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Thread: Interesting article on money management/anti consumerism

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    Default Interesting article on money management/anti consumerism

    "You can close your eyes to reality but not to memories -Stainslaw J. Lec

    Confuscius say: "Man who pull bra stap get bust in face"


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    Default Re: Interesting article on money management/anti consumerism

    I think a lot of this has to do with context though. Like... where were they living? You couldn't really live this way in California or various major cities because renting is so high. And for a lot of people, they can only earn their high income in those areas. Or they are happier (and thus have a higher quality of life) living in those places. Also, in many places, not having a car is doing you a huge disservice. You lose a lot of time with public transportation, and a lot of money with cabs.

    And they lived on $25k/year as a family of 3? That's probably $17k after taxes, so... less than $1,500 per month for a family of 3?! I know they said their house was paid off, but $1,500?! What about food, utilities, health insurance, personal care items, emergencies, home maintenance (since they owned their home and a rental home), property taxes, travel/vacations, doctor and dentist visits, random expenses, etc.? There's just no way that would be enough money for 3 people to live on every month. Health insurance alone would probably be like $1,000 for the 3 of them.

    He bashes going to starbucks, driving a truck, going to yoga... what if these things make you happy? Or what if they are things that motivate you to work even harder? Its so annoying because he like assumes his opinion should be everyone's because its ~*logical*~. It may be logical in the context of his life/family, but not for many others.

    Where do you draw the line between living cheaply to save money, and spending the money you've worked hard to earn? I really hate articles like these. Its just like slut shaming. Virigin-whore complex. Or America's obsession with thinness vs ~*real women have curves*~. Its like we always need to shame or praise someone for something. Can't we just accept that different things work for different people, and not others? While I don't advocate debt, you also shouldn't have to sacrifice your quality of life just to ~*save money*~. You can't take it with you when you die. Different things work for different people and there's nothing wrong with that.

    And honestly, I'd much rather work my entire life doing things I love, than retire at 30 and live frugally before and after. If anything, I personally think a better quality of life would be to live semi-frugally and work your entire life.
    Last edited by GlamourRouge; 04-27-2013 at 08:30 AM. Reason: grammar

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    Default Re: Interesting article on money management/anti consumerism

    I get both Mr. Mustache, and GR points. Obviously, the "protagonist" got a lot of mileage by living a 19th century lifestyle in a 21st century world.
    Yet, as GR points out, there is plenty of room between extreme consumerism, and a Luddite lifestyle. One old quote says that "a man is wealthy to the degree of what he can do without.

    Having approach of getting a good residence that meets your needs vs the max ammount that you can qualify for. Ditto on buying a late model used car, and keeping it a long time vs buying the latest hot new model just because the friendly dealer salesman slid you into an "attractive" monthly payment loan. Not having to buy stuff just because it is "on sale". (Having extra items around residence compels one to buy another dresser, or closet organizer. Cutting vices/pampers can often give yourself an effective raise. (Not buying a pack a day, or an extra Starbucks a day times 250-350 days can help build a decent rainy day fund). For some people, relocating to lower cost area can pay off.

    Interesting read, but not one to take too literally. Kind of like starvation diets are good for everyone while ignoring that cutting snacks and stepping up exercise a bit can still benefit some people.
    I'm right 96% of the time. I don't sweat the other 5% .......................

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    Default Re: Interesting article on money management/anti consumerism

    let us not forget that a family of 3 earning just $25k per year ...

    - not only pays zero income taxes, but also receives a 'subsidy' from higher earning US taxpayers in the form of 'refundable tax credits'

    - is ( probably ) eligible for Medicaid, thus eliminating out-of-pocket health insurance costs

    - is ( probably ) eligible for SNAP / Food Stamps, thus reducing out-of-pocket costs for groceries

    The unspoken point of course is that, whether this family is earning $25k per year and receiving subsidies and benefits, or earning $40k per year without subsidies and without benefits, their standard of living would be more or less unchanged. Thus the low cash lifestyle advocated by Mr Moustache is in fact dependent on other higher earning Americans subsidizing his family !!!
    Last edited by Melonie; 04-27-2013 at 04:19 PM.

