South African Mr Money Mustache?? early retirement guru

[ronz91]

I think people just get themselves into too much debt over ridiculous rubbish because it has become the cultural norm world wide. Once my bond is paid off I can easily live off less than R10k. That includes water, electricity, food, petrol, going out, medical aid, car and home insurance, uncapped internet, gym, etc which would allow me to save almost 75% of my salary. It's because people have this notion that they need a Jag/Range Rover instead of a small car along with all the other stuff their lifestyle can barely manage to afford.

I always ask people when getting onto these types of topics if they were fired/retrenched tomorrow, how much would they need every month to maintain their current lifestyle. Most people would have to sell their house, cars (prob wife and kids too) just to stay afloat and out of debt. It's satisfying knowing that the largest costs for me each month are my savings contributions which can be stopped at any time if need be and have no impact on my current lifestyle.

How do you manage that?
What sort of medical aid are you one because mine is R1500 just for hospital cover while most people I know spend R3000+ per month for a basic health plan with MSA with one main member only.
Feeding a family of four costs at least R4000 per month unless you eat a lot of pasta, maize meal, etc.

I think what Paul_S and myself actually would like is a more detailed break-down of your budget if you don't mind.

 

[^^vampire^^]

I'm an avid reader of MMM.

Currently stay in Roodepoort, JHB. I think the thing to note here is that frugality is a lifestyle not just something you do every now and then. Also being frugal doesn't mean in any way that you are a cheapskate. I often have take-aways and usually eat out at a restaurant (my gf and I love trying new restaurants) or go to movies at least once a week. We also try to do one international holiday a year. To give you another example I made sure I got a job that is as close as possible to home. It takes me 12 minutes to drive to work. If I wanted to go the MMM way I could probably use a bicycle to get to work but taxi's etc make this far too dangerous a choice.

Also important to note is that I don't have a wife or kids and my budget stipulated would be if I was staying in my complex unit with a bond paid off which should be done soon. My actual budget looks different now as there are RA and investment contributions which far outweigh my costs each month which go off at the beginning of the month so I have no extra money to spend each month. I also pay at least double my bond.

Below are my costs each month:

* R5000 - Groceries etc (R1000 per week) - this is for petrol, food and going out which is more than enough I've found.
* R700 - Car & Home Insurance (2011 Hyundai Atos / R150 000 household content cover through SANTAM)
* R800 - Levies & Water & Refuse
* R270 - Rates (Complex unit 78m squared with 2 parking bays)
* R300 - Electricity (I only keep one light on at a time for the room I am currently in, I only use my pc or tv at one time, use geyser 2 hours per day which allows for a bath at night, shower in the morning and washing of dishes, use washing machine once a week for 2 loads)
* R2500 - Medical Aid (Discovery Classic Priority)
* R300 - Internet (Capped 40GB Anytime, 100GB Night Surfing)
* R170 - Cell phone (Blackberry, BIS, R100 airtime monthly)
* R220 - Gym (Viva Gym Hillfox Centre)
============
R10 260
============

* R4800 - Bond Repayment
============
R15 060
============

* Car I bought cash.

If I wanted I could change my medical aid from a comprehensive plan to a hospital plan saving another R1000. I could also can the gym meaning I could come out needing R9 040 per month (excl current bond). I could buy a bicycle if I really wanted to and save R300-R400 per week on petrol pushing it down to R7 440 per month (excl current bond).


EDIT: Obviously living with kids etc would be more expensive but with 2 adult income earners and 2 kids with cars paid off and no bond I don't see why you couldn't live on R20 000 per month (choice of schooling dependent).

 

[Gaz{M}]

Things you are missing if you are married and have 1 kid:

Domestic Worker: R1000 to R2000 a month
Life Insurance: R1000
School/creche fees: R2000 + a month
Additional food/supplies per kid: R2000

That's another R4k to R5k a month. Add R4000 per additional kid.

Public Service Announcement: Save money and the planet! Don't have kids if you don't desperately want kids.

