can one be too frugal?

[NsXMas]

Today was a great day to look at homes in my area. I saw a house similar to mine with open house signs. When I walked in I was blown away. Top of the line Ethan Allen furniture, huge Plasma / LCD TV, huge Sony LCD monitor in the home office, etc etc...

When I opened the door to the garage - BAM - a brand new silver Lexus SC 430 convertible, and a silver Porsche 911 Carrerra 4S Cabriolet. I spoke to the owner and he didn't have garage space for all his cars, so his SO's Mercedes SLK was parked across the street, as well as a 4x4 SUV down the street.

I estimated that his cars were worth almost as much as his house. Compared to this owner, my vehicles are worth less than one of his vehicles.

I walked away wondering if I have been way too frugal. I have been stuffing money into investments, and have not splurged on a really nice vehicle before.

Of course my budget for the future includes either an Acura HSC or a Zanardi, and/or a Ferrari, but my garage right now is worth less than this person's single vehicle.

Is it possible to be too frugal?

 

[coolnsx]

I am currently building RV Port homes in Orlando where the cost of home is 1/2 the coach cost.....easy!

 

[dawggpie]

maybe that guy has 5 other properties and 500k invested into the market??

it's always a battle between living in the present and planning for the future. It's your call.

 

[NsXMas]

maybe that guy has 5 other properties and 500k invested into the market??

it's always a battle between living in the present and planning for the future. It's your call.

Don't think so. Otherwise his house would not be the same as mine. But he is buying into a bigger home with the combined income of his SO, that's why he's selling his house...

Very true about the decision of investing for the future or splurging now... Difficult choices.

 

[Dtrigg]

True wealth is accumulate by those that live BELOW their means.

 

[Osiris_x11]

werd'...

True wealth is accumulate by those that live BELOW their means.

"I'd like to live as a poor man with lots of money." -Pablo Picasso

 

[beckertb]

Save for the future. Spend money like there's no tomorrow. Live every day to it's fullest, for you may not be here tomorrow., etc, etc.

There are too many quotes to have just one. It is also such an individualized question. I know some people that pinch and save to the extreme, and some people that blow it all. Neither is right or wrong.

My personal philosophy: if you have the means and you want it--get it. If you don't have the means, you can't have it Remeber, you can always make more $.........

Ben

 

[nkb]

Don't think so. Otherwise his house would not be the same as mine. But he is buying into a bigger home with the combined income of his SO, that's why he's selling his house...

I don't think you can accurately estimate what he is worth, based on the limited amount you have seen.

This guy and his wife could be blowing every penny they have, so that they can have all the toys.
On the other hand, maybe they have millions stashed away in investments, could afford a house twice as big, and 4 Ferraris, but they choose not to.

Unless you get a peek at their incomes, and their financial portfolio, you can make absolutely no assumptions on how frugal or lavish their lifestyle is.
They could be as frugal (or more) as you, just with different parameters.

 

[rs250]

Read "The Millionaire Next Door". It's not what you make, it's what you keep.

 

[CokerRat]

There are always bigger houses, nicer cars, expensive vacations etc. How you decide to allocate your means to various neeeds, wants, and savings determines where you'll be in 20 years versus people with the same means. OK enough with the obvious, will sinking another $20K into a car today make you happier at the end of 20 years? Saving that amount may turn into $80-100K in 20 years.

Personally I am at a stage in my life where my goals are just paying down the mortgage, saving for kids' education (it's a long way off but it will be serious $$ when the time comes) and sock away some savings along the way, all the while keeping a standard of living that is not extravagant but makes us happy.

Two things I think are important:
1. ensure you have accessible savings to handle being unemployed for 6 months
2. live a lifestyle that would not be significantly disrupted by having my income cut by 20% because I suspect it would be difficult to scale back my lifestyle significantly

 

[ss_md]

True wealth is accumulate by those that live BELOW their means.

I know I'm going to get flamed for this but here goes . . .
This is not true. Wealth isn't created by living life below your means. A person can penny pinch for their entire life and never be wealthy. True wealth is accumulated by savvy individuals that have the know how and invest using OPM.

 

[Joel]

OPM?

 

[Psycnosis]

Other people's money.