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    Default Re: Interesting article on money management/anti consumerism

    so that guy is making money off of his blog. he and his wife chose to quit their jobs because of a few small investments they have instead of working to get a better nest egg and provide a higher quality of life for their son. they had middle class jobs, so if they worked an extra 25 years they could actually retire with guaranteed monthly income and health insurance for life. what happens if one of them becomes sick? what's going to happen to their son when he wants to join a sports team, take expensive sat practice classes, or go to college? my parents spent a ton of money on me as a kid so I would be at the top of my class and very cultured and as a result, I got into a top school. do they really have no desire to travel at all? and the fact they only have one rental home- what's going to happen when they need to replace all of the plumbing, the city decides it needs to be retrofitted, or the neighborhood turns into detroit and is worthless? what's going to happen when his stocks are worthless. isn't the number one rule of investing to not put all of your eggs in one basket?

    if you want to be a hermit in the woods, fine, but raising a kid like this is just stupid. and I dont believe half of the things he says about his amazing quality of life because hes just trying to attract readers to this blog hes making money off of. gourmet organic food my ass, I cook a lot with gourmet organic food and my food bill is minimum $400/month for one tiny person who doesnt eat large portions.

    I see nothing intrinsically rewarding about this. I lived on the cheap for my first 6 months of college and was miserable. it would be one thing if he was with the peace corps and volunteered constantly but just sitting around woodworking seems like a huge waste of life. it would essentially be like living in a retirement home, just doing mind numbing crafts all day, trapped and waiting to die.

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    Default Re: Interesting article on money management/anti consumerism

    I read through some of his blog. He does have health insurance for his family.

    http://www.mrmoneymustache.com/2012/...nsurance-plan/

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    Default Re: Interesting article on money management/anti consumerism

    I do a lot of What he says. we have a rental property, dont buy tons of extras, And we still don't have a lot to put away into long term savings and investments. Like we save a lot-and then spend a bunch of money on trips to see the world and family and friends. We spend in experiences versus stuff-well that and my daughters activities and education. And I already walk and take the train to work! (Too far to bike realistically)-and my husband walks. We own all our vehicles outright too.

    After My daughter starts first grade were are gonna start putting $ each month into my Roth IRA since we won't be paying school fees. And we don't pay for a car anyways. Honestly most of our money is spent in bulk on trips.
    Our before tax income last year was Under 40K. I think we're doing pretty good, considering that guy lives on 25K a year. We're pretty close to that and save for Aradias college and our retirements-but we don't have to pay for our house or utilities or health insurance thanks to the military.

    So I think what he's saying is almost impossible for most people-cause we are very frugal and aren't close to retiring. You'd have to have a higher income to out half or more than half away into savings.
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    Default Re: Interesting article on money management/anti consumerism

    "The latte is just the foamy figurehead of an entire spectrum of sloppy “I deserve it” luxury spending that consumes most of our gross domestic product these days." and if you earned the money to spend on a damn latte you DON'T deserve it?? i agree with GR, i've lived dirt poor my whole childhood up until i was 21 years old to the point where i was stealing toilet paper from mcdonalds to wipe my ass..if its the little things that keep you going then don't feel ashamed!

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    Default Re: Interesting article on money management/anti consumerism

    That "I deserve it spending" he's against-I kind of get it. Thats actually once of the points I agree with. If its every day then yeah there's an issue I'd think-but if its occasionally (once a month) I don't see anything wrong with it. I grew up with a family that spent spent spent. And now they can't afford to come visit me-even when I flew across the pacific and halfway across the US to see them, they couldn't afford to come visit me. If they'd cut down on their "luxury spending" as Mr. MM said, maybe they could've afforded to. And maybe they wouldn't half to work until their 80 yrs old-they'd have more of a retirement.

    Money management skills. People need them. As long as you're not living ABOVE your means-do as you will I suppose.
    "You can close your eyes to reality but not to memories -Stainslaw J. Lec

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    Default Re: Interesting article on money management/anti consumerism

    Quote Originally Posted by Melonie View Post
    let us not forget that a family of 3 earning just $25k per year ...

    - not only pays zero income taxes, but also receives a 'subsidy' from higher earning US taxpayers in the form of 'refundable tax credits'

    - is ( probably ) eligible for Medicaid, thus eliminating out-of-pocket health insurance costs
    He's not on Medicaid. He buys his own insurance.

    http://www.mrmoneymustache.com/2012/...nsurance-plan/

    Quote Originally Posted by Melonie View Post
    - is ( probably ) eligible for SNAP / Food Stamps, thus reducing out-of-pocket costs for groceries
    I doubt that he's on food stamps. I couldn't find anything about it on his blog.

    Quote Originally Posted by Melonie View Post
    The unspoken point of course is that, whether this family is earning $25k per year and receiving subsidies and benefits, or earning $40k per year without subsidies and without benefits, their standard of living would be more or less unchanged. Thus the low cash lifestyle advocated by Mr Moustache is in fact dependent on other higher earning Americans subsidizing his family !!!
    There are many $40,000 a year jobs that include health insurance as part of the employee benefits. Even if a family with a household income of $40,000 a year doesn't get employer-provided health insurance, any children would probably be eligible for SCHIP. A family that earns $40,000 a year would also be much more likely able to buy a home instead of renting, in which they would get a subsidy for their mortgage (interest deduction).

