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No. of Recommendations: 0
I am frugal maybe a little too much. my current apt is a sublease in a mitchell lama building in nyc. it looks cheap and it is. but now i am getting thrown out and was thinking of buying. according millionaire next door (MND) I should have a mortgage no more than 2.5 x my income. And many mnd's live in a lower middle class neighborhood. man i don't know.

used clothing is another thing. i've done it in the past but to go shopping all the time for that stuff. man i don't know. especially considering how relatively inexpensive clothing is. also they shop at jc penny too...its all polyester clothing.

also unsexy occupations like janitorial services business owner.

it sounds to me like they live the lifestyle of recently arrived immigrants who have questionable legal status and are making do the best way they can. not to mention don't make a lot of money. but its difficult for me to emulate this since i'm pre approved for a whole lot more than 2x my income.
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No. of Recommendations: 19
its difficult for me to emulate this since i'm pre approved for a whole lot more than 2x my income.

Well, in looking at your posting history, in addition to wanting to spend as much on a mortgage as you are pre-qualified for, you also want to get a car payment to buy a Porsche (or maybe a Ford) http://boards.fool.com/should-i-get-a-car-payment-31910291.a... and you are questioning what the use of being financially independent is, yet consider yourself a 'wage slave', even though you "can't imagine not having a job" http://boards.fool.com/is-financial-independence-over-rated-...

Given the pushback you seem to give to everyone who suggests that the things that you are questioning (frugality, LBYM, MND lifestyle, being FI, etc.) actually are worthwhile, it doesn't seem like the answers I would provide you would be useful to you, so I will just suggest that you have a nice time spending, and I hope you manage to keep a job until the day you die, as it seems like you're going to need it.

AJ
- who thinks your characterization of MND lifestyle is way off base
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No. of Recommendations: 11
You're trolling the wrong board. You want to be on the Living Below Your Means board.

Nancy
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Firstly I don't know how I'm trolling when I've been the biggest tightwad for years and always saved and have posted here on and off over the years. Second my car is 17 years old. How much longer do you want me to drive it?

Further, what part is mis-characterizing MND? Why don't you just tell me what the point is of MND?
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No. of Recommendations: 5
not to mention don't make a lot of money. but its difficult for me to emulate this since i'm pre approved for a whole lot more than 2x my income.

There are three different items regarding mortgages:
1.) Keeping a mortgage at less than 250% of your income is a good financial goal. Buying too much house puts the owner in a precarious financial position.
2.) Housing may not be available in that price range and housing prices may be continuing to increase.
3.) You don't have to spend your pre-approval limit
It is a limit and not a goal.

My mortgage was 4x my income, but it was a time of high inflation and I had just started working. Everything worked for me, my income increased and the housing prices have significantly increased. If my income hadn't increased, it would have been very difficult.
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No. of Recommendations: 4
also unsexy occupations like janitorial services business owner.

Being a business owner is a lot of work and isn't sexy. It takes effort and time to build a successful business, but that doesn't mean it won't provide a good income.

I tried it once, and decided I it wasn't for me. It doesn't mean that I put down the gardener for running an unsexy successful business.
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No. of Recommendations: 1
I don't know anyone who does any of the things like live in a lower middle class place; shop at inexpensive stores and / or used merchandise; and drive an older car except people who can't afford it.

I don't think the authors are distorting the truth but, I think there's a reason for it and that is because doing those things really sucks.
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No. of Recommendations: 25
I don't know anyone who does any of the things like live in a lower middle class place; shop at inexpensive stores and / or used merchandise; and drive an older car except people who can't afford it.

I don't think the authors are distorting the truth but, I think there's a reason for it and that is because doing those things really sucks.


Maybe you need to find a new group of friends.

PSU
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my parents don't like the idea either. I mean what happened to location location location when shopping for real estate?
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my parents don't like the idea either. I mean what happened to location location location when shopping for real estate?

Your post show extremes in viewing things that make up your lifestyle. Used 17 year old car vs Porsche? How about a 3 year old passenger car or even a new car that you maintain well for a long time? Lower middle class or what? I get a sense from your posts its a house in a high crime area vs gated community. You appear to not even consider used merchandise. Some stuff on craigslist still have the sales tags on them. My coworker just bought a pair of Danner boots that retail for $300 for $35 off of craigslist.

PSU
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No. of Recommendations: 3
I don't know anyone who does any of the things like live in a lower middle class place; shop at inexpensive stores and / or used merchandise; and drive an older car except people who can't afford it.

or don't like spending ridiculous amounts of money on a car. I still consider my Prius new, and it is 7 years old. My previous car had reached the point of where reliability and maintainability were issues. I won't tolerate an unreliable car, but that doesn't mean I am going to buy a Porsche, BMW or Tesla.

I don't think the authors are distorting the truth but, I think there's a reason for it and that is because doing those things really sucks.

Shopping for quality when it is of value is reasonable. Inexpensive stores can be appropriate for some items. I won't buy wrapping paper from the Dollar Store. It is simply to frustrating to use it. Bows and other gift wrap accessories from the Dollar store are acceptable.

I don't consider JC Penny that cheap. Since I don't shop there I don't know about the current quality of their clothes. I don't remember their housewares being that cheap.

Giving up recreational shopping and not allowing impulse buying is the easiest way to stop buying unnecessary stuff. Yesterday, I was in CVS to buy suntan lotion and wandered through their Halloween decorations. It wasn't easy, but I left with buying only what I went into the store to buy.
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No. of Recommendations: 13
SlickNik,

You wrote, I don't know anyone who does any of the things like live in a lower middle class place; shop at inexpensive stores and / or used merchandise; and drive an older car except people who can't afford it.

Maybe you need to hang out with different people. Of course most frugal people don't hang out places that cost them money. Most would spend time at home or the library or they'd spend time riding a bike or something that costs next to nothing.

If I were willing to work to 67, I could spend a great deal more than I do. I spend less than 1/6th of my gross on housing. My mortgage is a bit under 2x my gross. I own my own home (Seattle east-side); but it's a townhouse in an area where all the single-family homes are being bought up and torn down to make way for multi-million dollar homes that have more than twice the floor space; but they're on tiny lots, right up against their neighbors. Or the new builds are condos or apartments. If I really wanted more house, I wouldn't increase the mortgage by much - I'd put some of my savings into it instead. (I could pay off my mortgage right now, if I were willing to cash in my taxable stock investments.)

My car is 10 years old. But I bought it new. I didn't pay cash - mainly because banks were paying almost as much in interest as my loan and I wanted the cash on-hand. But less than a year later than changed, so I paid off the note. I've not had a car loan in over 9 years. Sure, I bought new. But I've bought used too - back when I couldn't really afford to buy new with cash. My last car I took from my ex shortly before we separated. It was over 12 years old before I replaced it. It had over 250,000 miles on it. I sold it to my (adult) son for cheap.

I also buy at inexpensive stores. I like J.C. Penney's. But I think they're too expensive half the time. Kohl's items on clearance with one of their 20 or 30% store-wide discounts is more my speed. I don't buy used clothes, mainly because the selection sucks and they don't last as long and I'm fairly hard to fit. But if a shirt is much more than $10, I'm probably not buying. Pants? Maybe $20. I'm only willing to spend money on shoes because walking on shoes that aren't comfortable has other consequences. Even so, my boots only cost $30, my walking shoes were about $50, while my dress shoes and sandals were $100 each. Most of my clothes are cotton. I won't wear poly, except for dress pants that have it in a blend to reduce wrinkles. Poly makes me itch.

By your definition, I probably don't live all that frugally. But then again I could "afford" to buy a lot more expensive things than I do. Instead I save what I don't spend so I can retire early...

And I haven't always lived that frugally. OK, that's not entirely true. My ex-wife didn't live that frugally, so I didn't by extension. My current good financial position is only a result of about 15 years of frugal living and saving. Before the separation and divorce, I'd say I was struggling to stay afloat.

- Joel
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No. of Recommendations: 4
heh heh....

My first car I had a note.....traded in in....and had a note for half the car.....the next car, after I was 7 years out of college...paid for in cash and never have bought a car on credit since.

Did buy a house and had a mortgage...sold it when I had to move and bought a townhouse - 25% down. Paid it off in 7 years. Moved to TX.....didn't need a mortgage on my 4 bedroom house. Had the cash.

The MND is a great book.

I drive two cars...a 2007 Prius (paid for in cash when I bought it0 and a 2009 CHevy Malibu. Time to trade the Malibu as it has 170,000 miles and is getting tired. Of course, I'll pay cash for the next car.

I buy my clothes at JC Penny or Walmart. Wear Jeans, shorts and tee shirts most of the year.

Retired 16 years ago......by being LBYM and following the MND philosophy.

Had my Corvette back in the 70s....got sports cars out of my system. Had vans.....then I just buy 'transportation'.

One HOnda Accord (1990 to 2007) was 17 years old when I sold it. Nice car but getting old. Seat sagging. rubber gaskets and bushings going. Sat many days out in sun at work (10 years worth).....in parking lot.

Ya gotta be kidding Nick. Porsche? Heck, only if you can afford to write check out of your petty cash account. Especially if you are in NYC! Heck, the insurance would run you $10K a year or more.
Plus $500 or $1000 a month to garage it.

The MND doesn't live in the city.


t
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No. of Recommendations: 34
Further, what part is mis-characterizing MND? Why don't you just tell me what the point is of MND?

The point of MND is that part of your lifestyle should include accumulating wealth, and not just spending all of your income. In order to do that, you need to live a lifestyle below what your gross income would suggest you could live. That does not mean:
- Living in a lower middle class neighborhood
- Buying all clothing as used
- living a lifestyle of a newly arrived immigrant with questionable legal status
- Living an unsavory lifestyle

It does mean:
- Not spending money before you get it by using credit cards or loans to supplement or pre-spend your income
- Not buying more house than you (1) need and (2) can afford without giving up things like saving for retirement and having fully funded emergency savings
- Spending only what you have to spend, rather than what you want to spend
- Determining what your true needs vs. wants are, and limiting your spending on the wants to be sure that all of the needs (including savings and investments) are taken care of first
- Doing some basic planning to ensure, at a minimum, your needs will be taken care of for your entire lifetime

AJ
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hey man just observing the people i see in lower mddle class residential areas and the ones who shop at thrift stores and jc pennys.
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No. of Recommendations: 10
My husband and I would fall into MND status pretty well. And it doesn't suck to live that lifestyle.

I think where the MND comes in is that people who tend to build wealth spend on things they value and don't spend on things they don't value. People without wealth may tend to either spend where there isn't value or else they value different things that the MND people don't, and those values generally don't help them in building wealth.

I drove a 15 year old car until recently when I did replace it (but plan to drive this one for 15 years). I prefer to shop for clothing used - it is much quicker and easier (my stores of choice sort the clothes by size and color, so I go to one place and can easily try on anything of interest and be in and out fast) and I don't have to feel bad if I ruin something doing yard work or spilling on it. I grocery shop at a combination of places, including Aldi's, which is a big discounter. I get my hair cut at an inexpensive no-appointment place and it's turns out as good as when I have gotten it done at a more expensive salon.

I recall when I owned a rental property my tenant used to spend her rent on dry cleaning, hair and nail appointments, and eating out. She valued those things. However, her job was a phone receptionist job where nobody ever saw her, and paid moderately low wages. She could not maintain that lifestyle on that income. For me looking on, I did not understand why she found value in those things. But that was her choice - she was always broke and late on rent and eventually got evicted. At a younger point in my life I had earned similar wages, but lived a much more frugal lifestyle and was able to build a nice nest

I do not find value in cars and clothes other than utilitarian value, so it is not worth it to me to spend more on them than I do. We did recently buy a nice house on a waterfront, which was not cheap, but it was reasonably priced for what it was and we have a mortgage of only about 1x our annual income (and can pay it off if we want at any time). We travel a couple times a year and while we try to find the best fares and so forth, we do not do it on the super cheap (no backpacking, etc) because we value comfortable travel.

