Actually, this is part Fribble, part LBYM and part Early Retirement in terms of where it belongs.

Surely, most of you have heard the phrase, "keeping up with the Joneses." Roughly translated, it amounts to "consumer competition" to see who can demonstrate who has "made it" more in life.

I can recall thinking this way, the "he/she who dies with the most toys wins" line of thinking. But have y'all ever thought about how much extra work you have to put in to accumulate all those toys?

A few days ago, someone suggested that my wife and I should move out of our modest 3-bedroom, 2-bathroom, 1200 square foot home and into something more befitting of the increased income we've enjoyed over the last three years or so. After all, don't we have to show the world we've "made it"?

Well, it sounds tempting. But I also think there's one calculation many people fail to take into account, above and beyond whether their savings and/or cash flow will be able to absorb it: How many more years will I *have* to endure the corporate rat race in order to acquire this new toy? This statement is often a bucket of cold water on the face.

Determine how much enjoyment you'll derive out of a purchase, determine how much longer it will force you to remain in the work force, and then decide. If we bought a new home that "kept up with the Joneses" according to our means, I calculated that it would delay our retirement by about nine years given reasonable estimates of earnings, payments, returns on investment and savings rates.

Is it worth nine years of a real-life Dilbert comic strip to show the world you've "made it," when the old home was perfectly sufficient, cozy and safe?

The same is true of a new car. Yeah, I lust after a 2001 Miata, but when I recall $500 payments for five years, realize that means no new investments for five years, that loss of investment compounds over 20 years to delay retirement by two years. It hardly seems worth it in that context, especially when the old '94 T-Bird is still going strong even after 110,000 miles. There's some amount of "living for today" to be done, because we have no assurance we'll have a tomorrow, but the costs should be weighed appropriately.

Sure, maybe I won't *want* to retire at 50 as I currently plan (I'm 35 now). Truthfully, I hope I won't want to retire, because I hope I mostly enjoy my work then. But working because you have to is a loss of empowerment, a loss of control, which makes one feel hopeless and powerless. I suppose I'm preaching to the choir here, but don't you think it helps strengthen your resolve to save rather than spend, when you think about purchases in terms of the years of freedom and financial independence you lose?

I'll let the rabid consumers "keep up with the Joneses" and work until they're 65 or worse. I'd rather buy leisure time, an early end to indentured servitude, and let the Joneses "win." We'll see who the winner is twenty years from now.

#29

We decided to let the Joneses win.. Instead of a new house, we decided to buy a storage shed out back, clean out the garage and turn that into my home office/gym. Since we have a small garage anyway, and an't part the minivan in it, we figure it is much cheaper to spend 5k to turn it into a 'den/homeoffice' than it is to buy a bigger HOUSE..
Keeping our eye on retireing millionaires before turning 60 !!!!! Gives us 28 more years of investing and working... OR LESS...

enjoy

#29 said:
"...don't you think it helps strengthen your resolve to save rather than spend, when you think about purchases in terms of the years of freedom and financial independence you lose?"

We are going through this right now. The remodelled kitchen we want is going to cost 14K., which for us represents about 7 months of after tax savings. To some, it would seem a no brainer, but we are struggling to justify this expenditure. The kitchen we have is perfectly serviceable, albeit old and dated.
From an envirnonmental standpoint, it also seems to border on "sinful" to simply throw out the current cabinets simply because they are old. Anybody else going through this sort of thing? Geez, my partner even told me a slab granite countertop "borders on a SWIG purchase" Ouch! That one hurt! Honest, I just want it cause it's so beautiful, and I don't care who else thinks so!
2002orbust

I haven't been around for a while but this seems like a thread that has been here before. Why does it have to be a rat race? I'm not some wet behind the ears rookie. I'm 46. I teach. I love it. If all my investments doubled I could retire forever. And what would I do then? Sooner or later, I would get bored. We all have a mission or destiny to discover. It you consider your work a rat race, it's obvious it isn't born of love or enthusiasm. I always admired the people who win the lottery and still go to work the next day because they love what they do.
Years ago, a friend told me to "do what I love and love what I do". I thought it was trite being a philosophy graduate so I went the rat way.
It took 20 years to wise up and listen to my heart and go back to teaching children.
I drive a 78 Fairmont with 200,000 miles and I couldn't care less what anyone else-especially the Jones clan- think.
Here's to all us ex-rats.