    Overall, all else being equal, a family with an income of $40,000 a year would have a much higher standard of living than a family with an income of $25,000 a year, especially if that family receives employee-provided health insurance. A married couple earning $40,000 a year, with a mortgage and a child or children, would most likely pay very little, if any, federal income tax. I doubt that the government assistance that a family earning $25,000 a year receives, would bring their standard of living to the same level as a family earning $40,000 a year, especially if that family has their health insurance provided by their employer.

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    Default Re: Interesting article on money management/anti consumerism

    i agree its smart to save your money and not spending on frivilous things when you are trying to retire early, i just didn't like the "i deserve" thing, that's all

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    Default Re: Interesting article on money management/anti consumerism

    Indeed it appears that Mr. Moustache has purchased a high deductible health insurance plan ... which will cease to exist in another 8 months to be replaced by ( subsidized ) ObamaCare public exchange coverage. From the same blog...

    (snip)"And it’s all changing in the near future again. Starting in 2014, the Affordable Care Act begins to shift the balance towards fuller coverage for all. Plans like mine with very high deductibles will phase out (although existing plans will be grandfathered in), meaning you will have to get more coverage and pay more for it. Balancing that out, however, are subsidies that will offset most or all of the extra cost for Mustachian-level early retirees,"(snip)

    Also, this does not alter the fact that Mr. Moustache's family avoids having to pay income taxes and is collecting different subsidies in the form of 'refundable tax credits' based on the family's $25k income level.


    Overall, all else being equal, a family with an income of $40,000 a year would have a much higher standard of living than a family with an income of $25,000 a year, especially if that family receives employee-provided health insurance
    Ah yes but all else is definitely NOT equal ! When one starts lookiing at the difference in income taxes paid in ( vs paid out via 'refundable tax credits' ), when one starts looking at the cash value of health insurance subsidies, school lunch subsidies, food stamp subsidies, and a host of other social welfare benefits, there is far less difference in net 'disposable income' than the $40k versus $25k would imply.

    And of course employer provided employee benefits is a non-issue since, by definition, a 'retired' person like Mr. Moustache is nobody's full time employee !!!

    My only real point here is that Mr. Moustache's premature retirement would arguably NOT have been possible without the involuntary largesse of Americans who are actually required to pay income taxes !!!
    Last edited by Melonie; 04-27-2013 at 06:54 PM.

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    Default Re: Interesting article on money management/anti consumerism

    Fantastic article. Thank you. My favorite part was the "I deserve it" luxury spening. We convince ourselves that we need a bunch of products instead of saving cash. Working hard for the rest of my life is not my dream. Living comfortably off investments is...

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    Default Re: Interesting article on money management/anti consumerism

    Quote Originally Posted by Melonie View Post
    let us not forget that a family of 3 earning just $25k per year ...

    - not only pays zero income taxes, but also receives a 'subsidy' from higher earning US taxpayers in the form of 'refundable tax credits'

    - is ( probably ) eligible for Medicaid, thus eliminating out-of-pocket health insurance costs

    - is ( probably ) eligible for SNAP / Food Stamps, thus reducing out-of-pocket costs for groceries

    The unspoken point of course is that, whether this family is earning $25k per year and receiving subsidies and benefits, or earning $40k per year without subsidies and without benefits, their standard of living would be more or less unchanged. Thus the low cash lifestyle advocated by Mr Moustache is in fact dependent on other higher earning Americans subsidizing his family !!!
    But I don't think they would qualify for those because they would have to list their assets, right? 2 paid-off houses and a bunch of investments (i think it said in the stock market?). They definitely wouldn't qualify unless they lied.


    Quote Originally Posted by LuckyOne View Post
    Working hard for the rest of my life is not my dream. Living comfortably off investments is...
    I think that is the root of the problem though. Working hard for the rest of your life is some people's dream. Because without working hard, you kind of like... feel like you don't have a purpose. I understand retiring when you're older because your body is older, and you can spend time with grandchildren and stuff, but retiring before that age for no logic reason would probably just make you want to re-enter the work force a year or 2 later, and chances are you'll be too old.

    I've met a lot of people who did that very thing, and then they were so miserable, isolated, and lonely. And while being too old to get hired at a job again, they basically just ended up volunteering like 20, 30, or more hours per week which is essentially working for free with no benefits.