We do buy what we want to, so it's not like we are living super frugally, but we are still spending much below them because we tend to spend where we find value and not on things that we don't highly value.
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No. of Recommendations: 3
We do buy what we want to, so it's not like we are living super frugally, but we are still spending much below them because we tend to spend where we find value and not on things that we don't highly value.</>

And I suspect you don't find value in things that other people give status to, like expensive cars, or expensive restaurants, and definitely not clothing.

I bought a pair of jeans yesterday. They're from Beans, and they last for years. I can't remember when I bought the most recent pair, but the older pair is developing a see-through look, and needs to be replaced.

I do have to get my hair cut at expensive places, unfortunately. I've tried cheap places, and it looks like I cut it off, in the dark, by myself. The people who have given me good cuts, places where I go back again and again, have informed me that I have incredibly complicated hair (it doesn't look complicated: it looks short with a little wave at the ends) but it seems I have 17 cowlicks.

So, like so many, I chose what I spend money on, and what I chose isn't always what others might value.

Nancy
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No. of Recommendations: 6
We do buy what we want to, so it's not like we are living super frugally, but we are still spending much below them because we tend to spend where we find value and not on things that we don't highly value.

And I suspect you don't find value in things that other people give status to, like expensive cars, or expensive restaurants, and definitely not clothing.


This. MND was very influential in my thinking on asset building. When I read it, I knew I would never be a millionaire, because I did too many things wrong. I didn't marry someone more frugal than myself. I didn't stay married for life. I not only didn't own a business, I had no interest in being an entrepreneur.

But my values lined up with many of the MND values, particularly in not spending money on things that I don't value. To me, a car is transportation. In 2007, when used cars were too costly to justify buying one, I couldn't justify buying a Prius instead of a Hyundai Accent because at $4 gasoline, it would take 180,000 miles to break even on the capital cost. 8 years later, I've driven ~65,000 miles on that Accent. I'll be keeping it at least two more years, more if it keeps performing well.

It took me a full year to get used to the idea that I had a net worth in 7 digits. No, I'm not as wealthy as the people Stanley and Danko profiled, even if you don't take inflation into account. But I have enough.

It's not about an unsavory, hyper-cheap lifestyle. It's about an attitude of not wasting money on things that aren't of value, and not being impressed with status as a value. Sometimes, paying a premium price for higher quality is worth every penny. Frequently, paying a premium price gets only a tiny amount of quality with the big helping of marketed status. The attitude is about making sure I get good value for my money, not about spending the least possible.

So, like so many, I chose what I spend money on, and what I chose isn't always what others might value.

And this. The biggest waste of money is buying for other people's values instead of your own. Learn to buy your own values, and there's a decent chance you'll have enough even if you aren't the MND.

Patzer
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No. of Recommendations: 35
My wife is an immigrant, so we are outliers even among MNDs. We have always lived well below our means. Our mortgage was about half what we were approved for and we paid the house off in three years (wife's preference (not recommended)). We splurged on a good school district and now one kid is at Rice and the other is applying for Stanford.

Since I don't have a white collar career, I wouldn't think of buying new clothes. I buy a new pair of jeans every few years. I buy top quality shoes to prevent injury. The suit I bought for our wedding day is the only one I've ever owned.

We buy only new (wife's preference (not recommended)) Japanese cars and keep them over 10 years: 2001 Corolla, 2009 CRV, 2012 Prius, 2014 Fit.

We clip coupons and eat simple foods which are mostly stir fry and rice. We splurge on fruit and fresh vegetables. We stayed in hostels after splurging on a flight to New Zealand and ate one meal a day in budget restaurants. We brought back nothing but photographs and memories.

Since we have always saved a lot whether our income was high or low, I now manage a seven figure portfolio full-time and walk to the gym to save gas and burn more fat. Staying healthy saves money. No one would dream how wealthy we are and we like it that way. We just smile and nod when our neighbors talk about all the things they "need" and how hard they work to get them.
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No. of Recommendations: 10
shop at inexpensive stores and / or used merchandise; and drive an older car except people who can't afford it.

I recently bought a new car. New to me, that is, a 2011 Infiniti G-37. Before that I had a 1997 Infinity J-30T. (Still do, actually, because I didn't trade it in, the value was so low.) So I bought myself a really nice car and then drove it for 15 years. Also have a 1996 Geo Tracker, which we pull behind our 1996 DutchStar RV.

I shop at inexpensive stores, I occasionally go to flea markets or Goodwill type stores and buy "used" merchandise (I just got a Teeter Hangup kind of thing for $35 instead of $350.) And our house is lovely, but perhaps surprisingly middle class.

Now I say the following only for the purpose of responding to your last six words. I could buy a 2015 Infiniti off the showroom floor if I wanted to. Actually, I could buy 80 of them, but I choose not to since that would be absurd, and I bought the used one because *I liked it*, and I was happy to let some other idiot eat the depreciation of the first three years, which is when the biggest hit comes. I saw little difference between the '11 and the '15, so I didn't need to spend another $30k for no particular reason. Same thing with the Teeter Hangup, and likewise with the house.

Oh, I would like to have a new RV, but the one we have has given us quite good service, and what's the point, really? A roof, a bed, a kitchen, an engine, a generator, that's pretty much all we need. More, actually, because it's a splurge, but then perhaps we could afford it because we didn't buy the new car every year or two, we have fun walking around the Goodwill store, and I even enjoy buying something on Amazon with a cash back card and saving twice.

There is some good advice in The Millionaire Next Door. Follow it and you'll be the Million Who Lives Here. Think about it.
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No. of Recommendations: 3
Having visited Goofy at his house, I can vouch for its loveliness, especially Goofy's professional quality DIY home improvements such as custom designed & built closets and lovely bathrooms.

We each pick & choose what things we find worth spending on and what are good avenues for saving.

I cut my own hair, do my own nails, seldom wear makeup, don't buy pricy lotions/perfumes/jewelry, and only purchase new clothes/accessories when something dies and I have to replace it. I know poor women who spend much more on grooming/outfitting themselves than I do! Even the hubster gets 2-3 haircuts a year at the cheap barbershop.

BUT. I spend a lot on food...go out often for raw northern-waters oysters ($30/dozen at the local joint), buy pastured meat, wild fish (no farm-raised tilapia for this lady ;-), organic produce, cooked in Le Creuset and All-Clad pots and prepped with a $180 Japanese chef's knife. And a Vitamix--an older style purchased at Costco for hundreds less than the latest. But not second-hand.

I used to take a pricy trip most years, but not lately. I do get a nice facial once in a while.

I moved a lot and put a larger percentage down every time, until my last house for which we paid cash. Second to last was 2/3 down. Cash for cars. I've never been in consumer debt, and I was working poor in my 20s and barely middle class in my 30s. I didn't get ahead of myself.

I'm cheap about utilities. Cell phones only--no landline, no cable/dish tv just internet, we conserve water and electricity. We clean our own house but pay landscapers to do the yard.
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No. of Recommendations: 5
Probably most of the people you see in lower-middle-class areas, shopping at thrift stores, etc. cannot afford more. But how do you know a few of them aren't much better off than your observations suggest? Are you asking them about their savings account balances?

You might find me at a thrift store occasionally. I prefer new clothes as a general rule, but most of them come from Costco or Walmart sales racks. The fact is I only clothes shop about once a year, and it's just to replace whatever is old/threadbare enough to toss out. You might see me driving my 1992 Honda Civic.

Now, I do have things that shout "higher income" but you're not likely to see them unless I invite you to my home. You'd never look at me on the street and guess I'm a millionaire. You'd look at me and assume you're better off. And that's how my savings account and I like it.
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These stories are great but you all sound like Millionaire Next Door light.

I did not take "we choose what to spend money on" as what the theme of the book. Although foregoing status items is part of it -- and it sounds like most here took that a way from the book -- there is a lot more to it than that however.

It sounds like to me you are just borrowing ideas from the book and made them your own and I don't know if you're millionaires or not anyway.

I didn't make that part up about living in a lower middle class neighborhood. It's in the book. And having just looked at a co-op in a lower middle class area -- I think it would really suck living there especially since I'm pre approved for more and, if I were a successful business owner; such a thought would be out of the question.



Page 3 from the book describing the typical MND: "He is a compulsive saver and investor."





Full Definition of COMPULSIVE


1: having power to compel
2: of, relating to, caused by, or suggestive of psychological compulsion or obsession <compulsive actions> <a compulsive gambler>
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Page 3 from the book describing the typical MND: "He is a compulsive saver and investor."

That would be me. Also I bought a house for 1/3 the amount I am qualified to buy.

PSU
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No. of Recommendations: 19
I didn't make that part up about living in a lower middle class neighborhood. It's in the book.

Really? There is one reference to 'lower middle-class' in the entire book. (Here's a link to a PDF of the book, so you can search it yourself: http://davidbeitler.com/temp/The%20Millionaire%20Next%20Door... ) It's on page 8:

Big Hat No Cattle

We first heard this expression from a thirty-five-year-old Texan. He owned a very successful business that rebuilt large diesel engines. But he drove a ten-year-old car and wore jeans and a buckskin shirt. He lived in a modest house in a lower-middle-class area. His neighbors were postal clerks, firemen, and mechanics.


Immediately after, beginning on page 8, the book profiles the 'typical' millionaire, including the value of the houses they live in, on page 9:

Most of us (97 percent) are homeowners. We live in homes currently valued at an average of $320,000.

For context, this book was published in 1996, and the most recent survey that the authors based their book on was done from May 1995 - Jan 1996. In Jan, 1996, per the US Census Bureau http://www.census.gov/const/uspricemon.pdf the median home sales price in the US was $131,900 and the average home sales price was $155,300. Given that the average millionaire lived in a house that was more than twice either of those prices, I will refer you back to a statement in my last post:

That does not mean:
- Living in a lower middle class neighborhood

And having just looked at a co-op in a lower middle class area -- I think it would really suck living there especially since I'm pre approved for more

If that's what you value, then go ahead and spend more. If you want to be a millionaire, you will temper what you value with what you need to spend to get it. If you don't want to be a millionaire, then why do you seem to be seeking approval to spend that much?

AJ
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No. of Recommendations: 3
I don't know anyone who does any of the things like live in a lower middle class place; shop at inexpensive stores and / or used merchandise; and drive an older car except people who can't afford it.

I don't think the authors are distorting the truth but, I think there's a reason for it and that is because doing those things really sucks.



What would Warren Buffett drive? Where would he live?

With an estimated fortune of $46 billion, Warren Buffett can buy pretty much anything he wants. Unlike many of his fellow billionaires, however, the country's second-richest man has no interest in expensive symbols of wealth.

...

Buffett, who famously still lives in the modest Omaha house he bought for $31,500 in 1958 and drives a Cadillac he bought "about 6 or 7" years ago, said his idea of a perfect day involves being alone with no interruptions so he can read and think.


http://www.cnbc.com/id/49787452
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No. of Recommendations: 5
I don't know if you're millionaires or not anyway.

A million isn't worth as much as it use to be worth.

I don't doubt that there are quite a few millionaires here and that most millionaires are living an average middle class life. A million doesn't produce enough income to be living an upper middle class life.
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No. of Recommendations: 6
It sounds like to me you are just borrowing ideas from the book and made them your own and

So? Everyone is responsible for their own financial choices. Many of the suggestions in Millionaire Next Door are good and some are dated. I bought more house than it recommended, and it was a good choice for me. I have never owned a high end car and don't aspire to one. We have always saved/invested. If out net worth was double, I would consider moving. My husband placed retirement over a larger house and increased net worth.

