Hacker News Board Hacker News, browsed like a classic message board
Live data from Hacker News

Being frugal is for the rich

theoutline.com

Post reply on HN
Print view View original

251–260 of 305 posts

Re: Being frugal is for the rich

#251

Post by markc »

nunez wrote: post #130

I was expecting the article to say how they've inherited a massive amount of money or how their parents paid for their education/first home/etc., which made them deciding to go frugal by achieving financial independence a hell of a lot easier. I didn't see any of that. Furthermore, the author doesn't fully explain how these two were "rich" before pursuing their journey to frugality aside from purchasing a home in Cam…

>which was a smart decision

And a lucky one. I'm boggled that they found a 4 bedroom in Cambridge MA for $460k in 2012. I was very actively looking for real-estate in Cambridge that same year, and decent 3 bedroom condos started at $500k. I don't think I saw a single 4 bedroom single family home under $1M. Maybe it was a wreck that were able to fix up for not to much $$.

Today their formula can't be replicated here. Any place in that area that can rent for $4400/mo. costs well over $1M so they had great luck AND great timing (interest rates were around 3% also) - on top of smarts and hard work I'm sure.

Re: Being frugal is for the rich

#252

Post by ericd »

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... )

If you have a $100k/year take home between you and a significant other, and you have a 50%+ savings rate which you invest, not very long at all. If you have a 5% savings rate, on the other hand, it will take a very long time.

Being frugal is incredibly helpful for all but the richest among us, and I'm amazed that people are so critical of it. I see so many people who would be so much better off than they are if they just didn't buy so much unnecessary shit.

Re: Being frugal is for the rich

#253

Post by ericd »

azernik wrote: post #61
aschearer wrote: post #15

Earlier quoted context omitted.

Sure, but are people like the ones in this article or MMM seriously advocating that their philosophy will solve poverty? It's always struck me as middle or even upper middle class people revolting against over consumption and debt. Insofar as that's the case it seems like a positive development. And I don't see why we can't do two things at once, address inequality and poverty and reform out-of-control consumerism.

I've heard this frequently in right-wing circles; see e.g. the complaints about people on welfare having (shock!) smartphones.

Smartphones are an expensive luxury, not a necessity. I think the expectation is that people on the public dole should be trying to save as much as possible and try to get off of welfare.

Re: Being frugal is for the rich

#254

Post by sametmax »

ikeyany wrote: post #121
sametmax wrote: post #96

Earlier quoted context omitted.

Open a company. Try to avoid it. Understand why others do it. Then look for solutions.

Others do it because it's cheaper than providing full-time salary+benefits. Average people don't really have the resources or connections to open a company.

There is more to it than that. And what's more, knowing things theoretically is very different that having to take a decision while you are exhausted, trying to take a decision before a big deadline, in the commute between work and the family, while your balance sheet is worrying you and you have social pressure from your workers, investors and colleagues. Also knowing they all will be affected by whatever you choose to do in many different ways, short and long term.

That's why living the experience is important. It gives you perspective on the decision process, which is more than just numbers.

Re: Being frugal is for the rich

#255

Post by ericd »

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.

Don't forget new cars, especially financed with debt.

Re: Being frugal is for the rich

#256

Post by [deleted] »

Consultant32452 wrote: post #225
KingMob wrote: post #102

Earlier quoted context omitted.

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.

There's a simpler test here. If you weren't sure what color your skin would be, what income bracket you'd be born into, what level of health you'd have at birth, or even what country you'd be born in, would you rather be born in 2018 or 1950?

[deleted]

Re: Being frugal is for the rich

#257

Post by ericd »

nunez wrote: post #137
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…

I honestly don't understand how enjoyably living in Europe is possible. The class divide seems to be much greater over there. My wife and I were in Barcelona a few weeks ago to celebrate our honeymoon. Prior to going, I did some research on what life was like there. The max salary for most people in tech in the area is about €75,000 (~$USD 93.5k). This is considered a great wage over there. The rents within the city…

AFAICT, based on my visits and the people I know there, it's a pretty different lifestyle, people seem much more frugal. People eat out less frequently. Owning a car is much less common, and those that people own are usually much less luxurious (many more very compact cars). Housing is generally much more modest (this is almost universally true), Europeans seem a bit flabbergasted at the gigantic houses we live in when they visit. A lot of things like transit and healthcare are heavily subsidized, so low earners can still get around and get medical attention. The top tax rates are fairly high, but I believe not that much higher than the cumulative tax rates for a high earner living in CA or NY, once you consider fed income+state income+sales tax+payroll tax.

Basically, Europeans on average have much lower incomes than Americans, and they seem much more frugal.

Re: Being frugal is for the rich

#258

Post by ericd »

bluetomcat wrote: post #80

Living in Eastern Europe, I was able to witness the streamlined shift to a Western consumerist lifestyle in a mere 15 to 20 years. There was a saying in communist Bulgaria, "having money doesn't mean that there is anything you can spend it on". This encouraged people to save and have longer-term goals. Fast forward to today, everyday spending opportunities are beyond every corner, and people prove that they are succe…

It's still very much a thing here. Curbing that habit is one of the things these bloggers talk a lot about, since doing that helps you save much more.

Re: Being frugal is for the rich

#259

Post by sjapkee »

nunez wrote: post #137
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…

I honestly don't understand how enjoyably living in Europe is possible. The class divide seems to be much greater over there. My wife and I were in Barcelona a few weeks ago to celebrate our honeymoon. Prior to going, I did some research on what life was like there. The max salary for most people in tech in the area is about €75,000 (~$USD 93.5k). This is considered a great wage over there. The rents within the city…

Cheap public transport, cheap medicine, cheap food, cheap housing (mostly) and people live without shit in the head like "I should own giant house, pick-up or other giant car and eat only in restaurants". That's how normal people live.
Post reply on HN