 

[F40]

This is an interesting thread. Some comments though. One cannot "SPYDO" yourself to wealth or financial freedom (simply pay your debts off). That is a fallacy and a notion most middle income earners think is the way to financial freedom. Going hand-in-hand with this is generally a very frugal approach to finances and thinking that a life of deprivation is plausible.

Financial savvy requires much more. I certainly do not want to live off R10,000 pm after having spent a lifetime just making sure I killed my bond as quickly as possible. The biggest problem with not reaching financial freedom for 99% of people is not a lack of savings, but a lack of taking too little calculated risks in their lifetime.

I certainly have no intention or desire to pay off my bond - ever, although I can do it immediately about 40 times over. I make much more using that money than paying interest at prime less 2%.

Lastly - the person saying he can easily live off R10,000 - BS. He said he goes overseas once a year? Sorry - not on R10,000 a month after living expenses.

 

[akescpt]

This is an interesting thread. Some comments though. One cannot "SPYDO" yourself to wealth or financial freedom (simply pay your debts off). That is a fallacy and a notion most middle income earners think is the way to financial freedom. Going hand-in-hand with this is generally a very frugal approach to finances and thinking that a life of deprivation is plausible.

Financial savvy requires much more. I certainly do not want to live off R10,000 pm after having spent a lifetime just making sure I killed my bond as quickly as possible. The biggest problem with not reaching financial freedom for 99% of people is not a lack of savings, but a lack of taking too little calculated risks in their lifetime.

I certainly have no intention or desire to pay off my bond - ever, although I can do it immediately about 40 times over. I make much more using that money than paying interest at prime less 2%.

Lastly - the person saying he can easily live off R10,000 - BS. He said he goes overseas once a year? Sorry - not on R10,000 a month after living expenses.

Dude. Educate us then. Need an alternative to the pay off the bond now! Seems to be a common theme on here.

 

[F40]

Dude. Educate us then. Need an alternative to the pay off the bond now! Seems to be a common theme on here.

Invest the extra money you were going to pay into your bond in equities. Maybe start with an ETF, but start learning about sectors and individual companies. Take the same horizon as you aimed to pay your bond off in. Use the power of compound interest. Use gearing effectively, although cautiously. Have some balls, but be sensible. Educate yourself on the stock market. Avoid penny stocks. But go BIG when you have conviction.

Lastly - avoid BTL residential properties at all costs.

 

[^^vampire^^]

This is an interesting thread. Some comments though. One cannot "SPYDO" yourself to wealth or financial freedom (simply pay your debts off). That is a fallacy and a notion most middle income earners think is the way to financial freedom. Going hand-in-hand with this is generally a very frugal approach to finances and thinking that a life of deprivation is plausible.

Financial savvy requires much more. I certainly do not want to live off R10,000 pm after having spent a lifetime just making sure I killed my bond as quickly as possible. The biggest problem with not reaching financial freedom for 99% of people is not a lack of savings, but a lack of taking too little calculated risks in their lifetime.

I certainly have no intention or desire to pay off my bond - ever, although I can do it immediately about 40 times over. I make much more using that money than paying interest at prime less 2%.

Lastly - the person saying he can easily live off R10,000 - BS. He said he goes overseas once a year? Sorry - not on R10,000 a month after living expenses.

Clearly too full of yourself to take the time to read and understand. I said I COULD live off less than R10 000 a month once my bond is paid if I wanted to, I didn't say I DO. Aside from my income I run a part time business which is where I get the money to do my international holidays. I don't really consider this money income as I know it's going to get burnt.

People who don't understand what frugality is are always the ones to breeze in, leave silly comments and leave. Just because someone decides to live a frugal lifestyle doesn't mean they live a life of deprivation, it means that they have come to the understanding that they don't need to needlessly spend money and/or rack up debt. People who live a life of deprivation are idiots and do themselves no favours in many ways.

Anyway, every time living a frugal lifestyle is discussed there are always people that feel the need to comment without understanding the idea in it's entirety. It's about killing what debt you have, not making more debt, not spending needlessly, saving and then investing, then passing on the correct ideals to others. If people had a little self control they would not create any debt for themselves, realise they could earn a high salary if they invest in themselves properly and then by not spending all that money every month paying off debts or buying ridiculous luxuries, invest more and become financially independent earlier in life.