I have watched Suze Orman and found her entertaining, and ignored many of her suggestions. I consider the person behind Rich Dad/Poor Dad to be a liar. David Ramsey preaches to those who are deep in debt. I don't find him relevant. All personal opinions, and I don't care what other's think.

Rather than continuing to rail against MND and trying to disprove it, have you sat down and created a budget based on what is important to you?
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No. of Recommendations: 4
"I don't doubt that there are quite a few millionaires here and that most millionaires are living an average middle class life. A million doesn't produce enough income to be living an upper middle class life. "

True.....you'd be hard pressed these days to even reliably get 4% SWR out of it. But...if you had a company or government pension of , say, $35,000 a year, and maybe wife too.......and you both collected SS of say......$40,000 a year for both....well.....you'd be over a $100,00 a year in income which ain't shabby.

Depends what your reality is.

------

"It sounds like to me you are just borrowing ideas from the book and made them your own and "

Why not? If they are sound principles!

-----
"I have watched Suze Orman and found her entertaining, and ignored many of her suggestions. I consider the person behind Rich Dad/Poor Dad to be a liar. David Ramsey preaches to those who are deep in debt. I don't find him relevant. All personal opinions, and I don't care what other's think. "

Suze Orman gave decent advice and wrote decent books till the financial crash. Then she literally imploded, telling folks 'if you don't feel comfortable owning stocks (after the had crashed 35%) - sell them'....and those who followed her advice were screwed. Market recovered shortly thereafter. She's been pretty well absent other than some PBS type re-runs and hypes.

Rich Dad/Poor dad author was a scam artist from day one and still is. Thoroughly debunked on the internet.

If you need financial advice , turn to Scott Burns, or re read your TMND and Boggle on Mutual Funds.

---------
I enjoyed reading TMND. I watched many of my co workers blow through a half million or more. fancy $50,000 sports cars. Moved up from $150K or $200K houses to $350K or $400K houses to 'capture' the equity gain of a 'larger house' .......which ate more of their income in utilities and buying furniture and landscaping and everything else.....but 'everyone' else was doing it.....and they likely had 3 or 4 cars for 2 people, plus an RV.....and maybe jet skis and boats....


I saved 35-45% of my take home pay. Bought a nice house in 1990 when I got transferred to TX. About 2.2 times my salary. Paid it off in 7 years because I put 50% down. 4 bedrooms, 3 bath, family and dining room, too.......pool...... company paid all the closing cost..and the only reason I bought that much house is I sold a town house in the DC area and the tax law was such you paid 28% cap gains tax unless you bought a 'similar' or higher price house.


Bought a 1990 Honda in 1990 and kept it 17 years.

Retired at 52.5 at the end of 1999 - no pension.

Retired now 17 years. Finances doing fine.

I don't eat expensive steaks. I eat out but average $10 or under for dinner/lunch when I do. I travel a lot but stay at Super 8 or Motel 6. I drive a Chevy Malibu - 2009. Most days I wear shorts and tee -shirt, or blue jeans and flannel shirt in the winter time.

I join the town gym for $100 a year senior rate - no need for fancy $80/month health clubs.......

It's your life and money. Who knows? An asteroid could end it all tomorrow......but I'm still planning on living to 95. And having the money to do it.

Everyone should read TMND .....to get 'calibrated'......

There are lots of people who EARN and SPEND lots of money and have no assets. They aren't rich...but ARE the targets of politicians who want more of their income.

I just like to fly under the radar. Drive up to a fancy restaurant in a top end Mercedes...and the car hop expects a $20 tip. For a 7 year old Malibu? $5 will do it..... or drive up to a store....the clerks watch to see what you drive...and the price is accordingly at some of them....or the bargaining. Heck, they ain't stupid. Not that I go to restaurants with car hops...heh heh.....Golden Corral or Furr's Buffet is more like it. or the Fishmonger. Or Red Lobster.




t.
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Suze Orman gave decent advice and wrote decent books till the financial crash. Then she literally imploded, telling folks 'if you don't feel comfortable owning stocks (after the had crashed 35%) - sell them'....and those who followed her advice were screwed. Market recovered shortly thereafter. She's been pretty well absent other than some PBS type re-runs and hypes.

I had wondered what happened to her. We gave up cable before the crash. She still shows up on PBS occasionally.

Rich Dad/Poor dad author was a scam artist from day one and still is. Thoroughly debunked on the internet.

It hasn't stopped him (who shall remain unnamed because he annoys me to the point I can't remember his name) from continuing to hold events.
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Buffet sold a multi million dollar house in laguna beach CA

He also has his own plane

He's also in his 80s and still working.

Compare that w everyone on the finance boards who wants to retire before 65 for some inexplicable reason.
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Re: Suze Orman

She also had a show on CNBC that I think aired on Saturday nights until a few months ago. Decent show where she dished out personal finance advice to people hopelessly in debt. When it wasn't football season, my wife and I would watch it occasionally.

Here's an article from the Washington Post talking about the show going off the air:

https://www.washingtonpost.com/entertainment/tv/so-long-suze...

- Matt
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Compare that w everyone on the finance boards who wants to retire before 65 for some inexplicable reason.

Work is a four letter word.

PSU
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Compare that w everyone on the finance boards who wants to retire before 65 for some inexplicable reason.

Buffet has a job that he enjoys, and has control of his working environment.

Most jobs wear on people. Until a couple months ago, I didn't have any plans to retire. Things can change quickly.
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Keep reading the book AJ they go into more detail later about mortgages
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Compare that w everyone on the finance boards who wants to retire before 65 for some inexplicable reason.

It's not so much retirement as it is more financial independence to live your life without being tethered to a particular place of employment or career. If you've built a career over many years, it's very difficult to walk away from that and essentially start over in something new unless you are financially independent.

I enjoy my job and have worked in this field for many years; at this point in my life, it would be difficult to change careers but there are other things I'd like to do so I'm working toward becoming financially independent.

Minxie
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Keep reading the book AJ I've read the book.'

I've read the book, TYVM.

they go into more detail later about mortgages

Oh, you mean this, starting on page 68?

If you're not yet wealthy but want to be someday, never purchase a home that requires a mortgage that is more than twice your household's total annual realized income.

Living in less costly areas can enable you to spend less and to invest more of your income. You will pay less for your home and correspondingly less for your property taxes. Your neighbors will be less likely to drive expensive motor vehicles. You will find it easier to keep up, even ahead, of the Joneses and still accumulate wealth.

It's your choice. Perhaps you will make a better one than a young stock broker, Bob, we recently advised. We gave him the same advice about the ideal ratio of home price to income. This thirty-seven-year old broker had a total realized income of $84,000. He wanted our advice about buying a $310,000 home. He planned to make a down payment of $60,000. He also planned to become wealthy. Carrying a $250,000 mortgage, we felt, would be an impediment to his goal.

We suggested that he buy something less expensive, such as a $200,000 home with a $140,000 mortgage. This would be within the parameters of the rule. Bob rejected this advice. He did not want to live in a neighborhood full of "truckers and construction workers." After all, he is a financial consultant and a college graduate.

But what Bob does not realize is that many construction workers and their spouses have combined incomes of more than $84,000. Of course, his mortgage broker told him he was qualified for a $250,000 mortgage. But that's like asking a fox to estimate the number of chickens in your coop.


Can you find 'lower middle class' anywhere in that section? I can't. I did see Bob's perception that he would be living in a neighborhood of "truckers and construction workers" - but I would question that perception. I bought a house for $201k, putting 20% down, at a time when I was making more than Bob. Sure, I had a neighbor who was a postal worker on one side. But on the other side, I had a neighbor who was a marketing manager. And behind me, I had a consulting engineer. I have a master's degree and work in Financial Services.

As the authors say - it's your choice. But the couple of times that I had a mortgage that was more than twice my salary were also, probably not coincidentally, the times I felt most stressed about my personal finances.

AJ
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I enjoy my job and have worked in this field for many years; at this point in my life, it would be difficult to change careers but there are other things I'd like to do so I'm working toward becoming financially independent.

Working at 80 should be a choice and not a need.

A widowed co-worker who is over 70 has decided to retire because of an upcoming marriage. Working hasn't been a financial requirement for quite awhile.

Another employee in my building looks in his 70s, but illness has prematurely aged him. He is very frail, using oxygen and a walker. It is clearly a struggle to even get to his office. Working everyday can't be a choice.

My husband chose to retire several years ago. I don't like some of my new job responsibilities, and they are causing stress. Changing jobs would require a commitment that I just don't want at this time in my life. It is time to make an exit plan. Since we have been financially responsibility, it could be today and that helps in managing the situation. I am making (and prepaying most of the cost) travel plans that will force me to retire next year. A much better position that if we were in debt and one or both of us needed to work for another decade.
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Can you find 'lower middle class' anywhere in that section? I can't. I did see Bob's perception that he would be living in a neighborhood of "truckers and construction workers" - but I would question that perception. I bought a house for $201k, putting 20% down, at a time when I was making more than Bob. Sure, I had a neighbor who was a postal worker on one side. But on the other side, I had a neighbor who was a marketing manager. And behind me, I had a consulting engineer.

=======================================

As someone who works in the construction/trucking field (we are in repair of heavy equipment) I really question whether your neighbors are better neighbors than the truckers and construction workers would be.
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It sounds like to me you are just borrowing ideas from the book and made them your own and I don't know if you're millionaires or not anyway.

Right. The people in the book weren't really millionaires either. It was all fiction. No millionaires exist outside of pro sports, media stars, and fortune 500 CEOs. That's it. No regular folks with a decent-ish income could possible live below their means consistently for a number of years and save up. It's just a crazy pipe dream.

And nobody with access to a credit card could possibly forgo clothes shopping at the trendy stores or whatever other excuses you've got. Nobody could ever save any of their paycheck. The whole idea is preposterous.

You're conclusion seems to be that The Millionaire Next Door isn't reasonable. My conclusion is that you just aren't the type that has the will-power to make the choices that could turn you into the type the book talks about.

Sure, we probably, as a group, don't ALL do EVERYTHING the book mentions. We pick and choose some options that work for us, or adapt them, or come up with our own strategies. Whatever. The point is that we've done enough to achieved our financial goals.

I wish you luck in life, and hope that our government doesn't tax me more to subsidize your later years.

xtn
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As someone who works in the construction/trucking field (we are in repair of heavy equipment) I really question whether your neighbors are better neighbors than the truckers and construction workers would be.

Preach it!

Where are those bank managers and dentists going to be when you want help replacing some fence panels or something. Blue-collar folks all day long in my book!
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As someone who works in the construction/trucking field (we are in repair of heavy equipment) I really question whether your neighbors are better neighbors than the truckers and construction workers would be.

I'm confused. Where did I say that my neighbors were any better (or worse) than having truckers and construction workers for neighbors? All I did was give their professions, to show that the professions weren't in synch with Bob's (and apparently, the OP's) perception of what professions the neighbors of a $200k house that required a mortgage of less than twice one's income would have.

Actually, I like having truckers, construction and trades workers as neighbors. Many are willing to provide guidance (and sometimes, help) on home projects. Due to the practical, hands-on nature of their work, they can have shortcuts and/or suggestions for practical, cheaper solutions.

AJ
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sorry if you took it personal but yes the authors recommending that to the white collar worker (a finance professional I think??) who did not want to live in such an area is exactly what I am talking about. Incidentally I live in a building where I make 3x what the income limit as a subleasor but that as you can imagine is coming to an end (through no choice of my own).
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Also we're talking about a book from 20 years ago w/ housing prices from that period as well.