>> The remodelled kitchen we want is going to cost 14K., which for us represents about 7 months of after tax savings. To some, it would seem a no brainer, but we are struggling to justify this expenditure. The kitchen we have is perfectly serviceable, albeit old and dated. <<

Sounds like our kitchen, actually.

As I said, you have to decide how it set your plans back and make the decision accordingly (which can be kinda tough if the two folks who make the decision can't agree).

In our case, we're probably going to move away when we retire -- sell the house and move to a place with a very low cost of living, pocketing a fair sum of money from the sale of the house in this overpriced area. If an upgraded kitchen can help make a sale or improve resale value by almost as much as we pay, it's worth it. Of course, if you never plan on moving, resale is less of an issue, and comes down to simply your own enjoyment and how much you'll get out of it.

There are no wrong answers -- as long as the decisions are made with sufficient forethought.

Best of luck to you!

#29

>> Why does it have to be a rat race? <<

Probably because a lot of folks spend their first years in the work force trying to maximize income, then when they get burned out, they do whatever they can to be able to do almost anything else.

It doesn't *have* to be a rat race, but most people treat it that way. And when too many people treat it that way, the rats just keep getting faster.

>> I'm 46. I teach. I love it. If all my investments doubled I could retire forever. And what would I do then? Sooner or later, I would get bored. <<

See, that's the thing -- you love what you're doing. Don't confuse "retire" in the sense that we use it as meaning sitting around on your butt in the house all day, doing nothing useful. Really all it means is a declaration of independence from working at any given job because you *have* to financially. I'd consider myself "retired" even if I were still working full time, if I truly loved what I was doing and could quit any time I wanted if the job started to suck.

>> I thought it was trite being a philosophy graduate so I went the rat way. <<

That's what most of us do. And while the pay can be better, the burn-out and stress levels make it a less attractive proposition.

>> It took 20 years to wise up and listen to my heart and go back to teaching children. <<

You're an example of exactly what I'm talking about, then -- you've achieved the point where you can do what you love and not worry about the pay, or feel "stuck" where you are because you need the paycheck. Great feeling, isn't it? I'm saying that's what we should be aspiring to, IMO.

>> I drive a 78 Fairmont with 200,000 miles and I couldn't care less what anyone else-especially the Jones clan- think. <<

That's the attitude I'm talking about. A lot of people *do* care, and they probably don't really realize the ramifications of their decisions. They go on hating their job into their sixties, not even realizing that financial decisions to buy expensive things which provide only marginal enjoyment may have forced them to be miserable for a decade longer than they had to be there.

#29

I don't want anyone to take this personally. I am not attacking anyone's value system here but I am disclosing perhaps a little of my own. Someone posted...

<<<< I always admired the people who win the lottery and still go to work the next day because they love what they do.>>>>>

Well, if this lottery winner owns his own business then I guess he can continue to go to the office each day if that's how he gets his charge. However, if he is a worker/wage earner/employee type of person, and I have seen real life examples of these lottery winner people on TV, I think they should be shot! This kind of behavior is inexcusable!

My reaction to them is: They just won a million dollars (or 10 million or 50 million whatever) they dont need the job anymore.... step down for crice-akes! He's 50+ yrs old, makes 30-40-50 grand a yr has millions in the bank but doesnt want to give it up so some 25 or 30 yr old guy with mouths to feed can maybe at least submit a resume for the job! Or maybe the guy just under him on the ladder might like to move up a notch for a year before HE retires? How much do some people want out of life? No he doesnt OWE those people anything but I couldnt live with myself if I new other people needed the jon and I didn't but I planted my fat @ss in the office and collected a paycheck for another 10 yrs because...man I just love it here!

> the "he/she who dies with the most toys wins" line of thinking

I believe the correct response to this line of thinking is:

"He/She who dies with the most toys, still dies ..."

Your mileage may vary of course ... ;-)

In our case, it's letting the Jones' stay ahead. Different approach, same end (hopefully). Last year we decided to ditch our perfectly ok 3-br, 2 bth 1800 sf house for what will serve for the next 15 years as our dream house. Because of my increased income and an incredible 1999 in the stock market, we decided to convert some of that asset to real estate. We built a 3100 sf, 4 br, house in 2 acres of woods with everything we wanted. But the houses going up around us make ours look modest.