    Quote Originally Posted by simone87 View Post
    i agree its smart to save your money and not spending on frivilous things when you are trying to retire early, i just didn't like the "i deserve" thing, that's all
    I agree. Most of the time, you DO deserve it though! You're working your ass off! You deserve to treat yourself here and there! And there's nothing wrong with that. There shouldn't be shaming. He gave off like a shaming, im-better-than-you-are-because-im-too-smart-to-think-i-deserve-things-i-dont-need, and I know that turned a lot of people off including myself.



    Quote Originally Posted by charlotte. View Post
    what happens if one of them becomes sick?

    do they really have no desire to travel at all?

    and the fact they only have one rental home- what's going to happen when they need to replace all of the plumbing, the city decides it needs to be retrofitted, or the neighborhood turns into detroit and is worthless?

    They will be in for a VERY rude awakening! The ONLY reason they have been successful is because they have been lucky. ONLY reason. No random expenses have come up.

    What if they wake up one day and don't have a voice for months and need to go to the doctor and spend tens of thousands on doctor visits? They'd scramble to get a job, well one of them would.

    And yes, what if their son resents that they always have to do things cheaply like vacation in the woods? He may want to travel the world one day, and resent that his family was so pushy and cheap. I once had a psychology teacher who was a marriage and family therapist also, and she always talked about how she resented how her family was so cheap, always bought cheap gifts, and was super obsessed with controlling their money to the point where it didn't allow them to live. And she would always talk about how she hates being around them because they are so nosy and controlling about finances and what other people spend it on. I wouldn't be surprised if the sun turned out to be the same way.

    As for rental property maitenence, again they have just been lucky. Things happen. Accidents happen. Life happens. I would LOVE to look at his blog after something major came up in his life and he realized he was fucked because he didn't account for a broken bone, a car accident, cancer, a major medical problem like lupus, his son's expensive college education, his house catching on fire, or any other random life even that happens all the time and costs a ton of money.
    Last edited by GlamourRouge; 04-28-2013 at 05:22 AM. Reason: grammar

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    Default Re: Interesting article on money management/anti consumerism

    But I don't think they would qualify for those because they would have to list their assets, right? 2 paid-off houses and a bunch of investments (i think it said in the stock market?). They definitely wouldn't qualify unless they lied.

    There is no 'assets' test for 'refundable tax credits' - they are strictly income based. The Earned Income tax credit for a family of 3 earning $25k is something on the order of $4-5k. The Child Care tax credit for a family of 3 earning $25k is another $1k. These moneys are paid out by the IRS even though they ( far ) exceed the amount of federal income tax owed by the family of 3 earning $25k ( which is essentially zero ). State based SNAP / School Lunch / Utility assistance eligibility does include a 'resources' test, however REAL ESTATE is not a listed type of resource thus ownership of a house / multiple houses does NOT present an obstacle to eligibility ... with these benefits easily adding up to another several thousand dollars per year. The 'resources' test only looks at cash and cash equivalents such as bank account balances, stock / mutual fund shares which can instantly be converted to cash. For that matter, moneys contributed to gov't sanctioned retirement accounts are also not a listed type of resource ! And the 2014 Public Health Exchange insurance subsidies are strictly based on income level, with the probable federal 'subsidy' for 2014 insurance coverage for a family of 3 earning $25k being in the ballpark of yet another $4-5k.

    No, it's pretty clear that Mr. Moustache has done his homework in regard to 'the system' . And in truth I don't fault Mr. Moustache a bit for doing so. After all, coming from New York, I have seen the results of the 'moral hazard' created by generous social welfare benefits / gov't subsidies being 'lost' if a person works too many hours / accepts a promotion with higher paycheck and higher responsibility etc. ... which from a self-serving viewpoint boils down to working harder in exchange for 'nothing' because some / all of their additional after-tax earnings must then be directed towards paying 'full price' for groceries, school lunches, utility bills, etc..

    However, US federal and state gov'ts already have a budget problem, in that the number of citizens 'consuming' gov't benefits, thus the cost to federal and state taxpayers of providing those benefits, is rising ... while the number of citizens actually paying federal and state income taxes to cover the costs of providing those benefits is falling. This has prompted tax rate increases at the federal and state level, which reduces whatever difference previously existed in standard of living between someone earning $40k and $25k ... and which GREATLY reduces whatever difference previously existed in standard of living between someone earning $50k and $25k.
    Last edited by Melonie; 04-28-2013 at 05:18 AM.