Also it is worthy to note that living in a high cost of living area -- with bubble like housing prices -- should be taken into account as well. 200k might get you a mini mansion in some parts of the country ...in some where like DC or San Francisco it prolly get you a apartment the size of a closet in a high crime area.
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Really? There is one reference to 'lower middle-class' in the entire book. (Here's a link to a PDF of the book, so you can search it yourself:

Thanks for posting that link! I am skimming through it today for the first time. It's pretty timeless advice.
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Also it is worthy to note that living in a high cost of living area -- with bubble like housing prices -- should be taken into account as well. 200k might get you a mini mansion in some parts of the country ...in some where like DC or San Francisco it prolly get you a apartment the size of a closet in a high crime area.

In DC or San Francisco, pay rates are higher than in lower cost of living areas. They often are not enough higher to make up for the much higher cost of housing, but that's the choice that people who choose to live in those areas make. But it's their choice, and it still doesn't negate the fact that spending more on housing allows you less to spend on other things, like investing and retirement savings.

Personally, I have turned down an opportunity to work in the San Francisco area because the pay increase would not have been enough to pay for the type of housing that I wanted to live in, and still allow me to pay for what else I valued.

AJ
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OK fair enough but spending 2x times the median or avg income, on a mortgage, in such areas doesn't get you a house in a solidly middle class area is the point.
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I wish you luck in life, and hope that our government doesn't tax me more to subsidize your later years.

That's my biggest concern. Maybe I'm doing it all wrong. I should just blow my money on fun stuff.

PSU
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Also it is worthy to note that living in a high cost of living area -- with bubble like housing prices -- should be taken into account as well. 200k might get you a mini mansion in some parts of the country ...in some where like DC or San Francisco it prolly get you a apartment the size of a closet in a high crime area.

200K won't buy you anything in San Francisco. I live in Silicon Valley. If I was in the market to buy a house now, I would consider moving out of the area. When I bought a house it was about 4.5 times my income. The price for the same house is now around 7 times my income. If we were younger and my husband was still working, then it would be doable to buy a house but not in the 2 to 3 times income range.

You are assuming just because housing prices are high they are in a bubble. When it comes to real estate, it is location, location, location. Locally, the recession caused a temporary drop in housing prices, and those that had to sell at that time had problems. Even during the worst part of the foreclosure crisis, most local cities had a limited amount of inventory on the market. Stockton which has been referred to as the foreclosure epicenter is only about 80 miles away, and may never recover.
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Page 1 from the book


"...Then we discovered something even odder: Many people who have a great deal of wealth do not even live in upscale neighborhoods."
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Page 1 from the book


"...Then we discovered something even odder: Many people who have a great deal of wealth do not even live in upscale neighborhoods."


So?

There is a lot of housing between lower middle class and upscale neighborhood.

You don't need our approval for your choice of housing. Just don't ask me for a handout someday.

PSU
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Why would I ask you for a hand out?
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The funny thing is I like MND and live a pretty frugal lifestyle.

Aside from the housing thing - which seems to be dated given today's prices I am very frugal.
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OK fair enough but spending 2x times the median or avg income, on a mortgage, in such areas doesn't get you a house in a solidly middle class area is the point.

Gosh, I missed that point when you said And many mnd's live in a lower middle class neighborhood in your first post.

I think the point is - many MNDs choose not to live in high cost areas, so they don't have to have a mortgage more than 2x their income, and can still live in a solidly middle class area.

Since you have chosen to live in a high cost area like NYC, maybe your choice should be to rent, rather than buy.

AJ
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My take-away from TMND was that a lot of millionaires are not who you think would be the millionaire. That often times it's not the heart surgeon with the Porsche 911 and the boat. That it's often landlords who own multiple small apartment complexes in unglamourous parts of town, someone who owns a parking lot/deck, etc. Things we would think of as more "blue collar" type jobs or businesses. And they didn't become millionaires overnight. But the way they became millionaires was by not constantly "trading up" their lifestyle/consumer habits. They didn't care about trying to impress people. So as they built their business and their business grew, they maintained many of the same habits they had when they were just starting out. And (compared to say a heart surgeon) they didn't have high-pressure jobs and liked it that way. My other take away was a lot of them if married with a family, the spouse was usually a SAHP (probably partly due to when the book was written). And some of that probably goes into why they stayed careful with their money, because they were the sole provider while they were building their business and if something happened to them they probably didn't have tons in life insurance on themselves.

Most on this board aren't business owners. So we're somewhere in between where we work as an employee, probably have to stay up to date in our field, sometimes want to splurge on ourselves because we work hard, but also know they only way to really get ahead is to buy assets with one's money instead of just consumer goods that lose value.
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OK fair enough but spending 2x times the median or avg income on a mortgage...

The cost of a house and the amount borrowed in mortgage debt are only loosely connected. Particularly so for a "mnd" type of saver.

As a self-described "tightwad" saver I'd have expected you to be more cognizant of that fact. A smaller mortgage is simple, just make a larger downpayment.
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He's also in his 80s and still working.

Compare that w everyone on the finance boards who wants to retire before 65 for some inexplicable reason.


Here's the thing about the Buffets, Steve Jobs, etc: they found something they're passionate about and they happen to be able to make a living doing it. That's why they do it until they die and no matter how much money they accumulate.

A LOT of other people, most people probably, only work to make money. Some people are interested in so many different things, they're not passionate about one single things. And a lot of people just can't make a living doing what they're passionate about.

So that's why once they accumulate enough money, they retire from working for money.
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Most on this board aren't business owners. So we're somewhere in between where we work as an employee, probably have to stay up to date in our field, sometimes want to splurge on ourselves because we work hard, but also know they only way to really get ahead is to buy assets with one's money instead of just consumer goods that lose value.

Cars are the best example of expensive consumer goods that lose value and can be expensive to keep. The more expensive the car, the higher the taxes, insurance (this can vary, insurance for specific models and cars without safety features can be expensive), repairs (the more expensive the car, the higher the cost of replacement parts and repairs), and licensing.

Locally, public transit is marginal and my work hours erratic. I have always needed a car for commuting, and have mostly bought new cars. They haven't been high end cars and held until maintenance became an issue.
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"Buffet sold a multi million dollar house in laguna beach CA

He also has his own plane

He's also in his 80s and still working.

Compare that w everyone on the finance boards who wants to retire before 65 for some inexplicable reason. "

- ---

You can bet he didn't pay a million dollars for that house.

And, no, he doesn't own a plane. HIs corporation owns a plane. Big difference.

Yep, he works by choice. So? Buffet is doing WHAT he likes to do, and I'd bet he doesn't fret too much. Most of his work has been handed off to subordinates.

Buffet has already given away 10s of billions to the Bill and Melinda gates foundation.....thereby avoiding totally all federal estate taxes on his billions and billions of dollars.


t.
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"Right. The people in the book weren't really millionaires either. It was all fiction. No millionaires exist outside of pro sports, media stars, and fortune 500 CEOs."

Heh hehe.....most sports pros, media stars, and fortune 50 CEOs aren't millionaires either...or if they are, not for long. earning a million dollars a year usually means those folks will spend big and be bankrupt in five or ten years - like most football and sports stars are. Most 'media stars' have a spurt and die. Heck, even Elvis was having to work his butt off to pay his bills...which wound up killing him, and Michael Jackson was tens of millions in debt.....and that killed him. You envy that?


And yes, the people in the book were MILLIONAIRES. Documented millonaires with a MILLION OR MORE IN NET WORTH.

You confuse 'annual income' with total net worth.
\
And you sound like a typical non-millionaire or even wannabee as saying 'regular folks can't be millionaires'!


--------





"No regular folks with a decent-ish income could possible live below their means consistently for a number of years and save up. It's just a crazy pipe dream."

Heh heh......you better visit the Retire Early boards where quite a few of the regulars are or will be millionaires by the time they retire early and none of them were media stars, sports stars or Fortune 500 CEOs. most were librarians and engineers and businessmen.

---------




"And nobody with access to a credit card could possibly forgo clothes shopping at the trendy stores or whatever other excuses you've got. "

And that is why most folks will never accumulate a million in assets or more. consumption, consumption and consumption and keeping up with the image and the Joneses.

----------



"Nobody could ever save any of their paycheck. The whole idea is preposterous."

heh heh......for those who either have passed the point of no return, or just don't like to save.

----------

"You're conclusion seems to be that The Millionaire Next Door isn't reasonable. My conclusion is that you just aren't the type that has the will-power to make the choices that could turn you into the type the book talks about."

well, some folks will. Some won't. some folks will eventually see the light.

-------

"Sure, we probably, as a group, don't ALL do EVERYTHING the book mentions. We pick and choose some options that work for us, or adapt them, or come up with our own strategies. Whatever. The point is that we've done enough to achieved our financial goals."

that is the key, although blowing it consistently in one area sure dents the overall picture.

----------

The book TMND is a good book to show how people get to the level of a million in net worth.

A lot of folks just don't get it.

Not my problem.

I'd bet not one person on my street realizes I'm doing great in retirement and been retired for 17 years already.

t.
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Cheapest house in expensive neighborhood is not a bad strategy.
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"You can bet he didn't pay a million dollars for that house."

How do you know? You actually went to the county clerk and looked?

"And, no, he doesn't own a plane. HIs corporation owns a plane. Big difference."

Not really. When you're an executive you're making money on the stock price which is positively and negatively affected by things like private jets. Many executives at smaller companies have sold their private jets to please share holders.

"Yep, he works by choice. So? Buffet is doing WHAT he likes to do, and I'd bet he doesn't fret too much. Most of his work has been handed off to subordinates."

Sorry but I just don't envy anyone who's grinding it out on their a-- in an early retirement considering this is a new phenom. We didn't live this long before and certainly didn't retire this early before. It's kinda like wimping out and shirking.

"Buffet has already given away 10s of billions to the Bill and Melinda gates foundation.....thereby avoiding totally all federal estate taxes on his billions and billions of dollars."

One of his biggest negatives was that he never gave to charity -- not even 10 years ago. This could be like a tax thing.
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Sorry but I just don't envy anyone who's grinding it out on their a-- in an early retirement considering this is a new phenom. We didn't live this long before and certainly didn't retire this early before. It's kinda like wimping out and shirking.


Being a wage slave is kinda like wimping out and shirking. Financial independence is the only escape. Being frugal and LBYM is the only way for most people to achieve financial independence.

Work until you die if you want, but nobody has ever laid on their death bed wishing they had spent more time at the office.
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Sorry but I just don't envy anyone who's grinding it out on their a-- in an early retirement considering this is a new phenom. We didn't live this long before and certainly didn't retire this early before. It's kinda like wimping out and shirking.

Unless you're a nurse or a doctor or do something that really helps other people, no one is going to care whether you retire early or whether you work until you drop dead.

And as you hit 50 if you're an employee you're probably going to see that you become less desirable to employers unless you're in a field like being a surgeon where decades of experience are necessary to reach your prime. If you're a business owner, depending on the business/industry, you might see you become less desirable to customers.

We might be living longer, but we still vastly favor youth. Of people who retire before full retirement age, about 1/3 do so because they want to, another 1/3 start having health problems that make maintaining their full-time job too difficult, and about 1/3 are just aged-out of the marketplace.
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http://www.cnbc.com/2014/07/15/buffetts-gift-to-gates-founda...

He decided to let his bridge friend take care of his charity gift.
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"You can bet he didn't pay a million dollars for that house."

How do you know? You actually went to the county clerk and looked?


Zillow makes it is much easier to find the history of a property. So, yes Buffet did pay slightly over a million for the house, and sold it for around a $4M profit.

4/93 - $1,100,000
2/06 - $5,295,000
4/12 - $4,300,000
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Compare that w everyone on the finance boards who wants to retire before 65 for some inexplicable reason.

The reason is pretty explicable.
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I mean I am kinda done with this and it seems like all the boards are same thing. But being an MND means that you are an actual millionaire. It also meant you were in your 50s and working an average of 55 hours a week. It is not the same thing at all to forego status items and not be a millionaire and not work.
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I thought he'd never leave.
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I thought he'd never leave.