Is this LBYM? Not exactly. But by converting asset money, we avoided an insane mortgage payment that would have required me to sustain the insane rat-race job I'm in now. We got our child off a busy road into a beautiful wooded subdivision. And in 15 years, the house will probably be worth enough to sell and retire off of by itself, not counting the stock market assets we still have. I have exactly the same end goal - retire to a relatively cheap, warm place and keep working part time at whatever I feel like doing. I'll be 52 (54 when my daughter graduates college). And the houses around us will help out (45 ft long master bedrooms!?!?), but they'll be being paid for by people who have absolutely maxed themselves out.

(That said, I could have paid off that mortgage and gone independent this year. But we didn't want to live there.)

Back to the kitchen thread. In general, kitchens and baths will pay for themselves in resale. Just don't do anything nutty. If your cabinets are in good shape you can buy new door fronts for a lot less than new cabinets. A step up would be melamine boxes and wood fronts. You can spend a mint on cabinets or you can spend very little. Visit some places and see whats out there before getting too set on what you want to do. Full extension hinges and dovetail joints will set you back a little. Save those for the house you'll grow old in. There are also lots of roll out baskets and dividers and such that you can get at HD or the Container store and enhance the functionality of your cabinets fairly inexpensively.

An economical flooring choice is linoleum. There are a lot of beautiful textures and patterns now available. Check out Forbo. I don't like vinyl because it can melt if you drop that hot skillet on it. New backsplashes in tile, stainless steel, mirror or laminate can enhance an often unadorned area. Lighting is important. lots of light where you need it: on your hands. And new (yet not commercial grade) appliances can easily update an old kitchen. GE and Frigidaire have very nice stuff.

Granite is recognized as the best counter material by home buyers and its a wonderful surface to work on and maintain. I wouldn't feel bad about wanting to use it. But granite begs for wood cabinets so if you want laminate fronts, go with a laminate counter. I've seen a lot of tile counters lately. They look good but won't hold a cutting board steady. And the grout can get grungy without a lot of toothbrush work.

Most of this work you can probably do yourself, btw. There are plenty of books to walk you through it. That could greatly reduce the cost and assage your guilt. Lastly, if your going to move eventually, do it sooner rather than later so that you get the enjoyment out of it for as long as possible. Don't build it for someone else to enjoy.

nmckay
happy to help with architectural threads

>> Lastly, if your going to move eventually, do it sooner rather than later so that you get the enjoyment out of it for as long as possible. Don't build it for someone else to enjoy. <<

It's funny how human nature works, how you live with something you really don't like for a long time, and then fix it up for someone else.

It's like folks who get all dressed up for the office, looking really good, and then come home to their loved ones and immediately change into their "grubbies." In some sense, we do what we feel we need to, but it makes you wonder...

#29

In keeping with the remodeling thread, one thing I learned from our contractor (before I wanted to kill him) was that, in a small bathroom, make everything LARGE - big vanity, big mirror, big towel bars. It really works!

blissduran

I'll let the rabid consumers "keep up with the Joneses" and work until they're 65 or worse. I'd rather buy leisure time, an early end to indentured servitude, and let the Joneses "win." We'll see who the winner is twenty years from now.

Many of my coworkers expect me to be impressed by their cell phones and pagers. I keep thinking that I'm glad to not be at the beck and call of everybody who has your number(s). How nice to have a conversation without interuptions.

Sometimes I wish I could have a cool new car. Other times I feel like I have nothing to prove, and am secure enough to drive my nine year old sedan. After all, Sam Walton drove an old truck.

Many of my coworkers expect me to be impressed by their cell phones and pagers. I keep thinking that I'm glad to not be at the beck and call of everybody who has your number(s). How nice to have a conversation without interuptions.

I got tired of the coworkers, and administrators, and students, and interns, etc. etc. etc. Quit the university and started my own consulting firm. Now I work about 6 weeks out of the year to make the same annual salary as the university paid for 60 hour weeks, eleven months out of the year.

AND my handicap has gone from 18 to 8!