Although according to you this is all incorrect and ridiculous - so please enlighten us to how we could all be like you and be in the position to pay our bond 40 fold.

 

[F40]

Clearly too full of yourself to take the time to read and understand. I said I COULD live off less than R10 000 a month once my bond is paid if I wanted to, I didn't say I DO. Aside from my income I run a part time business which is where I get the money to do my international holidays. I don't really consider this money income as I know it's going to get burnt.

People who don't understand what frugality is are always the ones to breeze in, leave silly comments and leave. Just because someone decides to live a frugal lifestyle doesn't mean they live a life of deprivation, it means that they have come to the understanding that they don't need to needlessly spend money and/or rack up debt. People who live a life of deprivation are idiots and do themselves no favours in many ways.

Anyway, every time living a frugal lifestyle is discussed there are always people that feel the need to comment without understanding the idea in it's entirety. It's about killing what debt you have, not making more debt, not spending needlessly, saving and then investing, then passing on the correct ideals to others. If people had a little self control they would not create any debt for themselves, realise they could earn a high salary if they invest in themselves properly and then by not spending all that money every month paying off debts or buying ridiculous luxuries, invest more and become financially independent earlier in life.

Although according to you this is all incorrect and ridiculous - so please enlighten us to how we could all be like you and be in the position to pay our bond 40 fold.

I give my opinion which is not what you want to hear and now I am full of myself? That's a bit teenagerish...

Anyhow - I really do not want to convince you otherwise. You pay off your bond, aspire to live off R10,000 pm and drive your Atos forever. Good for you.

 

[supersunbird]

I give my opinion which is not what you want to hear and now I am full of myself? That's a bit teenagerish...

Anyhow - I really do not want to convince you otherwise. You pay off your bond, aspire to live off R10,000 pm and drive your Atos forever. Good for you.

Unfortunately he is right, you are full of yourself since you didn't read and comprehend what he said.

I do agree with your bond thing though. And any debt that has much lower interest than you can earn elsewhere. My rental property I am not paying of early, the tenant is paying it. It will have been purchased with other peoples (the banks and the tenants) money yay!

 

[MickeyD]

This is an interesting thread. Some comments though. One cannot "SPYDO" yourself to wealth or financial freedom (simply pay your debts off). That is a fallacy and a notion most middle income earners think is the way to financial freedom. Going hand-in-hand with this is generally a very frugal approach to finances and thinking that a life of deprivation is plausible.

Financial savvy requires much more. I certainly do not want to live off R10,000 pm after having spent a lifetime just making sure I killed my bond as quickly as possible. The biggest problem with not reaching financial freedom for 99% of people is not a lack of savings, but a lack of taking too little calculated risks in their lifetime.

I certainly have no intention or desire to pay off my bond - ever, although I can do it immediately about 40 times over. I make much more using that money than paying interest at prime less 2%.

I agree with this in that SPYDO is not the end of the line. But I'd rather not have any debt and then invest than using my bond to do so. Remember that not everybody gets prime minus 2% so it may not be feasible for all.

Another tip, which I did not get the opportunity to implement, is to take out life policies on your parents (with their approval of course!!).

 

[^^vampire^^]

I give my opinion which is not what you want to hear and now I am full of myself? That's a bit teenagerish...

Anyhow - I really do not want to convince you otherwise. You pay off your bond, aspire to live off R10,000 pm and drive your Atos forever. Good for you.

Yes, full of yourself because the way you post your statements coupled with not actually reading and understanding anything I posted.

I said I COULD live off R10k a month, I didn't say I DO. I don't plan on living off R10 000 a month or drive an Atos my whole life. Maybe one day I'll get a nice BMW when I can afford to buy it cash, however, I will not go and finance a Porsche instead - get the picture? That's creating unnecessary debt. The whole idea here is to live well within your means so that you can meet anything that life throws at you and to not spend needlessly (especially if you don't have the money to spend in the first place). I probably never will have to live off R10k a month, but the point here is that my spending is low because I don't buy erroneous crap, so I could if I needed to (retrenchment/fired/business closes etc).