OPM?

 

[Psycnosis]

I deal with the same thing, a person I work with has a Jet nice house and some very nice cars. I like knowing that if I really wanted any of that I could go buy it today. but I like even MORE knowing that I don't have to work 1 more day in my life and I can retire any time I want to.

 

[svalleynsx]

I know I'm going to get flamed for this but here goes . . .
This is not true. Wealth isn't created by living life below your means. A person can penny pinch for their entire life and never be wealthy. True wealth is accumulated by savvy individuals that have the know how and invest using OPM.

I think what this partially means is that wealth is not the definitive benchmark as to a person's happiness.

There is also a saying that goes, "The more you know, the less you need".

 

[Dtrigg]

ss_md, not a flame, but take the suggestion of rs 250 and read "The Millionaire Next Door". It is a fantastic book. The real wealth in America is not the physician making $300,000 per year and spending $300,000. It's the guy that owns the junk yard that earns $100,000 and lives on $50,000. Most Americans can't even afford to retire when they become of age. If you want, party hardy now, but remember the rule of 7 in the future.

If someone is smart enough to accumulate wealth, they are not going to be dumb enough to let someone use it, unless it is proven to them. Why do I say that - I have taken a number of companies public and worked with financial institutions. They want the numbers. If people have lots of money, they will be in managed money accounts.

Regards,

Doug

 

[Psycnosis]

lol, this stuff is funny seeing it on a NSX board, people with 90k cars. Anyway I used to have a NSX for 6 years when I had problems making the payments, sold it and bought something new for less then 1/2 a NSX in July even though now I can really afford a NSX even 2 new one's . Anyway funny story, a fried of mine that trades futures for a living and is SUPER frugal and has a 1984 volvo, this person makes WELL over 1 millions a month doing the futures thing. I ask him when he is going to get a new car, he said if he does well he may get a 1985 volvo lol. Also I used to support CNN doing exec support and worked with Ted, Jane and the rest of the high ups. Funny thing is Ted had a old POS 1984 Ford and Jane had a shitter car as well. People that have it don't show it, most that DON'T have it try to show it. The old $20 millionaire’s with there 3xx BMW's. Also a house OR a car are NOT assets no matter what anyone say's. You pay them they don't pay you.

ss_md, not a flame, but take the suggestion of rs 250 and read "The Millionaire Next Door". It is a fantastic book. The real wealth in America is not the physician making $300,000 per year and spending $300,000. It's the guy that owns the junk yard that earns $100,000 and lives on $50,000. Most Americans can't even afford to retire when they become of age. If you want, party hardy now, but remember the rule of 7 in the future.

If someone is smart enough to accumulate wealth, they are not going to be dumb enough to let someone use it, unless it is proven to them. Why do I say that - I have taken a number of companies public and worked with financial institutions. They want the numbers. If people have lots of money, they will be in managed money accounts.

Regards,

Doug

 

[O-Ace]

I like being in the middle...having a good time in the Present but still having enough for tomorrow. This guy that makes $1mill a month and drives a POS volvo doesn't make any sense to me. If you can afford something easily and actually WANT it, then get it! What good is the money if you can't spend any of it? It's just a damn number if you're not gonna use it

-Awais

 

[Psycnosis]

lolrof, that's just him though. It's fun for him to make money and the guys is super nice, also owns a HUGE vending company that makes millions. Ya but just think O-ace, if you had 1 shitty car and spent the TIME and money to learn the markets then you could have anything you wanted? But people spend as much as they make or more, why not just save it and do anything you want to? Maybe he does not give a crap about cars or a big house just like Ted turner? I think most people spend all they can hell it's the american way, have to keep up with everyone else. Look at Buffett same deal... Anyway do what you want, I will save my money and if I want something I get it and pay CASH. Enzo, Evo what's the diff lolrof. Anyway man have a good one and best of luck.