Rock Chalk, y'all,

Dr. J. Hawk

Lastly, if your going to move eventually, do it sooner rather than later so that you get the enjoyment out of it for as long as possible. Don't build it for someone else to enjoy.


this makes so much sense. DH and I lived 10 years in our first house, a little 800 sq ft ranch that we almost doubled in size by adding a master bedroom and bath. Took us 6 years to do that addition, and we had to stay in the old part of course, with the nasty carpets, dingy walls, dismal heating system, etc. We were living in the new bedroom finally for about 1 year when DH got transferred. Suddenly there I was finishing the addition and then getting new carpeting, paint, etc in the old part, just to sell the place!

So next house was the dream house that we would live in for 15 years. Perfect kitchen, master bath, balconies, everything, designed by us and built for us. Three and a half years later we sell it to get out of the rat race DH had gotten stuck in to pay for it.

House #3, under 2000 sq feet, missing moldings, needing repairs, way up in the cold north, in short something we would never have considered a few years ago. But we love it.

I have heard from my old neighbors the new neighbors of both houses love what we did. I am glad someone is enjoying them, but we are going to enjoy this one, or ELSE!


DLF

ziggy29 is full of great stuff to say today...

"Don't confuse "retire" in the sense that we use it as meaning sitting around on your butt in the house all day, doing nothing useful. Really all it means is a declaration of independence from working at any given job because you *have* to financially. I'd consider myself "retired" even if I were still working full time, if I truly loved what I was doing and could quit any time I wanted if the job started to suck."

The quote above is exactly what I have been trying to explain to my husband. He keeps saying he wants to work until he's 65 or 70. Hey, I say all power to him if that's what he wants to do. But what if he really starts to hate his job at 55 or 60? What if we want to go to the beach for two months like his grandparents do now?

You are right about the freedom aspect. I can taste it and that's why I LBYM!

"Don't confuse "retire" in the sense that we use it as meaning sitting around on your butt in the house
all day, doing nothing useful. Really all it means is a declaration of independence from working at any
given job because you *have* to financially. I'd consider myself "retired" even if I were still working
full time, if I truly loved what I was doing and could quit any time I wanted if the job started to suck."

Beverlx: The quote above is exactly what I have been trying to explain to my husband. He keeps saying he
wants to work until he's 65 or 70. Hey, I say all power to him if that's what he wants to do. But what
if he really starts to hate his job at 55 or 60? What if we want to go to the beach for two months like
his grandparents do now?

Perhaps it would be easier for him to go after if you frase it as FI, or financial independence. I don't think anyone objects to that goal.

Sometimes it's all in how you market the idea.

InParadise

InParadise,

Ah! Very good idea about using the term "financial independence"!

I'm brand new to this forum (LBYM), and already have gotten lots of tips, thanks everyone. This particular post especially resonated with me, because it reminded me that one of the things I hate to keep hearing in the media is: "you consumers, you're wrecking the economy because you're not spending enough, especially on the 'big ticket' items", then, the reverse of the coin: "you people, you're not saving enough, we don't save enough in this country, you're wrecking the economy, what's wrong with you???!!"

So, which is it, do we keep up with the Joneses and "save the economy" (I don't *think* so!) or do we do the smart thing and save money for ourselves (and the economy, I guess)?? I'm definitely working toward the latter.

Thanks,
gkkk4

"So, which is it, do we keep up with the Joneses and "save the economy" (I don't *think* so!) or do we do the smart thing and save money for ourselves (and the economy, I guess)?? I'm definitely working toward the latter."

You can look at this several ways.

First, I like all those people working hard, earning cash, paying Uncle Sam 33 and 36% tax, paying FICA, and working till at least 65, maybe 68 or 70. Keeps the economy going strong.

The mass 'herds' of consumers will continue to consume and the marketeers will continue to woo them with expensive toys, coffees, vacations, cars, houses, etc. No sense fighting the herds.

Second, You just don't have to join them.

Appreciate that they are making your stocks more valuable as they work and spend and spend and spend.

Apprreciate, as you are retired early, that giving up just a little (like 10-15%) of disposable income got you to retirement 10 or 15 (or 20?) years ahead of the others - and they are frantically working away just trying to make ends meet - more stuff takes more money to keep going..... Now you get to enjoy 10-15 years of life without the hassles of work.

Walk, jog, hop, whatever to a different drummer.....on your own plan....no sense to follow what the marketeers have in mind for you....<grin>....no need to follow the lemmings into credit card debt (the average american home has close to $10,000 CC debt), and up to 80% of their annual income in total debt.