm inclined to think it's a natural knee.

For very few people does that knee hit before $100K/yr in a major US city. I'd guess that for a great many people, it doesn't hit until after $250K/yr, which is why people for shorthand say that it doesn't exist.

If you'd like to challenge yourself to bring that knee closer to the left side of the graph for yourself, I recommend Mr Money Moustache, Len Penzo and JLCollinsNH as bloggers who write extensively (and well) about this topic. Quick Googling will find them all.

I believe that getting to the right side of that knee, where you can stop worrying about money, is worth so much more mentally and emotionally than any amount of lifestyle inflation (beyond the basics of food and shelter). So, whether you can manage to increase your income to pass to the right of the knee, or move the knee to the left of your income, either way you'll be happier than a new car, new house, splendid vacations or 100 great dinners out.

Re: The real use of money is to buy freedom

#64

Post by theorique »

xioxox wrote: post #55
rahimnathwani wrote: post #8

Earlier quoted context omitted.

I recall a colleague once (~10 years ago) telling me that some people he knew felt that 5k GBP would be enough to solve all of their (money) worries. I thought it absurd, i.e. too low given things like planning for old age. I guess there are people who would think my estimate too low if I said I needed 5m for the same purpose. (not saying 5m is the right number for me or anyone else.)

5k seems absurd, though there is a big differential in the UK between those who own a house and those who do not. If I lived in London, 1e6 GBP would be necessary for housing alone, a ridiculous sum compared to the average wage.

Do you have a large family or a need for an enormous space?

London's expensive, but it's not that expensive. You can get a nice, but not huge, apartment in a central area for £400 / week which would work out to £20K per year.

Source: this was true as of 2011 when I stayed with friends in a 2BR apartment paying exactly that.

Re: The real use of money is to buy freedom

#65

Post by bluecalm »

hkmurakami wrote: post #50
dsirijus wrote: post #46

Earlier quoted context omitted.

I went a similar road (from $50 a month in an underground windowless garage with no utilities whatsoever, to a 200m2 penthouse). I'd put an accent on your point #2 - it really makes a huge difference to just shoot up some money into trivialities and mundane annoyances in your life just to make them magically go away. Because there's so many of them, most cannot afford that. I'd like to add a point though, maybe the m…

Was #6 because of how you dressed, or because you could host events at your new place, or some other factors? I'm curious since I have some acquaintances who are morbidly afraid of having members of the opposite sex approach them for their substantial wealth. They go out of their way to mask their material status.

Why gender neutral language ? I think it makes big difference for men and women. Women are way more attracted to status/wealth than men are and I think it's important for yours (or parent's) point to specify their sex.

Re: The real use of money is to buy freedom

#66

Post by gaius »

hkmurakami wrote: post #50
dsirijus wrote: post #46

Earlier quoted context omitted.

I went a similar road (from $50 a month in an underground windowless garage with no utilities whatsoever, to a 200m2 penthouse). I'd put an accent on your point #2 - it really makes a huge difference to just shoot up some money into trivialities and mundane annoyances in your life just to make them magically go away. Because there's so many of them, most cannot afford that. I'd like to add a point though, maybe the m…

Was #6 because of how you dressed, or because you could host events at your new place, or some other factors? I'm curious since I have some acquaintances who are morbidly afraid of having members of the opposite sex approach them for their substantial wealth. They go out of their way to mask their material status.

There's a difference between having money, which appeals only to the most shallow, and making money, which is a proxy for a range of universally desirable attributes (motivation, confidence, tenacity, intelligence, etc).

Re: The real use of money is to buy freedom

#67

Post by gaius »

rwmj wrote: post #27
forgottenpaswrd wrote: post #16

When you know self made millionaires you learn one thing: "Money is not wealth". Almost nobody that understands wealth holds money, money is a tool for exchanging things and its value decreases with time. They hold real state, they hold precious metals, they hold stock, they travel, they know people. The people that made money usually like making wealth and don't fear losing it so much, they learn all their life to h…

The one thing I learned from working with a couple of very rich people was that all they think about is how to get money . Which is why I'm never going to be super-rich, because I don't really care about it obsessionally like those two did. Edit: I should say these were self-made millionaires. I have also worked with people who were millionaires just by being in the right place at the right time, and they were comple…

Nolan Bushnell (Atari) said something like, business is a game and money is how you keep score. If that's their game, let them enjoy it!

Re: The real use of money is to buy freedom

#68

Post by theorique »

rwmj wrote: post #27
forgottenpaswrd wrote: post #16

When you know self made millionaires you learn one thing: "Money is not wealth". Almost nobody that understands wealth holds money, money is a tool for exchanging things and its value decreases with time. They hold real state, they hold precious metals, they hold stock, they travel, they know people. The people that made money usually like making wealth and don't fear losing it so much, they learn all their life to h…

The one thing I learned from working with a couple of very rich people was that all they think about is how to get money . Which is why I'm never going to be super-rich, because I don't really care about it obsessionally like those two did. Edit: I should say these were self-made millionaires. I have also worked with people who were millionaires just by being in the right place at the right time, and they were comple…

This is true. The self-made multimillionaires that I've met and worked with don't just "turn it off" because they've made it. The habits and practices that got them there are something that they carry with them.

Now, of course, they structure their lives so that they work when they want, where they want, and build in a lot of time and space for enjoying the things they enjoy (Superbowl tickets? Vacation with family on the water? Of course.) But they also work a lot.

Re: The real use of money is to buy freedom

#69

Post by rikacomet »

miles wrote: post #21

Tim O'Reilly on money: It’s easy to get caught up in the heady buzz of making money. You should regard money as fuel for what you really want to do, not as a goal in and of itself. Money is like gas in the car — you need to pay attention or you’ll end up on the side of the road — but a well-lived life is not a tour of gas stations! Source: http://radar.oreilly.com/2009/01/work-on-stuff-that-matters-...

perhaps, its this way, that earning money is so hard compared to other things we do in our life (except love), is we have to push our self so much, to earn it, but once we have enough.. we can't stop. Thats because its also incredibly hard to stop earning money once you know how to do it.

Re: The real use of money is to buy freedom

#70

Post by gaius »

kamaal wrote: post #57
downandout wrote: post #44

Earlier quoted context omitted.

He actually mentioned in the article that he grew up "middle class". I am aware that middle class in India may be different than in the US, but it is clear that he was never poor - going to bed hungry etc.

>>I am aware that middle class in India may be different than in the US As an Indian I can tell you, To give you a true perspective almost every one rich in India apart from Ambanis and Tata(Kind of Rockfellers and Rothschilds of India) think they are from the middle class. The super poor in India die out of hunger. Farmers commit suicide day in and out. The lower middle class barely gets any education and nearly die…

There is the same perception issue here in England. Hugh Muir writing in the Guardian (probably the second most popular left-wing paper) defines "middle class" to mean "private education" which is about 7% of the population. Presumably he considers himself to be "working class"...
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