Do they ever really leave?

PSU
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What did you guys bring to the table?
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ANd since when is retiring in your 50s the same as retiring in your 90s. Although its nice to know what I'm dealing with.
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Go grind it out on your ass and pretend you're the same a millionaire next door or a warren buffet. laughable.
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Do they ever really leave?

PSU


Apparently not.
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What did you guys bring to the table?

Why does it matter? It won't be what you want to hear so you'll just reject whatever we write.

PSU
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ANd since when is retiring in your 50s the same as retiring in your 90s. Although its nice to know what I'm dealing with.

When keeping employed in one's 60's became so hard.


Working Americans expect to retire at age 66, up from 63 in 2002, according to a recent Gallup poll. But most retirees don’t stay on the job nearly that long.

The average retirement age among retirees is 62, Gallup found. And even retirement at age 62 is a recent development. The average retirement age has hovered around 60 for most of the past decade.
..........
Many of these early retirements are unexpected and due to unforeseen circumstances. About half (49 percent) of retirees say they left the workforce earlier than planned, often to cope with a health problem or disability (61 percent) or to care for a spouse or other family member (18 percent), EBRI found. Other retirees are forced out of their jobs due to changes at their company, such as a downsizing or closure (18 percent), changes in the skills required for their job (7 percent) or other work-related reasons (22 percent).



http://money.usnews.com/money/retirement/articles/2014/05/12...
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But being an MND means that you are an actual millionaire.

To be a MND, in was necessary to be a future MND. Becoming a MND requires patience and living within your means. It doesn't mean living in a tent until your assets are over a million or foregoing all status items, but you can't have all of the high status items that you want. I have to admit a little envy for a $2.5M house that recently sold in an upscale neighborhood near us. What I don't envy is what it would take to own the house.

We just bought a new car for my husband, and paid cash. I am currently using most of my earned income to pre-pay for a couple of cruises and other travel. The first year of retirement will involve not so cheap travel.

I thought we were doing a good job of being the low key MND type, but those that know we are both engineers realize that we have more income that we are spending.

Good luck with your life. We are doing fine, and now enjoying the realization of our financial plans.
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$350,000 home in San Francisco
Cheapest house on the market
Obviously being sold for land value

http://fortune.com/2015/09/25/san-francisco-cheapest-home/?x...
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These are just baloney excuses.

The average joe expects to retire at 62...big whoop.

The retirement age was 65 when FDR implemented social security when no one lived as long.

Explain to me why you expect to retire 3 years from when when FDR planned for it back when work was more pysically demanding and when you are going to live longer than when he implemented social security.

Yes tightening your belt is hard. saving is hard. breaking your addiction to food and other vices is hard. working till your later years and putting up with work is hard. And yes accumulating real wealth is hard.

No one has any guts any more. Speaking of MND Stanly was right is another one of his books..."most lack the guts to be rich."

The more I observe the older generation at work and reading these responses now the more I agree. I think most people reach an age and are just like whatever. I doubt being lke most people will get you anywhere.
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The more I observe the older generation at work and reading these responses now the more I agree. I think most people reach an age and are just like whatever. I doubt being lke most people will get you anywhere.

This is my last post on this thread.

You have $10K in liquid assets, some balance in a 401K, and an old car. You want to buy a house, a car and furniture and don't want to understand what financial independence buys. You claim to be preapproved for a loan that is more than twice your income. If your posts are true (which is iffy). Are you really preapproved or just prequalified? There is significant differences between preapproval and prequalified and the final step of obtaining a mortgage. If you buy a car, it will further decrease your ability to obtain a loan and the maximum mortgage. 10K isn't enough for a down payment. Borrowing from your 401K for a down payment is only going to cause you more financial issues.

Your car is 17 years old and you haven't saved enough to buy a car. If you could afford a new car, you would have been able to save the amount of the payments each month and by now just buy the car.

We recently sold a house. Part of the decision about which offer (there were multiple offers by the specified date to submit offers) to accept was the probability that the buyer could obtain a loan. We would not have considered a offer from someone in your financial situation.

The more I observe the older generation at work and reading these responses now the more I agree. I think most people reach an age and are just like whatever. I doubt being lke most people will get you anywhere.

I don't know your co-workers. Many of the baby boomers are in deep financial trouble. When they are forced to retire, it is going to be bad. Being like most people wont get you anywhere, and especially not to financial security. MND are the unusual.

My husband chose to retire to spend more time with family and doing what he wanted. There is a great deal of age discrimination in tech. It would be difficult for me to find another job, and more difficult to find a job that I would enjoy. My job has changed to the point that I no longer enjoy it. I don't want to think about the stress if we had a mortgage or other debt. I might have a fleeting thought about this on our next international flight (business class), but probably not.
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What is your point? It sounds to me like I pretty much summed it up about people like you.

Who says work is something you enjoy? It's called work for a reason.

Who says you are forced to do anything like retire?

Who says you have to or are entitled to get a job paying what you made before?

Me I could be happy working in a motorcycle shop for 15 an hour if I was sitting on a stack of CASH or guitar store. Or I would be doing something involving my hobbies. But that is the point I do something.

Also, i have more assets than the 401k and it's none of your business
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A million dollars is not a lot of money.

If I had a million dollars
If I had a million dollars
Well, I'd buy you a house
I would buy you a house

And if I had a million dollars
If I had a million dollars
I'd buy you furniture for your house
Maybe a nice Chesterfield or an ottoman

And if I had a million dollars
If I had a million dollars
Well, I'd buy you a K-Car
A nice Reliant automobile
And if I had a million dollars, I'd buy your love

If I had a million dollars
I'd build a tree-fort in our yard
If I had a million dollars you could help
It wouldn't be that hard

If I had a million dollars
Maybe we could put a little tiny fridge
In there somewhere
We could just go up there and hang out

Like open the fridge and stuff
And there'd all be foods laid out for us
Like little pre-wrapped sausages and things

They have pre-wrapped sausages
But they don't have pre-wrapped bacon
Well, can you blame them?
Yeah!

If I had a million dollars
If I had a million dollars
Well, I'd buy you a fur coat
But not a real fur coat, that's cruel

And if I had a million dollars
If I had a million dollars
Well, I'd buy you an exotic pet
Yep, like a llama or an emu

And if I had a million dollars
If I had a million dollars
Well, I'd buy you John Merrick's remains
All them crazy elephant bones
And if I had a million dollars I'd buy your love

If I had a million dollars
We wouldn't have to walk to the store
If I had a million dollars
We'd take a limousine, 'cause it costs more

If I had a million dollars
We wouldn't have to eat Kraft Dinner
But we would eat Kraft Dinner

Of course we would, we'd just eat more
And buy really expensive ketchups with it
That's right, all the fanciest Dijon ketchups

If I had a million dollars
If I had a million dollars
Well, I'd buy you a green dress
But not a real green dress, that's cruel

And if I had a million dollars
If I had a million dollars
Well, I'd buy you some art
A Picasso or a Garfunkel

If I had a million dollars
If I had a million dollars
Well, I'd buy you a monkey
Haven't you always wanted a monkey?
If I had a million dollars I'd buy your love

If I had a million dollars
If I had a million dollars
If I had a million dollars
If I had a million dollars
If I had a million dollars
I'd be rich!
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Me I could be happy working in a motorcycle shop for 15 an hour if I was sitting on a stack of CASH or guitar store. Or I would be doing something involving my hobbies. But that is the point I do something.

You seem to think retired people don't do anything. Most retirees I know who have good savings or a pension do a lot of things - from travel, to painting, to sometimes working part time. That's the point of financial freedom - doing what you want, whether it pays or not, versus doing what you have to do to earn a buck.

And who says the motorcycle shop owner or guitar store owner is going to want to hire you when you're 60 or 70? Ageism might be against the law, but it's very hard to prove.
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What is your point? It sounds to me like I pretty much summed it up about people like you.

Too bad your conclusions, just like your characterizations of MNDs, are incorrect.

Who says work is something you enjoy? It's called work for a reason.

Which is why people would like to retire earlier rather than later - so they can devote more of their time to things they enjoy, rather than to work.

Who says you are forced to do anything like retire?

People who actually are retired say so: http://www.usatoday.com/story/money/2015/06/02/majority-of-a...

According to a recent study by Voya Financial, 60% of retired U.S. workers said they had to stop working unexpectedly.

"It's notable that more and more people anecdotally are not necessarily retiring just because they're moving off into the sunset and taking walks on beaches,'' says James Nichols, Voya Financial's head of retirement income and advice strategy. "Retirement for many of them is something that happens to them as opposed to something they chose. ... It's not the people who turn 62 and want to retire at 62 and do. It's the people who turned 64 and wanted to work till 68, and it didn't happen the way they wanted to.''

Among the 1,002 recent retirees who were surveyed, 29% said the timing of their retirement was somewhat unexpected, while 31% said the timing was very unexpected.

And 33% of those respondents said they left their jobs involuntarily. The largest number — 16% — had to retire because of health challenges, while 11% stepped away because they lost their jobs, 3% had to stop working because they needed to care for a spouse or dependent, and another 3% retired involuntarily because of their age.

Such unpredictability lends credence to the oft-given advice that workers need to save as much, and as soon, as they can.


So, working to a certain age, or until you die, may be what you plan, but based on the experience of current retirees, there's a 60% chance that you won't be able to execute on that plan.

Who says you have to or are entitled to get a job paying what you made before?

If you are even able to work, and didn't have to retire earlier than planned because of health reasons, or to take care of a loved one, you may not be able to find a job.

Me I could be happy working in a motorcycle shop for 15 an hour if I was sitting on a stack of CASH or guitar store.

Well, you seem to reject the MND tenets of having a lifestyle that will allow you to accumulate wealth. So, where do you plan on getting that pile of cash if you don't have a lifestyle that will allow you to accumulate wealth? (It's a good thing to be putting 10% into your 401(k), but it's only about 2/3 of the currently recommended 15% savings rate for retirement. Adding in annual Roth IRA savings (if you are eligible) might get you up to 13% or so, but that's still short of 15%.

Also, i have more assets than the 401k and it's none of your business

Sure, then why did it take you 2 years to pay off a 'goliath' $10k in credit card debt? http://boards.fool.com/paid-off-my-credit-card-28315894.aspx...

And if you have other assets, then why would you need to get advice on if you should get a car payment? Why not just liquidate some of your assets and pay cash, borrow against some of the assets, or do your own analysis to determine if it's cheaper to liquidate assets vs. getting a car loan? http://boards.fool.com/should-i-get-a-car-payment-31910291.a...

You sublease in a Mitchell-Lama building, and you say you make 3 times what you would be allowed to make if you were actually the lessee. Since, for a single person, the lowest Mitchell-Lama maximum income is $48,350 http://www1.nyc.gov/site/hpd/renters/mitchell-lama-rentals.p... that means that you must make at least in the $150k range.

Assuming that your take-home pay, after taxes, deductions, 401(k), etc. is at least 40% of your gross, that means you have spendable income of about $60k/year, or $5k/month. Yet, you say in the car payment thread I've only saved like 10k in a checking account Combined with the fact that it took you 2 years to pay off $10k in credit card debt, that appears to be evidence that you are probably spending most, if not all, of that money each month.

You claim you are frugal, yet even with at least $60k in spendable income/year, you haven't managed to save enough money to buy the car you want for cash. Actions speak louder than words.

AJ
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Dude I'm right about everything.

Firstly all information from newspapers are dubious sources to begin with. These are the same leftists who love to run stories on how a minimum wage McDonalds worker can't live in (insert high cost of living area here) where he works and therefore we should raise the minimum wage to like 30 $/hour.