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    Default Re: Interesting article on money management/anti consumerism

    Because of tax deductions and credits, if they managed their taxes properly their effective tax liability could be close to 0% if only earning 25k. I managed my husband's taxes and my taxes (joint return) and our gross income was around 45k but we got back $6000.

    We did this by not changing our withholding when we got married. We claimed no exemptions/dependents even with being married and my son. So we overpaid substantially and got it all back. We also spent $5200 on school tuition, out of pocket.

    This year should be the same story since we bought our first house.
    If you are willing to do for one year what other's won't, you can spend a lifetime doing what other's cant.


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    Default Re: Interesting article on money management/anti consumerism

    Quote Originally Posted by Melonie View Post
    There is no 'assets' test for 'refundable tax credits' - they are strictly income based. The Earned Income tax credit for a family of 3 earning $25k is something on the order of $4-5k. The Child Care tax credit for a family of 3 earning $25k is another $1k. These moneys are paid out by the IRS even though they ( far ) exceed the amount of federal income tax owed by the family of 3 earning $25k ( which is essentially zero ). State based SNAP / School Lunch / Utility assistance eligibility does include a 'resources' test, however REAL ESTATE is not a listed type of resource thus ownership of a house / multiple houses does NOT present an obstacle to eligibility ... with these benefits easily adding up to another several thousand dollars per year. The 'resources' test only looks at cash and cash equivalents such as bank account balances, stock / mutual fund shares which can instantly be converted to cash. For that matter, moneys contributed to gov't sanctioned retirement accounts are also not a listed type of resource ! And the 2014 Public Health Exchange insurance subsidies are strictly based on income level, with the probable federal 'subsidy' for 2014 insurance coverage for a family of 3 earning $25k being in the ballpark of yet another $4-5k.

    No, it's pretty clear that Mr. Moustache has done his homework in regard to 'the system' . And in truth I don't fault Mr. Moustache a bit for doing so. After all, coming from New York, I have seen the results of the 'moral hazard' created by generous social welfare benefits / gov't subsidies being 'lost' if a person works too many hours / accepts a promotion with higher paycheck and higher responsibility etc. ... which from a self-serving viewpoint boils down to working harder in exchange for 'nothing' because some / all of their additional after-tax earnings must then be directed towards paying 'full price' for groceries, school lunches, utility bills, etc..

    However, US federal and state gov'ts already have a budget problem, in that the number of citizens 'consuming' gov't benefits, thus the cost to federal and state taxpayers of providing those benefits, is rising ... while the number of citizens actually paying federal and state income taxes to cover the costs of providing those benefits is falling. This has prompted tax rate increases at the federal and state level, which reduces whatever difference previously existed in standard of living between someone earning $40k and $25k ... and which GREATLY reduces whatever difference previously existed in standard of living between someone earning $50k and $25k.
    There are a number of states where every worker pays state income tax, no matter how poor they are. There are also states where nobody pays state income tax, no matter how wealthy they are. These states get a significant amount of their revenue from the sales tax, which many poor people pay a higher percentage of their income in tax than wealthy people.

    Please provide the figures you came up with, showing how government benefits GREATLY reduce the standard of living between someone earning $40k and 25k. For the person earning $40k, we will assume their employer provides them with health insurance, and that they maximize their income tax deductions. Also, please show where you got your figures from. I did a search on the for an EITC calculator and found this:

    http://www.cbpp.org/eic2012/calculator/eitcm1.htm

    For a married household with one child, filing jointly, the calculated EITC is $2,734, not the $4 - $5k you stated in your above post.

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    Default Re: Interesting article on money management/anti consumerism

    Since you have time on your hands to run calcs ( attempting to point out that my estimate was $1,500 in error - which may or may not be the case depending on how the rental income is booked ), I'll let you run calcs on the effect of the 400% of official poverty level on upcoming national health care insurance premium subsidies. As I read the law, those earning less than this level ( = mid $40k in most areas, higher in some ) have their health care premiums and expenses limited to 9.5% of gross income = something on the order of 4-5k per year. But those earning 401%+ of the poverty level no longer fall under those subsidies / limits, thus probable health insurance premium costs instantly jump to ~10k+ per year for the 'qualified' health insurance coverage the exchanges are required to offer after the first of the year.
    Last edited by Melonie; 04-29-2013 at 03:39 PM.

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  4. Interesting Article
    By Bella21 in forum Stripping (was Stripping General)
    Replies: 0
    Last Post: 07-24-2005, 04:55 PM
  5. interesting article....
    By RYAN in forum Body Business
    Replies: 0
    Last Post: 01-19-2004, 11:46 AM

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