I do agree with what you said about sticking money in higher generating streams rather than paying off the bond - I'm lucky enough that I can do both at the same time.

You may think my reply was teenagerish but at least I take the time to read, analyse and understand what people post. You on the other hand read "this guy lives off R10k his whole life" and then started your post rather than taking in everything I said.

 

[cerebus]

Unfortunately he is right, you are full of yourself since you didn't read and comprehend what he said.

Well, he's clearly rich enough that he doesn't have to pay attention.

 

[supersunbird]

Well, he's clearly rich enough that he doesn't have to pay attention.

Hahahahahahahahahaha! Wish I was that rich...

 

[^^vampire^^]

I wonder if I would spend lots of time on MyBB still if I could afford to pay my bond 40 times.
Maybe they'd give me unpaid mod permissions

 

[Verde]

Another tip, which I did not get the opportunity to implement, is to take out life policies on your parents (with their approval of course!!).

Do you think life insurance is a free lunch?

 

[ronz91]

I'm an avid reader of MMM.

Currently stay in Roodepoort, JHB. I think the thing to note here is that frugality is a lifestyle not just something you do every now and then. Also being frugal doesn't mean in any way that you are a cheapskate. I often have take-aways and usually eat out at a restaurant (my gf and I love trying new restaurants) or go to movies at least once a week. We also try to do one international holiday a year. To give you another example I made sure I got a job that is as close as possible to home. It takes me 12 minutes to drive to work. If I wanted to go the MMM way I could probably use a bicycle to get to work but taxi's etc make this far too dangerous a choice.

Also important to note is that I don't have a wife or kids and my budget stipulated would be if I was staying in my complex unit with a bond paid off which should be done soon. My actual budget looks different now as there are RA and investment contributions which far outweigh my costs each month which go off at the beginning of the month so I have no extra money to spend each month. I also pay at least double my bond.

Below are my costs each month:

* R5000 - Groceries etc (R1000 per week) - this is for petrol, food and going out which is more than enough I've found.
* R700 - Car & Home Insurance (2011 Hyundai Atos / R150 000 household content cover through SANTAM)
* R800 - Levies & Water & Refuse
* R270 - Rates (Complex unit 78m squared with 2 parking bays)
* R300 - Electricity (I only keep one light on at a time for the room I am currently in, I only use my pc or tv at one time, use geyser 2 hours per day which allows for a bath at night, shower in the morning and washing of dishes, use washing machine once a week for 2 loads)
* R2500 - Medical Aid (Discovery Classic Priority)
* R300 - Internet (Capped 40GB Anytime, 100GB Night Surfing)
* R170 - Cell phone (Blackberry, BIS, R100 airtime monthly)
* R220 - Gym (Viva Gym Hillfox Centre)
============
R10 260
============

* R4800 - Bond Repayment
============
R15 060
============

* Car I bought cash.

If I wanted I could change my medical aid from a comprehensive plan to a hospital plan saving another R1000. I could also can the gym meaning I could come out needing R9 040 per month (excl current bond). I could buy a bicycle if I really wanted to and save R300-R400 per week on petrol pushing it down to R7 440 per month (excl current bond).


EDIT: Obviously living with kids etc would be more expensive but with 2 adult income earners and 2 kids with cars paid off and no bond I don't see why you couldn't live on R20 000 per month (choice of schooling dependent).

Thanks for the very detailed answer, very helpful. Sounds like you could be our local MMM

 

[ronz91]

Things you are missing if you are married and have 1 kid:

Domestic Worker: R1000 to R2000 a month
Life Insurance: R1000
School/creche fees: R2000 + a month
Additional food/supplies per kid: R2000

That's another R4k to R5k a month. Add R4000 per additional kid.

Public Service Announcement: Save money and the planet! Don't have kids if you don't desperately want kids.

That is one pampered kid

 

[cerebus]

That is one pampered kid

That is one guy who has no idea what frugality means.

 

[ronz91]

Mr Money Mustache is that you

 

[Paul_S]

View attachment 203844

Driving the right kind of vehicle to save money.