Second, you keep nit picking about about the lower middle class thing but it's obvious if you read between the lines that's what they are doing. Here's a quote from another one of Stanley's book's, Stop Acting Rich, page 1 of the book when he's describing his father's hunch on who the truly wealthy are and where the reside:

"Most of his 'blue' customers lived in working- or LOWER MIDDLE CLASS (blue collar) neighborhoods....Contrary to what you may think, my father found that the 'blue' route was more financially lucrative of the two."

Surely now you're going to come up with some excuse as to why that really isn't what he means.

And I was making a lot less 5 years ago than I am now so what? It's not your business how much i save or how frugal i am.
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** what he means by "financially lucrative of the two" -- he is comparing the blue/working route to his upper middle class route.
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Dude I'm right about everything.

Yeah, just keep telling yourself that. Never let facts get in the way of a loudly proclaimed argument.

AJ
- not a 'dude' - one of the many things you got wrong
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Yeah, just keep telling yourself that. Never let facts get in the way of a loudly proclaimed argument.

He also has ignored the question about if he has a budget based on what is important to him.
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Look why don't you start your own thread where you interpret the millionaire next door to be what you think it means.

If it means retiring before the age of 65 (w/o the money accumulated by an MND of course) and budgeting based on this early retirement because that is important to you; then have at it.

That is not what Stanley is trying to convey.

What facts have you presented anyway?

I have you given you 2 verbatim quotes from Stanley and what is pretty much the theme of his writings throughout.
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I'm guessing I could buy and sell SlickNik twenty times over, even though the most I've ever earned is $72,000. It's just about employing LBYM principals consistently over time.

SlickNik's perceptions and arguments are exactly what I would expect to hear out of all my non-(and-never-going-to-be)-millionaire neighbors.
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Dude I'm right about everything.

Yeah, just keep telling yourself that. Never let facts get in the way of a loudly proclaimed argument.

AJ
- not a 'dude' - one of the many things you got wrong

The only evidence you presented was from a stupid US census site on the average home price going back to the 1960s. What a ridiculous conclusion. I'm sure it includes data on working poor all over the country. It proves nothing!
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Psst- principles
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I have you given you 2 verbatim quotes from Stanley and what is pretty much the theme of his writings throughout.

Still don't care. MND isn't a religious text.

I read the book over 10 years old. It was interesting and some suggestions were useful. The rest were ignored or by now forgotten, and the book and long since gone to Goodwill. A LBYM lifestyle has provided us with a good financial position.
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Who cares about your "good" financial position? Whatever that is.

Who the hell are you?

In case you haven't noticed MND is subject of this thread.
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MND - my nitwit doppel
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And what exactly is your question?
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"Compare that w everyone on the finance boards who wants to retire before 65 for some inexplicable reason."

I was eligible for full retirement a year ago at 63% of my high-3 years average salary. That, in addition to fully funding our TSP/401K S&P 500 index fund during the recent crash and riding the run back up makes retirement doable right now, and I'm getting pretty close. As we say in work, I'm in the KMA club, and may walk any minute.

Getting to this point was the result of a lifetime of frugal living, and living well below our means. We did it because it was the lifestyle we chose, not because we aspired to someone else's ideal. The MND cites anecdotal evidence to what is possible. Choose the anecdotes relevant to your personal circumstances, set your own goals and you can do it too.
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I think the question, as the title states is: is the millionaire next door lifestyle unsavory.

The question isn't is living below your means unsavory. Which I do anyway.

The millionaire next door lifestyle consists of goals that end in a million dollars minimum; not retiring at or before 65 without the 7 figures by cutting back on everything.

Judging from the responses here the answer to my question is yes. It is unsavory. Living in a blue collar or lower middle class area is unsavory. Living in a place that is 2.5 x your income is also. Some don't seem to be as averse to used clothing and cheap stores as I am but, the difference between that and getting something on sale new at like a mid-priced dept. store is negligible. These people will drive a 3000 dollar mini van, that they paid cash for, despite a 7 figure net worth, and work an average of 55 hours a week despite having that net worth in their late 50s. That's saying something. There really is a lot of diversity when it comes to living within your means -- which is not to apparent to everyone on this board pretty much.
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Judging from the responses here the answer to my question is yes. It is unsavory. Living in a blue collar or lower middle class area is unsavory. Living in a place that is 2.5 x your income is also. Some don't seem to be as averse to used clothing and cheap stores as I am but, the difference between that and getting something on sale new at like a mid-priced dept. store is negligible. These people will drive a 3000 dollar mini van, that they paid cash for, despite a 7 figure net worth, and work an average of 55 hours a week despite having that net worth in their late 50s. That's saying something. There really is a lot of diversity when it comes to living within your means -- which is not to apparent to everyone on this board pretty much.

I think you're looking at the book wrong. The book was written in the 1996's but they followed people for 20 years. They took out any millionaires/billionaires who made their money from: winning the lotto, having some business really take off quickly (the Steve Jobs types), being a sport/actor/musician star.

So then what they were left with was mostly 50 year-olds who made their million(s) the slow way. Most at that time owned their own business, but these weren't flashy/glamorous businesses. Most of these millionaire started out blue collar/working class and therefore stayed in their neighborhoods as they slowing increased their wealth - it's not like they were the children of middle and upper class parents and then moved to blue collar neighborhoods in adulthood. But the gist is if you don't win the lotto, are the Steve Jobs type, or are some kind of entertainment star, if you want to become a millionaire it's slow consistent habits. That's part of why the millionaires in the book were 50+ year olds and not 20 year olds.

If the book were re-written today, the authors would probably find a lot more millionaires who had/have middle class white collar jobs who made their millions the slow way by investing employee income. Simply because white collar jobs increased from 1996-2015 compared to white collar jobs in 1976-1996.
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Why are you guys making up your own facts and recommending things that are simply not true. Try as you want it to be true just working a white collar job, working for someone else, without a really really high income isn't going to be enough.


I think you're looking at the book wrong. The book was written in the 1996's but they followed people for 20 years.

1. I am not looking at the book wrong. If you missed the blue collar element to this you are though. It appears everyone else is also.

2. Please cite where they did a case study for 20 years. It was based on surveys and focus groups. I don't know the time frame but no where near that I would imagine.


They took out any millionaires/billionaires who made their money from: winning the lotto, having some business really take off quickly (the Steve Jobs types), being a sport/actor/musician star.


They didn't take out anybody it's just that such instances are so rare, contrary to what television and media would have you believe, they are practically negligible in the grand scheme of things when it comes to wealth in America.


Most of these millionaire started out blue collar/working class and therefore stayed in their neighborhoods as they slowing increased their wealth - it's not like they were the children of middle and upper class parents and then moved to blue collar neighborhoods in adulthood.


How do you know that? Few inherited their wealth something like 10%. And most did it in one generation I know that. No other break down is given as far as I know w socioeconomic class, and this is just an assumption on your part.


If the book were re-written today, the authors would probably find a lot more millionaires who had/have middle class white collar jobs who made their millions the slow way by investing employee income. Simply because white collar jobs increased from 1996-2015 compared to white collar jobs in 1976-1996.


There were several sequels to the book the last being in 2010 and nothing in the book indicates what you are saying is true. And how do you there are more white collar jobs?

It seems more to me you want it to be true that you can live in middle class hood; work a white collar job like everyone else; and retire comfortably at 55 but it's just not true.
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Why are you guys making up your own facts and recommending things that are simply not true. Try as you want it to be true just working a white collar job, working for someone else, without a really really high income isn't going to be enough.

I couldn't disagree more. Here's a post on another blog called Mr. Money Mustache entitled "The Shockingly Simple Math Behind Early Retirement". Try as you might, you can't argue with basic math.

http://www.mrmoneymustache.com/2012/01/13/the-shockingly-sim...

-Agg97
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2. Please cite where they did a case study for 20 years. It was based on surveys and focus groups. I don't know the time frame but no where near that I would imagine.

It was the premise of the book - they didn't just survey people over 1 year.

How can you join the ranks of America's wealthy (defined as people whose net worth is over one million dollars)? It's easy, say doctors Stanley and Danko, who have spent the last 20 years interviewing members of this elite club: you just have to follow seven simple rules.

http://www.amazon.com/Millionaire-Next-Door-Surprising-Ameri...


How do you know that? Few inherited their wealth something like 10%. And most did it in one generation I know that. No other break down is given as far as I know w socioeconomic class, and this is just an assumption on your part.

It's not really just an "assumption" when one considers the stores they shop at and the consumer base of those stores, education level, avoidance of economic outpatient care to offspring and the fact that we don't see any mass-migration of middle and upper middle class adult children moving to blue-collar neighborhoods. Their spouse didn't work (since some talked about their spouse running the household, clipping coupons), etc.

There were several sequels to the book the last being in 2010 and nothing in the book indicates what you are saying is true. And how do you there are more white collar jobs?

There's been new releases of the book since 1996, some with a new intro from the author, but not a "sequel" or a rewrite or even revised study.

And we know there are more white collar jobs from all kinds of other economic reports and reports - the book doesn't exist in a vacuum where nothing else happens and no other research is available.

It seems more to me you want it to be true that you can live in middle class hood; work a white collar job like everyone else; and retire comfortably at 55 but it's just not true.

Maybe I can, maybe I can't. Only time will tell. I live in a middle class neighborhood. I have a white collar job. I feel I live fairly comfortably, and I save about 40% of my income. I've consistently saved at least 30% of my income for the past 7 years. My personal goal isn't to retire at 55. I'd like to have enough in assets by 60 so that if I'm able (and wanted) to work I still can, but if I don't feel like working (or am aged-out) I can stop without a huge hit to my standard of living. I might stay in the US, I might consider moving to a foreign country with a lower cost of living. A lot can happen in 17 years, so I don't know if that will be possible. But I feel I'll be in a better position either way at 60 by saving, and I don't really feel I'm giving up a great deal today to do so.

Does that mean I think every white collar worker can save 40% of their income, of course not. Many have children to raise - I only have to feed myself and my dog. And besides, with most economies driven by consumer spending, for my stock investments to go up I need consumers to keep buying. When my neighbor buys a new car that makes me happy - because I probably own stock in the car company she/he bought from, and I haven't bought a new car in almost 16 years and hope not to have to for another 4-5 years - and my buying habits are not going to help my car stock increase.

At the end of the day we can't all be millionaires, but I'm going to try while maintaining a white collar job and living in a middle class neighborhood.
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That guy is the biggest fraud ever.
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He never discloses how much he makes with that blog
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That guy is the biggest fraud ever.

He never discloses how much he makes with that blog


I know it's hard for you to focus. The point is the math. The very, very simple math. Not the messenger who points out the very very simple math.

Look a squirrel!
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The math is BS. 5 % returns over decades. He's a fraud.
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Not to mention the only nice thing he has are his houses. Otherwise it's literally living a welfare lifestyle. He puts 1000s of hours a year into fixing up his house as a semi pro / DYI carpenter. How is that not work ?
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Not to mention the only nice thing he has are his houses. Otherwise it's literally living a welfare lifestyle.

His homes are probably important to him. Other things must not be. Just because what he values isn't what you value doesn't mean he's living a life of denying himself what he wants in life.


He puts 1000s of hours a year into fixing up his house as a semi pro / DYI carpenter. How is that not work ?

Not having to answer to anyone (not bosses, not customers/clients) but yourself typically isn't thought of as "work". He probably enjoys working on his house, that's probably his "hobby" and since he doesn't have to please anyone but himself (and a wife/partner if he has one) that's typically not looked at as "work" since no one is going to pay you to fix up your own house - they'll pay you to fix up theirs.
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Living in a blue collar or lower middle class area is unsavory. Living in a place that is 2.5 x your income is also.