I like being in the middle...having a good time in the Present but still having enough for tomorrow. This guy that makes $1mill a month and drives a POS volvo doesn't make any sense to me. If you can afford something easily and actually WANT it, then get it! What good is the money if you can't spend any of it? It's just a damn number if you're not gonna use it

-Awais

 

[O-Ace]

Trading futures is not the only way to make money

-Awais

 

[Psycnosis]

I know, I used to have my own company because anytime you have people you have the pain in the ass of dealing with them lol. Also my mom is funny she works at the mall for about 10$ a hour has MANY houses and 5 cars. It's WHAT you do with the money that matters, futures for me is I can do it any time any where. It took me a lot of time and 1,000's of hours to get down but I am done. I can work if I want to, sit at home, go on a cruse, whatever I want, the problem she has is if someone does not pay, or repairs, stuff like that "people" problems again. My Father owns a insurance company "people" problem again. You see where I am going. I know what you are thinking but wait Ryan you can pay people to manage it, then again who is going to work harder for your money? You or some real-estate age-nt

Trading futures is not the only way to make money

-Awais

 

[huckster]

this is an interesting topic to me, because there are no 'right' answers, only opinions.

There are lots of people out there with great homes and cars but they cant afford to eat out and/or have delinquent taxes because they are living at/past their financial limit.

A true story; a guy who was as common as dirt(he was in fact a farmer) walked into a mercedes dealership to buy a new car. He was dressed in what he always wore, basic bib overalls(clean) and looked like what he saw himself as and in fact really was--a farmer.

He waited and waited for service, was dismissed when he asked for help, and finally got some low level sales guy to talk to him. He told him what he wanted, and paid cash for it when he got it. This bib overall average joe farmer was in fact a multi-millionairre with a very low profile.

Appearances can be deceiving. Do what you want because it suits you.

I know a lot of people in sales who have the personality where they spend close to the limit as a tool for motivation. They work to acquire possessions and lifestyle.

There are also people (i happen to know one) that work to acquire money. When they pass away, everyone is stunned to find that they have amassed great amounts of money.

Frugal is great if time and experience with loved ones isnt the cost.

I personally strive for the happy medium, weighted toward the lifestyle. My children wont remember me for the money I leave them, they'll remember me for how i spent my time and money with them.

 

[O-Ace]

It's a very personal choice. Some people don't like sitting at home staring at LCDs all day It does get boring after a while

-Awais

 

[Psycnosis]

Very good and true, TIME is all you have, it really is. I am 28 and have no kids as of yet but I will have a few down the road and the money I have gives me the freedom to do what I need to do to help them, No I will not buy then a car @ 16 they can work just like I did. But if they need help with homework or a ride to school I will do that because I can. I will never forget this, my father has his own business so he works when he wants and I was a ADD kid so I was always going crazy in school. One day he said if you are not good in school I am going to goto school with you to make sure you are good. I was thinking ya right dad. Well sure enough he showed up and stayed the whole day with me, I was in 6th grade and when I talked he poped me in the back of the head, the teachers loved it, I hated it. Funny thing he said if I ever do it again he will be there for a week, never happened again lol. D Also my grandmother has 3 farms and 800 acers of land.

this is an interesting topic to me, because there are no 'right' answers, only opinions.

There are lots of people out there with great homes and cars but they cant afford to eat out and/or have delinquent taxes because they are living at/past their financial limit.

A true story; a guy who was as common as dirt(he was in fact a farmer) walked into a mercedes dealership to buy a new car. He was dressed in what he always wore, basic bib overalls(clean) and looked like what he saw himself as and in fact really was--a farmer.

He waited and waited for service, was dismissed when he asked for help, and finally got some low level sales guy to talk to him. He told him what he wanted, and paid cash for it when he got it. This bib overall average joe farmer was in fact a multi-millionairre with a very low profile.

Appearances can be deceiving. Do what you want because it suits you.

I know a lot of people in sales who have the personality where they spend close to the limit as a tool for motivation. They work to acquire possessions and lifestyle.

There are also people (i happen to know one) that work to acquire money. When they pass away, everyone is stunned to find that they have amassed great amounts of money.

Frugal is great if time and experience with loved ones isnt the cost.

I personally strive for the happy medium, weighted toward the lifestyle. My children wont remember me for the money I leave them, they'll remember me for how i spent my time and money with them.

 

[Psycnosis]

Get a job that's what I did heheheh

It's a very personal choice. Some people don't like sitting at home staring at LCDs all day It does get boring after a while

-Awais