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Although I can afford a whole lot of STUFF, my personal philosophy has always been that it actually makes one more miserable. I detest clutter and own nothing that is particularly "showy". I have no jewelry (no watch, cuff links, etc.), apart from an inexpensive wedding ring. My wife's most expensive piece of jewelry is about $4k. She can of course buy whatever she wants, she just shares my philosophy - more stuff is more stuff to worry about. We have only 1 car (and were car free for about 5 years before we got the one we have now).
I see debt as a form of clutter, so I have no debt, and even when I bought personal properties to live in, I would only choose something that I could pay off within 8 years, and typically paid it off within 2-5 years. I would much rather spend money on nicer hotels, first class tickets, etc. Essentially, things that make living and travel easier.
After having a cancer - not being able to have kids - and potentially having it again at any point in time, I became the complete opposite of you.
I used to save quite a lot. I don't touch my existing savings but can't care even slightly about the future and just make myself happy however I feel.
If something remains to be saved, good. If not, doesn't matter.
I think you missed the point of my post. I said nothing about sacrificing quality of life or even saving. Rather, my point is that owning “things” is meaningless, and it is better to spend money on experiences.
As others have said, "spend less, save more". Of course, this doesn't really do much for motivation. One of the most valuable exercises a person can do is run the calculations to fully understand their financial situation, and get an idea of how aggressive they need to be at this, and what the consequences will be of not meeting their goals.
Everyone should really be conservatively estimating how much monthly income they need to live past a retirement age, their longest estimate on expected life span, and therefore the amount of savings needed at a particular point in time, assuming a worst case low-risk return.
Some simple, exercises:
- How much have you saved now, and how long would this last if you stopped working today?
- At your current savings rate, how much will you have saved at your estimated retirement date? How long will it last?
- How much do you have to increase your earnings, to increase your savings, in order to meet your retirement goal?
- How much can you reduce your post-retirement income to, to get by?
- If you had to stop working right now, how long could you support your lifestyle? How long could you support your most downsized lifestyle?
It's bizarre, but I have suggested the above to a friend, and it turned out that he (at 41 years old) had never considered that at some point he wouldn't be able to work, and was pretty much assuming that no savings beyond what his company was taking out of his paycheck for pension would be sufficient (definitely is not).
I also have at least one friend (42 years old), who has almost no savings (does have house equity though), who had been expecting that his income would take off at some point, and savings would become inevitable at that point. He is already earning over R1m+, and doesn't save a cent, so I don't really know at which point he expects this to kick in.
In both of the above scenarios, I realized that they have a tendency to believe that they are effectively immortal (or at least believed they could do their jobs until both they and their wive's dropped) and that their means of income is perpetually safe. They are quite calm, going to nice restaurants, and going on on nice holidays, despite being no more than three paychecks from having to sell their property on a fire sale just to put food on the table. It's this false sense of invulnerability that has put them in a precarious situation, and all it will take is one serious illness or a sudden shift in their respective industries to halt their lifestyles in their tracks.
Anyway, suggesting the above calculations did help them somewhat. One accused me of trying to make them "panic" - some panic is not a bad thing if it can pop that bubble.
These are people whose kids will end up having to support them. I've seen it a lot. They should know better and probably do but DGAF.
It's a bit contentious in the current social climate (hear me out) but IMO if anything, you should aim to build generational wealth so you can give your kids a leg up on their first house/business/uni fees and not be a drain on their resources as they try to set their own family up.
NOTE: By "generational wealth" I'm not suggesting that billionaires hoarding 98% of the worlds resources is a good thing, I'm talking about normal, middle class families.