My home is <1.5x my annual income.
I live in a small town that doesn't really have different areas of blue collar/white collar, and most plumbers I know are made of gold. Much of my street is full of old people.
People who have lived in their homes for 50+ years.
So yeah, these houses are all dated, and are mostly at least 150 yrs old. Nothing new & fancy, but safe, quiet, in a boring small town- which is important to me.
It might not be to someone else who wants nightlife within walking distance.

Some don't seem to be as averse to used clothing and cheap stores as I am but, the difference between that and getting something on sale new at like a mid-priced dept. store is negligible.

I'll disagree with you here. The thrift store I frequent still has lower prices for higher quality than Kohl's-on-sale.
For a variety of reasons I buy almost all of my clothing used (not underwear/bras, but clothes/coats.)
I dress professionally, and once I've had a *new* item for a week, then it's used anyway, so I don't care that someone else broke it first.
One of the main reasons I by used, however, is that used clothing has already been washed and there will be no This Is shrinking/fading not as I had expected occurrences.
If it is in a thrift store, it has been washed, and it will fit the same way next week as it did in the store. I can get Talbots pants or Lucky jeans (brands that fit me properly and last a loong time - I don't care so much about the name of brand, but about knowing how it fits- banana republic apparently does not believe people shaped like me exist, but the gap does)
I'll admit that women have a greater abundance of choice in used clothes than men, so YMMV.

These people will drive a 3000 dollar mini van, that they paid cash for, despite a 7 figure net worth, and work an average of 55 hours a week despite having that net worth in their late 50s. That's saying something.

I drive a 1990 Toyota, and can see no reason to replace it.
I work @ 55 hours a week. I am a business owner/consulting engineer.
I don't know what that "something" is that it is saying.
(almost 50, but I'd be furiously pleased to still be driving the same car in 10 years)

There really is a lot of diversity when it comes to living within your means -- which is not to apparent to everyone on this board pretty much.


There is - for some people it means living at 90% of their income (which is still LBYM - for others it means living at 10% of their income.
but there is an L in there for LIVING, and that is where the liberties are taken for wants-and-not-needs.

I live in New England and don't turn on my heat until early November, and even then it never gets set above 60 degrees... everyone has their limits.

peace & savory
t
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It seems more to me you want it to be true that you can live in middle class hood; work a white collar job like everyone else; and retire comfortably at 55 but it's just not true.

And if you keep telling yourself that, then it never will be true for you.

AJ
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By mid Prices dept store i meant macys

Idk kohls but This woman i dated told me kohls was a cheap store

And she would know cuz I never seen anyone's skin crawl at the thought of anything cheap before

I have Some used clothed i love.

But i cant be bothered any more w shopping let alone for used.

Not to mention it seems like all The thrift
Stores have closed in my neighborhood
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The math is BS. 5% returns over decades.

Anyone who thinks 5% returns over decades is unattainable...isn't really trying, are they?
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The math is BS. 5% returns over decades.

Anyone who thinks 5% returns over decades is unattainable...isn't really trying, are they?


Those are adjusted for inflation. Can you tell me what the affects of QE infinity are on inflation? I can't. And tat is just in the near future. Who knows what it will be decades from now. It assumes 3% inflation for decades.

Suppose you "retire" in your late 30s and find you need to be working agin F/T in your 50s. "Can I get fries with that?"
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Not to mention for health insurance he has a high deductible plan. That's great when you're young, but what about when you're older and health issues arise?
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It also assumes you live the same life you're living now. Whatever you're making now -- that is what you'll be drawing and living on 3 decades from now. skrimping all the time. I don't know what kinda job you have but, the one I have sounds like much more fun than that. And at least some day i'll be aspiring to more than what I have now. even if don't make it, at least I tried something rather than live the same lifestyle I did when I was living at my parents house in between semesters at college.
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And that is the point. Without disclosing what he makes on the blog and other activities -- the numbers are just romance.
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It seems more to me you want it to be true that you can live in middle class hood; work a white collar job like everyone else; and retire comfortably at 55 but it's just not true.

And if you keep telling yourself that, then it never will be true for you.

AJ


THat assumes living like my parents in a staid suburb filled with people in their 60s who aren't really doing much on weekdays is desirable to me. It is not.
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THat assumes living like my parents in a staid suburb filled with people in their 60s who aren't really doing much on weekdays is desirable to me. It is not.

Frankly, my dear, I don't give a damn. Your narcissistic personality bores me. Good bye.
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just working a white collar job, working for someone else, without a really really high income isn't going to be enough.

Well, actually, it is. Lots of people here have told you it is, and I can say that it has been enough for me, as well.

Not that that will stop this particular discussion.

ThyPeace, I know, I know. Feeding and all that.
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I don't know what kinda job you have but, the one I have sounds like much more fun than that.

Your job can't be too much fun if you post on a message board all day long.
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Judging from the responses here the answer to my question is yes. It is unsavory. Living in a blue collar or lower middle class area is unsavory. Living in a place that is 2.5 x your income is also. Some don't seem to be as averse to used clothing and cheap stores as I am but, the difference between that and getting something on sale new at like a mid-priced dept. store is negligible.

Whether or not it is unsavory is a subjective thing, won't you agree? You may think it is, and I may think it isn't. Right?

I don't happen to think blue-collar automatically means lower middle class. I think it means middle class. I have moved into an 80th-percentil type neighborhood now, but I stayed in the blue collar hood for a decade longer than I needed to. In fact I never needed to...I was approved for a lot more house back then anyway. And the higher-end home I've moved into now is also less than half of what I could get approved for.

See, it's a relative thing. The millionaires detailed in the book have their own examples. Do all of them seem unsavory to you? How about wrist-watches? Do you feel the need for a gold Rolex or whatever? I never have. Different strokes for different folks. So yes, I recognize that LBYM can be done in diverse ways.

But the main point is that those who care about looking wealthy hardly ever become wealthy. If you and I have the same income, and you care about nicer clothes, a Rolex, a newer car, a bigger house, etc. more than I care about them, then I'm going to build net worth faster than you probably. And having a bunch of money in the bank is NOT unsavory.

xtn
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Where's the living in a blue collar or lower middle class income neighborhood coming from? Stanley and Danko found their millionaires by looking in upscale neighborhoods. They admit that they will have missed millionaires living in less prestigious neighborhoods, but they certainly demonstrated that not all millionaires live in less prestigious neighborhoods.

Whether living in a blue collar neighborhood is unsavory or not (a matter of opinion), it doesn't describe the millionaires profiled in MND.

Patzer
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Where's the living in a blue collar ... neighborhood


Plumbers are blue collar and they are made of gold...


peace & income
t
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Plumbers are blue collar and they are made of gold...
=================

Not always. Sometimes it's very difficult to get paid for the work done...especially when it's not new construction plumbing.



Jean
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Where's the living in a blue collar or lower middle class income neighborhood coming from? Stanley and Danko found their millionaires by looking in upscale neighborhoods. They admit that they will have missed millionaires living in less prestigious neighborhoods, but they certainly demonstrated that not all millionaires live in less prestigious neighborhoods.

Whether living in a blue collar neighborhood is unsavory or not (a matter of opinion), it doesn't describe the millionaires profiled in MND.

Patzer


I don't know if this is a joke or what but, they distinctly say that those living in prestigious neighborhoods have big incomes and no real wealth outside the equity in their home. repeatedly. big hat no cattle.
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"I don't doubt that there are quite a few millionaires here and that most millionaires are living an average middle class life. A million doesn't produce enough income to be living an upper middle class life. "

True.....you'd be hard pressed these days to even reliably get 4% SWR out of it. But...if you had a company or government pension of , say, $35,000 a year, and maybe wife too.......and you both collected SS of say......$40,000 a year for both....well.....you'd be over a $100,00 a year in income which ain't shabby.

Depends what your reality is.

------


I was only thinking about the income produced by $1M. $100K income isn't shabby. It is possible to draw some pensions before 60, but most don't have that option.

Reality and location do make a difference. Here, $100K won't qualify to buy an average house. Whether or not the $100K includes mortgage or rent payments makes a huge difference.
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"It seems more to me you want it to be true that you can live in middle class hood; work a white collar job like everyone else; and retire comfortably at 55 but it's just not true."

Clearly, you are mathematically challenged if you don't realize that white collar professionals can live a middle class neighborhood, save, and INVEST and comfortably well before 55.

My wife and I got white collar jobs. We make LESS than our peers because we refuse to work more than 40-hours per week (highly frowned upon in most professional circles).

We lived well below our means. That doesn't mean we lived in a slum, but we lived in a middle to maybe slightly upper middle class neighborhood.

We were millionaires in our late 30s, multimillionaires not too many years after that.

It ain't that hard. Two professionals making $150k combined (not hard to achieve at all). Live on $50k (we live on far less, btw, and earn more).

That gives you $100k per year to invest. Plus investment returns/compounding. You'll be millionaires in well under 10 years.

So yeah, you were right. It didn't take until age 55. It took far less time than that (Hell, we still aren't that old).

Now if you'll excuse me, I have to take a shower. We're heading out to Target to buy some shirts on sale- $8 for a cotton polo.

Could I afford to go to Macy's and pay $60 (for essentially the same shirt), or Saks and pay $100 (again, for essentially the same shirt)?

Sure.

But why would I? I'm not an idiot, and unlike some shallow, insecure, immature folks, I really don't see the need to pay 10 times as much for the same cotton shirt just to get a "HEY, LOOK AT ME!" designer logo slapped on the shirt.

Your insecurity and immaturity is costing you a lot of money, kid.

You might want to fix that.
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You obviously don't date the kind of women I date.

But a hole is a hole right just like a shirt is shirt and a car is a car no matter if it's a Mercedes or a pinto.

I'm no kid but I do make a lot more than you so maybe you should show some respect.

I guess it depends what your priorities are where you left live

It's obviously a bit more difficult in a high cost area

Sheesh you would think with a name like c64 they'd be cool.

PS- I'm wearing a nice shirt from Macy's for 20 bucks that was 50% off
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You are clearly shallow, foolish, materialistic and easily influenced by commercials that tell you that you need the newest car, the nicest clothes, or the latest iWhatever to be happy.



Either that or they look at some of the people that tend to shop at these places -- people like you -- who didn't do much except save every penny-- and think ick.
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I'm no kid but I do make a lot more than you so maybe you should show some respect.

How would you know? He didn't list his income.

PSU
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I'm no kid but I do make a lot more than you so maybe you should show some respect.

I make a lot more than you and your behavior on these message boards hasn't earned you any respect.
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I'm no kid but I do make a lot more than you so maybe you should show some respect.

No matter how old you are, your posting style is juvenile, so you have earned the right to be called 'kid'.

Respect needs to be earned. Your income/earnings have nothing to do with whether you have earned respect on these boards, even if you do earn more than Commodore64, or anyone else that you've responded to. (Not that anyone can tell, since you haven't shared your income.)

So far, you have done nothing but spit on lifestyle choices that have been presented by many others in their responses to you as being valuable and defamed most of those who have responded to you. In my book, you've only earned pity, not respect.

AJ
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Do you have any examples?
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Do you have any examples?

Well, I found all of these:

http://boards.fool.com/LastPosts.asp?limit=99&uid=873166...
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So everyone of them basically?

Why because I don't agree with this ridiculous idea of retiring before 65?

And how should I know that is most people's goals?

I'd rather retire when you're supposed to retire. What so wrong e that?
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So everyone(sic) of them basically?

Pretty much. I would challenge you to go back and find posts where you show respect to those who have ideas that you disagree with and show respect to their ideas. If you don't show respect, why should anyone show you any respect?

Why because I don't agree with this ridiculous idea of retiring before 65?

And there's another example. Calling it 'ridiculous' to retire before 65 is spitting on the idea, and defaming everyone who has said they have done so, or plans to do so.

And how should I know that is most people's goals?

Where did anyone say it was? Many of those who responded to you said that they have already done so, that it was their goal, or that choices that would allow someone to do so should be valued. But they also said that many people (apparently including you) make choices that don't allow them to do so.

I'd rather retire when you're supposed to retire. What so wrong e that?

And when is it that you are 'supposed to retire'?
- the year you turn 55, when you can access a 401(k) without tax penalties from an employer that you leave in or after that year?
- the year that you can first receive a reduced pension from your employer?
- the year you can first receive a full pension from your employer?
- the year in which the pension from your employer will no longer increase, even if you work longer?
- age 59 1/2, when you can access IRA funds without tax penalties or resorting to SEPP withdrawals?
- age 60, when you can claim SS from a deceased spouse?
- age 62, when you can first claim SS based on your earnings?
- age 65, when you become eligible for Medicare?
- age 65 - 67, when you reach your 'full retirement age' according to SS, depending on your date of birth?
- age 70, when your SS benefits will stop increasing, even if you don't claim them?
- some mandatory age (often between 55 and 70) set by your employer, your place of residence or your profession?
- upon reaching financial independence?

Given that there are so many retirement dates/milestones, it seems ludicrous to say that there is one age that everyone is 'supposed to' retire.

AJ
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I'd rather retire when you're supposed to retire. What so wrong e that?

Not a d@mn thing. But why let someone else-or even Conventional Wisdom--make such a personal decision for you?
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Well look at it another way... If FDR introduced this idea in the new deal when life expectancy was much lower -- and work was more physical and agrarian in nature -- then why would you retire even sooner than that by scrimping and expect respect?
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I'm no kid but I do make a lot more than you so maybe you should show some respect.

I make a lot more than you and your behavior on these message boards hasn't earned you any respect.


I get the respect I deserve, Don't care about the rest, hardly work at all and probably make more than both of you. :-) <snark snark snark>

Not only that I walked to school uphill in both directions! Kids these days don't realize how good the have it.
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Well look at it another way... If FDR introduced this idea in the new deal when life expectancy was much lower -- and work was more physical and agrarian in nature -- then why would you retire even sooner than that by scrimping and expect respect?

Oh, I don't know - maybe because they set a goal for themselves and managed to achieve it?

I guess in your book, setting and achieving goals isn't something that's deserving of as much respect as being a 'wage slave' until some particular age, set by someone else, is?

AJ
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If your goals are to live on as little as possible so you don't have to work well then yes that is a goal. But what a goal! You think that is as laudable as a goal like making partner at your law firm and buying that big house? You think that should merit the same respect? Maybe I'm alone here but not in the real world.
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Not to mention what does this have to do with the millionaire next door?

They were already in their late 50s on average with 7 figure sometimes 8 figure net worth and still working an average of 55 hours a week. Does that sound like more my goals?I think so. They definetly don't seem like the ones many posters here made them out to be.
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If your goals are to live on as little as possible so you don't have to work well then yes that is a goal. But what a goal! You think that is as laudable as a goal like making partner at your law firm and buying that big house? You think that should merit the same respect? Maybe I'm alone here but not in the real world.

Your respect for someone is contingent on the size of their house?! How shallow. How bizarre.

PS--My house is over 2500 sq ft, and I wish I lived in a smaller one (my husband wants to stay here, and so we do). Although it can seem quite full when my kids and grandkids are visiting ;-)

PPS--I retired early and don't live on "as little as possible," but one of my friends does (a single woman now about age 70 who lives on $20k or so). She travels, eats out, lives in a small condo (sans mortgage) in a very inexpensive but quite nice college town. She's about 2 hours from the mountains, the ocean, and a major airport. She drives large, used high-end cars--feels safer in a tank(!). She's respected enough to have been president of her condo association. She's popular, smart, and has led an interesting life. Even if she didn't make partner at a law firm.
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If your goals are to live on as little as possible so you don't have to work well then yes that is a goal.

I didn't see anyone with that as a goal. That doesn't mean it isn't a respectable goal.

But what a goal! You think that is as laudable as a goal like making partner at your law firm and buying that big house? You think that should merit the same respect?

Why not? Are any of the goals hurting you?

Maybe I'm alone here but not in the real world.

Maybe in the real world the folks aren't telling you what their goals are because they know your opinions.

I know I would just nod my head, smile and walk away if I was in this discussion in person.
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They were already in their late 50s on average with 7 figure sometimes 8 figure net worth and still working an average of 55 hours a week. Does that sound like more my goals? I think so. They definetly don't seem like the ones many posters here made them out to be.

I think it's pretty sad that you seem to need others to have the same goals as you to validate your goals.

And sadder still that you don't see anyone else's goals as valid unless they are the same as yours.
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Your respect for someone is contingent on the size of their house?! How shallow. How bizarre.


You're taking that out of context. I never said that. I was trying to give you an example of a goal -- not my goal per se -- but a goal which I feel is worthy of respect.

It really boils down to merit. That is nothing new. So according to you, any goal, no matter what, "as long as it doesn't hurt anyone," is just as respectable as the next one, is what you're saying?

What if my goal is to do as little as possible and drink beer every night? Is that a respectable goal? I'm not hurting anyone right?
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I think it's pretty sad that you seem to need others to have the same goals as you to validate your goals.

And sadder still that you don't see anyone else's goals as valid unless they are the same as yours.
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huh?
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huh?

I guess you confused yourself.

PSU
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Dude you never seem to get when it's a quote and when it's not. Even thought everyone else does...
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Dude you never seem to get when it's a quote and when it's not. Even thought everyone else does...

I get that the italicized text was a quote of someone else's post. The standard posting procedures is to italicize the text that you are quoting and then put your response to the quoted words immediately after that like I'm doing here. People don't put a quote in a post, post it to the board and then followup that post with response in a separate post.

I'm making a joke at your expense.

PSU
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Dude you never seem to get when it's a quote and when it's not. Even thought everyone else does...

=======================================

Really?

When you read a post you can see the post they are responding to if you click on the subject line.

I did it with this post:

http://boards.fool.com/your-respect-for-someone-is-contingen...

However, instead of taking me to Astro's post...

http://boards.fool.com/if-your-goals-are-to-live-on-as-littl...

it took me to this post:

http://boards.fool.com/they-were-already-in-their-late-50s-o...

So you replied to my post with a quote from Astro's post.

Most folks quote material from the actual post they are responding to. It makes it confusing when posters do not do that.
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I get that the italicized text was a quote of someone else's post. The standard posting procedures is to italicize the text that you are quoting and then put your response to the quoted words immediately after that like I'm doing here.
PSU


No kidding. Kinda like I've done in like every post except one other one. There's a short cut key that just submitted it before I got the chance to peck out my reply to the quote. Rather than not reply at all I did it immediately after. I thought it was obvious and always is on years of message boarding even without the quoted text of who the reply is for. The only times it hasn't been is with you.
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There's a short cut key that just submitted it before I got the chance to peck out my reply to the quote. Rather than not reply at all I did it immediately after. I thought it was obvious and always is on years of message boarding even without the quoted text of who the reply is for.

Typically, when folks do that, they make the next post, preface it with something like "I submitted too quickly" or similar wording, and then repost the entire thing with the complete text.

The only times it hasn't been is with you.

I can't speak for anyone else, but I was confused about what you were trying to say as well, and I've been on these boards for a while, so I imagine others were just as confused.
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OK I'll fix it....


I think it's pretty sad that you seem to need others to have the same goals as you to validate your goals.

And sadder still that you don't see anyone else's goals as valid unless they are the same as yours.


huh?
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No kidding. Kinda like I've done in like every post except one other one. There's a short cut key that just submitted it before I got the chance to peck out my reply to the quote. Rather than not reply at all I did it immediately after. I thought it was obvious and always is on years of message boarding even without the quoted text of who the reply is for. The only times it hasn't been is with you.

Are you that obtuse? I already said I was making fun of you because you replied to your "own post" with a "Huh?".

In this case, the "own post" is not the content of the post but the linking back to the previous post through the Subject: link.

PSU
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What is your problem?
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What is your problem?

I don't have one.

PSU
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....with 7 figure sometimes 8 figure net worth and still working an average of 55 hours a week. Does that sound like more my goals?I think so.



My goals are similar, except I want to *play* for 55 hours a week.

Jim
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Well then the answer to my question is yes -- it's unsavory. Since now it should be obvious that it's not enough just to live within your means to be one of them.

For some reason, people take that to mean I am going to rack up $10k in credit card debt, but that is hardly the case.
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<<it sounds to me like they live the lifestyle of recently arrived immigrants who have questionable legal status and are making do the best way they can. not to mention don't make a lot of money. but its difficult for me to emulate this since i'm pre approved for a whole lot more than 2x my income.>>



This is a view into your mind rather than the lifestyle of other people.



Seattle Pioneer
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And many mnd's live in a lower middle class neighborhood. man i don't know.

used clothing is another thing. i've done it in the past but to go shopping all the time for that stuff. man i don't know. especially considering how relatively inexpensive clothing is. also they shop at jc penny too...its all polyester clothing.

also unsexy occupations like janitorial services business owner.


I've been through both TMND books, and learned a lot from them. I don't recall reading that MNDs live in "lower middle class neighborhoods." I'm recalling middle class...which allows you to live nicely *and* accumulate wealth via investments or business rather than sink a lot of money into house payments.

You don't have to buy ALL your clothes used, or buy the rattiest garbage in the thrift store. I picked up a real nice suit for $7, and it fit well enough to where it needed no alterations. I suppose it belonged to a guy who passed away, gained/lost a lot of weight, or retired, because it was nearly perfect. There was a wear spot on the right rear pocket, so I know where the guy carried his wallet. My wife fixed it with some spare material from what was taken in elsewhere. So, there's no hole about to form. Last month I found some brand name deck shoes for $3, and it appeared they'd been worn 0 to 4 times. A couple years ago I got a "looks new" jacket at a "Close Out / Overstock" store. Its imperfection was a mark on the white trim. The mark cleaned right off...probably pencil, but even if it hadn't been. coats get marks/tears/snags pretty quickly, and it was worth the "risk" to save 75%.

You are right that MNDs have "unsexy occupations like janitorial services," but you might be under emphasizing the "business owner" part. They probably get started doing the grunt work, but eventually are doing the business part and hiring people to clean, or the most "unsexy" tasks. That's nearly universal, right? As an engineer, I earn good money doing some interesting work, and the automotive safety part might even be "sexy." But I sure don't make what the owners make.

Here's a lesson my 12-year-old (at the time) son learned: He had to run out and buy figurines of characters from the hottest movie. Then, a year later, he wanted to sell them and get the money to buy video games. He was only able to get 5% to 15% of what he paid. The light bulb idea was: "Renting the newness of something can be expensive. Someone who put off having that stuff a year got a 90% discount. Make sure you honestly assess the value of something before you trade off your money for it." That doesn't mean that nothing is worth a high price, but look at all the people who paid hundreds over list price to be the first one to have an iSomething. I work with plenty of people who don't put enough in the 401k to get the maximum company matching money, yet drive new cars, go on exotic vacations, and refurnish their home's furniture because they're tired of the way the perfectly-good 5-year-old stuff looks. My wife has a friend who (with her husband) NEVER say "no" to their two children. The 17-year-old boy has a new full-size truck, and they have a weird collection of pets like an alligator. The husband asked me to come over to his house to help him trouble-shoot his multiple camera security system. But the wife is always complaining about lack of money and they asked for some school fees to be waived because they're so broke.

It's not up to me to tell them it's backwards, but then there are a lot of complaints that they can never retire, will have to work 'til 75, etc. Well, we've all made trade-offs for our limited resources like time and income. What you and I need to do is make a conscientious decision as to where those things go. I don't want to live like a pauper, but there are a lot of purchases I *don't* make because I'm trading off that thing now vs. my financial freedom in a few years.
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I have always been happiest when I owned the business where I worked!!

David
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